Document:

Exhibit 10.1

 

EXECUTION VERSION

 

GENER8 MARITIME SUBSIDIARY VII INC.
  as Borrower

 

THE COMPANIES listed in Part A of Schedule 1

as Original Owner Guarantors and 
 Original Hedge Guarantors

 

GENER8 CHIOTIS LLC 
 GENER8 MILTIADES LLC

as Additional Owner Guarantors and 
 Additional Hedge Guarantors

 

GENER8 MARITIME, INC.

as Parent Guarantor

 

CITIBANK, N.A. 
 NORDEA BANK FINLAND PLC, NEW YORK BRANCH 
  as Global Co-ordinators

 

CITIBANK, N.A. 
  as Bookrunner

 

CITIBANK, N.A. 
 THE EXPORT-IMPORT BANK OF CHINA

BANK OF CHINA, NEW YORK BRANCH

as Mandated Lead Arrangers

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1

as Original Lenders

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1

as Hedge Counterparties

 

CITIBANK, N.A., LONDON BRANCH

as ECA Co-ordinator and ECA Agent

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH
  as Facility Agent and Security Agent

 

 

AMENDING AND RESTATING DEED

 

 

relating to a loan agreement originally dated as of 30 November 2015
 as supplemented by a supplemental agreement dated 28 December 2015

 

 

INDEX

 

	
Clause
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1
    	
INTERPRETATION
    	
2
    
	
 
    	
 
    	
 
    
	
2
    	
ACCESSION
    	
3
    
	
 
    	
 
    	
 
    
	
3
    	
CONDITIONS PRECEDENT
    	
3
    
	
 
    	
 
    	
 
    
	
4
    	
REPRESENTATIONS AND   WARRANTIES
    	
4
    
	
 
    	
 
    	
 
    
	
5
    	
AMENDMENT AND   RESTATEMENT OF LOAN AGREEMENT AND OTHER FINANCE DOCUMENTS
    	
5
    
	
 
    	
 
    	
 
    
	
6
    	
FURTHER ASSURANCE
    	
6
    
	
 
    	
 
    	
 
    
	
7
    	
COSTS AND EXPENSES
    	
6
    
	
 
    	
 
    	
 
    
	
8
    	
NOTICES
    	
6
    
	
 
    	
 
    	
 
    
	
9
    	
COUNTERPARTS
    	
6
    
	
 
    	
 
    	
 
    
	
10
    	
CONFIRMATION BY   BORROWER AND OTHER OBLIGORS
    	
6
    
	
 
    	
 
    	
 
    
	
11
    	
GOVERNING LAW
    	
6
    
	
 
    	
 
    	
 
    
	
12
    	
ENFORCEMENT
    	
6
    
	
 
    	
 
    	
 
    
	
SCHEDULE   1
    	
8
    
	
 
    	
 
    	
 
    
	
PART A   ORIGINAL OWNER GUARANTORS AND ORIGINAL HEDGE GUARANTORS
    	
8
    
	
 
    	
 
    	
 
    
	
PART B   ORIGINAL LENDERS
    	
9
    
	
 
    	
 
    	
 
    
	
PART C   HEDGE COUNTERPARTIES
    	
10
    
	
 
    	
 
    	
 
    
	
EXECUTION   PAGES
    	
11
    
	
 
    	
 
    	
 
    
	
EXHIBIT A   FORM OF EFFECTIVE DATE NOTICE
    	
19
    
	
 
    	
 
    	
 
    
	
APPENDIX 1 PART A   FORM OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE   AMENDMENTS TO THE LOAN AGREEMENT
    	
21
    
	
 
    	
 
    	
 
    
	
APPENDIX   1 PART B FORM OF CLEAN COPY AMENDED AND RESTATED LOAN AGREEMENT
    	
21
    
					

 

 

THIS DEED is made on 29 June 2016

 

BETWEEN

 

(1)                                 GENER8 MARITIME SUBSIDIARY VII INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as borrower (the “Borrower”);

 

(2)                                 The limited liability companies listed in Part A of Schedule 1 (The Parties) therein as original owner guarantors (the “Original Owner Guarantors”) and as original hedge guarantors (the “Original Hedge Guarantors”);

 

(3)                                 GENER8 CHIOTIS LLC and GENER8 MILTIADES LLC, each a limited liability company formed and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 additional owner guarantors (the “Additional Owner Guarantors”) and as additional hedge guarantors (the “Additional Hedge Guarantors”);

 

(4)                                 GENER8 MARITIME, INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the “Parent Guarantor”);

 

(5)                                 CITIBANK, N.A. and NORDEA BANK FINLAND PLC, NEW YORK BRANCH as global co-ordinators (the “Global Co-ordinators” and each, a “Global Co-ordinator”);

 

(6)                                 CITIBANK, N.A. as bookrunner (the “Bookrunner”);

 

(7)                                 CITIBANK, N.A., THE EXPORT-IMPORT BANK OF CHINA and BANK OF CHINA, NEW YORK BRANCH as mandated lead arrangers (the “Mandated Lead Arrangers” and each, a “Mandated Lead Arranger”);

 

(8)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 as lenders (the “Original Lenders” and each, an “Original Lender”);

 

(9)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1 as hedge counterparties (the “Hedge Counterparties” and each a, “Hedge Counterparty”);

 

(10)                          CITIBANK, N.A., LONDON BRANCH as ECA agent (the “ECA Agent”) and as ECA co-ordinator (the “ECA Co-ordinator”);

 

(11)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as agent of the other Finance Parties (the “Facility Agent”); and

 

(12)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as security agent for the Secured Parties (the “Security Agent”).

 

BACKGROUND

 

(A)                               By a loan agreement dated as of 30 November 2015 (as supplemented by a supplemental agreement dated 28 December 2015, the “Facility Agreement”) and made between amongst others (i) the Borrower, as borrower, (ii) the Original Owner Guarantors and Original Hedge Guarantors and the Parent Guarantor,  as guarantors, (iii) Original Lenders, as lenders, (iv) the Hedge Counterparties as hedge counterparties, (v) the Mandated Lead Arrangers, as

 

 

mandated lead arrangers, (vi) the Facility Agent, as agent for the other Finance Parties and (vii) the Security Agent, as security agent for the Secured Parties, the Original Lenders have made available to the Borrower a facility of up to US$259,575,772.50.

 

(B)                               The Parties have agreed to:

 

(i)                                     the accession of the Additional Owner Guarantors and the Additional Hedge Guarantors into the Facility Agreement so that the Additional Owner Guarantors and the Additional Hedge Guarantors will be included as joint and several guarantors thereunder with effect from the Effective Date (as defined below) together with the existing Original Owner Guarantors and the Original Hedge Guarantors (the “Accession”);

 

(ii)                                  enhance the facility under the Facility Agreement by including two additional tranches (the “Additional Tranches”) in an aggregate amount of $125,651,722.50 for the purposes of financing two additional ships with hull numbers H1357 and H1358; and

 

(iii)                               amend the Facility Agreement to reflect the Accession of the Additional Owner Guarantors and Additional Hedge Guarantors and the addition of the Additional Tranches (the “Proposed Changes”).

 

(C)                               This Deed sets out the terms and conditions on which the Finance Parties agree, with effect on and from the Effective Date, at the request of the Borrower, to the Proposed Changes and the consequential amendments to the Finance Documents in connection with those matters and certain other changes referred to in this Deed.

 

IT IS AGREED as follows:

 

1                                         INTERPRETATION

 

1.1                               Defined expressions.  Words and expressions defined in the Facility Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

 

1.2                               Definitions.  In this Deed, unless the contrary intention appears:

 

“Acceding Parties” means collectively, the Additional Owner Guarantors and the Additional Hedge Guarantors (and each or any of them as the context may require, an “Acceding Party”).

 

“Amended and Restated Facility Agreement” means the Facility Agreement as amended and restated by this Deed in the form set out in Appendix 1.

 

“Addendum to Mortgage” means in relation to each Original Owner Guarantor, an addendum to the mortgage executed by such Original Owner Guarantor and the Security Agent as mortgagee, supplementing the Mortgage relating to the Ship relating to such Original Owner Guarantor, in the agreed form.

 

“Effective Date” means the date specified on the Effective Date Notice.

 

“Effective Date Notice” means a notice in the form set out in Exhibit A.

 

“Party” means a party to this Deed.

 

1.3                               Application of construction and interpretation provisions of Facility Agreement.  Clauses 1.2 and 1.5 of the Facility Agreement apply, with any necessary modifications, to this Deed.

 

2

 

1.4                               Application of construction and interpretation provisions of Facility Agreement

 

Clause 1.2 (construction) of the Facility Agreement applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

1.5                               Designation as a Finance Document

 

The Borrower and the Facility Agent designate this Deed as a Finance Document.

 

1.6                               Third party rights

 

Unless provided to the contrary in a Finance Document, a person who is not a Party has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Deed.

 

2                                         ACCESSION

 

With effect from the Effective Date and subject to and upon the terms and conditions of this Deed, in consideration of the Finance Parties agreeing to advance the Additional Tranches to the Borrower upon the terms and conditions of the Amended and Restated Facility Agreement and the Lenders continuing to make available the amounts presently extended under the Facility to the Borrower pursuant to the terms and conditions of the Facility Agreement:

 

(a)                                 the Lenders and the other Finance Parties agree to (i) the Proposed Changes; and (ii) the amendments to the Facility Agreement and the other Finance Documents as set out in this Deed, and

 

(b)                                 each of the Parties agrees that:

 

(i)                                     the Additional Owner Guarantors shall be included and deemed to be additional guarantors under the Facility Agreement on a joint and several basis with the Original Owner Guarantors in accordance with the terms of this Deed and the Amended and Restated Facility Agreement;

 

(ii)                                  the Additional Hedge Guarantors shall be included and deemed to be additional guarantors under the Facility Agreement on a joint and several basis with the Original Hedge Guarantors in accordance with the terms of this Deed and the Amended and Restated Facility Agreement; and

 

(iii)                               the Facility Agreement shall be amended and restated in the manner set out in the Amended and Restated Facility Agreement.

 

3                                         CONDITIONS PRECEDENT

 

3.1                               Agreement of the Lenders and the Finance Parties.  The agreement of the Lenders, the other Finance Parties and the other Parties contained in Clause 2 (Accession) is subject to:

 

(a)                                 no Default or Event of Default having occurred continuing on the date of this Deed and on the Effective Date or resulting from entry into this Deed or the occurrence of the Effective Date;

 

(b)                                 the Repeating Representations to be made by each Obligor being true in all material respects (it being understood and agreed that such representations and warranties shall be deemed to have been made on each of the date of this Deed and the Effective Date with reference to the facts and circumstances existing as at such dates, except to the extent that such representations and warranties specifically refer to an earlier date, in which they shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under clause 18.7 (Financial Statements; Financial Condition;

 

3

 

Undisclosed Liabilities) of the Facility Agreement shall be made with reference to the latest financial statements provided under the Facility Agreement and as at the last day of the financial period in relation to which such financial statements relate);

 

(c)                                  no event described in paragraph (a) of clause 7.2 (change of control) of the Facility Agreement having occurred on the date of this Deed or the Effective Date;

 

(d)                                 no event described in paragraphs (a) to (d) of clause 7.5 (mandatory prepayment on default under shipbuilding contract) of the Facility Agreement having occurred on the date of this Deed or the Effective Date; and

 

(e)                                  the Facility Agent shall have received the following documents and evidence in all respects in form and substance satisfactory to the Facility Agent and its lawyers on or before the date of this Deed or such later date as the Facility Agent may agree with the Borrower:

 

(i)            the duly executed original of this Deed duly executed by the parties to it;

 

(ii)           the duly executed originals of the Addendum to Mortgage relating to each Ship owned by an Original Owner Guarantor, duly executed by the parties thereto;

 

(iii)          the duly executed originals of the Membership Interest Pledges relating to each Additional Owner Guarantor, duly executed by the parties thereto (together with any documents required to be provided thereunder);

 

(iv)          copies of resolutions of the directors and (if required) resolutions of shareholders of Borrower, the Acceding Parties and the other relevant Obligors, authorising the execution of this Deed and (where applicable) the relevant Addendum to Mortgage and the Membership Interest Pledges;

 

(v)           evidence satisfactory to the Facility Agent that each Addendum to Mortgage has been duly recorded with the Marshall Islands ship registry;

 

(vi)          favourable legal opinions from lawyers appointed by the Facility Agent on such matters concerning the laws of the Republic of the Marshall Islands, England and such other relevant jurisdictions as the Facility Agent may reasonably require; and

 

(vii)         any further opinions, consents, agreements and documents in connection with this Deed and the Finance Documents which the Facility Agent may reasonably request by notice to the Borrower prior to the date of this Deed.

 

3.2                               Effective Date Notice. On satisfaction or waiver of the conditions precedent specified in this Clause, the Effective Date Notice shall be signed by the Facility Agent and the Facility Agent shall fix the day of the Effective Date and provide a copy of the Effective Date Notice to the Borrower, the Acceding Parties and the Lenders.

 

4                                         REPRESENTATIONS AND WARRANTIES

 

4.1                               General

 

Each Acceding Party, the Borrower, the Original Owner Guarantors and the Original Hedge Guarantors each makes the representations and warranties set out in this Clause 4 (Representations and Warranties) to each Finance Party on the date of this Deed and the Effective Date.

 

4

 

4.2                               Corporate Power and Authority; Legal Validity and Enforceability

 

(a)                                 Each has the corporate or other applicable power and authority to execute and deliver this Deed and perform the terms and provisions of this Deed and of the Facility Agreement, as amended by this Deed, and has taken all necessary corporate or other applicable action to authorize the execution and delivery of this Deed, and performance by it of this Deed and of the Facility Agreement, as amended by this Deed, and (in the case of the Original Owner Guarantors) the relevant Addendum to Mortgage.

 

(b)                                 Each has duly executed and delivered this Deed, and this Deed (and the Facility Agreement, as amended by this Deed) constitutes the legal, valid and binding obligation of such party enforceable against it in accordance with its terms, except to the extent that the enforceability thereof may be limited by 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).

 

4.3                               No Violation

 

Neither the execution nor the delivery of this Deed, nor the performance or compliance by it with the terms and provisions thereof (or of the Facility Agreement, as amended by this Deed), will:

 

(a)                                 contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality;

 

(b)                                 conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Security (except Other Permitted Security) upon any of its material properties or assets pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which it is a party or by which it or any of its material property or assets is bound or to which it may be subject; or

 

(c)                                  violate any provision of its constitutional documents.

 

5                                         AMENDMENT AND RESTATEMENT OF LOAN AGREEMENT AND OTHER FINANCE DOCUMENTS

 

5.1                               Specific amendments to Facility Agreement.  Subject to Clause 3, with effect on and from the Effective Date, the Facility Agreement shall be, and shall be deemed by this Deed to be, amended and restated in the form of the Amended and Restated Facility Agreement; and, as so amended and restated, the Facility Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

 

5.2                               Amendments to Finance Documents.  Subject to Clause 3, with effect on and from the Effective Date, each of the Finance Documents, shall be, and shall be deemed by this Deed to be, amended as follows:

 

(a)                                 the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and restated or supplemented by this Deed; and

 

(b)                                 by construing references throughout each of the Finance Documents to “this Deed”, “this Agreement”, “hereunder” and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Deed.

 

5

 

5.3                               Finance Documents to remain in full force and effect.  The Finance Documents shall remain in full force and effect as amended by:

 

(a)                                 the amendments contained or referred to in Clauses 5.1 and 5.2; and

 

(b)                                 such further or consequential modifications as may be necessary to give full effect to the terms of this Deed.

 

6                                         FURTHER ASSURANCE

 

Clause 21.34 (Further Assurance) of the Facility Agreement shall apply, with any necessary adaptations, in relation to this Deed.

 

7                                         COSTS AND EXPENSES

 

The Borrower shall reimburse the Facility Agent on demand for all costs and expenses (including reasonable legal fees, VAT and other disbursements) incurred by the Finance Parties in connection with or arising out of the negotiation, execution, operation or implementation of this Deed and any other documents required in connection herewith.

 

8                                         NOTICES

 

Clause 38 (notices) of the Facility Agreement, as amended and supplemented by this Deed, applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

9                                         COUNTERPARTS

 

This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Deed.

 

10                                  CONFIRMATION BY BORROWER AND OTHER OBLIGORS

 

Notwithstanding any of the provisions of this Deed, the Borrower, the Original Owner Guarantors, the Original Hedge Guarantors and the Parent Guarantor hereby acknowledge and confirm that:

 

(a)                                 the terms and conditions of the Finance Documents to which they are a party continue to constitute its legal, binding and valid obligations enforceable in accordance with their terms (as amended and/or supplemented by this Deed); and

 

(b)                                 save as expressly amended under this Deed, the Facility Agreement and the other Finance Documents to which it is a party to, shall remain in full force and effect.

 

11                                  GOVERNING LAW

 

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

12                                  ENFORCEMENT

 

12.1                        Jurisdiction

 

(a)                                 The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed or any non-contractual obligation arising out of or in connection with this Deed) (a “Dispute”).

 

6

 

(b)                                 Each of the Borrower, the Acceding Parties, the Original Owner Guarantors, the Original Hedge Guarantors and the Parent Guarantor accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no party will argue to the contrary.

 

(c)                                  This Clause 12.1 (Jurisdiction) is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

12.2                        Service of process

 

(a)                                 Without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Acceding Parties, the Original Owner Guarantors, the Original Hedge Guarantors and the Parent Guarantor:

 

(i)                                     irrevocably appoints Cheesewrights as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed; and

 

(ii)                                  agrees that failure by a process agent to notify the relevant appointing party of the process will not invalidate the proceedings concerned.

 

(b)                                 If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower (on behalf of the Acceding Parties the Original Owner Guarantors, the Original Hedge Guarantors and the Parent Guarantor) must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.

 

THIS DEED has been duly executed as a Deed on the date stated at the beginning of this Deed.

 

7

 

SCHEDULE 1

 

PART A

 

ORIGINAL OWNER GUARANTORS 
 AND ORIGINAL HEDGE GUARANTORS

 

	
Name of Original Owner
   Guarantor / Hedge
   Guarantor
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
GENER8 STRENGTH LLC
   GENER8 SUPREME LLC
   GENER8 SUCCESS LLC
   GENER8 ANDRIOTIS LLC
    	
 
    	
REPUBLIC OF MARSHALL ISLANDS
    	
 
    	
963430
   963435
   963434
   963431
    	
 
    	
299 PARK AVENUE,
   2nd Floor
   NEW YORK, NY 10017
   Attn: Chief Financial Officer
   Telephone: (212) 763-5600
   Facsimile: (212) 763-5608
   E-mail: finance@gener8maritime.com
    
   With a copy to:
    
   Kramer Levin Naftalis & Frankel LLP
   1177 Avenue of the Americas
   New York, NY 10036
   Attention: Kenneth Chin, Esq.
    
   Telephone: +1 212 715 9100
   Facsimile: +1 212 715 8000
    

 

8

 

PART B

 

ORIGINAL LENDERS

 

	
Name of Commercial Lender
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch,
   Citigroup Centre, Canada Square,
   London, E14 5LB
   c/o Citibank International Limited,
   Poland Branch
   7/9 Traugutta str., 1st Floor
   00-985 Warsaw, Poland
   Attention: Loan Operations Department
   (Kara Catt / Romina Coates — EAF Middle Office)
   Telephone: +44 207986 4881
   Facsimile: +44 207 655 2380
   E-mail: cibuk.loans@citi.com
    
   With a copy to:
    
   388 Greenwich Street,
   New York, NY, 10013
   Attention: Meghan O’Connor
   Telephone: +1 212 816 8557
   Facsimile: N/A
   E-mail: meghan.oconnor@citi.com
    
	
 
    	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF CHINA
    	
 
    	
No.30 Fu Xing Men Nei St., Xicheng District
   Beijing, China100031
   Attention: Transport Finance Department(Jenny Mi/
   Wei Zhenyu)
   Telephone: +86 10 83578412/83579512
   Facsimile: +86 10 83578428/9
   Email: mijie@eximbank.gov.cn/
   weizhenyu@eximbank.gov.cn
    
	
 
    	
 
    	
 
    
	
BANK OF CHINA, NEW YORK BRANCH
    	
 
    	
Bank of China, New York Branch
   410 Madison Avenue
   New York, NY 10017
   Attention: Operation Service Department

(Ms. Wenzhen   Zhang)

Telephone: +1 646 231 3143
   Facsimile: +1 212 371 4185
   E-mail: synloanadmin.nyb@bocusa.com

wzhang@bocusa.com
    

 

9

 

PART C

 

HEDGE COUNTERPARTIES

 

	
 
    	
 
    	
 
    
	
Name of Hedge Counterparties
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch,
   Citigroup Centre, Canada Square,
   London, E14 5LB
   c/o Citibank International Limited,
   Poland Branch
   7/9 Traugutta str., 1st Floor
   00-985 Warsaw, Poland
   Attention: Loan Operations Department
   (Kara Catt / Romina Coates — EAF Middle Office)
   Telephone: +44 207986 4881
   Facsimile: +44 207 655 2380
   E-mail: cibuk.loans@citi.com
    
   With a copy to:
    
   388 Greenwich Street,
   New York, NY, 10013
   Attention: Meghan O’Connor
   Telephone: +1 212 816 8557
   Facsimile: N/A
   E-mail: meghan.oconnor@citi.com
    
	
 
    	
 
    	
 
    
	
NORDEA BANK FINLAND PLC
    	
 
    	
1211 Avenue of   the Americas,

23rd Floor,

New York, NY   10036
   Attention: Shipping Offshore and Oil Services
   Telephone:  +1 212 318 9636

Facsimile:     +1 212 421 4420

 

With a copy to:

 

Essendropsgate 7
   P.O. Box 1166 Sentrum
   NO-0107 Oslo, Norway
   Facsimile: +47 22 48 66 78
    

 

10

 

EXECUTION PAGES

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 MARITIME SUBSIDIARY VII INC., 
  as Borrower

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:   Vice President and Secretary
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 MARITIME, INC., 
 as Parent Guarantor

 

 

	
/s George Fikaris
    	
 
    
	
Name: George   Fikaris
    	
 
    
	
Title:   Vice President
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 STRENGTH LLC, 
 as Original Owner Guarantor and Original Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:     Manager
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 SUPREME LLC, 
 as Original Owner Guarantor and Original Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:   Manager
    	
 
    

 

11

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 SUCCESS LLC, 
 as Original Owner Guarantor and Original Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:     Manager
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 ANDRIOTIS LLC, 
 as Original Owner Guarantor and Original Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:     Manager
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 ANDRIOTIS LLC, 
 as Original Owner Guarantor and Original Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:     Manager
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 CHIOTIS LLC, 
 as Additional Owner Guarantor and Additional Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:     Manager
    	
 
    

 

12

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

GENER8 MILTIADES LLC, 
 as Additional Owner Guarantor and Additional Hedge Guarantor

 

 

	
/s/ George Fikaris
    	
 
    
	
Name: George Fikaris
    	
 
    
	
Title:   Vice   President and Secretary
    	
 
    

 

13

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

CITIBANK, N.A.,
  as Global Co-ordinator

 

 

	
/s/ Kara Catt
    	
 
    
	
Name:
    	
Kara Catt
    	
 
    
	
Title:
    	
Vice President 
   Citibank, N.A
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,
  as Global Co-ordinator

 

 

	
/s/ Martin   Lunder
    	
 
    
	
Name:
    	
Martin Lunder
    	
 
    
	
Title:
    	
Senior Vice   President
    	
 
    

 

 

	
/s/ Erik Havnvik
    	
 
    
	
Name:
    	
Erik Havnvik
    	
 
    
	
Title:
    	
Vice President
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 CITIBANK, N.A.,
  as Bookrunner

 

 

	
/s/ Kara Catt
    	
 
    
	
Name:
    	
Kara Catt
    	
 
    
	
Title:
    	
Vice President 
   Citibank, N.A
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 CITIBANK, N.A.,
  as Mandated Lead Arranger

 

 

	
/s/ Kara Catt
    	
 
    
	
Name:
    	
Kara Catt
    	
 
    
	
Title:
    	
Vice President 
   Citibank, N.A
    	
 
    

 

14

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 THE EXPORT-IMPORT BANK OF CHINA,
  as Mandated Lead Arranger

 

 

	
/s/ Gao Zeteng
    	
 
    
	
Name: Gao Zefeng
    	
 
    
	
Title:     Assistant General Manager
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 BANK OF CHINA, NEW YORK BRANCH,
 as Mandated Lead Arranger

 

 

	
/s/ Xu, Chen
    	
 
    
	
Name: Xu, Chen
    	
 
    
	
Title:    President, U.S.A. & Chief Executive Officer
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 CITIBANK, N.A., LONDON BRANCH, 
 as Original Lender

 

 

	
/s/ Kara Catt
    	
 
    
	
Name:
    	
Kara Catt
    	
 
    
	
Title:
    	
Vice President
   Citibank, N.A. London
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF
 THE EXPORT-IMPORT BANK OF CHINA, 
 as Original Lender

 

 

	
/s/ Gao Zeteng
    	
 
    
	
Name: Gao Zefeng
    	
 
    
	
Title:     Assistant General Manager
    	
 
    

 

15

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF
 BANK OF CHINA, NEW YORK BRANCH, 
 as Original Lender

 

 

	
/s/ Xu, Chen
    	
 
    
	
Name: Xu, Chen
    	
 
    
	
Title:    President, U.S.A. & Chief Executive Officer
    	
 
    

 

16

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 CITIBANK, N.A., LONDON BRANCH, 
 as Hedge Counterparty

 

 

	
ILLEGIBLE
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
  NORDEA BANK FINLAND PLC
 as Hedge Counterparty

 

 

	
/s/ Martin Lunder
    	
 
    
	
Name: Martin Lunder
    	
 
    
	
Title:     Senior Vice President
    	
 
    

 

 

	
/s/ Erik Havnvik
    	
 
    
	
Name: Erik Havnvik
    	
 
    
	
Title:   Vice   President
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
 CITIBANK, N.A., LONDON BRANCH, 
 as ECA Co-ordinator and ECA Agent

 

 

	
/s/ Kara Catt
    	
 
    
	
Name:
    	
Kara Catt
    	
 
    
	
Title:
    	
Vice President
   Citibank, N.A. London
    	
 
    

 

17

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF 
  NORDEA BANK FINLAND PLC, NEW YORK BRANCH, 
 as Facility Agent

 

 

	
/s/ Martin Lunder
    	
 
    
	
Name: Martin Lunder
    	
 
    
	
Title:     Senior Vice President
    	
 
    

 

 

	
/s/ Erik Havnvik
    	
 
    
	
Name: Erik Havnvik
    	
 
    
	
Title:   Vice   President
    	
 
    

 

 

EXECUTED AND DELIVERED AS A DEED 
 FOR AND ON BEHALF OF

NORDEA BANK FINLAND PLC, NEW YORK BRANCH, 
 as Security Agent

 

 

	
/s/ Martin Lunder
    	
 
    
	
Name: Martin Lunder
    	
 
    
	
Title:     Senior Vice President
    	
 
    

 

 

	
/s/ Erik Havnvik
    	
 
    
	
Name: Erik Havnvik
    	
 
    
	
Title:   Vice   President
    	
 
    

 

18

 

EXHIBIT A

 

FORM OF EFFECTIVE DATE NOTICE

 

Amending and Restating Deed

dated [·] (the “Deed”)

 

In accordance with clause 3 of the Deed, the Facility Agent hereby confirms that all the conditions set out in clause 3 of the Deed have been satisfied in full or, to the extent not so satisfied, waived in writing on                    .

 

Accordingly, the Effective Date shall be                     .

 

 

THE FACILITY AGENT

 

 

	
 
    	
 
    
	
For and on behalf of
    	
 
    
	
NORDEA BANK FINLAND PLC, NEW YORK BRANCH
    	
 
    

 

19

 

APPENDIX 1

 

PART A

 

FORM OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE AMENDMENTS TO THE LOAN AGREEMENT

 

Amendments are indicated as follows:

 

1          additions are indicated by underlined text; and

 

2          deletions are shown by strike-through text.

 

 

     

AMENDED AND RESTATED FINAL VERSION

 

FACILITY AGREEMENT DATED AS OF 30 NOVEMBER 2015

AS SUPPLEMENTED BY A SUPPLEMENTAL AGREEMENT DATED 28 DECEMBER 2015 AND

AS AMENDED AND RESTATED BY AN AMENDING AND RESTATING DEED DATED 29 JUNE 2016
 TERM LOAN FACILITY OF UP TO $385,227,495

 

GENER8 MARITIME SUBSIDIARY VII INC.
 as Borrower

 

THE COMPANIES listed in Part A of Schedule 1

as joint and several Owner Guarantors and 
 joint and several Hedge Guarantors

 

GENER8 MARITIME, INC.

as Parent Guarantor

 

CITIBANK, N.A. 
 NORDEA BANK FINLAND PLC, NEW YORK BRANCH 
  as Global Co-ordinators

 

CITIBANK, N.A. 
  as Bookrunner

 

CITIBANK, N.A. 
 THE EXPORT-IMPORT BANK OF CHINA

BANK OF CHINA, NEW YORK BRANCH

as Mandated Lead Arrangers

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1

as Original Lenders

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1

as Hedge Counterparties

 

CITIBANK, N.A., LONDON BRANCH

as ECA Co-ordinator and ECA Agent

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH
  as Facility Agent and Security Agent

 

 

Index

 

	
Clause
    	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
Section 1 Interpretation
    	
2
    
	
1
    	
Definitions and   Interpretation
    	
2
    
	
Section 2 The Facility
    	
42
    
	
2
    	
The Facility
    	
42
    
	
3
    	
Purpose
    	
43
    
	
4
    	
Conditions of   Utilisation
    	
44
    
	
Section 3 Utilisation
    	
46
    
	
5
    	
Utilisation
    	
46
    
	
Section 4 Repayment, Prepayment and   Cancellation
    	
49
    
	
6
    	
Repayment
    	
49
    
	
7
    	
Prepayment and   Cancellation
    	
49
    
	
Section 5 Costs of Utilisation
    	
54
    
	
8
    	
Interest
    	
54
    
	
9
    	
Interest Periods
    	
57
    
	
10
    	
Changes to the   Calculation of Interest
    	
57
    
	
11
    	
Fees and Sinosure   Premium
    	
58
    
	
Section 6 Additional Payment Obligations
    	
60
    
	
12
    	
Tax Gross Up and   Indemnities; FATCA
    	
60
    
	
13
    	
Increased Costs
    	
63
    
	
14
    	
Other Indemnities
    	
64
    
	
15
    	
Mitigation by the   Finance Parties
    	
67
    
	
16
    	
Costs and Expenses
    	
69
    
	
Section 7 Guarantees
    	
70
    
	
17
    	
Guarantee and Indemnity
    	
70
    
	
Section 8 Representations, Undertakings and   Events of Default
    	
75
    
	
18
    	
Representations
    	
75
    
	
19
    	
Information   Undertakings
    	
85
    
	
20
    	
Financial Covenants
    	
90
    
	
21
    	
General Undertakings
    	
90
    
	
22
    	
Insurance Undertakings
    	
108
    
	
23
    	
Shipbuilding Contract   Undertakings
    	
112
    
	
24
    	
General Ship   Undertakings
    	
114
    
	
25
    	
Security Cover
    	
121
    
	
26
    	
Application of Earnings
    	
121
    
	
27
    	
Events of Default
    	
123
    
	
Section 9 Changes to Parties
    	
129
    
	
28
    	
Changes to the Lenders
    	
129
    
	
29
    	
Changes to the Obligors
    	
134
    
	
Section 10 The Finance Parties
    	
135
    
	
30
    	
The Facility Agent and   the Mandated Lead Arrangers
    	
135
    
	
31
    	
The Security Agent
    	
144
    
	
32
    	
ECA Agent
    	
157
    
	
33
    	
sinosure Specific   Provisions
    	
158
    
	
34
    	
Conduct of Business by   the Finance Parties
    	
166
    
	
35
    	
Sharing among the   Finance Parties
    	
166
    
	
Section 11 Administration
    	
168
    
	
36
    	
Payment Mechanics
    	
168
    
	
37
    	
Set-Off
    	
172
    
	
37A
    	
Bail-In
    	
172
    
	
38
    	
Notices
    	
172
    
	
39
    	
Calculations and   Certificates
    	
175
    
	
40
    	
Partial Invalidity
    	
175
    
	
41
    	
Remedies and Waivers
    	
175
    
	
42
    	
Settlement or Discharge   Conditional
    	
175
    
	
43
    	
Irrevocable Payment
    	
175
    
	
44
    	
Amendments and Waivers
    	
175
    

 

 

	
45
    	
Confidential   Information
    	
177
    
	
46
    	
Counterparts
    	
181
    
	
Section 12 Governing Law and Enforcement
    	
182
    
	
47
    	
Governing Law
    	
182
    
	
48
    	
Enforcement
    	
182
    
	
49
    	
PATRIOT Act Notice
    	
182
    
	
 
    	
 
    	
 
    
	
Execution
    	
 
    
	
 
    	
 
    	
 
    
	
Execution Pages
    	
183
    
	
 
    	
 
    	
 
    
	
Schedules
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule 1 The Parties
    	
192
    
	
Part A The Obligors
    	
192
    
	
Part B The Original Lenders
    	
194
    
	
Part C Hedge Counterparties
    	
195
    
	
Part D The Servicing Parties
    	
196
    
	
Schedule 2 Conditions Precedent
    	
198
    
	
Part A Conditions Precedent to Initial   Utilisation Request
    	
198
    
	
Part B Conditions Precedent to Utilisation —   Advance
    	
200
    
	
Schedule 3 Utilisation Request
    	
203
    
	
Schedule 4 Commitments
    	
204
    
	
Schedule 5 Form of Transfer Certificate
    	
206
    
	
Schedule 6 Form of Assignment Agreement
    	
209
    
	
Schedule 7 Form of Compliance Certificate
    	
212
    
	
Schedule 8 Details of Ships
    	
213
    
	
Schedule 9 ERISA Plans and contributions
    	
215
    
	
Schedule 10 Subsidiaries
    	
216
    
	
Schedule 11 Financial Indebtedness
    	
221
    
	
Schedule 12 Insurances
    	
222
    
	
Schedule 13 Existing Transactions
    	
223
    
	
Schedule 14 Non-Cash Charges
    	
224
    
	
Schedule 15 Timetables
    	
225
    
	
Schedule 16 Form of MT 199
    	
226
    

 

 

THIS AGREEMENT is dated as of 30 November 2015 as supplemented by a supplemental agreement dated 28 December 2015 and as amended and restated by an amending and restating deed dated 29 June 2016.

 

PARTIES

 

(1)                                 GENER8 MARITIME SUBSIDIARY VII INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as borrower (the “Borrower”);

 

(2)                                 The limited liability companies listed in Part A of Schedule 1 (The Parties) therein as joint and several owner guarantors (the “Owner Guarantors”) and as joint and several hedge guarantors (the “Hedge Guarantors”);

 

(3)                                 GENER8 MARITIME, INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the “Parent Guarantor”);

 

(4)                                 CITIBANK, N.A. and NORDEA BANK FINLAND PLC, NEW YORK BRANCH as global co-ordinators (the “Global Co-ordinators” and each, a “Global Co-ordinator”);

 

(5)                                 CITIBANK, N.A. as bookrunner (the “Bookrunner”);

 

(6)                                 CITIBANK, N.A., THE EXPORT-IMPORT BANK OF CHINA and BANK OF CHINA, NEW YORK BRANCH as mandated lead arrangers (the “Mandated Lead Arrangers” and each, a “Mandated Lead Arranger”);

 

(7)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the “Original Lenders” and each, an “Original Lender”);

 

(8)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1 (The Parties) as hedge counterparties (the “Hedge Counterparties” and each a, “Hedge Counterparty”);

 

(9)                                 CITIBANK, N.A., LONDON BRANCH as ECA agent (the “ECA Agent”) and as ECA co-ordinator (the “ECA Co-ordinator”);

 

(10)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as agent of the other Finance Parties (the “Facility Agent”); and

 

(11)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as security agent for the Secured Parties (the “Security Agent”).

 

BACKGROUND

 

(A)                               The Lenders have agreed to make available to the Borrower a term loan facility of up to $385,227,495.

 

(B)                               The Hedge Counterparties may enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower’s exposure under this Agreement to interest rate fluctuations.

 

OPERATIVE PROVISIONS

 

1

 

SECTION 1

 

INTERPRETATION

 

1                                         DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

“Acceptable Accounting Firm” means Deloitte & Touche LLP, PricewaterhouseCoopers, Ernst & Young or KPMG, or such other recognized accounting firm as the Facility Agent may, with the consent of the Required Lenders, approve from time to time in writing, such approval not to be unreasonably withheld.

 

“Account Bank” means Nordea Bank Finland plc acting through its office at 1211 Avenue of the Americas, 23rd Floor, New York, NY 10036.

 

“Accounts” means the Earnings Accounts, the Minimum Liquidity Account and the Debt Service Reserve Account.

 

“Account Security” means a document creating Security over any Account in agreed form.

 

“Addendum to Mortgage” means, in relation to a Ship, an addendum to mortgage executed by the Security Agent and the Owner Guarantor owning that Ship in agreed form.

 

“Additional Collateral” shall mean additional Security satisfactory to the Required Lenders created in favour of the Security Agent to cure non-compliance with Clause 25 (Security Cover) (it being understood that cash collateral comprised of Dollars (which shall be valued at par) shall be deemed satisfactory), pursuant to security documentation in agreed form, in an aggregate amount at least sufficient to cure such non-compliance.

 

“Advance” means the borrowing of all or part of a Vessel Loan under this Agreement.

 

“Affected Lender” has the meaning given to it in paragraph (b) of Clause 10.2 (Market disruption).

 

“Affiliate” means, with respect to any Person, any other Person (including, for purposes of Clause 21.30 (Other transactions), all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided however, that for purposes of Clause 21.30 (Other transactions), an Affiliate of the Parent Guarantor shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Parent Guarantor and any officer or director of the Parent Guarantor or any of its Subsidiaries.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.  Notwithstanding anything to the contrary contained above, neither the Facility Agent, nor the Security Agent, the ECA Agent nor the Mandated Lead Arrangers nor any Lender (or any of their respective Affiliates) shall be deemed to constitute an Affiliate of the Parent Guarantor or its Subsidiaries in connection with the Finance Documents or its dealings or arrangements relating thereto.

 

“Aggregate Collateral Vessel Value” means at any time, the aggregate of the Fair Market Value of all the Ships which are, in each case, subject to a Mortgage.

 

2

 

“Amending and Restating Deed” means the amending and restating deed dated                    2016 and made between, amongst others, the Parties.

 

“Anti-Bribery and Corruption Laws” means the US Foreign Corrupt Practices Act of 1977 as amended and the rules and regulations thereunder, the UK Bribery Act of 2010, and/or any similar laws, rules or regulations issued, administered or enforced by the United States, United Kingdom, the European Union or any of its member states, or any other country or Governmental Agency having jurisdiction over any Finance Party, Sinosure or any Obligor.

 

“Appraisal” means, with respect to a Ship, a written appraisal provided by an Approved Appraiser in favour of the Facility Agent for the purposes of determining the Fair Market Value of such Ship.

 

“Approved Appraiser” means Fearnleys, Clarksons, Braemar Seascope, Maersk Broker K.S., Lorentzen & Stemoco and Simpson Spence & Young (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent.

 

“Approved Classification” means, in relation to a Ship, as at the date of this Agreement, the dual classification with (a) China Classification Society (“CCS”) and (b) the Approved Classification Society specified in relation to that Ship in Schedule 8 (Details of the Ships) or the equivalent classification with another Approved Classification Society.

 

“Approved Classification Society” means American Bureau of Shipping (“ABS”), DNV GL Group (“DNV”), Lloyd’s Register (“LR”), Nippon Kaiji Kyokai (“NKK”), Bureau Veritas (“BV”)  or any other classification society approved in writing by the Facility Agent.

 

“Approved Commercial Manager” means, in relation to a Ship, Navig8 Pte. Ltd., Navig8 Asia Pte. Ltd., VL8 Management Inc., the Parent Guarantor, any of its Affiliates, or such other person approved in writing by the Facility Agent acting with the authorization of the Required Lenders as the commercial manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks or, if such Ship is entered into a Pool Agreement, the Pool Manager.

 

“Approved Flag” shall have the meaning provided in Clause 24.2 (Flag of Ships; Citizenship; Ship Classification).

 

“Approved Insurance Broker” means Bankserve, Willis, Aon, Marsh, Leeds and Leeds and any other firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorization of the Required Lenders.

 

“Approved Manager” means, in relation to a Ship, the Approved Commercial Manager or the Approved Technical Manager of that Ship.

 

“Approved Technical Manager” means, in relation to a Ship, Northern Marine Management Ltd., Anglo-eastern Shipmanagement (Singapore) Pte. Ltd., Anglo-eastern International (Macao Commercial Offshore) Limited, Wallem Shipmanagement Limited, Selandia Ship Management Pte. Ltd., Selandia Ship Management (India) Pvt. Ltd., Selmar Ltd, the Parent Guarantor, any of its wholly owned subsidiaries or such other person approved in writing by the Facility Agent acting with the authorization of the Required Lenders as the technical manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks.

 

“Assignment of Builder’s Warranties” means in relation to a Ship, the assignment of builder’s warranties in respect of that Ship entered into or to be entered into by the Owner Guarantor owning that Ship and the Security Agent in the agreed form.

 

3

 

“Assignment of Hedging Agreement” means a first assignment of the rights and interests of the Parent Guarantor or the Borrower (as the case may be), in any Hedging Agreement entered into or to be entered into between the Parent Guarantor or the Borrower (as the case may be) and the Security Agent, in agreed form.

 

“Assignment Agreement” means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

 

“Authorization” means an authorization, consent, approval, resolution, license, exemption, filing, notarization, legalization or registration.

 

“Availability Period” means in relation to each Vessel Loan, the period from and including the date of this Agreement up to and including,

 

(a)                                 the earliest of:

 

(i)            the Delivery Date of the Ship to which that Vessel Loan relates;

 

(ii)           the date falling 180 days from the Scheduled Delivery Date of the Ship to which that Vessel Loan relates; and

 

(iii)          31 May, 2017, or

 

(b)                                 such later date as may be agreed by the Lenders and Sinosure with the Borrower.

 

“Available Commitment” means, in relation to a Lender in respect of a Vessel Loan, such Lender’s Commitment minus:

 

(a)                                 the amount of its Contribution in such outstanding Vessel Loan; and

 

(b)                                 in relation to any proposed Utilisation, the amount of its Contribution in any Advance that is due to be made on or before the proposed Utilisation Date.

 

“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment under all Vessel Loans.

 

“Bail-In Action” means the exercise of any Write-down and Conversion Powers.

 

“Bail-In Legislation” means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time.

 

“Balloon Repayment” means in relation to each Vessel Loan, an amount equal to such Vessel Loan as at the date of its Utilisation Date minus all Repayment Instalments for such Vessel Loan.

 

“Bank Secrecy Act” means the U.S. Bank Secrecy Act of 1970.

 

“Basel II” has the meaning ascribed to it under Clause 13.3 (Exceptions).

 

“Basel III” means:

 

4

 

(a)                                 the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

(b)                                 the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

(c)                                  any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

 

“Blue Mountain Indebtedness” means unsecured Financial Indebtedness incurred by the Parent Guarantor, pursuant to that certain note and guarantee agreement, dated as of March 28, 2014, among Parent Guarantor, as borrower and Blue Mountain Capital Management, LLC and certain of its affiliates, as purchasers (as amended, restated, replaced or modified from time to time provided that after giving effect to any such amendment, restatement, replacement or modification (including in respect of any Permitted Blue Mountain Refinancing Indebtedness) the Blue Mountain Indebtedness Requirements shall be satisfied), in an initial aggregate principal amount not to exceed $131,600,000, as such amount may be (i) increased to include the amount of interest accrued after March 28, 2014 and capitalized or paid in kind in accordance with the terms thereof and other amounts payable in connection therewith and/or (ii) decreased pursuant to principal prepayments thereof permitted pursuant to Clause 21.28 (Dividends).

 

“Blue Mountain Indebtedness Requirements” shall mean with respect to the Blue Mountain Indebtedness or any amendment, restatement, replacement or other modification thereof that:

 

(a)                                 such Financial Indebtedness shall mature no earlier than March 28, 2020 and shall not require any scheduled amortization, mandatory redemption or prepayment prior to such date (other than any prepayment required (i) from the net cash proceeds from the disposition of any Equity Interests of Subsidiary V Inc., or any assets of the Subsidiary V Inc. and/or its Subsidiaries and/or (ii) upon a change of control (as defined in the documentation governing such Financial Indebtedness) or acceleration of such Financial Indebtedness following an event of default thereunder);

 

(b)                                 such Financial Indebtedness shall not be secured or guaranteed by any Subsidiary of the Parent Guarantor other than Subsidiary V Inc.;

 

(c)                                  such Financial Indebtedness shall permit the Parent Guarantor at its option to make all interest payments thereunder in kind or in cash and to the extent that the documentation governing the Financial Indebtedness contains any financial maintenance covenant (other than a collateral maintenance test) applicable to the Parent Guarantor that is more favourable to the lenders or providers thereunder than to the Lenders herein, this Agreement shall automatically be amended to include such more favourable financial maintenance covenant (including any definitions used therein) without any further action or consent of the Borrower and the Facility Agent shall be permitted to amend this Agreement to reflect such financial maintenance covenant (it being understood and agreed that the Borrower

 

5

 

shall be deemed to have consented to such amendment and authorized the Facility Agent to effect such amendment on its behalf).

 

“Break Costs” means other than the CEXIM Prepayment Fee, the amount (if any) by which:

 

(a)                                 the interest which a Lender should have received for the period from the date of receipt of all or any part of its Contribution in the Loan or Unpaid Sum to the last day of the current Interest Period in relation to the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

exceeds:

 

(b)                                 the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

 

“Bridging Facility” means the term loan facility of up to $60,174,000 provided by Citibank, N.A., New York Branch to the Borrower to finance the payment of the Delivery Instalment of Ship A to the relevant Seller.

 

“Builder” means Shanghai Waigaoqiao Shipbuilding Co., Ltd., a corporation organised and existing under the laws of the PRC having its registered office at 3001 Zhouhai Road, Pudong New District, Shanghai 200137, the People’s Republic of China.

 

“Business Day” means a day except Saturday, Sunday and any day which shall be in London, New York, Hong Kong, Oslo and Beijing, a legal holiday or a day in which banking institutions are authorized or required by law or other government action to close.

 

“Capitalized Lease Obligations” of any Person shall mean all rental obligations which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

 

“Cash Equivalents” means:

 

(a)                                 securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition;

 

(b)                                 time deposits, certificates of deposit or deposits in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having (x) capital and surplus in excess of $200,000,000 and (y) a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from

 

6

 

Moody’s with maturities of not more than one year from the date of acquisition by such Person;

 

(c)                                  repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above;

 

(d)                                 commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof  by Moody’s and in each case maturing not more than one year after the date of acquisition by such Person;

 

(e)                                  investments in money market funds substantially all of whose assets are comprised of the types described in clauses (a) through (d) above; and

 

(f)                                   such other securities or instruments as the Required Lenders shall agree in writing.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), as amended by the Superfund Amendments Reauthorization Act of 1986 (42 U.S.C. § 9601 et seq.).

 

“CEXIM” means The Export-Import Bank of China.

 

“CEXIM Prepayment Fee” means a non-refundable prepayment fee of an amount equivalent to 0.50% of any prepaid amount of CEXIM’s Contribution.

 

“Charter” means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence.

 

“Change of Control” means:

 

(a)                                 in respect of the Borrower, the occurrence of any act, event or circumstance that without prior written consent of all the Lenders results in the Parent Guarantor owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in the Borrower;

 

(b)                                 in respect of an Owner Guarantor and/or a Hedge Guarantor, the occurrence of any act, event or circumstance that without prior written consent of all the Lenders results in the Parent Guarantor owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in that Owner Guarantor and/or Hedge Guarantor (except as permitted under Clause 21.22(a) (Disposals); and

 

(c)                                  in respect of the Parent Guarantor, save with the prior written consent of the Required Lenders:

 

(i)                                     a “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), is or shall be the “beneficial owner” (as so defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) or otherwise have obtained ownership or control, directly or indirectly, of 35% or more on a fully diluted basis of the voting and/or economic interest in the Parent Guarantor’s Equity Interests; or

 

(ii)                                  the replacement of a majority of the directors on the board of directors of the Parent Guarantor over a two-year period from the directors who constituted the board of directors of the Parent Guarantor at the beginning

 

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of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of the Parent Guarantor 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 were previously so approved; or

 

(iii)                               none of the following shall be a director of the Parent Guarantor: (a) Mr. Peter Georgiopoulous, (b) Mr. Gary Brocklesby or (c) Mr. Nicolas Busch; or

 

(iv)                              a “change of control” or similar event shall occur as provided in any outstanding Financial Indebtedness (excluding Financial Indebtedness with an aggregate principal amount of less than $20,000,000) of the Parent Guarantor or any of its Subsidiaries (or the documentation governing the same).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.

 

“Commercial Management Agreement” means, in relation to a Ship, the form of agreement entered into between the relevant Owner Guarantor and the Approved Commercial Manager regarding the commercial management of that Ship in agreed form.

 

“Commission” or “SEC” means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.

 

“Commitment” means:

 

(a)                                 in relation to an Original Lender, the amount set opposite its name in the 3rd column of Schedule 4 (Commitments) and the amount of any other Commitment transferred or assigned to it under this Agreement; and

 

(b)                                 in relation to any other Lender, the amount of any Commitment transferred or assigned to it under this Agreement, to the extent not cancelled, reduced or transferred by it under this Agreement.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Compliance Certificate” means a certificate in the form set out in Schedule 7 (Form of Compliance Certificate) or in any other form agreed between the Parent Guarantor and the Facility Agent.

 

“Confidential Information” means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

 

(a)                                 any member of the Group or any of its advisers; or

 

(b)                                 another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

 

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in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes any Funding Rate or information that:

 

(i)            is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 45 (Confidential Information); or

 

(ii)           is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

 

(iii)          is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

 

“Confidentiality Undertaking” means a confidentiality undertaking in any form agreed between the Borrower and the Facility Agent.

 

“Compensation Notice” means a notice issued by Sinosure following (a) the application of a claim applied by the ECA Agent (on behalf of the Lenders) in connection with a Sinosure Insurance Policy and (b) the issuance of a claim opinion by Sinosure.

 

“Consolidated Cash Interest Expense” means, for any period,

 

(a)                                 the total consolidated interest expense paid or payable in cash of the Parent Guarantor and its Subsidiaries (including, without limitation, to the extent included under GAAP, all commission, discounts and other commitment fees and charges (e.g., fees with respect to letters of credit, any Hedging Agreement, any Non-Lender Hedging Agreement or any Other Hedging Agreement) for such period (calculated without regard to any limitations on payment thereof), adjusted to exclude (to the extent same would otherwise be included in the calculation above in this paragraph (a)), the amortization of any deferred financing costs for such period and any interest expense actually “paid in kind” or accreted during such period, plus

 

(b)                                 without duplication, that portion of Capitalized Lease Obligations of the Parent Guarantor and its Subsidiaries on a consolidated basis representing the interest factor for such period, minus

 

(c)                                  cash interest income.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period, adjusted by:

 

(a)                                 adding thereto the following to the extent deducted in calculating such Consolidated Net Income:

 

(i)                                     consolidated interest expense and amortization of debt discount and commissions and other fees and charges, including, without limitation, noncash interest payments, the interest component of capitalized lease obligations, net payments, if any, made (less net payments, if any, received), pursuant to any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other Hedging Agreements,

 

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amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other Hedging Agreements, associated with Financial Indebtedness for such period (whether amortized or immediately expensed),

 

(ii)           consolidated income tax expense for such period, including, without limitation, penalties and interest related to such taxes or arising from any tax examinations and tax expense in respect of repatriated funds,

 

(iii)          any gross transportation tax expense for such period,

 

(iv)          all amounts attributable to depreciation, amortization and impairment charges, including, without limitation, amortization of intangible assets (including goodwill) and amortization of deferred financing fees or costs for such period,

 

(v)           any extraordinary losses, expenses or charges for such period, including, without limitation, accruals and payments for amounts payable under executive compensation agreements, severance costs, relocation costs, retention and completion bonuses and losses realized on disposition of property outside of the ordinary course of business and operating expenses directly attributable to the implementation of cost savings initiatives, and losses relating to activities constituting a business that is being terminated or discontinued,

 

(vi)          any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans,

 

(vii)         non-cash restricted stock compensation, including, without limitation, any restricted stock units,

 

(viii)        any non-cash charges or losses, including, without limitation, non-cash compensation expenses for such period, adjustments to bad-debt reserves, losses recognized in respect of postretirement benefits as a result of the application of FASB ASC 715, losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any extraordinary gains for such period,

 

(ix)          any losses from the sales of any Ship for such period,

 

(x)           all costs and expenses incurred in connection with any equity issuances permitted hereunder so long as, notwithstanding anything set forth herein to the contrary, the Net Cash Proceeds of such equity issuances are applied to the prepayment of the Loan and such prepayments are applied to reduce the relevant payments due under the Finance Documents,

 

(xi)          non-recurring costs, charges, accruals, reserves and business optimization expense, including, without limitation, any severance and restructuring costs, integration costs related to acquisitions after the date of this Agreement, project start-up costs, transition costs, cost related to the  opening, closure and/or consolidation of offices and facilities (including, without limitation, fees and expenses incurred in connection with the

 

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winding up of all of the Parent Guarantor and its Subsidiaries’ activities and operations in Portugal), contract termination costs, systems establishment costs, and excess pension charges,

 

(xii)         all non-recurring fees, costs and expenses related to any litigation or settlements,

 

(xiii)        any proceeds from business interruption insurance,

 

(xiv)        any charges, losses, lost profits, expenses or write-offs to the extent indemnified or insured by a third party to the extent that coverage has not been denied and so long as such amounts are actually reimbursed to the Parent Guarantor or any of its Subsidiaries within one year after the related amount is first added to Consolidated EBITDA pursuant to this paragraph (xv),

 

(xv)         cash expenses relating to earn outs and similar obligations, and

 

(xvi)        all costs and expenses incurred in connection with the Finance Documents, the Finance Documents (as defined in the credit agreement for the Korean Facility) and the Credit Documents (as defined in the Re-financing Facility Credit Agreement), and

 

(b)                                 subtracting therefrom the following to the extent added in calculating such Consolidated Net Income:

 

(i)            any extraordinary gains for such period;

 

(ii)           any gains from the sales of any Ship for such period; and

 

(iii)          any gains realized on disposition of property not in the ordinary course

 

Unless otherwise agreed to by the Facility Agent, for purposes of this definition of “Consolidated EBITDA,” “non-recurring” means any expense, loss or gain as of any date that (x) did not occur in the ordinary course of the Parent Guarantor or its Subsidiaries’ business; (y) is of a nature and type that has not occurred in the prior two years and is not reasonably expected to recur in the future; and (z) any fees, expenses or charges related to any equity offering, investment or Financial Indebtedness or amendments thereto permitted by this Agreement, whether or not consummated.

 

“Consolidated Indebtedness” shall mean, with respect to any Person, as at any relevant date, (x) the aggregate outstanding principal amount of the Loan under this Agreement and the loans under the Re-financing Facility and the Korean Facility, plus (y) the aggregate outstanding principal amount of any other Financial Indebtedness of the Parent Guarantor or any of its Subsidiaries permitted pursuant to Clause 21.25(g) (Financial Indebtedness).

 

“Consolidated Leverage Ratio” shall mean, at any date of determination, the ratio of Consolidated Net Indebtedness of the Parent Guarantor and its Subsidiaries on such date to Consolidated Total Capitalization of the Parent Guarantor and its Subsidiaries on such date.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net after tax income of the Parent Guarantor and its Subsidiaries for such period determined in accordance with GAAP; provided that for purposes of calculating Consolidated Net Income in

 

11

 

connection with Clause 21.28(b) (Dividends), Consolidated Net Income shall be adjusted by adding thereto the non-cash charges set forth in Schedule 14 (Non-cash charges) to the extent deducted in determining consolidated net after-tax income for such period and any gain on the sale of assets which are designated by the Parent Guarantor as being included in the Excess Asset Sale Proceeds Amount shall be excluded.

 

“Consolidated Net Indebtedness” shall mean, with respect to any Person, as at any relevant date, (x) Consolidated Indebtedness less (y) an amount equal to the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries as at such date.

 

“Consolidated Tangible Net Worth” shall mean, at any time of determination for any Person, the Net Worth of such Person and its Subsidiaries at such time determined on a consolidated basis in accordance with GAAP minus goodwill.

 

“Consolidated Total Capitalization” shall mean, at any time of determination for any Person, the sum of Consolidated Net Indebtedness of such Person at such time and Consolidated Tangible Net Worth of such Person at such time.

 

“Constitutional Documents” with respect to any Obligor means the Memorandum of Association or Certificate of Incorporation, as the case may be, Certificate of Formation (including, without limitation, by the filing or modification of any certificate of designation made prior to the date of this Agreement), By-Laws, limited liability company agreement or partnership agreement (or equivalent organizational documents).

 

“Contingent Extras” means, in relation to a Ship, an amount equivalent to the aggregate of unforeseen costs and expenses (including the cost of extras) as permitted by the terms of the Shipbuilding Contract relating to such Ship incurred during the period commencing from the date of this Agreement up to and including the Delivery Date of such Ship and which are documented in such form and substance acceptable to the Facility Agent (including by any relevant supplemental agreements to such Shipbuilding Contract), provided that the aggregate of such amount shall not exceed $500,000 in relation to such Ship.

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any indebtedness (“primary obligations”) of any other person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such person in good faith.

 

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“Contract Price” means, in relation to a Ship, the aggregate of (i) the price payable for that Ship under its Shipbuilding Contract and (ii) the Contingent Extras for that Ship, subject to adjustment as provided in such Shipbuilding Contract pursuant to the terms thereof.

 

“Contract Price Instalment” means, in relation to a Ship, each instalment of the Contract Price payable under the Shipbuilding Contract relating to that Ship.

 

“Contribution” means, in relation to a Lender, the part of the Loan, an Advance or, as the context may require, a Vessel Loan which is owing to that Lender.

 

“Debt Service Coverage Ratio” shall mean, for any period, the ratio of the Consolidated EBITDA for such period to the aggregate of (a) the scheduled principal repayments in respect of Consolidated Indebtedness for such period and (b) the Consolidated Cash Interest Expense for such period.

 

“Debt Service Reserve Account” means:

 

(a)                                 an account in the name of the Parent Guarantor with the Account Bank designated “Gener8 Maritime, Inc. — Debt Service Reserve Account (Sinosure)”; or

 

(b)                                 any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.

 

“Debtor Relief Laws” shall mean the U.S. Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” means an Event of Default or a Potential Event of Default.

 

“Default Period” means, with respect to any Lender, the period during which such Lender is a Defaulting Lender.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

 

“Delegate” means any delegate, agent, attorney, co-trustee or other person appointed by the Security Agent.

 

“Delivery Date” means, in relation to a Ship, the date on which that Ship is delivered by the relevant Seller to the relevant Owner Guarantor designated or to be designated as receiving delivery of such Ship pursuant to the relevant Shipbuilding Contract.

 

“Delivery Instalment” means, in relation to a Ship, the delivery instalment of the relevant Contract Price payable under the relevant Shipbuilding Contract.

 

“Disbursement Authorization” has the meaning given in paragraph (b) of Clause 5.8 (Prepositioning of funds).

 

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“Disruption Event” means either or both of:

 

(a)                                 a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any Obligor; or

 

(b)                                 the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Obligor preventing that, or any other, Party or, if applicable, any Obligor:

 

(i)            from performing its payment obligations under the Finance Documents; or

 

(ii)           from communicating with other Parties or, if applicable, any Obligor in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is beyond the control of, any Obligor.

 

“Dividend” means, with respect to any Person, a dividend, distribution or return of any equity capital to its stockholders, partners or members, any other distribution, payment or delivery of property or cash to its stockholders, partners or members in their capacity as such (other than common stock, and the right to purchase any of such stock of such Person), the redemption, retirement, purchase or acquisition, directly or indirectly, for a consideration of any shares of any class of its capital stock or any other Equity Interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), including Stock Buy-Backs, or the setting aside of any funds for any of the foregoing purposes, or the granting of permission to any of its Subsidiaries to purchase or otherwise acquire for a consideration (other than common stock, Qualified Preferred Stock and the right to purchase any of such stock of such Person) any shares of any class of the capital stock or any other Equity Interests of such Person outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests) except for share repurchases resulting from the unwinding of any share sale requiring the repayment of any advances in connection with such sale as a result of any default on payment on the part of the ultimate purchaser of such shares.  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 aside of any funds for  the foregoing purposes.  For the avoidance of doubt, (i) any non-cash anti-dilution adjustments under the warrants listed on in Schedule 14 (Non-cash charges) shall not constitute a Dividend and (ii) payments under the indemnification provisions of the Merger Agreement shall constitute a Dividend.

 

“Document of Compliance” has the meaning given to it in the ISM Code.

 

“dollars” and “$” mean the lawful currency, for the time being, of the U.S.

 

“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner Guarantor owning that Ship or the Security Agent and which arise out of the use or operation of that Ship, including (but not limited to):

 

14

 

(a)                                 the following, save to the extent that any of them is, as of the date of this Agreement or with the prior written consent of the Facility Agent, pooled or shared with any other person:

 

(i)            all freight, hire and passage moneys;

 

(ii)           compensation payable to the Owner Guarantor owning that Ship or the Security Agent in the event of requisition of that Ship for hire;

 

(iii)          remuneration for salvage and towage services;

 

(iv)          demurrage and detention moneys;

 

(v)           damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of that Ship;

 

(vi)          all moneys which are at any time payable under any Insurances in relation to loss of hire;

 

(vii)         all monies which are at any time payable to the Owner Guarantor owning that Ship in relation to general average contribution; and

 

(b)                                 if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.

 

“Earnings Account” means, in relation to an Owner Guarantor:

 

(a)                                 an account in the name of that Owner Guarantor with the Account Bank designated “Earnings Account”; or

 

(b)                                 any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.

 

“ECP” means an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder.

 

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system maintained by the SEC.

 

“EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.

 

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation:

 

15

 

(a)                                 any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and

 

(b)                                 any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

 

“Environmental Law” means any applicable federal, state, foreign, or local statute, legal requirements, law, treaty, protocol, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, deed or rule of common law, now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Parent Guarantor or any of its Subsidiaries, relating to the environment or to Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq.; any applicable state, foreign, international or local counterparts or equivalents thereof, in each case as amended from time to time; and any applicable rules, regulations or requirements of an Approved Classification Society in respect of any Ship.

 

“Equity Interests” of any person means:

 

(a)                                 any and all shares and other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such person; and

 

(b)                                 all rights to purchase, warrants or options or convertible debt (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such person.

 

“Equity Proceeds Amount” shall mean, on any date, the amount of Net Cash Proceeds received by the Parent Guarantor from the issuance of Equity Interests of the Parent Guarantor after the date of this Agreement less the amount of Dividends paid by the Parent Guarantor and any cash payments in respect of Blue Mountain Indebtedness made pursuant to Clause 21.28 (Dividends) prior to such date.

 

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) which together with the Parent Guarantor or a Subsidiary of the Parent Guarantor would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

 

“Event of Default” means any event or circumstance specified as such in Clause 27 (Events of Default).

 

16

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder.

 

“Excess Asset Sale Proceeds Amount” means the amount of net cash proceeds received by the Parent Guarantor and its Subsidiaries from the sale of any assets consummated on or after the date of this Agreement (after the payment of any Financial Indebtedness required to be repaid as a consequence of the sale of such assets), which are designated by the Parent Guarantor at any time after such sale to be included in the Excess Asset Sale Proceeds Amount; provided that the Parent may not make such a designation if a Restricted Payment has been made under Clause 21.28 (Dividends) and such Restricted Payment would not have been permitted under such Clause if such amount of gain from the sale of such assets had been excluded from Consolidated Net Income at the time such Restricted Payment was made.

 

“Excluded Hedging Obligation” means, with respect to a Hedge Guarantor, any Hedging Obligation if, and to the extent that, all or a portion of the guarantee of such Hedge Guarantor of, or the grant by such Hedge Guarantor of a security interest to secure, such Hedging Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Hedge Guarantor’s failure for any reason to constitute an ECP at the time the guarantee of such Hedge Guarantor or the grant of such security interest becomes effective with respect to such Hedging Obligation. If a Hedging Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedging Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient,

 

(a)                                 Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, imposed as a result of such Recipient being organized under the laws of, or having (or having had) its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof);

 

(b)                                 Taxes attributable to such Recipient’s failure to comply with Clause 12.2(c) (Tax Gross-up); and

 

(c)                                  any U.S. federal withholding Taxes imposed under FATCA.

 

“Executive Order” has the meaning provided in paragraph (a) of Clause 18.17 (Sanctions).

 

“Existing Indebtedness” has the meaning provided in Clause 18.21 (Indebtedness).

 

“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

 

“Facility Office” means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

 

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“Fair Market Value” means, in relation to a Ship or any other vessel, at any date, the fair market value of that Ship or vessel shown by the arithmetic mean of two valuations, each:

 

(a)                                 as at a date not more than 14 Business Days previously;

 

(b)                                 prepared by Approved Appraisers which shall be selected by the Parent Guarantor;

 

(c)                                  for and addressed to the Facility Agent;

 

(d)                                 with or without physical inspection of that Ship or vessel (as the Facility Agent may require); and

 

(e)                                  on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any Charter or other contract of employment (and with no value to be given to any pooling arrangements),

 

after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale, provided that if a range of values is provided in a particular appraisal, then the Fair Market Value in such appraisal shall be deemed to be the arithmetic median of such values and if such valuations differ by more than 15% of the lower valuation, a third valuation shall be obtained from another Approved Appraiser selected by the Facility Agent) and the fair market value of that Ship or vessel shall be shown by the arithmetic mean of all three such valuations.

 

“FATCA” means Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(i) of the Code and any legislation adopted pursuant to any intergovernmental agreement to implement the foregoing.

 

“Fee Letter” means any letter or letters between any of the Mandated Lead Arrangers, the ECA Co-ordinator, the Facility Agent and the Security Agent and any Obligor setting out any of the fees referred to in Clause 11 (Fees and Sinosure Premium).

 

“Finance Document” means:

 

(a)                                 this Agreement;

 

(b)                                 the Supplemental Agreement;

 

(c)                                  the Amending and Restating Deed;

 

(d)                                 any Fee Letter;

 

(e)                                  each Utilisation Request;

 

(f)                                   any Security Document;

 

(g)                                  any Hedging Agreement;

 

(h)                                 any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

 

(i)                                     any other document designated as such by the Facility Agent and the Borrower.

 

18

 

“Finance Party” means the Bookrunner, the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Global Co-ordinators, the ECA Co-ordinator, the ECA Agent, a Lender or a Hedge Counterparty.

 

“Financial Covenants” means the covenants set forth in Clause 20 (Financial Covenants).

 

“Financial Indebtedness” means any indebtedness for or in relation to:

 

(a)                                 all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services;

 

(b)                                 the maximum amount available to be drawn under all letters of credit issued for the account of such Person and all unpaid drawings in respect of such letters of credit;

 

(c)                                  all indebtedness of the types described in paragraphs (a) to (g) of this definition secured by any Security on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (to the extent of the value of the respective property);

 

(d)                                 the aggregate amount required to be capitalized under leases under which such Person is the lessee;

 

(e)                                  all obligations of such person to pay a specified purchase price for goods or services, whether or not delivered or accepted ( i.e. take-or-pay and similar obligations);

 

(f)                                   all Contingent Obligations of such Person, and

 

(g)                                  all obligations under any Hedging Agreement or Other Hedging Agreement,

 

provided that Financial Indebtedness shall in any event not include trade payables and expenses accrued in the ordinary course of business.

 

“First Fiscal Quarter Date” means in relation to a Vessel Loan, the Fiscal Quarter Date occurring in the next Fiscal Quarter falling after the Utilisation Date of such Advance.

 

“Fiscal Quarter” means, in relation to each year, each period of three (3) consecutive months in such year which (a) commences on January 1 of such year and ends on March 31 of such year; (b) commences on April 1 of each year and ends on June 30 of such year; (c) commences on 1 July of such year and ends on 30 September of such year; or (d) commences on 1 October of such year and ends on 31 December of such year.

 

“Fiscal Quarter Date” means in relation to a Vessel Loan, 21 March, 21 June, 21 September and 21 December of each calendar year commencing from the Utilisation Date of such Vessel Loan.

 

“Fiscal Year” means, in relation to any person, each period of one (1) year commencing on January 1 of each year and ending on December 31 of such year in respect of which its accounts are or ought to be prepared.

 

“Flag Jurisdiction Transfer” shall mean the transfer of the registration and flag of a Ship from one Approved Flag to another Approved Flag in accordance with Clause 24.3 (Flag Jurisdiction Transfer).

 

“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag Jurisdiction Transfer occurs.

 

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“Foreign Pension Plan” means any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Parent Guarantor or any one or more of its Subsidiaries primarily for the benefit of employees of the Parent Guarantor or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, and which plan would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA.

 

“Funding Rate” means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).

 

“GAAP” means generally accepted accounting principles in the U.S., including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.

 

“General Assignment” means in relation to a Ship, the general assignment creating Security over the following entered into or to be entered into by the Owner Guarantor owning that Ship and the Security Agent in agreed form:

 

(a)                                 that Ship’s Earnings;

 

(b)                                 its Insurances;

 

(c)                                  any Requisition Compensation;

 

(d)                                 the relevant Pool Agreement;

 

(e)                                  the relevant Charter(s); and

 

(f)                                   the relevant Ship Management Agreement.

 

“Governmental Authority” means the government of the United Kingdom, the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Group” means the Parent Guarantor and its Subsidiaries.

 

“Guarantors” means the Parent Guarantor and the Owner Guarantors (and each, a “Guarantor”).

 

“Hazardous Materials” means:

 

(a)                                 any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;

 

(b)                                 any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law; and

 

20

 

(c)                                  any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under Environmental Laws.

 

“Hedging Agreement” means each ISDA master agreement (together with the schedule thereto) made between the Borrower or the Parent Guarantor (as the case may be) and a Hedge Counterparty for the hedging of the Borrower’s interest rate exposure under this Agreement.

 

“Hedging Obligation” means, with respect to the Borrower, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Immaterial Subsidiary” means any Subsidiary of the Parent Guarantor (other than an Obligor and any Subsidiary who is an obligor or security provider in relation to the Re-financing Facility and/or the Korean Facility) whose aggregate assets account for less than 5.0% of the consolidated total assets of the Parent Guarantor (as determined in accordance with GAAP) and less than 5.0% of the Consolidated EBITDA of the Parent Guarantor.

 

“Indemnified Person” has the meaning given to it in Clause 14.2(b) (Other indemnities).

 

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Finance Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Insurances” means, in relation to a Ship:

 

(a)                                 all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and

 

(b)                                 all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.

 

“Intercompany Ship Delivery Agreement” means the ship delivery agreement dated 3 September 2015 entered into between amongst others, Subsidiary Inc. and the Borrower, together with the relevant assignment (and if applicable, nomination) agreement in relation to each Ship to be entered into between, amongst others, Subsidiary Inc. and the relevant Owner Guarantor.

 

“Interest Period” means, in relation to an Advance, the Loan or any part of the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

 

“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time.

 

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.

 

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“ISSC” means an International Ship Security Certificate issued under the ISPS Code.

 

“Korean Facility” means the term loan facility of up to $963,743,455 provided by certain lenders to Gener8 Maritime Subsidiary VIII Inc. to inter alia, assist its Wholly-Owned Subsidiaries purchase of fifteen (15) x 320,000 dwt very large crude oil carriers pursuant to a facility agreement dated as of 31 August 2015 (as amended and/or supplemented from time to time).

 

“Leaseholds” of any person shall mean all the right, title and interest of such person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

 

“Lender” means:

 

(a)                                 any Original Lender; and

 

(b)                                 any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 28 (Changes to the Lenders),

 

which in each case has not ceased to be a Party in accordance with this Agreement.

 

“Lender Default” means, as to any Lender:

 

(a)                                 the wrongful refusal (which has not been retracted) of such Lender to make available its portion of any Utilisation,

 

(b)                                 such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or

 

(c)                                  such Lender having notified the Facility Agent and/or any Obligor:

 

(i)                                     that it does not intend to comply with its obligations under Clause 5.4 (Lender’s participation) in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Clause or

 

(ii)                                  of the events described in the preceding paragraph (b),

 

provided that, no Lender Default shall occur under paragraph (b) solely as a result of the acquisition or maintenance of an ownership interest in such Lender or Person controlling such Lender or the exercise of control over such Lender or Person controlling such Lender by a Governmental Authority or an instrumentality thereof, so long as such ownership or controlling interest does not result in or provide such Lender with immunity from the jurisdiction of courts within England or United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

“LIBOR” means, in relation to any Advance, the Loan, any part of the Loan or any Unpaid Sum:

 

(a)                                 the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of the relevant Advance, the Loan, the relevant part of the Loan or the Unpaid Sum; or

 

(b)                                 as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate),

 

and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

 

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“Loan” means the loan to be made available under the Facility or, as the context may require, the aggregate principal amount of Utilisations outstanding for the time being under this Agreement.

 

“Major Casualty” means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.

 

“Manager’s Undertaking” means, in relation to a Ship, the letter of undertaking from each of the relevant Approved Managers in respect of such Ship in agreed form.

 

“Margin” means 2.0% per annum.

 

“Margin Regulations” means the provisions of Regulations T, U and X of the Board of Governors of the Federal Reserve System.

 

“Margin Stock” has the meaning provided in Regulation U.

 

“Material Adverse Effect” means a material adverse effect on:

 

(a)                                 the business, property, assets, liabilities, condition (financial or otherwise) of any Obligor and its Subsidiaries taken as a whole,

 

(b)                                 the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights and remedies of any Finance Party under any Finance Documents; or

 

(c)                                  the ability of any Obligor and its Subsidiaries, taken as a whole, to perform its or their obligations under any Finance Document.

 

“Maximum Contract Price” means, in relation to a Ship, the maximum contract price set out in the corresponding column under the heading “Maximum Contract Price” in Schedule 8 (Details of the Ships).

 

“Merger” means the merger of Gener8 Maritime Acquisition, Inc. into Navig8 Crude Tankers, Inc. with the Parent Guarantor as the surviving entity pursuant to the Merger Agreement.

 

“Merger Agreement” means the agreement and plan of merger dated 24 February 2015 entered into between, amongst others, General Maritime Corporation, Gener8 Maritime Acquisition, Inc. and Navig8 Crude Tankers, Inc. in connection with inter alia, the proposed reverse subsidiary merger between Navig8 Crude Tankers, Inc. and Gener8 Maritime Acquisition, Inc.

 

“Minimum Liquidity Account” means the account in the name of the Parent Guarantor with the Account Bank designated “Gener8 Maritime, Inc. - Minimum Liquidity Account (Sinosure)”.

 

“Minimum Liquidity Amount” means $1,500,000 per delivered Ship.

 

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

(a)                                 (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month

 

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in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

(b)                                 if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

 

(c)                                  if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

 

The above rules will only apply to the last Month of any period.

 

“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

 

“Mortgage” means, in relation to a Ship, a first preferred Marshall Islands ship mortgage on that Ship in agreed form, together with any Addendum to Mortgage relating to that Ship entered into from time to time.

 

“Multiemployer Plan” means an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) which is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) and which is currently contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code), and any such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) to which the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code) contributed to or had an obligation to contribute to such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) during the preceding five-year period.

 

“Navig8 Group” shall mean Navig8 Ltd. and its Affiliates.

 

“Net Cash Proceeds” means,

 

(a)                                 with respect to any Security Assets Disposition, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Security Assets Disposition, other than the portion of such deferred payment constituting interest, but only as and when received) received by the Parent Guarantor or the Borrower or any of their respective Subsidiaries from such Security Assets Disposition net of

 

(i)                                     reasonable transaction costs (including, without limitation, reasonable attorney’s fees) and sales commissions and

 

(ii)                                  the estimated marginal increase in income taxes and any stamp tax payable by the Parent Guarantor, the Borrower or any of its Subsidiaries as a result of such Security Assets Disposition and

 

(b)                                 with respect to the issuance of any Equity Interests, the aggregate cash proceeds received by the Parent Guarantor from such equity issuance net of reasonable transaction costs related thereto (including, without limitation, reasonable attorney’s fees).

 

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“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock and the effect of any impairment of intangible assets on and after the date of this Agreement.

 

“Non-Defaulting Lenders” means all Lenders other than the Defaulting Lender(s).

 

“Non-Lender” means a bank or financial institution who is not a Lender or an Affiliate of a Lender.

 

“Non-Lender Designated Transaction” means, in relation to the Borrower, a transaction which fulfils the following requirements:

 

(a)                                 it is entered into by the Borrower pursuant to a Non-Lender Hedging Agreement with a Non-Lender; and

 

(b)                                 its purpose is the hedging of all or part of the Borrower’s exposure to fluctuations in:

 

(i)                                     LIBOR arising from the funding of the Loan, or any part thereof for a period expiring no later than the final Termination Date or

 

(ii)                                  currency or any other purpose or risks as agreed by a Non-Lender.

 

“Non-Lender Hedging Agreement” means each ISDA master agreement (together with the schedule thereto) made or to be between the Borrower and a Non-Lender and includes all Non-Lender Designated Transactions from time to time entered into and confirmations of Non-Lender Designated Transactions from time to time exchanged under such master agreement.

 

“Obligor” means the Borrower, the Parent Guarantor, an Owner Guarantor, or a Hedge Guarantor.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“OPA” means the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq.

 

“Original Financial Statements” means, in relation to the Parent Guarantor, the audited consolidated financial statements of the Group for its Fiscal Year ended 2014.

 

“Other Hedging Agreement” means any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreement or arrangements designed to protect against fluctuations in currency and commodity values, and shall for the avoidance of doubt, exclude any agreement to hedge interest rate fluctuations.

 

“Other Permitted Security” has the meaning ascribed thereto in Clause 21.21(a) (Negative pledge).

 

“Other Taxes” has the meanings ascribed thereto in Clause 12.2(b).

 

“Overseas Regulations” means the Overseas Companies Regulations 2009 (SI 2009/1801).

 

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“Owner Guarantor A”, “Owner Guarantor B”, “Owner Guarantor C”, “Owner Guarantor D”, “Owner Guarantor E” and “Owner Guarantor F” have the meanings set out in Schedule 8 (Details of the Ships).

 

“pari passu”, when used with respect to the ranking of any Financial Indebtedness of any person in relation to other Financial Indebtedness of such person, means that each such Financial Indebtedness:

 

(a)                                 either (i) is not subordinated in right of payment to any other Financial Indebtedness of such person or (ii) is subordinate in right of payment to the same Financial Indebtedness of such person as is the other and is so subordinate to the same extent; and

 

(b)                                 is not subordinate in right of payment to the other or to any Financial Indebtedness of such person as to which the other is not so subordinate.

 

“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

“PATRIOT Act” means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.

 

“Party” means a party to this Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Blue Mountain Refinancing Indebtedness” shall mean any Financial Indebtedness of the Parent Guarantor issued or given in exchange for, or the proceeds of which are used to, extend, refinance, renew, replace or refund the Blue Mountain Indebtedness, so long as:

 

(a)                                 such Financial Indebtedness has a weighted average life to maturity greater than or equal to the weighted average life to maturity of the Blue Mountain Indebtedness;

 

(b)                                 such extension, refinancing, renewal, replacement or refunding does not:

 

(i)                                     increase the amount of the Blue Mountain Indebtedness outstanding immediately prior to such extension, refinancing, renewal, replacement or refunding (it being understood and agreed that any premium due under the Blue Mountain Indebtedness shall not constitute an increase in the amount of the Blue Mountain Indebtedness) ; or

 

(ii)                                  add guarantors, obligors or security from that which applied to the Blue Mountain Indebtedness on the date hereof, and

 

(iii)                               such Financial Indebtedness otherwise complies with the Blue Mountain Indebtedness Requirements.

 

“Permitted Encumbrance” means:

 

(a)                                 in relation to Real Property, easements, rights-of-way, restrictions, encroachments, exceptions to title and other similar charges or encumbrances; and

 

26

 

(b)                                 in relation to any Ship or any asset which is subject to Security under a Finance Document, any Permitted Security; and

 

(c)                                  in relation to any other property not referred to in paragraphs (a) and (b) above, charges or encumbrances over such property arising in the ordinary course of business which do not materially diminish the value of such property.

 

“Permitted Security” means:

 

(a)                                 Security created by the Finance Documents;

 

 

(b)                                 any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

 

(c)                                  liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;

 

(d)                                 liens for salvage;

 

(e)                                  liens for master’s disbursements incurred in the ordinary course of trading; and

 

(f)                                   any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship and not as a result of any default or omission by any Obligor,

 

provided that such liens do not secure amounts more than 30 days overdue and, in the case of liens for repair or maintenance, such liens do not secure any amounts exceeding $1,000,000.

 

“Person” means any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

 

“Plan” means any “employee pension benefit plan” as defined in Section 3(2) of ERISA, which is currently maintained or contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate and which is subject to ERISA.

 

“Pool Agreement” means, in relation to a Ship, a pool management for a duration of 12 months or more entered into or to be entered into by (or as may be novated to) the relevant Owner Guarantor of that Ship and a Pool Manager (as amended and/or supplemented from time to time).

 

“Pool Manager” means, in relation to a Ship, VL8 Pool Inc., V8 Pool Inc., Unique Tankers LLC, any Affiliate of the Parent Guarantor (provided that the requirements of Clause 21.30 (Other transactions) shall be satisfied with respect thereto) or any other reputable pool manager (provided that the Parent Guarantor shall give the Facility Agent at least 30 days’ prior written notice of the inclusion of the relevant Ship (to which such pool manager relates) in a new Pool Agreement.

 

“Potential Event of Default” means any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making

 

27

 

of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

“PRC” means the People’s Republic of China, excluding Hong Kong, the Macau Special Administrative Region and Taiwan.

 

“Projections” means the Parent Guarantor’s forecasted consolidated and consolidating:

 

(a)                                 balance sheets;

 

(b)                                 profit and loss statements;

 

(c)                                  cash flow statements; and

 

(d)                                 capitalization statements,

 

all prepared on a Subsidiary by Subsidiary basis and based upon good faith estimates and assumptions believed by the Parent Guarantor to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.

 

“Qualified ECP Guarantor” means, in respect of any Hedging Obligation, each Hedge Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Hedging Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualified Preferred Stock” means any preferred stock so long as the terms of any such preferred stock:

 

(a)                                 do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision occurring no earlier than one year after the last Termination Date,

 

(b)                                 do not require the cash payment of dividends and

 

(c)                                  any other preferred stock that:

 

(i)                                     satisfies paragraph (a) of this definition of Qualified Preferred Stock and

 

(ii)                                  that is otherwise issuable or may be distributed pursuant to a shareholders’ rights plan of the Parent Guarantor; provided, however, any Dividend or similar feature of such Qualified Preferred Stock shall only be declared and paid in accordance with Clause 21.28 (Dividends).

 

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

 

“Rating Agencies” means:

 

(a)                                 S&P and Moody’s; or

 

28

 

(b)                                 if S&P or Moody’s or both of them are not making ratings of securities publicly available, a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Facility Agent with the consent of the Required Lenders, which will be substituted for S&P or Moody’s or both, as the case may be.

 

“Real Property” of any person shall mean all the right, title and interest of such person in and to land, improvements and fixtures, including Leaseholds.

 

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.

 

“Recipient” has the meanings ascribed thereto in Clause 12.5(b).

 

“Re-financing Facility” means the term loan facility of up to $581,000,000 provided by certain banks and financial institutions to the Parent Guarantor and certain of its Subsidiaries to inter alia, re-finance certain loans obtained by the Parent Guarantor and certain of its Subsidiaries in respect of its existing fleet of ships.

 

“Re-financing Facility Credit Agreement” means the credit agreement dated 3 September 2015 and to be executed by, inter alios, the Parent Guarantor and certain of its Subsidiaries in respect of the Re-financing Facility (as amended and/or supplemented from time to time).

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

 

“Relevant Advance” has the meaning given to it in Part B of Schedule 2 (Conditions Precedent).

 

“Relevant Interbank Market” means the London interbank market.

 

“Remaining Shipyard Payments” means, as of any date:

 

(a)                                 the aggregate of (i) the Delivery Instalments payable to the relevant Seller in relation to the Ships and (ii) the delivery instalments payable to the relevant builder(s) of all vessels financed pursuant to the Korean Facility;

 

minus

 

(b)                                 the aggregate amounts paid by the Parent Guarantor or its subsidiaries to the relevant builder(s) prior to such date;

 

minus

 

(c)                                  the aggregate principal amount of Loan and aggregate Available Commitments of all Lenders under all Vessel Loans and loans and unfunded commitments under the Korean Facility.  For the avoidance of doubt, if the Remaining Shipyard Payments are negative, the Remaining Shipyard Payments shall be deemed to be zero.

 

“Repayment Date” means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).

 

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“Repayment Instalments” has the meaning given to it in Clause 6.1 (Repayment of Loan).

 

“Repeating Representation” means each of the representations set out in Clauses 18.2 (Corporate / Limited Liability Company/ Limited Partnership Status), 18.3 (Corporate power and authority; legal validity and enforceability), 18.4 (Pari passu ranking), 18.5 (No violation), 18.6 (Government approvals), 18.7 (Financial statements; Financial condition; Undisclosed Liabilities), 18.8 (Litigation), 18.10 (Use of proceeds, Margin Regulations), 18.12 (Subsidiaries), 18.14 (Compliance with statutes etc.), 18.16 (Anti-money laundering; anti-corruption) and 18.17 (Sanctions) and any representation of any Obligor made in any other Finance Document that is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.

 

“Reportable Event” means an event described in Section 4043(c) of ERISA with respect to a Plan (other than any Plan maintained by a Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code or any Multiemployer Plan) that is subject to Title IV of ERISA other than those events as to which the 30-day notice period referred to in Section 4043 is waived.

 

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

“Required Insurance” means insurance as set forth in Clause 22 (Insurance Undertakings) hereto.

 

“Required Lenders” means CEXIM and one other Lender provided, further, that if any Lender shall be a Defaulting Lender at such time, then such Defaulting Lender’s Commitment or Contribution in the Loan shall be excluded from the determination of Required Lenders for so long as such Lender is a Defaulting Lender.

 

“Requisition” means, in relation to a Ship:

 

(a)                                 any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension) unless it is within 30 days redelivered to the full control of the relevant Owner Guarantor; and

 

(b)                                 any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the Owner Guarantor.

 

“Requisition Compensation” includes all compensation or other moneys payable by reason of any Requisition.

 

“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.

 

“Restricted Party” means any Person:

 

(a)                                 that is listed on any Sanctions List or against whom Sanctions are directed (whether designated by name or by reason of being included in a class of person);

 

(b)                                 that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to country-wide or

 

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territory wide Sanctions (including without limitation, as at the date of this Agreement, Cuba, the Crimea, Iran, Syria, Sudan and North Korea);

 

(c)                                  that is directly or indirectly owned or controlled by, or acting on behalf of a Person referred to in clauses (a) and/or (b) above;

 

(d)                                 with which any Finance Party is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions.

 

“Restricted Payment” shall have the meaning provided in Clause 21.28 (Dividends).

 

“Returns” has the meaning provided in paragraph (b) of Clause 18.11 (Tax Returns and Payments).

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies Inc., and its successors.

 

“Safety Management Certificate” has the meaning given to it in the ISM Code.

 

“Safety Management System” has the meaning given to it in the ISM Code.

 

“Sanctions” means the economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adopted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

 

“Sanctions Authorities” means:

 

(a)                                 the United Kingdom;

 

(b)                                 the United States of America;

 

(c)                                  the European Union;

 

(d)                                 the member states of the European Union;

 

(e)                                  the United Nations; and

 

(f)                                   any authority acting on behalf of any of them in connection with Sanctions, including without limitation, OFAC and Her Majesty’s Treasury of the United Kingdom.

 

“Sanctions List” means any list of prohibited persons, vessels or entities published in connection with Sanctions by or on behalf of any Sanctions Authority.

 

“Scheduled Delivery Date” means, in relation to a Ship, the scheduled date of delivery of that Ship as set out in the corresponding column under the heading “Scheduled Delivery Date” in Schedule 8 (Details of the Ships).

 

“Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on page LIBOR01 of the Thomson Reuters screen (or such other service as may be nominated by the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available)) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters; provided

 

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that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purpose of this Agreement. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

 

“Secured Liabilities” means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor to any Secured Party under or in connection with each Finance Document.

 

“Secured Party” means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

 

“Security” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing) or any other agreement or arrangement having the effect of conferring security.

 

“Security Assets” means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

“Security Assets Disposition” means

 

(a)                                 the sale, lease, transfer, bareboat charter or other disposition of Security Assets by the Parent Guarantor or any of its Subsidiaries to any Person other than the Parent Guarantor or any Subsidiary of the Parent Guarantor or

 

(b)                                 any Total Loss of any Ship;

 

provided, however, that any charter of a Ship shall not be considered a Security Assets Disposition for purposes of Clause 7.6 (Mandatory prepayment on sale or Total Loss).

 

“Security Document” means:

 

(a)                                 any Shares Security;

 

(b)                                 any General Assignment;

 

(c)                                  any Assignment of Builder’s Warranties;

 

(d)                                 any Assignment of Hedging Agreement;

 

(e)                                  any Mortgage;

 

(f)                                   any Account Security;

 

(g)                                  any Manager’s Undertaking;

 

(h)                                 any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or

 

(i)                                     any other document designated as such by the Facility Agent and the Borrower.

 

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“Security Period” means the period starting on or about the date of this Agreement (but no later than the first Utilisation Date) and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

 

“Security Property” means:

 

(a)                                 the Transaction Security expressed to be granted in favour of the Security Agent as security agent for the Secured Parties and all proceeds of that Transaction Security;

 

(b)                                 the Security Agent’s interest in any trust created under the Finance Documents; and

 

(c)                                  any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,

 

except:

 

(i)                                     rights intended for the sole benefit of the Security Agent; and

 

(ii)                                  any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

 

“Security Requirements” means, with respect to a Ship, each of the requirements set out in Clause 24.4(Security Requirements).

 

“Seller” means:

 

(a)                                 in relation to Ship A and Ship B, the Builder; and

 

(b)                                 in relation to Ship C, Ship D, Ship E and Ship F the Builder and China Shipbuilding Trading Company, Limited.

 

“Seller’s Bank” has the meaning given in paragraph (b) of Clause 5.8 (Prepositioning of funds).

 

“Servicing Party” means the ECA Agent, the Facility Agent or the Security Agent.

 

“Shares Security” means, in relation to each of the Borrower and the Owner Guarantors, a document creating Security over the Equity Interests of the Borrower or as the case may be, such Owner Guarantor, in agreed form.

 

“Ship” means each of the ships set out in the corresponding column under the heading “Ship” in Schedule 8 (Details of the Ships).

 

“Ship A”, “Ship B”, “Ship C”, “Ship D”, “Ship E” and “Ship F” have the meanings set out in Schedule 8 (Details of the Ships).

 

“Shipbuilding Contract” means, in relation to a Ship, the relevant shipbuilding contract set out in the corresponding column under the heading “Shipbuilding Contract” in Schedule 8 (Details of the Ships) entered into or to be entered into by the relevant Seller and the relevant Owner Guarantor or its Affiliate, for the construction of that Ship (as amended and supplemented from time to time with the prior written consent of the Lenders) and

 

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including without limitation, supplemented by and read together with the Intercompany Ship Delivery Agreement relating to such Ship (and any assignment and/or novation agreement referred to therein).

 

“Ship Management Agreement” means a Technical Management Agreement or a Commercial Management Agreement.

 

“Sinosure” means China Export & Credit Insurance Corporation, a state owned enterprise having its registered office at No. 11 Fenghuiyuan, Xicheng, District, Beijing, the People’s Republic of China.

 

“Sinosure Insurance Policy” means, in respect of a Ship, the export insurance policy to be issued by Sinosure setting out the terms and conditions of the buyer’s credit insurance, insuring at least 95 per cent of the Vessel Loan outstanding from time to time and the estimated accrued interest thereunder (such estimates to be based on calculations agreed between the ECA Agent and Sinosure) on such terms and conditions acceptable to the Lenders.

 

“Sinosure Matters” means all communications and dealings with Sinosure in connection with each Sinosure Insurance Policy, any Finance Document, the Borrower and/or any other Obligor or any matters relating thereto (including, without limitation, obtaining any approvals and/or instructions from Sinosure).

 

 

“Sinosure Premium” means in relation to an Advance, subject to Clause 33.14 (Sinosure Premium and Sinosure), 3.21% of the aggregate of the relevant Vessel Loan and the estimated accrued interest thereunder (such estimates to be based on calculations agreed between the ECA Agent and Sinosure), and which shall be paid by the date of Utilisation of that Advance.

 

“Solvent” shall mean, with respect to any Person on a particular date, that on such date:

 

(a)                                 the sum of the fair market value of the assets, at a fair valuation, of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;

 

(b)                                 the sum of the present fair saleable value of the assets of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;

 

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(c)                                  such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature; and

 

(d)                                 such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct its or their respective businesses,

 

and for purposes of this definition, “debt” means any liability on a claim, and “claim” means (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specified Time” means a day or time determined in accordance with Schedule 15 (Timetables).

 

“Stock Buy-Back” shall mean, with respect to any Person, that such Person or any Subsidiary of such Person shall have redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration (other than common stock, Qualified Preferred Stock or the right to purchase any such stock of such Person), any shares of any class of its capital stock or membership interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Persons with respect to its capital stock).

 

“Subsidiary” means, with respect to any person:

 

(a)                                 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

 

(b)                                 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.

 

“Subsidiary Inc.” means Gener8 Maritime Subsidiary Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands.

 

“Subsidiary V Inc.” means Gener8 Maritime Subsidiary V Inc. (formerly known as VLCC Acquisition I Corporation), a corporation incorporated under the laws of Marshall Islands with registered number 67634 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

 

“Supplemental Agreement” means the supplemental agreement dated 28 December 2015 and made between, amongst others, the Borrower, the Parent Guarantor, the Facility Agent and the Security Agent in connection with this Agreement.

 

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“Taxes” means all taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties imposed with respect thereto.

 

“Technical Management Agreement” means, in relation to a Ship, the agreement entered into between the relevant Owner Guarantor and the Approved Technical Manager regarding the technical management of such Ship in agreed form.

 

“Termination Date” means in relation to a Vessel Loan, the date falling 144 Months from the Utilisation Date of that Vessel Loan.

 

“Test Period” means each period of four consecutive fiscal quarters, in each case taken as one accounting period, ending on 31 March, 30 June, 30 September or 31 December.

 

“Third Parties Act” has the meaning given to it in Clause 1.5 (Third party rights).

 

“Total Commitments” means the aggregate of the Commitments, being $385,227,495 as at the date of this Agreement.

 

“Total Indebtedness” shall mean, at any time, all Financial Indebtedness of the Parent Guarantor and its Subsidiaries at such time.

 

“Total Loss” means any of the following events:

 

(a)                                 the actual or constructive total loss of a Ship or the agreed or compromised total loss of a Ship; or

 

(b)                                 the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Ship or any arrest or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the relevant Owner Guarantor.

 

“Total Loss Date” means in relation to a “Total Loss” of a Ship:

 

(c)                                  in the event of an actual loss of a Ship, at the time and on the date of such loss or if that is not known at noon Greenwich Mean Time on the date which such Ship was last heard from;

 

(d)                                 in the event of damage which results in a constructive or compromised or arranged total loss of a Ship, at the time and on the date of the event giving rise to such damage; or

 

(e)                                  in the case of any other type of total loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.

 

“Transaction Document” means:

 

(a)                                 a Finance Document;

 

(b)                                 any Shipbuilding Contract;

 

(c)                                  any Charter; and

 

(d)                                 any other document designated as such by the Facility Agent and the Borrower.

 

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“Transaction Obligor” means an Obligor, any Approved Manager or any other member of the Group who executes a Transaction Document.

 

“Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.

 

“Transfer Certificate” means a certificate in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.

 

“Transfer Date” means, in relation to an assignment or a transfer, the later of:

 

(a)                                 the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

(b)                                 the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

 

“UCC” means the Uniform Commercial Code of the State of New York.

 

“Unfunded Current Liability” of any Plan means the amount, if any, as of the most recent valuation date for the applicable Plan, by which the present value of the Plan’s benefit liabilities determined in accordance with actuarial assumptions at such time consistent with those prescribed by Section 430 of the Code and Section 303 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA.

 

“UK Establishment” means a UK establishment as defined in the Overseas Regulations.

 

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

“Unrestricted Cash and Cash Equivalents” means, when referring to cash or Cash Equivalents of the Parent Guarantor or any of its Subsidiaries, that such cash or Cash Equivalents:

 

(a)                                 does not appear (or would not be required to appear) as “restricted” on a consolidated balance sheet of the Parent Guarantor or of any such Subsidiary;

 

(b)                                 are not subject to any Security in favour of any Person other than the Security Agent for the benefit of the Finance Parties; the Security Agent (as defined in the credit agreement for the Korean Facility) and the Collateral Agent (as defined in the Re-financing Facility Credit Agreement) for the benefit of the Secured Creditors under and as defined in the Re-financing Facility Credit Agreement) (provided that any cash or Cash Equivalents of the Parent Guarantor or any Subsidiary that are subject to such Security may be included in the calculation of Minimum Liquidity Amount); or

 

(c)                                  are otherwise generally available for use by the Parent Guarantor or such Subsidiary.

 

“U.S.” means the United States of America.

 

“Utilisation” means a utilisation of the Facility.

 

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Advance is to be made.

 

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“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Utilisation Request).

 

“VAT” means:

 

(a)                                 any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

(b)                                 any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

 

“Vessel Loan” means in relation to a Ship, the part of the Facility made or to be made available to the Borrower of up to the lowest of (i) 67.5 per cent of the Contract Price of that Ship; (ii) 67.5 per cent of the Maximum Contract Price of that Ship; and (iii) 65 percent of the Fair Market Value of that Ship, or as the context may require, the aggregate principal amount outstanding in relation thereto.

 

“Wholly-Owned Subsidiary” means, as to any Person,

 

(a)                                 any corporation 100% of whose capital stock (other than director’s qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person; and

 

(b)                                 any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has directly or indirectly a 100% equity interest at such time.

 

“Write-down and Conversion Powers” means in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

 

1.2                               Construction

 

(a)                                 Unless a contrary indication appears, a reference in this Agreement to:

 

(i)                                     the “Account Bank”, any “Mandated Lead Arranger”, the “Facility Agent”, any “Finance Party”, any “Hedge Counterparty”, any “Lender”, any “Obligor”, any “Party”, any “Secured Party”, the “Security Agent”, the “ECA Agent”, either “Global Co-ordinator”, the “Bookrunner”, the “ECA Co-ordinator”, any “Transaction Obligor” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;

 

(ii)                                  “assets” includes present and future properties, revenues and rights of every description;

 

(iii)                               a liability which is “contingent” means a liability which is not certain to arise and/or the amount of which remains unascertained;

 

(iv)                              “document” includes a deed and also a letter, email, fax or telex;

 

(v)                                 “expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

 

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(vi)                              a “Finance Document”, a “Security Document” or a “Transaction Document”  or any other agreement or instrument is a reference to that Finance Document or Security Document or Transaction Document or other agreement or instrument as amended or novated;

 

(vii)                           “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

(viii)                        “law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any statute, regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

 

(ix)                              “proceedings” means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

 

(x)                                 a “person” includes any individual or natural person, firm, corporation, limited liability company, partnership, government, state or agency of a state or any association, trust, joint venture, consortium unincorporated association, joint stock company and trust (whether or not having separate legal personality);

 

(xi)                              a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organization;

 

(xii)                           a provision of law is a reference to that provision as amended or re-enacted from time to time;

 

(xiii)                        a time of day is a reference to New York City time (unless otherwise indicated);

 

(xiv)                       any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

 

(xv)                          words denoting the singular number shall include the plural and vice versa; and

 

(xvi)                       “including” and “in particular” (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

 

(b)                                 The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

 

(c)                                  Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.

 

(d)                                 Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

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(e)                                  A Potential Event of Default is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.

 

(f)                                   Any reference to Nordea Bank Finland plc (either directly or indirectly in its capacity as Lender, Global Co-ordinator, Facility Agent and/or Security Agent or any other capacity) in the Finance Documents shall be automatically construed as a reference to Nordea Bank AB (publ) in the event of any corporate reconstruction, merger, amalgamation, consolidation between Nordea Bank Finland plc and Nordea Bank AB (publ) where Nordea Bank AB (publ) is the surviving entity and acquires all the rights of and assumes all the obligations of Nordea Bank Finland plc and nothing in the Finance Documents shall be construed so as to restrict, limit or impose any notification or other requirement or condition on either Nordea Bank Finland plc or Nordea Bank AB (publ) in respect of the acquisition of rights to or assumption of obligations by Nordea Bank AB (publ) hereunder pursuant to such merger.

 

1.3                               Construction of insurance terms

 

In this Agreement:

 

“approved” means, for the purposes of Clause 22 (Insurance undertakings), approved in writing by the Facility Agent;

 

“excess risks” means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;

 

“obligatory insurances” means all insurances effected, or which any Owner Guarantor is obliged to effect, under Clause 22 (Insurance undertakings) or any other provision of this Agreement or of another Finance Document;

 

“policy” includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

“protection and indemnity risks” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and

 

“war risks” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83) and includes all risks as set out in the amended version of the AHIS Addendum (April 1, 1984).

 

1.4                               Agreed forms of Finance Documents

 

References in Clause 1.1 (Definitions) to any Finance Document being in “agreed form” are to that Finance Document:

 

(a)                                 in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or

 

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(b)                                 in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorization of the Required Lenders or, where Clause 44.1 (Required consents) applies, all the Lenders.

 

1.5                               Third party rights

 

(a)                                 Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.

 

(b)                                 Subject to Clause 44.3 (Other exceptions) but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

(c)                                  Any Receiver, Delegate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 30.11 (Exclusion of liability) or paragraph (b) of Clause 31.10 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

 

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SECTION 2

 

THE FACILITY

 

2                                         THE FACILITY

 

2.1                               The Facility

 

Subject to the terms of this Agreement, the Lenders agree to make available to the Borrower a dollar term loan facility in six Vessel Loans and all the Vessel Loans shall be in an aggregate amount not exceeding $385,227,495.

 

2.2                               Finance Parties’ rights and obligations

 

(a)                                 The obligations of each Finance Party under the Finance Documents are several and not joint.  Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

(b)                                 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

 

(c)                                  Except as otherwise provided in a Finance Document, a Finance Party may not separately sue for any Unpaid Sum due and payable to it or enforce any Security or any other right under a Finance Document.

 

2.3                               Borrower’s Agent

 

(a)                                 The Borrower by its execution of this Agreement irrevocably appoints the Parent Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorizes:

 

(i)                                     the Parent Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by the Borrower notwithstanding that they may affect the Borrower, without further reference to or the consent of the Borrower; and

 

(ii)                                  each Finance Party to give any notice, demand or other communication to the Borrower pursuant to the Finance Documents to the Parent Guarantor,

 

and in each case the Borrower shall be bound as though the Borrower itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

 

(b)                                 Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Parent Guarantor or given to the Parent Guarantor under any Finance Document on behalf of the Borrower or in connection with the Finance Document (whether or not known to the Borrower) shall be binding for all purposes on the Borrower as if the Borrower had expressly made, given or

 

42

 

concurred with it.  In the event of any conflict between any notices or other communications of the Parent Guarantor and the Borrower, those of the Parent Guarantor shall prevail.

 

3                                         PURPOSE

 

3.1                               Purpose

 

The Borrower shall apply all amounts borrowed by it under the Facility and in relation to each Vessel Loan only for the following purposes:

 

(a)                                 to re-finance the Bridging Facility;

 

(b)                                 to on-lend or contribute by way of equity to the Owner Guarantor of the Ship to which such Vessel Loan relates, to finance the payment of Delivery Instalment of that Ship to the relevant Seller or to reimburse the Parent Guarantor or any of its Subsidiaries for its payment of such Delivery Instalment;

 

(c)                                  to re-finance the funding of the Contract Price Instalments (other than the Delivery Instalment) of the relevant Ship; and

 

(d)                                 provided that the Parent Guarantor or any of its Subsidiaries has paid or has procured payment, in relation to a Ship, of an amount equivalent to the higher of (A) 32.5% of the Final Contract Price of that Ship and (B) the difference between the Final Contract Price of that Ship and 65% of the Fair Market Value of that Ship (where “Final Contract Price” means the lower of the Contract Price of that Ship and the Maximum Contract Price of that Ship), to be applied as directed by the Parent Guarantor to fund the Debt Service Reserve Account to the extent required by Clause 26.2 (Debt Service Reserve Account)),

 

provided that each Advance shall not exceed the amount of the Vessel Loan to which it relates.

 

3.2                               Monitoring

 

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

3.3                               Obligors and the Shipbuilding Contracts

 

(a)                                 Each Obligor’s obligations (including, without limitation, its payment obligations) under each Finance Document are not:

 

(i)                                     subject to or dependent upon the execution or performance by any Seller or any other person of its obligations under a Shipbuilding Contract (as applicable); and

 

(ii)                                  in any way affected, prejudiced, discharged or affected by reason of any matter affecting any Shipbuilding Contract and/or Seller,

 

and each Obligor hereby acknowledges that the foregoing is an essential condition of each Lender’s entry into this Agreement and the other Finance Documents.

 

(b)                                 Without prejudice to the generality of paragraph (a) above, each Obligor agrees that it will not claim to be relieved of the performance of any of its obligations under this Agreement or any other Finance Document by reason of any failure, delay or default whatsoever on the part of any Seller or any Obligor in the performance of its obligations under any Shipbuilding Contract.

 

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(c)                                  Each Obligor expressly acknowledges and agrees that its obligations under this Agreement and any other Finance Document are:

 

(i)                                     unconditional and irrevocable; and

 

(ii)                                  absolutely, totally and completely independent and separate from any other Obligor’s obligations under any Shipbuilding Contract,

 

and each Obligor undertakes irrevocably and unconditionally to pay any and all amounts under this Agreement and any other Finance Document when they fall due and shall not raise any defences or exercise any rights against any Finance Party that it may have against any Seller in respect of any Shipbuilding Contract.

 

4                                         CONDITIONS OF UTILISATION

 

4.1                               Initial conditions precedent

 

The Borrower may not deliver a Utilisation Request unless the Facility Agent has received or waived in accordance with Clause 4.4 (Waiver of conditions precedent), all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent.

 

4.2                               Further conditions precedent

 

The Lenders will be obliged to comply with Clause 5.4 (Lenders’ participation) only if:

 

(a)                                 on the date of the Utilisation Request and on the proposed Utilisation Date and before the Advance is made available:

 

(i)                                     no Event of Default is continuing or would result from the proposed Advance;

 

(ii)                                  no event which would result in an Material Adverse Effect has occurred or would result from the proposed Advance;

 

(iii)                               the Repeating Representations to be made by each Obligor are true and correct in all material respects (it being understood and agreed that such representations and warranties shall be deemed to have been made on each of the date of the Utilisation Request and the proposed Utilisation Date with reference to the facts and circumstances existing as at such dates, except to the extent that such representations and warranties specifically refer to an earlier date, in which they shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under Clause 18.7 (Financial statements; Financial Condition; Undisclosed Liabilities) which shall be made with reference to the latest financial statements provided under this Agreement and as at the last day of the financial period in relation to which such financial statements relate);

 

(iv)                              a Change of Control has not occurred;

 

(v)                                 no event described in paragraphs (a) to (d) of Clause 7.5 (Mandatory cancellation or prepayment on default under Shipbuilding Contract) has occurred in respect of the Ship or Seller or Shipbuilding Contract to which the Utilisation Request relates;

 

(vi)                              the provisions of paragraph (b) of Clause 10.2 (Market disruption) do not apply;

 

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(vii)                           the ECA Agent has not received any notice from Sinosure requesting the Lenders to suspend the making of any Advance and/or the Lenders are not required by the terms of any of the Sinosure Insurance Policies to suspend the making of any Advance; and

 

(viii)                        no occurrence, event or circumstances exist which prohibits any of the Lenders from participating in any Advance pursuant to the terms of any of the Sinosure Insurance Policies;

 

(b)                                 the Facility Agent and the ECA Agent have received on or before the relevant Utilisation Date, or is satisfied that it will receive when the Advance is made available all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent) in form and substance reasonably satisfactory to the Facility Agent to the extent such documents or other evidence have not been waived in accordance with Clause 4.4 (Waiver of conditions precedent).

 

4.3                               Notification of satisfaction of conditions precedent

 

(a)                                 The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).

 

(b)                                 Other than to the extent that the Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorize (but do not require) the Facility Agent to give that notification.  The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

 

4.4                               Waiver of conditions precedent

 

If the Lenders, at their discretion, permit an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrower shall ensure that such conditions are satisfied within five (5) Business Days after the relevant Utilisation Date or such later date as the Facility Agent, acting with the authorization of the Lenders, may agree in writing with the Borrower, provided that in connection with the prepositioning of funds pursuant to Clause 5.8 (Prepositioning of funds), the Facility Agent and the Lenders agree to suspend fulfillment of certain conditions precedent set forth in paragraphs of Part B of Schedule 2 (Conditions Precedent) (the “Closing CPs”) solely for the time period commencing on the Utilisation Date and ending on the relevant Delivery Date, and the Borrower acknowledges and agrees that fulfillment of the Closing CPs to the satisfaction of the Facility Agent (acting on the instructions of the Lenders) shall be required as a condition precedent to the countersignature by a representative of the Facility Agent of the protocol of delivery and acceptance relating to the relevant Ship referred to in paragraph (b)(ii) of Clause 5.8 (Prepositioning of funds).

 

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SECTION 3

 

UTILISATION

 

5                                         UTILISATION

 

5.1                               Delivery of a Utilisation Request

 

(a)                                 The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.

 

(b)                                 The Borrower may not deliver more than one Utilisation Request under each Vessel Loan.

 

5.2                               Completion of a Utilisation Request

 

(a)                                 Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(i)                                     the proposed Utilisation Date is a Business Day within the relevant Availability Period relating to the relevant Vessel Loan;

 

(ii)                                  the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

 

(iii)                               the proposed Interest Period complies with Clause 9 (Interest Periods).

 

(b)                                 Only one Advance may be requested in each Utilisation Request.

 

5.3                               Currency and amount

 

(a)                                 The currency specified in a Utilisation Request must be dollars.

 

(b)                                 The amount of the proposed Advance must be an amount which is not more than the relevant Vessel Loan and not more than the Maximum Contract Price.

 

(c)                                  The amount of the proposed Advance must be an amount which is not more than the Available Commitment of all Lenders in relation to the relevant Vessel Loan.

 

(d)                                 The amount of the proposed Advance must be an amount which would not oblige the Borrower or any other Obligor to provide additional security or prepay part of the Advance if the ratio set out in Clause 25 (Security Cover) were applied and notice was given by the Facility Agent under Clause 25.1 (Minimum required security cover) immediately after the Advance was made.

 

5.4                               Lenders’ participation

 

(a)                                 If the conditions set out in this Agreement have been met or waived in accordance with Clause 4.4 (Waiver of conditions precedent), each Lender shall make its Contribution in each Advance available by the Utilisation Date through its Facility Office.

 

(b)                                 The amount of each Lender’s Contribution in each Advance will be equal to the proportion borne by its Commitment in relation to the relevant Vessel Loan to the Commitments allocated in respect of such Vessel Loan immediately before making that Advance.

 

(c)                                  The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its Contribution in that Advance by the Specified Time.

 

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5.5                               Cancellation of Commitments

 

The Commitments allocated in respect of any Vessel Loan which are unutilised at the end of the Availability Period for such Vessel Loan shall then be cancelled at that time.

 

5.6                               Payment to third parties

 

The Facility Agent shall, on each Utilisation Date, pay to, or for the account of, the Borrower the amounts which the Facility Agent receives from the Lenders in respect of that Advance.  That payment shall be made in like funds as the Facility Agent received from the Lenders in respect of each Advance to the account of the Seller and/or such other account which the Borrower specifies in the relevant Utilisation Request.

 

5.7                               Disbursement of Advance to third party

 

A payment by the Facility Agent as directed by the Borrower under Clause 5.6 (Payment to third parties) to a person other than the Borrower shall constitute the making of the relevant Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender’s Contribution in that Advance.

 

5.8                               Prepositioning of funds

 

If the Lenders, at the request of the Borrower and on terms acceptable to all the Lenders and in their absolute discretion, agree to preposition funds with any bank for the purposes of any Utilisation of an Advance (such date, the “Preposition Date”):

 

(a)                                 each Lender agrees to fund its Contribution in such Advance on a day not more than three Business Days prior to the Delivery Date of the Ship to which that Advance relates;

 

(b)                                 on the relevant Preposition Date, the Facility Agent shall:

 

(i)                                     preposition an amount equal to the Delivery Instalment of the relevant Ship at a bank or other financial institution acceptable to the Facility Agent and the Required Lenders (where such acceptable bank shall include, for the avoidance of doubt, the Bank of China and/or the Industrial and Commercial Bank of China) (a “Seller’s Bank”) as directed by the Borrower in the relevant Utilisation Request and satisfactory to the Facility Agent (acting on instructions of the Required Lenders), which funds shall be held at the relevant Seller’s Bank in the name and under the sole control of the Facility Agent; and

 

(ii)                                  issue a SWIFT MT 199 or other similar communication in the form attached as Schedule 16 (Form of MT 199) of this Agreement or such other form and substance acceptable to the Facility Agent (acting on instructions of the Required Lenders) (each such communication, a “Disbursement Authorization”) authorizing the release of such funds by the relevant Seller’s Bank on the relevant Delivery Date upon receipt of a protocol of delivery and acceptance in respect of such Ship duly executed by the relevant Seller and the relevant Owner Guarantor or its Affiliates and countersigned by a representative of the Facility Agent;

 

(c)                                  the date on which the Lenders fund the relevant Advance constitutes the Utilisation Date in respect of such Advance and the Borrower agrees to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 (Calculation of interest) and so that interest shall be paid together with the first payment of interest on such Advance after the Utilisation Date in respect of it or, if such Utilisation Date does not occur, within three Business Days of demand by the Facility Agent;

 

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(d)                                 from the date the proceeds of the relevant Advance are deposited at the relevant Seller’s Bank to the relevant Delivery Date (or, if delivery of the relevant Ship does not occur within five (5) Business Days (or such other period as agreed by the Required Lenders) of the Delivery Date specified in the relevant Disbursement Authorization, the date on which the funds are returned to the Facility Agent for redistribution to the Lenders), the Borrower shall be entitled to interest on such Advance at the applicable rate, if any, paid by such Seller’s Bank for such deposited funds;

 

(e)                                  if the relevant Ship is not delivered five (5) Business Days (or such other period as agreed by the Required Lenders) of the Delivery Date specified in the relevant Disbursement Authorization and the proceeds of the relevant Advance are returned to the Facility Agent and redistributed to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Facility Agent and (ii) the Available Commitment of the relevant Vessel Loan of all Lenders will be increased by an amount equal to the aggregate principal amount of the Utilised Advance so returned; and

 

(f)                                   the Borrower and the Parent Guarantor shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may incur in connection with such prepositioning of funds arrangement (other than by reason of gross negligence or willful misconduct of any Finance Party).

 

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SECTION 4

 

REPAYMENT, PREPAYMENT AND CANCELLATION

 

6                                         REPAYMENT

 

6.1                               Repayment of Loan

 

The Borrower shall repay each Vessel Loan by equal consecutive quarterly instalments, each in an amount equal to 1 and 2/3 percent of such Vessel Loan (each, a “Repayment Instalment”) on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such Vessel Loan.  On the Termination Date of each Vessel Loan, the Borrower shall additionally repay the amount of the relevant Balloon Repayment relating to such Vessel Loan.

 

6.2                               Termination Date

 

On each Termination Date, the Borrower shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.

 

6.3                               [Intentionally deleted.]

 

6.4                               Re-borrowing

 

The Borrower may not re-borrow any part of the Facility which is repaid.

 

7                                         PREPAYMENT AND CANCELLATION

 

7.1                               Illegality

 

(a)                                 If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its Contribution in an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

 

(i)                                     that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

 

(ii)                                  upon the Facility Agent notifying the Borrower, the Available Commitment in respect of any Vessel Loan of that Lender will be immediately cancelled; and

 

(iii)                               the Borrower shall prepay that Lender’s Contribution in any Vessel Loan on the last day of the Interest Period for such Vessel Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation prepaid.

 

(b)                                 Any partial prepayment under this Clause 7.1 (Illegality) shall reduce pro rata for each Vessel Loan the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.

 

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7.2                               Change of control

 

If a Change of Control occurs:

 

(a)                                 the Parent Guarantor or the Borrower shall promptly notify the Facility Agent upon becoming aware of that event; and

 

(b)                                 if the Required Lenders so require, the Facility Agent shall, by not less than ten Business Days’ notice to the Borrower, cancel the Facility and declare the Loan outstanding, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all outstanding Loan and amounts will become immediately due and payable.

 

7.3                               Voluntary and automatic cancellation

 

(a)                                 The Borrower may, if it gives the Facility Agent not less than ten (10) Business Days’ prior notice, and upon payment of all relevant fees in respect of such prepayment (including without limitation, the relevant CEXIM Prepayment Fee payable under Clause 11.4 (CEXIM Prepayment Fee) in the case of CEXIM’s Contribution), cancel the whole or any part (being a minimum amount of $5,000,000, unless the cancelled amount relates solely to amounts which had been allocated for payment of Contingent Extras) of the Available Facility.

 

(b)                                 Any cancellation of a Vessel Loan under this Clause shall reduce the Commitments of the relevant Lenders and the amount of that Vessel Loan then unutilised pro rata.

 

(c)                                  The unutilised Commitment (if any) of each Lender in respect of a Vessel Loan shall be automatically cancelled at close of business on the last day of the Availability Period of that Vessel Loan.

 

7.4                               Voluntary prepayment of Loan

 

(a)                                 The Borrower may, if it gives the Facility Agent and the ECA Agent not less than ten (10) Business Days’ (or such shorter period as the Required Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $5,000,000).

 

(b)                                 Any partial prepayment of a Vessel Loan under this Clause 7.4 (Voluntary prepayment of Loan) shall reduce in inverse chronological order the amount of each Repayment Instalment and the Balloon Repayment falling after that prepayment by the amount prepaid or such other manner as the Lenders may otherwise agree.

 

7.5                               Mandatory cancellation or prepayment on default under Shipbuilding Contract

 

If, in relation to a Ship:

 

(a)                                 any of the events specified in Clause 27.7 (Insolvency Event) occurs in relation to the relevant Seller; or

 

(b)                                 a party to the Shipbuilding Contract relating to that Ship cancels, rescinds, assigns, novates or terminates such Shipbuilding Contract or such Shipbuilding Contract otherwise ceases to remain in full force and effect for any reason; or

 

(c)                                  such Ship has not been delivered to, and accepted by, the relevant Owner Guarantor which either is a party to the Shipbuilding Contract relating to that Ship to receive the Ship, by the last day of the Availability Period of the Vessel Loan relating to that Ship; or

 

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(d)                                 the relevant Owner Guarantor or its Affiliate which is a party to that Shipbuilding Contract ceases to be the sole legal and beneficial owner of all the rights of the buyer under such Shipbuilding Contract,

 

then:

 

(i)                                     the Borrower shall promptly notify the Facility Agent; and

 

(ii)                                  if the Required Lenders so require, the Facility Agent shall cancel the Vessel Loan relating to that Ship and declare such Vessel Loan, together with interest accrued on it, and all other amounts relating to it and accrued under the Finance Documents immediately due and payable, whereupon such Vessel Loan will be cancelled and all such outstanding amounts relating thereto will become immediately due and payable.

 

7.6                               Mandatory prepayment on sale or Total Loss

 

(a)                                 If a Ship is sold, or becomes a Total Loss, the Borrower shall on the Relevant Date prepay the Vessel Loan applicable to that Ship.

 

(b)                                 On the Relevant Date, the Borrower shall also prepay such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25.1 (Minimum required security cover) were applied immediately following the payment referred to in paragraph (a) above.

 

(c)                                  In this Clause 7.6 (Mandatory prepayment on sale or Total Loss):

 

“Relevant Date” means:

 

(i)                                     in the case of a sale of a Ship, on the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and

 

(ii)                                  in the case of a Total Loss of a Ship, on the earlier of:

 

(A)                               the date falling 120 days after the Total Loss Date; and

 

(B)                               the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss.

 

7.7                               Termination etc. of Sinosure Insurance Policies

 

If at any time, in relation to an Advance, the relevant Sinosure Insurance Policy is cancelled, unenforceable, suspended, invalid or terminated (whether in whole or in part) while any amounts remain outstanding in relation to such Advance, the Facility Agent shall immediately cancel the Commitments relating to that Advance and declare that such Advance be payable on demand.

 

7.8                               Right of replacement and repayment and cancellation in relation to a single Lender

 

(a)                                 If:

 

(i)                                     any sum payable to any Lender by a Transaction Obligor is required to be increased under Clause 12.2 (Tax gross-up) or under that clause as incorporated by reference or in full in any other Finance Document; or

 

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(ii)                                  any Lender claims indemnification from the Borrower under Clause 12.2 (Tax gross-up) or Clause 13.1 (Increased costs);

 

the Borrower may during, in the case of sub-paragraphs (i) and (ii) above, the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and/or its intention to procure the repayment of that Lender’s Contribution in the Loan and give the Facility Agent notice of its intention to replace that Lender in accordance with paragraph (e) below.

 

(b)                                 On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

 

(c)                                  On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender’s Contribution in the Loan; provided that unless all Commitments have been utilised hereunder, the Borrower shall be required to replace such repaid Lender in accordance with paragraphs (e) and (f) below.

 

(d)                                 Any partial prepayment under this Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender) shall reduce pro rata the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.

 

(e)                                  The Borrower may, in the circumstances set out in paragraph (a) above and shall, under paragraph (c) above, if required), on thirty (30) Business Days’ prior notice to the Facility Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 28 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender’s Contribution in the Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.

 

(f)                                   The replacement of a Lender pursuant to paragraph (e) above shall be subject to the following conditions:

 

(i)                                     the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of a Servicing Party;

 

(ii)                                  the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of CEXIM acting in its capacity as a Lender;

 

(iii)                               neither the Facility Agent nor any Lender shall have any obligation to find a replacement Lender;

 

(iv)                              in no event shall the Lender replaced under paragraph (e) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents;

 

(v)                                 the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (e) above once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer; and

 

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(vi)                              the proposed replacement Lender may not be an affiliate or a subsidiary of the Parent Guarantor.

 

(g)                                  A Lender shall perform the checks described in sub-paragraph (v) of paragraph (f) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (e)above and shall notify the Facility Agent and the Borrower when it is satisfied that it has complied with those checks.

 

7.9                               Restrictions

 

(a)                                 Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

(b)                                 Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and amounts (if any) payable under the Hedging Agreements in connection with that prepayment and, subject to the fee provided for in Clause 11.4 (CEXIM Prepayment Fee) and any Break Costs, without premium or penalty.

 

(c)                                  The Borrower may not re-borrow any part of the Facility which is prepaid.

 

(d)                                 The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

(e)                                  No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

(f)                                   If the Facility Agent receives a notice under this Clause 7 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to the Borrower or the affected Lenders and/or Hedge Counterparties, as appropriate.

 

7.10                        Refund of Sinosure Premium on voluntary prepayment

 

(a)                                 The Borrower may, upon any voluntary prepayment of the Loan (whether in whole or in part) in accordance with Clause 7.4 (Voluntary prepayment of Loan), request the ECA Agent to seek a refund from Sinosure of such portion of the Sinosure Premium paid by the Borrower in respect of the Advance prepaid pursuant to the terms of this Agreement.

 

(b)                                 In the event that Sinosure (in its absolute discretion) consents to such request and refunds such portion of the Sinosure Premium (which shall be determined and calculated by Sinosure pursuant to the terms of the relevant Sinosure Insurance Policy and Sinosure’s own internal regulations) to the Facility Agent, the Facility Agent shall remit such refund to the Borrower in accordance with Clause 36 (Payment Mechanics).

 

(c)                                  Sinosure retains the right to refuse a request by the Borrower of a refund of the Sinosure Premium in respect of an Advance once the relevant Advance is made and shall not be obliged to give any reason for such refusal, and nothing shall oblige the Facility Agent or the ECA Agent to take any further action if Sinosure refuses or fails for whatever reason to refund any portion of the Sinosure Premium once such premium is paid.

 

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SECTION 5

 

COSTS OF UTILISATION

 

8                                         INTEREST

 

8.1                               Calculation of interest

 

The rate of interest on an Advance, the Loan, any part of the Loan or any Unpaid Sum for each Interest Period is the percentage rate per annum which is the aggregate of:

 

(a)                                 the Margin; and

 

(b)                                 LIBOR.

 

8.2                               Payment of interest

 

(a)                                 The Borrower shall pay accrued interest on each Advance, the Loan or any part of the Loan on each Repayment Date.

 

(b)                                 If an Interest Period is longer than three Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the next occurring Repayment Date.

 

8.3                               Default interest

 

(a)                                 If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Agreement) on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two percent per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent.  Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Obligor on demand by the Facility Agent.

 

(b)                                 If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:

 

(i)                                     the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

 

(ii)                                  the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two percent per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

 

(c)                                  Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

 

8.4                               Notification of rates of interest

 

The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

 

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8.5                               Hedging

 

(a)                                 The Borrower or the Parent Guarantor may, but (subject to Clause 8.6 (Hedging - First right to bid and Non-Lender Hedging Agreements) is not obliged to, enter into Hedging Agreements from time to time, and shall after the relevant date of entry into such Hedging Agreements maintain such Hedging Agreements in accordance with this Clause 8.5 (Hedging).

 

(b)                                 Each Hedging Agreement (and where applicable, each hedging transaction under such Hedging Agreement) shall:

 

(i)                                     be for a term ending on or prior to the relevant Termination Date in respect of each Vessel Loan;

 

(ii)                                  have settlement dates coinciding with the Repayment Dates;

 

(iii)                               be in agreed form;

 

(iv)                              provide for two-way payments in the event of a termination of a transaction in respect of a Hedging Agreement, whether on a Termination Event (as defined in the relevant Hedging Agreement) or on an Event of Default (as defined in the relevant Hedging Agreement); and

 

(v)                                 provide that the Termination Currency (as defined in the relevant Hedging Agreement) shall be dollars.

 

(c)                                  The rights of the Borrower or the Parent Guarantor (as the case may be) under the Hedging Agreements shall be assigned by way of security under an Assignment of Hedging Agreement.

 

(d)                                 The parties to each Hedging Agreement must comply with the terms of that Hedging Agreement.

 

(e)                                  For so long as an Event of Default has occurred and is continuing, neither a Hedge Counterparty nor the Borrower may amend, supplement, extend or waive the terms of any Hedging Agreement without the consent of the Facility Agent (such consent not to be unreasonably withheld).

 

(f)                                   Paragraph (e) above shall not apply to an amendment, supplement or waiver that is administrative and mechanical in nature and does not give rise to a conflict with any provision of this Agreement.

 

(g)                                  If, at any time, the aggregate notional principal amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed the Loan at that time, the Borrower or the Parent Guarantor (as the case may be) must promptly notify the Facility Agent and must, at the request of the Facility Agent, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Facility Agent so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.

 

(h)                                 Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (g) above will be apportioned as between those transactions pro rata.

 

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(i)                                     Paragraph (g) above shall not apply to any transactions in respect of any Hedging Agreement under which the Borrower or the Parent Guarantor (as the case may be) does not have any actual or contingent indebtedness.

 

(j)                                    Subject to paragraph (k) below, neither a Hedge Counterparty nor the Borrower or the Parent Guarantor (as the case may be) may terminate or close out any transactions in respect of any Hedging Agreement (in whole or in part) except:

 

(i)                                     in accordance with paragraph (g) above,

 

(ii)                                  on the occurrence of an Illegality (as such expression is defined in the relevant Hedging Agreement);

 

(iii)                               if the Facility Agent serves notice or having served notice, makes a demand under Clause 27.20 (Acceleration);

 

(iv)                              with the consent of the Facility Agent (acting on instructions of the Required Lenders) if an Event of Default has occurred; or

 

(v)                                 If the Secured Liabilities (other than in respect of the Hedging Agreements) have been irrevocably and unconditionally paid and discharged in full;

 

(k)                                 If a Hedge Counterparty is entitled to terminate or close out any transaction in respect of any Hedging Agreement under sub-paragraph (iii) of paragraph (j) above, such Hedge Counterparty shall promptly terminate or close out such transaction following a request to do so by the Security Agent.

 

(l)                                     A Hedge Counterparty may only suspend making payments under a transaction in respect of a Hedging Agreement if the Borrower or the Parent Guarantor (as the case may be) is in breach of its payment obligations under any transaction in respect of that Hedging Agreement.

 

(m)                             Each Hedge Counterparty consents to, and acknowledges notices of, the assigning by way of security by the Borrower or the Parent Guarantor (as the case may be) pursuant to the relevant Assignment of Hedging Agreement of its rights under the Hedging Agreements to which it is party in favour of the Security Agent.

 

(n)                                 Any such assigning by way of security is without prejudice to, and after giving effect to, the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.

 

(o)                                 Neither the Security Agent nor any other Finance Party shall be liable for or have any obligation in respect of the performance of any of the Borrower’s or as the case may be, the Parent Guarantor’s obligations under a Hedging Agreement.

 

8.6                               Hedging - First right to bid and Non-Lender Hedging Agreements

 

(a)                                 Each of the Borrower and the Parent Guarantor undertakes with the Lenders and the Hedge Counterparties, that in the event the Borrower or the Parent Guarantor (as the case may be), intends to enter into hedging transactions or agreements for the purpose of hedging against the interest rate in connection with this Agreement, it shall provide the Lenders and the Hedge Counterparties with the first right to bid in relation to such potential hedging transactions or agreements, before it concludes the same with a Non-Lender.

 

(b)                                 The Borrower or the Parent Guarantor may only enter into a Non-Lender Hedging Agreement pursuant to this Clause on condition that such Non-Lender does not share in any

 

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Security provided under the Finance Documents and that no Security shall be granted by any Obligor in respect of the Borrower’s or as the case may be, the Parent Guarantor’s obligations to a Non-Lender under such Non-Lender Hedging Agreement.

 

9                                         INTEREST PERIODS

 

9.1                               Interest Periods

 

(a)                                 Each Interest Period relating to a Vessel Loan will, subject to paragraphs (d) and (e) below, be three Months.

 

(b)                                 An Interest Period relating to a Vessel Loan shall not extend beyond the Termination Date relating to such Vessel Loan and shall instead end on such Termination Date.

 

(c)                                  In respect of a Repayment Instalment, an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it if such date is before the end of the Interest Period then current.

 

(d)                                 Subject to paragraph (e) below, the first Interest Period for the Loan shall start on the first Utilisation Date and each subsequent Interest Period in respect of the Loan shall start on the last day of the preceding Interest Period in respect of the Loan.

 

(e)                                  The first Interest Period for the second and any subsequent Advance shall start on the Utilisation Date of such Advance and end on the last day of the prevailing Interest Period applicable to the Loan.

 

(f)                                   Except for the purposes of paragraph (d) and paragraph (e) above, the Loan shall have one Interest Period at any time.

 

9.2                               Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

10                                  CHANGES TO THE CALCULATION OF INTEREST

 

10.1                        Unavailability of Screen Rate

 

(a)                                 If no Screen Rate is available for LIBOR for:

 

(i)                                     dollars; or

 

(ii)                                  the Interest Period of an Advance, the Loan, any part of the Loan or any Unpaid Sum,

 

there shall be no LIBOR for that Advance, the Loan, that part of the Loan or that Unpaid Sum and Clause 10.3 (Cost of funds) shall apply to that Advance, the Loan, that part of the Loan or that Unpaid Sum for that Interest Period.

 

10.2                        Market disruption

 

(a)                                 If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose Contribution in the relevant Advance or the Loan exceed fifty percent of the relevant Advance or the Loan as appropriate) (the “Relevant Lender(s)”) that the cost to it of funding its Contribution in that

 

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Advance or the Loan from whatever source it may reasonably select would be in excess of the LIBOR for such Interest Period, then Clause 10.3 (Costs of funds) shall apply to that Advance or the Loan (as applicable) for that Interest Period.

 

(b)                                 If, at least one (1) Business Day before the start of an Interest Period, the Facility Agent receives notification from the Relevant Lender(s) (the “Affected Lender(s)”) that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund its Contribution in an Advance, each such Affected Lender’s obligation to make that Advance shall be suspended while that situation continues.

 

10.3                        Cost of funds

 

(a)                                 If this Clause 10.3 (Cost of funds) applies, the rate of interest on a Lender’s share of an Advance, the Loan, any part of the Loan or any Unpaid Sum for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

(i)                                     the relevant Margin; and

 

(ii)                                  the rate notified to the Facility Agent by that Lender as soon as practicable before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the actual cost to the relevant Lender of funding its Contribution in that Advance, the Loan, that part of the Loan or that Unpaid Sum from whatever source it may reasonably select.

 

(b)                                 If this Clause 10.3 (Cost of funds) applies and the Facility Agent or the Borrower so require, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

 

(c)                                  Any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

 

10.4                        Break Costs

 

(a)                                 The Borrower shall, within three Business Days of demand by a Finance Party (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation, provided that no Finance Party shall be required to disclose any information that would be confidential or price sensitive), pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

 

11                                  FEES AND SINOSURE PREMIUM

 

11.1                        Commitment fee

 

(a)                                 The Borrower shall pay to the Facility Agent (for the account of each relevant Lender), in respect of each Vessel Loan, a fee computed at the rate of 40 percent of the Margin per annum on such Lender’s Available Commitment for that Vessel Loan for the period commencing from either (i) the date of this Agreement (in the case of Ship A, Ship B, Ship C and Ship D) and (ii) the date of the Amending and Restating Deed (in the case of Ship E and Ship F), and up to and including, the last day of the Availability Period relating to such Vessel Loan.

 

(b)                                 The accrued commitment fee payable in respect of each Vessel Loan is payable on each Fiscal Quarter Date which ends during the Availability Period of such Vessel

 

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Loan, on the last day of such Availability Period and, if cancelled, on the cancelled amount of each Lender’s Commitment of such Vessel Loan, at the time the cancellation is effective, provided that it is hereby agreed that the first payment of such commitment fee of a Vessel Loan in respect of Ship A, Ship B, Ship C or Ship D shall be payable on the Utilisation Date of such Vessel Loan.

 

11.2                        Upfront fee

 

The Borrower shall pay to the ECA Agent (for the account of each Lender), an upfront fee in the amount and at the times agreed in a Fee Letter.

 

11.3                        Facility Agent fee

 

The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

 

11.4                        CEXIM Prepayment Fee

 

(a)                                 Subject to paragraph (b) below, in the case of a voluntary prepayment pursuant to Clause 7.4 (Voluntary prepayment of Loan), the Borrower must pay to the Facility Agent for the account of CEXIM, the CEXIM Prepayment Fee on the date of prepayment of CEXIM’s Contribution.

 

(b)                                 No fee shall be payable under this Clause if the prepayment is made:

 

(i)                                     after the first 24 Months of the Utilisation of such Vessel Loan;

 

(ii)                                  under Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender); or

 

(iii)                               under Clause 25 (Security cover).

 

11.5                        [Intentionally deleted]

 

11.6                        Sinosure Premium

 

The Borrower shall pay Sinosure the Sinosure Premium for each Vessel Loan in the amount notified in writing to the Borrower by Sinosure on or prior to the Utilisation of the relevant Advance.

 

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SECTION 6

 

ADDITIONAL PAYMENT OBLIGATIONS

 

12                                  TAX GROSS UP AND INDEMNITIES; FATCA

 

12.1                        [Intentionally left blank]

 

12.2                        Tax gross-up

 

(a)                                 All payments made by any Obligor hereunder or under any Finance Document (other than a Hedging Agreement) will be made without setoff, counterclaim or other defence. All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law. If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Finance Document, then:

 

(i)                                     the Borrower shall be entitled to make such deduction or withholding,

 

(ii)                                  the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority and

 

(iii)                               in the case of any Indemnified Taxes, the Borrower agrees to pay the full amount of such Indemnified Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Finance Document, after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein or in such Finance Document.

 

The Borrower shall indemnify each Finance Party, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by such Finance Party or required to be withheld or deducted from a payment to such Finance Party, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Finance Party (with a copy to the Facility Agent), or by the Facility Agent on its own behalf or on behalf of a Finance Party, shall be conclusive absent manifest error. In the event the Borrower pays amounts deducted and withheld to the relevant taxing authority in respect of Indemnified Taxes, the Borrower will furnish to the Facility Agent within forty-five (45) days after the date of payment of any Indemnified Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower.  The Borrower agrees to indemnify and hold harmless each Finance Party, and reimburse such Finance Party upon its written request, for the amount of any Indemnified Taxes so levied or imposed and paid by such Finance Party.

 

(b)                                 Without duplicating the payments under paragraph (a) above, the Borrower agrees to pay any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Finance Document excluding such amounts imposed in connection with an Assignment Agreement, a Transfer Certificate, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Finance Document, except to the extent that any such change is requested in writing by a Borrower (all such non-excluded Taxes described in this paragraph (b) of Clause 12.2 (Tax gross-up) being referred to as “Other Taxes”).

 

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(c)                                  Any Finance Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Finance Document shall deliver to the Borrower and the Facility Agent, at the time or times reasonably requested by the Borrower or the Facility Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Facility Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Finance Party, if reasonably requested by the Borrower or the Facility Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Facility Agent as will enable the Borrower or the Facility Agent to determine whether or not such Finance Party is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Finance Party’s reasonable judgment such completion, execution or submission would subject such Finance Party to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Finance Party.

 

(d)                                 If the Facility Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by an Obligor or with respect to which such Obligor has paid additional amounts pursuant to Clause 12.2(a) (Tax Gross-up), it shall pay over such refund to such Obligor (but only to the extent of indemnity payments made, or additional amounts paid, by such Obligor under Clause 12.2(a) (Tax Gross-up) with respect to the Indemnified Taxes or payments of Other Taxes pursuant to Clause 12.2(a) (Tax Gross-up) giving rise to such refund), net of all reasonable out-of-pocket expenses of the Facility Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Facility Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  In the event the Facility Agent or such Lender is required to repay such refund to such Governmental Authority, then such Obligor, upon the written request of the Facility Agent or such Lender, agrees to promptly repay the amount paid over to such Obligor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, but without any other interest, penalties or charges) to the Facility Agent or such Lender.  Nothing in this Clause 12.2(d) (Tax Gross-up) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).

 

(e)                                  Each Party shall, within ten Business Days of a reasonable request by another Party:

 

(i)                                     confirm to that other Party whether or not it would be subject to withholding Tax imposed by FATCA if such Party were to fail to comply with the applicable reporting requirements of FATCA; and

 

(ii)                                  supply to that other Party such forms (including U.S. Internal Revenue Service Forms W-8 or W-9), documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA.

 

If a Party confirms to another Party pursuant to the foregoing that it would not be subject to withholding Tax imposed by FATCA or provides a U.S. Internal Revenue Service Form W-8 or W-9 and it subsequently becomes aware that it may be subject to withholding Tax imposed by FATCA or that the Form has ceased to be accurate or valid, that Party shall notify that other Party reasonably promptly or provide a revised Form, respectively.

 

Without duplication of the foregoing, if a payment made to a Lender under any Finance Document would be subject to withholding Tax imposed by FATCA if such Lender were to fail

 

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to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Facility Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Facility Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Facility Agent as may be necessary for the Borrower and the Facility Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Each Party may make any deduction it is required to make by FATCA, and any payment required in connection with that FATCA deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA deduction or otherwise compensate the recipient of the payment for that FATCA deduction. Each Party shall promptly, upon becoming aware that it must make a deduction under FATCA (or that there is any change in the rate or the basis of such FATCA deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

 

(f)                                   Each Lender shall severally indemnify the Facility Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Facility Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Borrower to do so) and (ii) any Taxes excluded in Clause 12.2(a) (Tax Gross-up) attributable to such Lender, in each case, that are payable or paid by the Facility Agent in connection with any Finance Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Facility Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Facility Agent to set off and apply any and all amounts at any time owing to such Lender under any Finance Document (other than a Hedging Agreement) or otherwise payable by the Facility Agent to the Lender from any other source against any amount due to the Facility Agent under this paragraph (f).

 

(g)                                  Each Party’s obligations under this Clause 12.2(Tax Gross-up) shall survive the resignation or replacement of the Facility Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Finance Document.

 

12.3                        [Intentionally left blank]

 

12.4                        [Intentionally left blank]

 

12.5                        VAT

 

(a)                                 All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

 

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(b)                                 If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

(i)                                     (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

(ii)                                  (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

(c)                                  Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

(d)                                 In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.

 

13                                  INCREASED COSTS

 

13.1                        Increased costs

 

(a)                                 Subject to Clause 13.3 (Exceptions), the Borrower shall, within three Business Days of written demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

 

(i)                                     the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

 

(ii)                                  compliance with any law or regulation made,

 

after the date of this Agreement.  Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) Basel III, and all requests, rules, regulations, guidelines and directives promulgated pursuant to the foregoing, are deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.

 

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(b)                                 In this Agreement, “Increased Costs” means:

 

(i)                                     a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

 

(ii)                                  an additional or increased cost; or

 

(iii)                               a reduction of any amount due and payable under any Finance Document,

 

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

 

13.2                        Increased cost claims

 

(a)                                 A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower (and such notification shall, to the extent commercially practicable, contain reasonable details of the calculation for such additional amounts).

 

(b)                                 Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.

 

13.3                        Exceptions

 

Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

 

(a)                                 attributable to an Excluded Tax or a change in the rate of tax on the overall net income of a Finance Party;

 

(b)                                 compensated for by Clause 12.2 (Tax gross-up)

 

(c)                                  compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost);

 

(d)                                 attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;

 

(e)                                  incurred by a Hedge Counterparty in its capacity as such; or

 

(f)                                   attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

 

14                                  OTHER INDEMNITIES

 

14.1                        Currency indemnity

 

(a)                                 If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the

 

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“Second Currency”) for the purpose of:

 

(i)                                     making or filing a claim or proof against that Obligor; or

 

(ii)                                  obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall, as an independent obligation, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

(b)                                 Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

(c)                                  This Clause 14.1 (Currency indemnity) does not apply to any sum due to a Hedge Counterparty in its capacity as such.

 

14.2                        Other indemnities

 

(a)                                 Each Obligor shall, upon written request, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:

 

(i)                                     the occurrence of any Event of Default;

 

(ii)                                  a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 35 (Sharing among the Finance Parties);

 

(iii)                               funding, or making arrangements to fund, its Contribution in an Advance requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Secured Party alone); or

 

(iv)                              the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

 

(b)                                 Each Obligor shall, on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an “Indemnified Person”), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory inquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents (other than a Hedging Agreement), having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or willful misconduct of that Indemnified Person.

 

(c)                                  Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

 

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(i)                                     arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or

 

(ii)                                  in connection with any Environmental Claim.

 

(d)                                 Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 (Other indemnities) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

 

(e)                                  Notwithstanding the foregoing, this Clause 14.2 (Other indemnities) shall not cover the types of costs, loss or liability covered by Clause 10.2 (Market disruption), Clause 12 (Tax gross-up and indemnities, FATCA), Clause 13 (Increased costs), Clause 16 (Costs and expenses) and the other provisions of this Clause 14 (Other indemnities).

 

14.3                        Mandatory Cost

 

Each Obligor shall, on demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:

 

(a)                                 in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and

 

(b)                                 in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the U.K. Financial Conduct Authority and/or the U.K. Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),

 

which, in each case, is referable to that Lender’s Contribution in the Loan.

 

14.4                        Indemnity to the Facility Agent

 

Each Obligor shall, on demand, jointly and severally indemnify the Facility Agent against:

 

(a)                                 any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

 

(i)                                     investigating any event which it reasonably believes is a Default; or

 

(ii)                                  acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized; or

 

(iii)                               instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement ); and

 

(b)                                 any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents (other than a Hedging Agreement).

 

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14.5                        Indemnity to the Security Agent

 

(a)                                 Each Obligor shall, on demand, jointly and severally indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:

 

(i)                                     in relation to or as a result of:

 

(A)                               any failure by the Borrower to comply with its obligations under Clause 16 (Costs and Expenses);

 

(B)                               acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized;

 

(C)                               the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;

 

(D)                               the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents (other than a Hedging Agreement) or by law;

 

(E)                                any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents (other than a Hedging Agreement);

 

(F)                                 any action by any Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and

 

(G)                               instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement).

 

(ii)                                  acting as Security Agent, Receiver or Delegate under the Finance Documents (other than a Hedging Agreement) or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (other than a Hedging Agreement) (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

 

(b)                                 The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

 

15                                  MITIGATION BY THE FINANCE PARTIES

 

15.1                        Mitigation

 

(a)                                 Each Finance Party shall, in consultation with the Borrower, take all commercially reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities; FATCA), Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) transferring its rights and obligations under the Finance Documents (other than a Hedging Agreement) to another Affiliate or Facility Office.

 

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(b)                                 Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

15.2                        Limitation of liability

 

(a)                                 Each Obligor shall, on demand, jointly and severally indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

 

(b)                                 A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if either:

 

(i)            a Default has occurred and is continuing; or

 

(ii)           in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it in any economic, legal or regulatory respect.

 

15.3                        Defaulting Lender

 

(a)                                 Notwithstanding any other provision in this Agreement to the contrary, if at any time a Lender becomes a Defaulting Lender, so long as such Lender is a Defaulting Lender, fees pursuant to Clause 11.1 (Commitment fee) shall cease to accrue on such Defaulting Lender’s unused Commitment until such time as such Lender is no longer a Defaulting Lender, at which time fees pursuant to Clause 11.1 (Commitment fee) shall resume to accrue and be payable in accordance with Clause 11.1 (Commitment fee).

 

(b)                                 Each Defaulting Lender shall indemnify the Borrower, the Facility Agent and each Non-Defaulting Lender from and against any and all loss, damage or expenses, including but not limited to reasonable legal fees and, in the case of the Facility Agent or any Non-Defaulting Lender, funds (if any) advanced by the Facility Agent or by any Non-Defaulting Lender, on account of such Defaulting Lender’s failure to timely fund its applicable Commitment of an Advance or to otherwise perform its obligations under the Finance Documents (other than a Hedging Agreement).

 

(c)                                  In the event that the Facility Agent and the Borrower agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Contribution of the Lenders in the Loan shall be readjusted to reflect the inclusion of such Lender’s Contribution in the Loan and on such date such Lender shall purchase at par such of the Loan or Contribution therein of the other Lenders as the Facility Agent shall determine may be necessary in order for such Lender to hold its pro rata share of the Contribution in the Loan and/or the Commitments.

 

(d)                                 At any time during a Default Period, the Borrower may, upon three (3) Business Days prior notice to the applicable Defaulting Lender (so long as such Default Period remains in effect at the end of such notice period), require such Defaulting Lender to assign all right, title and interest that it may have in, and its Contribution in the Loan and any other obligations of the Borrower under this Agreement and the Finance Documents to another Lender (if another Lender will consent to purchase such right, title and interest and participations) or another Person in accordance with and subject to the terms of Clause 28 (Changes to the Lenders) of this Agreement, if such Person can be found by the Borrower, for a purchase price equal to 100% of the principal amount of Contribution in the Loan plus the amount of any interest and fees accrued and owing to such Defaulting Lender as of the date of such assignment.

 

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16                                  COSTS AND EXPENSES

 

16.1                        Transaction expenses

 

The Obligors shall, jointly and severally on demand, pay the Facility Agent, the Security Agent, the ECA Agent (for the account of Sinosure) and the Mandated Lead Arrangers the amount of all documented costs and expenses (including reasonable legal fees) reasonably incurred by any Secured Party and/or Sinosure in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

 

(a)                                 this Agreement and any other documents referred to in this Agreement;

 

(b)                                 the Transaction Security;

 

(c)                                  each of the Sinosure Insurance Policies and any other documents which may at any time be required by Sinosure to give effect to the terms of any Sinosure Insurance Policy or which Sinosure is entitled to call for or obtain pursuant to the terms of any Sinosure Insurance Policy; and

 

(d)                                 any other Finance Documents executed after the date of this Agreement.

 

16.2                        Amendment costs

 

If:

 

(a)                                 an Obligor requests an amendment, waiver or consent; or

 

(b)                                 an amendment is required pursuant to Clause 36.9 (Change of currency); or

 

(c)                                  an Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,

 

the Obligors shall, jointly and severally on demand, reimburse each of the Facility Agent, the ECA Agent (for the account of Sinosure)  and the Security Agent for the amount of all costs and expenses (including reasonable legal fees) reasonably incurred by each Secured Party and/or Sinosure in responding to, evaluating, negotiating or complying with that request or requirement.

 

16.3                        Enforcement and preservation costs

 

The Obligors shall, jointly and severally on demand, pay to:

 

(a)                                 each Secured Party the amount of all costs and expenses (including reasonable legal fees) incurred by that Secured Party in connection with any step taken with a view to the protection, the enforcement of, or the preservation of any rights under, any Finance Document (other than a Hedging Agreement) or the Transaction Security and with any proceedings instituted by or against that Secured Party as a consequence of it entering into a Finance Document (other than a Hedging Agreement), taking or holding the Transaction Security, or enforcing those rights; and

 

(b)                                 each Lender and the ECA Agent (for the account of Sinosure) the amount of all costs and expenses (including reasonable legal fees) incurred by a Lender and/or Sinosure in connection with or incidental to the enforcement or exercise of, or the preservation of, its rights, powers, discretions and remedies under any Sinosure Insurance Policy and any proceedings instituted by or against any Lender and/or Sinosure in connection thereto.

 

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SECTION 7

 

GUARANTEES

 

17                                  GUARANTEE AND INDEMNITY

 

17.1                        Joint and several liability

 

All liabilities and obligations of the Guarantors under this Agreement shall, whether expressed to be so or not, be joint and several.

 

17.2                        Keepwell

 

Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Hedge Guarantor to honor all of its obligations under this Clause 17 (Guarantee and Indemnity) in respect of the Hedging Obligations guaranteed hereby (provided that each Qualified ECP Guarantor shall be liable under this Clause 17.2 (Keepwell) only for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Clause 17 (Guarantee and Indemnity), or otherwise under the guarantee under this Clause, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  Each Qualified ECP Guarantor intends that this Clause 17.2 (Keepwell) constitute, and this Clause 17.2 (Keepwell) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Hedge Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

17.3                        Guarantee and indemnity

 

Each Guarantor irrevocably and unconditionally:

 

(a)                                 guarantees to each Finance Party, as a primary obligor and not merely as a surety, punctual payment and performance by each Obligor (other than itself) of all such other Obligor’s obligations under the Finance Documents;

 

(b)                                 undertakes with each Finance Party that whenever an Obligor (other than itself) does not pay any amount (whether for principal, interest, fees, expenses or otherwise) when due (whether at stated maturity, by acceleration or otherwise) under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it were the primary obligor; and

 

(c)                                  agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor (other than itself) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by it under this indemnity will not exceed the amount it would have had to pay under this Clause 17 (Guarantee and Indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

 

Notwithstanding the foregoing, such obligations guaranteed by the Guarantors under this Clause 17 (Guarantee and Indemnity) shall not include any Excluded Hedging Obligations.

 

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17.4                        Continuing guarantee

 

This guarantee is a continuing guarantee that shall remain in full force and effect until the irrevocable payment and performance in full by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.  This guarantee constitutes a guarantee of punctual performance and payment and not merely of collection.

 

17.5                        Reinstatement

 

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Secured Party in whole or in part on the basis of any payment, security or other disposition which is rescinded, discharged, avoided or reduced, or must be restored or returned, upon insolvency, bankruptcy, reorganization, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 17 (Guarantee and Indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

17.6                        Waiver of defences

 

The obligations of each Guarantor under this Clause 17 (Guarantee and Indemnity) and in respect of any Transaction Security are irrevocable, absolute and unconditional and shall not be affected or discharged by an act, omission, matter or thing which, but for this Clause 17.6 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 17 (Guarantee and Indemnity) or in respect of any Transaction Security (without limitation and whether or not known to it or any Secured Party) including (and each of the Guarantors hereby irrevocably waives any defences it may now have or hereafter acquire in any way relating to):

 

(a)                                 any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

(b)                                 the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

(c)                                  the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any Security Asset;

 

(d)                                 any incapacity or lack of power, authority or legal personality of or dissolution or change in the corporate or company structure, shareholders, members or status of an Obligor or any other person (including without limitation any change in the holding of such Obligor’s or other person’s Equity Interests);

 

(e)                                  any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

 

(f)                                   any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

(g)                                  any bankruptcy, insolvency or similar proceedings.

 

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17.7                        Guarantor Intent

 

Without prejudice to the generality of Clause 17.6 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:  business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

 

17.8                        Immediate recourse

 

Each Guarantor waives any right it may have of first requiring any Secured Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 17 (Guarantee and Indemnity).This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

17.9                        Appropriations

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Secured Party (or any trustee or agent on its behalf) may:

 

(a)                                 refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Parent Guarantor shall not be entitled to the benefit of the same; and

 

(b)                                 hold in an interest-bearing suspense account any moneys received from each Guarantor or on account of such Guarantor’s liability under this Clause 17 (Guarantee and Indemnity).

 

17.10                 Deferral of Guarantor’s rights

 

All rights which a Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against the Borrower, any other Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17 (Guarantee and Indemnity):

 

(a)                                 to be indemnified by an Obligor;

 

(b)                                 to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor’s obligations under the Finance Documents;

 

(c)                                  to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Finance Documents or of any other guarantee or 

 

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security taken pursuant to, or in connection with, the Finance Documents by any Secured Party;

 

(d)                                 to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 17 (Guarantee and Indemnity);

 

(e)                                  to exercise any right of set-off against any Obligor; and/or

 

(f)                                   to claim or prove as a creditor of any Obligor in competition with any Secured Party.

 

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Secured Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 36 (Payment Mechanics).

 

17.11                 Additional security

 

This guarantee and any other Security given by a Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Secured Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.

 

17.12                 Independent obligations

 

The obligations of each Guarantor under or in respect of this guarantee are independent of any other obligations of any other Obligor under or in respect of the Finance Documents, and a separate action or actions may, with the consent of the Security Agent or the Facility Agent (in each case, acting with the authorization of the Required Lenders) be brought against any Guarantor to enforce this guarantee irrespective of whether any action is brought against any other Obligor or whether any other Obligor is joined in any such action or actions.

 

17.13                 Bankruptcy

 

Additionally, the Guarantors unconditionally and irrevocably guarantee the payment of any and all of the Secured Liabilities (including, without limitation, all interest accruing subsequent to the commencement of any case, proceeding or other action relating to any other Obligor under any Debtor Relief Laws, and all interest which, but for any such case, proceeding or other action would otherwise accrue) to the Finance Parties whether or not due or payable by the Borrower or any Obligor upon the occurrence of any of the events specified in Clause 27.7(Insolvency Event), and irrevocably, unconditionally and jointly and severally promises to pay such indebtedness to the Finance Parties, or order, on demand, in lawful money of the U.S.

 

17.14                 Reliance

 

It is not necessary for any Finance Party to inquire into the capacity or powers of any Guarantor or any of their respective Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any of the Secured Liabilities made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

 

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17.15                 Subordination

 

Any Financial Indebtedness of the Borrower now or hereafter owing to any Guarantor is hereby subordinated to the Secured Liabilities of the Borrower owing to the Finance Parties; and if the Facility Agent so requests at a time when an Event of Default exists, all such Financial Indebtedness of the Borrower to any Guarantor shall be collected, enforced and received by such Guarantor for the benefit of the Finance Parties and be paid over to the Facility Agent on behalf of the Finance Parties on account of the Secured Liabilities to the Finance Parties, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guarantee.  Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any such Financial Indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination.  Without limiting the generality of the foregoing, the Guarantors hereby agrees with the Finance Parties that they will not exercise any right of subrogation which they may at any time otherwise have as a result of this Guarantee (whether contractual, under Section 509 of the U.S. Bankruptcy Code or otherwise) until all the Secured Liabilities have been irrevocably paid in full in cash.  If and to the extent required in order for the Secured Liabilities of the Guarantors to be enforceable under applicable federal, state and other laws relating to the insolvency of debtors, the maximum liability of each Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such Guarantor, under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under this Clause 17.15(Subordination).

 

17.16                 Applicability of provisions of Guarantee to other Security

 

Clauses 17.4 (Continuing guarantee), 17.5 (Reinstatement), 17.6 (Waiver of defences), 17.7 (Guarantor Intent), 17.8 (Immediate recourse), 17.9 (Appropriations), 17.10 (Deferral of Guarantor’s rights), 17.11 (Additional security), 17.12 (Independent obligations), 17.13 (Bankruptcy), 17.14 (Reliance) and 17.15 (Subordination), shall apply, with any necessary modifications, to any Security which an Owner Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.

 

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SECTION 8

 

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

18                                  REPRESENTATIONS

 

18.1                        General

 

Each Obligor makes the representations and warranties set out in this Clause 18 (Representations) to each Finance Party on the date of this Agreement.

 

18.2                        Corporate/Limited Liability Company/Limited Partnership Status

 

(a)                                 Each Obligor is a duly organized and validly existing corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or formation.

 

(b)                                 Each Obligor has the corporate or other applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage.

 

(c)                                  Each Obligor is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

18.3                        Corporate Power and Authority; Legal Validity and Enforceability

 

(a)                                 Each Obligor has the corporate or other applicable power and authority to execute, deliver and perform the terms and provisions of each of the Transaction Documents to which it is party and has taken all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Transaction Documents.

 

(b)                                 Each Obligor has duly executed and delivered each of the Transaction Documents to which it is party, and each of such Transaction Documents constitutes the legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, except to the extent that the enforceability thereof may be limited by 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)                                  Each of the Security Documents creates in favour of the Security Agent for the benefit of the Secured Parties a legal, valid and enforceable fully perfected first priority security interest in and Security on all right, title and interest of the Obligors party thereto in the Security Assets described therein, subject only to Other Permitted Security.  No filings or recordings are required in order to perfect the security interests created under any Security Document or to ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document in each case, except for filings or recordings which shall have been made or will be made, in accordance with Schedule 2 (Conditions Precedent).

 

(d)                                 None of the Obligors has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made, in accordance with Schedule 2 (Conditions Precedent).

 

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18.4                        Pari passu ranking

 

Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

 

18.5                        No Violation

 

Neither the execution, delivery or performance by any Obligor of the Transaction Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will:

 

(a)                                 contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality;

 

(b)                                 conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Security (except Other Permitted Security) upon any of the material properties or assets of such Obligor pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which such Obligor is a party or by which it or any of its material property or assets is bound or to which it may be subject; or

 

(c)                                  violate any provision of the Constitutional Documents of such Obligor.

 

18.6                        Governmental Approvals

 

No Authorization or validation of, or filing, recording or registration with (except as have been obtained or made or, in the case of any filings or recordings in respect of the Security Documents, will be made within 10 days of the date such Security Document is required to be executed pursuant hereto), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with:

 

(a)                                 the execution, delivery and performance by any Obligor of any Finance Document to which it is a party; or

 

(b)                                 the legality, validity, binding effect or enforceability of any Finance Document to which it is a party.

 

18.7                        Financial Statements; Financial Condition; Undisclosed Liabilities

 

(a)                                 The audited consolidated balance sheets of the Parent Guarantor as at December 31, 2015 and the related consolidated statements of income and cash flows for the fiscal year ended on such date and (ii) the unaudited consolidated balance sheets of the Parent Guarantor as at March 31, 2016 and the related consolidated statements of income and cash flows, in each case for such quarterly accounting period, reported on by and accompanied by, in the case of the audited annual financial statements, an unqualified report from an Acceptable Accounting Firm, present fairly the consolidated financial condition of the Parent Guarantor as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended.  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein).

 

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Neither the Parent Guarantor nor any of its Subsidiaries has any material guarantee obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the financial statements referred to in the preceding sentence (it being understood that with respect to guarantee obligations, the underlying debt is so reflected).

 

(b)                                 Except as fully disclosed in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 (Financial statements), there were as of the date of this Agreement no liabilities or obligations with respect to the Parent Guarantor or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole.  As of the date of this Agreement, none of the Obligors knows of any basis for the assertion against it of any liability or obligation of any nature that is not fairly disclosed (including, without limitation, as to the amount thereof) in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 (Financial statements) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole.

 

(c)                                  The Projections delivered by the Parent Guarantor to the Facility Agent and the Lenders prior to the date of this Agreement have been prepared in good faith and are based on GAAP and reasonable assumptions, and there are no statements or conclusions in such Projections which are based upon or include information known to the Parent Guarantor on the date of this Agreement to be misleading in any material respect or which fail to take into account material information known to the Parent Guarantor on the date of this Agreement regarding the matters reported therein.  On the date of this Agreement, the Parent Guarantor believes that such Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results included in such Projections.

 

(d)                                 Since December 31, 2015  (or as the case may be, the date of the latest audited consolidated balance sheets of the Parent Guarantor provided to the Facility Agent pursuant to this Agreement), nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

 

18.8                        Litigation

 

Except as set forth in the most recent S-1 Registration Statement of the Parent Guarantor (filed with the SEC on June 22, 2015), there are no actions, suits, investigations (conducted by any governmental or other regulatory body of competent jurisdiction) or proceedings pending or, to the knowledge of the Parent Guarantor or the Borrower, threatened against the Parent Guarantor or any of its Subsidiaries (i) with respect to the Finance Documents; or (ii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

18.9                        True and Complete Disclosure

 

All factual information (taken individually or as a whole) furnished by or on behalf of the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender (including, without limitation, all information contained in the Transaction Documents and the Merger Agreement and any financial statement referred to in Clause 19.2 (Financial statements) for purposes of or in connection with this Agreement, the other Finance Documents or any 

 

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transaction contemplated herein or therein is, and all other such factual information (taken individually or as a whole) hereafter furnished by or on behalf of the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender will be, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided and copies of the Shipbuilding Contracts and the Merger Agreement are the full, complete and true copies of such documents and do not omit any addenda, amendments or supplements thereto.

 

18.10                 Use of Proceeds; Margin Regulations

 

(a)                                 All proceeds of the Loan shall be used in accordance with Clause 3.1 (Purpose).

 

(b)                                 No part of the proceeds of the Loan shall be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of the Loan nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations.

 

(c)                                  No proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party in a manner that would result in a violation of Sanctions, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions.

 

(d)                                 No payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions.

 

18.11                 Tax Returns and Payments

 

(a)                                 All payments which an Obligor is liable to make under the Finance Documents to which it is a party can properly be made without deduction or withholding for or on account of any Tax payable under any law of any relevant jurisdiction applicable as of the date of this Agreement.

 

(b)                                 The Parent Guarantor and each of its Subsidiaries has timely filed with the appropriate taxing authorities all material U.S. federal income tax returns, statements, forms and reports for taxes and all other material U.S., the United Kingdom, and non-U.S. tax returns, statements, forms and reports for taxes required to be filed by or with respect to the income, properties or operations of the Parent Guarantor and/or any of its Subsidiaries (the “Returns”).  All such Returns accurately reflect in all material respects all liability for taxes of the Parent Guarantor and its Subsidiaries as a whole for the periods covered thereby.  The Parent Guarantor and each of its Subsidiaries have paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all Taxes shown as due on all such Returns and all other material U.S. federal, state and the United Kingdom and non-U.S. Taxes that have become due and payable.

 

(c)                                  There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Parent Guarantor or any of its Subsidiaries, threatened by any authority regarding any Taxes relating to the Parent Guarantor or any of its Subsidiaries.

 

(d)                                 As of the date of this Agreement, neither the Parent Guarantor nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of the Parent Guarantor or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Parent Guarantor or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.

 

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(e)                                  Neither the Parent Guarantor nor any of its Subsidiaries (i) has engaged in any “listed transaction” within the meaning of Section 6011 of the Code or (ii) has any actual or potential liability for the taxes of any person (other than the Parent Guarantor or any of its present or former Subsidiaries) under the United States Treasury regulation Section 1.1502-6 (or any similar provision of state, local, foreign or provincial law).

 

18.12                 Compliance with ERISA

 

(a)                                 Schedule 9 (ERISA Plans and contributions) sets forth, as of the date of this Agreement, each Plan.

 

(b)                                 With respect to each Plan, other than any Multiemployer Plan (and each related trust, insurance contract or fund), there has been no failure to be in substantial compliance with its terms and with all applicable laws, including without limitation ERISA and the Code, that could reasonably be expected to give rise to a Material Adverse Effect.

 

(c)                                  Each Plan, other than any Multiemployer Plan (and each related trust, if any), which is intended to be qualified under Section 401(a) of the Code has received a determination letter (or an opinion letter) from the United States Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code. No Reportable Event has occurred.

 

(d)                                 To the best knowledge of an Obligor or any of its Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer Plan is insolvent or in reorganization.

 

(e)                                  No Plan has an Unfunded Current Liability in an amount material to an Obligor or any ERISA Affiliate’s operation.  No Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has failed to satisfy minimum funding standards, or has applied for or received a waiver of the minimum funding standards or an extension of any amortization period, within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA.

 

(f)                                   With respect to each Plan (other than a Multiemployer Plan) its actuary has certified that such Plan is not an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; all contributions required to be made with respect to a Plan have been or will be timely made.

 

(g)                                  Neither any Obligor nor any of its Subsidiaries nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or expects to incur any such liability under any of the foregoing sections with respect to any Plan.

 

(h)                                 No condition exists which presents a material risk to any Obligor or any of its Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code.

 

(i)                                     No proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan (in the case of a Multiemployer Plan, to the best knowledge of any Obligor or any of its Subsidiaries or ERISA Affiliates) which is subject to Title IV of ERISA.

 

(j)                                    No action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, or, to the best knowledge of any Obligor or any of its Subsidiaries, 

 

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expected or threatened which could reasonably be expected to have a Material Adverse Effect.

 

(k)                                 Using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, each of the Obligors and its Subsidiaries and ERISA Affiliates would have no liabilities to any Plans which are Multiemployer Plans in the event of a complete withdrawal therefrom in an amount which could reasonably be expected to have a Material Adverse Effect.

 

(l)                                     Neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received any notice that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA.

 

(m)                             Each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the any Obligor, any of its Subsidiaries, or any ERISA Affiliate has at all times been operated in material compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code.

 

(n)                                 No lien imposed under the Code or ERISA on the assets of any Obligor or any of its Subsidiaries or any ERISA Affiliate exists nor has any event occurred which could reasonably be expected to give rise to any such lien on account of any Plan.

 

(o)                                 Each Obligor and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA) which provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan the obligations with respect to which could reasonably be expected to have a Material Adverse Effect.

 

(p)                                 Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities.  All contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made.  Neither any Obligor nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan that could reasonably be expected to have a Material Adverse Effect.  Neither any Obligor nor any of its Subsidiaries maintains or contributes to any Foreign Pension Plan the obligations with respect to which could in the aggregate reasonably be expected to have a Material Adverse Effect.

 

18.13                 Subsidiaries

 

(a)                                 On the first Utilisation Date, the Parent Guarantor has no Subsidiaries other than those Subsidiaries listed on Schedule 10 (Subsidiaries) (which Schedule identifies the correct legal name, direct owner, percentage ownership and jurisdiction of organization of each such Subsidiary on the date hereof).  On the first Utilisation Date, all outstanding capital stock, membership interests, partnership interests, units or other form of equity, of each class outstanding, of each of the Subsidiaries listed on Schedule 10 (Subsidiaries) has been validly issued, is fully paid and non-assessable (to the extent applicable) and, except in the case of the Parent Guarantor, is owned beneficially and of record by a Obligor free and clear of all Security other than Other Permitted Security.

 

(b)                                 Each of the Owner Guarantors is a wholly-owned Subsidiary of the Borrower.

 

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18.14                 Compliance with Statutes, etc.

 

The Parent Guarantor and each of its Subsidiaries are in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such non-compliances that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

18.15                 Investment Company Act

 

Neither the Parent Guarantor, nor any of its Subsidiaries, is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

18.16                 Anti-Money Laundering; Anti-Corruption

 

(a)                                 Each Obligor, as well as their respective subsidiaries, directors and officers, have conducted and are conducting its businesses in compliance with Anti-Bribery and Corruption Laws and in particular:

 

(i)            no part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended; and

 

(ii)           no Obligor, nor their subsidiaries, respective directors, officers, or to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, employees, agents or representatives has made or agreed to make any contribution, payment, gift or entertainment to, or accepted or received any contributions, payments, gifts or entertainment from, any government official, employee, political party or agent or any candidate for any federal, state, local or foreign public office, where either the contribution, payment or gift or the purpose thereof was illegal under the laws of any federal, state, local or foreign jurisdiction.

 

(b)                                 Each Obligor as well as their respective directors and officers, complies with any applicable law or regulation implemented to combat “money laundering”, including without limitation the PATRIOT Act and the Bank Secrecy Act.

 

18.17                 Sanctions

 

(a)                                 To the extent applicable, each Obligor is in compliance, in all material respects, with:

 

(i)            all United States laws relating to terrorism or money laundering, including Executive order No. 13224 on Terrorist Financing, effective September 24, 2011 (the “Executive Order”); and

 

(ii)           the PATRIOT Act.

 

(b)                                 The Parent Guarantor does not (i) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (ii) engage in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempting to violate any of the prohibitions set forth in any United States anti-terrorism laws.

 

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(c)                                  Each Obligor has implemented and maintains in effect policies and procedures designed to ensure compliance by each such Obligor, its subsidiaries and their respective directors, officers, and to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, its employees, agents and representatives with all Sanctions and each Obligor, its subsidiaries and their respective directors, officers and to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, its employees, agents and representatives, are in compliance with Sanctions and are not engaged in any activity that would reasonably be expected to result in such Obligor being designated as a Restricted Party or otherwise violate or contravene any Sanctions.

 

(d)                                 No Obligor, nor any of an Obligor’s respective directors, officers, or to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, employees, agents or representatives (i) is a Restricted Party, is involved in any transaction through which it is reasonably likely to become a Restricted Party, or is involved in any transaction involving any Restricted Party, or (ii) is owned or controlled by or is acting directly or indirectly on or on behalf of a Restricted Party, (iii) owns or controls a Restricted Party or (iv) has received notice of or is aware of any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.

 

18.18                 Pollution and Other Regulations

 

(a)                                 Each of the Parent Guarantor and its Subsidiaries is in compliance with all applicable Environmental Laws governing its business, except for such failures to comply as are not reasonably likely to have a Material Adverse Effect, and neither the Parent Guarantor nor any of its Subsidiaries is, to the knowledge of the Parent Guarantor or the Borrower, liable for any penalties, fines or forfeitures for failure to comply with any of the foregoing except for such penalties, fines or forfeitures as are not reasonably likely to have a Material Adverse Effect.

 

(b)                                 All licenses, permits, registrations or approvals required for the business of the Parent Guarantor and each of its Subsidiaries, as conducted as of the date of this Agreement, under any Environmental Law have been secured and each of the Parent Guarantor and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as are not reasonably likely to have a Material Adverse Effect.

 

(c)                                  Neither the Parent Guarantor nor any of its Subsidiaries is in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree pursuant to any Environmental Law, to which the Parent Guarantor or such Subsidiary is a party or which would affect the ability of the Parent Guarantor or such Subsidiary to operate any Ship, Real Property or other facility and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, as such noncompliance, breaches or defaults as are not likely to, individually or in the aggregate, have a Material Adverse Effect.

 

(d)                                 There are, as of the date of this Agreement, no Environmental Claims pending or, to the knowledge of the Parent Guarantor or the Borrower, threatened, against the Parent Guarantor or any of its Subsidiaries in respect of which an unfavourable decision, ruling or finding would be reasonably likely to have a Material Adverse Effect.

 

(e)                                  There are no facts, circumstances, conditions or occurrences on any Ship, Real Property or other facility owned or operated by the Parent Guarantor or any of its Subsidiaries that are reasonably likely (i) to form the basis of an Environmental Claim against the Parent Guarantor, any of its Subsidiaries or any Ship, Real Property or other facility owned by the 

 

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Parent Guarantor or any of its Subsidiaries, or (ii) to cause such Ship, Real Property or other facility to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case for clauses (i) and (ii) above, such Environmental Claims or restrictions that individually or in the aggregate are not reasonably likely to have a Material Adverse Effect.

 

(f)                                   Hazardous Materials have not at any time prior to the date of this Agreement, been (i) generated, used, treated or stored on, or transported to or from, any Ship, Real Property or other facility at any time owned or operated by the Parent Guarantor or any of its Subsidiaries or (ii) released on or from any such Ship, Real Property or other facility, except in each case for clauses (i) and (ii) above where such occurrence or event, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

This Clause 18.18 (Pollution and Other Regulations) contains the sole and exclusive representations and warranties of the Obligors with respect to environmental, health and safety matters, including any relating to or arising under Environmental Laws, Environmental Claims or Hazardous Materials.

 

18.19                 Labor Relations

 

Neither the Parent Guarantor nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect and there is (a) no unfair labor practice complaint pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against any of them before the National Labor Relations Board, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against any of them, (b) no strike, labor dispute, slowdown or stoppage pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against the Parent Guarantor or any of its Subsidiaries and (c) no union representation proceeding pending with respect to the employees of the Parent Guarantor or any of its Subsidiaries, except (with respect to the matters specified in clauses (a), (b) and (c) above) as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

18.20                 Patents, Licenses, Franchises and Formulas

 

The Parent Guarantor and each of its Subsidiaries owns, or has the right to use, and has the right to enforce and prevent any third party from using, all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others, except for such failures and conflicts which could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

18.21                 Financial Indebtedness

 

Schedule 11 (Financial Indebtedness) sets forth a true and complete list of all Financial Indebtedness of the Parent Guarantor and its Subsidiaries as of the first Utilisation Date (other than (i) the Financial Indebtedness under the Korean Facility, the Re-financing Facility and the Blue Mountain Indebtedness and which is to remain outstanding after giving effect to the date of this Agreement) (the “Existing Indebtedness”) and (ii) the Financial Indebtedness under the Bridging Facility, in each case showing the

 

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aggregate principal amount thereof and the name of the borrower and any other entity which directly or indirectly guarantees such debt. 

 

18.22                 Insurance

 

Schedule 12 (Insurances) sets forth a true and complete listing of all insurance maintained by each Obligor with respect of the Ships, as of the date of this Agreement, with the amounts insured (and any deductibles) set forth therein.

 

18.23                 Concerning the Ships

 

The registered owner and jurisdiction of registration and flag (which shall be in an Approved Flag) of each Ship is set forth in Schedule 8 (Details of the Ships). Each Ship is and will be operated in compliance with all applicable law, rules and regulations, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or result in a material diminution in the value of such Ship.

 

18.24                 Citizenship

 

The Parent Guarantor and each other Obligor which owns or operates, or will own or operate, one or more Ships is, or will be, qualified to own and operate such Ships under the relevant Approved Flag, or will be permitted, to be flagged in accordance with the terms of the respective Ship’s Mortgage.

 

18.25                 Ship Classification Flag

 

Each Ship:

 

(a)                                 is or will be, classified in the highest class available for ships of its age and type with an Approved Classification Society, free of any conditions or recommendations, other than as permitted, or will be permitted, under the Ship’s Mortgages, and

 

(b)                                 flagged in an Approved Flag jurisdiction.

 

18.26                 No Immunity

 

The Parent Guarantor does not, nor does any other Obligor or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction.  The execution and delivery of the Finance Documents by the Obligors and the performance by them of their respective obligations thereunder constitute commercial transactions.

 

18.27                 Flags and Enforcement

 

No fees or taxes, including, without limitation, stamp, transaction, registration or similar taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Finance Documents other than recording taxes which have been, or will be, paid by the Parent Guarantor or any of its Subsidiaries as and to the extent due.  Under the laws of any Approved Flag jurisdiction,

 

(a)                                 the choice of English laws as set forth in the Finance Documents (other than the Accounts Security) which are stated to be governed by English laws; and

 

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(b)                                 the choice of the laws of the State of New York as set forth in the Accounts Security which are stated to be governed by the laws of the State of New York,

 

is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such Obligor of an agent for service of process, in each case as set forth in such Finance Documents, is legal, valid, binding and effective.

 

18.28                 Form of Documentation

 

Each of the Finance Documents is, or when executed will be, in proper legal form under the laws of the jurisdiction of the applicable Approved Flag for the enforcement thereof under such laws.  To ensure the legality, validity, enforceability or admissibility in evidence of each such Finance Document in applicable Approved Flag jurisdiction, it is not necessary that any Finance Document or any other document be filed or recorded with any court or other authority in such applicable Approved Flag jurisdiction, or notarized or executed under seal, or physically executed in any such jurisdiction, except as have been made, or will be made, in accordance with Clause 46 (Counterparts).

 

18.29                 Solvency

 

After giving effect to:

 

(a)                                 the Loan outstanding,

 

(b)                                 the consummation of the transactions contemplated hereunder; and

 

(c)                                  the payment and accrual of all transaction costs in connection with the foregoing,

 

the Parent Guarantor and its Subsidiaries, taken as a whole, and the Borrower and its Subsidiaries, taken as a whole, are Solvent.

 

18.30                 Overseas companies

 

No Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.

 

19                                  INFORMATION UNDERTAKINGS

 

19.1                        General

 

The undertakings in this Clause 19 (Information Undertakings) remain in force throughout the Security Period unless the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders), may otherwise permit.

 

19.2                        Financial statements

 

The Parent Guarantor shall supply to the Facility Agent in sufficient copies for all the Lenders:

 

(a)                                 within 90 days after the close of each fiscal year of the Parent Guarantor (i) the audited consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of income and retained 

 

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earnings and of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified by Deloitte & Touche LLP or such other independent certified public accountants of recognized national standing reasonably acceptable to the Facility Agent, together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of the Parent Guarantor and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge of any Default or Event of Default pursuant to the Financial Covenants, which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.

 

(b)                                 Within 45 days after the close of the first three quarterly accounting periods in each fiscal year of the Parent Guarantor, (i) the unaudited consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at the end of such quarterly accounting period and the related unaudited consolidated statements of income and cash flows, in each case for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, and in each case, setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the senior financial officer of the Parent Guarantor, subject to normal year-end audit adjustments and (ii) management’s discussion and analysis of the important operational and financial developments during the fiscal quarter and year-to-date periods.

 

(c)                                  As soon as available but not more than 30 days after the commencement of each fiscal year of the Parent Guarantor, cash flow projections (including a balance sheet and statement of profit and loss and cash flow) of the Parent Guarantor and its Subsidiaries in reasonable detail for the fiscal year in which such cash flow projections are actually delivered and the following three fiscal years.

 

(d)                                 Together with delivery of the compliance certificates described in Clause 19.3(a) (Compliance certificate) required in connection with each fiscal quarter in each fiscal year of the Parent Guarantor, and at any other time within thirty-three (33) days of the written request of the Facility Agent, valuations of each of the Ships dated no more than 14 Business Days prior to the delivery thereof, in form and substance reasonably satisfactory to the Facility Agent and from two Approved Appraisers stating the then current Fair Market Value of each of the Ships. All such valuations shall be conducted by, and made at the expense of, the Borrower (it being understood that the Facility Agent may and, at the request of the Required Lenders, shall, upon notice to the Borrower, obtain such valuations and that the cost of all such valuations will be for the account of the Borrower); provided that, unless an Event of Default shall then be continuing, in no event shall the Borrower be required to pay for more than four Appraisals of each Ship obtained by the Facility Agent (which shall for the avoidance of doubt, not include any valuations required to be provided by the Borrower under this Clause) pursuant to this paragraph (d) in any single fiscal year of the Borrower, with the cost of any such Appraisals obtained by the Facility Agent in excess thereof to be paid by the Lenders on a pro rata basis.

 

Notwithstanding the foregoing, the required financial statements of the Parent Guarantor shall be deemed to have furnished to the Facility Agent if the Parent Guarantor has filed such reports and information with the SEC via the EDGAR system (or any successor system) and such reports and information are publicly available.

 

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19.3                        Compliance Certificate

 

(a)                                 At the time of the delivery of the financial statements provided for in Clauses 19.2(a) and (b) (Financial Statements), a certificate of the senior financial officer of the Parent Guarantor in the form of Schedule 7 (Compliance Certificate) to the effect that, to the best of such officer’s knowledge, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall:

 

(i)            set forth the calculations required to establish whether the Parent Guarantor was in compliance with the Financial Covenants at the end of such fiscal quarter or year, as the case may be; and

 

(ii)           certify that there have been no changes to Schedule 10 (Subsidiaries) since the first Utilisation Date or, if later, since the date of the most recent certificate delivered pursuant to this Clause 19.3 (Compliance Certificate) or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this paragraph (ii).

 

(b)                                 At the time of a disposal of any Ship, a certificate of a senior financial officer of the Parent Guarantor which certificate shall:

 

(i)            certify on behalf of the Parent Guarantor the last valuation received pursuant to Clause 19.2(d) (Financial Statements) determining the Aggregate Collateral Vessel Value, after giving effect to such disposition(s) and/or showing the individual Fair Market Value of all Ships owned by the Owner Guarantors which have not been sold, transferred, lost or otherwise disposed of at such time; and

 

(ii)           set forth the calculations required to establish whether the Parent Guarantor is in compliance with the provisions of Clause 25.1 (Minimum required security cover)after giving effect to such disposition.

 

19.4                        Information: miscellaneous

 

Each Obligor shall and shall procure that each other Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders and to Sinosure, if the Facility Agent so requests):

 

(a)                                 promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Parent Guarantor or any of its Subsidiaries shall file with the SEC (or any successor thereto) or deliver to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor).

 

(b)                                 promptly upon, and in any event within five Business Days after, without duplication of any other reporting requirements herein, receipt of any notices of default, financial reporting and collateral reporting under the Re-financing Facility, and copies of all effectuated additions, amendments, restatements, supplements or other modifications in respect of the Re-financing Facility documents.

 

(c)                                  promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it (including without limitation compliance with FATCA) or as may be required by any regulatory authority.

 

(d)                                 promptly upon, and in any event within fifteen Business Days after, the Parent Guarantor obtains knowledge thereof, written notice of any of the following environmental matters occurring after the date of this Agreement, except to the extent that such environmental 

 

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matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:

 

(i)            any Environmental Claim pending or threatened in writing against the Parent Guarantor or any of its Subsidiaries or any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries;

 

(ii)           any condition or occurrence on or arising from any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries that (a) results in material noncompliance by the Parent Guarantor or such Subsidiary with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Parent Guarantor or any of its Subsidiaries or any such Ship or property;

 

(iii)          any condition or occurrence on any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries that could reasonably be expected to cause such Ship or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Parent Guarantor or such Subsidiary of such Ship or property under any Environmental Law;

 

(iv)          the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Parent Guarantor shall deliver to the Facility Agent all material notices received by the Parent Guarantor or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA or OPA; and

 

(v)           all such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Parent Guarantor’s or such Subsidiary’s response thereto. In addition, the Parent Guarantor will provide the Facility Agent with copies of all material communications with any government or governmental agency and all material communications with any person relating to any Environmental Claim of which notice is required to be given pursuant to this Clause 21.4 (Ownership of Subsidiaries), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Facility Agent or the Required Lenders;

 

(e)                                  promptly after Parent Guarantor’s or any of its Subsidiaries’ receipt thereof, a copy of any “management letter” received from its certified public accountants and management’s response thereto;

 

(f)                                   promptly and in any event within five Business Days after any Obligor obtains actual knowledge thereof, the relevant party shall supply to the Facility Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions by any Sanctions Authority against it, any of its Subsidiaries, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation and (ii) notice that any Obligor, any of its Subsidiaries or any of its direct or indirect owners, or any of their respective directors, officers, employees agents or representatives has become or is likely to become a Restricted Party or becomes involved in any transaction involving a Restricted Party; and

 

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(g)                                  from time to time, such other information or documents (financial or otherwise) with respect to the Parent Guarantor or its Subsidiaries as the Facility Agent or the Lenders (through the Facility Agent) may reasonably request in writing.

 

19.5                        “Know your customer” checks

 

(a)                                 If:

 

(i)            the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

(ii)           any change in the status of an Obligor (including, without limitation, a change of ownership of an Obligor) after the date of this Agreement; or

 

(iii)          a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

 

obliges a Finance Party (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) (such documentation and evidence to include without limitation, constitutional documents and certificates of good standing of a company, officer’s certificates setting out the names of a company’s directors and/or officers, copies of passports and address proofs of such directors and/or officers) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

(b)                                 Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

19.6                        Notification of Event of Default

 

Promptly, and in any event within three Business Days after the Parent Guarantor obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Parent Guarantor proposes to take with respect thereto, (ii) any litigation or governmental investigation or proceeding pending or threatened in writing against the Parent Guarantor or any of its Subsidiaries which, if adversely determined, could reasonably be expected to have a Material Adverse Effect on any Finance Document and (iii) any Total Loss in respect of any Ship.

 

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20                                  FINANCIAL COVENANTS

 

20.1                        General

 

The undertakings in this Clause 20 (Financial Covenants) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

20.2                        Debt Service Coverage Ratio

 

The Parent Guarantor will not permit the Debt Service Coverage Ratio for any Test Period ending on or after 31 March 2016 to be less than 1.10:1.00.

 

20.3                        Minimum Consolidated Liquidity

 

The Parent Guarantor will not permit at any time the cash and Cash Equivalents (which shall include funds on deposit in (i) any Debt Service Reserve Account and (ii) the debt service reserve account under the Korean Facility, each valued at 50% of par) held by the Parent Guarantor and its Subsidiaries to be less than the greatest of:

 

(a)                                 $50,000,000;

 

(b)                                 5.0% of Total Indebtedness; and

 

(c)                                  $1,500,000 per delivered Ship,

 

provided that, at all times, Unrestricted Cash and Cash Equivalents shall be no less than $25,000,000.

 

20.4                        Maximum Consolidated Leverage

 

The Parent Guarantor will not permit the Consolidated Leverage Ratio to be greater than 0.65 to 1.00 on the last day of any Test Period ending on or after 31 March 2016.

 

21                                  GENERAL UNDERTAKINGS

 

21.1                        General

 

The undertakings in this Clause 21 (General Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

21.2                        Corporate Franchises

 

The Parent Guarantor will, and will cause each of its Subsidiaries, to do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business, except, in the case of any Subsidiary of the Parent Guarantor that is not an Owner Guarantor, which could not be reasonably expected to have a Material Adverse Effect; provided, however, that nothing in this Clause 21.2 (Corporate Franchises) shall prevent:

 

(a)                                 sales or other dispositions of assets, consolidations or mergers by or involving the Parent Guarantor or any of its Subsidiaries which are permitted in accordance with Clause 21.23 (Merger) or Clause 21.22 (Disposals);

 

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(b)                                 any Owner Guarantor from changing the jurisdiction of its organization to the extent permitted by Clause 21.31(c)(vii) (Limitation on Certain Requirements on Subsidiaries); or

 

(c)                                  the abandonment by the Parent Guarantor or any of its Subsidiaries of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.

 

21.3                        Compliance with laws

 

Each Obligor will:

 

(a)                                 comply with all applicable statutes, regulations and orders of, and all applicable restrictions (including all laws and regulations relating to money laundering) imposed by, all governmental bodies, domestic or foreign, (i) in respect of the conduct of its business and the ownership of its property, except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) applicable to each Ship, its ownership, employment, operation, management and registration, including the ISM Code, ISPS Code, all material Environmental Laws, all Sanctions and the laws of the relevant Approved Flag;

 

(b)                                 obtain, comply with, and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

 

(c)                                  without limiting paragraph (a) above, not employ any Ship, nor allow its employment, operation or management in any manner contrary to any applicable law or regulation, including, but not limited to the ISM Code, the ISPS Code, all applicable Environmental Laws except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and all Sanctions.

 

21.4                        Ownership of Subsidiaries

 

(a)                                 Other than “director qualifying shares”, the Parent Guarantor shall at all times directly or indirectly own 100% of the Equity Interests of the Borrower and each of the Owner Guarantors.

 

(b)                                 The Parent Guarantor shall cause each Owner Guarantor to at all times be directly owned by one or more of the Obligors.

 

(c)                                  The Parent Guarantor will cause each Ship to be owned at all times by a single Owner Guarantor that owns no other Ships.

 

21.5                        Environmental claims

 

(a)                                 The Parent Guarantor will, and will cause each of its Subsidiaries to, comply with all Environmental Laws applicable to the ownership or use of any Ship or any other ship or property now or hereafter owned or operated by the Parent Guarantor or any of its Subsidiaries, will within a reasonable time period pay or cause to be paid all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and will keep or cause to be kept all such Ships or other ships or property free and clear of any Securities imposed pursuant to such Environmental Laws, in each of the foregoing cases, except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  None of the Parent Guarantor, any of Subsidiaries of the Parent Guarantor will generate, use, treat, store, 

 

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release or dispose of, or permit the generation, use, treatment, storage, release or disposal of, Hazardous Materials on any Ship or other ship or property now or hereafter owned or operated or occupied by the Parent Guarantor, any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property except in material compliance with all applicable Environmental Laws and as reasonably required by the trade in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Parent Guarantor will, and will cause each of its Subsidiaries to, maintain insurance on the Ships and any other Ship in at least such amounts as are in accordance with normal industry practice for similarly situated insureds, against losses from oil spills and other environmental pollution.

 

(b)                                 At the written request of the Facility Agent or the Required Lenders, the Parent Guarantor or the Borrower will provide, at the Parent Guarantor or the Borrower’s sole cost and expense, an environmental assessment of any Ship by an Approved Classification Society.  If said classification society, in its assessment, indicates that such Ship is not in compliance with the Environmental Laws, said society shall set forth potential costs of the remediation of such non-compliance; provided that such request for an assessment may be made only if:

 

(i)            there has occurred and is continuing an Event of Default;

 

(ii)           the Facility Agent or the Required Lenders reasonably and in good faith believe that the Parent Guarantor, any of its Subsidiaries or any such Ship is not in compliance with Environmental Law and such non-compliance could reasonably be expected to have a Material Adverse Effect; or

 

(iii)          the Facility Agent or the Required Lenders reasonably and in good faith believe that circumstances exist that reasonably could be expected to form the basis of an material Environmental Claim against the Parent Guarantor or any of its Subsidiaries or any such Ship.  If the Parent Guarantor or the Borrower fails to provide the same within ninety (90) days after such request was made, the Facility Agent may order the same and the Parent Guarantor or the Borrower shall grant and hereby grants to the Facility Agent and the Lenders and their agents reasonable access to such Ship and specifically grants the Facility Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at the Parent Guarantor or the Borrower’s expense.

 

21.6                        Maintenance of Property; Insurance

 

The Parent Guarantor will, and will cause each of its Subsidiaries to:

 

(a)                                 keep all material property necessary in its business in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted);

 

(b)                                 maintain insurance with respect to property that is not Ships in at least such amounts and against at least such risks as are in accordance with normal industry practice for similarly situated insureds;

 

(c)                                  maintain the Required Insurance with respect to the Ships at all times; and

 

(d)                                 furnish to the Facility Agent, at the written request of the Facility Agent or any Lender (through the Facility Agent), a complete description of the material terms of insurance carried, or, at the Borrower’s option, copies of such policies.

 

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21.7                        Taxation

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, pay and discharge, all material taxes, assessments and governmental charges or levies that become due and payable which are imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Security not otherwise permitted under Clause 21.21 (Negative pledge), provided that neither the Parent Guarantor nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

 

21.8                        Performance of obligations

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Finance Documents) by which it is bound except to the extent waived by the parties thereto and where such non-compliance could reasonably be expected to have a Material Adverse Effect.

 

21.9                        Use of Proceeds; Margin Regulations

 

The Parent Guarantor will procure that:

 

(a)                                 all proceeds of the Loan shall be used in accordance with Clause 3.1 (Purpose);

 

(b)                                 no part of the proceeds of the Loan shall be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of the Loan nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations;

 

(c)                                  no proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party in a manner that would result in a violation of Sanctions, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions; and

 

(d)                                 no payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions.

 

21.10                 [Intentionally Deleted]

 

21.11                 Books, Records and Inspections

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with GAAP and all requirements of law, shall be made of all dealings and transactions in relation to its business.  The Parent Guarantor will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Facility Agent and the Lenders as a group to visit and inspect, during regular business hours and under guidance of officers of the Parent Guarantor or any of its Subsidiaries, any of the properties of the Parent Guarantor or its Subsidiaries, and to examine the books of account of the Parent Guarantor or such Subsidiaries and discuss the affairs, finances and accounts of the Parent Guarantor or such Subsidiaries with, and be advised as to the same by, its and their officers and, in the presence of the Parent Guarantor, independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Facility Agent or the Required Lenders may request; provided that, unless an Event of 

 

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Default exists and is continuing at such time, the Facility Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Parent Guarantor.

 

21.12                 Conduct of business

 

The Parent Guarantor will, and will procure that each Owner Guarantor will:

 

(a)                                 maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Owner Guarantors;

 

(b)                                 maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or otherwise identify their assets and liabilities separate and distinct from the assets and liabilities of the other Owner Guarantors;

 

(c)                                  not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Owner Guarantors;

 

(d)                                 observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Constitutional Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings;

 

(e)                                  except as permitted by Clause 21.23(Merger), not be consensually merged or consolidated with the other Owner Guarantors (other than for financial reporting purposes);

 

(f)                                   procure that all transactions, agreements and dealings between the Parent Guarantor and the Owner Guarantors (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;

 

(g)                                  ensure that transactions between any of the Borrower and the Owner Guarantors, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Owner Guarantor, as applicable, as an entity separate and distinct from the Borrower or such Owner Guarantor, as applicable; and

 

(h)                                 in respect of each Owner Guarantor, refer to the Parent Guarantor as a department or division of such Owner Guarantor and will not otherwise refer to the Parent Guarantor in a manner inconsistent with its status as a separate and distinct legal entity.

 

21.13                 [Intentionally left blank]

 

21.14                 Loan proceeds

 

The Borrower will use the proceeds of the Loan only as provided in Clause 3.1 (Purpose).

 

21.15                 Charters

 

In connection with any Charter in respect of a Ship having an indicated duration of at least 12 months (including any optional extensions or renewals) entered or to be entered into by the relevant Owner Guarantor owning that Ship with a charterer (other than a member of Group) or any Charter of any duration entered into or to be entered into by the relevant Owner Guarantor owning that Ship with a charterer who is a member of the Group, the 

 

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relevant Owner Guarantor shall, at its own cost and expense, promptly and duly execute and deliver to the Security Agent a notice of the assignment in respect of such charter contained in the General Assignment, and will procure that such charterer executes and deliver to the Security Agent a consent and acknowledgement to such assignment in form and substance reasonably satisfactory to the Facility Agent (in the case where such charterer is a member of the Group) and in all other cases, use all commercially reasonable efforts to procure that such charterer executes and delivers to the Security Agent such consent and acknowledgment to such assignment.

 

21.16                 Sanctions

 

(a)                                 Each Obligor shall ensure that none of it, nor any of its directors or officers, and shall use its best efforts to ensure that none of its employees, agents or representatives or any other person acting on any of their behalf is or will become a Restricted Party, or is or will become involved in any transaction involving a Restricted Party.

 

(b)                                 Each Obligor shall to the best of its knowledge and ability, ensure that it is not owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of a Restricted Party, does not and will not own or control a Restricted Party, and is not and will not become involved in any transaction involving a Restricted Party.

 

(c)                                  Each Obligor shall ensure that its assets (including without limitation, each Ship) shall not be used directly or indirectly:

 

(i)            by or for the direct or indirect benefit of a Restricted Party;

 

(ii)           in any trade which is prohibited under Sanctions or which could expose any Obligor, any such Obligor’s assets, or any Secured Party to enforcement proceedings or any other consequences whatsoever arising from Sanctions.

 

21.17                 [Intentionally left blank]

 

21.18                 [Intentionally left blank]

 

21.19                 ERISA

 

(a)                                 As soon as reasonably possible and, in any event, within ten days after the Parent Guarantor or any of its Subsidiaries or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, the Parent Guarantor will deliver to the Facility Agent, with sufficient copies for each of the Lenders, a certificate of the senior financial officer of the Parent Guarantor setting forth the full details as to such occurrence and the action, if any, that the Parent Guarantor, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Parent Guarantor, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto:

 

(i)            that a Reportable Event has occurred (except to the extent that the Parent Guarantor has previously delivered to the Facility Agent a certificate and notices (if any) concerning such event pursuant to the next clause hereof);

 

(ii)           that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation 

 

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Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days;

 

(iii)          that a failure to satisfy minimum funding requirements, within the meaning of Section 412 of the Code or Section 302 of ERISA, has occurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required instalment payments) or an extension of any amortization period under Section 412 or 430 of the Code or Section 302 or 303 of ERISA with respect to a Plan;

 

(iv)          that the actuary of a Plan (other than a Multiemployer Plan) has or will certify that the Plan is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA;

 

(v)           that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA;

 

(vi)          that any contribution required to be made with respect to a Plan or Foreign Pension Plan has not been timely made and such failure could result in a material liability for the Parent Guarantor or any of its Subsidiaries;

 

(vii)         that a Plan has been or may be reasonably expected to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA with a material amount of unfunded benefit liabilities; that a Plan (in the case of a Multiemployer Plan, to the best knowledge of the Parent Guarantor or any of its Subsidiaries or ERISA Affiliates) has a material Unfunded Current Liability;

 

(viii)        that proceedings may be reasonably expected to be or have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;

 

(ix)          that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a material delinquent contribution to a Plan; that the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate will or may reasonably expect to incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 436(f), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or

 

(x)           that the Parent Guarantor, or any of its Subsidiaries may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan.

 

(b)                                 Upon request, the Parent Guarantor will deliver to the Facility Agent with sufficient copies to the Lenders:

 

(i)            a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service; and

 

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(ii)           copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA.

 

(c)                                  In addition to any certificates or notices delivered to the Lenders pursuant to subclauses (a) and (b), copies of annual reports and any records, documents or other information required to be furnished to the PBGC, and any notices received by the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan with respect to any circumstances or event that could reasonably be expected to result in a material liability shall be delivered to the Lenders no later than ten days after the date such annual report has been filed with the Internal Revenue Service or such records, documents and/or information has been furnished to the PBGC or such notice has been received by the Parent Guarantor, such Subsidiary or such ERISA Affiliate, as applicable.

 

21.20                 [Intentionally left blank]

 

21.21                 Negative pledge

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Security upon or with respect to any Security Assets, whether now owned or hereafter acquired, or sell any such Security Assets subject to an understanding or agreement, contingent or otherwise, to repurchase such Security Assets (including sales of accounts receivable with recourse to the Parent Guarantor or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC describing such Security or any other similar notice of Security under any similar recording or notice statute; provided that the provisions of this Clause 21.21(Negative Pledge) shall not prevent the creation, incurrence, assumption or existence of the following (any Security referred to in paragraphs (i) to (vii) (“Other Permitted Security”):

 

(i)            any inchoate Security for taxes, assessments or governmental charges or levies not yet due and payable or Securities for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

 

(ii)           any Permitted Encumbrance, and in the case where such Permitted Encumbrance is a Security imposed by law, such Security was incurred in the ordinary course of business and does not secure any Financial Indebtedness (such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar Security arising in the ordinary course of business) and:

 

(A)                               does not in the aggregate materially detract from the value of the Security Assets and does not materially impair the use thereof in the operation of the business of the Parent Guarantor or such Subsidiary; or

 

(B)                               which is being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Security Assets subject to any such Security);

 

(iii)          any Security (other than any Security imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations in each case

 

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incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money) and any Security arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that the aggregate value of all cash and property at any time encumbered pursuant to this paragraph (iii) shall not exceed $5,000,000;

 

(iv)                              any Security in respect of seamen’s wages which are not past due and other maritime Security for amounts arising in the ordinary course of business and not yet required to be removed or discharged under the terms of the respective Mortgages; and

 

(v)                                 any bankers’ Security, rights of setoff and other similar Security existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Obligor or any of its Subsidiaries, in each case granted in the ordinary course of business in favour of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements;

 

(vi)          any Permitted Security; and

 

(vii)         any Security arising out of any judgments, awards, decrees or attachments in respect of which the Parent Guarantor or its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review, provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed $10,000,000.

 

(b)                                 Each Obligor or any of its Subsidiaries, the Facility Agent and the Security Agent shall be authorized to take any actions deemed appropriate by it in connection with the granting of any Other Permitted Security (including, without limitation, by executing appropriate lien subordination agreements in favour of the holder or holders of such Security, in respect of the item or items of equipment or other assets subject to such Security).

 

21.22                 Disposals

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Subsidiaries to convey, sell, lease or otherwise dispose of any of the Security Assets, or enter into any sale-leaseback transactions involving any of the Security Assets, except that:

 

(i)                                     the Borrower and each Owner Guarantor may sell, lease or otherwise dispose of any Ship or 100% of the Equity Interest (but not part) of the Owner Guarantor owning that Ship), provided that:

 

(A)                               such sale is made on market terms at no less than Fair Market Value (as determined in accordance with the Appraisals most recently delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Clause 19.2(d)(Financial Statements) or delivered at the time of such sale to the Facility Agent by the Parent Guarantor);

 

(B)                               at least 75% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or to the respective Owner Guarantor which owned such Ship, on the date of consummation of such sale; and

 

(C)                               the Borrower shall prepay the relevant Vessel Loans as required by Clause 7.6 (Mandatory prepayment on sale or Total Loss) with the proceeds of such sale, and provided that no Default or Event of Default pursuant to Clause

 

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27.3 (Specific obligations) exists, such prepayment may be made with the proceeds of such sale together with such other cash of the Borrower;

 

(ii)                                  the Parent Guarantor and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale); and

 

(iii)                               the Borrower and any Owner Guarantor may transfer any Security Assets (other than a ship) to any other Owner Guarantor, so long as:

 

(A)                               no Default or Event of Default then exists; and

 

(B)                               the Security Requirement are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent (acting on instructions of the Required Lenders).

 

(b)                                 To the extent the Required Lenders (or to the extent required pursuant to Clause 44 (Amendments and Waivers) all Lenders) waive the provisions of this Clause 21.22 with respect to the sale of any Security Assets, or any Security Assets is sold as permitted by this Clause 21.22 (Disposals), such Security Assets (unless sold to the Parent Guarantor or a Subsidiary of the Parent Guarantor) shall be sold free and clear of the Securities created by the Security Documents, and the Facility Agent and Security Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

 

(c)                                  Save to the extent permitted under this Agreement or otherwise permitted by the Facility Agent (acting on instructions of the Required Lenders), nothing in this Clause shall be deemed to permit an Obligor from disposing all or substantially all of its assets.

 

21.23                 Merger

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to wind up, liquidate or dissolve its affairs or enter into any transaction of merger, consolidation or amalgamation or convey, sell, lease or otherwise dispose of all or substantially all of its assets, except that:

 

(a)                                 (i) any Owner Guarantor may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Owner Guarantor, so long as (x) no Default or Event of Default then exists and (y) the Security Requirements are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent and (ii) any Subsidiary of the Parent Guarantor (other than the Borrower, any Owner Guarantor and any subsidiary thereof) may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Subsidiary (other than the Borrower, any Owner Guarantor and any subsidiary thereof) of the Parent Guarantor or the Parent Guarantor;

 

(b)                                 following a Security Assets Disposition permitted by this Agreement, the Owner Guarantor which owned the Ship that is the subject of such Security Assets Disposition may dissolve, provided that (i) the Borrower shall prepay the relevant Vessel Loan as required by Clause 7.6 (Mandatory prepayment on sale or Total Loss), (ii) all of the proceeds of such dissolution shall be paid only to an Obligor and (iii) no Default or Event of Default is continuing unremedied at the time of such dissolution; and

 

(c)                                  any Subsidiary which is not an Obligor may wind up, liquidate or dissolve.

 

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21.24                 Change of business

 

(a)                                 The Parent Guarantor and its Subsidiaries will not engage in any business other than the businesses in which any of them is engaged in as of the date of this Agreement (or, in the case of any Subsidiary that is formed or incorporated after the date of this Agreement, any business in which the Parent Guarantor or any other Subsidiary is engaged as of the date of this Agreement) and activities directly related thereto, and similar or related maritime businesses.

 

(b)                                 The Borrower and Owner Guarantors will not engage in any operating or business activities other than (i) ownership, management or operation of the Ships, (ii) maintenance of legal existence (including the ability to incur fees, costs, expenses and taxes relating to such management), (iii) the entering into and performance of its obligations under this Agreement and the other Finance Documents and its Constitutional Documents, (iv) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group of the Parent Guarantor and its Subsidiaries, (v) holding any cash, Cash Equivalents and other property necessary or desirable in connection with or incidental to, the ownership, management and operation of the Ships, (vi) payment of Dividends, incurring Financial Indebtedness and any other activities to the extent permitted hereunder and under the other Finance Documents, (vii) providing indemnification to officers and directors and (viii) any activities incidental or reasonably related to the foregoing.

 

21.25                 Financial Indebtedness

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Financial Indebtedness other than:

 

(a)                                 Financial Indebtedness incurred pursuant to this Agreement and the other Finance Documents;

 

(b)                                 Financial Indebtedness of the Obligors incurred pursuant to (i) the Re-financing Facility in an aggregate principal amount not to exceed $581,000,000.00 at any time outstanding, less any repayments thereof made after the date hereof and (ii) the Korean Facility in an aggregate principal amount not to exceed $963,743,455.00 at any time outstanding, less any repayments thereof made after the date hereof, in each case including, for the avoidance of doubt, any swap or hedge agreement permitted thereunder in accordance with the terms thereof (including, without limitation, any swap or hedge agreement entered into by the relevant Obligor(s) for the purposes of hedging interest rate exposure thereunder);

 

(c)                                  any Hedging Agreement and Other Hedging Agreement entered into in the ordinary course of business and consistent with past practices; provided that (x) in the case of any Hedging Agreement, the term thereof does not extend beyond the relevant Termination Date and (y) in the case of any Other Hedging Agreement, the term thereof does not exceed six months and additionally, where such Hedging Agreement is an agreement to hedge interest rate fluctuations, such agreement is entered into in accordance with Clauses 8.5 (Hedging) to 8.6 (Hedging — First Right to Bid and Non-Lender Hedging Agreements) of this Agreement;

 

(d)                                 intercompany loans and advances (i) among the Obligors and (ii) made by Subsidiaries of the Parent Guarantor (other than the Obligors) to the Parent Guarantor or any other Subsidiary of the Parent; provided that any such loans or advances to an Obligor pursuant to this Clause 21.25(d) (Financial Indebtedness) shall be unsecured and subordinated to the obligations incurred hereunder of the respective Obligor pursuant to written subordination provisions

 

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on terms reasonably acceptable to the Facility Agent (acting on instructions of the Required Lenders);

 

(e)                                  the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness);

 

(f)                                   additional Financial Indebtedness incurred by the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding; and

 

(g)                                  the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) may incur and remain liable for Financial Indebtedness not otherwise permitted under this Clause 21.25 (Financial Indebtedness) so long as (i) no Default or Event of Default exists at the time of such incurrence and after giving effect thereto and (ii) the Parent Guarantor and its Subsidiaries shall be in pro forma compliance with the financial covenants under this Agreement both before and after giving effect to the incurrence of such Financial Indebtedness.

 

21.26                 Share capital

 

(a)                                 The Parent Guarantor will not issue, and will not permit any Subsidiary to issue, any preferred stock (or equivalent equity interests) other than Qualified Preferred Stock.

 

(b)                                 The Parent Guarantor will not permit the Borrower or any Owner Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except:

 

(i)                                     for transfers and replacements of then outstanding shares of capital stock,

 

(ii)           for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Parent Guarantor or any of its Subsidiaries in any class of the capital stock of such Subsidiary,

 

(iii)          to qualifying directors to the extent required by applicable law,

 

(iv)          to such Person’s shareholders or in connection with any investment permitted under this Agreement, and

 

(v)                                 to the Borrower or another Owner Guarantor, in the case of an Owner Guarantor, or to the Parent Guarantor, in the case of the Borrower.

 

All capital stock of the Borrower or any Owner Guarantor issued in accordance with this Clause 21.26 (Share Capital) shall be delivered to the Security Agent pursuant to the Shares Security.

 

21.27                 Jurisdiction of Employment

 

The Parent Guarantor will not, and will not permit the Owner Guarantors or any third party charterer of a Ship to, employ or cause to be employed any Ship in any country or jurisdiction in which (i) the Borrower, the Owner Guarantors or such third party charterer of

 

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a Ship is prohibited by law from doing business, (ii) the Security created by the applicable Mortgage will be rendered unenforceable or (iii) the Security Agent’s foreclosure or enforcement rights will be materially impaired or hindered.

 

21.28                 Dividends

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Parent Guarantor or any of its Subsidiaries or make any payment (other than customary out-of-pocket fees and expenses)  in respect of Blue Mountain Indebtedness (collectively, a “Restricted Payment”), except that:

 

(a)                                 (i) any Wholly-Owned Subsidiary of the Parent Guarantor (other than the Borrower, any Owner Guarantor and any subsidiary thereof) may pay Dividends to the Parent Guarantor or any Wholly-Owned Subsidiary of the Parent Guarantor, (ii) any Owner Guarantor may pay Dividends to the Borrower or any other Owner Guarantor and (iii) if the respective Subsidiary (other than the Borrower or an Owner Guarantor) is not a Wholly-Owned Subsidiary of the Parent Guarantor, such Subsidiary may pay Dividends to its shareholders generally so long as the Parent Guarantor and/or its respective Subsidiaries which own Equity Interests in the Subsidiary paying such Dividends receive at least their proportionate share thereof (based upon their relative holdings of the Equity Interests in the Subsidiary paying such cash Dividends and taking into account the relative preferences, if any, of the various classes of Equity Interests of such Subsidiary);

 

(b)                                 the Parent Guarantor may pay Dividends and cash payments may be made in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness), provided that:

 

(i)            no Default or Event of Default exists at the time of declaration of any Dividend and no Default or Event of Default pursuant to Clauses 27.2 (Non-payment), 27.3 (Specific obligations) (with respect to Clause 20 (Financial Covenants) only) or Clause 27.7 (Insolvency Event) exists at the time of payment of such Dividend or cash payment in respect of Blue Mountain Indebtedness,

 

(ii)           the aggregate amount of Restricted Payments made during the period commencing on the date of this Agreement and ending on any date of determination does not exceed 50% of the Consolidated Net Income of the Parent Guarantor for the period commencing on the date of the credit agreement relating to the Korean Facility and ending on the last day of the fiscal quarter most recently ended for which financial statements have been provided pursuant to Clause 19.2 (Financial statements) (taken as one accounting period);

 

(iii)          after giving effect to such Restricted Payments, the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries on a consolidated basis shall be no less than (A) the minimum amount required under Clause 20.3 (Minimum Consolidated Liquidity) plus (B) the Remaining Shipyard Payments plus (C) $25,000,000; and

 

(iv)                              the Aggregate Collateral Vessel Value plus the aggregate fair market value of the ships acting as security under the Korean Facility and the Re-Financing Facility shall be at least 200% of the sum of (A) the then aggregate outstanding principal amount of the Loan (plus the outstanding loans under the Korean Facility and the Re-Financing Facility) minus (B) any cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries plus (C)

 

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the Remaining Shipyard Payments under this Agreement and the Korean Facility; and

 

(c)                                  the Borrower may pay or make any Dividends, provided that:

 

(i)                                     no Default or Event of Default exists at the time of such Dividend or would result after giving effect thereto, and

 

(ii)                                  before and immediately after giving effect to such Dividend, the Parent Guarantor shall be in pro forma compliance with the Financial Covenants; and

 

(d)                                 the Parent Guarantor may make Restricted Payments provided that (i) no Default or Event of Default exists at the time of the payment thereof and (ii) such payments do not exceed the Equity Proceeds Amount at the time of such payments;

 

(e)                                  interest payments in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) may be paid through the issuance of additional Blue Mountain Indebtedness (or Permitted Blue Mountain Refinancing Indebtedness) in accordance with the terms thereof;

 

(f)                                   cash payments may be made in respect of the Blue Mountain Indebtedness with proceeds from any Permitted Blue Mountain Refinancing Indebtedness;

 

(g)                                  cash payments may be made in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) on the final maturity date of such Indebtedness;

 

(h)                                 payments in connection with the Merger in an amount not to exceed $5,000,000;

 

(i)                                     so long as no cash, Financial Indebtedness or other property of the Parent Guarantor and its Subsidiaries is being paid by the Parent Guarantor to such employees, former employees, directors or former directors in connection with such repurchase:

 

(i)                                     the Parent Guarantor may repurchase its outstanding Equity Interests held by its or any of its Subsidiary’s employees, former employees, directors and former directors pursuant to:

 

(A)                               that certain stock option grant agreement dated as of July 8, 2014, by and between Navig8 Group and L. Spenser Wells, as amended, supplemented or modified from time to time,

 

(B)                               that certain General Maritime, Inc. 2012 Equity Incentive Plan (as amended) and

 

(C)                               any grants or awards issued under any future management incentive plan entered into by Parent Guarantor or any of its Subsidiaries,

 

in each case, in connection with any exercise by such employees, former employees, directors or former directors to purchase the Parent Guarantor’s Equity Interest; and

 

(ii)                                  the Parent Guarantor may repurchase its outstanding Equity Interests in an amount equal to the value of any withholding taxes in connection with the vesting of any Equity Interests granted to its employees, former employees, directors and former directors; and

 

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(j)                                    the Parent Guarantor may make cash payments in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness), provided that:

 

(i)                                     no Default or Event of Default exists at the time of declaration of such cash payment,

 

(ii)                                  the aggregate amount of cash payments made pursuant to this clause (j) made during the period commencing on the date of this Agreement and ending on any date of determination does not exceed the Excess Asset Sale Proceeds Amount,

 

(iii)                               after giving effect to such cash payments, the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries on a consolidated basis shall be no less than (A) the minimum amount required under Clause 20.3 (Minimum consolidated liquidity) plus (B) the Remaining Shipyard Payments plus (C) $25,000,000, and

 

(iv)                              the Aggregate Collateral Vessel Value plus the aggregate Fair Market Value of all ships then acting as security under the Korean Facility and the Re-Financing Facility be at least 200% of the sum of (A) the then aggregate outstanding principal amount of Loans (plus the outstanding loans under the Korean Facility and the Re-Financing Facility) minus (B) any cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries plus (C) the Remaining Shipyard Payments under this Agreement and the credit agreement for the Korean Facility.

 

21.29                 Chartering Arrangements

 

(a)                                 The Parent Guarantor will, and procure that each Owner Guarantor shall, only charter out the Ship owned or to be owned by it under the relevant Pool Agreement, provided that any Ship may exit such Pool Agreement and be employed under a Charter either directly with a charterer (such direct Charter, an “Other Charter”) or through entering into another Pool Agreement without the prior written consent of the Facility Agent, if, such Other Charter is for a period of at least twelve (12) months (with or without optional extensions). No such Other Charter shall be entered into by an Owner Guarantor in relation to the Ship owned by it for a period less than twelve (12) months except with the prior written consent of the Facility Agent (acting on the instructions of Lender(s) whose Contribution or Commitments in the relevant Vessel Loan relating to that Ship is at least fifty per cent of such Vessel Loan or the Commitments relating thereto, as the case may be).

 

(b)                                 The Parent Guarantor will and procure that each Owner Guarantor shall (i) provide the Facility Agent with a true, and complete copy of any Pool Agreement entered into by such Owner Guarantor in relation to the Ship owned by it; (ii) ensure that each Pool Agreement entered into by the relevant Owner Guarantor shall constitute legal and valid and binding obligations of the Owner Guarantor party thereto and shall use commercially reasonable endeavours to ensure that such Pool Agreement shall constitute the legal and valid and binding obligations of the relevant Pool Manager which is party thereto, (iii) and ensure that each Pool Agreement is assignable, and shall be assigned, to the Security Agent pursuant to the relevant General Assignment, (iv) use commercially reasonable endeavours to procure that the relevant Pool Manager to such Pool Agreement shall provide an acknowledgement in such form and substance as set out in such General Assignment (or such other form as the Security Agent may approve.

 

(c)                                  Notwithstanding anything to the contrary set forth in this Agreement and any other Finance Documents, with respect to any charter of a Ship through a Pool Manager, such charter may

 

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only be entered into between the Owner Guarantor which owns such Ship and such Pool Manager and in no event shall the Parent Guarantor or any Subsidiary thereof (other than the Owner Guarantor owning such Ship) have any obligations thereunder.

 

21.30                 Other transactions

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any of its Affiliate, other than on terms and conditions no less favourable to such Person as would be obtained by such Person at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except:

 

(a)                                 Restricted Payments may be paid to the extent provided in Clause 21.28 (Dividends);

 

(b)                                 loans and investments may be made and other transactions may be entered into between the Parent Guarantor and its Subsidiaries to the extent permitted by Clause 21.28 (Dividends);  and Clause 21.25 (Financial Indebtedness);

 

(c)                                  as long as the Parent Guarantor has an independent compensation committee, directors’ fees as determined by such independent compensation committee and, at any time the Parent Guarantor does not have an independent compensation committee, the Parent Guarantor may pay reasonable directors’ fees;

 

(d)                                 the Parent Guarantor and its Subsidiaries may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;

 

(e)                                  the Parent Guarantor and its Subsidiaries may pay management fees which have been pre-approved by the Facility Agent (acting on instructions of the Required Lenders) to Wholly-Owned Subsidiaries of the Parent Guarantor in the ordinary course of business;

 

(f)                                   the Parent Guarantor and its Subsidiaries may enter into an Intercompany Ship Delivery Agreement;

 

(g)                                  the transactions in existence on the date of this Agreement which are listed on Schedule Schedule 13 (Existing Transactions)  shall be permitted; and

 

(h)                                 the Ship Management Agreements and the Pool Agreement.

 

21.31                 Limitation on Certain Restrictions on Subsidiaries

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to:

 

(a)                                 pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Parent Guarantor or any Subsidiary of the Parent Guarantor, or pay any Financial Indebtedness owed to the Parent Guarantor or a Subsidiary of the Parent Guarantor,

 

(b)                                 make loans or advances to the Parent Guarantor or any of the Parent Guarantor’s Subsidiaries; or

 

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(c)                                  transfer any of its properties or assets to the Parent Guarantor or any of the Parent Guarantor’s Subsidiaries, except for such encumbrances or restrictions existing under or by reason of:

 

(i)                                     applicable law;

 

(ii)           this Agreement and the other Finance Documents;

 

(iii)          the Korean Facility and the Re-financing Facility to the extent applicable, or any refinancing thereof or amendments thereto, and the other documents related thereto;

 

(iv)                              customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Parent Guarantor or a Subsidiary of the Parent Guarantor;

 

(v)                                 customary provisions restricting assignment of any agreement entered into by the Parent Guarantor or a Subsidiary of the Parent Guarantor in the ordinary course of business;

 

(vi)                              restrictions which are not more restrictive than those contained in this Agreement for any documents governing any Financial Indebtedness incurred after the date of this Agreement in accordance with the terms of this Agreement; and

 

(vii)                           the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness).

 

21.32                 Jurisdiction of incorporation or formation; Amendment of constitutional documents

 

(a)                                 The Parent Guarantor will not, and will not permit the Borrower or any Owner Guarantor to, amend, modify or change its (i) Constitutional Documents from that provided to the Facility Agent as at the date of this Agreement or (ii) any agreement entered into by it with respect to its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to its Equity Interests, other than 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, upon not less than 30 days prior written notice to the Facility Agent and so long as no Default or Event of Default exists and is continuing, any Owner Guarantor may change its jurisdiction of organization to another jurisdiction reasonably satisfactory to the Facility Agent (acting on the instructions of the Required Lenders), provided that any Owner Guarantor that has entered into the Security Documents hereunder shall promptly take all actions reasonably deemed necessary by the Security Agent to preserve, protect and maintain, without interruption, the security interest and Security of the Security Agent in any Security Assets owned by such Owner Guarantor to the satisfaction of the Security Agent, and such Owner Guarantor shall have provided to the Facility Agent and the Lenders such opinions of counsel as may be reasonably requested by the Facility Agent to assure itself that the conditions of this proviso have been satisfied.

 

21.33                 End of Fiscal Year; Fiscal Quarter

 

The Parent Guarantor shall cause:

 

(a)                                 each of its, and each of its Subsidiaries’ fiscal years to end on December 31; and

 

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(b)                                 each of its and its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year.

 

21.34                 Further assurance

 

(a)                                 The Parent Guarantor will, and will cause each of the Subsidiaries to, cause the Security Requirement to be satisfied at all times.

 

(b)                                 The Parent Guarantor, on behalf of itself and each other Obligor, will at any time and from time to time, at the expense of the Parent Guarantor or such other Obligor, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Facility Agent may reasonably require, to perfect and protect any Security granted or purported to be granted hereby or by the other Finance Documents, or to enable the Security Agent to exercise and enforce its rights and remedies with respect to any Security Assets.  Without limiting the generality of the foregoing, the Parent Guarantor will, and will cause each Obligor, execute (to the extent applicable) and file, or cause to be filed, such financing or continuation statements under any applicable law, or amendments thereto, such amendments or supplements to the Mortgages (including any amendments required to maintain Securities granted by such Mortgages pursuant to the effectiveness of this Agreement), and such other instruments or notices, as may be reasonably necessary, or that the Facility Agent may reasonably require, to protect and preserve the Securities granted or purported to be granted hereby and by the other Finance Documents.

 

(c)                                  The Parent Guarantor, Borrower and Owner Guarantors hereby authorize the Security Agent to file one or more financing or continuation statements under any applicable law, and amendments thereto, relative to all or any part of the Collateral, without the signature of the Parent Guarantor, Borrower or any Owner Guarantor, where permitted by law.  The Security Agent will promptly send the Parent Guarantor a copy of any financing or continuation statements which it may file without the signature of the Parent Guarantor,  Borrower or any Owner Guarantor and the filing or recordation information with respect thereto.

 

(d)                                 At the reasonable written request of any counterparty to Hedging Agreement entered into after the date of this Agreement (to the extent permitted under this Agreement to be entered into and secured but would not result in or create any Excluded Hedging Obligation) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Hedging Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Obligor and, at the written direction of the Security Agent, the mortgagee, shall promptly execute an amendment to each Mortgage adding obligations under such Hedging Agreement as an additional secured obligation under each Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Security Agent.

 

21.35                 Special Provisions Relating to the Blue Mountain Indebtedness

 

Notwithstanding anything to the contrary set forth in this Agreement and any other Finance Documents, the Parent Guarantor will not, and will not permit any Subsidiary to:

 

(a)                                 amend, modify, refinance or replace the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) in a manner such that the Blue Mountain Indebtedness (or such Permitted Blue Mountain Refinancing Indebtedness) will not comply with the Blue Mountain Indebtedness Requirements; or

 

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(b)                                 pay any interest in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) in cash or make any other prepayment or redemption thereof, other than as permitted pursuant to Clause 21.28 (Dividends); or

 

(c)                                  permit any vessels other than the Ships on the date hereof to be owned by Subsidiary V Inc. or any of its Subsidiaries; or

 

(d)                                 permit Subsidiary V Inc. or any of its Subsidiaries to hold cash and Cash Equivalents in excess of an amount reasonably determined by the Parent Guarantor to be necessary to fund operations of Subsidiary V Inc. and its Subsidiaries in the ordinary course of business.

 

21.36                 Overseas companies

 

Each Obligor shall promptly inform the Facility Agent if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Facility Agent regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.

 

22                                  INSURANCE UNDERTAKINGS

 

22.1                        General

 

The undertakings in this Clause 22 (Insurance Undertakings) remain in force from the date of this Agreement throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

22.2                        Maintenance of obligatory insurances

 

(a)                                 The Borrower and each Owner Guarantor shall keep each Ship insured with insurers and protection and indemnity clubs or associations of internationally recognized reputation, and placed in such markets, on such terms and conditions, and through an Approved Insurance Broker and under forms of policies approved by the Security Agent against the risks indicated below and such other risks as the Security Agent may reasonably specify from time to time; however, in no case shall the Security Agent specify insurance in excess of the customary insurances purchased by first-class owners of comparable vessels:

 

(i)                                     marine and war risk, including terrorism, confiscation, London Blocking and Trapping Addendum and Missing Collateral Vessel Clause, hull and machinery insurance, hull interest insurance and freight interest insurance (in each case, on an agreed value basis), together in an amount in Dollars at all times equal to or greater than the greater of (x) the then Fair Market Value of such Ship and (y) an amount which when aggregated with such insured value of the insurances for other Ships which are then subject to a Mortgage, is equal to one-hundred twenty per cent (120%) of the  aggregate principal amount of the Loan outstanding under this Agreement at such time. The insured value for hull and machinery insurances required under this clause (i) for a Ship shall at all times be in an amount equal to the greater of (x) eighty per cent (80%) of the Fair Market Value of such Ship and (y) an amount which, when aggregated with the insured value of the hull and machinery insurances of the other Ships which are then subject to a Mortgage is equal to the aggregate principal amount of the Loan outstanding under this Agreement at such time, and the remaining marine and war risk insurance required by this paragraph (i) may be taken out as hull and freight interest insurance;

 

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(ii)           marine and war risk protection and indemnity insurance or equivalent insurance (including coverage against liability for crew, fines and penalties arising out of the operation of such Ship, insurance against liability arising out of pollution, spillage or leakage, and workmen’s compensation or longshoremen’s and harbor workers’ insurance as shall be required by applicable law) and freight, demurrage & defense insurance in such amounts approved by the Security Agent; provided, however, that insurance against liability under law or international convention arising out of pollution, spillage or leakage shall be in an amount not less than the greater of:

 

(A)                               $1,000,000,000;

 

(B)                               the maximum amount reasonably available from the International Group of Protection and Indemnity Associations (the “International Group”) or alternatively such sources of pollution, spillage or leakage coverage as are commercially available in any absence of such coverage by the International Group as shall be carried by prudent shipowners engaged in similar trades; and

 

(C)                               the amounts required by the laws or regulations of the United States of America or any applicable jurisdiction in which such Ship may be trading from time to time.

 

(iii)          mortgagee’s interest insurance and mortgagee’s additional perils insurance on such conditions as the Security Agent may reasonably require and mortgagee’s interest insurance for pollution risks as from time to time agreed, satisfactory to the Security Agent and for an amount in U.S. dollars approved by the Security Agent but not being less than 120% of the sum of the aggregate principal amount of the Loan outstanding pursuant to this Agreement, the Borrower and such Owner Guarantor having no interest or entitlement in respect of such policies; all such mortgagee’s interest insurance cover shall be obtained directly by the Security Agent and the Security Agent undertakes to use its best endeavors to match the premium level that the Borrower or such Owner Guarantor would have paid if they had arranged such cover on such conditions (as demonstrated by the reasonable satisfaction of the Security Agent), provided that in no event shall the Borrower or such Owner Guarantor be required to reimburse the Security Agent for any such costs in excess of the premium level then available to the Security Agent in the market; and

 

(iv)                              while such Ship is idle or laid up, at the option of the Borrower and in lieu of the above-mentioned marine and war risk hull insurance, port risk insurance insuring such Ship against the usual risks encountered by like vessels under similar circumstances.

 

(b)                                 The marine and commercial war-risk insurance required in this Clause 22.2 (Maintenance of Obligatory Insurances) for such Ship shall have deductibles and franchises in amounts reasonably satisfactory to the Security Agent. All insurance maintained hereunder shall be primary insurance without right of contribution against any other insurance maintained by the Security Agent.  The policy of marine and war risk hull and machinery insurance with respect to each Ship shall, if so requested by the Security Agent, provide that the Security Agent shall be a named insured in its capacity as mortgagee and as loss payee.  The entry in a marine and war risk protection indemnity club with respect to each Ship shall note the interest of the Security Agent.  The Facility Agent, the Security Agent and each of their  respective successors and assigns shall not be responsible for any premiums, club calls, assessments or any other obligations or for the representations and warranties made therein by the Borrower, any of the Borrower’s Subsidiaries, the Owner Guarantor or any other Person.  In addition, the Borrower shall reimburse the Facility Agent for the commercially reasonable cost of mortgagee’s interest insurance and mortgagee’s additional

 

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perils insurance, which the Facility Agent will take out on each Ship upon such terms and in such amounts as the Facility Agent shall deem appropriate.

 

(c)                                  The Security Agent shall from time to time obtain a detailed report signed by an Approved Broker with respect to P & I entry, the hull and machinery and war risk insurance carried and maintained on each Ship, together with their opinion as to the adequacy thereof and its compliance with the provisions of this Clause 22.2 (Maintenance of Obligatory Insurances).  At the Borrower’s expense, the Borrower will instruct its insurance broker (which, for the avoidance of doubt shall be a different insurance broker from the Approved Insurance Broker referred to in the immediately preceding sentence) and the P & I club or association providing P & I insurance referred to in part (a)(ii) of this Clause 22.2 (Maintenance of Obligatory Insurances), to agree to advise the Facility Agent by electronic mail of any expiration, termination, alteration or cancellation of any policy, any default in the payment of any premium and of any other act or omission on the part of the Borrower or Owner Guarantor of which the Borrower or such Owner Guarantor has knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on each Ship, and to provide an opportunity of paying any such unpaid premium or call, such right being exercisable by the Security Agent on each Ship on an individual and not on a fleet basis.  In addition, the Borrower and each Owner Guarantor shall promptly provide the Security Agent with any information which the Security Agent reasonably requests for the purpose of obtaining or preparing any report from the Security Agent’s independent marine insurance consultant as to the adequacy of the insurances effected or proposed to be effected in accordance with this Clause 22.2 (Maintenance of Obligatory Insurances) as of the date hereof or in connection with any renewal thereof, and the Borrower and each Owner Guarantor shall upon demand indemnify the Security Agent in respect of all reasonable fees and other expenses incurred by or for the account of the Security Agent in connection with any such report, provided that the Security Agent shall be entitled to such indemnity only for one such report during a period of twelve months.

 

(d)                                 The underwriters or brokers shall furnish the Security Agent with a letter or letters of undertaking to the effect that:

 

(i)            they will hold the instruments of insurance, and the benefit of the insurances thereunder, to the order of the Security Agent in accordance with the terms of the loss payable clause referred to in the Assignment of Insurances;

 

(ii)           they will have endorsed on each and every policy as and when the same is issued the loss payable clause, to be in the excess of an amount equivalent to the Major Casualty, and the notice of assignment referred to in the relevant Assignment of Insurances for such Ship; and

 

(iii)          they will not set off against any sum recoverable in respect of a claim against any Ship under the said underwriters or brokers or any other Person in respect of any other vessel nor cancel the said insurances by reason of non-payment of such premiums or other amounts.

 

(e)                                  All policies of insurance required hereby shall provide for not less than fourteen (14) days prior written notice (seven (7) days in respect of war risks) to be received by the Security Agent of the termination or cancellation of the insurance evidenced thereby.  All policies of insurance maintained pursuant to this Clause 22.2 (Maintenance of Obligatory Insurances) for risks covered by insurance other than that provided by a P & I Club shall contain provisions waiving underwriters’ rights of subrogation thereunder against any assured named in such policy and any assignee of said assured, only to the extent such underwriters agree to so waive rights of subrogation (provided that it is understood and agreed that the Borrower and each Owner Guarantor shall use commercially reasonable efforts to obtain such waivers).  The Borrower and each Owner Guarantor shall assign to the Security Agent its full rights under any policies of insurance in respect of each Ship in accordance with the  terms contained herein (and, for the avoidance of doubt, such assignments shall include any additional value of any insurance that exceeds the values expressly required herein in respect of such Ship).  Each of the Borrower and each Owner Guarantor agrees that it shall

 

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deliver unless the insurances by their terms provide that they cannot cease (by reason of nonrenewal or otherwise) without the Facility Agent being informed and having the right to continue the insurance by paying any premiums not paid by the Borrower or such Owner Guarantor, receipts showing payment of premiums for Required Insurance and also of demands from each Ships P & I underwriters to the Security Agent at least two (2) days before the risk in question commences.

 

(f)                                   Unless the Security Agent shall otherwise agree, all amounts of whatsoever nature payable under any insurance must be payable to the Security Agent for distribution first to itself and thereafter to the Borrower, relevant Owner Guarantor or others as their interests may appear, provided that, notwithstanding anything to the contrary herein, until otherwise required by the Security Agent by notice to the underwriters upon the occurrence and continuance of an Event of Default hereunder, (i) amounts payable under any insurance on a Ship with respect to protection and indemnity risks may be paid directly to (x) the Borrower or relevant Owner Guarantor reimburse it for any loss, damage or expense incurred by it and covered by such insurance or (y) the Person to whom any liability covered by such insurance has been incurred, and (ii) amounts payable under any insurance with respect to such Ship involving any damage to such Ship not constituting an Total Loss, may be paid by underwriters directly for the repair, salvage or other charges involved or, if the Borrower or such Owner Guarantor shall have first fully repaired the damage or paid all of the salvage or other charges, may be paid to the Borrower or such Owner Guarantor as reimbursement therefor; provided, however, that if such amounts (including any franchise or deductible) are in excess of an amount equivalent to the Major Casualty, the underwriters shall not make such payment without first obtaining the written consent thereto of the Security Agent and the loss payable clauses pertaining to such insurances shall be endorsed to that effect.

 

(g)                                  All amounts paid to the Security Agent in respect of any insurance on each Ship shall be disposed of as follows (after deduction of the expenses of the Security Agent in collecting such amounts):

 

(i)            any amount which might have been paid at the time, in accordance with the provisions of paragraph (d) above, directly to the Borrower, Owner Guarantor or others shall be paid by the Security Agent to, or as directed by, the Borrower;

 

(ii)           all amounts paid to the Security Agent in respect of a Total Loss of such Ship shall be applied by the Security Agent to the payment of the Financial Indebtedness hereby secured pursuant to Clause 7.6(b) (Mandatory Prepayment on Sale or Total Loss) of this Agreement; and

 

(iii)          all other amounts paid to the Security Agent in respect of any insurance on such Ship may, in the Security Agent’s sole discretion, be held and applied to the prepayment of the Secured Liabilities or to making of needed repairs or other work on such Ship, or to the payment of other claims incurred by the Borrower or Owner Guarantor relating to such Ship, or may be paid to the Borrower, Owner Guarantor or whosoever may be entitled thereto.

 

(h)                                 In the event that any claim or lien is asserted against a Ship for loss, damage or expense which is covered by insurance required hereunder and it is necessary for the Borrower or Owner Guarantor to obtain a bond or supply other security to prevent arrest of such Ship or to release such Ship from arrest on account of such claim or lien, the Security Agent, on request of the Borrower, may, in the sole discretion of the Security Agent, assign to any Person, firm or corporation executing a surety or guarantee bond or other agreement to save or release such Ship from such arrest, all right, title and interest of the Security Agent in and to said insurance covering said loss, damage or expense, as collateral security to indemnify against liability under said bond or other agreement.

 

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(i)                                     The Borrower shall deliver to the Security Agent certified copies and, whenever so reasonably requested by the Security Agent, if available to the Borrower, the originals of all certificates of entry, cover notes, binders, evidences of insurance and policies and all endorsements and riders amendatory thereof in respect of insurance maintained pursuant to Clause 22 (Insurance Undertakings) for the purpose of inspection or safekeeping, or, alternatively, satisfactory letters of undertaking from the broker holding the same.  The Security Agent shall be under no duty or obligation to verify the adequacy or existence of any such insurance or any such policies, endorsement or riders.

 

(j)                                    Neither the Borrower nor any Owner Guarantor will execute or permit or willingly allow to be done any act by which any insurance may be suspended, impaired or cancelled, and that it will not permit or allow any Ship to undertake any voyage or run any risk or transport any cargo which may not be permitted by the policies in force, without having previously notified the Security Agent in writing and insured such Ship by additional coverage to extend to such voyages, risks, passengers or cargoes.

 

(k)                                 In case any underwriter proposes to pay less on any claim than the amount thereof, the Borrower shall forthwith inform the Security Agent, and if a Default, Event of Default or a Total Loss has occurred and is continuing, the Security Agent shall have the exclusive right to negotiate and agree to any compromise.

 

(l)                                     The Borrower and each Owner Guarantor will comply with and satisfy all of the provisions of any applicable law, convention, regulation, proclamation or order concerning financial responsibility for liabilities imposed on the Borrower, Owner Guarantor or each Ship with respect to pollution by any state or nation or political subdivision thereof and will maintain all certificates or other evidence of financial responsibility as may be required by any such law, convention, regulation, proclamation or order with respect to the trade in which such Ship is from time to time engaged and the cargo carried by it.

 

23                                  SHIPBUILDING CONTRACT UNDERTAKINGS

 

23.1                        General

 

The undertakings in this Clause 23 (Shipbuilding Contract Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

23.2                        Performance of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor or Subsidiary Inc., as applicable, shall:

 

(a)                                 observe and perform all its obligations and meet all its liabilities under or in connection with each Shipbuilding Contract to which it is a party to which non-compliance of would lead to a breach or default under such Shipbuilding Contract; and

 

(b)                                 take any action, or refrain from taking any action, which the Facility Agent may reasonably request in connection with any breach of the Shipbuilding Contract to which it is a party to, by it.

 

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23.3                        No variation, release etc. of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that no relevant Owner Guarantor or Subsidiary Inc., as applicable, shall whether by a document, by conduct, by acquiescence or in any other way:

 

(a)                                 vary, amend or waive the Shipbuilding Contract which it is a party to in a manner materially adverse to the Lenders;

 

(b)                                 terminate the Shipbuilding Contract to which it is a party to or treat itself as discharged or relieved from further performance of any of its obligations or liabilities under the Shipbuilding Contract to which it is a party to without the consent of the Facility Agent,

 

only if it is hereby agreed that an Owner Guarantor or Subsidiary Inc., may assign, novate or transfer all of (but not part of) its rights, title, interest and benefit under a Shipbuilding Contract to which it is a party to, only if, prior to any such assignment, novation or transfer, the Facility Agent has been provided by the Borrower, in advance, with satisfactory documentary evidence that the Vessel Loan relating to such Shipbuilding Contract has been or will be fully prepaid and/or the relevant portion of the Commitments relating to such Vessel Loan has been or will be fully cancelled in compliance with Clause 7.6 (Mandatory prepayment on Sale or Total Loss ).

 

23.4                        Action to protect validity of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor or Subsidiary Inc., as applicable, shall use its best endeavors to ensure that all interests and rights conferred by the Shipbuilding Contract to which it is a party to remain valid and enforceable in all respects and retain the priority which they were intended to have.

 

23.5                        No assignment etc. of Shipbuilding Contracts

 

Save as permitted by the Finance Documents, no Owner Guarantor shall, and the Borrower and the Parent Guarantor shall procure that no Owner Guarantor shall assign, novate, transfer or dispose of any of its rights or obligations under the Shipbuilding Contract to which it is a party to.

 

23.6                        Provision of information relating to Shipbuilding Contracts

 

Without prejudice to Clause 19.4 (Information: miscellaneous), the Borrower and the Parent Guarantor shall procure that the relevant Transaction Obligor shall:

 

(a)                                 promptly inform the Borrower and Parent Guarantor if any breach of the Shipbuilding Contract to which it is a party occurs or a serious risk of such a breach arises and of any other event or matter affecting that Shipbuilding Contract, the Intercompany Ship Delivery Agreement to which it is a party, which has or is reasonably likely to have a Material Adverse Effect and the Borrower and Parent Guarantor shall promptly inform the Facility Agent of any incurrence of Clause (a);

 

(b)                                 provide the Borrower and Parent Guarantor, promptly after service, with copies of all material notices served on or by it or any other Obligor under or in connection with the Shipbuilding Contract to which it is a party to and the Borrower and the Parent Guarantor shall promptly provide the Facility Agent with all notices received pursuant to this paragraph (b); and

 

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(c)                                  provide the Borrower and Parent Guarantor with any information which the Facility Agent reasonably requests about any interest or right of any kind which any Owner Guarantor or Subsidiary Inc. has at any time to, in or in connection with, the Shipbuilding Contract to which it is a party to or in relation to any matter arising out of or in connection with that Shipbuilding Contract including the progress of the construction of the Ship relating to such Shipbuilding Contract, and the Borrower and Parent Guarantor shall provide the Facility Agent with all information received pursuant to this paragraph (c).

 

24                                  GENERAL SHIP UNDERTAKINGS

 

24.1                        General

 

The undertakings in this Clause 24 (General Ship Undertakings) remain in force on and from the date of the relevant Delivery Date of a Ship and throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Lenders (or, where specified, and the ECA) may otherwise permit.

 

24.2                        Flag of Ships; Citizenship; Ship Classification

 

(a)                                 The Parent Guarantor shall, and shall cause each Owner Guarantor that owns a Ship to, cause each Ship to be registered under the laws and flag of (i) the Bahamas, (ii) the Republic of Malta; (iii) the Republic of Liberia, (iv) the Republic of the Marshall Islands, (v) the Republic of Panama; (vi) Bermuda; (vii) the United Kingdom; (viii) the Republic of Singapore or (ix) such other jurisdiction acceptable to the Lenders and Sinosure (each jurisdiction in clauses (i) through and including (v), an “Approved Flag”).  Notwithstanding the foregoing, any Obligor may transfer a Ship to another Approved Flag in accordance with Clause 24.3 (Flag Jurisdiction Transfer).

 

(b)                                 The Parent Guarantor will, and will cause each Owner Guarantor which owns or operates a Ship to, be qualified to own and operate such Ship under the laws of the applicable Approved Flag in accordance with the terms of the related Mortgage.

 

(c)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to keep such Ship in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Ship is classified in the highest class available for vessels of its age and type with an Approved Classification Society, free of any overdue conditions or  recommendations affecting the seaworthiness of such Ship, provided that if the classification of any of the Ships shall be subject to any such recommendations, the Borrower will and will cause each Owner Guarantor which operates such Ship to provide a written report to the Facility Agent describing the recommendations and assessing the steps required to be taken to prevent such recommendations from becoming overdue recommendations and it is hereby further agreed that there shall be no change in the classification of any of the Ships, save with the prior written consent of the Required Lenders.

 

(d)                                 The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:

 

(i)                                     comply with and satisfy in all material respects all applicable legal requirements of the jurisdiction of such Ship’s home port, now or hereafter from time to time in effect, in order that such Ship shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Ship for participation in the trades and services to which it may be dedicated from time to time; or

 

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(ii)                                  not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.

 

(e)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:

 

(i)                                     make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Ship will not be materially impaired; and

 

(ii)                                  except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Obligors installed on such Ship except in the ordinary course of the operation and maintenance of such Ship unless:

 

(A)                               the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security (other than any Other Permitted Security) in favour of any Person other than the Security Agent and becomes, upon installation on such Ship, the property of the Obligors and subject to the security constituted by the Mortgage; or

 

(B)                               the removal will not materially diminish the value of such Ship.

 

(f)                                   The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to submit such Ship to such periodical or other surveys as may be required for classification purposes and, upon the written request of the Security Agent, supply to the Security Agent copies of all survey reports and classification certificates issued in respect thereof.

 

(g)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Security (other than any Other Permitted Security) on, or claims enforceable against, such Ship other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Ship pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Security or claim as aforesaid, procure, if possible, the release of such Ship from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.

 

(h)                                 The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to maintain, or cause to be maintained by the charterer or lessee of any Ship, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable legal requirements for any Ship and such other similar certificates as may be required in the course of the operations of any Ship pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable legal requirements.

 

(i)                                     The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to cause such Ships to be managed by Approved Managers, provided that nothing herein shall be construed so as to prohibit such Approved Manager from sub-contracting its management duties. The Parent Guarantor and such Owner Guarantor will use all commercially reasonable endeavours to procure that such Approved Manager shall enter into a Manager’s Undertaking.

 

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24.3                        Flag Jurisdiction Transfer

 

Each Owner Guarantor of a Ship shall, and each other Obligor shall procure that such Owner Guarantor shall only change the flag of the Ship which is owned by it from its initial Approved Flag to a new Approved Flag (the “Transferred Ship”) and further upon fulfillment of the following conditions:

 

(a)                                 on or prior to each Flag Jurisdiction Transfer Date, the Facility Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Owner Guarantor owning that Transferred Ship, certifying that:

 

(i)            all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Flag Jurisdiction Transfer being consummated on the Jurisdiction Transfer Date and otherwise referred to herein shall have been obtained and remain in effect;

 

(ii)           there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement; and

 

(iii)          copies of resolutions approving the Flag Jurisdiction Transfer of such Owner Guarantor owning that Ship and any other matters the Facility Agent may reasonably request have been provided to the Facility Agent;

 

(b)                                 on a date no later than by the Flag Jurisdiction Transfer Date:

 

(i)            the Owner Guarantor owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry of the new Approved Flag, a new Mortgage (which shall to the extent possible, be registered as a “continuation mortgage” to the original Mortgage recorded in the initial Approved Flag) with respect to such Transferred Ship and such Mortgage shall be effective to create in favour of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Ship, subject only to any Other Permitted Security;

 

(ii)           all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve such security interests shall have been duly effected and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent;

 

(iii)          the Facility Agent shall have received from counsel to the Owner Guarantor owning that Transferred Ship reasonably satisfactory to the Facility Agent practicing in those jurisdictions in which the Transferred Ship is to be registered and/or the Owner Guarantor owning such Transferred Ship is organized, opinions which shall be addressed to the Facility Agent and each of the Lenders, and dated on such Flag Jurisdiction Transfer Date, which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the perfection of the security interests granted pursuant to the new Mortgage registered over the Transferred Ship and such other matters incident thereto as the Facility Agent may reasonably request;

 

(iv)          the Facility Agent shall have received:

 

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(A)                               a certificate of ownership issued by the registry of the new Approved Flag showing the registered ownership of the Transferred Ship in the name of the relevant Owner Guarantor owning that Transferred Ship; and

 

(B)                               a certificate of ownership and encumbrance or, as applicable a transcript of registry issued by the registry of the new Approved Flag with respect to the Transferred Ship, indicating no recorded mortgages, encumbrances or liens over the Transferred Ship other than any Security in favour of the Secured Parties and any Other Permitted Security, and

 

(C)                               a certificate satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained in respect of the Transferred Ship certifying that such insurances (x) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Security Agent as mortgagee and (y) conform with the insurance requirements of the Mortgage and this Agreement;

 

(v)                                 the Security Requirements, as applicable, for the Transferred Ship shall have been satisfied; and

 

(vi)                              that:

 

(A)                               no Event of Default has occurred and is continuing; and

 

(B)                               all representations and warranties contained in this Agreement or in any other Finance Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

 

24.4                        Security Requirements

 

Each Owner Guarantor of a Ship which is to be subject to a Flag Jurisdiction Transfer shall, and each other Obligor shall procure that such Owner Guarantor shall comply with the following conditions in relation to such Ship for the purposes of such Flag Jurisdiction Transfer:

 

(a)                                 the Owner Guarantor owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate ship registry, a Mortgage with respect to such Ship and such Mortgage shall be effective to create in favour of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Ship;

 

(b)                                 the Facility Agent shall have received each of the following:

 

(i)            class certificates from an Approved Classification Society indicating that such Ship meets the criteria specified in Clause 24.2 (Flag of Ships; Citizenship; Ship Classification);

 

(ii)           certified copies of all agreements related to the Ship Management Agreements and, if applicable, the Pool Agreement or other applicable Charter, for such Ship;

 

(iii)          certified copies of all ISM Code and ISPS Code documentation for each Ship; and

 

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(c)                                  a report, in form and scope reasonably satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained by the Parent Guarantor, the Borrower or the Owner Guarantors in respect of such Ship, together with a certificate from such broker certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Facility Agent, the Security Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance requirements of each respective Mortgage (it being understood that, except as required by applicable law, the insurance requirements of such Mortgage shall not exceed the Required Insurance) and (iii) include copies of the Required Insurance;

 

(d)                                 the Facility Agent shall have received from counsels (acting for the Lenders) (i) of the Marshall Islands, (ii) in the jurisdiction of the flag of the Ship and (iii) in such other relevant jurisdictions as the Facility Agent may require, an opinion addressed to the Facility Agent and each of the Lenders, in each case which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the matters set forth in the relevant Exhibit, including the perfection of the security interests (other than those to be covered by opinions delivered pursuant to the other opinions above) granted pursuant to the Security Documents, and such other matters incidental to the transactions contemplated herein as the Facility Agent may reasonably request;

 

(e)                                  the Facility Agent shall have received a certificate, dated on or about the date of this Agreement and reasonably acceptable to the Facility Agent, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Parent Guarantor, the Borrower and Owner Guarantors, and attested to by the Secretary or any Assistant Secretary (or, to the extent such entity does not have a Secretary or Assistant Secretary, the analogous Person within such entity) of such entity, as the case may be, with appropriate insertions, together with copies of the Constitutional Documents of such entity and the resolutions of such entity referred to in such certificate authorizing the consummation of the transactions contemplated by the Finance Documents; and

 

(f)                                   the Facility Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Facility Agent may have reasonably requested in connection with any matters set out in this Clause, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities.

 

24.5                        Classification society undertaking

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and use all commercially reasonable efforts to procure that the Approved Classification Society undertakes with the Security Agent):

 

(a)                                 to send to the Security Agent, following receipt of a written request from the Security Agent, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;

 

(b)                                 to allow the Security Agent (or its agents), at any time and from time to time, to inspect the original class and related records of that Owner Guarantor and that Ship at the offices of the Approved Classification Society and to take copies of them;

 

(c)                                  to notify the Security Agent immediately in writing if the Approved Classification Society:

 

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(i)                                     receives notification from that Owner Guarantor or any person that that Ship’s Approved Classification Society is to be changed; or

 

(ii)                                  becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship’s class under the rules or terms and conditions of that Owner Guarantor or that Ship’s membership of the Approved Classification Society;

 

(d)                                 following receipt of a written request from the Security Agent:

 

(i)                                     to confirm that that Owner Guarantor is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or

 

(ii)                                  to confirm that that Owner Guarantor is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Security Agent in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.

 

24.6                        Modifications

 

No Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, make any modification or repairs to, or replacement of, the Ship owned by it, or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.

 

24.7                        Removal and installation of parts

 

(a)                                 Subject to paragraph (b) below, no Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, remove any material part of any Ship, or any item of equipment installed on any Ship unless:

 

(i)            the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;

 

(ii)           the replacement part or item is free from any Security in favour of any person other than the Security Agent; and

 

(iii)          the replacement part or item becomes, on installation on that Ship, the property of that Owner Guarantor and subject to the security constituted by the Mortgage on that Ship.

 

(b)                                 An Owner Guarantor may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Owner Guarantor.

 

24.8                        Surveys

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting with the authorization of the Required Lenders or the ECA, provide the Facility Agent, with copies of all survey reports.

 

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24.9                        Ship inspections

 

(a)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times, to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

 

(b)                                 Any inspection of a Ship to be conducted by the Security Agent (or its agents) shall be:

 

(i)            without undue interference with the operations of that Ship;

 

(ii)           made upon the giving of at least 15 Business Days’ prior written notice by the Facility Agent; and

 

(iii)          at the cost of the Owner Guarantor owning that Ship provided, that the Owner Guarantor shall not be required to bear the cost of more than one inspection in each calendar year unless an Event of Default has occurred and is continuing.

 

24.10                 Prevention of and release from arrest

 

(a)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, promptly discharge:

 

(i)            all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;

 

(ii)           all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and

 

(iii)          all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.

 

(b)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, upon receiving notice of the arrest or seizure of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim:

 

(i)            no later than within seven days of receiving such notice, notify the Facility Agent (who shall promptly notify the Lenders) and provide a report to the Facility Agent (for its forwarding to the Lenders) containing such information as the Lenders may require on such arrest, seizure or detention; and

 

(ii)           promptly procure its release by providing bail or otherwise as the circumstances may require.

 

24.11                 Restrictions on chartering etc.

 

No Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, in relation to the Ship owned by it:

 

(a)                                 let that Ship on demise charter for any period save with the prior written consent of the Lenders and upon such conditions as the Lenders may require (including without limitation, an assignment of the insurances of such demise owner in favour of the Security Agent);

 

(b)                                 de activate or lay up that Ship; or

 

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(c)                                  put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.

 

24.12                 Notice of Mortgage

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or as the case may be, first preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Agent.

 

25                                  SECURITY COVER

 

25.1                        Minimum required security cover

 

(a)                                 The Parent Guarantor will not permit the Aggregate Collateral Vessel Value, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent to be, at any time, less than 135% of an amount equal to the aggregate principal amount of the Loan outstanding hereunder, at such time, and provided that any non-compliance with this Clause 25.1 (Minimum required security cover) shall not constitute an Event of Default (but shall constitute a Default), so long as within thirty (30) days of such non-compliance, the Borrower has either (x) provided Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepaid such portion of the Loan outstanding hereunder, to cure such non-compliance.

 

(b)                                 Any prepayment pursuant to this Clause 25.1 (Minimum required security cover) shall be applied to reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid, pro rata in respect of each Vessel Loan outstanding.

 

26                                  APPLICATION OF EARNINGS

 

26.1                        Payment of Earnings and Minimum Consolidated Liquidity

 

(a)                                 Each Obligor shall cause the Earnings and any other income derived from each of the respective Ships, to the extent constituting Requisition Compensation, Earnings and Insurances, to be deposited by the respective account debtor in respect of such earnings into one or more of the Earnings Accounts maintained for such Obligor from time to time.  Without limiting any Obligor’s obligations in respect of this Clause 26.1 (Payment of Earnings and Minimum Consolidated Liquidity), each of the Obligors agrees that, in the event it receives any earnings and other income constituting Requisition Compensation, Earnings, and Insurances in relation to a Ship, and such other proceeds are deposited into any account other than the Earnings Account relating to that Ship, it shall promptly notify the Facility Agent and immediately deposit all such proceeds into the Earnings Account relating to that Ship.

 

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(b)                                 The Parent Guarantor and the Borrower shall ensure that commencing from the first Utilisation Date, there shall be deposited in the Minimum Liquidity Account (which shall be subject to an Accounts Security executed by the Parent Guarantor in favour of the Security Agent) an amount equivalent to the Minimum Liquidity Amount and shall further procure that such amount is maintained in the Minimum Liquidity Account until the Secured Liabilities have been fully and irrevocably repaid.

 

(c)                                  All payments by a Hedge Counterparty to the Borrower or the Parent Guarantor under a Hedging Agreement shall be paid to the Minimum Liquidity Account, and the Borrower and  the Parent Guarantor (as the case may be) hereby irrevocably authorises such Hedge Counterparty to direct such payments into the Minimum Liquidity Account.

 

26.2                        Debt Service Reserve Account

 

Each Obligor shall ensure that, on the Utilisation Date of each Vessel Loan, there shall be maintained in the Debt Service Reserve Account a credit balance of no less than the aggregate of:

 

(a)                                 the full amount of the Repayment Instalment falling due under Clause 6.1 (Repayment of Loan) on the next Repayment Date (for the avoidance of doubt, excluding the relevant Balloon Payment) relating to such Vessel Loan; and

 

(b)                                 the amount of interest on such Vessel Loan which is payable on the next due date for payment of interest on such Vessel Loan under this Agreement,

 

provided that it is hereby agreed that after the first Repayment Date of each Vessel Loan, each Obligor may be required to top up such amount in the Debt Service Reserve Account in an amount necessary to ensure that the amount of the next Repayment Instalment and amount of interest payable on the next due date for payment in relation to such Vessel Loan, shall at all times reflect the aggregate amount of the next Repayment Instalment and amount of interest next due for payment in respect of each Vessel Loan, at the relevant time.

 

26.3                        Shortfall in Earnings

 

(a)                                 If the aggregate of the credit balance on the Debt Service Reserve Account falls below the amounts required under Clause 26.2 (Debt Service Reserve Account ), the Parent Guarantor shall promptly make up the amount of the insufficiency and in any event, immediately on demand from the Facility Agent.

 

(b)                                 Without prejudicing the Facility Agent’s right to make such demand at any time, the Facility Agent may, if so authorized by the Required Lenders, permit the Borrower to make up all or part of the insufficiency from the Earnings received in the Earnings Account.

 

26.4                        Interest accrued on Debt Service Reserve Account

 

Any credit balance on the Debt Service Reserve Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Account Bank likely to remain on the Debt Service Reserve Account.

 

26.5                        Release of accrued interest

 

Interest accruing under Clause 26.4 (Interest accrued on Debt Service Reserve Account) shall be credited to the Debt Service Reserve Account, shall be released to the Parent Guarantor

 

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at the end of the Security Period.  For the avoidance of doubt, such interest shall count towards the amounts in the Debt Service Reserve Account required to be maintained under Clause 26.2 (Debt Service Reserve Account).

 

26.6                        Withdrawals from Accounts

 

No withdrawals may be made from any Account without the prior written consent of the Facility Agent unless:

 

(a)                                 Clause 26.1(b) (Payment of Earnings and Minimum Consolidated Liquidity) and Clause 26.2 (Debt Service Reserve Account) are fully complied with; and

 

(b)                                 no Event of Default has occurred and is continuing.

 

26.7                        Location of Accounts

 

Each Obligor shall promptly execute any documents which the Facility Agent specifies is necessary to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and the Debt Service Reserve Account.

 

27                                  EVENTS OF DEFAULT

 

27.1                        General

 

Each of the events or circumstances set out in this Clause 27 (Events of Default) is an Event of Default except for Clause 27.19 (Acceleration).

 

27.2                        Non-payment

 

Any Obligor shall default in the payment when due of any amounts due under any Finance Document (including without limitation, any Sinosure Premium) unless its failure to pay is caused by:

 

(a)                                 administrative or technical error; or

 

(b)                                 a Disruption Event,

 

and payment is made within three (3) Business Days of the payment due date.

 

27.3                        Specific obligations

 

Any Obligor shall default in the due performance or observance by it of any term, covenant or agreement contained in Clauses 19.2 (Financial statements), 19.3 (Compliance certificate), 20 (Financial covenants), 21.2 (Corporate Franchises), 21.4 (Ownership of subsidiaries), 21.21 (Negative pledge), 21.22 (Disposals), 21.23 (Merger), 21.24 (Change of business), 21.25 (Financial Indebtedness), 21.26 (Share capital), 21.27 (Jurisdiction of employment), 21.28 (Dividends), 21.29 (Chartering arrangements), 21.30 (Other transactions), 21.31 (Limitation on certain restrictions on Subsidiaries), 21.32 (Jurisdiction of incorporation or formation; Amendment of constitutional documents), 21.33 (End of fiscal year; Fiscal quarter), 21.34 (Further assurance) and 25.1 (Minimum required security cover).

 

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27.4                        Other obligations

 

(a)                                 An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.2 (Non-payment) and Clause 27.3 (Specific obligations).

 

(b)                                 No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within thirty (30) days of the Facility Agent giving notice to the Borrower or (if earlier) any Obligor becoming aware of the failure to comply.

 

27.5                        Misrepresentation

 

Any representation, warranty or statement made by any Obligor herein or in any other Finance Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made.

 

27.6                        Cross default

 

(a)                                 The Parent Guarantor or any of its Subsidiaries shall default in any payment of any Financial Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created; or

 

(b)                                 The Parent Guarantor or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Financial Indebtedness (other than the obligations created hereunder) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Financial Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Financial Indebtedness to become due prior to its stated maturity; or

 

(c)                                  Any Financial Indebtedness (other than the obligations created hereunder) of the Parent Guarantor or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid, redeemed, defeased or repurchased, other than by a regularly scheduled required prepayment or in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment prior to the stated maturity thereof;

 

provided that it shall not be a Default or Event of Default under this Clause 27.6 (Cross Default) unless the aggregate principal amount of all Financial Indebtedness as described in preceding clauses (a) through (c), inclusive, exceeds $1,000,000 (in the case of each of the Obligors (other than the Parent Guarantor)) and $10,000,000 (in the case of the Parent Guarantor and its Subsidiaries (other than the Obligors) on a consolidated basis).

 

27.7                        Insolvency Event

 

(a)                                 Either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary):

 

(i)                                     is unable or admits inability to pay its debts as they fall due;

 

(ii)                                  is deemed to, or is declared to, be unable to pay its debts under applicable law; or

 

(iii)                               suspends or threatens to suspend making payments on any of its debts.

 

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(b)                                 The value of the assets of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary) is less than its liabilities (taking into account contingent and prospective liabilities).

 

(c)                                  A moratorium is declared in respect of any indebtedness of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary).  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

 

27.8                        Insolvency proceedings

 

(a)                                 Any corporate action, legal proceedings or other procedure or step is taken in relation to:

 

(i)            the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary), other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;

 

(ii)           a composition, compromise, assignment or arrangement with any creditor of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary);

 

(iii)          the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary) or any of its respective assets; or

 

(iv)                              enforcement of any Security over any assets of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary),

 

(v)                                 or any analogous procedure or step is taken in any jurisdiction.

 

(b)                                 Paragraph (a) above shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious or is being contested in good faith, with appropriate financial reserves and due diligence and is discharged, stayed or dismissed within 30 days of commencement of, if earlier, the date on which it is advertised.

 

27.9                        Creditors’ process

 

Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of an Obligor having an aggregate value of $10,000,000 and is not discharged within 60 days.

 

27.10                 ERISA

 

(a)                                 Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 or 430 of the Code or Section 302 or 303 of ERISA; or

 

(b)                                 a Reportable Event shall have occurred; or

 

(c)                                  a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days; or

 

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(d)                                 any Plan which is subject to Title IV of ERISA shall have had or is reasonably likely to have a trustee appointed to administer such Plan; or

 

(e)                                  any Plan which is subject to Title IV of ERISA is, shall have been or is reasonably likely to be terminated or to be the subject of termination proceedings under ERISA; or

 

(f)                                   any Plan shall have an Unfunded Current Liability, its actuary has certified that a determination has been made that a Plan (other than a Multiemployer Plan) is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; or

 

(g)                                  a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; or

 

(h)                                 a contribution required to be made with respect to a Plan or a Foreign Pension Plan is not timely made; or

 

(i)                                     the Parent Guarantor or any of its Subsidiaries or any ERISA Affiliate has incurred or events have happened, or reasonably expected to happen, that will cause it to incur any liability to  or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or

 

(j)                                    the Parent Guarantor, or any of its Subsidiaries, has incurred or is reasonably likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans; or

 

(k)                                 there shall result from any of the foregoing event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability, or such lien, security interest or liability, individually, and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or could reasonably be expected to have, a Material Adverse Effect.

 

27.11                 Guaranties

 

After the execution and delivery thereof, any guaranty pursuant to Clause 17 (Guarantee and Indemnity) of this Agreement, or any provision thereof, shall cease to be in full force or effect as to any Guarantor (unless such Guarantor is no longer a Subsidiary of the Parent Guarantor by virtue of a liquidation, sale, merger or consolidation permitted by Clauses 21.23 (Merger) and/or 21.24 (Change of Business)) or any Guarantor (or person acting by or on behalf of such Guarantor) shall deny or disaffirm such Guarantor’s obligations under the guaranty to which it is a party or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the guaranty to which it is a party beyond any grace period (if any) provided therefor.

 

27.12                 Security imperiled

 

At any time after the execution and delivery thereof, any of the Security Documents shall cease to be in full force and effect, or shall cease in any material respect to give the Security Agent for the benefit of the Secured Parties the Security, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Security on, all of the Security Assets), in favour of the Security Agent, superior to and prior to the rights of all third Persons (except in connection with any Other Permitted Security), and subject to no other Security (except any Other Permitted 

 

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Security), or any Obligor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any of the Security Documents and such default shall continue beyond any grace period (if any) specifically applicable thereto pursuant to the terms of such Security Document, or any “event of default” (as defined in any Mortgage) shall occur in respect of any Mortgage.

 

27.13                 Cessation or change of business

 

Except in connection with the sale of a Ship by the Owner Guarantor that owns it or save to the extent permitted under this Agreement, any Obligor:

 

(a)                                 suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business; or

 

(b)                                 changes the nature of its business from that conducted as at the date of this Agreement.

 

27.14                 Repudiation and rescission of agreements

 

Save to the extent permitted under this Agreement, an Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.

 

27.15                 Restricted Party and non-compliance with Sanctions and/or Anti-Bribery and Corruption Laws

 

A Transaction Obligor or any Subsidiary of it or any of their respective directors or officers becomes a Restricted Party or any Obligor or its Subsidiary fails to comply with any Sanctions and/or any Anti-Bribery and Corruption Laws applicable to it, and in particular to the extent required under Clause 21.3 (Compliance with laws).

 

27.16                 Arrest etc.

 

Any Ship which is subject to a Mortgage is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the Owner Guarantor owning such Ship fails to procure the release of such Ship within a period of 30 Business Days thereafter (the “30 Days Period”) unless the Borrower has prepaid the Vessel Loan in full (together with all interest, fees and other related amounts payable in relation thereto) on or before the last day of the 30 Days Period.

 

27.17                 Transaction Documents.

 

(a)                                 It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents.

 

(b)                                 Any obligation of a Transaction Obligor under the Transaction Documents is not or ceases to be legal, valid, binding or enforceable.

 

(c)                                  Any Transaction Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Document is alleged by a party to it (other than a Finance Party) to be ineffective.

 

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27.18                 Stock Exchange Listing

 

The shares of the Parent Guarantor cease to remain listed, or are suspended from trading on the New York Stock Exchange for a consecutive period of more than fourteen (14) days.

 

27.19                 Sinosure Insurance Policies

 

(a)                                 Any default (howsoever described) occurs under the terms of any Sinosure Insurance Policy.

 

(b)                                 Any Sinosure Insurance Policy is terminated, repudiated or ceases to be in full force and effect.

 

27.20                 Acceleration

 

Upon the occurrence and during the continuance of an Event of Default, the Facility Agent may and, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Facility Agent, any Lender to enforce its claims against any Obligor (provided that, if an Event of Default specified in Clause 27.7 (Insolvency Event) shall occur in respect of any Obligor, the result which would occur upon the giving of written notice by the Facility Agent to the Borrower as specified in paragraphs (a) and (b) below shall occur automatically without the giving of any such notice):

 

(a)                                 cancel the Total Commitments, whereupon they shall immediately be cancelled and/or declare the outstanding principal of and any accrued interest in respect of the Loan and all Secured Liabilities owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; and

 

(b)                                 enforce, as Security Agent, all of the Security and security interests created pursuant to the Security Documents.

 

27.21                 No impairment of rights.

 

Nothing in this Clause 27 (Events of Default) shall be taken to impair or restrict the exercise of any right given to individual Finance Parties under a Finance Document.

 

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SECTION 9

 

CHANGES TO PARTIES

 

28                                  CHANGES TO THE LENDERS

 

28.1                        Assignments and transfers by the Lenders

 

Subject to this Clause 28 (Changes to the Lenders), a Lender (the “Existing Lender”) may:

 

(a)                                 assign all of its rights (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender); or

 

(b)                                 transfer by novation all of its rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender),

 

under the Finance Documents to another bank or financial institution, Sinosure or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”); provided that if all of any Existing Lender’s rights are less than $20,000,000 in principal amount and any Affiliates of such Existing Lender hold any rights under this Agreement, then such Existing Lender and its Affiliates must assign or transfer all of their rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender and such Affiliates) to the New Lender.

 

28.2                        Conditions of assignment or transfer

 

(a)                                 The consent of the Borrower or any Owner Guarantor is not required for an assignment or transfer by an Existing Lender. The written consent of Sinosure is required for any assignment or transfer by an Existing Lender. The consent of the Parent Guarantor is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

 

(i)                                     to another Lender or an Affiliate of a Lender;

 

(ii)                                  if the Existing Lender is a fund, to a fund which is a Related Fund; or

 

(iii)                               made at a time when any Event of Default is continuing.

 

(b)                                 The consent of the Parent Guarantor to an assignment or transfer must not be unreasonably withheld or delayed.  The Parent Guarantor will be deemed to have given its consent ten (10) days after the Existing Lender has requested it unless consent is expressly refused by the Parent Guarantor within that time.

 

(c)                                  The consent of the Parent Guarantor to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 (Mandatory Cost) if the Existing Lender agrees to indemnify the Borrower against any such additional amount payable by the Borrower under such Clause.

 

(d)                                 An assignment will only be effective on:

 

(i)                                     receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to 

 

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the Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it were an Original Lender; and

 

(ii)                                  performance by the Facility Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.

 

(e)                                  Each Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender’s title and of any rights or equities which the Borrower or any other Obligor had against the Existing Lender.

 

(f)                                   A transfer will only be effective if the procedure set out in Clause 28.5 (Procedure for transfer) is complied with.

 

(g)                                  If:

 

(i)                                     a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

 

(ii)                                  as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),

 

then the New Lender or Lender acting through its new Facility Office is entitled to receive payment under those Clauses only to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.  This paragraph (g) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.

 

(h)                                 Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

 

28.3                        Assignment or transfer fee

 

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $5,000.

 

28.4                        Limitation of responsibility of Existing Lenders

 

(a)                                 Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

 

(i)                                     the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;

 

(ii)                                  the financial condition of any Obligor;

 

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(iii)                               the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

 

(iv)                              the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

and any representations or warranties implied by law are excluded.

 

(b)                                 Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:

 

(i)                                     has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document or the Transaction Security; and

 

(ii)                                  will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities throughout the Security Period.

 

(c)                                  Nothing in any Finance Document obliges an Existing Lender to:

 

(i)                                     accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28 (Changes to the Lenders); or

 

(ii)                                  support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Finance Documents or otherwise.

 

28.5                        Procedure for transfer

 

(a)                                 Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.

 

(b)                                 The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

 

(c)                                  Subject to Clause 28.9 (Pro rata interest settlement), on the Transfer Date:

 

(i)                                     to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the “Discharged Rights and Obligations”);

 

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(ii)                                  each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

 

(iii)                               the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Mandated Lead Arrangers and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and

 

(iv)                              the New Lender shall become a Party as a “Lender”.

 

28.6                        Procedure for assignment

 

(a)                                 Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

 

(b)                                 The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

 

(c)                                  Subject to Clause 28.9 (Pro rata interest settlement), on the Transfer Date:

 

(i)            the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;

 

(ii)           the Existing Lender will be released from the obligations (the “Relevant Obligations”) expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and

 

(iii)          the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.

 

(d)                                 Lenders may utilise procedures other than those set out in this Clause 28.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 28.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender)  provided that they comply with the conditions set out in Clause 28.2 (Conditions of assignment or transfer).

 

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28.7                        Copy of Transfer Certificate or Assignment Agreement to Borrower

 

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

 

28.8                        Security over Lenders’ rights

 

In addition to the other rights provided to Lenders under this Clause 28 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

 

(a)                                 any charge, assignment, pledge or other Security to secure obligations to a federal reserve or central bank; and

 

(b)                                 in the case of any Lender which is a fund, any charge, assignment, pledge or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

 

except that no such charge, assignment, pledge or Security shall:

 

(i)                                     release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment, pledge or Security for the Lender as a party to any of the Finance Documents; or

 

(ii)                                  require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

 

28.9                        Pro rata interest settlement

 

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.5 (Procedure for transfer) or any assignment pursuant to Clause 28.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

 

(a)                                 any interest or fees in respect of the relevant Contribution which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

 

(b)                                 the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

 

(i)                                     when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

 

(ii)                                  the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

 

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(c)                                  In this Clause 28.9 (Pro rata interest settlement) references to “Interest Period” shall be construed to include a reference to any other period for accrual of fees.

 

29                                  CHANGES TO THE OBLIGORS

 

29.1                        Assignment or transfer by Obligors

 

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

29.2                        Release of security

 

(a)                                 If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:

 

(i)                                     the disposal is permitted by the terms of any Finance Document;

 

(ii)                                  all Lenders agree to the disposal;

 

(iii)                               the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or

 

(iv)                              the disposal is being effected by enforcement of a Security Document,

 

the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document.  However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).

 

(b)                                 If the Security Agent is satisfied that a release is allowed under this Clause 29.2 (Release of security) (at the request and expense of the Borrower) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release.  Each other Finance Party irrevocably authorizes the Security Agent to enter into any such document.  Any release will not affect the obligations of any other Obligor under the Finance Documents.

 

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SECTION 10

 

THE FINANCE PARTIES

 

30                                  THE FACILITY AGENT AND THE MANDATED LEAD ARRANGERS

 

30.1                        Appointment of the Facility Agent

 

(a)                                 Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

 

(b)                                 Each other Finance Party authorizes the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.

 

(c)                                  Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.

 

30.2                        Instructions

 

(a)                                 The Facility Agent shall:

 

(i)                                     unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:

 

(A)                               all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

 

(B)                               in all other cases, the Required Lenders; and

 

(ii)                                  not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).

 

(b)                                 The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Required Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

 

(c)                                  Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Required Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

 

(d)                                 The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security 

 

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that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

 

(e)                                  Without prejudice to the remainder of this Clause 30.2 (Instructions), in the absence of instructions, the Facility Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties.  The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.

 

(f)                                   The Facility Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

 

30.3                        Duties of the Facility Agent

 

(a)                                 The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

(b)                                 Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

 

(c)                                  Without prejudice to Clause 28.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.

 

(d)                                 Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

(e)                                  If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

 

(f)                                   If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Mandated Lead Arrangers or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.

 

(g)                                  The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

 

30.4                        Role of the Mandated Lead Arrangers

 

Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.

 

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30.5                        No fiduciary duties

 

(a)                                 Nothing in any Finance Document constitutes the Facility Agent or the Mandated Lead Arrangers as a trustee or fiduciary of any other person.

 

(b)                                 Neither the Facility Agent nor the Mandated Lead Arrangers shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.

 

30.6                        Application of receipts

 

Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 36.5 (Application of receipts; partial payments).

 

30.7                        Business with the Group

 

The Facility Agent and the Mandated Lead Arrangers may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

 

30.8                        Rights and discretions

 

(a)                                 The Facility Agent may:

 

(i)                                     rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;

 

(ii)                                  assume that:

 

(A)                               any instructions received by it from the Required Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

 

(B)                               unless it has received notice of revocation, that those instructions have not been revoked; and

 

(iii)                               rely on a certificate from any person:

 

(A)                               as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

 

(B)                               to the effect that such person approves of any particular dealing, transaction, step, action or thing,

 

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

 

(b)                                 The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:

 

(i)                                     no Default has occurred (unless it has actual knowledge of a Default arising under Clause 27 (Events of Default);

 

(ii)                                  any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

 

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(iii)                               any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

 

(c)                                  The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

 

(d)                                 Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.

 

(e)                                  The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

 

(f)                                   The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

 

(i)                                     be liable for any error of judgment made by any such person; or

 

(ii)                                  be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

 

unless such error or such loss was caused by the Facility Agent’s gross negligence or willful misconduct.

 

(g)                                  Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.

 

(h)                                 Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Mandated Lead Arrangers is obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

(i)                                     Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

 

30.9                        Responsibility for documentation

 

Neither the Facility Agent nor the Mandated Lead Arrangers is responsible or liable for:

 

(a)                                 the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

 

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(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(c)                                  any determination as to whether any information provided or to be provided to any Finance Party or Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

 

30.10                 No duty to monitor

 

Neither the Facility Agent nor any Mandated Lead Arranger shall be bound to inquire:

 

(a)                                 whether or not any Default has occurred;

 

(b)                                 as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or

 

(c)                                  whether any other event specified in any Transaction Document has occurred.

 

30.11                 Exclusion of liability

 

(a)                                 Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 36.11 (Disruption to Payment Systems etc.) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

 

(i)                                     any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

 

(ii)                                  exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(iii)                               any shortfall which arises on the enforcement or realization of the Security Property; or

 

(iv)                              without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

 

(A)                               any act, event or circumstance not reasonably within its control; or

 

(B)                               the general risks of investment in, or the holding of assets in, any jurisdiction,

 

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or

 

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systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

 

(b)                                 No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property (other than any claim based on, or any act or omission resulting from gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

 

(c)                                  The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Facility Agent for that purpose.

 

(d)                                 Nothing in this Agreement shall oblige the Facility Agent or the Mandated Lead Arrangers to carry out:

 

(i)                                     any “know your customer” or other checks in relation to any person; or

 

(ii)                                  any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

 

on behalf of any Finance Party and each Finance Party confirms to the Facility Agent and the Mandated Lead Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Mandated Lead Arrangers.

 

(e)                                  Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent’s liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss.  In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.

 

30.12                 Lenders’ indemnity to the Facility Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or willful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 36.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) in acting as 

 

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Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.

 

30.13                 Resignation of the Facility Agent

 

(a)                                 The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.

 

(b)                                 Alternatively, the Facility Agent may resign by giving 15 days’ notice to the other Finance Parties and the Borrower, in which case the Required Lenders may appoint a successor Facility Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(c)                                  If the Required Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent (with effect from its written acceptance) with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(d)                                 If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 30 (The Facility Agent and the Mandated Lead Arrangers ) and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent’s normal fee rates and those amendments will bind the Parties.

 

(e)                                  The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.

 

(f)                                   The Facility Agent’s resignation notice shall only take effect upon the appointment of a successor.

 

(g)                                  Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 (Indemnity to the Facility Agent) and this Clause 30 (The Facility Agent and the Mandated Lead Arrangers ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent.  Any fees for the account of the 

 

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retiring Facility Agent shall cease to accrue from (and shall be payable on) that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

(h)                                 The Required Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Facility Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrower.

 

(i)                                     The consent of the Borrower, the Parent Guarantor or any other Obligor, is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.

 

30.14                 Confidentiality

 

(a)                                 In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

 

(b)                                 If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

 

30.15                 Relationship with the other Finance Parties

 

(a)                                 Subject to Clause 28.9 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender or Hedge Counterparty at the opening of business (in the place of the Facility Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office or, as the case may be, the Hedge Counterparty:

 

(i)                                     entitled to or liable for any payment due under any Finance Document on that day; and

 

(ii)                                  entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

 

unless it has received not less than five Business Days’ prior notice from that Lender or Hedge Counterparty to the contrary in accordance with the terms of this Agreement.

 

(b)                                 Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.

 

(c)                                  Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents.  Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 38.5 (Electronic communication) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of 

 

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Clause 38.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 38.5 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

 

30.16                 Credit appraisal by the Finance Parties

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Mandated Lead Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

 

(a)                                 the financial condition, status and nature of each member of the Group;

 

(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(c)                                  whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(d)                                 the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

 

(e)                                  the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

 

30.17                 Facility Agent’s management time

 

Any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Facility Agent) and Clause 16 (Costs and Expenses) shall include the cost of utilising the Facility Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 (Fees and Sinosure Premium).

 

30.18                 Deduction from amounts payable by the Facility Agent

 

If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards  satisfaction of the amount owed.  For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

 

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30.19                 Reliance and engagement letters

 

Each Secured Party confirms that each of the Mandated Lead Arrangers and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Mandated Lead Arrangers or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

 

30.20                 Full freedom to enter into transactions

 

Without prejudice to Clause 30.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:

 

(a)                                 to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)                                 to deal in and enter into and arrange transactions relating to:

 

(i)                                     any securities issued or to be issued by any Obligor or any other person; or

 

(ii)                                  any options or other derivatives in connection with such securities; and

 

(c)                                  to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

31                                  THE SECURITY AGENT

 

31.1                        Appointment and trust

 

(a)                                 Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted or required under any applicable law) trustee in connection with the Security Property and confirms that the Security Agent shall have a lien on the Security Property and the proceeds of the enforcement of the Security Documents for all moneys payable to the beneficiaries of the Security Documents.

 

(b)                                 The Security Agent accepts its appointment under paragraph (a) above as trustee of the Security Property with effect from the date of this Agreement and declares that it holds the Security Property in trust for the Secured Parties on the terms contained in this Agreement 

 

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and shall deal with the Security Property in accordance with this Clause 31 (The Security Agent) and the other provisions of the Finance Documents.

 

(c)                                  Each other Finance Party authorizes the Security Agent to (i) perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions, and (ii) execute each of the Security Documents and all other documents that may be approved by the Facility Agent and/or the Required Lenders for execution by it.

 

(d)                                 Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.

 

31.2                        Enforcement through Security Agent only

 

The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

 

31.3                        Instructions

 

(a)                                 The Security Agent shall:

 

(i)                                     unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Facility Agent acting on the instructions of:

 

(A)                               all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

 

(B)                               in all other cases, the Required Lenders; and

 

(ii)                                  not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).

 

(b)                                 The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Facility Agent acting on the instructions of the Required Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

 

(c)                                  Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Facility Agent acting on the instructions of the Required Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

 

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(d)                                 The Security Agent may refrain from acting in accordance with any instructions of the Facility Agent acting on the instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

 

(e)                                  Without prejudice to the remainder of this Clause 31.3 (Instructions), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

 

(f)                                   The Security Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

 

31.4                        Duties of the Security Agent

 

(a)                                 The Security Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

(b)                                 The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party.

 

(c)                                  Except where a Finance Document specifically provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

(d)                                 If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

 

(e)                                  The Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

 

31.5                        No fiduciary duties

 

(a)                                 Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Obligor.

 

(b)                                 The Security Agent shall not be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account.

 

31.6                        Business with the Group

 

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

 

31.7                        Rights and discretions

 

(a)                                 The Security Agent may:

 

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(i)                                     rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;

 

(ii)                                  assume that:

 

(A)                               any instructions received by it from the Facility Agent acting on the instructions of the Required Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

 

(B)                               unless it has received notice of revocation, that those instructions have not been revoked; and

 

(iii)                               rely on a certificate from any person:

 

(A)                               as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

 

(B)                               to the effect that such person approves of any particular dealing, transaction, step, action or thing,

 

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

 

(b)                                 The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Secured Parties) that:

 

(i)                                     no Default has occurred;

 

(ii)                                  any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

 

(iii)                               any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

 

(c)                                  The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

 

(d)                                 Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.

 

(e)                                  The Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

 

(f)                                   The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

 

(i)                                     be liable for any error of judgment made by any such person; or

 

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(ii)                                  be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

 

unless such error or such loss was caused by the Security Agent’s gross negligence or willful misconduct.

 

(g)                                  Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.

 

(h)                                 Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

(i)                                     Notwithstanding any provision of any Finance Document to the contrary, the Security Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

 

31.8                        Responsibility for documentation

 

The Security Agent is not responsible or liable for:

 

(a)                                 the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

 

(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(c)                                  any determination as to whether any information provided or to be provided to any Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

 

31.9                        No duty to monitor

 

The Security Agent shall not be bound to inquire:

 

(a)                                 whether or not any Default has occurred;

 

(b)                                 as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or

 

(c)                                  whether any other event specified in any Transaction Document has occurred.

 

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31.10                 Exclusion of liability

 

(a)                                 Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:

 

(i)                                     any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless caused by its gross negligence or willful misconduct;

 

(ii)                                  exercising, or not exercising ,any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(iii)                               any shortfall which arises on the enforcement or realization of the Security Property; or

 

(iv)                              without prejudice to the generality of paragraphs (i)  to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

 

(A)                               any act, event or circumstance not reasonably within its control; or

 

(B)                               the general risks of investment in, or the holding of assets in, any jurisdiction,

 

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

 

(b)                                 No Party other than the Security Agent, that Receiver or that Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.5 (Third party rights).

 

(c)                                  The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Security Agent if the Security Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Security Agent for that purpose.

 

(d)                                 Nothing in this Agreement shall oblige the Security Agent to carry out:

 

(i)                                     any “know your customer” or other checks in relation to any person; or

 

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(ii)                                  any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

 

on behalf of any Finance Party and each Finance Party confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.

 

(e)                                  Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent, any Receiver or Delegate, any liability of the Security Agent, any Receiver or Delegate arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss.  In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.

 

31.11                 Lenders’ indemnity to the Security Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Security Agent and every Receiver and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct) duly justified in acting as Security Agent, Receiver or Delegate under the Finance Documents (unless the Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.

 

31.12                 Resignation of the Security Agent

 

(a)                                 The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.

 

(b)                                 Alternatively, the Security Agent may resign by giving 15 days’ notice to the other Finance Parties and the Borrower, in which case the Required Lenders may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(c)                                  If the Required Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

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(d)                                 The retiring Security Agent shall make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.

 

(e)                                  The Security Agent’s resignation notice shall only take effect upon:

 

(i)                                     the appointment of a successor; and

 

(ii)                                  the transfer of all the Security Property to that successor.

 

(f)                                   Upon the appointment of a successor, the retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 31.23 (Winding up of trust) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 (Indemnity to the Security Agent) and this Clause 31 (The Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent.  Any fees for the account of the retiring Security Agent shall cease to accrue from (and shall be payable on) that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

(g)                                  The Required Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.

 

(h)                                 The consent of the Borrower (or any other Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.

 

31.13                 Confidentiality

 

(a)                                 In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.

 

(b)                                 If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

 

31.14                 Credit appraisal by the Finance Parties

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

 

(a)                                 the financial condition, status and nature of each member of the Group;

 

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(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(c)                                  whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(d)                                 the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

 

(e)                                  the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

 

31.15                 Security Agent’s management time

 

(a)                                 Any amount payable to the Security Agent under Clause 14.5 (Indemnity to the Security Agent) and Clause 16 (Costs and Expenses) shall include the cost of utilising the Security Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 11 (Fees and Sinosure Premium).

 

(b)                                 Without prejudice to paragraph (a) above, in the event of:

 

(i)                                     a Default;

 

(ii)                                  the Security Agent being requested by an Obligor or the Facility Agent acting on the instructions of the Required Lenders to undertake duties which the Security Agent and the Borrower agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

 

(iii)                               the Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances,

 

the Borrower shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.

 

(c)                                  If the Security Agent and the Borrower fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrower (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of any investment bank shall be final and binding upon the Parties.

 

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31.16                 Reliance and engagement letters

 

Each Secured Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or  letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

 

31.17                 No responsibility to perfect Transaction Security

 

The Security Agent shall not be liable for any failure to:

 

(a)                                 require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Security Assets; or

 

(b)                                 obtain any license, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security; or

 

(c)                                  require any further assurance in relation to any Security Document.

 

31.18                 Insurance by Security Agent

 

(a)                                 The Security Agent shall not be obliged:

 

(i)                                     to insure any of the Security Assets;

 

(ii)                                  to require any other person to maintain any insurance; or

 

(iii)                               to verify any obligation to arrange or maintain insurance contained in any Finance Document,

 

and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.

 

(b)                                 Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Facility Agent acting on the instructions of the Required Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.

 

31.19                 Custodians and nominees

 

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it with reasonable care under this Agreement or be bound to supervise the proceedings or acts of any person.

 

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31.20                 Delegation by the Security Agent

 

(a)                                 Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.

 

(b)                                 That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit and commercially reasonable in the interests of the Secured Parties.

 

(c)                                  No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate selected by it with reasonable care.

 

31.21                 Additional Security Agents

 

(a)                                 The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

 

(i)                                     if it considers that appointment to be in the best interests of the Secured Parties; or

 

(ii)                                  for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or

 

(iii)                               for obtaining or enforcing any judgment in any jurisdiction, and the Security Agent shall give prior notice to the Borrower and the Finance Parties of that appointment.

 

(b)                                 Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.

 

(c)                                  The commercially reasonable remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

 

31.22                 Acceptance of title

 

The Security Agent shall be entitled to accept without inquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Security Assets and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.

 

31.23                 Winding up of trust

 

If the Security Agent, with the approval of the Facility Agent determines that:

 

(a)                                 all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and

 

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(b)                                 no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,

 

then

 

(i)                                     the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

 

(ii)                                  any Security Agent which has resigned pursuant to Clause 31.12 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Security Document.

 

31.24                 Powers supplemental to Trustee Acts

 

The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.

 

31.25                 Disapplication of Trustee Acts

 

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents.  Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

 

31.26                 Application of receipts

 

(a)                                 Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Agent receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 31 (The Security Agent), the “Recoveries”) shall be transferred to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments).

 

(b)                                 Paragraph (a) above is without prejudice to the rights of the Security Agent, each Receiver and each Delegate:

 

(i)                                     under Clause 14.5 (Indemnity to the Security Agent) or any other indemnity in favour of the Security Agent under the Finance Documents to be indemnified out of the Security Assets; and

 

(ii)                                  under any Finance Document to credit any moneys received or recovered by it to any suspense account.

 

(c)                                  Any transfer by the Security Agent to the Facility Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Agent.

 

(d)                                 The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) of this Clause 31.26 (Application of receipts) in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.

 

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31.27                 Deductions from receipts

 

(a)                                 Before transferring any moneys to the Facility Agent under Clause 31.26 (Application of receipts), the Security Agent may, in its discretion:

 

(i)                                     deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Agent or any Receiver or Delegate and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;

 

(ii)                                  set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and

 

(iii)                               pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

 

(b)                                 For the purposes of sub-paragraph (i) of paragraph (a) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.

 

31.28                 Prospective liabilities

 

Following enforcement of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments) in respect of:

 

(a)                                 any sum to the Security Agent, any Receiver or any Delegate; and

 

(b)                                 any part of the Secured Liabilities,

 

that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.

 

31.29                 Investment of proceeds

 

Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent’s discretion in accordance with the provisions of this Clause 31.29 (Investment of proceeds).

 

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31.30                 Currency conversion

 

(a)                                 For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.

 

(b)                                 The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

 

31.31                 Good discharge

 

Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Secured Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

 

31.32                 Full freedom to enter into transactions

 

Without prejudice to Clause 31.6 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:

 

(a)                                 to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)                                 to deal in and enter into and arrange transactions relating to:

 

(i)                                     any securities issued or to be issued by any Obligor or any other person; or

 

(ii)                                  any options or other derivatives in connection with such securities; and

 

(c)                                  to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

32                                  ECA AGENT

 

32.1                        The ECA Agent

 

(a)                                 Each Lender appoints and authorizes the ECA Agent to act as its agent under and in connection with this Agreement and the other Finance Documents, in relation to each Sinosure Insurance Policy and all Sinosure Matters with power to take such actions as:

 

(i)                                     are specified under any Finance Document as being for the ECA Agent to take on behalf of the Lenders insured under the Sinosure Insurance Policy;

 

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(ii)                                  are specifically delegated to the ECA Agent by the terms of the Sinosure Insurance Policy; or

 

(iii)                               are reasonably incidental thereto,

 

and if expressly authorized in writing by each Lender, the ECA Agent may execute and deliver on its behalf the Sinosure Insurance Policy and all documents that are necessary or desirable in connection with such agreement, and where the ECA Agent has acted in accordance with the express written instructions of the Lenders, each Lender agrees severally to be bound by the terms and conditions of each Sinosure Insurance Policy as if it had executed and delivered such agreement for and in its own name.

 

(b)                                 Without limiting the foregoing:

 

(i)                                     each Lender authorizes the ECA Agent to exercise those rights, powers and discretions which are expressly given to the ECA Agent by this Agreement and the other Finance Documents, together with any other reasonably incidental rights, powers and discretions; and

 

(ii)                                  each Lender appoints the ECA Agent solely for the purpose of:

 

(A)                               providing, revealing and disclosing, such information and details relating to any Obligor, the Finance Documents and the facilities granted pursuant thereto, to Sinosure as Sinosure may require from time to time for the purpose of issuing and administering the Sinosure Insurance Policies; and

 

(B)                               making a claim on behalf of the Lenders under the Sinosure Insurance Policies and directing payment of the insurance proceeds under the Sinosure Insurance Policies which shall be held by the Security Agent in trust for the Lenders and for application by the Facility Agent in accordance with Clause 36 (Payment Mechanics) of this Agreement.

 

32.2                        Lenders’ indemnity to the ECA Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the ECA Agent, within three Business Days of demand, against any cost, loss or liability incurred by it (otherwise than by reason of the ECA Agent’s gross negligence or wilful misconduct) duly justified in acting as ECA Agent under the Finance Documents (unless the ECA Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the ECA Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the ECA Agent to an Obligor.

 

33                                  SINOSURE SPECIFIC PROVISIONS

 

33.1                        No actions without Lender consent

 

(a)                                 Except where the ECA Agent reasonably believes that this is inconsistent with the terms of any Sinosure Insurance Policy, the ECA Agent agrees:

 

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(i)                                     not to take any action under the relevant Sinosure Insurance Policy without the consent of all the Lenders (which consent shall not be unreasonably withheld or delayed), unless the ECA Agent has reasonably determined that such action would not be detrimental to the insurance coverage provided to the Lenders thereunder; and

 

(ii)                                  to take such actions under the relevant Sinosure Insurance Policy (including with respect to any amendment, modification or supplement to that Sinosure Insurance Policy) as may be directed by all the Lenders from time to time;

 

provided that, notwithstanding anything herein or in the relevant Sinosure Insurance Policy to the contrary, the ECA Agent shall not be obliged to take any such action or to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties or the exercise of any of its rights or powers under this Agreement or the relevant Sinosure Insurance Policy if:

 

(A)                               it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; or

 

(B)                               such action would be contrary to applicable law.

 

(b)                                 If, in respect of any Sinosure Matters in relation to or arising out of any of the Finance Documents, where the approval, consent, authorization or instruction of Sinosure is required under the terms of the Finance Documents or the relevant Sinosure Insurance Policy, the ECA Agent wishes to take any step or action under or in relation to which conflicts with, or in contrary to, the provisions of the relevant Sinosure Insurance Policy and/or the approval, consent, authorization or instruction of Sinosure, such step or action may only be taken with consent of all Lenders.

 

33.2                        Limitation on obligation of ECA Agent to request instructions

 

The ECA Agent shall not have any obligation to request the Facility Agent or the Required Lenders or any other Finance Party to give it any instructions or to make any determination.

 

33.3                        Ratification of unauthorized action of ECA Agent

 

Any action which the ECA Agent takes or purports to take at a time when it had not been authorized to do so shall, if subsequently ratified, be as valid as regards every Finance Party as if the ECA Agent had been expressly authorized in advance.

 

33.4                        Cooperation with the ECA Agent

 

(a)                                 Each Lender and each Obligor undertakes to cooperate with the ECA Agent to comply with any legal requirements imposed on the ECA Agent in connection with the performance of its duties under this Agreement or any other Finance Document and shall supply any  information reasonably requested by the ECA Agent in connection with the proper performance of those duties.

 

(b)                                 The ECA Agent undertakes to provide timely notice to Sinosure with respect to any matters that require consent from the Required Lenders.

 

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33.5                        Nature of the ECA Agent’s duties

 

The ECA Agent’s duties under the Finance Documents are limited to coordinating and communicating with Sinosure. Unless otherwise specifically required under this Agreement, the ECA Agent is not tasked with responsibilities relating to payment, collection or receipt of funds.

 

33.6                        Lenders’ representations

 

Each Lender represents and warrants to the ECA Agent, with effect from the date of the relevant Sinosure Insurance Policy, that:

 

(a)                                 no information provided by such Lender in writing to the ECA Agent or to Sinosure prior to the date of this Agreement was untrue or incorrect in any material respect except to the extent that such Lender, in the exercise of reasonable care and due diligence prior to giving such information, could not have discovered the error or omission;

 

(b)                                 it has not taken (or failed to take), and agrees that it shall not take (or fail to take), any action that would result in the ECA Agent being in breach of any of its obligations in its capacity as ECA Agent under the relevant Sinosure Insurance Policy or the other Finance Documents, or result in the relevant Lenders being in breach of any of their respective obligations as insured parties under the relevant Sinosure Insurance Policy, or which would otherwise prejudice the ECA Agent’s ability to make a claim on behalf of the Lenders under the relevant Sinosure Insurance Policy;

 

(c)                                  it has reviewed the relevant Sinosure Insurance Policy and is aware of the provisions thereof; and

 

(d)                                 the representations and warranties made by the ECA Agent on behalf of each Lender under the relevant Sinosure Insurance Policy are true and correct with respect to such Lender in all respects.

 

33.7                        Provision of information

 

The ECA Agent shall provide to Sinosure any information which it receives from any Obligor or the Facility Agent pursuant to the Finance Documents and which it is obliged to provide to Sinosure under the terms of the relevant Sinosure Insurance Policy.

 

33.8                        Lender communications

 

Each Lender shall promptly forward to the ECA Agent a copy of any communication relating to Sinosure Matters which that Lender sends to, or receives from, any Obligor or Sinosure directly.

 

33.9                        Claims under Sinosure Insurance Policies

 

Each Lender acknowledges and agrees that, unless otherwise provided for in the relevant Sinosure Insurance Policy, it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with any of the Sinosure Insurance Policies except through the ECA Agent and that all of the rights of the Lenders under any of the Sinosure Insurance Policies shall only be exercised by the ECA Agent.

 

33.10                 Application of receipts

 

(a)                                 Except as expressly stated to the contrary in any Finance Document, any moneys which the ECA Agent receives or recovers shall be transferred to the Facility Agent as soon as 

 

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practicable upon receipt by the ECA Agent, for application in accordance with Clause 36 (Payment Mechanics) of this Agreement.

 

(b)                                 The parties agree that any unpaid Sinosure Premium and any unpaid fees, costs and expenses of Sinosure shall constitute amounts then due and payable in respect of the Loan under the Finance Documents for the purposes of the amounts then due and payable in respect of Clause 36 (Payment Mechanics) of this Agreement.

 

33.11                 Assignment to Sinosure

 

Each of the Parties agrees that, upon the issuance of the Compensation Notice by Sinosure in accordance with the terms of any Sinosure Insurance Policy:

 

(a)                                 the obligations of the Borrower, any other Obligor or any other party to the Finance Documents shall not be reduced or affected in any manner;

 

(b)                                 each of the Lenders shall assign to Sinosure:

 

(i)                                     such part of their respective contributions and (to the extent that there remain any) of their respective contributions as is equal to the amount to be paid to it by Sinosure under the relevant Sinosure Insurance Policy as set out in the Compensation Notice; and

 

(ii)                                  the rights of the Lenders to recover against the Borrower, any other Obligors or any other party to the Finance Documents pursuant to the Finance Documents or any relevant laws;

 

in each case, by means of a substitution certificate or such other evidence of assignment as may be reasonably required by Sinosure, provided that this shall not be construed as depriving any Lender of its rights to recover any part of the Total Commitments, the Loan or otherwise of the Unpaid Sum still owing to it after receipt of the relevant Sinosure Insurance Policy insurance proceeds;

 

(c)                                  Sinosure shall, upon being validly assigned rights under the Finance Documents pursuant to Clause 28.1 (Assignment and transfers by the Lenders), and to the extent of such assignment, be an assignee and as such shall be entitled to the rights and benefits of the Lenders under this Agreement and the other Finance Documents in respect of such payment to the extent of its interest;

 

(d)                                 until such assignment, each of the Lenders shall hold in trust for Sinosure any payments under this Agreement and each of the other Finance Documents and pay or transfer such payment to Sinosure in accordance with the relevant Sinosure Insurance Policy;

 

(e)                                  without prejudice to the indemnity provisions in Clause 14 (Other Indemnities), the Borrower and/or any other Obligor shall indemnify Sinosure in respect of any actual, reasonable costs or expenses (including reasonable legal fees) suffered or incurred by Sinosure in connection with the assignment referred to in this Clause 33.11 or in connection with any review by Sinosure of any Event of Default or dispute between the Borrower and/or any other Obligor and the Finance Parties occurring prior to the assignment referred to in this Clause 33.11;

 

(f)                                   with respect to the obligations of the Borrower and the other Obligors owed to the Facility Agent and/or the Lenders under the Finance Documents, such obligations shall additionally be owed to Sinosure by way of subrogation of the rights of the Lenders;

 

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(g)                                  the Borrower agrees to cooperate with the Facility Agent, the ECA Agent and the Lenders, as the case may be, in giving effect to any subrogation or assignment referred to in this Clause 33.11 and to take all actions requested by the Facility Agent, any Lender, the ECA Agent or Sinosure, in each case to the extent capable of being done by it, to implement or give effect to such subrogation or assignment;

 

(h)                                 the Borrower hereby acknowledges, for the benefit of the Lenders and Sinosure, that any payments made by Sinosure to an Lender (or to the Facility Agent or the ECA Agent on their respective behalfs) pursuant to a Sinosure Insurance Policy, will not satisfy, reduce, release or prejudice any of the Borrower’s obligations under the Finance Documents in whole or in part, which obligations shall remain due and payable notwithstanding the receipt or application of those payments;

 

(i)                                     on the date of any subrogation to, or (as applicable) assignment of any rights referred to in this Clause 33.11:

 

(i)                                     all further rights and benefits (including the right to receive commission in respect thereof but not any duty or other obligations) whatsoever of the relevant Lender in relation to the portion of the Loan or the rights and benefits to which such assignment or rights of subrogation relate under or arising out of this Agreement shall, to the extent of such assignment or rights of subrogation, be vested in and be for the benefit of Sinosure; and

 

(ii)                                  references in this Agreement to the Lenders shall, where relevant in the context thereafter be construed so as to include Sinosure in relation to such rights and benefits as are assigned to, or to which Sinosure has rights of subrogation; and

 

(j)                                    the representations and warranties made in this Agreement in favour of the relevant Lender shall survive any assignment or transfer pursuant to this Clause 33.11 and shall also inure to the benefit of Sinosure;

 

provided that nothing in this Clause 33.11 shall be construed as depriving the Lenders of any rights they may have against the Borrower or any other Obligor in respect of the Lenders’ rights under Clauses 14 (Other indemnities) and 13 (Increased costs).

 

33.12                 Cooperation with Sinosure; Events of Default

 

(a)                                 Each of the ECA Agent, the Facility Agent and the Security Agent shall provide to Sinosure any information which it receives from the Borrower and any other Obligor pursuant to the Finance Documents.

 

(b)                                 Each of the ECA Agent, the Facility Agent and the Security Agent agrees that it shall consult with Sinosure wherever reasonably practical prior to issuing a notice pursuant to Clause 27 (Events of Default), provided that Sinosure’s consent shall not be required in order for any such notice of default to be issued (other than by Sinosure to the extent required under any Sinosure Insurance Policy).

 

(c)                                  Notwithstanding anything to the contrary in any Finance Document, if an Event of Default has occurred and is continuing, the Facility Agent shall put to the vote of the Required Lenders the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 27 (Events of Default) of this Agreement should be invoked.  Should the Required Lenders’ vote be in favour of any of actions described in the preceding sentence, (i) the Facility Agent shall inform the ECA Agent and the ECA Agent shall discuss in a timely manner with Sinosure and obtain Sinosure’s consent before taking any step to

 

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enforce the Finance Documents and (ii) after obtaining the aforementioned consent from Sinosure, the Facility Agent and the Security Agent shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose.

 

(d)                                 Failing agreement between the Facility Agent (acting on behalf of the Required Lenders) and the ECA Agent (acting on behalf of Sinosure), the Facility Agent and the Security Agent shall be entitled to act in accordance with the instructions of the Required Lenders, including in relation to any waiver of an Event of Default and enforcement of remedies related thereto, provided that this does not result in any Sinosure Insurance Policy being lost, cancelled, unenforceable or invalid.

 

33.13                 Sinosure Override

 

Notwithstanding anything to the contrary in this Agreement or any other Finance Document, nothing in this Agreement shall permit or oblige any Lender to act (or omit to act) in a manner that is inconsistent with any requirement of Sinosure under or in connection with any Sinosure Insurance Policy and, in particular:

 

(a)                                 each of the Lenders and if applicable, the ECA Agent shall be authorized to take all such actions as they may deem necessary to ensure that all requirements of Sinosure under or in connection with each of the Sinosure Insurance Policies are complied with;

 

(b)                                 no Lender shall be obliged to do anything if, in its opinion (upon consultation with the ECA Agent), to do so could result in a breach of any requirements of Sinosure under or in connection with a Sinosure Insurance Policy or affect the validity of a Sinosure Insurance Policy;

 

(c)                                  each of the Lenders will agree to accept the instructions as advised to them by the ECA Agent or Sinosure and to act in conformity therewith in connection with their obligations under this Agreement; and

 

(d)                                 in the event of any conflict or inconsistency between the terms of this Agreement and any Sinosure Insurance Policy, the terms of the relevant Sinosure Insurance Policy shall prevail.

 

33.14                 Sinosure Premium and Sinosure

 

Without prejudice to Clause 7.10 (Refund of Sinosure Premium on voluntary prepayment), the Borrower:

 

(a)                                 agrees, and each Lender acknowledges and agrees, that:

 

(i)                                     the amount of any Sinosure Premium will be calculated in accordance with the percentage included in the relevant defined term as of the date of this Agreement, but otherwise subject to the terms of the relevant Sinosure Insurance Policy and Sinosure’s internal regulations; and

 

(ii)                                  no Lender is in any way involved in the calculation or payment of any part of any Sinosure Premium;

 

(b)                                 agrees that their obligation to pay any Sinosure Premium or any part of any Sinosure Premium in accordance with the relevant Sinosure Insurance Policy shall be an absolute and unconditional obligation and, once paid, shall not be affected by any failure by the Borrower to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the Loan;

 

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(c)                                  acknowledges that it shall pay an amount equivalent to each Sinosure Premium to Sinosure on the relevant due date, and no Sinosure Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the relevant Sinosure Insurance Policy and Clause 7.10 (Refund of Sinosure Premium on voluntary prepayment);

 

(d)                                 agrees that if, for any reason whatsoever, any additional premium is or becomes payable to Sinosure in respect of any Sinosure Insurance Policy, the Borrower shall promptly pay such additional premium in full and the Borrower shall fully cooperate with the Facility Agent and the ECA Agent on their reasonable request to take all steps necessary on the part of the Borrower to ensure that each Sinosure Insurance Policy remains in full force and effect throughout the Facility Period; and

 

(e)                                  shall indemnify Sinosure in relation to any costs or expenses (including reasonable legal fees) suffered or incurred by Sinosure (other than as a result of Sinosure’s gross negligence or wilful misconduct) in connection with any transfer to Sinosure undertaken pursuant to Clause 33.11 (Assignment to Sinosure) or in connection with any review by Sinosure of or in relation to any Event of Default and/or amendment or supplement to any of the Finance Documents and/or a request for a consent or approval from Sinosure; and

 

(f)                                   undertakes to pay any fees in relation to the application for any letter of interest or letter of intent in relation to the Sinosure Insurance Policy.

 

33.15                 Liability for Sinosure Premiums

 

(a)                                 The Borrower shall be responsible and shall bear the cost of the Sinosure Premium of each Sinosure Insurance Policy and shall pay the relevant Sinosure Premium for each Advance on the Utilisation Date relating to that Advance.

 

33.16                 Sinosure Insurance Policies

 

(a)                                 The Borrower will not, without the ECA Agent’s prior written consent, do or omit to do anything which may to its knowledge adversely prejudice the Lenders’ rights under any Sinosure Insurance Policy.

 

(b)                                 The ECA Agent and the Lenders are responsible for complying with the terms of each Sinosure Insurance Policy from which each Lender benefits.

 

33.17                 Sinosure Requirements

 

Each Obligor must execute all such other documents and instruments and do all such other acts and things as the ECA Agent, acting on the instructions of Sinosure and/or any Finance Party may reasonably require:

 

(a)                                 in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

 

(b)                                 in order for the beneficiaries under each Sinosure Insurance Policy to comply with and continue to benefit from that Sinosure Insurance Policy or to maintain the effectiveness of that Sinosure Insurance Policy.

 

33.18                 Protection of each of the Sinosure Insurance Policies

 

(a)                                 If at any time in the reasonable opinion of the ECA Agent, any provision of a Finance Document contradicts or conflicts with any provision of a Sinosure Insurance Policy or Sinosure requires any further action to be taken or documents to be entered into for such

 

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Sinosure Insurance Policy to remain in full force and effect, the Borrower shall use commercially reasonable efforts to take such action as the ECA Agent or Sinosure shall  reasonably require to remove any contradiction or conflict and to ensure such Sinosure Insurance Policy remains in full force and effect.

 

(b)                                 In addition, the Borrower shall comply with any instructions given by Sinosure to the ECA Agent in relation to such Sinosure Insurance Policy and the transactions contemplated in such Sinosure Insurance Policy provided that such instructions are in compliance with that Sinosure Insurance Policy.

 

33.19                 Notification to Sinosure

 

(a)                                 The Borrower will deliver a notice to each of the Facility Agent and the ECA Agent promptly after it becomes aware of the occurrence of any political or commercial risk covered by a Sinosure Insurance Policy and will:

 

(i)                                     pay any additional premium payable to Sinosure in relation to the relevant Sinosure Insurance Policy; and

 

(ii)                                  cooperate with the ECA Agent on its reasonable request to take all steps necessary on the part of the Borrower to ensure that the relevant Sinosure Insurance Policy remains in full force and effect throughout the Facility Period which shall include providing the ECA Agent with any information, reasonably requested by the ECA Agent, relating to any material commercial facts which could result in a Material Adverse Change.

 

(b)                                 In addition, the Borrower shall promptly supply to the ECA Agent copies of all financial or other information reasonably required by the ECA Agent to satisfy any request for information made by Sinosure pursuant to a Sinosure Insurance Policy.

 

(c)                                  The Borrower agrees that it shall be reasonable for the ECA Agent to make a request under this Clause 33.19 (Notification to Sinosure) if it is required to do so as a condition of maintaining a Sinosure Insurance Policy in full force and effect.

 

33.20                 Prior consultation with Sinosure

 

(a)                                 The Borrower acknowledges that the ECA Agent may, under the terms of each Sinosure Insurance Policy be required:

 

(i)                                     to consult with Sinosure, prior to the exercise of certain decisions under the Finance Documents to which that Borrower is a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and

 

(ii)                                  to follow certain instructions given by Sinosure.

 

(b)                                 Each Lender will be deemed to have acted reasonably if it has acted on the instructions of the ECA Agent (given by Sinosure to the ECA Agent in accordance with the terms of a Sinosure Insurance Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.

 

33.21                 Demand under Sinosure Insurance Policies

 

Notwithstanding any other terms as set forth herein and the other Finance Documents, the ECA Agent shall make a written demand to Sinosure under a Sinosure Insurance Policy only 

 

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after the Facility Agent has first made a written demand for payment of the relevant amount of the Unpaid Sum to the Guarantors under the relevant Guaranties.

 

33.22                 Replacement of the ECA Agent

 

(a)                                 After consultation with the Borrower, any Lender may, with the prior consent of the Lenders (other than any Lender which is also the ECA Agent) constituting the Required Lenders and Sinosure and by giving 30 days’ notice to the ECA Agent, replace the ECA Agent by appointing a successor ECA Agent.

 

(b)                                 The retiring ECA Agent shall make available to the successor ECA Agent such documents and records and provide such assistance as the successor ECA Agent may reasonably request for the purposes of performing its functions as ECA Agent under the Finance Documents.

 

(c)                                  The appointment of the successor ECA Agent shall take effect on the date specified in the notice from the Required Lenders to the retiring ECA Agent. As from this date, the retiring ECA Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) above) and any agency fees for the account of the retiring ECA Agent shall cease to accrue from (and shall be payable on) that date.

 

(d)                                 Any successor ECA Agent and each of the other Parties shall have the same rights and obligations among themselves as they would have had if such successor had been an original Party.

 

34                                  CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision of this Agreement will:

 

(a)                                 interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

 

(b)                                 oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

(c)                                  oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

 

35                                  SHARING AMONG THE FINANCE PARTIES

 

35.1                        Payments to Finance Parties

 

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 36 (Payment Mechanics) (a “Recovered Amount”) and applies that amount to a payment due to it under the Finance Documents then:

 

(a)                                 the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;

 

(b)                                 the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 36 (Payment Mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

 

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(c)                                  the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 36.5 (Application of receipts; partial payments).

 

35.2                        Redistribution of payments

 

The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 36.5 (Application of receipts; partial payments) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.

 

35.3                        Recovering Finance Party’s rights

 

On a distribution by the Facility Agent under Clause 35.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

 

35.4                        Reversal of redistribution

 

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

 

(a)                                 each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and

 

(b)                                 as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

 

35.5                        Exceptions

 

(a)                                 This Clause 35 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.

 

(b)                                 A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

 

(i)                                     it notified that other Finance Party of the legal or arbitration proceedings; and

 

(ii)                                  that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

 

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SECTION 11

 

ADMINISTRATION

 

36                                  PAYMENT MECHANICS

 

36.1                        Payments to the Facility Agent

 

(a)                                 On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make an amount in dollars equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time specified by the Facility Agent as being customary for settlement of transactions in dollars in the place of payment.

 

(b)                                 Payment shall be made to such account and with such bank as the Facility Agent, in each case, specifies.

 

36.2                        Distributions by the Facility Agent

 

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 36.3 (Distributions to an Obligor) and Clause 36.4 (Clawback and pre-funding), be made available by the Facility Agent as soon as practicable after receipt by the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrower in a Utilisation Request.

 

36.3                        Distributions to an Obligor

 

The Facility Agent may (with the consent of the Obligor or in accordance with Clause 37 (Set-Off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

 

36.4                        Clawback and pre-funding

 

(a)                                 Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

(b)                                 Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

 

(c)                                  If the Facility Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

 

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(i)                                     the Borrower shall on demand refund it to the Facility Agent; and

 

(ii)                                  the Lender by whom those funds should have been made available or, if the Lender fails to do so, the Borrower, shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

 

36.5                        Application of receipts; partial payments

 

(a)                                 Subject to the paragraphs below and except as any Finance Document may otherwise provide, any payment (in an amount sufficient to fully repay or prepay the Loan and all amounts owing under the Finance Documents (other than the Hedging Agreements)) that is received or recovered by any Finance Party (other than any Hedge Counterparty) under, in  connection with, or pursuant to any Finance Document shall be paid to the Facility Agent which shall apply the same in the following order:

 

(i)                                     first, in or towards payment of any amounts then due and payable under any of the Finance Documents (other than the Hedging Agreements) to the Lenders;

 

(ii)                                  secondly, in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document (other than the Hedging Agreements) to the Lenders but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them;

 

(iii)                               thirdly, in or towards payment of:

 

(A)                               any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(B)                               thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(iv)                              finally, any surplus shall be paid to the Borrower or to any other person who appears to be entitled to it;

 

(b)                                 If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by the Obligors under the Finance Documents (other than the Hedging Agreements), the Facility Agent shall apply that payment towards the obligations of the Borrower and the other Obligors under the Finance Documents (other than the Hedging Agreements) in the following order:

 

(i)                                     first, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents (other than the Hedging Agreements);

 

(ii)                                  secondly, in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;

 

(iii)                               thirdly, in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement;

 

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(iv)                              fourthly, in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties), but unpaid under the Finance Documents (other than the Hedging Agreements);

 

(v)                                 finally, in or towards payment of:

 

(A)                               any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(B)                               thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;

 

(c)                                  The Facility Agent shall, if so directed by all the Lenders and the Hedge Counterparties, vary the order set out in sub-paragraphs (ii) to (v) of paragraph (b) above.

 

(d)                                 Paragraphs (a) and (c) above will override any appropriation made by an Obligor.

 

(e)                                  Notwithstanding the foregoing, no amount received from a Guarantor in respect of its obligations under Clause 17 (Guarantee and Indemnity) shall be applied to any Excluded Hedging Obligations.

 

36.6                        No set-off by Obligors

 

(a)                                 All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

(b)                                 Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.

 

36.7                        Business Days

 

(a)                                 Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

(b)                                 During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

36.8                        Currency of account

 

(a)                                 Subject to paragraphs (b) and (c) below, dollars are the currency of account and payment for any sum due from an Obligor under any Finance Document.

 

(b)                                 Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

(c)                                  Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

 

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36.9                        Change of currency

 

(a)                                 Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then:

 

(i)            any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrower); and

 

(ii)           any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

 

(b)                                 If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

 

36.10                 Currency Conversion

 

(a)                                 For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.

 

(b)                                 The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

 

36.11                 Disruption to Payment Systems etc.

 

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:

 

(a)                                 the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

 

(b)                                 the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

 

(c)                                  the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

 

(d)                                 any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 44 (Amendments and Waivers);

 

(e)                                  the Facility Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any

 

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actions pursuant to or in connection with this Clause 36.11 (Disruption to Payment Systems etc.); and

 

(f)                                   the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

 

37                                  SET-OFF

 

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents other than a Hedging Agreement (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

37A                         BAIL-IN

 

37A.1               Contractual recognition of bail-in

 

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

(a)                                 any Bail-In Action in relation to any such liability, including (without limitation):

 

(i)            a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

 

(ii)           a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

 

(iii)          a cancellation of any such liability; and

 

(b)                                 a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

 

38                                  NOTICES

 

38.1                        Communications in writing

 

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

 

38.2                        Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:

 

(a)                                 in the case of the Borrower, the Owner Guarantors and the Parent Guarantor, that specified in Schedule 1 (The Parties);

 

(b)                                 in the case of each Lender, each Obligor, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;

 

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(c)                                  in the case of the Facility Agent, that specified in Schedule 1 (The Parties);

 

(d)                                 in the case of the Security Agent, that specified in Schedule 1 (The Parties); and

 

(e)                                  in the case of the ECA Agent, that specified in Schedule 1 (The Parties),

 

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.

 

38.3                        Delivery

 

(a)                                 Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

(i)            if by way of fax, when received in legible form; or

 

(ii)           if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under Clause 38.2 (Addresses), if addressed to that department or officer.

 

(b)                                 Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 (The Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).

 

(c)                                  All notices from or to an Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.

 

(d)                                 Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

 

(e)                                  Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

 

38.4                        Notification of address and fax number

 

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 38.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

 

38.5                        Electronic communication

 

(a)                                 Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:

 

(i)            notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

 

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(ii)           notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.

 

(b)                                 Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication.

 

(c)                                  Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.

 

(d)                                 Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

 

(e)                                  Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 38.5 (Electronic communication).

 

(f)                                   Each Obligor may satisfy its obligation under the Finance Documents to which it is a party to deliver any information via telecopier, email or other electronic means (including by way of the Facility Agent’s Debtdomain system).  All Lenders confirm that they have consented to the use of the Facility Agent’s Debtdomain system as an accepted method of communication under or in connection with the Finance Documents and agree that Debtdomain system will be the primary method of communication between the Facility Agent, the ECA Agent and the Lenders.  The Lenders acknowledge that a communication made via Debtdomain will be effective once the communication is posted to Debtdomain by the Facility Agent or ECA Agent.

 

38.6                        English language

 

(a)                                 Any notice given under or in connection with any Finance Document must be in English.

 

(b)                                 All other documents provided under or in connection with any Finance Document must be:

 

(i)            in English; or

 

(ii)           if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

38.7                        Hedging Agreement

 

Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility.

 

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39                                  CALCULATIONS AND CERTIFICATES

 

39.1                        Accounts

 

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

39.2                        Certificates and determinations

 

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

39.3                        Day count convention

 

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

 

40                                  PARTIAL INVALIDITY

 

If, at any time, any provision of a Finance Document 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 under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

41                                  REMEDIES AND WAIVERS

 

No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of a Secured Party shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.

 

42                                  SETTLEMENT OR DISCHARGE CONDITIONAL

 

Any settlement or discharge under any Finance Document between any Finance Party and any Obligor shall be conditional upon no security or payment to any Finance Party by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any bankruptcy or insolvency law or otherwise.

 

43                                  IRREVOCABLE PAYMENT

 

If the Facility Agent considers that an amount paid or discharged by, or on behalf of, an Obligor or by any other person in purported payment or discharge of an obligation of that Obligor to a Finance Party under the Finance Documents is capable of being avoided or otherwise set aside on the bankruptcy, liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.

 

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44                                  AMENDMENTS AND WAIVERS

 

44.1                        Required consents

 

Neither this Agreement nor any other Finance Documents nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Obligors party thereto and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with obligations incurred hereunder being directly affected in the case of following paragraphs (i) to (iii)) and, in the case of the following paragraph (vii), to the extent that any such Lender would be required to make an Advance in excess of its pro rata portion provided for in this Agreement or would receive a payment or prepayment of the Loan that (in any case) is less than its pro rata portion provided for in this Agreement, in each case, as a result of any such amendment, modification or waiver referred to in the following clause (vii)):

 

(i)            extend the final scheduled maturity of the Loan, extend the timing for or reduce the principal amount of any Repayment Date, or reduce the rate or extend the time of payment of fees or interest on the Loan, or reduce the principal amount thereof (except to the extent repaid in cash);

 

(ii)           release any of the Security Assets (except as expressly provided otherwise in the Finance Documents) under the Security Documents;

 

(iii)          amend, modify or waive any provision of this Clause 44 (Amendments and Waivers) or amend Clauses 2.2 (Finance Parties’ rights and obligations), 3 (Purpose), 7.2 (Change of control), 7.7 (Termination etc. of Sinosure Insurance Policies) or 18.10 (Use of proceeds; Margin regulations) or 18.17 (Sanctions) or 21.9 (Use of proceeds; Margin regulations) or 21.16 (Sanctions) or 28 (Changes to the Lenders);

 

(iv)          an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments ratably under the Facility;

 

(v)           reduce the percentage specified in the definition of Required Lenders or otherwise amend or modify the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Loan are included on the date of this Agreement),

 

(vi)          consent to the assignment or transfer by any Obligor of any of its respective rights and obligations under this Agreement,

 

(vii)         amend, modify or waive any provision in this Agreement to the extent providing for payments or prepayments of Loan to be applied pro rata among the Lenders entitled to such payments or prepayments of the Loan, or

 

(viii)        release any Guarantor from any guarantee to the extent same owns a Ship (other than as provided in this Agreement), provided, further, that no such change, waiver, discharge or termination shall (A) without the consent of the Facility Agent, amend, modify or waive any provision of Clause 30 (The Facility Agent and the Mandated Lead Arrangers) as same applies to the Facility Agent or any other provision as same relates to the rights or obligations of the Facility Agent, or (B) without the consent of the Security Agent, amend, modify or waive any provision relating to the rights or obligations of the Security Agent.

 

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44.2                        Non-Consenting Lender

 

If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by paragraphs (i) through (viii), inclusive, of Clause 44.1 (Required Consents), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required (any such Lender, a “Non-Consenting Lender”) is not obtained, then the Borrower shall have the right, so long as all Non-Consenting Lenders whose individual consent is required are treated as described in either paragraphs (a) or (b) below, to:

 

(a)                                 replace each such Non-Consenting Lender with one or more Replacement Lenders pursuant to Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender) so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination; or

 

(b)                                 repay the outstanding Loan of such Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s consent, in accordance with Clause 44.1 (Required consents)

 

provided that, unless the Vessel Loans that are repaid pursuant to preceding paragraph (b) are immediately replaced in full at such time through the addition of new Lenders or the increase of the outstanding Vessel Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding paragraph (b), the Required Lenders (determined before giving effect to the proposed action) shall specifically consent thereto, provided, further, that in any event the Borrower shall not have the right to replace a Lender or repay such Lender’s Vessel Loan solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Clause 44.1 (Required consents).

 

44.3                        Other exceptions

 

(a)                                 An amendment or waiver which relates to the rights or obligations of a Servicing Party or the a Mandated Lead Arranger (each in their capacity as such) may not be effected without the consent of that Servicing Party or that Mandated Lead Arranger, as the case may be.

 

(b)                                 The Borrower and the Facility Agent, the Mandated Lead Arrangers, the ECA Agent, CEXIM or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.

 

(c)                                  An amendment or waiver which relates to the rights or obligations of a Hedge Counterparty (in its capacity as such) may not be effected without the consent of that Hedge Counterparty.

 

44.4                        Rights of a Defaulting Lender

 

Notwithstanding anything to the contrary herein, any Lender that is a Defaulting Lender shall not have any right to approve or disapprove of any amendment, waiver or consent hereunder; provided that, except as otherwise provided in Clause 15.3 (Defaulting Lender), (i) the Commitments of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender, and (ii) no payment to such Defaulting Lender shall be decreased or postponed without the consent of such Defaulting Lender.

 

45                                  CONFIDENTIAL INFORMATION

 

45.1                        Confidential Information

 

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 45.2 (Disclosure of Confidential

 

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Information) and Clause 45.3 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

45.2                        Disclosure of Confidential Information

 

Any Finance Party may disclose:

 

(a)                                 to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

(b)                                 to any person:

 

(i)            to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;

 

(ii)           with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;

 

(iii)          appointed by any Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of Clause 30.15 (Relationship with the other Finance Parties));

 

(iv)          who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;

 

(v)           to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

 

(vi)          to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;

 

(vii)         to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.8 (Security over Lenders’ rights);

 

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(viii)        who is a Party, a member of the Group or any related entity of a Transaction Obligor;

 

(ix)          as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or

 

(x)           with the consent of the Parent Guarantor;

 

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

 

(A)                               in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

(B)                               in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

(C)                               in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

 

(c)                                  to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement in such form as may be agreed between the Borrower and the relevant Finance Party;

 

(d)                                 to any Rating Agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such Rating Agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the Rating Agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and

 

(e)                                  to Sinosure.

 

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45.3                        Disclosure to numbering service providers

 

(a)                                 Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

 

(i)            names of Obligors;

 

(ii)           country of domicile of Obligors;

 

(iii)          place of incorporation/formation of Obligors;

 

(iv)          date of this Agreement;

 

(v)           Clause 47 (Governing Law);

 

(vi)          the names of the Facility Agent, the Security Agent and the Mandated Lead Arrangers;

 

(vii)         date of each amendment and restatement of this Agreement;

 

(viii)        amount of Total Commitments;

 

(ix)          currency of the Facility;

 

(x)           type of Facility;

 

(xi)          ranking of Facility;

 

(xii)         a Termination Date;

 

(xiii)        changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and

 

(xiv)        such other information agreed between such Finance Party and the Borrower,

 

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

(b)                                 The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

 

(c)                                  Each Obligor represents that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

 

45.4                        Entire agreement

 

This Clause 45 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

45.5                        Inside information

 

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated

 

180

 

or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

45.6                        Notification of disclosure

 

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

 

(a)                                 of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 45.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

(b)                                 upon becoming aware that Confidential Information has been disclosed in breach of this Clause 45 (Confidential Information).

 

45.7                        [Intentionally left blank]

 

46                                  COUNTERPARTS

 

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

181

 

SECTION 12

 

GOVERNING LAW AND ENFORCEMENT

 

47                                  GOVERNING LAW

 

This Agreement and the other Finance Documents (except as otherwise provided in a Finance Document) and any non-contractual obligations arising out of or in connection with them are governed by English law.

 

48                                  ENFORCEMENT

 

48.1                        Jurisdiction

 

(a)                                 The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any other Finance Documents to which the Obligor is a party (including a dispute regarding the existence, validity or termination of this Agreement or such Finance Document or any non-contractual obligation arising out of or in connection with this Agreement or such Finance Document) (a “Dispute”).

 

(b)                                 The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.

 

(c)                                  This Clause 48.1 (Jurisdiction) is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

48.2                        Service of process

 

(a)                                 Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

 

(i)            irrevocably appoints Cheesewrights as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

 

(ii)           agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

 

(b)                                 If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower (on behalf of all the Obligors) must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.

 

49                                  PATRIOT ACT NOTICE

 

49.1                        PATRIOT Act notice

 

Each of the Secured Parties hereby notifies the Obligors that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Secured Parties, each of the Secured Parties is required to obtain, verify and record certain information and documentation that identifies each Obligor, which information includes the name and address of each Obligor and such other information that will allow each of the Secured Parties to identify each Obligor in accordance with the PATRIOT Act.

 

182

 

EXECUTION PAGES

 

WHEREFORE, the Parties have caused this Facility Agreement executed on 1 December 2015 and dated as of 30 November 2015, as supplemented by a supplemental agreement dated 28 December 2015 and as amended and restated by an Amending and Restating Deed to be executed on 2016.

 

183

 

	
GENER8 MARITIME SUBSIDIARY VII INC., as   Borrower
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 MARITIME, INC., as Parent   Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 STRENGTH LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 SUPREME   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 SUCCESS   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

184

 

	
GENER8 ANDRIOTIS LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 CHIOTIS LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 MILTIADES LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

185

 

	
CITIBANK, N.A., as Global Co-ordinator
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,   NEW YORK BRANCH, as Global   Co-ordinator
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

186

 

	
CITIBANK, N.A., as Bookrunner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

187

 

	
CITIBANK, N.A., as Mandated Lead Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF   CHINA, as Mandated Lead   Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BANK OF CHINA, NEW YORK   BRANCH, as Mandated Lead   Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

188

 

	
CITIBANK,   N.A., LONDON BRANCH, as Original   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF CHINA, as Original Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BANK OF CHINA, NEW YORK BRANCH, as Original Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

189

 

	
CITIBANK, N.A., LONDON   BRANCH, as Hedge Counterparty
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

190

 

	
CITIBANK, N.A., LONDON   BRANCH, as ECA Co-ordinator   and ECA Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC, NEW YORK BRANCH, as Facility Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC, NEW   YORK BRANCH, as Security   Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

191

 

SCHEDULE 1

THE PARTIES

 

PART A

 

THE OBLIGORS

 

	
Name of Borrower
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 MARITIME   SUBSIDIARY VII INC.
    	
 
    	
REPUBLIC OF MARSHALL ISLANDS
    	
 
    	
78649
    	
 
    	
299 PARK AVENUE,
   2nd Floor
   NEW YORK, NY 10171-0002
   Attn: Chief Financial Officer
   Telephone: (212) 763-5600
   Facsimile: (212) 763-5608
   E-mail: finance@gener8maritime.com

With a copy to:

 

Kramer Levin Naftalis & Frankel LLP
   1177 Avenue of the Americas
   New York, NY 10036
   Attention: Kenneth Chin, Esq.

Telephone: +1 212 715 9100
   Facsimile: +1 212 715 8000
    

 

	
Name of Parent
   Guarantor
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 MARITIME INC.
    	
 
    	
REPUBLIC OF MARSHALL ISLANDS
    	
 
    	
31343
    	
 
    	
299 PARK AVENUE,
   2nd Floor
   NEW YORK, NY 10171-0002
   Attn: Chief Financial Officer
   Telephone: (212) 763-5600
   Facsimile: (212) 763-5608
   E-mail: finance@gener8maritime.com
    
   With a copy to:
    
   Kramer Levin Naftalis & Frankel LLP
   1177 Avenue of the Americas
   New York, NY 10036
   Attention: Kenneth Chin, Esq.
    
   Telephone: +1 212 715 9100
   Facsimile: +1 212 715 8000
    

 

192

 

	
Name of Owner
   Guarantor / Hedge
   Guarantor
    	
 
    	
Place   of Incorporation
   or Formation
    	
 
    	
Registration   number
   (or equivalent, if any)
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 STRENGTH LLC

GENER8 SUPREME LLC

GENER8 SUCCESS LLC

GENER8 ANDRIOTIS LLC

GENER8 CHIOTIS LLC

GENER8 MILTIADES LLC
    	
 
    	
 

REPUBLIC OF MARSHALL ISLANDS
    	
 
    	
963430

963435

963434

963431

 

963432

963433
    	
 
    	
299 PARK AVENUE, 
   2nd Floor

NEW YORK, NY 10171-0002

Attn: Chief Financial Officer

Telephone: (212) 763-5600

Facsimile: (212) 763-5608

E-mail: finance@gener8maritime.com

 

With a copy to:

 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Attention: Kenneth Chin, Esq.

 

Telephone: +1 212 715 9100

Facsimile: +1 212 715 8000
    

 

193

 

PART B

 

THE ORIGINAL LENDERS

 

	
Name of Commercial Lender
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch,
   Citigroup Centre, Canada Square,
   London, E14 5LB
   c/o Citibank International Limited,
   Poland Branch
   7/9 Traugutta str., 1st Floor
   00-985 Warsaw, Poland
   Attention: Loan Operations Department
   (Kara Catt / Romina Coates — EAF Middle Office)
   Telephone: +44 207986 4881
   Facsimile: +44 207 655 2380
   E-mail: cibuk.loans@citi.com
    
   With a copy to:
    
   388 Greenwich Street,
   New York, NY, 10013
   Attention: Meghan O’Connor
   Telephone: +1 212 816 8557
   Facsimile: N/A
   E-mail: meghan.oconnor@citi.com
    
	
 
    	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF CHINA
    	
 
    	
No.30 Fu Xing Men Nei St., Xicheng District
   Beijing, China100031
   Attention: Transport Finance Department(Jenny Mi/ Wei Zhenyu)
   Telephone: +86 10 83578412/83579512
   Facsimile: +86 10 83578428/9
   Email: mijie@eximbank.gov.cn/ 

weizhenyu@eximbank.gov.cn
    
	
 
    	
 
    	
 
    
	
BANK OF CHINA, NEW YORK BRANCH
    	
 
    	
Bank of China, New York Branch
   410 Madison Avenue
   New York, NY 10017
   Attention: Operation Service Department

(Ms. Wenzhen   Zhang)

Telephone: +1 646 231 3143

Facsimile: +1 212 371 4185
   E-mail: synloanadmin.nyb@bocusa.com

wzhang@bocusa.com
    

 

194

 

PART C

 

HEDGE COUNTERPARTIES

 

	
Name   of Hedge
   Counterparties
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London   Branch,

Citigroup Centre,   Canada Square,

London, E14 5LB

c/o Citibank   International Limited, 
   Poland Branch

7/9   Traugutta str., 1st Floor

00-985 Warsaw, Poland

Attention: Loan   Operations Department

(Kara Catt / Romina   Coates — EAF Middle Office)
   Telephone: +44 207986 4881

Facsimile:  +44 207 655 2380

E-mail:   cibuk.loans@citi.com

 

With a copy to:

 

388 Greenwich Street, 
   New York, NY, 10013

Attention: Meghan   O’Connor

Telephone: +1 212 816   8557

Facsimile: N/A

E-mail:  meghan.oconnor@citi.com
    

 

195

 

PART D

 

THE SERVICING PARTIES

 

	
Name of Facility Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,
   NEW YORK BRANCH
    	
 
    	
1211 Avenue of the   Americas,

23rd Floor,

New York, NY 10036
   Attn:  Shipping Offshore and Oil Services

 

Telephone:    +1 212 318 9636
   Facsimile:   +1 212 421 4420
   E-mail: dlny-ny-cadloan@nordea.com

   with a copy to:

 

Essendropsgate 7
   P.O. Box 1166 Sentrum
   NO-0107 Oslo, Norway

 

Facsimile: +47 22 48 66 78
    E-mail: agency.soosid@nordea.com
    

 

	
Name of Security Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,
   NEW YORK BRANCH
    	
 
    	
1211 Avenue of the   Americas,

23rd Floor,

New York, NY 10036
   Attn:  Shipping Offshore and Oil Services

 

Telephone:    +1 212 318 9636
   Facsimile:   +1 212 421 4420
   E-mail: dlny-ny-cadloan@nordea.com

   with a copy to:

 

Essendropsgate 7
   P.O. Box 1166 Sentrum
   NO-0107 Oslo, Norway

 

Facsimile: +47 22   48 66 78
    E-mail: agency.soosid@nordea.com
    

 

	
Name of ECA Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A.,
   LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch

c/o Citibank International Limited, 
   Poland Branch

7/9 Traugutta   str., 1st Floor

00-985 Warsaw, Poland

Attention: Loan Operations Department

(Kara Catt/ Romina Coates — EAF Middle Office)
    

 

196

 

	
 
    	
 
    	
Facsimile:    +44 207 655 2380

Telephone: +44   207986 4881

 

E-mail:   cibuk.loans@citi.com
    

 

197

 

SCHEDULE 2

 

CONDITIONS PRECEDENT

 

PART A

 

CONDITIONS PRECEDENT TO INITIAL UTILISATION REQUEST

 

1                                         Obligors

 

1.1                               A copy of the Constitutional Documents of each Obligor.

 

1.2                               A copy of a resolution of the board of directors (or equivalent) of each Obligor:

 

(a)                                 approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;

 

(b)                                 authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

 

(c)                                  authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices (including, if relevant, a Utilisation Request) to be signed and/or dispatched by it under, or in connection with, the Finance Documents to which it is a party.

 

1.3                               A specimen of the signature of each person authorized by the resolution referred to in paragraph 1.2 above.

 

1.4                               A copy of a resolution signed by the holder of the issued shares in each of the Owner Guarantors, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Owner Guarantor is a party.

 

1.5                               A certificate of an authorized signatory of the relevant Obligor certifying that each copy (but not an original) document relating to it specified in paragraphs 1 and 2 this Part A of Schedule 2 (Conditions Precedent) and every other copy document (but not an original) delivered by it under this Schedule, is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

2                                         Shipbuilding Contracts and other Documents

 

2.1                               Copies of the Shipbuilding Contracts (which shall for the avoidance of doubt, include the Intercompany Ship Delivery Agreement) and the Merger Agreement and of all documents signed or issued by an Obligor or its Affiliate or the Seller (or any of them) under or in connection with it.

 

3                                         Finance Documents

 

3.1                               A duly executed copy of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent).

 

3.2                               A duly executed copy of any other document required to be delivered by each Finance Document if not otherwise referred to this Schedule 2 (Conditions Precedent).

 

198

 

4                                         Security

 

4.1                               A duly executed copy of the Account Security in relation to each Account and of the Shares Security in respect of the Borrower and each Owner Guarantor (and of each document to be delivered under each of them).

 

4.2                               If applicable, a duly executed copy of each Assignment of Hedging Agreement in respect of the Borrower or the Parent Guarantor (as the case may be) (and of each document to be delivered under each of them).

 

4.3                               Documentary evidence that the Security intended to be created on or prior to the date of the first Utilisation Request by each of the Finance Documents has been duly perfected under applicable law.

 

5                                         Legal opinions

 

5.1                               A legal opinion of Watson Farley & Williams which shall be addressed to the Facility Agent, the Security Agent, the Lenders and Sinosure on such matters concerning English laws.

 

5.2                               A legal opinion of Watson Farley & Williams LLP which shall be addressed to the Facility Agent, the Security Agent, the Lenders and Sinosure on such matters concerning the laws of the Marshall Islands.

 

5.3                               A legal opinion of Global Law Office which shall be addressed to the Facility Agent from lawyers (either issued or in a form acceptable to the Facility Agent) on such matters concerning the laws of the PRC in respect of Sinosure and/or the Sinosure Insurance Policies.

 

5.4                               Favourable legal opinions by lawyers appointed by the Facility Agent on such matters concerning the laws of such relevant jurisdictions as the Facility Agent may require, substantially in the form distributed to the Original Lenders before signing this Agreement.

 

6                                         Other documents and evidence

 

6.1                               The Original Financial Statements of the Parent Guarantor.

 

6.2                               Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees and Sinosure Premium) and Clause 16 (Costs and Expenses) have been paid or will be paid by the first Utilisation Date.

 

6.3                               Such evidence as the Facility Agent and Sinosure may require for the Finance Parties to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the transactions contemplated by the Finance Documents.

 

6.4                               A copy of Sinosure’s written approval notice in respect of the transactions contemplated by the Finance Documents, in form and substance satisfactory to the Lenders and CEXIM.

 

6.5                               Evidence that any process agent referred to in Clause 48.2 (Service of process) has accepted its appointment.

 

6.6                               Evidence of written support by the competent Chinese Embassy and China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) for the export of the Ships by the relevant Seller.

 

199

 

PART B

 

CONDITIONS PRECEDENT TO UTILISATION —  ADVANCE

 

In this Part:

 

“Relevant Advance” means the Advance for which a drawing has been requested under the relevant Utilisation Request.

 

“Relevant Ship” means the Ship to which the proposed Advance relates.

 

“Relevant Owner Guarantor” means the Owner Guarantor owning the Relevant Ship.

 

1                                         Borrower and Relevant Owner Guarantor

 

A certificate of an authorized signatory of the Borrower and the Relevant Owner Guarantor certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at the Utilisation Date for the Relevant Advance (and in particular, that there are no further amendments and/or supplements to the Shipbuilding Contract other than those previously provided to the Facility Agent pursuant to Part A of this Schedule 2 (Conditions Precedent) or pursuant to Part B of this Schedule 2 (Conditions Precedent)).

 

2                                         Finance Documents

 

2.1                               A duly executed copy of each Security Document (other than the Mortgage and the relevant Manager’s Undertakings) if not previously provided pursuant to Part A of this Schedule 2 (Conditions Precedent).

 

2.2                               A duly executed copy of any other document required to be delivered by each Finance Document if not previously provided pursuant to Part A of this Schedule 2 (Conditions Precedent).

 

3                                         Ship and other security

 

3.1                               Such documentary evidence as the Facility Agent and its legal advisers may require in relation to the due authorization and execution of the relevant Shipbuilding Contracts by each of the parties thereto.

 

3.2                               Such documentary evidence as the Facility Agent and its legal advisers may require in relation to evidencing that the relevant Owner Guarantor is the buyer (and shall be the legal and beneficial owner) of the Relevant Ship.

 

3.3                               A duly executed original of the Mortgage in respect of the relevant Ship and of each document to be delivered under or pursuant thereto together with documentary evidence that the Mortgage in respect of the Relevant Ship has been duly registered as a valid first preferred or first priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.

 

3.4                               Documentary evidence that the Relevant Ship:

 

(a)                                 has been unconditionally delivered by the relevant Seller to, and accepted by, the Relevant Owner Guarantor under the Shipbuilding Contract relating to the Relevant Ship and that the full purchase price payable and all other sums due to such Seller under the said Shipbuilding Contract, other than the sums to be financed pursuant to the Utilisation of the Delivery

 

200

 

Advance, have been, or upon the Utilisation of the Delivery Advance, will be, paid to such Seller;

 

(b)                                 is definitively and if applicable, permanently registered in the name of the Relevant Owner Guarantor under the Approved Flag;

 

(c)                                  is in the absolute and unencumbered ownership of the Relevant Owner Guarantor save as contemplated by the Finance Documents;

 

(d)                                 maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and

 

(e)                                  is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.

 

3.5                               Documents establishing that the Relevant Ship will, as from the Utilisation Date of the Relevant Advance, be managed commercially by its Approved Commercial Manager and managed technically by its Approved Technical Manager on terms acceptable to the Facility Agent acting with the authorization of all of the Lenders together with:

 

(a)                                 to the extent commercially practicable, a Manager’s Undertaking for each of the Approved Managers for the Relevant Ship; and

 

(b)                                 copies of the relevant Pool Agreement (if applicable and including all relevant novations, amendments, supplements thereto), the relevant Approved Technical Manager’s Document of Compliance and of the Relevant Ship’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to the Relevant Ship including without limitation an ISSC.

 

3.6                               An opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances as the Facility Agent may reasonably require.

 

3.7                               Two Appraisals of the Relevant Ship stated to be for the purposes of this Agreement and dated not earlier than 14 Business Days before the Utilisation Date, evidencing the Fair Market Value of the Relevant Ship.

 

3.8                               Copy of any Charter to which the Relevant Ship is subject (including without limitation, any charter pursuant to the relevant Pool Agreement (if any).

 

3.9                               The Relevant Ship’s INMARSAT number (or equivalent).

 

4                                         Legal opinions

 

Legal opinions of the legal advisers to the Facility Agent in the jurisdiction of the Approved Flag of the Relevant Ship, the Republic of the Marshall Islands, the PRC and such other relevant jurisdictions as the Facility Agent may require.

 

5                                         Other documents and evidence

 

5.1                               Evidence that the fees, costs and expenses then due from Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Utilisation Date for the Delivery Advance.

 

201

 

5.2                               Evidence satisfactory to the Facility Agent that the Parent Guarantor and/or one or more of its Subsidiaries has made payment, or has procured the payment:

 

(a)                                 to the Seller, of the difference between (i) the Contract Price payable under the Shipbuilding Contract relating to the Relevant Ship and (ii) the sums to be financed pursuant to the Utilisation of the relevant Advance, to the Seller; and

 

(b)                                 to the Debt Service Reserve Account, an amount equal to the aggregate of:

 

(i)            the first Repayment Instalment and the amount of interest payable on the first due date for payment of interest relating to the Vessel Loan relating to the Relevant Advance; and

 

(ii)           the next Repayment Instalment and amount of interest payment on the next due date for payment of interest in respect of each utilised Vessel Loan,

 

provided that payment of such amounts may, if requested by the Borrower, be financed by the proceeds of the Relevant Advance in accordance with and upon fulfilment of the conditions set out in Clause 3.1(c) (Purpose).

 

5.3                               Evidence satisfactory to the ECA Agent that the relevant Sinosure Premium payable by the Borrower for the Relevant Advance, have been paid or will be paid by the Utilisation Date of the Relevant Advance.

 

5.4                               Evidence satisfactory to the Facility Agent that the Relevant Owner Guarantor is or will be the legal and beneficial owner of the Relevant Ship pursuant to its Shipbuilding Contract by the Utilisation Date of the Relevant Advance.

 

5.5                               Certified copies of the duly executed Sinosure Insurance Policy relating to the Relevant Ship together with such documentary evidence as the ECA Agent and its legal advisers may require in relation to the due authorisation and execution by Sinosure of such Sinosure Insurance Policy.

 

5.6                               Confirmation from the ECA Agent that it has not been notified by Sinosure of cancellation of any existing Sinosure Insurance Policy in relation to any Ship.

 

5.7                               A certified English translation in respect of any other documents referred to above as may be required by the Facility Agent.

 

202

 

SCHEDULE 3

 

UTILISATION REQUEST

 

From:               GENER8 MARITIME SUBSIDIARY VII INC.

 

To:                             NORDEA BANK FINLAND PLC, NEW YORK BRANCH as Facility Agent

 

Dated:           [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC. — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

2                                         We wish to borrow the Advance under Vessel Loan relating to Ship [·] on the following terms:

 

	
Proposed   Utilisation Date:
    	
[·]   (or, if that is not a Business Day, the next Business Day)
    
	
 
    	
 
    
	
Amount:
    	
[·]   or, if less, the Available Commitment of all Lenders in relation to such   Vessel Loan
    
	
 
    	
 
    
	
Interest Period:
    	
[·]
    

 

3                                         We confirm that each condition specified in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent) of this Agreement as they relate to the Advance to which this Utilisation Request refers is satisfied on the date of this Utilisation Request.

 

4                                         The proceeds of this Advance should be credited to: [account].

 

5                                         This Utilisation Request is irrevocable.

 

	
Yours faithfully
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[·]
    	
 
    
	
authorized signatory for
    	
 
    
	
GENER8   MARITIME SUBSIDIARY VII INC.
    	
 
    

 

203

 

SCHEDULE 4

 

COMMITMENTS

 

	
 
    	
 
    	
LENDER
    	
 
    	
COMMITMENT ($)
    	
 
    
	
Ship A
    	
 
    	
Citibank, N.A., London   Branch (“Citibank”)
    	
 
    	
6,696,202.50
    	
 
    
	
 
    	
 
    	
The Export-Import Bank   of China (“CEXIM”)
    	
 
    	
33,481,012.50
    	
 
    
	
 
    	
 
    	
Bank of China, New York   Branch (“BOC”)
    	
 
    	
26,784,810.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP A ($)
    	
 
    	
 
    	
 
    	
66,962,025.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship B
    	
 
    	
Citibank
    	
 
    	
6,696,202.50
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
33,481,012.50
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
26,784,810.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP B ($)
    	
 
    	
 
    	
 
    	
66,962,025.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship C
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP C ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    

 

204

 

	
 
    	
 
    	
LENDER
    	
 
    	
COMMITMENT ($)
    	
 
    
	
Ship D
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP D ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship E
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP E ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship F
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP F ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENTS OF THE   LENDERS
    	
 
    	
 
    	
 
    	
 385,227,495.00
    	
 
    

 

205

 

SCHEDULE 5

 

FORM OF TRANSFER CERTIFICATE

 

To:                             [·] as Facility Agent

 

From:               [The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

 

Dated:  [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Transfer Certificate.  Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

2                                         We refer to Clause 28.5 (Procedure for transfer) of the Agreement:

 

(a)                                 The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender’s rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender’s Commitment and Contribution in the Loan under the Agreement as specified in the Schedule in accordance with Clause 28.5 (Procedure for transfer) of the Agreement.

 

(b)                                 The proposed Transfer Date is [·].

 

(c)                                  The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 38.2 (Addresses) of the Agreement are set out in the Schedule.

 

3                                         The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 28.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

 

4                                         This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

5                                         This Transfer Certificate and any non-contractual obligations arising out of or in connection with it, are governed by English law.

 

6                                         This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

 

7                                         The New Lender confirms that, immediately following the effective date of this Transfer Certificate, it will be a FATCA Exempt Party.

 

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to

 

206

 

perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

 

207

 

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

 

[Facility Office address, fax number and attention details

 

for notices and account details for payments.]

 

	
[Existing Lender]
    	
 
    	
[New Lender]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
							

 

 

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

 

[Facility Agent]

 

 

	
By:
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
							

 

208

 

SCHEDULE 6

 

FORM OF ASSIGNMENT AGREEMENT

 

To:                             [·] as Facility Agent and [·] as Borrower, for and on behalf of each Obligor

 

From:               [the Existing Lender] (the “Existing Lender”) and [the New Lender] (the “New Lender”)

 

Dated:  [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is an Assignment Agreement.  Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

 

2                                         We refer to Clause 28.6 (Procedure for assignment):

 

(a)                                 The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender’s Commitment and Contribution in the Loan under the Agreement as specified in the Schedule.

 

(b)                                 The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitments and Contribution in the Loan under the Agreement specified in the Schedule.

 

(c)                                  The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

 

(d)                                 All rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender’s title and of any rights or equities which the Borrower or any other [Transaction] Obligor had against the Existing Lender.

 

3                                         The proposed Transfer Date is [·].

 

4                                         On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.

 

5                                         The Facility Office and address, fax, number and attention details for notices of the New Lender for the purposes of Clause 38.2 (Addresses) are set out in the Schedule.

 

6                                         The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 28.4 (Limitation of responsibility of Existing Lenders).

 

7                                         This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 28.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower (on behalf of each [Transaction] Obligor) of the assignment referred to in this Assignment Agreement.

 

209

 

8                                         This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.

 

9                                         This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

10                                  This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.

 

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

 

210

 

THE SCHEDULE

 

Commitment rights and obligations to be transferred by assignment, release and accession

 

[insert relevant details]

 

[Facility office address, fax number and attention details for notices
 and account details for payments]

 

	
[Existing Lender]
    	
 
    	
[New Lender]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
							

 

This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

 

Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.

 

[Facility Agent]

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
							

 

211

 

SCHEDULE 7

 

FORM OF COMPLIANCE CERTIFICATE

 

To:                             NORDEA BANK FINLAND PLC, NEW YORK BRANCH as Facility Agent

 

From:               GENER8 MARITIME, INC.

 

Dated:  [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

2                                         We confirm that:  [Insert details of covenants to be certified]

 

3                                         We confirm that as at the date hereof:

 

(a)                                 no [Event of] Default is continuing.](1)

 

(b)                                 no event which would result in an Material Adverse Effect has occurred or would result from the proposed Advance; and

 

(c)                                  the Repeating Representations to be made by each Obligor are true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which they shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under Clause 18.7 (Financial statements; Financial Condition; Undisclosed Liabilities) which shall be made with reference to the latest financial statements provided under the Agreement and as at the last day of the financial period in relation to which such financial statements relate).

 

Yours faithfully,

 

 

	
 
    	
 
    
	
[·]
    	
 
    
	
authorized signatory for
    	
 
    
	
GENER8 MARITIME, INC.
    	
 
    
	
 
    	
 
    
	
[insert applicable certification language]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf of
    	
 
    
	
[name of Auditors of the   Parent Guarantor]
    	
 
    

 

(1) If this statement cannot be made, the certificate should identify any [Event of] Default that is continuing and the steps, if any, being taken to remedy it.

 

212

 

SCHEDULE 8

 

DETAILS OF SHIPS

 

	
Ship
    	
 
    	
Hull
   Number
    	
 
    	
Owner Guarantor
    	
 
    	
Builder
    	
 
    	
Shipbuilding Contract
    	
 
    	
Ship Name
    	
 
    	
Approved Classification
    	
 
    	
Scheduled
   Delivery
   Date
    	
 
    	
Maximum
   Contract Price
   (USD)
    	
 
    
	
Ship A
    	
 
    	
H1384
    	
 
    	
Gener8 Strength LLC (“Owner Guarantor A”)
    	
 
    	
SWS(2)
    	
 
    	
Shipbuilding Contract   dated 21 March 2014 (Supplement dated 21 March 2014 and Addendum   No.1 dated 21 March 2014) signed by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Strength
    	
 
    	
ABS/CCS
    	
 
    	
10/29/15
    	
 
    	
99,203,000.00
    	
 
    
	
Ship B
    	
 
    	
H1385
    	
 
    	
Gener8 Supreme LLC (“Owner Guarantor B”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 21 March 2014 (Supplement dated 21 March 2014 and Addendum   No.1 dated 21 March 2014) signed by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Supreme
    	
 
    	
ABS/CCS
    	
 
    	
1/6/16
    	
 
    	
99,203,000.00
    	
 
    
	
Ship C
    	
 
    	
H1355
    	
 
    	
Gener8 Success LLC (“Owner Guarantor C”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Success
    	
 
    	
ABS/CCS
    	
 
    	
3/30/16
    	
 
    	
93,075,350.00
    	
 
    
	
Ship D
    	
 
    	
H1356
    	
 
    	
Gener8 Andriotis LLC (“Owner Guarantor D”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Andriotis
    	
 
    	
ABS/CCS
    	
 
    	
4/30/16
    	
 
    	
93,075,350.00
    	
 
    

 

(2) Shanghai Waigaoqiao Shipbuilding Co., Ltd.

 

213

 

	
Ship
    	
 
    	
Hull
   Number
    	
 
    	
Owner Guarantor
    	
 
    	
Builder
    	
 
    	
Shipbuilding Contract
    	
 
    	
Ship Name
    	
 
    	
Approved Classification
    	
 
    	
Scheduled
   Delivery
   Date
    	
 
    	
Maximum
   Contract Price
   (USD)
    	
 
    
	
Ship E
    	
 
    	
H1357
    	
 
    	
Gener8 Chiotis LLC (“Owner Guarantor E”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Chiotis
    	
 
    	
ABS/CCS
    	
 
    	
8/23/16
    	
 
    	
93,075,350.00
    	
 
    
	
Ship F
    	
 
    	
H1358
    	
 
    	
Gener8 Miltiades LLC (“Owner Guarantor F”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Miltiades
    	
 
    	
ABS/CCS
    	
 
    	
11/1/16
    	
 
    	
93,075,350.00
    	
 
    

 

214

 

SCHEDULE 9

 

ERISA PLANS AND CONTRIBUTIONS

 

General Maritime Corporation 401(k) Plan and Trust

 

215

 

SCHEDULE 10

 

SUBSIDIARIES

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    	
 
    
	
GMR Zeus LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Atlas LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Hercules LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Ulysses LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Poseidon LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Victory Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Vision Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
GMR Spartiate LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Maniate LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR St Nikolas LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR George T LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Kara G LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Harriet G LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Orion LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Argus LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Spyridon LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Horn LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Phoenix LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    

 

216

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    	
 
    
	
GMR Strength LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Daphne LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Defiance LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Elektra LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Companion Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Compatriot Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Consul Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Gener8 Maritime Subsidiary III Ltd.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Gener8 Maritime Subsidiary NEW IV Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Minotaur LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Agamemnon LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100
    	
%
    	
Republic of Liberia
    	
 
    
	
GMR Hope LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
GMR Chartering LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100
    	
%
    	
New York
    	
 
    
	
Gener8 Maritime Management LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
General Maritime Management (Portugal) LLC
    	
 
    	
Gener8 Maritime   Management LLC
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Unique Tankers LLC
    	
 
    	
Gener8 Maritime   Management LLC
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
General Maritime Management (Portugal) Limitada
    	
 
    	
Gener8 Maritime   Management (Portugal) LLC
    	
 
    	
100
    	
%
    	
Portugal
    	
 
    
	
General Maritime Crewing Pte. Limited
    	
 
    	
Gener8 Maritime   Management (Portugal) LLC
    	
 
    	
100
    	
%
    	
Singapore
    	
 
    
	
General Maritime Crewing Pte. Limited (India Division   Office; not a separate entity)
    	
 
    	
Gener8 Maritime Crewing   Pte. Limited
    	
 
    	
100
    	
%
    	
India
    	
 
    

 

217

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    	
 
    
	
General Maritime Crewing Pte. Limited
    	
 
    	
Gener8 Maritime Crewing   Pte. Limited
    	
 
    	
100
    	
%
    	
Russia
    	
 
    
	
Gener8 Maritime Subsidiary V Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Maritime Subsidiary VIII Inc.
    	
 
    	
Gener8 Maritime Subsidiary   V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Neptune LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Athena LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Apollo LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Ares LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Hera LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Constantine LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Oceanus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Nautilus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Macedon LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Noble LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Ethos LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Perseus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Theseus LLC
    	
 
    	
Gener8 Maritime Subsidiary   VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Hector LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Nestor LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Maritime 
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Republic of the 
    	
 
    

 

218

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    	
 
    
	
Subsidiary VII Inc.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Marshall Islands
    	
 
    
	
Gener8 Strength LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Supreme LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Andriotis LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Miltiades LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Success LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Chiotis LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Maritime Subsidiary VI Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Concord Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Contest Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Concept Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100
    	
%
    	
Bermuda
    	
 
    
	
Gener8 Maritime Subsidiary Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Strength Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Supreme Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Andriotis Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Miltiades Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Success Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Chiotis Inc.
    	
 
    	
Gener8 Maritime Subsidiary   Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 1 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 2 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    

 

219

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    	
 
    
	
Gener8 Tankers 3 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 4 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 5 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 6 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 7 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
Gener8 Tankers 8 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Cavaliere Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the Marshall   Islands
    	
 
    
	
STI Dundee Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Edinburgh Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Esles Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Glasgow Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Newcastle Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the   Marshall Islands
    	
 
    
	
STI Perth Shipping Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100
    	
%
    	
Republic of the Marshall   Islands
    	
 
    

 

220

 

SCHEDULE 11

 

FINANCIAL INDEBTEDNESS

 

1                                         Approximately $622,317,313 remaining instalment payments as of 12 May 2016 due under the shipbuilding contracts for 21 VLCCs.

 

2                                         Letter of credit of $1,385,378 dated as of 30 June 2015 by and among Fisher-Park Lane Owner LLC, as landlord and General Maritime Corporation, as tenant.

 

221

 

SCHEDULE 12

 

INSURANCES

 

NONE.

 

222

 

SCHEDULE 13

 

EXISTING TRANSACTIONS

 

1.              Corporate Administration Agreement, dated 17 December 2013, between Navig8 Crude Tankers Inc. and Navig8 Asia Pte Ltd (amended on 25 March 2014 and 7 May 2015)

 

2.              Project Structuring Agreement, dated 17 December 2013, between Navig8 Limited and Navig8 DMCC (amended on 25 March 2014)

 

3.              Plan Approval and Construction Supervision Agreement Relating to Hull No’s. NTP0137 and NTP0138, dated 25 March 2014, between Navig8 Crude Tankers Inc. and Navig8 Shipmanagement Pte Ltd.

 

223

 

SCHEDULE 14

 

NON-CASH CHARGES

 

1.              noncash interest expense and amortization of debt discount and commissions and other fees and charges, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements, associated with Financial Indebtedness for such period (whether amortized or immediately expensed) less any gains on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements;

 

2.              all amounts attributable to impairment charges on intangible assets, including, without limitation, amortization of intangible assets (including goodwill) for such period;

 

3.              any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans;

 

4.              non-cash restricted stock compensation, including, without limitation, any restricted stock units; and

 

5.              losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any gains on such minority interests or investments for such period.

 

224

 

SCHEDULE 15

 

TIMETABLES

 

	
Delivery of a duly   completed Utilisation Request (Clause 5.1 (Delivery   of a Utilisation Request))
    	
 
    	
Five (5) Business Days before the intended   Utilisation Date (Clause 5.1 (Delivery of a   Utilisation Request)) or the expiry of the preceding Interest   Period (Clause 9.1 (Interest Periods))
    
	
 
    	
 
    	
 
    
	
Facility Agent notifies the Lenders of the Advance   in accordance with Clause 5.4 (Lenders’ participation)
    	
 
    	
Four (4) Business Days before the intended   Utilisation Date.
    
	
 
    	
 
    	
 
    
	
LIBOR is fixed
    	
 
    	
Quotation Day as of 11:00 am New York time
    

 

225

 

SCHEDULE 16

 

FORM OF MT 199

 

Swift message to accompany MT103 payment for US$ [·] sent under swift reference number [·].

 

TO THE ATTENTION OF [Bank Name] ([Swift Address]), ADDRESS: [Street Address], ATTENTION: [Name, Telephone, Email]

 

Re: The Shipbuilding Contract dated [·] (as AMENDED, NOVATED and/or supplemented from time to time, the “Shipbuilding Contract”) made between [Original Buyer Name] WITH ADDRESS AT [·] (THE “ORIGINAL BUYER”) AND [Shipyard Name] WITH ADDRESS AT [·] [(the “Seller”)]/[(the “Builder”) AND [·] (together with the Builder, the “Seller”)] TO BE NOVATED TO [New Buyer Name] AS NEW BUYER (THE “BUYER”) FOR THE CONSTRUCTION OF [Shipyard Name] HULL [·] TO BE NAMED [·] (THE “VESSEL”).

 

We confirm having irrevocably remitted to you for value [DATE] an amount of US$ [·] (United States Dollars [·] only) being PART OF the delivery instalment in respect of the purchase of the Vessel by the Buyer from the Seller pursuant to the Shipbuilding Contract.

 

This amount is to be held to the sole order of [NORDEA BANK FINLAND PLC, NEW YORK BRANCH] under reference — [Shipyard Name] HULL [Hull Number] (to be named [Vessel Name]) delivery instalment.

 

You are hereby instructed to hold these funds and release them to the Builder only upon presentation to you by the Seller of a fax copy of the protocol of delivery and acceptance for the Vessel duly signed by the authorised representatives of the Seller and the Buyer and countersigned by any one of the following:

 

[Name, Nationality, Passport Number]

[Name, Nationality, Passport Number]

[Name, Nationality, Passport Number]

 

EACH OF [Law firm’s name], ACTING SINGLY ON BEHALF OF [NORDEA BANK FINLAND PLC, NEW YORK BRANCH].

 

These monies, when released, may only be used for payment to the account of the Seller with [Seller Bank Name, Address] in or towards satisfaction of the balance of the purchase price for the Vessel, payment instructions:

 

1.              BANK: [·]

2.              ACCOUNT NO.: [·]

3.              CORRESPONDENT BANK: [·]

4.              BENEFICIARY: [·]

5.              REFERENCE: [·]

 

In the event that all or any part of the amount so remitted has not been released in accordance with the foregoing instructions by close of business on [date, to be not later than 5 business days after the scheduled delivery date], then all of the money held by you must be immediately returned by remitting the same to [NORDEA BANK FINLAND PLC, NEW YORK BRANCH (swift code NDEAUS3NXXX)], for THE account of [Borrower] Account number [·] under reference: attn CREDIT ADMINISTRATION DEPARTMENT RE: [Borrower Name] — return of purchase price of the vessel [·].

 

If you have any questions please contact [·] telephone no. [·] AT [NORDEA BANK FINLAND PLC, NEW YORK BRANCH.]

 

226

 

APPENDIX 1

 

PART B

 

FORM OF CLEAN COPY AMENDED AND RESTATED
 LOAN AGREEMENT

 

 

AMENDED AND RESTATED FINAL VERSION

 

FACILITY AGREEMENT DATED AS OF 30 NOVEMBER 2015

AS SUPPLEMENTED BY A SUPPLEMENTAL AGREEMENT DATED 28 DECEMBER 2015 AND

AS AMENDED AND RESTATED BY AN AMENDING AND RESTATING DEED DATED 29 JUNE 2016
 TERM LOAN FACILITY OF UP TO $385,227,495

 

GENER8 MARITIME SUBSIDIARY VII INC.
 as Borrower

 

 THE COMPANIES listed in Part A of Schedule 1

as joint and several Owner Guarantors and 
 joint and several Hedge Guarantors

 

GENER8 MARITIME, INC.

as Parent Guarantor

 

CITIBANK, N.A. 
 NORDEA BANK FINLAND PLC, NEW YORK BRANCH 
  as Global Co-ordinators

 

CITIBANK, N.A. 
  as Bookrunner

 

CITIBANK, N.A. 
 THE EXPORT-IMPORT BANK OF CHINA

BANK OF CHINA, NEW YORK BRANCH

as Mandated Lead Arrangers

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1

as Original Lenders

 

THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1

as Hedge Counterparties

 

CITIBANK, N.A., LONDON BRANCH

as ECA Co-ordinator and ECA Agent

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH
  as Facility Agent and Security Agent

 

 

Index

 

	
Clause
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 1   Interpretation
    	
 
    	
2
    
	
1
    	
Definitions and   Interpretation
    	
 
    	
2
    
	
Section 2   The Facility
    	
 
    	
41
    
	
2
    	
The Facility
    	
 
    	
41
    
	
3
    	
Purpose
    	
 
    	
42
    
	
4
    	
Conditions of   Utilisation
    	
 
    	
43
    
	
Section 3   Utilisation
    	
 
    	
45
    
	
5
    	
Utilisation
    	
 
    	
45
    
	
Section 4   Repayment, Prepayment and Cancellation
    	
 
    	
48
    
	
6
    	
Repayment
    	
 
    	
48
    
	
7
    	
Prepayment and   Cancellation
    	
 
    	
48
    
	
Section 5   Costs of Utilisation
    	
 
    	
53
    
	
8
    	
Interest
    	
 
    	
53
    
	
9
    	
Interest Periods
    	
 
    	
56
    
	
10
    	
Changes to the   Calculation of Interest
    	
 
    	
56
    
	
11
    	
Fees and Sinosure   Premium
    	
 
    	
57
    
	
Section 6   Additional Payment Obligations
    	
 
    	
59
    
	
12
    	
Tax Gross Up and   Indemnities; FATCA
    	
 
    	
59
    
	
13
    	
Increased Costs
    	
 
    	
62
    
	
14
    	
Other Indemnities
    	
 
    	
63
    
	
15
    	
Mitigation by the   Finance Parties
    	
 
    	
66
    
	
16
    	
Costs and Expenses
    	
 
    	
68
    
	
Section 7   Guarantees
    	
 
    	
69
    
	
17
    	
Guarantee and Indemnity
    	
 
    	
69
    
	
Section 8   Representations, Undertakings and Events of Default
    	
 
    	
74
    
	
18
    	
Representations
    	
 
    	
74
    
	
19
    	
Information   Undertakings
    	
 
    	
84
    
	
20
    	
Financial Covenants
    	
 
    	
89
    
	
21
    	
General Undertakings
    	
 
    	
89
    
	
22
    	
Insurance Undertakings
    	
 
    	
107
    
	
23
    	
Shipbuilding Contract   Undertakings
    	
 
    	
111
    
	
24
    	
General Ship   Undertakings
    	
 
    	
112
    
	
25
    	
Security Cover
    	
 
    	
119
    
	
26
    	
Application of Earnings
    	
 
    	
120
    
	
27
    	
Events of Default
    	
 
    	
122
    
	
Section 9   Changes to Parties
    	
 
    	
128
    
	
28
    	
Changes to the Lenders
    	
 
    	
128
    
	
29
    	
Changes to the Obligors
    	
 
    	
133
    
	
Section 10   The Finance Parties
    	
 
    	
134
    
	
30
    	
The Facility Agent and   the Mandated Lead Arrangers
    	
 
    	
134
    
	
31
    	
The Security Agent
    	
 
    	
143
    
	
32
    	
ECA Agent
    	
 
    	
156
    
	
33
    	
sinosure Specific Provisions
    	
 
    	
157
    
	
34
    	
Conduct of Business by   the Finance Parties
    	
 
    	
165
    
	
35
    	
Sharing among the   Finance Parties
    	
 
    	
165
    
	
Section 11   Administration
    	
 
    	
167
    
	
36
    	
Payment Mechanics
    	
 
    	
167
    
	
37
    	
Set-Off
    	
 
    	
171
    
	
37A
    	
Bail-In
    	
 
    	
171
    
	
38
    	
Notices
    	
 
    	
171
    
	
39
    	
Calculations and   Certificates
    	
 
    	
174
    
	
40
    	
Partial Invalidity
    	
 
    	
174
    
	
41
    	
Remedies and Waivers
    	
 
    	
174
    
	
42
    	
Settlement or Discharge   Conditional
    	
 
    	
174
    
	
43
    	
Irrevocable Payment
    	
 
    	
174
    
	
44
    	
Amendments and Waivers
    	
 
    	
175
    

 

 

	
45
    	
Confidential   Information
    	
 
    	
176
    
	
46
    	
Counterparts
    	
 
    	
180
    
	
Section 12   Governing Law and Enforcement
    	
 
    	
181
    
	
47
    	
Governing Law
    	
 
    	
181
    
	
48
    	
Enforcement
    	
 
    	
181
    
	
49
    	
PATRIOT Act Notice
    	
 
    	
181
    
	
 
    	
 
    	
 
    	
 
    
	
Execution
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Execution   Pages
    	
 
    	
182
    
	
 
    	
 
    	
 
    
	
Schedules
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule   1 The Parties
    	
 
    	
191
    
	
Part A   The Obligors
    	
 
    	
191
    
	
Part B   The Original Lenders
    	
 
    	
193
    
	
Part C   Hedge Counterparties
    	
 
    	
194
    
	
Part D   The Servicing Parties
    	
 
    	
195
    
	
Schedule   2 Conditions Precedent
    	
 
    	
197
    
	
Part A   Conditions Precedent to Initial Utilisation Request
    	
 
    	
197
    
	
Part B   Conditions Precedent to Utilisation — Advance
    	
 
    	
199
    
	
Schedule   3 Utilisation Request
    	
 
    	
202
    
	
Schedule   4 Commitments
    	
 
    	
203
    
	
Schedule   5 Form of Transfer Certificate
    	
 
    	
205
    
	
Schedule   6 Form of Assignment Agreement
    	
 
    	
208
    
	
Schedule   7 Form of Compliance Certificate
    	
 
    	
211
    
	
Schedule   8 Details of Ships
    	
 
    	
212
    
	
Schedule   9 ERISA Plans and contributions
    	
 
    	
214
    
	
Schedule   10 Subsidiaries
    	
 
    	
215
    
	
Schedule   11 Financial Indebtedness
    	
 
    	
220
    
	
Schedule   12 Insurances
    	
 
    	
221
    
	
Schedule   13 Existing Transactions
    	
 
    	
222
    
	
Schedule   14 Non-Cash Charges
    	
 
    	
223
    
	
Schedule   15 Timetables
    	
 
    	
224
    
	
Schedule   16 Form of MT 199
    	
 
    	
225
    

 

 

THIS AGREEMENT is dated as of 30 November 2015 as supplemented by a supplemental agreement dated 28 December 2015 and as amended and restated by an amending and restating deed dated 29 June 2016.

 

PARTIES

 

(1)                                 GENER8 MARITIME SUBSIDIARY VII INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as borrower (the “Borrower”);

 

(2)                                 The limited liability companies listed in Part A of Schedule 1 (The Parties) therein as joint and several owner guarantors (the “Owner Guarantors”) and as joint and several hedge guarantors (the “Hedge Guarantors”);

 

(3)                                 GENER8 MARITIME, INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the “Parent Guarantor”);

 

(4)                                 CITIBANK, N.A. and NORDEA BANK FINLAND PLC, NEW YORK BRANCH as global co-ordinators (the “Global Co-ordinators” and each, a “Global Co-ordinator”);

 

(5)                                 CITIBANK, N.A. as bookrunner (the “Bookrunner”);

 

(6)                                 CITIBANK, N.A., THE EXPORT-IMPORT BANK OF CHINA and BANK OF CHINA, NEW YORK BRANCH as mandated lead arrangers (the “Mandated Lead Arrangers” and each, a “Mandated Lead Arranger”);

 

(7)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the “Original Lenders” and each, an “Original Lender”);

 

(8)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1 (The Parties) as hedge counterparties (the “Hedge Counterparties” and each a, “Hedge Counterparty”);

 

(9)                                 CITIBANK, N.A., LONDON BRANCH as ECA agent (the “ECA Agent”) and as ECA co-ordinator (the “ECA Co-ordinator”);

 

(10)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as agent of the other Finance Parties (the “Facility Agent”); and

 

(11)                          NORDEA BANK FINLAND PLC, NEW YORK BRANCH as security agent for the Secured Parties (the “Security Agent”).

 

BACKGROUND

 

(A)                               The Lenders have agreed to make available to the Borrower a term loan facility of up to $385,227,495.

 

(B)                               The Hedge Counterparties may enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower’s exposure under this Agreement to interest rate fluctuations.

 

1

 

OPERATIVE PROVISIONS

 

SECTION 1

 

INTERPRETATION

 

1                                         DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

“Acceptable Accounting Firm” means Deloitte & Touche LLP, PricewaterhouseCoopers, Ernst & Young or KPMG, or such other recognized accounting firm as the Facility Agent may, with the consent of the Required Lenders, approve from time to time in writing, such approval not to be unreasonably withheld.

 

“Account Bank” means Nordea Bank Finland plc acting through its office at 1211 Avenue of the Americas, 23rd Floor, New York, NY 10036.

 

“Accounts” means the Earnings Accounts, the Minimum Liquidity Account and the Debt Service Reserve Account.

 

“Account Security” means a document creating Security over any Account in agreed form.

 

“Addendum to Mortgage” means, in relation to a Ship, an addendum to mortgage executed by the Security Agent and the Owner Guarantor owning that Ship in agreed form.

 

“Additional Collateral” shall mean additional Security satisfactory to the Required Lenders created in favour of the Security Agent to cure non-compliance with Clause 25 (Security Cover) (it being understood that cash collateral comprised of Dollars (which shall be valued at par) shall be deemed satisfactory), pursuant to security documentation in agreed form, in an aggregate amount at least sufficient to cure such non-compliance.

 

“Advance” means the borrowing of all or part of a Vessel Loan under this Agreement.

 

“Affected Lender” has the meaning given to it in paragraph (b) of Clause 10.2 (Market disruption).

 

“Affiliate” means, with respect to any Person, any other Person (including, for purposes of Clause 21.30 (Other transactions), all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided however, that for purposes of Clause 21.30 (Other transactions), an Affiliate of the Parent Guarantor shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Parent Guarantor and any officer or director of the Parent Guarantor or any of its Subsidiaries.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.  Notwithstanding anything to the contrary contained above, neither the Facility Agent, nor the Security Agent, the ECA Agent nor the Mandated Lead Arrangers nor any Lender (or any of their respective Affiliates) shall be deemed to constitute an Affiliate of the Parent Guarantor or its Subsidiaries in connection with the Finance Documents or its dealings or arrangements relating thereto.

 

“Aggregate Collateral Vessel Value” means at any time, the aggregate of the Fair Market Value of all the Ships which are, in each case, subject to a Mortgage.

 

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“Amending and Restating Deed” means the amending and restating deed dated                                  2016 and made between, amongst others, the Parties.

 

“Anti-Bribery and Corruption Laws” means the US Foreign Corrupt Practices Act of 1977 as amended and the rules and regulations thereunder, the UK Bribery Act of 2010, and/or any similar laws, rules or regulations issued, administered or enforced by the United States, United Kingdom, the European Union or any of its member states, or any other country or Governmental Agency having jurisdiction over any Finance Party, Sinosure or any Obligor.

 

“Appraisal” means, with respect to a Ship, a written appraisal provided by an Approved Appraiser in favour of the Facility Agent for the purposes of determining the Fair Market Value of such Ship.

 

“Approved Appraiser” means Fearnleys, Clarksons, Braemar Seascope, Maersk Broker K.S., Lorentzen & Stemoco and Simpson Spence & Young (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent.

 

“Approved Classification” means, in relation to a Ship, as at the date of this Agreement, the dual classification with (a) China Classification Society (“CCS”) and (b) the Approved Classification Society specified in relation to that Ship in Schedule 8 (Details of the Ships) or the equivalent classification with another Approved Classification Society.

 

“Approved Classification Society” means American Bureau of Shipping (“ABS”), DNV GL Group (“DNV”), Lloyd’s Register (“LR”), Nippon Kaiji Kyokai (“NKK”), Bureau Veritas (“BV”)  or any other classification society approved in writing by the Facility Agent.

 

“Approved Commercial Manager” means, in relation to a Ship, Navig8 Pte. Ltd., Navig8 Asia Pte. Ltd., VL8 Management Inc., the Parent Guarantor, any of its Affiliates, or such other person approved in writing by the Facility Agent acting with the authorization of the Required Lenders as the commercial manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks or, if such Ship is entered into a Pool Agreement, the Pool Manager.

 

“Approved Flag” shall have the meaning provided in Clause 24.2 (Flag of Ships; Citizenship; Ship Classification).

 

“Approved Insurance Broker” means Bankserve, Willis, Aon, Marsh, Leeds and Leeds and any other firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorization of the Required Lenders.

 

“Approved Manager” means, in relation to a Ship, the Approved Commercial Manager or the Approved Technical Manager of that Ship.

 

“Approved Technical Manager” means, in relation to a Ship, Northern Marine Management Ltd., Anglo-eastern Shipmanagement (Singapore) Pte. Ltd., Anglo-eastern International (Macao Commercial Offshore) Limited, Wallem Shipmanagement Limited, Selandia Ship Management Pte. Ltd., Selandia Ship Management (India) Pvt. Ltd., Selmar Ltd, the Parent Guarantor, any of its wholly owned subsidiaries or such other person approved in writing by the Facility Agent acting with the authorization of the Required Lenders as the technical manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks.

 

“Assignment of Builder’s Warranties” means in relation to a Ship, the assignment of builder’s warranties in respect of that Ship entered into or to be entered into by the Owner Guarantor owning that Ship and the Security Agent in the agreed form.

 

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“Assignment of Hedging Agreement” means a first assignment of the rights and interests of the Parent Guarantor or the Borrower (as the case may be), in any Hedging Agreement entered into or to be entered into between the Parent Guarantor or the Borrower (as the case may be) and the Security Agent, in agreed form.

 

“Assignment Agreement” means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

 

“Authorization” means an authorization, consent, approval, resolution, license, exemption, filing, notarization, legalization or registration.

 

“Availability Period” means in relation to each Vessel Loan, the period from and including the date of this Agreement up to and including,

 

(a)                                 the earliest of:

 

(i)                                     the Delivery Date of the Ship to which that Vessel Loan relates;

 

(ii)                                  the date falling 180 days from the Scheduled Delivery Date of the Ship to which that Vessel Loan relates; and

 

(iii)                               31 May, 2017, or

 

(b)                                 such later date as may be agreed by the Lenders and Sinosure with the Borrower.

 

“Available Commitment” means, in relation to a Lender in respect of a Vessel Loan, such Lender’s Commitment minus:

 

(a)                                 the amount of its Contribution in such outstanding Vessel Loan; and

 

(b)                                 in relation to any proposed Utilisation, the amount of its Contribution in any Advance that is due to be made on or before the proposed Utilisation Date.

 

“Available Facility” means the aggregate for the time being of each Lender’s Available Commitment under all Vessel Loans.

 

“Bail-In Action” means the exercise of any Write-down and Conversion Powers.

 

“Bail-In Legislation” means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time.

 

“Balloon Repayment” means in relation to each Vessel Loan, an amount equal to such Vessel Loan as at the date of its Utilisation Date minus all Repayment Instalments for such Vessel Loan.

 

“Bank Secrecy Act” means the U.S. Bank Secrecy Act of 1970.

 

“Basel II” has the meaning ascribed to it under Clause 13.3 (Exceptions).

 

“Basel III” means:

 

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(a)                                 the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

(b)                                 the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

(c)                                  any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

 

“Blue Mountain Indebtedness” means unsecured Financial Indebtedness incurred by the Parent Guarantor, pursuant to that certain note and guarantee agreement, dated as of March 28, 2014, among Parent Guarantor, as borrower and Blue Mountain Capital Management, LLC and certain of its affiliates, as purchasers (as amended, restated, replaced or modified from time to time provided that after giving effect to any such amendment, restatement, replacement or modification (including in respect of any Permitted Blue Mountain Refinancing Indebtedness) the Blue Mountain Indebtedness Requirements shall be satisfied), in an initial aggregate principal amount not to exceed $131,600,000, as such amount may be (i) increased to include the amount of interest accrued after March 28, 2014 and capitalized or paid in kind in accordance with the terms thereof and other amounts payable in connection therewith and/or (ii) decreased pursuant to principal prepayments thereof permitted pursuant to Clause 21.28 (Dividends).

 

“Blue Mountain Indebtedness Requirements” shall mean with respect to the Blue Mountain Indebtedness or any amendment, restatement, replacement or other modification thereof that:

 

(a)                                 such Financial Indebtedness shall mature no earlier than March 28, 2020 and shall not require any scheduled amortization, mandatory redemption or prepayment prior to such date (other than any prepayment required (i) from the net cash proceeds from the disposition of any Equity Interests of Subsidiary V Inc., or any assets of the Subsidiary V Inc. and/or its Subsidiaries and/or (ii) upon a change of control (as defined in the documentation governing such Financial Indebtedness) or acceleration of such Financial Indebtedness following an event of default thereunder);

 

(b)                                 such Financial Indebtedness shall not be secured or guaranteed by any Subsidiary of the Parent Guarantor other than Subsidiary V Inc.;

 

(c)                                  such Financial Indebtedness shall permit the Parent Guarantor at its option to make all interest payments thereunder in kind or in cash and to the extent that the documentation governing the Financial Indebtedness contains any financial maintenance covenant (other than a collateral maintenance test) applicable to the Parent Guarantor that is more favourable to the lenders or providers thereunder than to the Lenders herein, this Agreement shall automatically be amended to include such more favourable financial maintenance covenant (including any definitions used therein) without any further action or consent of the Borrower and the Facility Agent shall be permitted to amend this Agreement to reflect such financial maintenance covenant (it being understood and agreed that the Borrower

 

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shall be deemed to have consented to such amendment and authorized the Facility Agent to effect such amendment on its behalf).

 

“Break Costs” means other than the CEXIM Prepayment Fee, the amount (if any) by which:

 

(a)                                 the interest which a Lender should have received for the period from the date of receipt of all or any part of its Contribution in the Loan or Unpaid Sum to the last day of the current Interest Period in relation to the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

exceeds:

 

(b)                                 the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

 

“Bridging Facility” means the term loan facility of up to $60,174,000 provided by Citibank, N.A., New York Branch to the Borrower to finance the payment of the Delivery Instalment of Ship A to the relevant Seller.

 

“Builder” means Shanghai Waigaoqiao Shipbuilding Co., Ltd., a corporation organised and existing under the laws of the PRC having its registered office at 3001 Zhouhai Road, Pudong New District, Shanghai 200137, the People’s Republic of China.

 

“Business Day” means a day except Saturday, Sunday and any day which shall be in London, New York, Hong Kong, Oslo and Beijing, a legal holiday or a day in which banking institutions are authorized or required by law or other government action to close.

 

“Capitalized Lease Obligations” of any Person shall mean all rental obligations which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

 

“Cash Equivalents” means:

 

(a)                                 securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition;

 

(b)                                 time deposits, certificates of deposit or deposits in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having (x) capital and surplus in excess of $200,000,000 and (y) a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from Moody’s with maturities of not more than one year from the date of acquisition by such Person;

 

(c)                                  repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above;

 

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(d)                                 commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such Person;

 

(e)                                  investments in money market funds substantially all of whose assets are comprised of the types described in clauses (a) through (d) above; and

 

(f)                                   such other securities or instruments as the Required Lenders shall agree in writing.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), as amended by the Superfund Amendments Reauthorization Act of 1986 (42 U.S.C. § 9601 et seq.).

 

“CEXIM” means The Export-Import Bank of China.

 

“CEXIM Prepayment Fee” means a non-refundable prepayment fee of an amount equivalent to 0.50% of any prepaid amount of CEXIM’s Contribution.

 

“Charter” means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence.

 

“Change of Control” means:

 

(a)                                 in respect of the Borrower, the occurrence of any act, event or circumstance that without prior written consent of all the Lenders results in the Parent Guarantor owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in the Borrower;

 

(b)                                 in respect of an Owner Guarantor and/or a Hedge Guarantor, the occurrence of any act, event or circumstance that without prior written consent of all the Lenders results in the Parent Guarantor owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in that Owner Guarantor and/or Hedge Guarantor (except as permitted under Clause 21.22(a) (Disposals); and

 

(c)                                  in respect of the Parent Guarantor, save with the prior written consent of the Required Lenders:

 

(i)                                     a “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), is or shall be the “beneficial owner” (as so defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) or otherwise have obtained ownership or control, directly or indirectly, of 35% or more on a fully diluted basis of the voting and/or economic interest in the Parent Guarantor’s Equity Interests; or

 

(ii)                                  the replacement of a majority of the directors on the board of directors of the Parent Guarantor over a two-year period from the directors who constituted the board of directors of the Parent Guarantor at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of the Parent Guarantor 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 were previously so approved; or

 

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(iii)                               none of the following shall be a director of the Parent Guarantor: (a) Mr. Peter Georgiopoulous, (b) Mr. Gary Brocklesby or (c) Mr. Nicolas Busch; or

 

(iv)                              a “change of control” or similar event shall occur as provided in any outstanding Financial Indebtedness (excluding Financial Indebtedness with an aggregate principal amount of less than $20,000,000) of the Parent Guarantor or any of its Subsidiaries (or the documentation governing the same).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.

 

“Commercial Management Agreement” means, in relation to a Ship, the form of agreement entered into between the relevant Owner Guarantor and the Approved Commercial Manager regarding the commercial management of that Ship in agreed form.

 

“Commission” or “SEC” means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.

 

“Commitment” means:

 

(a)                                 in relation to an Original Lender, the amount set opposite its name in the 3rd column of Schedule 4 (Commitments) and the amount of any other Commitment transferred or assigned to it under this Agreement; and

 

(b)                                 in relation to any other Lender, the amount of any Commitment transferred or assigned to it under this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Compliance Certificate” means a certificate in the form set out in Schedule 7 (Form of Compliance Certificate) or in any other form agreed between the Parent Guarantor and the Facility Agent.

 

“Confidential Information” means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

 

(a)                                 any member of the Group or any of its advisers; or

 

(b)                                 another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

 

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes any Funding Rate or information that:

 

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(i)                                     is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 45 (Confidential Information); or

 

(ii)                                  is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

 

(iii)                               is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

 

“Confidentiality Undertaking” means a confidentiality undertaking in any form agreed between the Borrower and the Facility Agent.

 

“Compensation Notice” means a notice issued by Sinosure following (a) the application of a claim applied by the ECA Agent (on behalf of the Lenders) in connection with a Sinosure Insurance Policy and (b) the issuance of a claim opinion by Sinosure.

 

“Consolidated Cash Interest Expense” means, for any period,

 

(a)                                 the total consolidated interest expense paid or payable in cash of the Parent Guarantor and its Subsidiaries (including, without limitation, to the extent included under GAAP, all commission, discounts and other commitment fees and charges (e.g., fees with respect to letters of credit, any Hedging Agreement, any Non-Lender Hedging Agreement or any Other Hedging Agreement) for such period (calculated without regard to any limitations on payment thereof), adjusted to exclude (to the extent same would otherwise be included in the calculation above in this paragraph (a)), the amortization of any deferred financing costs for such period and any interest expense actually “paid in kind” or accreted during such period, plus

 

(b)                                 without duplication, that portion of Capitalized Lease Obligations of the Parent Guarantor and its Subsidiaries on a consolidated basis representing the interest factor for such period, minus

 

(c)                                  cash interest income.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period, adjusted by:

 

(a)                                 adding thereto the following to the extent deducted in calculating such Consolidated Net Income:

 

(i)                                     consolidated interest expense and amortization of debt discount and commissions and other fees and charges, including, without limitation, noncash interest payments, the interest component of capitalized lease obligations, net payments, if any, made (less net payments, if any, received), pursuant to any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other Hedging Agreements, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other

 

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Hedging Agreements, associated with Financial Indebtedness for such period (whether amortized or immediately expensed),

 

(ii)                                  consolidated income tax expense for such period, including, without limitation, penalties and interest related to such taxes or arising from any tax examinations and tax expense in respect of repatriated funds,

 

(iii)                               any gross transportation tax expense for such period,

 

(iv)                              all amounts attributable to depreciation, amortization and impairment charges, including, without limitation, amortization of intangible assets (including goodwill) and amortization of deferred financing fees or costs for such period,

 

(v)                                 any extraordinary losses, expenses or charges for such period, including, without limitation, accruals and payments for amounts payable under executive compensation agreements, severance costs, relocation costs, retention and completion bonuses and losses realized on disposition of property outside of the ordinary course of business and operating expenses directly attributable to the implementation of cost savings initiatives, and losses relating to activities constituting a business that is being terminated or discontinued,

 

(vi)                              any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans,

 

(vii)                           non-cash restricted stock compensation, including, without limitation, any restricted stock units,

 

(viii)                        any non-cash charges or losses, including, without limitation, non-cash compensation expenses for such period, adjustments to bad-debt reserves, losses recognized in respect of postretirement benefits as a result of the application of FASB ASC 715, losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any extraordinary gains for such period,

 

(ix)                              any losses from the sales of any Ship for such period,

 

(x)                                 all costs and expenses incurred in connection with any equity issuances permitted hereunder so long as, notwithstanding anything set forth herein to the contrary, the Net Cash Proceeds of such equity issuances are applied to the prepayment of the Loan and such prepayments are applied to reduce the relevant payments due under the Finance Documents,

 

(xi)                              non-recurring costs, charges, accruals, reserves and business optimization expense, including, without limitation, any severance and restructuring costs, integration costs related to acquisitions after the date of this Agreement, project start-up costs, transition costs, cost related to the opening, closure and/or consolidation of offices and facilities (including, without limitation, fees and expenses incurred in connection with the winding up of all of the Parent Guarantor and its Subsidiaries’ activities and operations in Portugal), contract termination costs, systems establishment costs, and excess pension charges,

 

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(xii)                           all non-recurring fees, costs and expenses related to any litigation or settlements,

 

(xiii)                        any proceeds from business interruption insurance,

 

(xiv)                       any charges, losses, lost profits, expenses or write-offs to the extent indemnified or insured by a third party to the extent that coverage has not been denied and so long as such amounts are actually reimbursed to the Parent Guarantor or any of its Subsidiaries within one year after the related amount is first added to Consolidated EBITDA pursuant to this paragraph (xv),

 

(xv)                          cash expenses relating to earn outs and similar obligations, and

 

(xvi)                       all costs and expenses incurred in connection with the Finance Documents, the Finance Documents (as defined in the credit agreement for the Korean Facility) and the Credit Documents (as defined in the Re-financing Facility Credit Agreement), and

 

(b)                                 subtracting therefrom the following to the extent added in calculating such Consolidated Net Income:

 

(i)                                     any extraordinary gains for such period;

 

(ii)                                  any gains from the sales of any Ship for such period; and

 

(iii)                               any gains realized on disposition of property not in the ordinary course

 

Unless otherwise agreed to by the Facility Agent, for purposes of this definition of “Consolidated EBITDA,” “non-recurring” means any expense, loss or gain as of any date that (x) did not occur in the ordinary course of the Parent Guarantor or its Subsidiaries’ business; (y) is of a nature and type that has not occurred in the prior two years and is not reasonably expected to recur in the future; and (z) any fees, expenses or charges related to any equity offering, investment or Financial Indebtedness or amendments thereto permitted by this Agreement, whether or not consummated.

 

“Consolidated Indebtedness” shall mean, with respect to any Person, as at any relevant date, (x) the aggregate outstanding principal amount of the Loan under this Agreement and the loans under the Re-financing Facility and the Korean Facility, plus (y) the aggregate outstanding principal amount of any other Financial Indebtedness of the Parent Guarantor or any of its Subsidiaries permitted pursuant to Clause 21.25(g) (Financial Indebtedness).

 

“Consolidated Leverage Ratio” shall mean, at any date of determination, the ratio of Consolidated Net Indebtedness of the Parent Guarantor and its Subsidiaries on such date to Consolidated Total Capitalization of the Parent Guarantor and its Subsidiaries on such date.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net after tax income of the Parent Guarantor and its Subsidiaries for such period determined in accordance with GAAP; provided that for purposes of calculating Consolidated Net Income in connection with Clause 21.28(b) (Dividends), Consolidated Net Income shall be adjusted by adding thereto the non-cash charges set forth in Schedule 14 (Non-cash charges) to the extent deducted in determining consolidated net after-tax income for such period and any gain on the sale of assets which are designated by the Parent Guarantor as being included in the Excess Asset Sale Proceeds Amount shall be excluded.

 

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“Consolidated Net Indebtedness” shall mean, with respect to any Person, as at any relevant date, (x) Consolidated Indebtedness less (y) an amount equal to the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries as at such date.

 

“Consolidated Tangible Net Worth” shall mean, at any time of determination for any Person, the Net Worth of such Person and its Subsidiaries at such time determined on a consolidated basis in accordance with GAAP minus goodwill.

 

“Consolidated Total Capitalization” shall mean, at any time of determination for any Person, the sum of Consolidated Net Indebtedness of such Person at such time and Consolidated Tangible Net Worth of such Person at such time.

 

“Constitutional Documents” with respect to any Obligor means the Memorandum of Association or Certificate of Incorporation, as the case may be, Certificate of Formation (including, without limitation, by the filing or modification of any certificate of designation made prior to the date of this Agreement), By-Laws, limited liability company agreement or partnership agreement (or equivalent organizational documents).

 

“Contingent Extras” means, in relation to a Ship, an amount equivalent to the aggregate of unforeseen costs and expenses (including the cost of extras) as permitted by the terms of the Shipbuilding Contract relating to such Ship incurred during the period commencing from the date of this Agreement up to and including the Delivery Date of such Ship and which are documented in such form and substance acceptable to the Facility Agent (including by any relevant supplemental agreements to such Shipbuilding Contract), provided that the aggregate of such amount shall not exceed $500,000 in relation to such Ship.

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any indebtedness (“primary obligations”) of any other person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such person in good faith.

 

“Contract Price” means, in relation to a Ship, the aggregate of (i) the price payable for that Ship under its Shipbuilding Contract and (ii) the Contingent Extras for that Ship, subject to adjustment as provided in such Shipbuilding Contract pursuant to the terms thereof.

 

“Contract Price Instalment” means, in relation to a Ship, each instalment of the Contract Price payable under the Shipbuilding Contract relating to that Ship.

 

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“Contribution” means, in relation to a Lender, the part of the Loan, an Advance or, as the context may require, a Vessel Loan which is owing to that Lender.

 

“Debt Service Coverage Ratio” shall mean, for any period, the ratio of the Consolidated EBITDA for such period to the aggregate of (a) the scheduled principal repayments in respect of Consolidated Indebtedness for such period and (b) the Consolidated Cash Interest Expense for such period.

 

“Debt Service Reserve Account” means:

 

(a)                                 an account in the name of the Parent Guarantor with the Account Bank designated “Gener8 Maritime, Inc. — Debt Service Reserve Account (Sinosure)”; or

 

(b)                                 any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.

 

“Debtor Relief Laws” shall mean the U.S. Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” means an Event of Default or a Potential Event of Default.

 

“Default Period” means, with respect to any Lender, the period during which such Lender is a Defaulting Lender.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

 

“Delegate” means any delegate, agent, attorney, co-trustee or other person appointed by the Security Agent.

 

“Delivery Date” means, in relation to a Ship, the date on which that Ship is delivered by the relevant Seller to the relevant Owner Guarantor designated or to be designated as receiving delivery of such Ship pursuant to the relevant Shipbuilding Contract.

 

“Delivery Instalment” means, in relation to a Ship, the delivery instalment of the relevant Contract Price payable under the relevant Shipbuilding Contract.

 

“Disbursement Authorization” has the meaning given in paragraph (b) of Clause 5.8 (Prepositioning of funds).

 

“Disruption Event” means either or both of:

 

(a)                                 a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any Obligor; or

 

(b)                                 the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if

 

13

 

applicable, any Obligor preventing that, or any other, Party or, if applicable, any Obligor:

 

(i)                                     from performing its payment obligations under the Finance Documents; or

 

(ii)                                  from communicating with other Parties or, if applicable, any Obligor in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is beyond the control of, any Obligor.

 

“Dividend” means, with respect to any Person, a dividend, distribution or return of any equity capital to its stockholders, partners or members, any other distribution, payment or delivery of property or cash to its stockholders, partners or members in their capacity as such (other than common stock, and the right to purchase any of such stock of such Person), the redemption, retirement, purchase or acquisition, directly or indirectly, for a consideration of any shares of any class of its capital stock or any other Equity Interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), including Stock Buy-Backs, or the setting aside of any funds for any of the foregoing purposes, or the granting of permission to any of its Subsidiaries to purchase or otherwise acquire for a consideration (other than common stock, Qualified Preferred Stock and the right to purchase any of such stock of such Person) any shares of any class of the capital stock or any other Equity Interests of such Person outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests) except for share repurchases resulting from the unwinding of any share sale requiring the repayment of any advances in connection with such sale as a result of any default on payment on the part of the ultimate purchaser of such shares.  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 aside of any funds for the foregoing purposes.  For the avoidance of doubt, (i) any non-cash anti-dilution adjustments under the warrants listed on in Schedule 14 (Non-cash charges) shall not constitute a Dividend and (ii) payments under the indemnification provisions of the Merger Agreement shall constitute a Dividend.

 

“Document of Compliance” has the meaning given to it in the ISM Code.

 

“dollars” and “$” mean the lawful currency, for the time being, of the U.S.

 

“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner Guarantor owning that Ship or the Security Agent and which arise out of the use or operation of that Ship, including (but not limited to):

 

(a)                                 the following, save to the extent that any of them is, as of the date of this Agreement or with the prior written consent of the Facility Agent, pooled or shared with any other person:

 

(i)                                     all freight, hire and passage moneys;

 

(ii)                                  compensation payable to the Owner Guarantor owning that Ship or the Security Agent in the event of requisition of that Ship for hire;

 

(iii)                               remuneration for salvage and towage services;

 

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(iv)                              demurrage and detention moneys;

 

(v)                                 damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of that Ship;

 

(vi)                              all moneys which are at any time payable under any Insurances in relation to loss of hire;

 

(vii)                           all monies which are at any time payable to the Owner Guarantor owning that Ship in relation to general average contribution; and

 

(b)                                 if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.

 

“Earnings Account” means, in relation to an Owner Guarantor:

 

(a)                                 an account in the name of that Owner Guarantor with the Account Bank designated “Earnings Account”; or

 

(b)                                 any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.

 

“ECP” means an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder.

 

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system maintained by the SEC.

 

“EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.

 

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation:

 

(a)                                 any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and

 

(b)                                 any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

 

“Environmental Law” means any applicable federal, state, foreign, or local statute, legal requirements, law, treaty, protocol, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, deed or rule of common law, now or hereafter in effect and in each case as amended, and any judicial or administrative

 

15

 

interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Parent Guarantor or any of its Subsidiaries, relating to the environment or to Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq.; any applicable state, foreign, international or local counterparts or equivalents thereof, in each case as amended from time to time; and any applicable rules, regulations or requirements of an Approved Classification Society in respect of any Ship.

 

“Equity Interests” of any person means:

 

(a)                                 any and all shares and other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such person; and

 

(b)                                 all rights to purchase, warrants or options or convertible debt (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such person.

 

“Equity Proceeds Amount” shall mean, on any date, the amount of Net Cash Proceeds received by the Parent Guarantor from the issuance of Equity Interests of the Parent Guarantor after the date of this Agreement less the amount of Dividends paid by the Parent Guarantor and any cash payments in respect of Blue Mountain Indebtedness made pursuant to Clause 21.28 (Dividends) prior to such date.

 

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) which together with the Parent Guarantor or a Subsidiary of the Parent Guarantor would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“EU Bail-In Legislation Schedule” means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

 

“Event of Default” means any event or circumstance specified as such in Clause 27 (Events of Default).

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder.

 

“Excess Asset Sale Proceeds Amount” means the amount of net cash proceeds received by the Parent Guarantor and its Subsidiaries from the sale of any assets consummated on or after the date of this Agreement (after the payment of any Financial Indebtedness required to be repaid as a consequence of the sale of such assets), which are designated by the Parent Guarantor at any time after such sale to be included in the Excess Asset Sale Proceeds Amount; provided that the Parent may not make such a designation if a Restricted Payment has been made under Clause 21.28 (Dividends) and such Restricted Payment would not have been permitted under such Clause if such amount of gain from the sale of such assets had been excluded from Consolidated Net Income at the time such Restricted Payment was made.

 

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“Excluded Hedging Obligation” means, with respect to a Hedge Guarantor, any Hedging Obligation if, and to the extent that, all or a portion of the guarantee of such Hedge Guarantor of, or the grant by such Hedge Guarantor of a security interest to secure, such Hedging Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Hedge Guarantor’s failure for any reason to constitute an ECP at the time the guarantee of such Hedge Guarantor or the grant of such security interest becomes effective with respect to such Hedging Obligation. If a Hedging Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedging Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient,

 

(a)                                 Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, imposed as a result of such Recipient being organized under the laws of, or having (or having had) its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof);

 

(b)                                 Taxes attributable to such Recipient’s failure to comply with Clause 12.2(c) (Tax Gross-up); and

 

(c)                                  any U.S. federal withholding Taxes imposed under FATCA.

 

“Executive Order” has the meaning provided in paragraph (a) of Clause 18.17 (Sanctions).

 

“Existing Indebtedness” has the meaning provided in Clause 18.21 (Indebtedness).

 

“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

 

“Facility Office” means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

 

“Fair Market Value” means, in relation to a Ship or any other vessel, at any date, the fair market value of that Ship or vessel shown by the arithmetic mean of two valuations, each:

 

(a)                                 as at a date not more than 14 Business Days previously;

 

(b)                                 prepared by Approved Appraisers which shall be selected by the Parent Guarantor;

 

(c)                                  for and addressed to the Facility Agent;

 

(d)                                 with or without physical inspection of that Ship or vessel (as the Facility Agent may require); and

 

(e)                                  on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any Charter or other contract of employment (and with no value to be given to any pooling arrangements),

 

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after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale, provided that if a range of values is provided in a particular appraisal, then the Fair Market Value in such appraisal shall be deemed to be the arithmetic median of such values and if such valuations differ by more than 15% of the lower valuation, a third valuation shall be obtained from another Approved Appraiser selected by the Facility Agent) and the fair market value of that Ship or vessel shall be shown by the arithmetic mean of all three such valuations.

 

“FATCA” means Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(i) of the Code and any legislation adopted pursuant to any intergovernmental agreement to implement the foregoing.

 

“Fee Letter” means any letter or letters between any of the Mandated Lead Arrangers, the ECA Co-ordinator, the Facility Agent and the Security Agent and any Obligor setting out any of the fees referred to in Clause 11 (Fees and Sinosure Premium).

 

“Finance Document” means:

 

(a)                                 this Agreement;

 

(b)                                 the Supplemental Agreement;

 

(c)                                  the Amending and Restating Deed;

 

(d)                                 any Fee Letter;

 

(e)                                  each Utilisation Request;

 

(f)                                   any Security Document;

 

(g)                                  any Hedging Agreement;

 

(h)                                 any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

 

(i)                                     any other document designated as such by the Facility Agent and the Borrower.

 

“Finance Party” means the Bookrunner, the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Global Co-ordinators, the ECA Co-ordinator, the ECA Agent, a Lender or a Hedge Counterparty.

 

“Financial Covenants” means the covenants set forth in Clause 20 (Financial Covenants).

 

“Financial Indebtedness” means any indebtedness for or in relation to:

 

(a)                                 all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services;

 

(b)                                 the maximum amount available to be drawn under all letters of credit issued for the account of such Person and all unpaid drawings in respect of such letters of credit;

 

(c)                                  all indebtedness of the types described in paragraphs (a) to (g) of this definition secured by any Security on any property owned by such Person, whether or not such

 

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indebtedness has been assumed by such Person (to the extent of the value of the respective property);

 

(d)                                 the aggregate amount required to be capitalized under leases under which such Person is the lessee;

 

(e)                                  all obligations of such person to pay a specified purchase price for goods or services, whether or not delivered or accepted ( i.e. take-or-pay and similar obligations);

 

(f)                                   all Contingent Obligations of such Person, and

 

(g)                                  all obligations under any Hedging Agreement or Other Hedging Agreement,

 

provided that Financial Indebtedness shall in any event not include trade payables and expenses accrued in the ordinary course of business.

 

“First Fiscal Quarter Date” means in relation to a Vessel Loan, the Fiscal Quarter Date occurring in the next Fiscal Quarter falling after the Utilisation Date of such Advance.

 

“Fiscal Quarter” means, in relation to each year, each period of three (3) consecutive months in such year which (a) commences on January 1 of such year and ends on March 31 of such year; (b) commences on April 1 of each year and ends on June 30 of such year; (c) commences on 1 July of such year and ends on 30 September of such year; or (d) commences on 1 October of such year and ends on 31 December of such year.

 

“Fiscal Quarter Date” means in relation to a Vessel Loan, 21 March, 21 June, 21 September and 21 December of each calendar year commencing from the Utilisation Date of such Vessel Loan.

 

“Fiscal Year” means, in relation to any person, each period of one (1) year commencing on January 1 of each year and ending on December 31 of such year in respect of which its accounts are or ought to be prepared.

 

“Flag Jurisdiction Transfer” shall mean the transfer of the registration and flag of a Ship from one Approved Flag to another Approved Flag in accordance with Clause 24.3 (Flag Jurisdiction Transfer).

 

“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag Jurisdiction Transfer occurs.

 

“Foreign Pension Plan” means any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Parent Guarantor or any one or more of its Subsidiaries primarily for the benefit of employees of the Parent Guarantor or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, and which plan would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA.

 

“Funding Rate” means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).

 

“GAAP” means generally accepted accounting principles in the U.S., including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and

 

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pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.

 

“General Assignment” means in relation to a Ship, the general assignment creating Security over the following entered into or to be entered into by the Owner Guarantor owning that Ship and the Security Agent in agreed form:

 

(a)                                 that Ship’s Earnings;

 

(b)                                 its Insurances;

 

(c)                                  any Requisition Compensation;

 

(d)                                 the relevant Pool Agreement;

 

(e)                                  the relevant Charter(s); and

 

(f)                                   the relevant Ship Management Agreement.

 

“Governmental Authority” means the government of the United Kingdom, the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Group” means the Parent Guarantor and its Subsidiaries.

 

“Guarantors” means the Parent Guarantor and the Owner Guarantors (and each, a “Guarantor”).

 

“Hazardous Materials” means:

 

(a)                                 any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;

 

(b)                                 any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law; and

 

(c)                                  any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under Environmental Laws.

 

“Hedging Agreement” means each ISDA master agreement (together with the schedule thereto) made between the Borrower or the Parent Guarantor (as the case may be) and a Hedge Counterparty for the hedging of the Borrower’s interest rate exposure under this Agreement.

 

“Hedging Obligation” means, with respect to the Borrower, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

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“Immaterial Subsidiary” means any Subsidiary of the Parent Guarantor (other than an Obligor and any Subsidiary who is an obligor or security provider in relation to the Re-financing Facility and/or the Korean Facility) whose aggregate assets account for less than 5.0% of the consolidated total assets of the Parent Guarantor (as determined in accordance with GAAP) and less than 5.0% of the Consolidated EBITDA of the Parent Guarantor.

 

“Indemnified Person” has the meaning given to it in Clause 14.2(b) (Other indemnities).

 

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Finance Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Insurances” means, in relation to a Ship:

 

(a)                                 all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and

 

(b)                                 all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.

 

“Intercompany Ship Delivery Agreement” means the ship delivery agreement dated 3 September 2015 entered into between amongst others, Subsidiary Inc. and the Borrower, together with the relevant assignment (and if applicable, nomination) agreement in relation to each Ship to be entered into between, amongst others, Subsidiary Inc. and the relevant Owner Guarantor.

 

“Interest Period” means, in relation to an Advance, the Loan or any part of the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

 

“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time.

 

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.

 

“ISSC” means an International Ship Security Certificate issued under the ISPS Code.

 

“Korean Facility” means the term loan facility of up to $963,743,455 provided by certain lenders to Gener8 Maritime Subsidiary VIII Inc. to inter alia, assist its Wholly-Owned Subsidiaries purchase of fifteen (15) x 320,000 dwt very large crude oil carriers pursuant to a facility agreement dated as of 31 August 2015 (as amended and/or supplemented from time to time).

 

“Leaseholds” of any person shall mean all the right, title and interest of such person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

 

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“Lender” means:

 

(a)                                 any Original Lender; and

 

(b)                                 any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 28 (Changes to the Lenders),

 

which in each case has not ceased to be a Party in accordance with this Agreement.

 

“Lender Default” means, as to any Lender:

 

(a)                                 the wrongful refusal (which has not been retracted) of such Lender to make available its portion of any Utilisation,

 

(b)                                 such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or

 

(c)                                  such Lender having notified the Facility Agent and/or any Obligor:

 

(i)                                     that it does not intend to comply with its obligations under Clause 5.4 (Lender’s participation) in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Clause or

 

(ii)                                  of the events described in the preceding paragraph (b),

 

provided that, no Lender Default shall occur under paragraph (b) solely as a result of the acquisition or maintenance of an ownership interest in such Lender or Person controlling such Lender or the exercise of control over such Lender or Person controlling such Lender by a Governmental Authority or an instrumentality thereof, so long as such ownership or controlling interest does not result in or provide such Lender with immunity from the jurisdiction of courts within England or United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

“LIBOR” means, in relation to any Advance, the Loan, any part of the Loan or any Unpaid Sum:

 

(a)                                 the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of the relevant Advance, the Loan, the relevant part of the Loan or the Unpaid Sum; or

 

(b)                                 as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate),

 

and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

 

“Loan” means the loan to be made available under the Facility or, as the context may require, the aggregate principal amount of Utilisations outstanding for the time being under this Agreement.

 

“Major Casualty” means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.

 

“Manager’s Undertaking” means, in relation to a Ship, the letter of undertaking from each of the relevant Approved Managers in respect of such Ship in agreed form.

 

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“Margin” means 2.0% per annum.

 

“Margin Regulations” means the provisions of Regulations T, U and X of the Board of Governors of the Federal Reserve System.

 

“Margin Stock” has the meaning provided in Regulation U.

 

“Material Adverse Effect” means a material adverse effect on:

 

(a)                                 the business, property, assets, liabilities, condition (financial or otherwise) of any Obligor and its Subsidiaries taken as a whole,

 

(b)                                 the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights and remedies of any Finance Party under any Finance Documents; or

 

(c)                                  the ability of any Obligor and its Subsidiaries, taken as a whole, to perform its or their obligations under any Finance Document.

 

“Maximum Contract Price” means, in relation to a Ship, the maximum contract price set out in the corresponding column under the heading “Maximum Contract Price” in Schedule 8 (Details of the Ships).

 

“Merger” means the merger of Gener8 Maritime Acquisition, Inc. into Navig8 Crude Tankers, Inc. with the Parent Guarantor as the surviving entity pursuant to the Merger Agreement.

 

“Merger Agreement” means the agreement and plan of merger dated 24 February 2015 entered into between, amongst others, General Maritime Corporation, Gener8 Maritime Acquisition, Inc. and Navig8 Crude Tankers, Inc. in connection with inter alia, the proposed reverse subsidiary merger between Navig8 Crude Tankers, Inc. and Gener8 Maritime Acquisition, Inc.

 

“Minimum Liquidity Account” means the account in the name of the Parent Guarantor with the Account Bank designated “Gener8 Maritime, Inc. - Minimum Liquidity Account (Sinosure)”.

 

“Minimum Liquidity Amount” means $1,500,000 per delivered Ship.

 

“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

(a)                                 (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

(b)                                 if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

 

(c)                                  if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

 

The above rules will only apply to the last Month of any period.

 

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“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

 

“Mortgage” means, in relation to a Ship, a first preferred Marshall Islands ship mortgage on that Ship in agreed form, together with any Addendum to Mortgage relating to that Ship entered into from time to time.

 

“Multiemployer Plan” means an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) which is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) and which is currently contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code), and any such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) to which the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code) contributed to or had an obligation to contribute to such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) during the preceding five-year period.

 

“Navig8 Group” shall mean Navig8 Ltd. and its Affiliates.

 

“Net Cash Proceeds” means,

 

(a)                                 with respect to any Security Assets Disposition, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Security Assets Disposition, other than the portion of such deferred payment constituting interest, but only as and when received) received by the Parent Guarantor or the Borrower or any of their respective Subsidiaries from such Security Assets Disposition net of

 

(i)                                     reasonable transaction costs (including, without limitation, reasonable attorney’s fees) and sales commissions and

 

(ii)                                  the estimated marginal increase in income taxes and any stamp tax payable by the Parent Guarantor, the Borrower or any of its Subsidiaries as a result of such Security Assets Disposition and

 

(b)                                 with respect to the issuance of any Equity Interests, the aggregate cash proceeds received by the Parent Guarantor from such equity issuance net of reasonable transaction costs related thereto (including, without limitation, reasonable attorney’s fees).

 

“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock and the effect of any impairment of intangible assets on and after the date of this Agreement.

 

“Non-Defaulting Lenders” means all Lenders other than the Defaulting Lender(s).

 

“Non-Lender” means a bank or financial institution who is not a Lender or an Affiliate of a Lender.

 

“Non-Lender Designated Transaction” means, in relation to the Borrower, a transaction which fulfils the following requirements:

 

24

 

(a)                                 it is entered into by the Borrower pursuant to a Non-Lender Hedging Agreement with a Non-Lender; and

 

(b)                                 its purpose is the hedging of all or part of the Borrower’s exposure to fluctuations in:

 

(i)                                     LIBOR arising from the funding of the Loan, or any part thereof for a period expiring no later than the final Termination Date or

 

(ii)                                  currency or any other purpose or risks as agreed by a Non-Lender.

 

“Non-Lender Hedging Agreement” means each ISDA master agreement (together with the schedule thereto) made or to be between the Borrower and a Non-Lender and includes all Non-Lender Designated Transactions from time to time entered into and confirmations of Non-Lender Designated Transactions from time to time exchanged under such master agreement.

 

“Obligor” means the Borrower, the Parent Guarantor, an Owner Guarantor, or a Hedge Guarantor.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“OPA” means the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq.

 

“Original Financial Statements” means, in relation to the Parent Guarantor, the audited consolidated financial statements of the Group for its Fiscal Year ended 2014.

 

“Other Hedging Agreement” means any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreement or arrangements designed to protect against fluctuations in currency and commodity values, and shall for the avoidance of doubt, exclude any agreement to hedge interest rate fluctuations.

 

“Other Permitted Security” has the meaning ascribed thereto in Clause 21.21(a) (Negative pledge).

 

“Other Taxes” has the meanings ascribed thereto in Clause 12.2(b).

 

“Overseas Regulations” means the Overseas Companies Regulations 2009 (SI 2009/1801).

 

“Owner Guarantor A”, “Owner Guarantor B”, “Owner Guarantor C”, “Owner Guarantor D”, “Owner Guarantor E” and “Owner Guarantor F” have the meanings set out in Schedule 8 (Details of the Ships).

 

“pari passu”, when used with respect to the ranking of any Financial Indebtedness of any person in relation to other Financial Indebtedness of such person, means that each such Financial Indebtedness:

 

(a)                                 either (i) is not subordinated in right of payment to any other Financial Indebtedness of such person or (ii) is subordinate in right of payment to the same Financial Indebtedness of such person as is the other and is so subordinate to the same extent; and

 

(b)                                 is not subordinate in right of payment to the other or to any Financial Indebtedness of such person as to which the other is not so subordinate.

 

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“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

“PATRIOT Act” means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.

 

“Party” means a party to this Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Blue Mountain Refinancing Indebtedness” shall mean any Financial Indebtedness of the Parent Guarantor issued or given in exchange for, or the proceeds of which are used to, extend, refinance, renew, replace or refund the Blue Mountain Indebtedness, so long as:

 

(a)                                 such Financial Indebtedness has a weighted average life to maturity greater than or equal to the weighted average life to maturity of the Blue Mountain Indebtedness;

 

(b)                                 such extension, refinancing, renewal, replacement or refunding does not:

 

(i)                                     increase the amount of the Blue Mountain Indebtedness outstanding immediately prior to such extension, refinancing, renewal, replacement or refunding (it being understood and agreed that any premium due under the Blue Mountain Indebtedness shall not constitute an increase in the amount of the Blue Mountain Indebtedness) ; or

 

(ii)                                  add guarantors, obligors or security from that which applied to the Blue Mountain Indebtedness on the date hereof, and

 

(iii)                               such Financial Indebtedness otherwise complies with the Blue Mountain Indebtedness Requirements.

 

“Permitted Encumbrance” means:

 

(a)                                 in relation to Real Property, easements, rights-of-way, restrictions, encroachments, exceptions to title and other similar charges or encumbrances; and

 

(b)                                 in relation to any Ship or any asset which is subject to Security under a Finance Document, any Permitted Security; and

 

(c)                                  in relation to any other property not referred to in paragraphs (a) and (b) above, charges or encumbrances over such property arising in the ordinary course of business which do not materially diminish the value of such property.

 

“Permitted Security” means:

 

(a)                                 Security created by the Finance Documents;

 

(b)                                 any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

 

(c)                                  liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;

 

26

 

(d)                                 liens for salvage;

 

(e)                                  liens for master’s disbursements incurred in the ordinary course of trading; and

 

(f)                                   any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship and not as a result of any default or omission by any Obligor,

 

provided that such liens do not secure amounts more than 30 days overdue and, in the case of liens for repair or maintenance, such liens do not secure any amounts exceeding $1,000,000.

 

“Person” means any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

 

“Plan” means any “employee pension benefit plan” as defined in Section 3(2) of ERISA, which is currently maintained or contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate and which is subject to ERISA.

 

“Pool Agreement” means, in relation to a Ship, a pool management for a duration of 12 months or more entered into or to be entered into by (or as may be novated to) the relevant Owner Guarantor of that Ship and a Pool Manager (as amended and/or supplemented from time to time).

 

“Pool Manager” means, in relation to a Ship, VL8 Pool Inc., V8 Pool Inc., Unique Tankers LLC, any Affiliate of the Parent Guarantor (provided that the requirements of Clause 21.30 (Other transactions) shall be satisfied with respect thereto) or any other reputable pool manager (provided that the Parent Guarantor shall give the Facility Agent at least 30 days’ prior written notice of the inclusion of the relevant Ship (to which such pool manager relates) in a new Pool Agreement.

 

“Potential Event of Default” means any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

“PRC” means the People’s Republic of China, excluding Hong Kong, the Macau Special Administrative Region and Taiwan.

 

“Projections” means the Parent Guarantor’s forecasted consolidated and consolidating:

 

(a)                                 balance sheets;

 

(b)                                 profit and loss statements;

 

(c)                                  cash flow statements; and

 

(d)                                 capitalization statements,

 

all prepared on a Subsidiary by Subsidiary basis and based upon good faith estimates and assumptions believed by the Parent Guarantor to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.

 

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“Qualified ECP Guarantor” means, in respect of any Hedging Obligation, each Hedge Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Hedging Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualified Preferred Stock” means any preferred stock so long as the terms of any such preferred stock:

 

(a)                                 do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision occurring no earlier than one year after the last Termination Date,

 

(b)                                 do not require the cash payment of dividends and

 

(c)                                  any other preferred stock that:

 

(i)                                     satisfies paragraph (a) of this definition of Qualified Preferred Stock and

 

(ii)                                  that is otherwise issuable or may be distributed pursuant to a shareholders’ rights plan of the Parent Guarantor; provided, however, any Dividend or similar feature of such Qualified Preferred Stock shall only be declared and paid in accordance with Clause 21.28 (Dividends).

 

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

 

“Rating Agencies” means:

 

(a)                                 S&P and Moody’s; or

 

(b)                                 if S&P or Moody’s or both of them are not making ratings of securities publicly available, a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Facility Agent with the consent of the Required Lenders, which will be substituted for S&P or Moody’s or both, as the case may be.

 

“Real Property” of any person shall mean all the right, title and interest of such person in and to land, improvements and fixtures, including Leaseholds.

 

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.

 

“Recipient” has the meanings ascribed thereto in Clause 12.5(b).

 

“Re-financing Facility” means the term loan facility of up to $581,000,000 provided by certain banks and financial institutions to the Parent Guarantor and certain of its Subsidiaries to inter alia, re-finance certain loans obtained by the Parent Guarantor and certain of its Subsidiaries in respect of its existing fleet of ships.

 

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“Re-financing Facility Credit Agreement” means the credit agreement dated 3 September 2015 and to be executed by, inter alios, the Parent Guarantor and certain of its Subsidiaries in respect of the Re-financing Facility (as amended and/or supplemented from time to time).

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

 

“Relevant Advance” has the meaning given to it in Part B of Schedule 2 (Conditions Precedent).

 

“Relevant Interbank Market” means the London interbank market.

 

“Remaining Shipyard Payments” means, as of any date:

 

(a)                                 the aggregate of (i) the Delivery Instalments payable to the relevant Seller in relation to the Ships and (ii) the delivery instalments payable to the relevant builder(s) of all vessels financed pursuant to the Korean Facility;

 

minus

 

(b)                                 the aggregate amounts paid by the Parent Guarantor or its subsidiaries to the relevant builder(s) prior to such date;

 

minus

 

(c)                                  the aggregate principal amount of Loan and aggregate Available Commitments of all Lenders under all Vessel Loans and loans and unfunded commitments under the Korean Facility.  For the avoidance of doubt, if the Remaining Shipyard Payments are negative, the Remaining Shipyard Payments shall be deemed to be zero.

 

“Repayment Date” means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).

 

“Repayment Instalments” has the meaning given to it in Clause 6.1 (Repayment of Loan).

 

“Repeating Representation” means each of the representations set out in Clauses 18.2 (Corporate / Limited Liability Company/ Limited Partnership Status), 18.3 (Corporate power and authority; legal validity and enforceability), 18.4 (Pari passu ranking), 18.5 (No violation), 18.6 (Government approvals), 18.7 (Financial statements; Financial condition; Undisclosed Liabilities), 18.8 (Litigation), 18.10 (Use of proceeds, Margin Regulations), 18.12 (Subsidiaries), 18.14 (Compliance with statutes etc.), 18.16 (Anti-money laundering; anti-corruption) and 18.17 (Sanctions) and any representation of any Obligor made in any other Finance Document that is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.

 

“Reportable Event” means an event described in Section 4043(c) of ERISA with respect to a Plan (other than any Plan maintained by a Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code or any Multiemployer Plan) that

 

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is subject to Title IV of ERISA other than those events as to which the 30-day notice period referred to in Section 4043 is waived.

 

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

“Required Insurance” means insurance as set forth in Clause 22 (Insurance Undertakings) hereto.

 

“Required Lenders” means CEXIM and one other Lender provided, further, that if any Lender shall be a Defaulting Lender at such time, then such Defaulting Lender’s Commitment or Contribution in the Loan shall be excluded from the determination of Required Lenders for so long as such Lender is a Defaulting Lender.

 

“Requisition” means, in relation to a Ship:

 

(a)                                 any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension) unless it is within 30 days redelivered to the full control of the relevant Owner Guarantor; and

 

(b)                                 any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the Owner Guarantor.

 

“Requisition Compensation” includes all compensation or other moneys payable by reason of any Requisition.

 

“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.

 

“Restricted Party” means any Person:

 

(a)                                 that is listed on any Sanctions List or against whom Sanctions are directed (whether designated by name or by reason of being included in a class of person);

 

(b)                                 that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to country-wide or territory wide Sanctions (including without limitation, as at the date of this Agreement, Cuba, the Crimea, Iran, Syria, Sudan and North Korea);

 

(c)                                  that is directly or indirectly owned or controlled by, or acting on behalf of a Person referred to in clauses (a) and/or (b) above;

 

(d)                                 with which any Finance Party is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions.

 

“Restricted Payment” shall have the meaning provided in Clause 21.28 (Dividends).

 

“Returns” has the meaning provided in paragraph (b) of Clause 18.11 (Tax Returns and Payments).

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies Inc., and its successors.

 

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“Safety Management Certificate” has the meaning given to it in the ISM Code.

 

“Safety Management System” has the meaning given to it in the ISM Code.

 

“Sanctions” means the economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adopted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

 

“Sanctions Authorities” means:

 

(a)                                 the United Kingdom;

 

(b)                                 the United States of America;

 

(c)                                  the European Union;

 

(d)                                 the member states of the European Union;

 

(e)                                  the United Nations; and

 

(f)                                   any authority acting on behalf of any of them in connection with Sanctions, including without limitation, OFAC and Her Majesty’s Treasury of the United Kingdom.

 

“Sanctions List” means any list of prohibited persons, vessels or entities published in connection with Sanctions by or on behalf of any Sanctions Authority.

 

“Scheduled Delivery Date” means, in relation to a Ship, the scheduled date of delivery of that Ship as set out in the corresponding column under the heading “Scheduled Delivery Date” in Schedule 8 (Details of the Ships).

 

“Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on page LIBOR01 of the Thomson Reuters screen (or such other service as may be nominated by the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available)) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purpose of this Agreement. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

 

“Secured Liabilities” means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor to any Secured Party under or in connection with each Finance Document.

 

“Secured Party” means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

 

“Security” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect

 

31

 

as any of the foregoing) or any other agreement or arrangement having the effect of conferring security.

 

“Security Assets” means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

“Security Assets Disposition” means

 

(a)                                 the sale, lease, transfer, bareboat charter or other disposition of Security Assets by the Parent Guarantor or any of its Subsidiaries to any Person other than the Parent Guarantor or any Subsidiary of the Parent Guarantor or

 

(b)                                 any Total Loss of any Ship;

 

provided, however, that any charter of a Ship shall not be considered a Security Assets Disposition for purposes of Clause 7.6 (Mandatory prepayment on sale or Total Loss).

 

“Security Document” means:

 

(a)                                 any Shares Security;

 

(b)                                 any General Assignment;

 

(c)                                  any Assignment of Builder’s Warranties;

 

(d)                                 any Assignment of Hedging Agreement;

 

(e)                                  any Mortgage;

 

(f)                                   any Account Security;

 

(g)                                  any Manager’s Undertaking;

 

(h)                                 any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or

 

(i)                                     any other document designated as such by the Facility Agent and the Borrower.

 

“Security Period” means the period starting on or about the date of this Agreement (but no later than the first Utilisation Date) and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

 

“Security Property” means:

 

(a)                                 the Transaction Security expressed to be granted in favour of the Security Agent as security agent for the Secured Parties and all proceeds of that Transaction Security;

 

(b)                                 the Security Agent’s interest in any trust created under the Finance Documents; and

 

(c)                                  any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,

 

except:

 

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(i)            rights intended for the sole benefit of the Security Agent; and

 

(ii)           any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

 

“Security Requirements” means, with respect to a Ship, each of the requirements set out in Clause 24.4(Security Requirements).

 

“Seller” means:

 

(a)                                 in relation to Ship A and Ship B, the Builder; and

 

(b)                                 in relation to Ship C, Ship D, Ship E and Ship F the Builder and China Shipbuilding Trading Company, Limited.

 

“Seller’s Bank” has the meaning given in paragraph (b) of Clause 5.8 (Prepositioning of funds).

 

“Servicing Party” means the ECA Agent, the Facility Agent or the Security Agent.

 

“Shares Security” means, in relation to each of the Borrower and the Owner Guarantors, a document creating Security over the Equity Interests of the Borrower or as the case may be, such Owner Guarantor, in agreed form.

 

“Ship” means each of the ships set out in the corresponding column under the heading “Ship” in Schedule 8 (Details of the Ships).

 

“Ship A”, “Ship B”, “Ship C”, “Ship D”, “Ship E” and “Ship F” have the meanings set out in Schedule 8 (Details of the Ships).

 

“Shipbuilding Contract” means, in relation to a Ship, the relevant shipbuilding contract set out in the corresponding column under the heading “Shipbuilding Contract” in Schedule 8 (Details of the Ships) entered into or to be entered into by the relevant Seller and the relevant Owner Guarantor or its Affiliate, for the construction of that Ship (as amended and supplemented from time to time with the prior written consent of the Lenders) and  including without limitation, supplemented by and read together with the Intercompany Ship Delivery Agreement relating to such Ship (and any assignment and/or novation agreement referred to therein).

 

“Ship Management Agreement” means a Technical Management Agreement or a Commercial Management Agreement.

 

“Sinosure” means China Export & Credit Insurance Corporation, a state owned enterprise having its registered office at No. 11 Fenghuiyuan, Xicheng, District, Beijing, the People’s Republic of China.

 

“Sinosure Insurance Policy” means, in respect of a Ship, the export insurance policy to be issued by Sinosure setting out the terms and conditions of the buyer’s credit insurance, insuring at least 95 per cent of the Vessel Loan outstanding from time to time and the estimated accrued interest thereunder (such estimates to be based on calculations agreed between the ECA Agent and Sinosure) on such terms and conditions acceptable to the Lenders.

 

“Sinosure Matters” means all communications and dealings with Sinosure in connection with each Sinosure Insurance Policy, any Finance Document, the Borrower and/or any other 

 

33

 

Obligor or any matters relating thereto (including, without limitation, obtaining any approvals and/or instructions from Sinosure).

 

“Sinosure Premium” means in relation to an Advance, subject to Clause 33.14 (Sinosure Premium and Sinosure), 3.21% of the aggregate of the relevant Vessel Loan and the estimated accrued interest thereunder (such estimates to be based on calculations agreed between the ECA Agent and Sinosure), and which shall be paid by the date of Utilisation of that Advance.

 

“Solvent” shall mean, with respect to any Person on a particular date, that on such date:

 

(a)                                 the sum of the fair market value of the assets, at a fair valuation, of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;

 

(b)                                 the sum of the present fair saleable value of the assets of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;

 

(c)                                  such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature; and

 

(d)                                 such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct its or their respective businesses,

 

and for purposes of this definition, “debt” means any liability on a claim, and “claim” means (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specified Time” means a day or time determined in accordance with Schedule 15 (Timetables).

 

“Stock Buy-Back” shall mean, with respect to any Person, that such Person or any Subsidiary of such Person shall have redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration (other than common stock, Qualified Preferred Stock or the right to purchase any such stock of such Person), any shares of any class of its capital stock or membership interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Persons with respect to its capital stock).

 

“Subsidiary” means, with respect to any person:

 

(a)                                 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 

 

34

 

happening of any contingency) is at the time owned by such person and/or one or more Subsidiaries of such person; and

 

(b)                                 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.

 

“Subsidiary Inc.” means Gener8 Maritime Subsidiary Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands.

 

“Subsidiary V Inc.” means Gener8 Maritime Subsidiary V Inc. (formerly known as VLCC Acquisition I Corporation), a corporation incorporated under the laws of Marshall Islands with registered number 67634 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

 

“Supplemental Agreement” means the supplemental agreement dated 28 December 2015 and made between, amongst others, the Borrower, the Parent Guarantor, the Facility Agent and the Security Agent in connection with this Agreement.

 

“Taxes” means all taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties imposed with respect thereto.

 

“Technical Management Agreement” means, in relation to a Ship, the agreement entered into between the relevant Owner Guarantor and the Approved Technical Manager regarding the technical management of such Ship in agreed form.

 

“Termination Date” means in relation to a Vessel Loan, the date falling 144 Months from the Utilisation Date of that Vessel Loan.

 

“Test Period” means each period of four consecutive fiscal quarters, in each case taken as one accounting period, ending on 31 March, 30 June, 30 September or 31 December.

 

“Third Parties Act” has the meaning given to it in Clause 1.5 (Third party rights).

 

“Total Commitments” means the aggregate of the Commitments, being $385,227,495 as at the date of this Agreement.

 

“Total Indebtedness” shall mean, at any time, all Financial Indebtedness of the Parent Guarantor and its Subsidiaries at such time.

 

“Total Loss” means any of the following events:

 

(a)                                 the actual or constructive total loss of a Ship or the agreed or compromised total loss of a Ship; or

 

(b)                                 the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Ship or any arrest or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the relevant Owner Guarantor.

 

“Total Loss Date” means in relation to a “Total Loss” of a Ship:

 

35

 

(c)                                  in the event of an actual loss of a Ship, at the time and on the date of such loss or if that is not known at noon Greenwich Mean Time on the date which such Ship was last heard from;

 

(d)                                 in the event of damage which results in a constructive or compromised or arranged total loss of a Ship, at the time and on the date of the event giving rise to such damage; or

 

(e)                                  in the case of any other type of total loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.

 

“Transaction Document” means:

 

(a)                                 a Finance Document;

 

(b)                                 any Shipbuilding Contract;

 

(c)                                  any Charter; and

 

(d)                                 any other document designated as such by the Facility Agent and the Borrower.

 

“Transaction Obligor” means an Obligor, any Approved Manager or any other member of the Group who executes a Transaction Document.

 

“Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.

 

“Transfer Certificate” means a certificate in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.

 

“Transfer Date” means, in relation to an assignment or a transfer, the later of:

 

(a)                                 the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

(b)                                 the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

 

“UCC” means the Uniform Commercial Code of the State of New York.

 

“Unfunded Current Liability” of any Plan means the amount, if any, as of the most recent valuation date for the applicable Plan, by which the present value of the Plan’s benefit liabilities determined in accordance with actuarial assumptions at such time consistent with those prescribed by Section 430 of the Code and Section 303 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA.

 

“UK Establishment” means a UK establishment as defined in the Overseas Regulations.

 

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

“Unrestricted Cash and Cash Equivalents” means, when referring to cash or Cash Equivalents of the Parent Guarantor or any of its Subsidiaries, that such cash or Cash Equivalents:

 

36

 

(a)                                 does not appear (or would not be required to appear) as “restricted” on a consolidated balance sheet of the Parent Guarantor or of any such Subsidiary;

 

(b)                                 are not subject to any Security in favour of any Person other than the Security Agent for the benefit of the Finance Parties; the Security Agent (as defined in the credit agreement for the Korean Facility) and the Collateral Agent (as defined in the Re-financing Facility Credit Agreement) for the benefit of the Secured Creditors under and as defined in the Re-financing Facility Credit Agreement) (provided that any cash or Cash Equivalents of the Parent Guarantor or any Subsidiary that are subject to such Security may be included in the calculation of Minimum Liquidity Amount); or

 

(c)                                  are otherwise generally available for use by the Parent Guarantor or such Subsidiary.

 

“U.S.” means the United States of America.

 

“Utilisation” means a utilisation of the Facility.

 

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Advance is to be made.

 

“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Utilisation Request).

 

“VAT” means:

 

(a)                                 any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

(b)                                 any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

 

“Vessel Loan” means in relation to a Ship, the part of the Facility made or to be made available to the Borrower of up to the lowest of (i) 67.5 per cent of the Contract Price of that Ship; (ii) 67.5 per cent of the Maximum Contract Price of that Ship; and (iii) 65 percent of the Fair Market Value of that Ship, or as the context may require, the aggregate principal amount outstanding in relation thereto.

 

“Wholly-Owned Subsidiary” means, as to any Person,

 

(a)                                 any corporation 100% of whose capital stock (other than director’s qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person; and

 

(b)                                 any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has directly or indirectly a 100% equity interest at such time.

 

“Write-down and Conversion Powers” means in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

 

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1.2                               Construction

 

(a)                                 Unless a contrary indication appears, a reference in this Agreement to:

 

(i)            the “Account Bank”, any “Mandated Lead Arranger”, the “Facility Agent”, any “Finance Party”, any “Hedge Counterparty”, any “Lender”, any “Obligor”, any “Party”, any “Secured Party”, the “Security Agent”, the “ECA Agent”, either “Global Co-ordinator”, the “Bookrunner”, the “ECA Co-ordinator”, any “Transaction Obligor” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;

 

(ii)           “assets” includes present and future properties, revenues and rights of every description;

 

(iii)          a liability which is “contingent” means a liability which is not certain to arise and/or the amount of which remains unascertained;

 

(iv)          “document” includes a deed and also a letter, email, fax or telex;

 

(v)           “expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

 

(vi)          a “Finance Document”, a “Security Document” or a “Transaction Document”  or any other agreement or instrument is a reference to that Finance Document or Security Document or Transaction Document or other agreement or instrument as amended or novated;

 

(vii)         “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

(viii)        “law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any statute, regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

 

(ix)          “proceedings” means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

 

(x)           a “person” includes any individual or natural person, firm, corporation, limited liability company, partnership, government, state or agency of a state or any association, trust, joint venture, consortium unincorporated association, joint stock company and trust (whether or not having separate legal personality);

 

(xi)          a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organization;

 

(xii)         a provision of law is a reference to that provision as amended or re-enacted from time to time;

 

(xiii)        a time of day is a reference to New York City time (unless otherwise indicated);

 

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(xiv)        any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

 

(xv)         words denoting the singular number shall include the plural and vice versa; and

 

(xvi)        “including” and “in particular” (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

 

(b)                                 The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

 

(c)                                  Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.

 

(d)                                 Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

(e)                                  A Potential Event of Default is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.

 

(f)                                   Any reference to Nordea Bank Finland plc (either directly or indirectly in its capacity as Lender, Global Co-ordinator, Facility Agent and/or Security Agent or any other capacity) in the Finance Documents shall be automatically construed as a reference to Nordea Bank AB (publ) in the event of any corporate reconstruction, merger, amalgamation, consolidation between Nordea Bank Finland plc and Nordea Bank AB (publ) where Nordea Bank AB (publ) is the surviving entity and acquires all the rights of and assumes all the obligations of Nordea Bank Finland plc and nothing in the Finance Documents shall be construed so as to restrict, limit or impose any notification or other requirement or condition on either Nordea Bank Finland plc or Nordea Bank AB (publ) in respect of the acquisition of rights to or assumption of obligations by Nordea Bank AB (publ) hereunder pursuant to such merger.

 

1.3                               Construction of insurance terms

 

In this Agreement:

 

“approved” means, for the purposes of Clause 22 (Insurance undertakings), approved in writing by the Facility Agent;

 

“excess risks” means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;

 

“obligatory insurances” means all insurances effected, or which any Owner Guarantor is obliged to effect, under Clause 22 (Insurance undertakings) or any other provision of this Agreement or of another Finance Document;

 

“policy” includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

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“protection and indemnity risks” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and

 

“war risks” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83) and includes all risks as set out in the amended version of the AHIS Addendum (April 1, 1984).

 

1.4                               Agreed forms of Finance Documents

 

References in Clause 1.1 (Definitions) to any Finance Document being in “agreed form” are to that Finance Document:

 

(a)                                 in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or

 

(b)                                 in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorization of the Required Lenders or, where Clause 44.1 (Required consents) applies, all the Lenders.

 

1.5                               Third party rights

 

(a)                                 Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.

 

(b)                                 Subject to Clause 44.3 (Other exceptions) but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

(c)                                  Any Receiver, Delegate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 30.11 (Exclusion of liability) or paragraph (b) of Clause 31.10 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

 

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SECTION 2

 

THE FACILITY

 

2                                         THE FACILITY

 

2.1                               The Facility

 

Subject to the terms of this Agreement, the Lenders agree to make available to the Borrower a dollar term loan facility in six Vessel Loans and all the Vessel Loans shall be in an aggregate amount not exceeding $385,227,495.

 

2.2                               Finance Parties’ rights and obligations

 

(a)                                 The obligations of each Finance Party under the Finance Documents are several and not joint.  Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

(b)                                 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

 

(c)                                  Except as otherwise provided in a Finance Document, a Finance Party may not separately sue for any Unpaid Sum due and payable to it or enforce any Security or any other right under a Finance Document.

 

2.3                               Borrower’s Agent

 

(a)                                 The Borrower by its execution of this Agreement irrevocably appoints the Parent Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorizes:

 

(i)            the Parent Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by the Borrower notwithstanding that they may affect the Borrower, without further reference to or the consent of the Borrower; and

 

(ii)           each Finance Party to give any notice, demand or other communication to the Borrower pursuant to the Finance Documents to the Parent Guarantor,

 

and in each case the Borrower shall be bound as though the Borrower itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

 

(b)                                 Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Parent Guarantor or given to the Parent Guarantor under any Finance Document on behalf of the Borrower or in connection with the Finance Document (whether or not known to the Borrower) shall be binding for all purposes on the Borrower as if the Borrower had expressly made, given or 

 

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concurred with it.  In the event of any conflict between any notices or other communications of the Parent Guarantor and the Borrower, those of the Parent Guarantor shall prevail.

 

3                                         PURPOSE

 

3.1                               Purpose

 

The Borrower shall apply all amounts borrowed by it under the Facility and in relation to each Vessel Loan only for the following purposes:

 

(a)                                 to re-finance the Bridging Facility;

 

(b)                                 to on-lend or contribute by way of equity to the Owner Guarantor of the Ship to which such Vessel Loan relates, to finance the payment of Delivery Instalment of that Ship to the relevant Seller or to reimburse the Parent Guarantor or any of its Subsidiaries for its payment of such Delivery Instalment;

 

(c)                                  to re-finance the funding of the Contract Price Instalments (other than the Delivery Instalment) of the relevant Ship; and

 

(d)                                 provided that the Parent Guarantor or any of its Subsidiaries has paid or has procured payment, in relation to a Ship, of an amount equivalent to the higher of (A) 32.5% of the Final Contract Price of that Ship and (B) the difference between the Final Contract Price of that Ship and 65% of the Fair Market Value of that Ship (where “Final Contract Price” means the lower of the Contract Price of that Ship and the Maximum Contract Price of that Ship), to be applied as directed by the Parent Guarantor to fund the Debt Service Reserve Account to the extent required by Clause 26.2 (Debt Service Reserve Account)),

 

provided that each Advance shall not exceed the amount of the Vessel Loan to which it relates.

 

3.2                               Monitoring

 

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

3.3                               Obligors and the Shipbuilding Contracts

 

(a)                                 Each Obligor’s obligations (including, without limitation, its payment obligations) under each Finance Document are not:

 

(i)            subject to or dependent upon the execution or performance by any Seller or any other person of its obligations under a Shipbuilding Contract (as applicable); and

 

(ii)           in any way affected, prejudiced, discharged or affected by reason of any matter affecting any Shipbuilding Contract and/or Seller,

 

and each Obligor hereby acknowledges that the foregoing is an essential condition of each Lender’s entry into this Agreement and the other Finance Documents.

 

(b)                                 Without prejudice to the generality of paragraph (a) above, each Obligor agrees that it will not claim to be relieved of the performance of any of its obligations under this Agreement or any other Finance Document by reason of any failure, delay or default whatsoever on the part of any Seller or any Obligor in the performance of its obligations under any Shipbuilding Contract.

 

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(c)                                  Each Obligor expressly acknowledges and agrees that its obligations under this Agreement and any other Finance Document are:

 

(i)            unconditional and irrevocable; and

 

(ii)           absolutely, totally and completely independent and separate from any other Obligor’s obligations under any Shipbuilding Contract,

 

and each Obligor undertakes irrevocably and unconditionally to pay any and all amounts under this Agreement and any other Finance Document when they fall due and shall not raise any defences or exercise any rights against any Finance Party that it may have against any Seller in respect of any Shipbuilding Contract.

 

4                                         CONDITIONS OF UTILISATION

 

4.1                               Initial conditions precedent

 

The Borrower may not deliver a Utilisation Request unless the Facility Agent has received or waived in accordance with Clause 4.4 (Waiver of conditions precedent), all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent.

 

4.2                               Further conditions precedent

 

The Lenders will be obliged to comply with Clause 5.4 (Lenders’ participation) only if:

 

(a)                                 on the date of the Utilisation Request and on the proposed Utilisation Date and before the Advance is made available:

 

(i)            no Event of Default is continuing or would result from the proposed Advance;

 

(ii)           no event which would result in an Material Adverse Effect has occurred or would result from the proposed Advance;

 

(iii)          the Repeating Representations to be made by each Obligor are true and correct in all material respects (it being understood and agreed that such representations and warranties shall be deemed to have been made on each of the date of the Utilisation Request and the proposed Utilisation Date with reference to the facts and circumstances existing as at such dates, except to the extent that such representations and warranties specifically refer to an earlier date, in which they  shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under Clause 18.7 (Financial statements; Financial Condition; Undisclosed Liabilities) which shall be made with reference to the latest financial statements provided under this Agreement and as at the last day of the financial period in relation to which such financial statements relate);

 

(iv)          a Change of Control has not occurred;

 

(v)           no event described in paragraphs (a) to (d) of Clause 7.5 (Mandatory cancellation or prepayment on default under Shipbuilding Contract) has occurred in respect of the Ship or Seller or Shipbuilding Contract to which the Utilisation Request relates;

 

(vi)          the provisions of paragraph (b) of Clause 10.2 (Market disruption) do not apply;

 

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(vii)         the ECA Agent has not received any notice from Sinosure requesting the Lenders to suspend the making of any Advance and/or the Lenders are not required by the terms of any of the Sinosure Insurance Policies to suspend the making of any Advance; and

 

(viii)        no occurrence, event or circumstances exist which prohibits any of the Lenders from participating in any Advance pursuant to the terms of any of the Sinosure Insurance Policies;

 

(b)                                 the Facility Agent and the ECA Agent have received on or before the relevant Utilisation Date, or is satisfied that it will receive when the Advance is made available all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent) in form and substance reasonably satisfactory to the Facility Agent to the extent such documents or other evidence have not been waived in accordance with Clause 4.4 (Waiver of conditions precedent).

 

4.3                               Notification of satisfaction of conditions precedent

 

(a)                                 The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).

 

(b)                                 Other than to the extent that the Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorize (but do not require) the Facility Agent to give that notification.  The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

 

4.4                               Waiver of conditions precedent

 

If the Lenders, at their discretion, permit an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrower shall ensure that such conditions are satisfied within five (5) Business Days after the relevant Utilisation Date or such later date as the Facility Agent, acting with the authorization of the Lenders, may agree in writing with the Borrower, provided that in connection with the prepositioning of funds pursuant to Clause 5.8 (Prepositioning of funds), the Facility Agent and the Lenders agree to suspend fulfillment of certain conditions precedent set forth in paragraphs of Part B of Schedule 2 (Conditions Precedent) (the “Closing CPs”) solely for the time period commencing on the Utilisation Date and ending on the relevant Delivery Date, and the Borrower acknowledges and agrees that fulfillment of the Closing CPs to the satisfaction of the Facility Agent (acting on the instructions of the Lenders) shall be required as a condition precedent to the countersignature by a representative of the Facility Agent of the protocol of delivery and acceptance relating to the relevant Ship referred to in paragraph (b)(ii) of Clause 5.8 (Prepositioning of funds).

 

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SECTION 3

 

UTILISATION

 

5                                         UTILISATION

 

5.1                               Delivery of a Utilisation Request

 

(a)                                 The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.

 

(b)                                 The Borrower may not deliver more than one Utilisation Request under each Vessel Loan.

 

5.2                               Completion of a Utilisation Request

 

(a)                                 Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(i)            the proposed Utilisation Date is a Business Day within the relevant Availability Period relating to the relevant Vessel Loan;

 

(ii)           the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

 

(iii)          the proposed Interest Period complies with Clause 9 (Interest Periods).

 

(b)                                 Only one Advance may be requested in each Utilisation Request.

 

5.3                               Currency and amount

 

(a)                                 The currency specified in a Utilisation Request must be dollars.

 

(b)                                 The amount of the proposed Advance must be an amount which is not more than the relevant Vessel Loan and not more than the Maximum Contract Price.

 

(c)                                  The amount of the proposed Advance must be an amount which is not more than the Available Commitment of all Lenders in relation to the relevant Vessel Loan.

 

(d)                                 The amount of the proposed Advance must be an amount which would not oblige the Borrower or any other Obligor to provide additional security or prepay part of the Advance if the ratio set out in Clause 25 (Security Cover) were applied and notice was given by the Facility Agent under Clause 25.1 (Minimum required security cover) immediately after the Advance was made.

 

5.4                               Lenders’ participation

 

(a)                                 If the conditions set out in this Agreement have been met or waived in accordance with Clause 4.4 (Waiver of conditions precedent), each Lender shall make its Contribution in each Advance available by the Utilisation Date through its Facility Office.

 

(b)                                 The amount of each Lender’s Contribution in each Advance will be equal to the proportion borne by its Commitment in relation to the relevant Vessel Loan to the Commitments allocated in respect of such Vessel Loan immediately before making that Advance.

 

(c)                                  The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its Contribution in that Advance by the Specified Time.

 

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5.5                               Cancellation of Commitments

 

The Commitments allocated in respect of any Vessel Loan which are unutilised at the end of the Availability Period for such Vessel Loan shall then be cancelled at that time.

 

5.6                               Payment to third parties

 

The Facility Agent shall, on each Utilisation Date, pay to, or for the account of, the Borrower the amounts which the Facility Agent receives from the Lenders in respect of that Advance.  That payment shall be made in like funds as the Facility Agent received from the Lenders in respect of each Advance to the account of the Seller and/or such other account which the Borrower specifies in the relevant Utilisation Request.

 

5.7                               Disbursement of Advance to third party

 

A payment by the Facility Agent as directed by the Borrower under Clause 5.6 (Payment to third parties) to a person other than the Borrower shall constitute the making of the relevant Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender’s Contribution in that Advance.

 

5.8                               Prepositioning of funds

 

If the Lenders, at the request of the Borrower and on terms acceptable to all the Lenders and in their absolute discretion, agree to preposition funds with any bank for the purposes of any Utilisation of an Advance (such date, the “Preposition Date”):

 

(a)                                 each Lender agrees to fund its Contribution in such Advance on a day not more than three Business Days prior to the Delivery Date of the Ship to which that Advance relates;

 

(b)                                 on the relevant Preposition Date, the Facility Agent shall:

 

(i)            preposition an amount equal to the Delivery Instalment of the relevant Ship at a bank or other financial institution acceptable to the Facility Agent and the Required Lenders (where such acceptable bank shall include, for the avoidance of doubt, the Bank of China and/or the Industrial and Commercial Bank of China) (a “Seller’s Bank”) as directed by the Borrower in the relevant Utilisation Request and satisfactory to the Facility Agent (acting on instructions of the Required Lenders), which funds shall be held at the relevant Seller’s Bank in the name and under the sole control of the Facility Agent; and

 

(ii)           issue a SWIFT MT 199 or other similar communication in the form attached as Schedule 16 (Form of MT 199) of this Agreement or such other form and substance acceptable to the Facility Agent (acting on instructions of the Required Lenders) (each such communication, a “Disbursement Authorization”) authorizing the release of such funds by the relevant Seller’s Bank on the relevant Delivery Date upon receipt of a protocol of delivery and acceptance in respect of such Ship duly executed by the relevant Seller and the relevant Owner Guarantor or its Affiliates and countersigned by a representative of the Facility Agent;

 

(c)                                  the date on which the Lenders fund the relevant Advance constitutes the Utilisation Date in respect of such Advance and the Borrower agrees to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 (Calculation of interest) and so that interest shall be paid together with the first payment of interest on such Advance after the Utilisation Date in respect of it or, if such Utilisation Date does not occur, within three Business Days of demand by the Facility Agent;

 

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(d)                                 from the date the proceeds of the relevant Advance are deposited at the relevant Seller’s Bank to the relevant Delivery Date (or, if delivery of the relevant Ship does not occur within five (5) Business Days (or such other period as agreed by the Required Lenders) of the Delivery Date specified in the relevant Disbursement Authorization, the date on which the funds are returned to the Facility Agent for redistribution to the Lenders), the Borrower shall be entitled to interest on such Advance at the applicable rate, if any, paid by such Seller’s Bank for such deposited funds;

 

(e)                                  if the relevant Ship is not delivered five (5) Business Days (or such other period as agreed by the Required Lenders) of the Delivery Date specified in the relevant Disbursement Authorization and the proceeds of the relevant Advance are returned to the Facility Agent and redistributed to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Facility Agent and (ii) the Available Commitment of the relevant Vessel Loan of all Lenders will be increased by an amount equal to the aggregate principal amount of the Utilised Advance so returned; and

 

(f)                                   the Borrower and the Parent Guarantor shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may incur in connection with such prepositioning of funds arrangement (other than by reason of gross negligence or willful misconduct of any Finance Party).

 

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SECTION 4

 

REPAYMENT, PREPAYMENT AND CANCELLATION

 

6                                         REPAYMENT

 

6.1                               Repayment of Loan

 

The Borrower shall repay each Vessel Loan by equal consecutive quarterly instalments, each in an amount equal to 1 and 2/3 percent of such Vessel Loan (each, a “Repayment Instalment”) on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such Vessel Loan.  On the Termination Date of each Vessel Loan, the Borrower shall additionally repay the amount of the relevant Balloon Repayment relating to such Vessel Loan.

 

6.2                               Termination Date

 

On each Termination Date, the Borrower shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.

 

6.3                               [Intentionally deleted.]

 

6.4                               Re-borrowing

 

The Borrower may not re-borrow any part of the Facility which is repaid.

 

7                                         PREPAYMENT AND CANCELLATION

 

7.1                               Illegality

 

(a)                                 If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its Contribution in an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

 

(i)            that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

 

(ii)           upon the Facility Agent notifying the Borrower, the Available Commitment in respect of any Vessel Loan of that Lender will be immediately cancelled; and

 

(iii)          the Borrower shall prepay that Lender’s Contribution in any Vessel Loan on the last day of the Interest Period for such Vessel Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment shall be cancelled in the amount of the participation prepaid.

 

(b)                                 Any partial prepayment under this Clause 7.1 (Illegality) shall reduce pro rata for each Vessel Loan the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.

 

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7.2                               Change of control

 

If a Change of Control occurs:

 

(a)                                 the Parent Guarantor or the Borrower shall promptly notify the Facility Agent upon becoming aware of that event; and

 

(b)                                 if the Required Lenders so require, the Facility Agent shall, by not less than ten Business Days’ notice to the Borrower, cancel the Facility and declare the Loan outstanding, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and all outstanding Loan and amounts will become immediately due and payable.

 

7.3                               Voluntary and automatic cancellation

 

(a)                                 The Borrower may, if it gives the Facility Agent not less than ten (10) Business Days’ prior notice, and upon payment of all relevant fees in respect of such prepayment (including without limitation, the relevant CEXIM Prepayment Fee payable under Clause 11.4 (CEXIM Prepayment Fee) in the case of CEXIM’s Contribution), cancel the whole or any part (being a minimum amount of $5,000,000, unless the cancelled amount relates solely to amounts which had been allocated for payment of Contingent Extras) of the Available Facility.

 

(b)                                 Any cancellation of a Vessel Loan under this Clause shall reduce the Commitments of the relevant Lenders and the amount of that Vessel Loan then unutilised pro rata.

 

(c)                                  The unutilised Commitment (if any) of each Lender in respect of a Vessel Loan shall be automatically cancelled at close of business on the last day of the Availability Period of that Vessel Loan.

 

7.4                               Voluntary prepayment of Loan

 

(a)                                 The Borrower may, if it gives the Facility Agent and the ECA Agent not less than ten (10) Business Days’ (or such shorter period as the Required Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $5,000,000).

 

(b)                                 Any partial prepayment of a Vessel Loan under this Clause 7.4 (Voluntary prepayment of Loan) shall reduce in inverse chronological order the amount of each Repayment Instalment and the Balloon Repayment falling after that prepayment by the amount prepaid or such other manner as the Lenders may otherwise agree.

 

7.5                               Mandatory cancellation or prepayment on default under Shipbuilding Contract

 

If, in relation to a Ship:

 

(a)                                 any of the events specified in Clause 27.7 (Insolvency Event) occurs in relation to the relevant Seller; or

 

(b)                                 a party to the Shipbuilding Contract relating to that Ship cancels, rescinds, assigns, novates or terminates such Shipbuilding Contract or such Shipbuilding Contract otherwise ceases to remain in full force and effect for any reason; or

 

(c)                                  such Ship has not been delivered to, and accepted by, the relevant Owner Guarantor which either is a party to the Shipbuilding Contract relating to that Ship to receive the Ship, by the last day of the Availability Period of the Vessel Loan relating to that Ship; or

 

49

 

(d)                                 the relevant Owner Guarantor or its Affiliate which is a party to that Shipbuilding Contract ceases to be the sole legal and beneficial owner of all the rights of the buyer under such Shipbuilding Contract,

 

then:

 

(i)            the Borrower shall promptly notify the Facility Agent; and

 

(ii)           if the Required Lenders so require, the Facility Agent shall cancel the Vessel Loan relating to that Ship and declare such Vessel Loan, together with interest accrued on it, and all other amounts relating to it and accrued under the Finance Documents immediately due and payable, whereupon such Vessel Loan will be cancelled and all such outstanding amounts relating thereto will become immediately due and payable.

 

7.6                               Mandatory prepayment on sale or Total Loss

 

(a)                                 If a Ship is sold, or becomes a Total Loss, the Borrower shall on the Relevant Date prepay the Vessel Loan applicable to that Ship.

 

(b)                                 On the Relevant Date, the Borrower shall also prepay such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25.1 (Minimum required security cover) were applied immediately following the payment referred to in paragraph (a) above.

 

(c)                                  In this Clause 7.6 (Mandatory prepayment on sale or Total Loss):

 

“Relevant Date” means:

 

(i)            in the case of a sale of a Ship, on the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and

 

(ii)           in the case of a Total Loss of a Ship, on the earlier of:

 

(A)                               the date falling 120 days after the Total Loss Date; and

 

(B)                               the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss.

 

7.7                               Termination etc. of Sinosure Insurance Policies

 

If at any time, in relation to an Advance, the relevant Sinosure Insurance Policy is cancelled, unenforceable, suspended, invalid or terminated (whether in whole or in part) while any amounts remain outstanding in relation to such Advance, the Facility Agent shall  immediately cancel the Commitments relating to that Advance and declare that such Advance be payable on demand.

 

7.8                               Right of replacement and repayment and cancellation in relation to a single Lender

 

(a)                                 If:

 

(i)            any sum payable to any Lender by a Transaction Obligor is required to be increased under Clause 12.2 (Tax gross-up) or under that clause as incorporated by reference or in full in any other Finance Document; or

 

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(ii)           any Lender claims indemnification from the Borrower under Clause 12.2 (Tax gross-up) or Clause 13.1 (Increased costs);

 

the Borrower may during, in the case of sub-paragraphs (i) and (ii) above, the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and/or its intention to procure the repayment of that Lender’s Contribution in the Loan and give the Facility Agent notice of its intention to replace that Lender in accordance with paragraph (e) below.

 

(b)                                 On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

 

(c)                                  On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender’s Contribution in the Loan; provided that unless all Commitments have been utilised hereunder, the Borrower shall be required to replace such repaid Lender in accordance with paragraphs (e) and (f) below.

 

(d)                                 Any partial prepayment under this Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender) shall reduce pro rata the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.

 

(e)                                  The Borrower may, in the circumstances set out in paragraph (a) above and shall, under paragraph (c) above, if required), on thirty (30) Business Days’ prior notice to the Facility Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 28 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender’s Contribution in the Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.

 

(f)                                   The replacement of a Lender pursuant to paragraph (e) above shall be subject to the following conditions:

 

(i)            the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of a Servicing Party;

 

(ii)           the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of CEXIM acting in its capacity as a Lender;

 

(iii)          neither the Facility Agent nor any Lender shall have any obligation to find a replacement Lender;

 

(iv)          in no event shall the Lender replaced under paragraph (e) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents;

 

(v)           the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (e) above once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer; and

 

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(vi)          the proposed replacement Lender may not be an affiliate or a subsidiary of the Parent Guarantor.

 

(g)                                  A Lender shall perform the checks described in sub-paragraph (v) of paragraph (f) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (e)above and shall notify the Facility Agent and the Borrower when it is satisfied that it has complied with those checks.

 

7.9                               Restrictions

 

(a)                                 Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

(b)                                 Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and amounts (if any) payable under the Hedging Agreements in connection with that prepayment and, subject to the fee provided for in Clause 11.4 (CEXIM Prepayment Fee) and any Break Costs, without premium or penalty.

 

(c)                                  The Borrower may not re-borrow any part of the Facility which is prepaid.

 

(d)                                 The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

(e)                                  No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

(f)                                   If the Facility Agent receives a notice under this Clause 7 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to the Borrower or the affected Lenders and/or Hedge Counterparties, as appropriate.

 

7.10                        Refund of Sinosure Premium on voluntary prepayment

 

(a)                                 The Borrower may, upon any voluntary prepayment of the Loan (whether in whole or in part) in accordance with Clause 7.4 (Voluntary prepayment of Loan), request the ECA Agent to seek a refund from Sinosure of such portion of the Sinosure Premium paid by the Borrower in respect of the Advance prepaid pursuant to the terms of this Agreement.

 

(b)                                 In the event that Sinosure (in its absolute discretion) consents to such request and refunds such portion of the Sinosure Premium (which shall be determined and calculated by Sinosure pursuant to the terms of the relevant Sinosure Insurance Policy and Sinosure’s own internal regulations) to the Facility Agent, the Facility Agent shall remit such refund to the Borrower in accordance with Clause 36 (Payment Mechanics).

 

(c)                                  Sinosure retains the right to refuse a request by the Borrower of a refund of the Sinosure Premium in respect of an Advance once the relevant Advance is made and shall not be obliged to give any reason for such refusal, and nothing shall oblige the Facility Agent or the ECA Agent to take any further action if Sinosure refuses or fails for whatever reason to refund any portion of the Sinosure Premium once such premium is paid.

 

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SECTION 5

 

COSTS OF UTILISATION

 

8                                         INTEREST

 

8.1                               Calculation of interest

 

The rate of interest on an Advance, the Loan, any part of the Loan or any Unpaid Sum for each Interest Period is the percentage rate per annum which is the aggregate of:

 

(a)                                 the Margin; and

 

(b)                                 LIBOR.

 

8.2                               Payment of interest

 

(a)                                 The Borrower shall pay accrued interest on each Advance, the Loan or any part of the Loan on each Repayment Date.

 

(b)                                 If an Interest Period is longer than three Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the next occurring Repayment Date.

 

8.3                               Default interest

 

(a)                                 If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Agreement) on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two percent per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent.  Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Obligor on demand by the Facility Agent.

 

(b)                                 If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:

 

(i)            the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

 

(ii)           the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two percent per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

 

(c)                                  Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

 

8.4                               Notification of rates of interest

 

The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

 

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8.5                               Hedging

 

(a)                                 The Borrower or the Parent Guarantor may, but (subject to Clause 8.6 (Hedging - First right to bid and Non-Lender Hedging Agreements) is not obliged to, enter into Hedging Agreements from time to time, and shall after the relevant date of entry into such Hedging Agreements maintain such Hedging Agreements in accordance with this Clause 8.5 (Hedging).

 

(b)                                 Each Hedging Agreement (and where applicable, each hedging transaction under such Hedging Agreement) shall:

 

(i)            be for a term ending on or prior to the relevant Termination Date in respect of each Vessel Loan;

 

(ii)           have settlement dates coinciding with the Repayment Dates;

 

(iii)          be in agreed form;

 

(iv)          provide for two-way payments in the event of a termination of a transaction in respect of a Hedging Agreement, whether on a Termination Event (as defined in the relevant Hedging Agreement) or on an Event of Default (as defined in the relevant Hedging Agreement); and

 

(v)           provide that the Termination Currency (as defined in the relevant Hedging Agreement) shall be dollars.

 

(c)                                  The rights of the Borrower or the Parent Guarantor (as the case may be) under the Hedging Agreements shall be assigned by way of security under an Assignment of Hedging Agreement.

 

(d)                                 The parties to each Hedging Agreement must comply with the terms of that Hedging Agreement.

 

(e)                                  For so long as an Event of Default has occurred and is continuing, neither a Hedge Counterparty nor the Borrower may amend, supplement, extend or waive the terms of any Hedging Agreement without the consent of the Facility Agent (such consent not to be unreasonably withheld).

 

(f)                                   Paragraph (e) above shall not apply to an amendment, supplement or waiver that is administrative and mechanical in nature and does not give rise to a conflict with any provision of this Agreement.

 

(g)                                  If, at any time, the aggregate notional principal amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed the Loan at that time, the Borrower or the Parent Guarantor (as the case may be) must promptly notify the Facility Agent and must, at the request of the Facility Agent, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Facility Agent so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.

 

(h)                                 Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (g) above will be apportioned as between those transactions pro rata.

 

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(i)                                   Paragraph (g) above shall not apply to any transactions in respect of any Hedging Agreement under which the Borrower or the Parent Guarantor (as the case may be) does not have any actual or contingent indebtedness.

 

(j)                                    Subject to paragraph (k) below, neither a Hedge Counterparty nor the Borrower or the Parent Guarantor (as the case may be) may terminate or close out any transactions in respect of any Hedging Agreement (in whole or in part) except:

 

(i)            in accordance with paragraph (g) above,

 

(ii)           on the occurrence of an Illegality (as such expression is defined in the relevant Hedging Agreement);

 

(iii)          if the Facility Agent serves notice or having served notice, makes a demand under Clause 27.20 (Acceleration);

 

(iv)          with the consent of the Facility Agent (acting on instructions of the Required Lenders) if an Event of Default has occurred; or

 

(v)           If the Secured Liabilities (other than in respect of the Hedging Agreements) have been irrevocably and unconditionally paid and discharged in full;

 

(k)                                 If a Hedge Counterparty is entitled to terminate or close out any transaction in respect of any Hedging Agreement under sub-paragraph (iii) of paragraph (j) above, such Hedge Counterparty shall promptly terminate or close out such transaction following a request to do so by the Security Agent.

 

(l)                                     A Hedge Counterparty may only suspend making payments under a transaction in respect of a Hedging Agreement if the Borrower or the Parent Guarantor (as the case may be) is in breach of its payment obligations under any transaction in respect of that Hedging Agreement.

 

(m)                             Each Hedge Counterparty consents to, and acknowledges notices of, the assigning by way of security by the Borrower or the Parent Guarantor (as the case may be) pursuant to the relevant Assignment of Hedging Agreement of its rights under the Hedging Agreements to which it is party in favour of the Security Agent.

 

(n)                                 Any such assigning by way of security is without prejudice to, and after giving effect to, the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.

 

(o)                                 Neither the Security Agent nor any other Finance Party shall be liable for or have any obligation in respect of the performance of any of the Borrower’s or as the case may be, the Parent Guarantor’s obligations under a Hedging Agreement.

 

8.6                               Hedging - First right to bid and Non-Lender Hedging Agreements

 

(a)                                 Each of the Borrower and the Parent Guarantor undertakes with the Lenders and the Hedge Counterparties, that in the event the Borrower or the Parent Guarantor (as the case may be), intends to enter into hedging transactions or agreements for the purpose of hedging against the interest rate in connection with this Agreement, it shall provide the Lenders and the Hedge Counterparties with the first right to bid in relation to such potential hedging transactions or agreements, before it concludes the same with a Non-Lender.

 

(b)                                 The Borrower or the Parent Guarantor may only enter into a Non-Lender Hedging Agreement pursuant to this Clause on condition that such Non-Lender does not share in any 

 

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Security provided under the Finance Documents and that no Security shall be granted by any Obligor in respect of the Borrower’s or as the case may be, the Parent Guarantor’s obligations to a Non-Lender under such Non-Lender Hedging Agreement.

 

9                                         INTEREST PERIODS

 

9.1                               Interest Periods

 

(a)                                 Each Interest Period relating to a Vessel Loan will, subject to paragraphs (d) and (e) below, be three Months.

 

(b)                                 An Interest Period relating to a Vessel Loan shall not extend beyond the Termination Date relating to such Vessel Loan and shall instead end on such Termination Date.

 

(c)                                  In respect of a Repayment Instalment, an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it if such date is before the end of the Interest Period then current.

 

(d)                                 Subject to paragraph (e) below, the first Interest Period for the Loan shall start on the first Utilisation Date and each subsequent Interest Period in respect of the Loan shall start on the last day of the preceding Interest Period in respect of the Loan.

 

(e)                                  The first Interest Period for the second and any subsequent Advance shall start on the Utilisation Date of such Advance and end on the last day of the prevailing Interest Period applicable to the Loan.

 

(f)                                   Except for the purposes of paragraph (d) and paragraph (e) above, the Loan shall have one Interest Period at any time.

 

9.2                               Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

10                                  CHANGES TO THE CALCULATION OF INTEREST

 

10.1                        Unavailability of Screen Rate

 

(a)                                 If no Screen Rate is available for LIBOR for:

 

(i)            dollars; or

 

(ii)           the Interest Period of an Advance, the Loan, any part of the Loan or any Unpaid Sum,

 

there shall be no LIBOR for that Advance, the Loan, that part of the Loan or that Unpaid Sum and Clause 10.3 (Cost of funds) shall apply to that Advance, the Loan, that part of the Loan or that Unpaid Sum for that Interest Period.

 

10.2                        Market disruption

 

(a)                                 If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose Contribution in the relevant Advance or the Loan exceed fifty percent of the relevant Advance or the Loan as appropriate) (the “Relevant Lender(s)”) that the cost to it of funding its Contribution in that 

 

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Advance or the Loan from whatever source it may reasonably select would be in excess of the LIBOR for such Interest Period, then Clause 10.3 (Costs of funds) shall apply to that Advance or the Loan (as applicable) for that Interest Period.

 

(b)                                 If, at least one (1) Business Day before the start of an Interest Period, the Facility Agent receives notification from the Relevant Lender(s) (the “Affected Lender(s)”) that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund its Contribution in an Advance, each such Affected Lender’s obligation to make that Advance shall be suspended while that situation continues.

 

10.3                        Cost of funds

 

(a)                                 If this Clause 10.3 (Cost of funds) applies, the rate of interest on a Lender’s share of an Advance, the Loan, any part of the Loan or any Unpaid Sum for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

(i)            the relevant Margin; and

 

(ii)           the rate notified to the Facility Agent by that Lender as soon as practicable before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the actual cost to the relevant Lender of funding its Contribution in that Advance, the Loan, that part of the Loan or that Unpaid Sum from whatever source it may reasonably select.

 

(b)                                 If this Clause 10.3 (Cost of funds) applies and the Facility Agent or the Borrower so require, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

 

(c)                                  Any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

 

10.4                        Break Costs

 

(a)                                 The Borrower shall, within three Business Days of demand by a Finance Party (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation, provided that no Finance Party shall be required to disclose any information that would be confidential or price sensitive), pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

 

11                                  FEES AND SINOSURE PREMIUM

 

11.1                        Commitment fee

 

(a)                                 The Borrower shall pay to the Facility Agent (for the account of each relevant Lender), in respect of each Vessel Loan, a fee computed at the rate of 40 percent of the Margin per annum on such Lender’s Available Commitment for that Vessel Loan for the period commencing from either (i) the date of this Agreement (in the case of Ship A, Ship B, Ship C and Ship D) and (ii) the date of the Amending and Restating Deed (in the case of Ship E and Ship F), and up to and including, the last day of the Availability Period relating to such Vessel Loan.

 

(b)                                 The accrued commitment fee payable in respect of each Vessel Loan is payable on each Fiscal Quarter Date which ends during the Availability Period of such Vessel Loan, on the last 

 

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day of such Availability Period and, if cancelled, on the cancelled amount of each Lender’s Commitment of such Vessel Loan, at the time the cancellation is effective, provided that it is hereby agreed that the first payment of such commitment fee of a Vessel Loan in respect of Ship A, Ship B, Ship C or Ship D shall be payable on the Utilisation Date of such Vessel Loan.

 

11.2                        Upfront fee

 

The Borrower shall pay to the ECA Agent (for the account of each Lender), an upfront fee in the amount and at the times agreed in a Fee Letter.

 

11.3                        Facility Agent fee

 

The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

 

11.4                        CEXIM Prepayment Fee

 

(a)                                 Subject to paragraph (b) below, in the case of a voluntary prepayment pursuant to Clause 7.4 (Voluntary prepayment of Loan), the Borrower must pay to the Facility Agent for the account of CEXIM, the CEXIM Prepayment Fee on the date of prepayment of CEXIM’s Contribution.

 

(b)                                 No fee shall be payable under this Clause if the prepayment is made:

 

(i)            after the first 24 Months of the Utilisation of such Vessel Loan;

 

(ii)           under Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender); or

 

(iii)          under Clause 25 (Security cover).

 

11.5                        [Intentionally deleted]

 

11.6                        Sinosure Premium

 

The Borrower shall pay Sinosure the Sinosure Premium for each Vessel Loan in the amount notified in writing to the Borrower by Sinosure on or prior to the Utilisation of the relevant Advance.

 

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SECTION 6

 

ADDITIONAL PAYMENT OBLIGATIONS

 

12                                  TAX GROSS UP AND INDEMNITIES; FATCA

 

12.1                        [Intentionally left blank]

 

12.2                        Tax gross-up

 

(a)                                 All payments made by any Obligor hereunder or under any Finance Document (other than a Hedging Agreement) will be made without setoff, counterclaim or other defence. All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law. If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Finance Document, then:

 

(i)            the Borrower shall be entitled to make such deduction or withholding,

 

(ii)           the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority and

 

(iii)          in the case of any Indemnified Taxes, the Borrower agrees to pay the full amount of such Indemnified Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Finance Document, after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein or in such Finance Document.

 

The Borrower shall indemnify each Finance Party, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by such Finance Party or required to be withheld or deducted from a payment to such Finance Party, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Finance Party (with a copy to the Facility Agent), or by the Facility Agent on its own behalf or on behalf of a Finance Party, shall be conclusive absent manifest error. In the event the Borrower pays amounts deducted and withheld to the relevant taxing authority in respect of Indemnified Taxes, the Borrower will furnish to the Facility Agent within forty-five (45) days after the date of payment of any Indemnified Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower.  The Borrower agrees to indemnify and hold harmless each Finance Party, and reimburse such Finance Party upon its written request, for the amount of any Indemnified Taxes so levied or imposed and paid by such Finance Party.

 

(b)                                 Without duplicating the payments under paragraph (a) above, the Borrower agrees to pay any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Finance Document excluding such amounts imposed in connection with an Assignment Agreement, a Transfer Certificate, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Finance Document, except to the extent that any such change is requested in writing by a Borrower (all such non-excluded Taxes described in this paragraph (b) of Clause 12.2 (Tax gross-up) being referred to as “Other Taxes”).

 

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(c)                                  Any Finance Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Finance Document shall deliver to the Borrower and the Facility Agent, at the time or times reasonably requested by the Borrower or the Facility Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Facility Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Finance Party, if reasonably requested by the Borrower or the Facility Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Facility Agent as will enable the Borrower or the Facility Agent to determine whether or not such Finance Party is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Finance Party’s reasonable judgment such completion, execution or submission would subject such Finance Party to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Finance Party.

 

(d)                                 If the Facility Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by an Obligor or with respect to which such Obligor has paid additional amounts pursuant to Clause 12.2(a) (Tax Gross-up), it shall pay over such refund to such Obligor (but only to the extent of indemnity payments made, or additional amounts paid, by such Obligor under Clause 12.2(a) (Tax Gross-up) with respect to the Indemnified Taxes or payments of Other Taxes pursuant to Clause 12.2(a) (Tax Gross-up) giving rise to such refund), net of all reasonable out-of-pocket expenses of the Facility Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Facility Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  In the event the Facility Agent or such Lender is required to repay such refund to such Governmental Authority, then such Obligor, upon the written request of the Facility Agent or such Lender, agrees to promptly repay the amount paid over to such Obligor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, but without any other interest, penalties or charges) to the Facility Agent or such Lender.  Nothing in this Clause 12.2(d) (Tax Gross-up) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).

 

(e)                                  Each Party shall, within ten Business Days of a reasonable request by another Party:

 

(i)            confirm to that other Party whether or not it would be subject to withholding Tax imposed by FATCA if such Party were to fail to comply with the applicable reporting requirements of FATCA; and

 

(ii)           supply to that other Party such forms (including U.S. Internal Revenue Service Forms W-8 or W-9), documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA.

 

If a Party confirms to another Party pursuant to the foregoing that it would not be subject to withholding Tax imposed by FATCA or provides a U.S. Internal Revenue Service Form W-8 or W-9 and it subsequently becomes aware that it may be subject to withholding Tax imposed by FATCA or that the Form has ceased to be accurate or valid, that Party shall notify that other Party reasonably promptly or provide a revised Form, respectively.

 

Without duplication of the foregoing, if a payment made to a Lender under any Finance Document would be subject to withholding Tax imposed by FATCA if such Lender were to fail 

 

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to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Facility Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Facility Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Facility Agent as may be necessary for the Borrower and the Facility Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Each Party may make any deduction it is required to make by FATCA, and any payment required in connection with that FATCA deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA deduction or otherwise compensate the recipient of the payment for that FATCA deduction. Each Party shall promptly, upon becoming aware that it must make a  deduction under FATCA (or that there is any change in the rate or the basis of such FATCA deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

 

(f)                                   Each Lender shall severally indemnify the Facility Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Facility Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Borrower to do so) and (ii) any Taxes excluded in Clause 12.2(a) (Tax Gross-up) attributable to such Lender, in each case, that are payable or paid by the Facility Agent in connection with any Finance Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Facility Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Facility Agent to set off and apply any and all amounts at any time owing to such Lender under any Finance Document (other than a Hedging Agreement) or otherwise payable by the Facility Agent to the Lender from any other source against any amount due to the Facility Agent under this paragraph (f).

 

(g)                                  Each Party’s obligations under this Clause 12.2(Tax Gross-up) shall survive the resignation or replacement of the Facility Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Finance Document.

 

12.3                        [Intentionally left blank]

 

12.4                        [Intentionally left blank]

 

12.5                        VAT

 

(a)                                 All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

 

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(b)                                 If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

(i)            (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

(ii)           (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

(c)                                  Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

(d)                                 In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.

 

13                                  INCREASED COSTS

 

13.1                        Increased costs

 

(a)                                 Subject to Clause 13.3 (Exceptions), the Borrower shall, within three Business Days of written demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

 

(i)            the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

 

(ii)           compliance with any law or regulation made,

 

after the date of this Agreement.  Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) Basel III, and all requests, rules, regulations, guidelines and directives promulgated pursuant to the foregoing, are deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.

 

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(b)                                 In this Agreement, “Increased Costs” means:

 

(i)            a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

 

(ii)           an additional or increased cost; or

 

(iii)          a reduction of any amount due and payable under any Finance Document,

 

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

 

13.2                        Increased cost claims

 

(a)                                 A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower (and such notification shall, to the extent commercially practicable, contain reasonable details of the calculation for such additional amounts).

 

(b)                                 Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.

 

13.3                        Exceptions

 

Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

 

(a)                                 attributable to an Excluded Tax or a change in the rate of tax on the overall net income of a Finance Party;

 

(b)                                 compensated for by Clause 12.2 (Tax gross-up)

 

(c)                                  compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost);

 

(d)                                 attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;

 

(e)                                  incurred by a Hedge Counterparty in its capacity as such; or

 

(f)                                   attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

 

14                                  OTHER INDEMNITIES

 

14.1                        Currency indemnity

 

(a)                                 If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the 

 

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“Second Currency”) for the purpose of:

 

(i)            making or filing a claim or proof against that Obligor; or

 

(ii)           obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall, as an independent obligation, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

(b)                                 Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

(c)                                  This Clause 14.1 (Currency indemnity) does not apply to any sum due to a Hedge Counterparty in its capacity as such.

 

14.2                        Other indemnities

 

(a)                                 Each Obligor shall, upon written request, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:

 

(i)            the occurrence of any Event of Default;

 

(ii)           a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 35 (Sharing among the Finance Parties);

 

(iii)          funding, or making arrangements to fund, its Contribution in an Advance requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Secured Party alone); or

 

(iv)          the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

 

(b)                                 Each Obligor shall, on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an “Indemnified Person”), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory inquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents (other than a Hedging Agreement), having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or willful misconduct of that Indemnified Person.

 

(c)                                  Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

 

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(i)            arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or

 

(ii)           in connection with any Environmental Claim.

 

(d)                                 Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 (Other indemnities) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

 

(e)                                  Notwithstanding the foregoing, this Clause 14.2 (Other indemnities) shall not cover the types of costs, loss or liability covered by Clause 10.2 (Market disruption), Clause 12 (Tax gross-up and indemnities, FATCA), Clause 13 (Increased costs), Clause 16 (Costs and expenses) and the other provisions of this Clause 14 (Other indemnities).

 

14.3                        Mandatory Cost

 

Each Obligor shall, on demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:

 

(a)                                 in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and

 

(b)                                 in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the U.K. Financial Conduct Authority and/or the U.K. Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),

 

which, in each case, is referable to that Lender’s Contribution in the Loan.

 

14.4                        Indemnity to the Facility Agent

 

Each Obligor shall, on demand, jointly and severally indemnify the Facility Agent against:

 

(a)                                 any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

 

(i)            investigating any event which it reasonably believes is a Default; or

 

(ii)           acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized; or

 

(iii)          instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement ); and

 

(b)                                 any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents (other than a Hedging Agreement).

 

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14.5                        Indemnity to the Security Agent

 

(a)                                 Each Obligor shall, on demand, jointly and severally indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:

 

(i)            in relation to or as a result of:

 

(A)          any failure by the Borrower to comply with its obligations under Clause 16 (Costs and Expenses);

 

(B)          acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized;

 

(C)          the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;

 

(D)          the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents (other than a Hedging Agreement) or by law;

 

(E)           any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents (other than a Hedging Agreement);

 

(F)           any action by any Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and

 

(G)          instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement).

 

(ii)           acting as Security Agent, Receiver or Delegate under the Finance Documents (other than a Hedging Agreement) or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (other than a Hedging Agreement) (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

 

(b)                                 The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

 

15                                  MITIGATION BY THE FINANCE PARTIES

 

15.1                        Mitigation

 

(a)                                 Each Finance Party shall, in consultation with the Borrower, take all commercially reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities; FATCA), Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) transferring its rights and obligations under the Finance Documents (other than a Hedging Agreement) to another Affiliate or Facility Office.

 

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(b)                                 Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

15.2                        Limitation of liability

 

(a)                                 Each Obligor shall, on demand, jointly and severally indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

 

(b)                                 A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if either:

 

(i)            a Default has occurred and is continuing; or

 

(ii)           in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it in any economic, legal or regulatory respect.

 

15.3                        Defaulting Lender

 

(a)                                 Notwithstanding any other provision in this Agreement to the contrary, if at any time a Lender becomes a Defaulting Lender, so long as such Lender is a Defaulting Lender, fees pursuant to Clause 11.1 (Commitment fee) shall cease to accrue on such Defaulting Lender’s unused Commitment until such time as such Lender is no longer a Defaulting Lender, at which time fees pursuant to Clause 11.1 (Commitment fee) shall resume to accrue and be payable in accordance with Clause 11.1 (Commitment fee).

 

(b)                                 Each Defaulting Lender shall indemnify the Borrower, the Facility Agent and each Non-Defaulting Lender from and against any and all loss, damage or expenses, including but not limited to reasonable legal fees and, in the case of the Facility Agent or any Non-Defaulting Lender, funds (if any) advanced by the Facility Agent or by any Non-Defaulting Lender, on account of such Defaulting Lender’s failure to timely fund its applicable Commitment of an Advance or to otherwise perform its obligations under the Finance Documents (other than a Hedging Agreement).

 

(c)                                  In the event that the Facility Agent and the Borrower agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Contribution of the Lenders in the Loan shall be readjusted to reflect the inclusion of such Lender’s Contribution in the Loan and on such date such Lender shall purchase at par such of the Loan or Contribution therein of the other Lenders as the Facility Agent shall determine may be necessary in order for such Lender to hold its pro rata share of the Contribution in the Loan and/or the Commitments.

 

(d)                                 At any time during a Default Period, the Borrower may, upon three (3) Business Days prior notice to the applicable Defaulting Lender (so long as such Default Period remains in effect at the end of such notice period), require such Defaulting Lender to assign all right, title and interest that it may have in, and its Contribution in the Loan and any other obligations of the Borrower under this Agreement and the Finance Documents to another Lender (if another Lender will consent to purchase such right, title and interest and participations) or another Person in accordance with and subject to the terms of Clause 28 (Changes to the Lenders) of this Agreement, if such Person can be found by the Borrower, for a purchase price equal to 100% of the principal amount of Contribution in the Loan plus the amount of any interest and fees accrued and owing to such Defaulting Lender as of the date of such assignment.

 

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16                                  COSTS AND EXPENSES

 

16.1                        Transaction expenses

 

The Obligors shall, jointly and severally on demand, pay the Facility Agent, the Security Agent, the ECA Agent (for the account of Sinosure) and the Mandated Lead Arrangers the amount of all documented costs and expenses (including reasonable legal fees) reasonably incurred by any Secured Party and/or Sinosure in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

 

(a)                                 this Agreement and any other documents referred to in this Agreement;

 

(b)                                 the Transaction Security;

 

(c)                                  each of the Sinosure Insurance Policies and any other documents which may at any time be required by Sinosure to give effect to the terms of any Sinosure Insurance Policy or which Sinosure is entitled to call for or obtain pursuant to the terms of any Sinosure Insurance Policy; and

 

(d)                                 any other Finance Documents executed after the date of this Agreement.

 

16.2                        Amendment costs

 

If:

 

(a)                                 an Obligor requests an amendment, waiver or consent; or

 

(b)                                 an amendment is required pursuant to Clause 36.9 (Change of currency); or

 

(c)                                  an Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,

 

the Obligors shall, jointly and severally on demand, reimburse each of the Facility Agent, the ECA Agent (for the account of Sinosure)  and the Security Agent for the amount of all costs and expenses (including reasonable legal fees) reasonably incurred by each Secured Party and/or Sinosure in responding to, evaluating, negotiating or complying with that request or requirement.

 

16.3                        Enforcement and preservation costs

 

The Obligors shall, jointly and severally on demand, pay to:

 

(a)                                 each Secured Party the amount of all costs and expenses (including reasonable legal fees) incurred by that Secured Party in connection with any step taken with a view to the protection, the enforcement of, or the preservation of any rights under, any Finance Document (other than a Hedging Agreement) or the Transaction Security and with any proceedings instituted by or against that Secured Party as a consequence of it entering into a Finance Document (other than a Hedging Agreement), taking or holding the Transaction Security, or enforcing those rights; and

 

(b)                                 each Lender and the ECA Agent (for the account of Sinosure) the amount of all costs and expenses (including reasonable legal fees) incurred by a Lender and/or Sinosure in connection with or incidental to the enforcement or exercise of, or the preservation of, its rights, powers, discretions and remedies under any Sinosure Insurance Policy and any proceedings instituted by or against any Lender and/or Sinosure in connection thereto.

 

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SECTION 7

 

GUARANTEES

 

17                                  GUARANTEE AND INDEMNITY

 

17.1                        Joint and several liability

 

All liabilities and obligations of the Guarantors under this Agreement shall, whether expressed to be so or not, be joint and several.

 

17.2                        Keepwell

 

Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Hedge Guarantor to honor all of its obligations under this Clause 17 (Guarantee and Indemnity) in respect of the Hedging Obligations guaranteed hereby (provided that each Qualified ECP Guarantor shall be liable under this Clause 17.2 (Keepwell) only for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Clause 17 (Guarantee and Indemnity), or otherwise under the guarantee under this Clause, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  Each Qualified ECP Guarantor intends that this Clause 17.2 (Keepwell) constitute, and this Clause 17.2 (Keepwell) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Hedge Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

17.3                        Guarantee and indemnity

 

Each Guarantor irrevocably and unconditionally:

 

(a)                                 guarantees to each Finance Party, as a primary obligor and not merely as a surety, punctual payment and performance by each Obligor (other than itself) of all such other Obligor’s obligations under the Finance Documents;

 

(b)                                 undertakes with each Finance Party that whenever an Obligor (other than itself) does not pay any amount (whether for principal, interest, fees, expenses or otherwise) when due (whether at stated maturity, by acceleration or otherwise) under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it were the primary obligor; and

 

(c)                                  agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor (other than itself) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by it under this indemnity will not exceed the amount it would have had to pay under this Clause 17 (Guarantee and Indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

 

Notwithstanding the foregoing, such obligations guaranteed by the Guarantors under this Clause 17 (Guarantee and Indemnity) shall not include any Excluded Hedging Obligations.

 

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17.4                        Continuing guarantee

 

This guarantee is a continuing guarantee that shall remain in full force and effect until the irrevocable payment and performance in full by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.  This guarantee constitutes a guarantee of punctual performance and payment and not merely of collection.

 

17.5                        Reinstatement

 

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Secured Party in whole or in part on the basis of any payment, security or other disposition which is rescinded, discharged, avoided or reduced, or must be restored or returned, upon insolvency, bankruptcy, reorganization, liquidation, administration or otherwise, without  limitation, then the liability of each Guarantor under this Clause 17 (Guarantee and Indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

17.6                        Waiver of defences

 

The obligations of each Guarantor under this Clause 17 (Guarantee and Indemnity) and in respect of any Transaction Security are irrevocable, absolute and unconditional and shall not be affected or discharged by an act, omission, matter or thing which, but for this Clause 17.6 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 17 (Guarantee and Indemnity) or in respect of any Transaction Security (without limitation and whether or not known to it or any Secured Party) including (and each of the Guarantors hereby irrevocably waives any defences it may now have or hereafter acquire in any way relating to):

 

(a)                                 any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

(b)                                 the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

(c)                                  the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any Security Asset;

 

(d)                                 any incapacity or lack of power, authority or legal personality of or dissolution or change in the corporate or company structure, shareholders, members or status of an Obligor or any other person (including without limitation any change in the holding of such Obligor’s or other person’s Equity Interests);

 

(e)                                  any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

 

(f)                                   any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

(g)                                  any bankruptcy, insolvency or similar proceedings.

 

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17.7                        Guarantor Intent

 

Without prejudice to the generality of Clause 17.6 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:  business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

 

17.8                        Immediate recourse

 

Each Guarantor waives any right it may have of first requiring any Secured Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 17 (Guarantee and Indemnity).This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

17.9                        Appropriations

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Secured Party (or any trustee or agent on its behalf) may:

 

(a)                                 refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Parent Guarantor shall not be entitled to the benefit of the same; and

 

(b)                                 hold in an interest-bearing suspense account any moneys received from each Guarantor or on account of such Guarantor’s liability under this Clause 17 (Guarantee and Indemnity).

 

17.10                 Deferral of Guarantor’s rights

 

All rights which a Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against the Borrower, any other Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17 (Guarantee and Indemnity):

 

(a)                                 to be indemnified by an Obligor;

 

(b)                                 to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor’s obligations under the Finance Documents;

 

(c)                                  to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Finance Documents or of any other guarantee or 

 

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security taken pursuant to, or in connection with, the Finance Documents by any Secured Party;

 

(d)                                 to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 17 (Guarantee and Indemnity);

 

(e)                                  to exercise any right of set-off against any Obligor; and/or

 

(f)                                   to claim or prove as a creditor of any Obligor in competition with any Secured Party.

 

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Secured Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 36 (Payment Mechanics).

 

17.11                 Additional security

 

This guarantee and any other Security given by a Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Secured Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.

 

17.12                 Independent obligations

 

The obligations of each Guarantor under or in respect of this guarantee are independent of any other obligations of any other Obligor under or in respect of the Finance Documents, and a separate action or actions may, with the consent of the Security Agent or the Facility Agent (in each case, acting with the authorization of the Required Lenders) be brought against any Guarantor to enforce this guarantee irrespective of whether any action is brought against any other Obligor or whether any other Obligor is joined in any such action or actions.

 

17.13                 Bankruptcy

 

Additionally, the Guarantors unconditionally and irrevocably guarantee the payment of any and all of the Secured Liabilities (including, without limitation, all interest accruing subsequent to the commencement of any case, proceeding or other action relating to any other Obligor under any Debtor Relief Laws, and all interest which, but for any such case, proceeding or other action would otherwise accrue) to the Finance Parties whether or not due or payable by the Borrower or any Obligor upon the occurrence of any of the events  specified in Clause 27.7(Insolvency Event), and irrevocably, unconditionally and jointly and severally promises to pay such indebtedness to the Finance Parties, or order, on demand, in lawful money of the U.S.

 

17.14                 Reliance

 

It is not necessary for any Finance Party to inquire into the capacity or powers of any Guarantor or any of their respective Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any of the Secured Liabilities made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

 

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17.15                 Subordination

 

Any Financial Indebtedness of the Borrower now or hereafter owing to any Guarantor is hereby subordinated to the Secured Liabilities of the Borrower owing to the Finance Parties; and if the Facility Agent so requests at a time when an Event of Default exists, all such Financial Indebtedness of the Borrower to any Guarantor shall be collected, enforced and received by such Guarantor for the benefit of the Finance Parties and be paid over to the Facility Agent on behalf of the Finance Parties on account of the Secured Liabilities to the Finance Parties, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guarantee.  Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any such Financial Indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination.  Without limiting the generality of the foregoing, the Guarantors hereby agrees with the Finance Parties that they will not exercise any right of subrogation which they may at any time otherwise have as a result of this Guarantee (whether contractual, under Section 509 of the U.S. Bankruptcy Code or otherwise) until all the Secured Liabilities have been irrevocably paid in full in cash.  If and to the extent required in order for the Secured Liabilities of the Guarantors to be enforceable under applicable federal, state and other laws relating to the insolvency of debtors, the maximum liability of each Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such Guarantor, under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under this Clause 17.15(Subordination).

 

17.16                 Applicability of provisions of Guarantee to other Security

 

Clauses 17.4 (Continuing guarantee), 17.5 (Reinstatement), 17.6 (Waiver of defences), 17.7 (Guarantor Intent), 17.8 (Immediate recourse), 17.9 (Appropriations), 17.10 (Deferral of Guarantor’s rights), 17.11 (Additional security), 17.12 (Independent obligations), 17.13 (Bankruptcy), 17.14 (Reliance) and 17.15 (Subordination), shall apply, with any necessary modifications, to any Security which an Owner Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.

 

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SECTION 8

 

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

18                                  REPRESENTATIONS

 

18.1                        General

 

Each Obligor makes the representations and warranties set out in this Clause 18 (Representations) to each Finance Party on the date of this Agreement.

 

18.2                        Corporate/Limited Liability Company/Limited Partnership Status

 

(a)                                 Each Obligor is a duly organized and validly existing corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or formation.

 

(b)                                 Each Obligor has the corporate or other applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage.

 

(c)                                  Each Obligor is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

18.3                        Corporate Power and Authority; Legal Validity and Enforceability

 

(a)                                 Each Obligor has the corporate or other applicable power and authority to execute, deliver and perform the terms and provisions of each of the Transaction Documents to which it is party and has taken all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Transaction Documents.

 

(b)                                 Each Obligor has duly executed and delivered each of the Transaction Documents to which it is party, and each of such Transaction Documents constitutes the legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, except to the extent that the enforceability thereof may be limited by 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)                                  Each of the Security Documents creates in favour of the Security Agent for the benefit of the Secured Parties a legal, valid and enforceable fully perfected first priority security interest in and Security on all right, title and interest of the Obligors party thereto in the Security Assets described therein, subject only to Other Permitted Security.  No filings or recordings are required in order to perfect the security interests created under any Security Document or to ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document in each case, except for filings or recordings which shall have been made or will be made, in accordance with Schedule 2 (Conditions Precedent).

 

(d)                                 None of the Obligors has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made, in accordance with Schedule 2 (Conditions Precedent).

 

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18.4                        Pari passu ranking

 

Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

 

18.5                        No Violation

 

Neither the execution, delivery or performance by any Obligor of the Transaction Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will:

 

(a)                                 contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality;

 

(b)                                 conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Security (except Other Permitted Security) upon any of the material properties or assets of such Obligor pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which such Obligor is a party or by which it or any of its material property or assets is bound or to which it may be subject; or

 

(c)                                  violate any provision of the Constitutional Documents of such Obligor.

 

18.6                        Governmental Approvals

 

No Authorization or validation of, or filing, recording or registration with (except as have been obtained or made or, in the case of any filings or recordings in respect of the Security Documents, will be made within 10 days of the date such Security Document is required to be executed pursuant hereto), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with:

 

(a)                                 the execution, delivery and performance by any Obligor of any Finance Document to which it is a party; or

 

(b)                                 the legality, validity, binding effect or enforceability of any Finance Document to which it is a party.

 

18.7                        Financial Statements; Financial Condition; Undisclosed Liabilities

 

(a)                                 The audited consolidated balance sheets of the Parent Guarantor as at December 31, 2015 and the related consolidated statements of income and cash flows for the fiscal year ended on such date and (ii) the unaudited consolidated balance sheets of the Parent Guarantor as at March 31, 2016 and the related consolidated statements of income and cash flows, in each case for such quarterly accounting period, reported on by and accompanied by, in the case of the audited annual financial statements, an unqualified report from an Acceptable Accounting Firm, present fairly the consolidated financial condition of the Parent Guarantor as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended.  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein).  Neither the Parent Guarantor nor any of its 

 

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Subsidiaries has any material guarantee obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the financial statements referred to in the preceding sentence (it being understood that with respect to guarantee obligations, the underlying debt is so reflected).

 

(b)                                 Except as fully disclosed in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 (Financial statements), there were as of the date of this Agreement no liabilities or obligations with respect to the Parent Guarantor or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole.  As of the date of this Agreement, none of the Obligors knows of any basis for the assertion against it of any liability or obligation of any nature that is not fairly disclosed (including, without limitation, as to the amount thereof) in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 (Financial statements) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole.

 

(c)                                  The Projections delivered by the Parent Guarantor to the Facility Agent and the Lenders prior to the date of this Agreement have been prepared in good faith and are based on GAAP and reasonable assumptions, and there are no statements or conclusions in such Projections which are based upon or include information known to the Parent Guarantor on  the date of this Agreement to be misleading in any material respect or which fail to take into account material information known to the Parent Guarantor on the date of this Agreement regarding the matters reported therein.  On the date of this Agreement, the Parent Guarantor believes that such Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results included in such Projections.

 

(d)                                 Since December 31, 2015 (or as the case may be, the date of the latest audited consolidated balance sheets of the Parent Guarantor provided to the Facility Agent pursuant to this Agreement), nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

 

18.8                        Litigation

 

Except as set forth in the most recent S-1 Registration Statement of the Parent Guarantor (filed with the SEC on June 22, 2015), there are no actions, suits, investigations (conducted by any governmental or other regulatory body of competent jurisdiction) or proceedings pending or, to the knowledge of the Parent Guarantor or the Borrower, threatened against the Parent Guarantor or any of its Subsidiaries (i) with respect to the Finance Documents; or (ii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

18.9                        True and Complete Disclosure

 

All factual information (taken individually or as a whole) furnished by or on behalf of the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender (including, without limitation, all information contained in the Transaction Documents and the Merger Agreement and any financial statement referred to in Clause 19.2 (Financial statements) for purposes of or in connection with this Agreement, the other Finance Documents or any 

 

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transaction contemplated herein or therein is, and all other such factual information (taken individually or as a whole) hereafter furnished by or on behalf of the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender will be, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided and copies of the Shipbuilding Contracts and the Merger Agreement are the full, complete and true copies of such documents and do not omit any addenda, amendments or supplements thereto.

 

18.10                 Use of Proceeds; Margin Regulations

 

(a)                                 All proceeds of the Loan shall be used in accordance with Clause 3.1 (Purpose).

 

(b)                                 No part of the proceeds of the Loan shall be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of the Loan nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations.

 

(c)                                  No proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party in a manner that would result in a violation of Sanctions, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions.

 

(d)                                 No payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions.

 

18.11                 Tax Returns and Payments

 

(a)                                 All payments which an Obligor is liable to make under the Finance Documents to which it is a party can properly be made without deduction or withholding for or on account of any Tax payable under any law of any relevant jurisdiction applicable as of the date of this Agreement.

 

(b)                                 The Parent Guarantor and each of its Subsidiaries has timely filed with the appropriate taxing authorities all material U.S. federal income tax returns, statements, forms and reports for taxes and all other material U.S., the United Kingdom, and non-U.S. tax returns, statements, forms and reports for taxes required to be filed by or with respect to the income, properties or operations of the Parent Guarantor and/or any of its Subsidiaries (the  “Returns”).  All such Returns accurately reflect in all material respects all liability for taxes of the Parent Guarantor and its Subsidiaries as a whole for the periods covered thereby.  The Parent Guarantor and each of its Subsidiaries have paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all Taxes shown as due on all such Returns and all other material U.S. federal, state and the United Kingdom and non-U.S. Taxes that have become due and payable.

 

(c)                                  There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Parent Guarantor or any of its Subsidiaries, threatened by any authority regarding any Taxes relating to the Parent Guarantor or any of its Subsidiaries.

 

(d)                                 As of the date of this Agreement, neither the Parent Guarantor nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of the Parent Guarantor or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Parent Guarantor or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.

 

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(e)                                  Neither the Parent Guarantor nor any of its Subsidiaries (i) has engaged in any “listed transaction” within the meaning of Section 6011 of the Code or (ii) has any actual or potential liability for the taxes of any person (other than the Parent Guarantor or any of its present or former Subsidiaries) under the United States Treasury regulation Section 1.1502-6 (or any similar provision of state, local, foreign or provincial law).

 

18.12                 Compliance with ERISA

 

(a)                                 Schedule 9 (ERISA Plans and contributions) sets forth, as of the date of this Agreement, each Plan.

 

(b)                                 With respect to each Plan, other than any Multiemployer Plan (and each related trust, insurance contract or fund), there has been no failure to be in substantial compliance with its terms and with all applicable laws, including without limitation ERISA and the Code, that could reasonably be expected to give rise to a Material Adverse Effect.

 

(c)                                  Each Plan, other than any Multiemployer Plan (and each related trust, if any), which is intended to be qualified under Section 401(a) of the Code has received a determination letter (or an opinion letter) from the United States Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code. No Reportable Event has occurred.

 

(d)                                 To the best knowledge of an Obligor or any of its Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer Plan is insolvent or in reorganization.

 

(e)                                  No Plan has an Unfunded Current Liability in an amount material to an Obligor or any ERISA Affiliate’s operation.  No Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has failed to satisfy minimum funding standards, or has applied for or received a waiver of the minimum funding standards or an extension of any amortization period, within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA.

 

(f)                                   With respect to each Plan (other than a Multiemployer Plan) its actuary has certified that such Plan is not an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; all contributions required to be made with respect to a Plan have been or will be timely made.

 

(g)                                  Neither any Obligor nor any of its Subsidiaries nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or expects to incur any such liability under any of the foregoing sections with respect to any Plan.

 

(h)                                 No condition exists which presents a material risk to any Obligor or any of its Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code.

 

(i)                                     No proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan (in the case of a Multiemployer Plan, to the best knowledge of any Obligor or any of its Subsidiaries or ERISA Affiliates) which is subject to Title IV of ERISA.

 

(j)                                    No action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, or, to the best knowledge of any Obligor or any of its Subsidiaries,

 

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expected or threatened which could reasonably be expected to have a Material Adverse Effect.

 

(k)                                 Using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, each of the Obligors and its Subsidiaries and ERISA Affiliates would have no liabilities to any Plans which are Multiemployer Plans in the event of a complete withdrawal therefrom in an amount which could reasonably be expected to have a Material Adverse Effect.

 

(l)                                     Neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received any notice that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA.

 

(m)                             Each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the any Obligor, any of its Subsidiaries, or any ERISA Affiliate has at all times been operated in material compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code.

 

(n)                                 No lien imposed under the Code or ERISA on the assets of any Obligor or any of its Subsidiaries or any ERISA Affiliate exists nor has any event occurred which could reasonably be expected to give rise to any such lien on account of any Plan.

 

(o)                                 Each Obligor and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA) which provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan the obligations with respect to which could reasonably be expected to have a Material Adverse Effect.

 

(p)                                 Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities.  All contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made.  Neither any Obligor nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan that could reasonably be expected to have a Material Adverse Effect.  Neither any Obligor nor any of its Subsidiaries maintains or contributes to any Foreign Pension Plan the obligations with respect to which could in the aggregate reasonably be expected to have a Material Adverse Effect.

 

18.13                 Subsidiaries

 

(a)                                 On the first Utilisation Date, the Parent Guarantor has no Subsidiaries other than those Subsidiaries listed on Schedule 10 (Subsidiaries) (which Schedule identifies the correct legal name, direct owner, percentage ownership and jurisdiction of organization of each such Subsidiary on the date hereof).  On the first Utilisation Date, all outstanding capital stock, membership interests, partnership interests, units or other form of equity, of each class outstanding, of each of the Subsidiaries listed on Schedule 10 (Subsidiaries) has been validly issued, is fully paid and non-assessable (to the extent applicable) and, except in the case of the Parent Guarantor, is owned beneficially and of record by a Obligor free and clear of all Security other than Other Permitted Security.

 

(b)                                 Each of the Owner Guarantors is a wholly-owned Subsidiary of the Borrower.

 

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18.14                 Compliance with Statutes, etc.

 

The Parent Guarantor and each of its Subsidiaries are in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such non-compliances that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

18.15                 Investment Company Act

 

Neither the Parent Guarantor, nor any of its Subsidiaries, is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

18.16                 Anti-Money Laundering; Anti-Corruption

 

(a)                                 Each Obligor, as well as their respective subsidiaries, directors and officers, have conducted and are conducting its businesses in compliance with Anti-Bribery and Corruption Laws and in particular:

 

(i)            no part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended; and

 

(ii)           no Obligor, nor their subsidiaries, respective directors, officers, or to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, employees, agents or representatives has made or agreed to make any contribution, payment, gift or entertainment to, or accepted or received any contributions, payments, gifts or entertainment from, any government official, employee, political party or agent or any candidate for any federal, state, local or foreign public office, where either the contribution, payment or gift or the purpose thereof was illegal under the laws of any federal, state, local or foreign jurisdiction.

 

(b)                                 Each Obligor as well as their respective directors and officers, complies with any applicable law or regulation implemented to combat “money laundering”, including without limitation the PATRIOT Act and the Bank Secrecy Act.

 

18.17                 Sanctions

 

(a)                                 To the extent applicable, each Obligor is in compliance, in all material respects, with:

 

(i)            all United States laws relating to terrorism or money laundering, including Executive order No. 13224 on Terrorist Financing, effective September 24, 2011 (the “Executive Order”); and

 

(ii)           the PATRIOT Act.

 

(b)                                 The Parent Guarantor does not (i) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (ii) engage in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempting to violate any of the prohibitions set forth in any United States anti-terrorism laws.

 

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(c)                                  Each Obligor has implemented and maintains in effect policies and procedures designed to ensure compliance by each such Obligor, its subsidiaries and their respective directors, officers, and to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, its employees, agents and representatives with all Sanctions and each Obligor, its subsidiaries and their respective directors, officers and to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, its employees, agents and representatives, are in compliance with Sanctions and are not engaged in any activity that would reasonably be expected to result in such Obligor being designated as a Restricted Party or otherwise violate or contravene any Sanctions.

 

(d)                                 No Obligor, nor any of an Obligor’s respective directors, officers, or to the knowledge (actual, implied or constructive) of each such Obligor after making due and careful enquiries, employees, agents or representatives (i) is a Restricted Party, is involved in any transaction through which it is reasonably likely to become a Restricted Party, or is involved in any transaction involving any Restricted Party, or (ii) is owned or controlled by or is acting directly or indirectly on or on behalf of a Restricted Party, (iii) owns or controls a Restricted Party or (iv) has received notice of or is aware of any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.

 

18.18                 Pollution and Other Regulations

 

(a)                                 Each of the Parent Guarantor and its Subsidiaries is in compliance with all applicable Environmental Laws governing its business, except for such failures to comply as are not reasonably likely to have a Material Adverse Effect, and neither the Parent Guarantor nor any of its Subsidiaries is, to the knowledge of the Parent Guarantor or the Borrower, liable for any penalties, fines or forfeitures for failure to comply with any of the foregoing except for such penalties, fines or forfeitures as are not reasonably likely to have a Material Adverse Effect.

 

(b)                                 All licenses, permits, registrations or approvals required for the business of the Parent Guarantor and each of its Subsidiaries, as conducted as of the date of this Agreement, under any Environmental Law have been secured and each of the Parent Guarantor and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as are not reasonably likely to have a Material Adverse Effect.

 

(c)                                  Neither the Parent Guarantor nor any of its Subsidiaries is in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree pursuant to any Environmental Law, to which the Parent Guarantor or such Subsidiary is a party or which would affect the ability of the Parent Guarantor or such Subsidiary to operate any Ship, Real Property or other facility and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, as such noncompliance, breaches or defaults as are not likely to, individually or in the aggregate, have a Material Adverse Effect.

 

(d)                                 There are, as of the date of this Agreement, no Environmental Claims pending or, to the knowledge of the Parent Guarantor or the Borrower, threatened, against the Parent Guarantor or any of its Subsidiaries in respect of which an unfavourable decision, ruling or finding would be reasonably likely to have a Material Adverse Effect.

 

(e)                                  There are no facts, circumstances, conditions or occurrences on any Ship, Real Property or other facility owned or operated by the Parent Guarantor or any of its Subsidiaries that are reasonably likely (i) to form the basis of an Environmental Claim against the Parent Guarantor, any of its Subsidiaries or any Ship, Real Property or other facility owned by the 

 

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Parent Guarantor or any of its Subsidiaries, or (ii) to cause such Ship, Real Property or other facility to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case for clauses (i) and (ii) above, such Environmental Claims or restrictions that individually or in the aggregate are not reasonably likely to have a Material Adverse Effect.

 

(f)                                   Hazardous Materials have not at any time prior to the date of this Agreement, been (i) generated, used, treated or stored on, or transported to or from, any Ship, Real Property or other facility at any time owned or operated by the Parent Guarantor or any of its Subsidiaries or (ii) released on or from any such Ship, Real Property or other facility, except in each case for clauses (i) and (ii) above where such occurrence or event, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

This Clause 18.18 (Pollution and Other Regulations) contains the sole and exclusive representations and warranties of the Obligors with respect to environmental, health and safety matters, including any relating to or arising under Environmental Laws, Environmental Claims or Hazardous Materials.

 

18.19                 Labor Relations

 

Neither the Parent Guarantor nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect and there is (a) no unfair labor practice complaint pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against any of them before the National Labor Relations Board, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against any of them, (b) no strike, labor dispute, slowdown or stoppage pending against the Parent Guarantor or any of its Subsidiaries or, to the Parent Guarantor’s knowledge, threatened against the Parent Guarantor or any of its Subsidiaries and (c) no union representation proceeding pending with respect to the employees of the Parent Guarantor or any of its Subsidiaries, except (with respect to the matters specified in clauses (a), (b) and (c) above) as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

18.20                 Patents, Licenses, Franchises and Formulas

 

The Parent Guarantor and each of its Subsidiaries owns, or has the right to use, and has the right to enforce and prevent any third party from using, all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others, except for such failures and conflicts which could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

18.21                 Financial Indebtedness

 

Schedule 11 (Financial Indebtedness) sets forth a true and complete list of all Financial Indebtedness of the Parent Guarantor and its Subsidiaries as of the first Utilisation Date (other than (i) the Financial Indebtedness under the Korean Facility, the Re-financing Facility and the Blue Mountain Indebtedness and which is to remain outstanding after giving effect to the date of this Agreement) (the “Existing Indebtedness”) and (ii) the Financial Indebtedness under the Bridging Facility, in each case showing the aggregate principal 

 

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amount thereof and the name of the borrower and any other entity which directly or indirectly guarantees such debt.

 

18.22                 Insurance

 

Schedule 12 (Insurances) sets forth a true and complete listing of all insurance maintained by each Obligor with respect of the Ships, as of the date of this Agreement, with the amounts insured (and any deductibles) set forth therein.

 

18.23                 Concerning the Ships

 

The registered owner and jurisdiction of registration and flag (which shall be in an Approved Flag) of each Ship is set forth in Schedule 8 (Details of the Ships). Each Ship is and will be operated in compliance with all applicable law, rules and regulations, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or result in a material diminution in the value of such Ship.

 

18.24                 Citizenship

 

The Parent Guarantor and each other Obligor which owns or operates, or will own or operate, one or more Ships is, or will be, qualified to own and operate such Ships under the relevant Approved Flag, or will be permitted, to be flagged in accordance with the terms of the respective Ship’s Mortgage.

 

18.25                 Ship Classification Flag

 

Each Ship:

 

(a)                                 is or will be, classified in the highest class available for ships of its age and type with an Approved Classification Society, free of any conditions or recommendations, other than as permitted, or will be permitted, under the Ship’s Mortgages, and

 

(b)                                 flagged in an Approved Flag jurisdiction.

 

18.26                 No Immunity

 

The Parent Guarantor does not, nor does any other Obligor or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction.  The execution and delivery of the Finance Documents by the Obligors and the performance by them of their respective obligations thereunder constitute commercial transactions.

 

18.27                 Flags and Enforcement

 

No fees or taxes, including, without limitation, stamp, transaction, registration or similar taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Finance Documents other than recording taxes which have been, or will be, paid by the Parent Guarantor or any of its Subsidiaries as and to the extent due.  Under the laws of any Approved Flag jurisdiction,

 

(a)                                 the choice of English laws as set forth in the Finance Documents (other than the Accounts Security) which are stated to be governed by English laws; and

 

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(b)                                 the choice of the laws of the State of New York as set forth in the Accounts Security which are stated to be governed by the laws of the State of New York,

 

is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such Obligor of an agent for service of process, in each case as set forth in such Finance Documents, is legal, valid, binding and effective.

 

18.28                 Form of Documentation

 

Each of the Finance Documents is, or when executed will be, in proper legal form under the laws of the jurisdiction of the applicable Approved Flag for the enforcement thereof under such laws.  To ensure the legality, validity, enforceability or admissibility in evidence of each such Finance Document in applicable Approved Flag jurisdiction, it is not necessary that any Finance Document or any other document be filed or recorded with any court or other authority in such applicable Approved Flag jurisdiction, or notarized or executed under seal, or physically executed in any such jurisdiction, except as have been made, or will be made, in accordance with Clause 46 (Counterparts).

 

18.29                 Solvency

 

After giving effect to:

 

(a)                                 the Loan outstanding,

 

(b)                                 the consummation of the transactions contemplated hereunder; and

 

(c)                                  the payment and accrual of all transaction costs in connection with the foregoing,

 

the Parent Guarantor and its Subsidiaries, taken as a whole, and the Borrower and its Subsidiaries, taken as a whole, are Solvent.

 

18.30                 Overseas companies

 

No Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.

 

19                                  INFORMATION UNDERTAKINGS

 

19.1                        General

 

The undertakings in this Clause 19 (Information Undertakings) remain in force throughout the Security Period unless the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders), may otherwise permit.

 

19.2                        Financial statements

 

The Parent Guarantor shall supply to the Facility Agent in sufficient copies for all the Lenders:

 

(a)                                 within 90 days after the close of each fiscal year of the Parent Guarantor (i) the audited consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of income and retained 

 

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earnings and of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified by Deloitte & Touche LLP or such other independent certified public accountants of recognized national standing reasonably acceptable to the Facility Agent, together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of the Parent Guarantor and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge of any Default or Event of Default pursuant to the Financial Covenants, which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.

 

(b)                                 Within 45 days after the close of the first three quarterly accounting periods in each fiscal year of the Parent Guarantor, (i) the unaudited consolidated balance sheets of the Parent Guarantor and its Subsidiaries as at the end of such quarterly accounting period and the related unaudited consolidated statements of income and cash flows, in each case for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, and in each case, setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the senior financial officer of the Parent Guarantor, subject to normal year-end audit adjustments and (ii) management’s discussion and analysis of the important operational and financial developments during the fiscal quarter and year-to-date periods.

 

(c)                                  As soon as available but not more than 30 days after the commencement of each fiscal year of the Parent Guarantor, cash flow projections (including a balance sheet and statement of profit and loss and cash flow) of the Parent Guarantor and its Subsidiaries in reasonable detail for the fiscal year in which such cash flow projections are actually delivered and the following three fiscal years.

 

(d)                                 Together with delivery of the compliance certificates described in Clause 19.3(a) (Compliance certificate) required in connection with each fiscal quarter in each fiscal year of the Parent Guarantor, and at any other time within thirty-three (33) days of the written request of the Facility Agent, valuations of each of the Ships dated no more than 14 Business Days prior to the delivery thereof, in form and substance reasonably satisfactory to the Facility Agent and from two Approved Appraisers stating the then current Fair Market Value of each of the Ships. All such valuations shall be conducted by, and made at the expense of, the Borrower (it being understood that the Facility Agent may and, at the request of the Required Lenders, shall, upon notice to the Borrower, obtain such valuations and that the cost of all such valuations will be for the account of the Borrower); provided that, unless an Event of Default shall then be continuing, in no event shall the Borrower be required to pay for more than four Appraisals of each Ship obtained by the Facility Agent (which shall for the avoidance of doubt, not include any valuations required to be provided by the Borrower under this Clause) pursuant to this paragraph (d) in any single fiscal year of the Borrower, with the cost of any such Appraisals obtained by the Facility Agent in excess thereof to be paid by the Lenders on a pro rata basis.

 

Notwithstanding the foregoing, the required financial statements of the Parent Guarantor shall be deemed to have furnished to the Facility Agent if the Parent Guarantor has filed such reports and information with the SEC via the EDGAR system (or any successor system) and such reports and information are publicly available.

 

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19.3                        Compliance Certificate

 

(a)                                 At the time of the delivery of the financial statements provided for in Clauses 19.2(a) and (b) (Financial Statements), a certificate of the senior financial officer of the Parent Guarantor in the form of Schedule 7 (Compliance Certificate) to the effect that, to the best of such officer’s knowledge, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall:

 

(i)            set forth the calculations required to establish whether the Parent Guarantor was in compliance with the Financial Covenants at the end of such fiscal quarter or year, as the case may be; and

 

(ii)           certify that there have been no changes to Schedule 10 (Subsidiaries) since the first Utilisation Date or, if later, since the date of the most recent certificate delivered pursuant to this Clause 19.3 (Compliance Certificate) or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this paragraph (ii).

 

(b)                                 At the time of a disposal of any Ship, a certificate of a senior financial officer of the Parent Guarantor which certificate shall:

 

(i)            certify on behalf of the Parent Guarantor the last valuation received pursuant to Clause 19.2(d) (Financial Statements) determining the Aggregate Collateral Vessel Value, after giving effect to such disposition(s) and/or showing the individual Fair Market Value of all Ships owned by the Owner Guarantors which have not been sold, transferred, lost or otherwise disposed of at such time; and

 

(ii)           set forth the calculations required to establish whether the Parent Guarantor is in compliance with the provisions of Clause 25.1 (Minimum required security cover)after giving effect to such disposition.

 

19.4                        Information: miscellaneous

 

Each Obligor shall and shall procure that each other Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders and to Sinosure, if the Facility Agent so requests):

 

(a)                                 promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Parent Guarantor or any of its Subsidiaries shall file with the SEC (or any successor thereto) or deliver to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor).

 

(b)                                 promptly upon, and in any event within five Business Days after, without duplication of any other reporting requirements herein, receipt of any notices of default, financial reporting and collateral reporting under the Re-financing Facility, and copies of all effectuated additions, amendments, restatements, supplements or other modifications in respect of the Re-financing Facility documents.

 

(c)                                  promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it (including without limitation compliance with FATCA) or as may be required by any regulatory authority.

 

(d)                                 promptly upon, and in any event within fifteen Business Days after, the Parent Guarantor obtains knowledge thereof, written notice of any of the following environmental matters occurring after the date of this Agreement, except to the extent that such environmental 

 

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matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:

 

(i)            any Environmental Claim pending or threatened in writing against the Parent Guarantor or any of its Subsidiaries or any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries;

 

(ii)           any condition or occurrence on or arising from any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries that (a) results in material noncompliance by the Parent Guarantor or such Subsidiary with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Parent Guarantor or any of its Subsidiaries or any such Ship or property;

 

(iii)          any condition or occurrence on any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries that could reasonably be expected to cause such Ship or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Parent Guarantor or such Subsidiary of such Ship or property under any Environmental Law;

 

(iv)                              the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Ship or property owned or operated or occupied by the Parent Guarantor or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Parent Guarantor shall deliver to the Facility Agent all material notices received by the Parent Guarantor or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA or OPA; and

 

(v)                                 all such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Parent Guarantor’s or such Subsidiary’s response thereto. In addition, the Parent Guarantor will provide the Facility Agent with copies of all material communications with any government or governmental agency and all material communications with any person relating to any Environmental Claim of which notice is required to be given pursuant to this Clause 21.4 (Ownership of Subsidiaries), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Facility Agent or the Required Lenders;

 

(e)                                  promptly after Parent Guarantor’s or any of its Subsidiaries’ receipt thereof, a copy of any “management letter” received from its certified public accountants and management’s response thereto;

 

(f)                                   promptly and in any event within five Business Days after any Obligor obtains actual knowledge thereof, the relevant party shall supply to the Facility Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions by any Sanctions Authority against it, any of its Subsidiaries, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation and (ii) notice that any Obligor, any of its Subsidiaries or any of its direct or indirect owners, or any of their respective directors, officers, employees agents or representatives has become or is likely to become a Restricted Party or becomes involved in any transaction involving a Restricted Party; and

 

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(g)                                  from time to time, such other information or documents (financial or otherwise) with respect to the Parent Guarantor or its Subsidiaries as the Facility Agent or the Lenders (through the Facility Agent) may reasonably request in writing.

 

19.5                        “Know your customer” checks

 

(a)                                 If:

 

(i)            the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

(ii)           any change in the status of an Obligor (including, without limitation, a change of ownership of an Obligor) after the date of this Agreement; or

 

(iii)          a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

 

obliges a Finance Party (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) (such documentation and evidence to include without limitation, constitutional documents and certificates of good standing of a company, officer’s certificates setting out the names of a company’s directors and/or officers, copies of passports and address proofs of such directors and/or officers) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

(b)                                 Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

19.6                        Notification of Event of Default

 

Promptly, and in any event within three Business Days after the Parent Guarantor obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Parent Guarantor proposes to take with respect thereto, (ii) any litigation or governmental investigation or proceeding pending or threatened in writing against the Parent Guarantor or any of its Subsidiaries which, if adversely determined, could reasonably be expected to have a Material Adverse Effect on any Finance Document and (iii) any Total Loss in respect of any Ship.

 

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20                                  FINANCIAL COVENANTS

 

20.1                        General

 

The undertakings in this Clause 20 (Financial Covenants) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

20.2                        Debt Service Coverage Ratio

 

The Parent Guarantor will not permit the Debt Service Coverage Ratio for any Test Period ending on or after 31 March 2016 to be less than 1.10:1.00.

 

20.3                        Minimum Consolidated Liquidity

 

The Parent Guarantor will not permit at any time the cash and Cash Equivalents (which shall include funds on deposit in (i) any Debt Service Reserve Account and (ii) the debt service reserve account under the Korean Facility, each valued at 50% of par) held by the Parent Guarantor and its Subsidiaries to be less than the greatest of:

 

(a)                                 $50,000,000;

 

(b)                                 5.0% of Total Indebtedness; and

 

(c)                                  $1,500,000 per delivered Ship,

 

provided that, at all times, Unrestricted Cash and Cash Equivalents shall be no less than $25,000,000.

 

20.4                        Maximum Consolidated Leverage

 

The Parent Guarantor will not permit the Consolidated Leverage Ratio to be greater than 0.65 to 1.00 on the last day of any Test Period ending on or after 31 March 2016.

 

21                                  GENERAL UNDERTAKINGS

 

21.1                        General

 

The undertakings in this Clause 21 (General Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

21.2                        Corporate Franchises

 

The Parent Guarantor will, and will cause each of its Subsidiaries, to do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business, except, in the case of any Subsidiary of the Parent Guarantor that is not an Owner Guarantor, which could not be reasonably expected to have a Material Adverse Effect; provided, however, that nothing in this Clause 21.2 (Corporate Franchises) shall prevent:

 

(a)                                 sales or other dispositions of assets, consolidations or mergers by or involving the Parent Guarantor or any of its Subsidiaries which are permitted in accordance with Clause 21.23 (Merger) or Clause 21.22 (Disposals);

 

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(b)                                 any Owner Guarantor from changing the jurisdiction of its organization to the extent permitted by Clause 21.31(c)(vii) (Limitation on Certain Requirements on Subsidiaries); or

 

(c)                                  the abandonment by the Parent Guarantor or any of its Subsidiaries of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.

 

21.3                        Compliance with laws

 

Each Obligor will:

 

(a)                                 comply with all applicable statutes, regulations and orders of, and all applicable restrictions (including all laws and regulations relating to money laundering) imposed by, all governmental bodies, domestic or foreign, (i) in respect of the conduct of its business and the ownership of its property, except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) applicable to each Ship, its ownership, employment, operation, management and registration, including the ISM Code, ISPS Code, all material Environmental Laws, all Sanctions and the laws of the relevant Approved Flag;

 

(b)                                 obtain, comply with, and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

 

(c)                                  without limiting paragraph (a) above, not employ any Ship, nor allow its employment, operation or management in any manner contrary to any applicable law or regulation, including, but not limited to the ISM Code, the ISPS Code, all applicable Environmental Laws except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and all Sanctions.

 

21.4                        Ownership of Subsidiaries

 

(a)                                 Other than “director qualifying shares”, the Parent Guarantor shall at all times directly or indirectly own 100% of the Equity Interests of the Borrower and each of the Owner Guarantors.

 

(b)                                 The Parent Guarantor shall cause each Owner Guarantor to at all times be directly owned by one or more of the Obligors.

 

(c)                                  The Parent Guarantor will cause each Ship to be owned at all times by a single Owner Guarantor that owns no other Ships.

 

21.5                        Environmental claims

 

(a)                                 The Parent Guarantor will, and will cause each of its Subsidiaries to, comply with all Environmental Laws applicable to the ownership or use of any Ship or any other ship or property now or hereafter owned or operated by the Parent Guarantor or any of its Subsidiaries, will within a reasonable time period pay or cause to be paid all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and will keep or cause to be kept all such Ships or other ships or property free and clear of any Securities imposed pursuant to such Environmental Laws, in each of the foregoing cases, except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  None of the Parent Guarantor, any of Subsidiaries of the Parent Guarantor will generate, use, treat, store, 

 

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release or dispose of, or permit the generation, use, treatment, storage, release or disposal of, Hazardous Materials on any Ship or other ship or property now or hereafter owned or operated or occupied by the Parent Guarantor, any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property except in material compliance with all applicable Environmental Laws and as reasonably required by the trade in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Parent Guarantor will, and will cause each of its Subsidiaries to, maintain insurance on the Ships and any other Ship in at least such amounts as are in accordance with normal industry practice for similarly situated insureds, against losses from oil spills and other environmental pollution.

 

(b)                                 At the written request of the Facility Agent or the Required Lenders, the Parent Guarantor or the Borrower will provide, at the Parent Guarantor or the Borrower’s sole cost and expense, an environmental assessment of any Ship by an Approved Classification Society.  If said classification society, in its assessment, indicates that such Ship is not in compliance with the Environmental Laws, said society shall set forth potential costs of the remediation of such non-compliance; provided that such request for an assessment may be made only if:

 

(i)            there has occurred and is continuing an Event of Default;

 

(ii)           the Facility Agent or the Required Lenders reasonably and in good faith believe that the Parent Guarantor, any of its Subsidiaries or any such Ship is not in compliance with Environmental Law and such non-compliance could reasonably be expected to have a Material Adverse Effect; or

 

(iii)          the Facility Agent or the Required Lenders reasonably and in good faith believe that circumstances exist that reasonably could be expected to form the basis of an material Environmental Claim against the Parent Guarantor or any of its Subsidiaries or any such Ship.  If the Parent Guarantor or the Borrower fails to provide the same within ninety (90) days after such request was made, the Facility Agent may order the same and the Parent Guarantor or the Borrower shall grant and hereby grants to the Facility Agent and the Lenders and their agents reasonable access to such Ship and specifically grants the Facility Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at the Parent Guarantor or the Borrower’s expense.

 

21.6                        Maintenance of Property; Insurance

 

The Parent Guarantor will, and will cause each of its Subsidiaries to:

 

(a)                                 keep all material property necessary in its business in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted);

 

(b)                                 maintain insurance with respect to property that is not Ships in at least such amounts and against at least such risks as are in accordance with normal industry practice for similarly situated insureds;

 

(c)                                  maintain the Required Insurance with respect to the Ships at all times; and

 

(d)                                 furnish to the Facility Agent, at the written request of the Facility Agent or any Lender (through the Facility Agent), a complete description of the material terms of insurance carried, or, at the Borrower’s option, copies of such policies.

 

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21.7                        Taxation

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, pay and discharge, all material taxes, assessments and governmental charges or levies that become due and payable which are imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Security not otherwise permitted under Clause 21.21 (Negative pledge), provided that neither the Parent Guarantor nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

 

21.8                        Performance of obligations

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Finance Documents) by which it is bound except to the extent waived by the parties thereto and where such non-compliance could reasonably be expected to have a Material Adverse Effect.

 

21.9                        Use of Proceeds; Margin Regulations

 

The Parent Guarantor will procure that:

 

(a)                                 all proceeds of the Loan shall be used in accordance with Clause 3.1 (Purpose);

 

(b)                                 no part of the proceeds of the Loan shall be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock.  Neither the making of the Loan nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations;

 

(c)                                  no proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party in a manner that would result in a violation of Sanctions, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions; and

 

(d)                                 no payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions.

 

21.10                 [Intentionally Deleted]

 

21.11                 Books, Records and Inspections

 

The Parent Guarantor will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with GAAP and all requirements of law, shall be made of all dealings and transactions in relation to its business.  The Parent Guarantor will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Facility Agent and the Lenders as a group to visit and inspect, during regular business hours and under guidance of officers of the Parent Guarantor or any of its Subsidiaries, any of the properties of the Parent Guarantor or its Subsidiaries, and to examine the books of account of the Parent Guarantor or such Subsidiaries and discuss the affairs, finances and accounts of the Parent Guarantor or such Subsidiaries with, and be advised as to the same by, its and their officers and, in the presence of the Parent Guarantor, independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Facility Agent or the Required Lenders may request; provided that, unless an Event of 

 

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Default exists and is continuing at such time, the Facility Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Parent Guarantor.

 

21.12                 Conduct of business

 

The Parent Guarantor will, and will procure that each Owner Guarantor will:

 

(a)                                 maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Owner Guarantors;

 

(b)                                 maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or otherwise identify their assets and liabilities separate and distinct from the assets and liabilities of the other Owner Guarantors;

 

(c)                                  not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Owner Guarantors;

 

(d)                                 observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Constitutional Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings;

 

(e)                                  except as permitted by Clause 21.23(Merger), not be consensually merged or consolidated with the other Owner Guarantors (other than for financial reporting purposes);

 

(f)                                   procure that all transactions, agreements and dealings between the Parent Guarantor and the Owner Guarantors (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;

 

(g)                                  ensure that transactions between any of the Borrower and the Owner Guarantors, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Owner Guarantor, as applicable, as an entity separate and distinct from the Borrower or such Owner Guarantor, as applicable; and

 

(h)                                 in respect of each Owner Guarantor, refer to the Parent Guarantor as a department or division of such Owner Guarantor and will not otherwise refer to the Parent Guarantor in a manner inconsistent with its status as a separate and distinct legal entity.

 

21.13                 [Intentionally left blank]

 

21.14                 Loan proceeds

 

The Borrower will use the proceeds of the Loan only as provided in Clause 3.1 (Purpose).

 

21.15                 Charters

 

In connection with any Charter in respect of a Ship having an indicated duration of at least 12 months (including any optional extensions or renewals) entered or to be entered into by the relevant Owner Guarantor owning that Ship with a charterer (other than a member of Group) or any Charter of any duration entered into or to be entered into by the relevant Owner Guarantor owning that Ship with a charterer who is a member of the Group, the 

 

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relevant Owner Guarantor shall, at its own cost and expense, promptly and duly execute and deliver to the Security Agent a notice of the assignment in respect of such charter contained in the General Assignment, and will procure that such charterer executes and deliver to the Security Agent a consent and acknowledgement to such assignment in form and substance reasonably satisfactory to the Facility Agent (in the case where such charterer is a member of the Group) and in all other cases, use all commercially reasonable efforts to procure that such charterer executes and delivers to the Security Agent such consent and acknowledgment to such assignment.

 

21.16                 Sanctions

 

(a)                                 Each Obligor shall ensure that none of it, nor any of its directors or officers, and shall use its best efforts to ensure that none of its employees, agents or representatives or any other person acting on any of their behalf is or will become a Restricted Party, or is or will become involved in any transaction involving a Restricted Party.

 

(b)                                 Each Obligor shall to the best of its knowledge and ability, ensure that it is not owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of a Restricted Party, does not and will not own or control a Restricted Party, and is not and will not become involved in any transaction involving a Restricted Party.

 

(c)                                  Each Obligor shall ensure that its assets (including without limitation, each Ship) shall not be used directly or indirectly:

 

(i)            by or for the direct or indirect benefit of a Restricted Party;

 

(ii)           in any trade which is prohibited under Sanctions or which could expose any Obligor, any such Obligor’s assets, or any Secured Party to enforcement proceedings or any other consequences whatsoever arising from Sanctions.

 

21.17                 [Intentionally left blank]

 

21.18                 [Intentionally left blank]

 

21.19                 ERISA

 

(a)                                 As soon as reasonably possible and, in any event, within ten days after the Parent Guarantor or any of its Subsidiaries or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, the Parent Guarantor will deliver to the Facility Agent, with sufficient copies for each of the Lenders, a certificate of the senior financial officer of the Parent Guarantor setting forth the full details as to such occurrence and the action, if any, that the Parent Guarantor, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Parent Guarantor, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto:

 

(i)            that a Reportable Event has occurred (except to the extent that the Parent Guarantor has previously delivered to the Facility Agent a certificate and notices (if any) concerning such event pursuant to the next clause hereof);

 

(ii)           that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation 

 

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Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days;

 

(iii)          that a failure to satisfy minimum funding requirements, within the meaning of Section 412 of the Code or Section 302 of ERISA, has occurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required instalment payments) or an extension of any amortization period under Section 412 or 430 of the Code or Section 302 or 303 of ERISA with respect to a Plan;

 

(iv)          that the actuary of a Plan (other than a Multiemployer Plan) has or will certify that the Plan is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA;

 

(v)           that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA;

 

(vi)          that any contribution required to be made with respect to a Plan or Foreign Pension Plan has not been timely made and such failure could result in a material liability for the Parent Guarantor or any of its Subsidiaries;

 

(vii)         that a Plan has been or may be reasonably expected to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA with a material amount of unfunded benefit liabilities; that a Plan (in the case of a Multiemployer Plan, to the best knowledge of the Parent Guarantor or any of its Subsidiaries or ERISA Affiliates) has a material Unfunded Current Liability;

 

(viii)        that proceedings may be reasonably expected to be or have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;

 

(ix)          that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a material delinquent contribution to a Plan; that the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate will or may reasonably expect to incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 436(f), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or

 

(x)           that the Parent Guarantor, or any of its Subsidiaries may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan.

 

(b)                                 Upon request, the Parent Guarantor will deliver to the Facility Agent with sufficient copies to the Lenders:

 

(i)            a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service; and

 

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(ii)           copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA.

 

(c)                                  In addition to any certificates or notices delivered to the Lenders pursuant to subclauses (a) and (b), copies of annual reports and any records, documents or other information required to be furnished to the PBGC, and any notices received by the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan with respect to any circumstances or event that could reasonably be expected to result in a material liability shall be delivered to the Lenders no later than ten days after the date such annual report has been filed with the Internal Revenue Service or such records, documents and/or information has been furnished to the PBGC or such notice has been received by the Parent Guarantor, such Subsidiary or such ERISA Affiliate, as applicable.

 

21.20                 [Intentionally left blank]

 

21.21                 Negative pledge

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Security upon or with respect to any Security Assets, whether now owned or hereafter acquired, or sell any such Security Assets subject to an understanding or agreement, contingent or otherwise, to repurchase such Security Assets (including sales of accounts receivable with recourse to the Parent Guarantor or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC describing such Security or any other similar notice of Security under any similar recording or notice statute; provided that the provisions of this Clause 21.21(Negative Pledge) shall not prevent the creation, incurrence, assumption or existence of the following (any Security referred to in paragraphs (i) to (vii) (“Other Permitted Security”):

 

(i)            any inchoate Security for taxes, assessments or governmental charges or levies not yet due and payable or Securities for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

 

(ii)           any Permitted Encumbrance, and in the case where such Permitted Encumbrance is a Security imposed by law, such Security was incurred in the ordinary course of business and does not secure any Financial Indebtedness (such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar Security arising in the ordinary course of business) and:

 

(A)                               does not in the aggregate materially detract from the value of the Security Assets and does not materially impair the use thereof in the operation of the business of the Parent Guarantor or such Subsidiary; or

 

(B)                               which is being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Security Assets subject to any such Security);

 

(iii)          any Security (other than any Security imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations in each case 

 

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incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money) and any Security arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that the aggregate value of all cash and property at any time encumbered pursuant to this paragraph (iii) shall not exceed $5,000,000;

 

(iv)                              any Security in respect of seamen’s wages which are not past due and other maritime Security for amounts arising in the ordinary course of business and not yet required to be removed or discharged under the terms of the respective Mortgages; and

 

(v)                                 any bankers’ Security, rights of setoff and other similar Security existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Obligor or any of its Subsidiaries, in each case granted in the ordinary course of business in favour of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements;

 

(vi)                              any Permitted Security; and

 

(vii)         any Security arising out of any judgments, awards, decrees or attachments in respect of which the Parent Guarantor or its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review, provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed $10,000,000.

 

(b)                                 Each Obligor or any of its Subsidiaries, the Facility Agent and the Security Agent shall be authorized to take any actions deemed appropriate by it in connection with the granting of any Other Permitted Security (including, without limitation, by executing appropriate lien subordination agreements in favour of the holder or holders of such Security, in respect of the item or items of equipment or other assets subject to such Security).

 

21.22                 Disposals

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Subsidiaries to convey, sell, lease or otherwise dispose of any of the Security Assets, or enter into any sale-leaseback transactions involving any of the Security Assets, except that:

 

(i)            the Borrower and each Owner Guarantor may sell, lease or otherwise dispose of any Ship or 100% of the Equity Interest (but not part) of the Owner Guarantor owning that Ship), provided that:

 

(A)                               such sale is made on market terms at no less than Fair Market Value (as determined in accordance with the Appraisals most recently delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Clause 19.2(d)(Financial Statements) or delivered at the time of such sale to the Facility Agent by the Parent Guarantor);

 

(B)                               at least 75% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or to the respective Owner Guarantor which owned such Ship, on the date of consummation of such sale; and

 

(C)                               the Borrower shall prepay the relevant Vessel Loans as required by Clause 7.6 (Mandatory prepayment on sale or Total Loss) with the proceeds of such sale, and provided that no Default or Event of Default pursuant to Clause 

 

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27.3 (Specific obligations) exists, such prepayment may be made with the proceeds of such sale together with such other cash of the Borrower;

 

(ii)                                  the Parent Guarantor and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale); and

 

(iii)                               the Borrower and any Owner Guarantor may transfer any Security Assets (other than a ship) to any other Owner Guarantor, so long as:

 

(A)                               no Default or Event of Default then exists; and

 

(B)                               the Security Requirement are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent (acting on instructions of the Required Lenders).

 

(b)                                 To the extent the Required Lenders (or to the extent required pursuant to Clause 44 (Amendments and Waivers) all Lenders) waive the provisions of this Clause 21.22 with respect to the sale of any Security Assets, or any Security Assets is sold as permitted by this Clause 21.22 (Disposals), such Security Assets (unless sold to the Parent Guarantor or a Subsidiary of the Parent Guarantor) shall be sold free and clear of the Securities created by the Security Documents, and the Facility Agent and Security Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

 

(c)                                  Save to the extent permitted under this Agreement or otherwise permitted by the Facility Agent (acting on instructions of the Required Lenders), nothing in this Clause shall be deemed to permit an Obligor from disposing all or substantially all of its assets.

 

21.23                 Merger

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to wind up, liquidate or dissolve its affairs or enter into any transaction of merger, consolidation or amalgamation or convey, sell, lease or otherwise dispose of all or substantially all of its assets, except that:

 

(a)                                 (i) any Owner Guarantor may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Owner Guarantor, so long as (x) no Default or Event of Default then exists and (y) the Security Requirements are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent and (ii) any Subsidiary of the Parent Guarantor (other than the Borrower, any Owner Guarantor and any subsidiary thereof) may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Subsidiary (other than the Borrower, any Owner Guarantor and any subsidiary thereof) of the Parent Guarantor or the Parent Guarantor;

 

(b)                                 following a Security Assets Disposition permitted by this Agreement, the Owner Guarantor which owned the Ship that is the subject of such Security Assets Disposition may dissolve, provided that (i) the Borrower shall prepay the relevant Vessel Loan as required by Clause 7.6 (Mandatory prepayment on sale or Total Loss), (ii) all of the proceeds of such dissolution shall be paid only to an Obligor and (iii) no Default or Event of Default is continuing unremedied at the time of such dissolution; and

 

(c)                                  any Subsidiary which is not an Obligor may wind up, liquidate or dissolve.

 

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21.24                 Change of business

 

(a)                                 The Parent Guarantor and its Subsidiaries will not engage in any business other than the businesses in which any of them is engaged in as of the date of this Agreement (or, in the case of any Subsidiary that is formed or incorporated after the date of this Agreement, any business in which the Parent Guarantor or any other Subsidiary is engaged as of the date of this Agreement) and activities directly related thereto, and similar or related maritime businesses.

 

(b)                                 The Borrower and Owner Guarantors will not engage in any operating or business activities other than (i) ownership, management or operation of the Ships, (ii) maintenance of legal existence (including the ability to incur fees, costs, expenses and taxes relating to such management), (iii) the entering into and performance of its obligations under this Agreement and the other Finance Documents and its Constitutional Documents, (iv) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group of the Parent Guarantor and its Subsidiaries, (v) holding any cash, Cash Equivalents and other property necessary or desirable in connection with or incidental to, the ownership, management and operation of the Ships, (vi) payment of Dividends, incurring Financial Indebtedness and any other activities to the extent permitted hereunder and under the other Finance Documents, (vii) providing indemnification to officers and directors and (viii) any activities incidental or reasonably related to the foregoing.

 

21.25                 Financial Indebtedness

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Financial Indebtedness other than:

 

(a)                                 Financial Indebtedness incurred pursuant to this Agreement and the other Finance Documents;

 

(b)                                 Financial Indebtedness of the Obligors incurred pursuant to (i) the Re-financing Facility in an aggregate principal amount not to exceed $581,000,000.00 at any time outstanding, less any repayments thereof made after the date hereof and (ii) the Korean Facility in an aggregate principal amount not to exceed $963,743,455.00 at any time outstanding, less any repayments thereof made after the date hereof, in each case including, for the avoidance of doubt, any swap or hedge agreement permitted thereunder in accordance with the terms thereof (including, without limitation, any swap or hedge agreement entered into by the relevant Obligor(s) for the purposes of hedging interest rate exposure thereunder);

 

(c)                                  any Hedging Agreement and Other Hedging Agreement entered into in the ordinary course of business and consistent with past practices; provided that (x) in the case of any Hedging Agreement, the term thereof does not extend beyond the relevant Termination Date and (y) in the case of any Other Hedging Agreement, the term thereof does not exceed six months and additionally, where such Hedging Agreement is an agreement to hedge interest rate fluctuations, such agreement is entered into in accordance with Clauses 8.5 (Hedging) to 8.6 (Hedging — First Right to Bid and Non-Lender Hedging Agreements) of this Agreement;

 

(d)                                 intercompany loans and advances (i) among the Obligors and (ii) made by Subsidiaries of the Parent Guarantor (other than the Obligors) to the Parent Guarantor or any other Subsidiary of the Parent; provided that any such loans or advances to an Obligor pursuant to this Clause 21.25(d) (Financial Indebtedness) shall be unsecured and subordinated to the obligations incurred hereunder of the respective Obligor pursuant to written subordination provisions on terms reasonably acceptable to the Facility Agent (acting on instructions of the Required Lenders);

 

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(e)                                  the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness);

 

(f)                                   additional Financial Indebtedness incurred by the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding; and

 

(g)                                  the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) may incur and remain liable for Financial Indebtedness not otherwise permitted under this Clause 21.25 (Financial Indebtedness) so long as (i) no Default or Event of Default exists at the time of such incurrence and after giving effect thereto and (ii) the Parent Guarantor and its Subsidiaries shall be in pro forma compliance with the financial covenants under this Agreement both before and after giving effect to the incurrence of such Financial Indebtedness.

 

21.26                 Share capital

 

(a)                                 The Parent Guarantor will not issue, and will not permit any Subsidiary to issue, any preferred stock (or equivalent equity interests) other than Qualified Preferred Stock.

 

(b)                                 The Parent Guarantor will not permit the Borrower or any Owner Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except:

 

(i)            for transfers and replacements of then outstanding shares of capital stock,

 

(ii)           for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Parent Guarantor or any of its Subsidiaries in any class of the capital stock of such Subsidiary,

 

(iii)          to qualifying directors to the extent required by applicable law,

 

(iv)          to such Person’s shareholders or in connection with any investment permitted under this Agreement, and

 

(v)           to the Borrower or another Owner Guarantor, in the case of an Owner Guarantor, or to the Parent Guarantor, in the case of the Borrower.

 

All capital stock of the Borrower or any Owner Guarantor issued in accordance with this Clause 21.26 (Share Capital) shall be delivered to the Security Agent pursuant to the Shares Security.

 

21.27                 Jurisdiction of Employment

 

The Parent Guarantor will not, and will not permit the Owner Guarantors or any third party charterer of a Ship to, employ or cause to be employed any Ship in any country or jurisdiction in which (i) the Borrower, the Owner Guarantors or such third party charterer of a Ship is prohibited by law from doing business, (ii) the Security created by the applicable Mortgage will be rendered unenforceable or (iii) the Security Agent’s foreclosure or enforcement rights will be materially impaired or hindered.

 

21.28                 Dividends

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Parent Guarantor or any of its Subsidiaries 

 

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or make any payment (other than customary out-of-pocket fees and expenses)  in respect of Blue Mountain Indebtedness (collectively, a “Restricted Payment”), except that:

 

(a)                                 (i) any Wholly-Owned Subsidiary of the Parent Guarantor (other than the Borrower, any Owner Guarantor and any subsidiary thereof) may pay Dividends to the Parent Guarantor or any Wholly-Owned Subsidiary of the Parent Guarantor, (ii) any Owner Guarantor may pay Dividends to the Borrower or any other Owner Guarantor and (iii) if the respective Subsidiary (other than the Borrower or an Owner Guarantor) is not a Wholly-Owned Subsidiary of the Parent Guarantor, such Subsidiary may pay Dividends to its shareholders generally so long as the Parent Guarantor and/or its respective Subsidiaries which own Equity Interests in the Subsidiary paying such Dividends receive at least their proportionate share thereof (based upon their relative holdings of the Equity Interests in the Subsidiary paying such cash Dividends and taking into account the relative preferences, if any, of the various classes of Equity Interests of such Subsidiary);

 

(b)                                 the Parent Guarantor may pay Dividends and cash payments may be made in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness), provided that:

 

(i)            no Default or Event of Default exists at the time of declaration of any Dividend and no Default or Event of Default pursuant to Clauses 27.2 (Non-payment), 27.3 (Specific obligations) (with respect to Clause 20 (Financial Covenants) only) or Clause 27.7 (Insolvency Event) exists at the time of payment of such Dividend or cash payment in respect of Blue Mountain Indebtedness,

 

(ii)           the aggregate amount of Restricted Payments made during the period commencing on the date of this Agreement and ending on any date of determination does not exceed 50% of the Consolidated Net Income of the Parent Guarantor for the period commencing on the date of the credit agreement relating to the Korean Facility and ending on the last day of the fiscal quarter most recently ended for which financial statements have been provided pursuant to Clause 19.2 (Financial statements) (taken as one accounting period);

 

(iii)          after giving effect to such Restricted Payments, the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries on a consolidated basis shall be no less than (A) the minimum amount required under Clause 20.3 (Minimum Consolidated Liquidity) plus (B) the Remaining Shipyard Payments plus (C) $25,000,000; and

 

(iv)          the Aggregate Collateral Vessel Value plus the aggregate fair market value of the ships acting as security under the Korean Facility and the Re-Financing Facility shall be at least 200% of the sum of (A) the then aggregate outstanding principal amount of the Loan (plus the outstanding loans under the Korean Facility and the Re-Financing Facility) minus (B) any cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries plus (C) the Remaining Shipyard Payments under this Agreement and the Korean Facility; and

 

(c)                                  the Borrower may pay or make any Dividends, provided that:

 

(i)            no Default or Event of Default exists at the time of such Dividend or would result after giving effect thereto, and

 

(ii)           before and immediately after giving effect to such Dividend, the Parent Guarantor shall be in pro forma compliance with the Financial Covenants; and

 

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(d)                                 the Parent Guarantor may make Restricted Payments provided that (i) no Default or Event of Default exists at the time of the payment thereof and (ii) such payments do not exceed the Equity Proceeds Amount at the time of such payments;

 

(e)                                  interest payments in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) may be paid through the issuance of additional Blue Mountain Indebtedness (or Permitted Blue Mountain Refinancing Indebtedness) in accordance with the terms thereof;

 

(f)                                   cash payments may be made in respect of the Blue Mountain Indebtedness with proceeds from any Permitted Blue Mountain Refinancing Indebtedness;

 

(g)                                  cash payments may be made in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) on the final maturity date of such Indebtedness;

 

(h)                                 payments in connection with the Merger in an amount not to exceed $5,000,000;

 

(i)                                     so long as no cash, Financial Indebtedness or other property of the Parent Guarantor and its Subsidiaries is being paid by the Parent Guarantor to such employees, former employees, directors or former directors in connection with such repurchase:

 

(i)            the Parent Guarantor may repurchase its outstanding Equity Interests held by its or any of its Subsidiary’s employees, former employees, directors and former directors pursuant to:

 

(A)                               that certain stock option grant agreement dated as of July 8, 2014, by and between Navig8 Group and L. Spenser Wells, as amended, supplemented or modified from time to time,

 

(B)                               that certain General Maritime, Inc. 2012 Equity Incentive Plan (as amended) and

 

(C)                               any grants or awards issued under any future management incentive plan entered into by Parent Guarantor or any of its Subsidiaries,

 

in each case, in connection with any exercise by such employees, former employees, directors or former directors to purchase the Parent Guarantor’s Equity Interest; and

 

(ii)           the Parent Guarantor may repurchase its outstanding Equity Interests in an amount equal to the value of any withholding taxes in connection with the vesting of any Equity Interests granted to its employees, former employees, directors and former directors; and

 

(j)                                    the Parent Guarantor may make cash payments in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness), provided that:

 

(i)            no Default or Event of Default exists at the time of declaration of such cash payment,

 

(ii)           the aggregate amount of cash payments made pursuant to this clause (j) made during the period commencing on the date of this Agreement and ending on any date of determination does not exceed the Excess Asset Sale Proceeds Amount,

 

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(iii)          after giving effect to such cash payments, the Unrestricted Cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries on a consolidated basis shall be no less than (A) the minimum amount required under Clause 20.3 (Minimum consolidated liquidity) plus (B) the Remaining Shipyard Payments plus (C) $25,000,000, and

 

(iv)          the Aggregate Collateral Vessel Value plus the aggregate Fair Market Value of all ships then acting as security under the Korean Facility and the Re-Financing Facility be at least 200% of the sum of (A) the then aggregate outstanding principal amount of Loans (plus the outstanding loans under the Korean Facility and the Re-Financing Facility) minus (B) any cash and Cash Equivalents of the Parent Guarantor and its Subsidiaries plus (C) the Remaining Shipyard Payments under this Agreement and the credit agreement for the Korean Facility.

 

21.29                 Chartering Arrangements

 

(a)                                 The Parent Guarantor will, and procure that each Owner Guarantor shall, only charter out the Ship owned or to be owned by it under the relevant Pool Agreement, provided that any Ship may exit such Pool Agreement and be employed under a Charter either directly with a charterer (such direct Charter, an “Other Charter”) or through entering into another Pool Agreement without the prior written consent of the Facility Agent, if, such Other Charter is for a period of at least twelve (12) months (with or without optional extensions). No such Other Charter shall be entered into by an Owner Guarantor in relation to the Ship owned by it for a period less than twelve (12) months except with the prior written consent of the Facility Agent (acting on the instructions of Lender(s) whose Contribution or Commitments in the relevant Vessel Loan relating to that Ship is at least fifty per cent of such Vessel Loan or the Commitments relating thereto, as the case may be).

 

(b)                                 The Parent Guarantor will and procure that each Owner Guarantor shall (i) provide the Facility Agent with a true, and complete copy of any Pool Agreement entered into by such Owner Guarantor in relation to the Ship owned by it; (ii) ensure that each Pool Agreement entered into by the relevant Owner Guarantor shall constitute legal and valid and binding obligations of the Owner Guarantor party thereto and shall use commercially reasonable endeavours to ensure that such Pool Agreement shall constitute the legal and valid and binding obligations of the relevant Pool Manager which is party thereto, (iii) and ensure that each Pool Agreement is assignable, and shall be assigned, to the Security Agent pursuant to the relevant General Assignment, (iv) use commercially reasonable endeavours to procure that the relevant Pool Manager to such Pool Agreement shall provide an acknowledgement in such form and substance as set out in such General Assignment (or such other form as the Security Agent may approve.

 

(c)                                  Notwithstanding anything to the contrary set forth in this Agreement and any other Finance Documents, with respect to any charter of a Ship through a Pool Manager, such charter may only be entered into between the Owner Guarantor which owns such Ship and such Pool Manager and in no event shall the Parent Guarantor or any Subsidiary thereof (other than the Owner Guarantor owning such Ship) have any obligations thereunder.

 

21.30                 Other transactions

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any of its Affiliate, other than on terms and conditions no less favourable to such Person as would be obtained by such Person at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except:

 

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(a)                                 Restricted Payments may be paid to the extent provided in Clause 21.28 (Dividends);

 

(b)                                 loans and investments may be made and other transactions may be entered into between the Parent Guarantor and its Subsidiaries to the extent permitted by Clause 21.28 (Dividends);  and Clause 21.25 (Financial Indebtedness);

 

(c)                                  as long as the Parent Guarantor has an independent compensation committee, directors’ fees as determined by such independent compensation committee and, at any time the Parent Guarantor does not have an independent compensation committee, the Parent Guarantor may pay reasonable directors’ fees;

 

(d)                                 the Parent Guarantor and its Subsidiaries may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;

 

(e)                                  the Parent Guarantor and its Subsidiaries may pay management fees which have been pre-approved by the Facility Agent (acting on instructions of the Required Lenders) to Wholly-Owned Subsidiaries of the Parent Guarantor in the ordinary course of business;

 

(f)                                   the Parent Guarantor and its Subsidiaries may enter into an Intercompany Ship Delivery Agreement;

 

(g)                                  the transactions in existence on the date of this Agreement which are listed on Schedule Schedule 13 (Existing Transactions)  shall be permitted; and

 

(h)                                 the Ship Management Agreements and the Pool Agreement.

 

21.31                 Limitation on Certain Restrictions on Subsidiaries

 

The Parent Guarantor will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to:

 

(a)                                 pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Parent Guarantor or any Subsidiary of the Parent Guarantor, or pay any Financial Indebtedness owed to the Parent Guarantor or a Subsidiary of the Parent Guarantor,

 

(b)                                 make loans or advances to the Parent Guarantor or any of the Parent Guarantor’s Subsidiaries; or

 

(c)                                  transfer any of its properties or assets to the Parent Guarantor or any of the Parent Guarantor’s Subsidiaries, except for such encumbrances or restrictions existing under or by reason of:

 

(i)            applicable law;

 

(ii)           this Agreement and the other Finance Documents;

 

(iii)          the Korean Facility and the Re-financing Facility to the extent applicable, or any refinancing thereof or amendments thereto, and the other documents related thereto;

 

(iv)          customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Parent Guarantor or a Subsidiary of the Parent Guarantor;

 

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(v)           customary provisions restricting assignment of any agreement entered into by the Parent Guarantor or a Subsidiary of the Parent Guarantor in the ordinary course of business;

 

(vi)          restrictions which are not more restrictive than those contained in this Agreement for any documents governing any Financial Indebtedness incurred after the date of this Agreement in accordance with the terms of this Agreement; and

 

(vii)         the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness).

 

21.32                 Jurisdiction of incorporation or formation; Amendment of constitutional documents

 

(a)                                 The Parent Guarantor will not, and will not permit the Borrower or any Owner Guarantor to, amend, modify or change its (i) Constitutional Documents from that provided to the Facility Agent as at the date of this Agreement or (ii) any agreement entered into by it with respect to its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to its Equity Interests, other than 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, upon not less than 30 days prior written notice to the Facility Agent and so long as no Default or Event of Default exists and is continuing, any Owner Guarantor may change its jurisdiction of organization to another jurisdiction reasonably satisfactory to the Facility Agent (acting on the instructions of the Required Lenders), provided that any Owner Guarantor that has entered into the Security Documents hereunder shall promptly take all actions reasonably deemed necessary by the Security Agent to preserve, protect and maintain, without interruption, the security interest and Security of the Security Agent in any Security Assets owned by such Owner Guarantor to the satisfaction of the Security Agent, and such Owner Guarantor shall have provided to the Facility Agent and the Lenders such opinions of counsel as may be reasonably requested by the Facility Agent to assure itself that the conditions of this proviso have been satisfied.

 

21.33                 End of Fiscal Year; Fiscal Quarter

 

The Parent Guarantor shall cause:

 

(a)                                 each of its, and each of its Subsidiaries’ fiscal years to end on December 31; and

 

(b)                                 each of its and its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year.

 

21.34                 Further assurance

 

(a)                                 The Parent Guarantor will, and will cause each of the Subsidiaries to, cause the Security Requirement to be satisfied at all times.

 

(b)                                 The Parent Guarantor, on behalf of itself and each other Obligor, will at any time and from time to time, at the expense of the Parent Guarantor or such other Obligor, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Facility Agent may reasonably require, to perfect and protect any Security granted or purported to be granted hereby or by the other Finance Documents, or to enable the Security Agent to exercise and enforce its rights and remedies with respect to any Security Assets.  Without limiting the generality of the foregoing, the Parent Guarantor will, and will cause each Obligor, execute (to the extent applicable) and 

 

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file, or cause to be filed, such financing or continuation statements under any applicable law, or amendments thereto, such amendments or supplements to the Mortgages (including any amendments required to maintain Securities granted by such Mortgages pursuant to the effectiveness of this Agreement), and such other instruments or notices, as may be reasonably necessary, or that the Facility Agent may reasonably require, to protect and preserve the Securities granted or purported to be granted hereby and by the other Finance Documents.

 

(c)                                  The Parent Guarantor, Borrower and Owner Guarantors hereby authorize the Security Agent to file one or more financing or continuation statements under any applicable law, and amendments thereto, relative to all or any part of the Collateral, without the signature of the Parent Guarantor, Borrower or any Owner Guarantor, where permitted by law.  The Security Agent will promptly send the Parent Guarantor a copy of any financing or continuation statements which it may file without the signature of the Parent Guarantor, Borrower or any Owner Guarantor and the filing or recordation information with respect thereto.

 

(d)                                 At the reasonable written request of any counterparty to Hedging Agreement entered into after the date of this Agreement (to the extent permitted under this Agreement to be entered into and secured but would not result in or create any Excluded Hedging Obligation) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Hedging Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Obligor and, at the written direction of the Security Agent, the mortgagee, shall promptly execute an amendment to each Mortgage adding obligations under such Hedging Agreement as an additional secured obligation under each Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Security Agent.

 

21.35                 Special Provisions Relating to the Blue Mountain Indebtedness

 

Notwithstanding anything to the contrary set forth in this Agreement and any other Finance Documents, the Parent Guarantor will not, and will not permit any Subsidiary to:

 

(a)                                 amend, modify, refinance or replace the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) in a manner such that the Blue Mountain Indebtedness (or such Permitted Blue Mountain Refinancing Indebtedness) will not comply with the Blue Mountain Indebtedness Requirements; or

 

(b)                                 pay any interest in respect of the Blue Mountain Indebtedness (or any Permitted Blue Mountain Refinancing Indebtedness) in cash or make any other prepayment or redemption thereof, other than as permitted pursuant to Clause 21.28 (Dividends); or

 

(c)                                  permit any vessels other than the Ships on the date hereof to be owned by Subsidiary V Inc. or any of its Subsidiaries; or

 

(d)                                 permit Subsidiary V Inc. or any of its Subsidiaries to hold cash and Cash Equivalents in excess of an amount reasonably determined by the Parent Guarantor to be necessary to fund operations of Subsidiary V Inc. and its Subsidiaries in the ordinary course of business.

 

21.36                 Overseas companies

 

Each Obligor shall promptly inform the Facility Agent if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Facility Agent regarding the recording of any Transaction 

 

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Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.

 

22                                  INSURANCE UNDERTAKINGS

 

22.1                        General

 

The undertakings in this Clause 22 (Insurance Undertakings) remain in force from the date of this Agreement throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

22.2                        Maintenance of obligatory insurances

 

(a)                                 The Borrower and each Owner Guarantor shall keep each Ship insured with insurers and protection and indemnity clubs or associations of internationally recognized reputation, and placed in such markets, on such terms and conditions, and through an Approved Insurance Broker and under forms of policies approved by the Security Agent against the risks indicated below and such other risks as the Security Agent may reasonably specify from time to time; however, in no case shall the Security Agent specify insurance in excess of the customary insurances purchased by first-class owners of comparable vessels:

 

(i)            marine and war risk, including terrorism, confiscation, London Blocking and Trapping Addendum and Missing Collateral Vessel Clause, hull and machinery insurance, hull interest insurance and freight interest insurance (in each case, on an agreed value basis), together in an amount in Dollars at all times equal to or greater than the greater of (x) the then Fair Market Value of such Ship and (y) an amount which when aggregated with such insured value of the insurances for other Ships which are then subject to a Mortgage, is equal to one-hundred twenty per cent (120%) of the aggregate principal amount of the Loan outstanding under this Agreement at such time. The insured value for hull and machinery insurances required under this clause (i) for a Ship shall at all times be in an amount equal to the greater of (x) eighty per cent (80%) of the Fair Market Value of such Ship and (y) an amount which, when aggregated with the insured value of the hull and machinery insurances of the other Ships which are then subject to a Mortgage is equal to the aggregate principal amount of the Loan outstanding under this Agreement at such time, and the remaining marine and war risk insurance required by this paragraph (i) may be taken out as hull and freight interest insurance;

 

(ii)           marine and war risk protection and indemnity insurance or equivalent insurance (including coverage against liability for crew, fines and penalties arising out of the operation of such Ship, insurance against liability arising out of pollution, spillage or leakage, and workmen’s compensation or longshoremen’s and harbor workers’ insurance as shall be required by applicable law) and freight, demurrage & defense insurance in such amounts approved by the Security Agent; provided, however, that insurance against liability under law or international convention arising out of pollution, spillage or leakage shall be in an amount not less than the greater of:

 

(A)                               $1,000,000,000;

 

(B)                               the maximum amount reasonably available from the International Group of Protection and Indemnity Associations (the “International Group”) or alternatively such sources of pollution, spillage or leakage coverage as are commercially available in any absence of such coverage by the International Group as shall be carried by prudent shipowners engaged in similar trades; and

 

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(C)                               the amounts required by the laws or regulations of the United States of America or any applicable jurisdiction in which such Ship may be trading from time to time.

 

(iii)          mortgagee’s interest insurance and mortgagee’s additional perils insurance on such conditions as the Security Agent may reasonably require and mortgagee’s interest insurance for pollution risks as from time to time agreed, satisfactory to the Security Agent and for an amount in U.S. dollars approved by the Security Agent but not being less than 120% of the sum of the aggregate principal amount of the Loan outstanding pursuant to this Agreement, the Borrower and such Owner Guarantor having no interest or entitlement in respect of such policies; all such mortgagee’s interest insurance cover shall be obtained directly by the Security Agent and the Security Agent undertakes to use its best endeavors to match the premium level that the Borrower or such Owner Guarantor would have paid if they had arranged such cover on such conditions (as demonstrated by the reasonable satisfaction of the Security Agent), provided that in no event shall the Borrower or such Owner Guarantor be required to reimburse the Security Agent for any such costs in excess of the premium level then available to the Security Agent in the market; and

 

(iv)          while such Ship is idle or laid up, at the option of the Borrower and in lieu of the above-mentioned marine and war risk hull insurance, port risk insurance insuring such Ship against the usual risks encountered by like vessels under similar circumstances.

 

(b)                                 The marine and commercial war-risk insurance required in this Clause 22.2 (Maintenance of Obligatory Insurances) for such Ship shall have deductibles and franchises in amounts reasonably satisfactory to the Security Agent. All insurance maintained hereunder shall be primary insurance without right of contribution against any other insurance maintained by the Security Agent.  The policy of marine and war risk hull and machinery insurance with respect to each Ship shall, if so requested by the Security Agent, provide that the Security Agent shall be a named insured in its capacity as mortgagee and as loss payee.  The entry in a marine and war risk protection indemnity club with respect to each Ship shall note the interest of the Security Agent.  The Facility Agent, the Security Agent and each of their respective successors and assigns shall not be responsible for any premiums, club calls, assessments or any other obligations or for the representations and warranties made therein by the Borrower, any of the Borrower’s Subsidiaries, the Owner Guarantor or any other Person.  In addition, the Borrower shall reimburse the Facility Agent for the commercially reasonable cost of mortgagee’s interest insurance and mortgagee’s additional perils insurance, which the Facility Agent will take out on each Ship upon such terms and in such amounts as the Facility Agent shall deem appropriate.

 

(c)                                  The Security Agent shall from time to time obtain a detailed report signed by an Approved Broker with respect to P & I entry, the hull and machinery and war risk insurance carried and maintained on each Ship, together with their opinion as to the adequacy thereof and its compliance with the provisions of this Clause 22.2 (Maintenance of Obligatory Insurances).  At the Borrower’s expense, the Borrower will instruct its insurance broker (which, for the avoidance of doubt shall be a different insurance broker from the Approved Insurance Broker referred to in the immediately preceding sentence) and the P & I club or association providing P & I insurance referred to in part (a)(ii) of this Clause 22.2 (Maintenance of Obligatory Insurances), to agree to advise the Facility Agent by electronic mail of any expiration, termination, alteration or cancellation of any policy, any default in the payment of any premium and of any other act or omission on the part of the Borrower or Owner Guarantor of which the Borrower or such Owner Guarantor has knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on each Ship, and to provide an opportunity of paying any such unpaid premium or call, such right being exercisable by the Security Agent on each Ship on an individual and not on a fleet basis.  In addition, the Borrower and each Owner Guarantor shall promptly provide the Security Agent with any information which the Security Agent reasonably requests for the purpose of

 

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obtaining or preparing any report from the Security Agent’s independent marine insurance consultant as to the adequacy of the insurances effected or proposed to be effected in accordance with this Clause 22.2 (Maintenance of Obligatory Insurances) as of the date hereof or in connection with any renewal thereof, and the Borrower and each Owner Guarantor shall upon demand indemnify the Security Agent in respect of all reasonable fees and other expenses incurred by or for the account of the Security Agent in connection with any such report, provided that the Security Agent shall be entitled to such indemnity only for one such report during a period of twelve months.

 

(d)                                 The underwriters or brokers shall furnish the Security Agent with a letter or letters of undertaking to the effect that:

 

(i)            they will hold the instruments of insurance, and the benefit of the insurances thereunder, to the order of the Security Agent in accordance with the terms of the loss payable clause referred to in the Assignment of Insurances;

 

(ii)           they will have endorsed on each and every policy as and when the same is issued the loss payable clause, to be in the excess of an amount equivalent to the Major Casualty, and the notice of assignment referred to in the relevant Assignment of Insurances for such Ship; and

 

(iii)          they will not set off against any sum recoverable in respect of a claim against any Ship under the said underwriters or brokers or any other Person in respect of any other vessel nor cancel the said insurances by reason of non-payment of such premiums or other amounts.

 

(e)                                  All policies of insurance required hereby shall provide for not less than fourteen (14) days prior written notice (seven (7) days in respect of war risks) to be received by the Security Agent of the termination or cancellation of the insurance evidenced thereby.  All policies of insurance maintained pursuant to this Clause 22.2 (Maintenance of Obligatory Insurances) for risks covered by insurance other than that provided by a P & I Club shall contain provisions waiving underwriters’ rights of subrogation thereunder against any assured named in such policy and any assignee of said assured, only to the extent such underwriters agree to so waive rights of subrogation (provided that it is understood and agreed that the Borrower and each Owner Guarantor shall use commercially reasonable efforts to obtain such waivers).  The Borrower and each Owner Guarantor shall assign to the Security Agent its full rights under any policies of insurance in respect of each Ship in accordance with the terms contained herein (and, for the avoidance of doubt, such assignments shall include any additional value of any insurance that exceeds the values expressly required herein in respect of such Ship).  Each of the Borrower and each Owner Guarantor agrees that it shall deliver unless the insurances by their terms provide that they cannot cease (by reason of nonrenewal or otherwise) without the Facility Agent being informed and having the right to continue the insurance by paying any premiums not paid by the Borrower or such Owner Guarantor, receipts showing payment of premiums for Required Insurance and also of demands from each Ships P & I underwriters to the Security Agent at least two (2) days before the risk in question commences.

 

(f)                                   Unless the Security Agent shall otherwise agree, all amounts of whatsoever nature payable under any insurance must be payable to the Security Agent for distribution first to itself and thereafter to the Borrower, relevant Owner Guarantor or others as their interests may appear, provided that, notwithstanding anything to the contrary herein, until otherwise required by the Security Agent by notice to the underwriters upon the occurrence and continuance of an Event of Default hereunder, (i) amounts payable under any insurance on a Ship with respect to protection and indemnity risks may be paid directly to (x) the Borrower or relevant Owner Guarantor reimburse it for any loss, damage or expense incurred by it and covered by such insurance or (y) the Person to whom any liability covered by such insurance has been incurred, and (ii) amounts payable under any insurance with respect to such Ship involving any damage to such Ship not constituting an Total Loss, may be paid by 

 

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underwriters directly for the repair, salvage or other charges involved or, if the Borrower or such Owner Guarantor shall have first fully repaired the damage or paid all of the salvage or other charges, may be paid to the Borrower or such Owner Guarantor as reimbursement therefor; provided, however, that if such amounts (including any franchise or deductible) are in excess of an amount equivalent to the Major Casualty, the underwriters shall not make such payment without first obtaining the written consent thereto of the Security Agent and the loss payable clauses pertaining to such insurances shall be endorsed to that effect.

 

(g)                                  All amounts paid to the Security Agent in respect of any insurance on each Ship shall be disposed of as follows (after deduction of the expenses of the Security Agent in collecting such amounts):

 

(i)            any amount which might have been paid at the time, in accordance with the provisions of paragraph (d) above, directly to the Borrower, Owner Guarantor or others shall be paid by the Security Agent to, or as directed by, the Borrower;

 

(ii)           all amounts paid to the Security Agent in respect of a Total Loss of such Ship shall be applied by the Security Agent to the payment of the Financial Indebtedness hereby secured pursuant to Clause 7.6(b) (Mandatory Prepayment on Sale or Total Loss) of this Agreement; and

 

(iii)          all other amounts paid to the Security Agent in respect of any insurance on such Ship may, in the Security Agent’s sole discretion, be held and applied to the prepayment of the Secured Liabilities or to making of needed repairs or other work on such Ship, or to the payment of other claims incurred by the Borrower or Owner Guarantor relating to such Ship, or may be paid to the Borrower, Owner Guarantor or whosoever may be entitled thereto.

 

(h)                                 In the event that any claim or lien is asserted against a Ship for loss, damage or expense which is covered by insurance required hereunder and it is necessary for the Borrower or Owner Guarantor to obtain a bond or supply other security to prevent arrest of such Ship or to release such Ship from arrest on account of such claim or lien, the Security Agent, on request of the Borrower, may, in the sole discretion of the Security Agent, assign to any Person, firm or corporation executing a surety or guarantee bond or other agreement to save or release such Ship from such arrest, all right, title and interest of the Security Agent in and to said insurance covering said loss, damage or expense, as collateral security to indemnify against liability under said bond or other agreement.

 

(i)                                     The Borrower shall deliver to the Security Agent certified copies and, whenever so reasonably requested by the Security Agent, if available to the Borrower, the originals of all certificates of entry, cover notes, binders, evidences of insurance and policies and all endorsements and riders amendatory thereof in respect of insurance maintained pursuant to Clause 22 (Insurance Undertakings) for the purpose of inspection or safekeeping, or, alternatively, satisfactory letters of undertaking from the broker holding the same.  The Security Agent shall be under no duty or obligation to verify the adequacy or existence of any such insurance or any such policies, endorsement or riders.

 

(j)                                    Neither the Borrower nor any Owner Guarantor will execute or permit or willingly allow to be done any act by which any insurance may be suspended, impaired or cancelled, and that it will not permit or allow any Ship to undertake any voyage or run any risk or transport any cargo which may not be permitted by the policies in force, without having previously notified the Security Agent in writing and insured such Ship by additional coverage to extend to such voyages, risks, passengers or cargoes.

 

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(k)                                 In case any underwriter proposes to pay less on any claim than the amount thereof, the Borrower shall forthwith inform the Security Agent, and if a Default, Event of Default or a Total Loss has occurred and is continuing, the Security Agent shall have the exclusive right to negotiate and agree to any compromise.

 

(l)                                     The Borrower and each Owner Guarantor will comply with and satisfy all of the provisions of any applicable law, convention, regulation, proclamation or order concerning financial responsibility for liabilities imposed on the Borrower, Owner Guarantor or each Ship with respect to pollution by any state or nation or political subdivision thereof and will maintain all certificates or other evidence of financial responsibility as may be required by any such law, convention, regulation, proclamation or order with respect to the trade in which such Ship is from time to time engaged and the cargo carried by it.

 

23                                  SHIPBUILDING CONTRACT UNDERTAKINGS

 

23.1                        General

 

The undertakings in this Clause 23 (Shipbuilding Contract Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Required Lenders (or, where specified, all the Lenders) may otherwise permit.

 

23.2                        Performance of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor or Subsidiary Inc., as applicable, shall:

 

(a)                                 observe and perform all its obligations and meet all its liabilities under or in connection with each Shipbuilding Contract to which it is a party to which non-compliance of would lead to a breach or default under such Shipbuilding Contract; and

 

(b)                                 take any action, or refrain from taking any action, which the Facility Agent may reasonably request in connection with any breach of the Shipbuilding Contract to which it is a party to, by it.

 

23.3                        No variation, release etc. of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that no relevant Owner Guarantor or Subsidiary Inc., as applicable, shall whether by a document, by conduct, by acquiescence or in any other way:

 

(a)                                 vary, amend or waive the Shipbuilding Contract which it is a party to in a manner materially adverse to the Lenders;

 

(b)                                 terminate the Shipbuilding Contract to which it is a party to or treat itself as discharged or relieved from further performance of any of its obligations or liabilities under the Shipbuilding Contract to which it is a party to without the consent of the Facility Agent,

 

only if it is hereby agreed that an Owner Guarantor or Subsidiary Inc., may assign, novate or transfer all of (but not part of) its rights, title, interest and benefit under a Shipbuilding Contract to which it is a party to, only if, prior to any such assignment, novation or transfer, the Facility Agent has been provided by the Borrower, in advance, with satisfactory documentary evidence that the Vessel Loan relating to such Shipbuilding Contract has been or will be fully prepaid and/or the relevant portion of the Commitments relating to such Vessel Loan has been or will be fully cancelled in compliance with Clause 7.6 (Mandatory prepayment on Sale or Total Loss ).

 

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23.4                        Action to protect validity of Shipbuilding Contracts

 

The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor or Subsidiary Inc., as applicable, shall use its best endeavors to ensure that all interests and rights conferred by the Shipbuilding Contract to which it is a party to remain valid and enforceable in all respects and retain the priority which they were intended to have.

 

23.5                        No assignment etc. of Shipbuilding Contracts

 

Save as permitted by the Finance Documents, no Owner Guarantor shall, and the Borrower and the Parent Guarantor shall procure that no Owner Guarantor shall assign, novate, transfer or dispose of any of its rights or obligations under the Shipbuilding Contract to which it is a party to.

 

23.6                        Provision of information relating to Shipbuilding Contracts

 

Without prejudice to Clause 19.4 (Information: miscellaneous), the Borrower and the Parent Guarantor shall procure that the relevant Transaction Obligor shall:

 

(a)                                 promptly inform the Borrower and Parent Guarantor if any breach of the Shipbuilding Contract to which it is a party occurs or a serious risk of such a breach arises and of any other event or matter affecting that Shipbuilding Contract, the Intercompany Ship Delivery Agreement to which it is a party, which has or is reasonably likely to have a Material Adverse Effect and the Borrower and Parent Guarantor shall promptly inform the Facility Agent of any incurrence of Clause (a);

 

(b)                                 provide the Borrower and Parent Guarantor, promptly after service, with copies of all material notices served on or by it or any other Obligor under or in connection with the Shipbuilding Contract to which it is a party to and the Borrower and the Parent Guarantor shall promptly provide the Facility Agent with all notices received pursuant to this paragraph (b); and

 

(c)                                  provide the Borrower and Parent Guarantor with any information which the Facility Agent reasonably requests about any interest or right of any kind which any Owner Guarantor or Subsidiary Inc. has at any time to, in or in connection with, the Shipbuilding Contract to which it is a party to or in relation to any matter arising out of or in connection with that Shipbuilding Contract including the progress of the construction of the Ship relating to such Shipbuilding Contract, and the Borrower and Parent Guarantor shall provide the Facility Agent with all information received pursuant to this paragraph (c).

 

24                                  GENERAL SHIP UNDERTAKINGS

 

24.1                        General

 

The undertakings in this Clause 24 (General Ship Undertakings) remain in force on and from the date of the relevant Delivery Date of a Ship and throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Lenders (or, where specified, and the ECA) may otherwise permit.

 

24.2                        Flag of Ships; Citizenship; Ship Classification

 

(a)                                 The Parent Guarantor shall, and shall cause each Owner Guarantor that owns a Ship to, cause each Ship to be registered under the laws and flag of (i) the Bahamas, (ii) the Republic of Malta; (iii) the Republic of Liberia, (iv) the Republic of the Marshall Islands, (v) the Republic of Panama; (vi) Bermuda; (vii) the United Kingdom; (viii) the Republic of Singapore 

 

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or (ix) such other jurisdiction acceptable to the Lenders and Sinosure (each jurisdiction in clauses (i) through and including (v), an “Approved Flag”).  Notwithstanding the foregoing, any Obligor may transfer a Ship to another Approved Flag in accordance with Clause 24.3 (Flag Jurisdiction Transfer).

 

(b)                                 The Parent Guarantor will, and will cause each Owner Guarantor which owns or operates a Ship to, be qualified to own and operate such Ship under the laws of the applicable Approved Flag in accordance with the terms of the related Mortgage.

 

(c)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to keep such Ship in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Ship is classified in the highest class available for vessels of its age and type with an Approved Classification Society, free of any overdue conditions or recommendations affecting the seaworthiness of such Ship, provided that if the classification of any of the Ships shall be subject to any such recommendations, the Borrower will and will cause each Owner Guarantor which operates such Ship to provide a written report to the Facility Agent describing the recommendations and assessing the steps required to be taken to prevent such recommendations from becoming overdue recommendations and it is hereby further agreed that there shall be no change in the classification of any of the Ships, save with the prior written consent of the Required Lenders.

 

(d)                                 The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:

 

(i)            comply with and satisfy in all material respects all applicable legal requirements of the jurisdiction of such Ship’s home port, now or hereafter from time to time in effect, in order that such Ship shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Ship for participation in the trades and services to which it may be dedicated from time to time; or

 

(ii)           not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.

 

(e)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:

 

(i)            make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Ship will not be materially impaired; and

 

(ii)           except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Obligors installed on such Ship except in the ordinary course of the operation and maintenance of such Ship unless:

 

(A)                               the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security (other than any Other Permitted Security) in favour of any Person other than the Security Agent and becomes, upon installation on such Ship, the property of the Obligors and subject to the security constituted by the Mortgage; or

 

(B)                               the removal will not materially diminish the value of such Ship.

 

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(f)                                   The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to submit such Ship to such periodical or other surveys as may be required for classification purposes and, upon the written request of the Security Agent, supply to the Security Agent copies of all survey reports and classification certificates issued in respect thereof.

 

(g)                                  The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Security (other than any Other Permitted Security) on, or claims enforceable against, such Ship other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Ship pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Security or claim as aforesaid, procure, if possible, the release of such Ship from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.

 

(h)                                 The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to maintain, or cause to be maintained by the charterer or lessee of any Ship, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable legal requirements for any Ship and such other similar certificates as may be required in the course of the operations of any Ship pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable legal requirements.

 

(i)                                     The Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to cause such Ships to be managed by Approved Managers, provided that nothing herein shall be construed so as to prohibit such Approved Manager from sub-contracting its management duties. The Parent Guarantor and such Owner Guarantor will use all commercially reasonable endeavours to procure that such Approved Manager shall enter into a Manager’s Undertaking.

 

24.3                        Flag Jurisdiction Transfer

 

Each Owner Guarantor of a Ship shall, and each other Obligor shall procure that such Owner Guarantor shall only change the flag of the Ship which is owned by it from its initial Approved Flag to a new Approved Flag (the “Transferred Ship”) and further upon fulfillment of the following conditions:

 

(a)                                 on or prior to each Flag Jurisdiction Transfer Date, the Facility Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Owner Guarantor owning that Transferred Ship, certifying that:

 

(i)            all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Flag Jurisdiction Transfer being consummated on the Jurisdiction Transfer Date and otherwise referred to herein shall have been obtained and remain in effect;

 

(ii)           there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement; and

 

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(iii)          copies of resolutions approving the Flag Jurisdiction Transfer of such Owner Guarantor owning that Ship and any other matters the Facility Agent may reasonably request have been provided to the Facility Agent;

 

(b)                                 on a date no later than by the Flag Jurisdiction Transfer Date:

 

(i)            the Owner Guarantor owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry of the new Approved Flag, a new Mortgage (which shall to the extent possible, be registered as a “continuation mortgage” to the original Mortgage recorded in the initial Approved Flag) with respect to such Transferred Ship and such Mortgage shall be effective to create in favour of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Ship, subject only to any Other Permitted Security;

 

(ii)           all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve such security interests shall have been duly effected and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent;

 

(iii)          the Facility Agent shall have received from counsel to the Owner Guarantor owning that Transferred Ship reasonably satisfactory to the Facility Agent practicing in those jurisdictions in which the Transferred Ship is to be registered and/or the Owner Guarantor owning such Transferred Ship is organized, opinions which shall be addressed to the Facility Agent and each of the Lenders, and dated on such Flag Jurisdiction Transfer Date, which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the perfection of the security interests granted pursuant to the new Mortgage registered over the Transferred Ship and such other matters incident thereto as the Facility Agent may reasonably request;

 

(iv)          the Facility Agent shall have received:

 

(A)                               a certificate of ownership issued by the registry of the new Approved Flag showing the registered ownership of the Transferred Ship in the name of the relevant Owner Guarantor owning that Transferred Ship; and

 

(B)                               a certificate of ownership and encumbrance or, as applicable a transcript of registry issued by the registry of the new Approved Flag with respect to the Transferred Ship, indicating no recorded mortgages, encumbrances or liens over the Transferred Ship other than any Security in favour of the Secured Parties and any Other Permitted Security, and

 

(C)                               a certificate satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained in respect of the Transferred Ship certifying that such insurances (x) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Security Agent as mortgagee and (y) conform with the insurance requirements of the Mortgage and this Agreement;

 

(v)           the Security Requirements, as applicable, for the Transferred Ship shall have been satisfied; and

 

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(vi)          that:

 

(A)                               no Event of Default has occurred and is continuing; and

 

(B)                               all representations and warranties contained in this Agreement or in any other Finance Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

 

24.4                        Security Requirements

 

Each Owner Guarantor of a Ship which is to be subject to a Flag Jurisdiction Transfer shall, and each other Obligor shall procure that such Owner Guarantor shall comply with the following conditions in relation to such Ship for the purposes of such Flag Jurisdiction Transfer:

 

(a)                                 the Owner Guarantor owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate ship registry, a Mortgage with respect to such Ship and such Mortgage shall be effective to create in favour of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Ship;

 

(b)                                 the Facility Agent shall have received each of the following:

 

(i)            class certificates from an Approved Classification Society indicating that such Ship meets the criteria specified in Clause 24.2 (Flag of Ships; Citizenship; Ship Classification);

 

(ii)           certified copies of all agreements related to the Ship Management Agreements and, if applicable, the Pool Agreement or other applicable Charter, for such Ship;

 

(iii)          certified copies of all ISM Code and ISPS Code documentation for each Ship; and

 

(c)                                  a report, in form and scope reasonably satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained by the Parent Guarantor, the Borrower or the Owner Guarantors in respect of such Ship, together with a certificate from such broker certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Facility Agent, the Security Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance requirements of each respective Mortgage (it being understood that, except as required by applicable law, the insurance requirements of such Mortgage shall not exceed the Required Insurance) and (iii) include copies of the Required Insurance;

 

(d)                                 the Facility Agent shall have received from counsels (acting for the Lenders) (i) of the Marshall Islands, (ii) in the jurisdiction of the flag of the Ship and (iii) in such other relevant jurisdictions as the Facility Agent may require, an opinion addressed to the Facility Agent and each of the Lenders, in each case which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the matters set forth in the relevant Exhibit, including the perfection of the security interests (other than those to be covered by opinions delivered pursuant to the other opinions above) granted pursuant to the Security Documents, and such other matters incidental to the transactions contemplated herein as the Facility Agent may reasonably request;

 

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(e)                                  the Facility Agent shall have received a certificate, dated on or about the date of this Agreement and reasonably acceptable to the Facility Agent, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Parent Guarantor, the Borrower and Owner Guarantors, and attested to by the Secretary or any Assistant Secretary (or, to the extent such entity does not have a Secretary or Assistant Secretary, the analogous Person within such entity) of such entity, as the case may be, with appropriate insertions, together with copies of the Constitutional Documents of such entity and the resolutions of such entity referred to in such certificate authorizing the consummation of the transactions contemplated by the Finance Documents; and

 

(f)                                   the Facility Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Facility Agent may have reasonably requested in connection with any matters set out in this Clause, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities.

 

24.5                        Classification society undertaking

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and use all commercially reasonable efforts to procure that the Approved Classification Society undertakes with the Security Agent):

 

(a)                                 to send to the Security Agent, following receipt of a written request from the Security Agent, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;

 

(b)                                 to allow the Security Agent (or its agents), at any time and from time to time, to inspect the original class and related records of that Owner Guarantor and that Ship at the offices of the Approved Classification Society and to take copies of them;

 

(c)                                  to notify the Security Agent immediately in writing if the Approved Classification Society:

 

(i)            receives notification from that Owner Guarantor or any person that that Ship’s Approved Classification Society is to be changed; or

 

(ii)           becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship’s class under the rules or terms and conditions of that Owner Guarantor or that Ship’s membership of the Approved Classification Society;

 

(d)                                 following receipt of a written request from the Security Agent:

 

(i)            to confirm that that Owner Guarantor is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or

 

(ii)           to confirm that that Owner Guarantor is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Security Agent in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.

 

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24.6                        Modifications

 

No Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, make any modification or repairs to, or replacement of, the Ship owned by it, or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.

 

24.7                        Removal and installation of parts

 

(a)                                 Subject to paragraph (b) below, no Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, remove any material part of any Ship, or any item of equipment installed on any Ship unless:

 

(i)            the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;

 

(ii)           the replacement part or item is free from any Security in favour of any person other than the Security Agent; and

 

(iii)          the replacement part or item becomes, on installation on that Ship, the property of that Owner Guarantor and subject to the security constituted by the Mortgage on that Ship.

 

(b)                                 An Owner Guarantor may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Owner Guarantor.

 

24.8                        Surveys

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting with the authorization of the Required Lenders or the ECA, provide the Facility Agent, with copies of all survey reports.

 

24.9                        Ship inspections

 

(a)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times, to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

 

(b)                                 Any inspection of a Ship to be conducted by the Security Agent (or its agents) shall be:

 

(i)            without undue interference with the operations of that Ship;

 

(ii)           made upon the giving of at least 15 Business Days’ prior written notice by the Facility Agent; and

 

(iii)          at the cost of the Owner Guarantor owning that Ship provided, that the Owner Guarantor shall not be required to bear the cost of more than one inspection in each calendar year unless an Event of Default has occurred and is continuing.

 

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24.10                 Prevention of and release from arrest

 

(a)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, promptly discharge:

 

(i)            all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;

 

(ii)           all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and

 

(iii)          all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.

 

(b)                                 Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, upon receiving notice of the arrest or seizure of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim:

 

(i)            no later than within seven days of receiving such notice, notify the Facility Agent (who shall promptly notify the Lenders) and provide a report to the Facility Agent (for its forwarding to the Lenders) containing such information as the Lenders may require on such arrest, seizure or detention; and

 

(ii)           promptly procure its release by providing bail or otherwise as the circumstances may require.

 

24.11                 Restrictions on chartering etc.

 

No Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, in relation to the Ship owned by it:

 

(a)                                 let that Ship on demise charter for any period save with the prior written consent of the Lenders and upon such conditions as the Lenders may require (including without limitation, an assignment of the insurances of such demise owner in favour of the Security Agent);

 

(b)                                 de activate or lay up that Ship; or

 

(c)                                  put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.

 

24.12                 Notice of Mortgage

 

Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or as the case may be, first preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Agent.

 

25                                  SECURITY COVER

 

25.1                        Minimum required security cover

 

(a)                                 The Parent Guarantor will not permit the Aggregate Collateral Vessel Value, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by 

 

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the Facility Agent to be, at any time, less than 135% of an amount equal to the aggregate principal amount of the Loan outstanding hereunder, at such time, and provided that any non-compliance with this Clause 25.1 (Minimum required security cover) shall not constitute an Event of Default (but shall constitute a Default), so long as within thirty (30) days of such non-compliance, the Borrower has either (x) provided Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepaid such portion of the Loan outstanding hereunder, to cure such non-compliance.

 

(b)                                 Any prepayment pursuant to this Clause 25.1 (Minimum required security cover) shall be applied to reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid, pro rata in respect of each Vessel Loan outstanding.

 

26                                  APPLICATION OF EARNINGS

 

26.1                        Payment of Earnings and Minimum Consolidated Liquidity

 

(a)                                 Each Obligor shall cause the Earnings and any other income derived from each of the respective Ships, to the extent constituting Requisition Compensation, Earnings and Insurances, to be deposited by the respective account debtor in respect of such earnings into one or more of the Earnings Accounts maintained for such Obligor from time to time.  Without limiting any Obligor’s obligations in respect of this Clause 26.1 (Payment of Earnings and Minimum Consolidated Liquidity), each of the Obligors agrees that, in the event it receives any earnings and other income constituting Requisition Compensation, Earnings, and Insurances in relation to a Ship, and such other proceeds are deposited into any account other than the Earnings Account relating to that Ship, it shall promptly notify the Facility Agent and immediately deposit all such proceeds into the Earnings Account relating to that Ship.

 

(b)                                 The Parent Guarantor and the Borrower shall ensure that commencing from the first Utilisation Date, there shall be deposited in the Minimum Liquidity Account (which shall be subject to an Accounts Security executed by the Parent Guarantor in favour of the Security Agent) an amount equivalent to the Minimum Liquidity Amount and shall further procure that such amount is maintained in the Minimum Liquidity Account until the Secured Liabilities have been fully and irrevocably repaid.

 

(c)                                  All payments by a Hedge Counterparty to the Borrower or the Parent Guarantor under a Hedging Agreement shall be paid to the Minimum Liquidity Account, and the Borrower and the Parent Guarantor (as the case may be) hereby irrevocably authorises such Hedge Counterparty to direct such payments into the Minimum Liquidity Account.

 

26.2                        Debt Service Reserve Account

 

Each Obligor shall ensure that, on the Utilisation Date of each Vessel Loan, there shall be maintained in the Debt Service Reserve Account a credit balance of no less than the aggregate of:

 

(a)                                 the full amount of the Repayment Instalment falling due under Clause 6.1 (Repayment of Loan) on the next Repayment Date (for the avoidance of doubt, excluding the relevant Balloon Payment) relating to such Vessel Loan; and

 

(b)                                 the amount of interest on such Vessel Loan which is payable on the next due date for payment of interest on such Vessel Loan under this Agreement,

 

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provided that it is hereby agreed that after the first Repayment Date of each Vessel Loan, each Obligor may be required to top up such amount in the Debt Service Reserve Account in an amount necessary to ensure that the amount of the next Repayment Instalment and amount of interest payable on the next due date for payment in relation to such Vessel Loan, shall at all times reflect the aggregate amount of the next Repayment Instalment and amount of interest next due for payment in respect of each Vessel Loan, at the relevant time.

 

26.3                        Shortfall in Earnings

 

(a)                                 If the aggregate of the credit balance on the Debt Service Reserve Account falls below the amounts required under Clause 26.2 (Debt Service Reserve Account ), the Parent Guarantor shall promptly make up the amount of the insufficiency and in any event, immediately on demand from the Facility Agent.

 

(b)                                 Without prejudicing the Facility Agent’s right to make such demand at any time, the Facility Agent may, if so authorized by the Required Lenders, permit the Borrower to make up all or part of the insufficiency from the Earnings received in the Earnings Account.

 

26.4                        Interest accrued on Debt Service Reserve Account

 

Any credit balance on the Debt Service Reserve Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Account Bank likely to remain on the Debt Service Reserve Account.

 

26.5                        Release of accrued interest

 

Interest accruing under Clause 26.4 (Interest accrued on Debt Service Reserve Account) shall be credited to the Debt Service Reserve Account, shall be released to the Parent Guarantor at the end of the Security Period.  For the avoidance of doubt, such interest shall count towards the amounts in the Debt Service Reserve Account required to be maintained under Clause 26.2 (Debt Service Reserve Account).

 

26.6                        Withdrawals from Accounts

 

No withdrawals may be made from any Account without the prior written consent of the Facility Agent unless:

 

(a)                                 Clause 26.1(b) (Payment of Earnings and Minimum Consolidated Liquidity) and Clause 26.2 (Debt Service Reserve Account) are fully complied with; and

 

(b)                                 no Event of Default has occurred and is continuing.

 

26.7                        Location of Accounts

 

Each Obligor shall promptly execute any documents which the Facility Agent specifies is necessary to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and the Debt Service Reserve Account.

 

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27                                  EVENTS OF DEFAULT

 

27.1                        General

 

Each of the events or circumstances set out in this Clause 27 (Events of Default) is an Event of Default except for Clause 27.19 (Acceleration).

 

27.2                        Non-payment

 

Any Obligor shall default in the payment when due of any amounts due under any Finance Document (including without limitation, any Sinosure Premium) unless its failure to pay is caused by:

 

(a)                                 administrative or technical error; or

 

(b)                                 a Disruption Event,

 

and payment is made within three (3) Business Days of the payment due date.

 

27.3                        Specific obligations

 

Any Obligor shall default in the due performance or observance by it of any term, covenant or agreement contained in Clauses 19.2 (Financial statements), 19.3 (Compliance certificate), 20 (Financial covenants), 21.2 (Corporate Franchises), 21.4 (Ownership of subsidiaries), 21.21 (Negative pledge), 21.22 (Disposals), 21.23 (Merger), 21.24 (Change of business), 21.25 (Financial Indebtedness), 21.26 (Share capital), 21.27 (Jurisdiction of employment),  21.28 (Dividends), 21.29 (Chartering arrangements), 21.30 (Other transactions), 21.31 (Limitation on certain restrictions on Subsidiaries), 21.32 (Jurisdiction of incorporation or formation; Amendment of constitutional documents), 21.33 (End of fiscal year; Fiscal quarter), 21.34 (Further assurance) and 25.1 (Minimum required security cover).

 

27.4                        Other obligations

 

(a)                                 An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.2 (Non-payment) and Clause 27.3 (Specific obligations).

 

(b)                                 No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within thirty (30) days of the Facility Agent giving notice to the Borrower or (if earlier) any Obligor becoming aware of the failure to comply.

 

27.5                        Misrepresentation

 

Any representation, warranty or statement made by any Obligor herein or in any other Finance Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made.

 

27.6                        Cross default

 

(a)                                 The Parent Guarantor or any of its Subsidiaries shall default in any payment of any Financial Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created; or

 

(b)                                 The Parent Guarantor or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Financial Indebtedness (other than the obligations created hereunder) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Financial Indebtedness (or a trustee or agent on behalf of such holder or 

 

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holders) to cause (determined without regard to whether any notice is required), any such Financial Indebtedness to become due prior to its stated maturity; or

 

(c)                                  Any Financial Indebtedness (other than the obligations created hereunder) of the Parent Guarantor or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid, redeemed, defeased or repurchased, other than by a regularly scheduled required prepayment or in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment prior to the stated maturity thereof;

 

provided that it shall not be a Default or Event of Default under this Clause 27.6 (Cross Default) unless the aggregate principal amount of all Financial Indebtedness as described in preceding clauses (a) through (c), inclusive, exceeds $1,000,000 (in the case of each of the Obligors (other than the Parent Guarantor)) and $10,000,000 (in the case of the Parent Guarantor and its Subsidiaries (other than the Obligors) on a consolidated basis).

 

27.7                        Insolvency Event

 

(a)                                 Either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary):

 

(i)            is unable or admits inability to pay its debts as they fall due;

 

(ii)           is deemed to, or is declared to, be unable to pay its debts under applicable law; or

 

(iii)          suspends or threatens to suspend making payments on any of its debts.

 

(b)                                 The value of the assets of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary) is less than its liabilities (taking into account contingent and prospective liabilities).

 

(c)                                  A moratorium is declared in respect of any indebtedness of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary).  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

 

27.8                        Insolvency proceedings

 

(a)                                 Any corporate action, legal proceedings or other procedure or step is taken in relation to:

 

(i)            the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary), other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor;

 

(ii)           a composition, compromise, assignment or arrangement with any creditor of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary);

 

(iii)          the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary) or any of its respective assets; or

 

(iv)          enforcement of any Security over any assets of either the Parent Guarantor or any of its Subsidiaries (other than any Immaterial Subsidiary),

 

(v)           or any analogous procedure or step is taken in any jurisdiction.

 

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(b)                                 Paragraph (a) above shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious or is being contested in good faith, with appropriate financial reserves and due diligence and is discharged, stayed or dismissed within 30 days of commencement of, if earlier, the date on which it is advertised.

 

27.9                        Creditors’ process

 

Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of an Obligor having an aggregate value of $10,000,000 and is not discharged within 60 days.

 

27.10                 ERISA

 

(a)                                 Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 or 430 of the Code or Section 302 or 303 of ERISA; or

 

(b)                                 a Reportable Event shall have occurred; or

 

(c)                                  a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days; or

 

(d)                                 any Plan which is subject to Title IV of ERISA shall have had or is reasonably likely to have a trustee appointed to administer such Plan; or

 

(e)                                  any Plan which is subject to Title IV of ERISA is, shall have been or is reasonably likely to be terminated or to be the subject of termination proceedings under ERISA; or

 

(f)                                   any Plan shall have an Unfunded Current Liability, its actuary has certified that a determination has been made that a Plan (other than a Multiemployer Plan) is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; or

 

(g)                                  a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; or

 

(h)                                 a contribution required to be made with respect to a Plan or a Foreign Pension Plan is not timely made; or

 

(i)                                     the Parent Guarantor or any of its Subsidiaries or any ERISA Affiliate has incurred or events have happened, or reasonably expected to happen, that will cause it to incur any liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or

 

(j)                                    the Parent Guarantor, or any of its Subsidiaries, has incurred or is reasonably likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans; or

 

(k)                                 there shall result from any of the foregoing event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability, or such 

 

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lien, security interest or liability, individually, and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or could reasonably be expected to have, a Material Adverse Effect.

 

27.11                 Guaranties

 

After the execution and delivery thereof, any guaranty pursuant to Clause 17 (Guarantee and Indemnity) of this Agreement, or any provision thereof, shall cease to be in full force or effect as to any Guarantor (unless such Guarantor is no longer a Subsidiary of the Parent Guarantor by virtue of a liquidation, sale, merger or consolidation permitted by Clauses 21.23 (Merger) and/or 21.24 (Change of Business)) or any Guarantor (or person acting by or on behalf of such Guarantor) shall deny or disaffirm such Guarantor’s obligations under the guaranty to which it is a party or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the guaranty to which it is a party beyond any grace period (if any) provided therefor.

 

27.12                 Security imperiled

 

At any time after the execution and delivery thereof, any of the Security Documents shall cease to be in full force and effect, or shall cease in any material respect to give the Security Agent for the benefit of the Secured Parties the Security, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Security on, all of the Security Assets), in favour of the Security Agent, superior to and prior to the rights of all third Persons (except in connection with any Other Permitted Security), and subject to no other Security (except any Other Permitted Security), or any Obligor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any of the Security Documents and such default shall continue beyond any grace period (if any) specifically applicable thereto pursuant to the terms of such Security Document, or any “event of default” (as defined in any Mortgage) shall occur in respect of any Mortgage.

 

27.13                 Cessation or change of business

 

Except in connection with the sale of a Ship by the Owner Guarantor that owns it or save to the extent permitted under this Agreement, any Obligor:

 

(a)                                 suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business; or

 

(b)                                 changes the nature of its business from that conducted as at the date of this Agreement.

 

27.14                 Repudiation and rescission of agreements

 

Save to the extent permitted under this Agreement, an Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.

 

27.15                 Restricted Party and non-compliance with Sanctions and/or Anti-Bribery and Corruption Laws

 

A Transaction Obligor or any Subsidiary of it or any of their respective directors or officers becomes a Restricted Party or any Obligor or its Subsidiary fails to comply with any Sanctions 

 

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and/or any Anti-Bribery and Corruption Laws applicable to it, and in particular to the extent required under Clause 21.3 (Compliance with laws).

 

27.16                 Arrest etc.

 

Any Ship which is subject to a Mortgage is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the Owner Guarantor owning such Ship fails to procure the release of such Ship within a period of 30 Business Days thereafter (the “30 Days Period”) unless the Borrower has prepaid the Vessel Loan in full (together with all interest, fees and other related amounts payable in relation thereto) on or before the last day of the 30 Days Period.

 

27.17                 Transaction Documents.

 

(a)                                 It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents.

 

(b)                                 Any obligation of a Transaction Obligor under the Transaction Documents is not or ceases to be legal, valid, binding or enforceable.

 

(c)                                  Any Transaction Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Document is alleged by a party to it (other than a Finance Party) to be ineffective.

 

27.18                 Stock Exchange Listing

 

The shares of the Parent Guarantor cease to remain listed, or are suspended from trading on the New York Stock Exchange for a consecutive period of more than fourteen (14) days.

 

27.19                 Sinosure Insurance Policies

 

(a)                                 Any default (howsoever described) occurs under the terms of any Sinosure Insurance Policy.

 

(b)                                 Any Sinosure Insurance Policy is terminated, repudiated or ceases to be in full force and effect.

 

27.20                 Acceleration

 

Upon the occurrence and during the continuance of an Event of Default, the Facility Agent may and, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Facility Agent, any Lender to enforce its claims against any Obligor (provided that, if an Event of Default specified in Clause 27.7 (Insolvency Event) shall occur in respect of any Obligor, the result which would occur upon the giving of written notice by the Facility Agent to the Borrower as specified in paragraphs (a) and (b) below shall occur automatically without the giving of any such notice):

 

(a)                                 cancel the Total Commitments, whereupon they shall immediately be cancelled and/or declare the outstanding principal of and any accrued interest in respect of the Loan and all Secured Liabilities owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; and

 

(b)                                 enforce, as Security Agent, all of the Security and security interests created pursuant to the Security Documents.

 

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27.21                 No impairment of rights.

 

Nothing in this Clause 27 (Events of Default) shall be taken to impair or restrict the exercise of any right given to individual Finance Parties under a Finance Document.

 

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SECTION 9

 

CHANGES TO PARTIES

 

28                                  CHANGES TO THE LENDERS

 

28.1                        Assignments and transfers by the Lenders

 

Subject to this Clause 28 (Changes to the Lenders), a Lender (the “Existing Lender”) may:

 

(a)                                 assign all of its rights (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender); or

 

(b)                                 transfer by novation all of its rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender),

 

under the Finance Documents to another bank or financial institution, Sinosure or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”); provided that if all of any Existing Lender’s rights are less than $20,000,000 in principal amount and any Affiliates of such Existing Lender hold any rights under this Agreement, then such Existing Lender and its Affiliates must assign or transfer all of their rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender and such Affiliates) to the New Lender.

 

28.2                        Conditions of assignment or transfer

 

(a)                                 The consent of the Borrower or any Owner Guarantor is not required for an assignment or transfer by an Existing Lender. The written consent of Sinosure is required for any assignment or transfer by an Existing Lender. The consent of the Parent Guarantor is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

 

(i)            to another Lender or an Affiliate of a Lender;

 

(ii)           if the Existing Lender is a fund, to a fund which is a Related Fund; or

 

(iii)          made at a time when any Event of Default is continuing.

 

(b)                                 The consent of the Parent Guarantor to an assignment or transfer must not be unreasonably withheld or delayed.  The Parent Guarantor will be deemed to have given its consent ten (10) days after the Existing Lender has requested it unless consent is expressly refused by the Parent Guarantor within that time.

 

(c)                                  The consent of the Parent Guarantor to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 (Mandatory Cost) if the Existing Lender agrees to indemnify the Borrower against any such additional amount payable by the Borrower under such Clause.

 

(d)                                 An assignment will only be effective on:

 

(i)            receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to 

 

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the Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it were an Original Lender; and

 

(ii)           performance by the Facility Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.

 

(e)                                  Each Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender’s title and of any rights or equities which the Borrower or any other Obligor had against the Existing Lender.

 

(f)                                   A transfer will only be effective if the procedure set out in Clause 28.5 (Procedure for transfer) is complied with.

 

(g)                                  If:

 

(i)            a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

 

(ii)           as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),

 

then the New Lender or Lender acting through its new Facility Office is entitled to receive payment under those Clauses only to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.  This paragraph (g) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.

 

(h)                                 Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

 

28.3                        Assignment or transfer fee

 

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $5,000.

 

28.4                        Limitation of responsibility of Existing Lenders

 

(a)                                 Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

 

(i)            the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;

 

(ii)           the financial condition of any Obligor;

 

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(iii)          the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

 

(iv)          the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

and any representations or warranties implied by law are excluded.

 

(b)                                 Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:

 

(i)            has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document or the Transaction Security; and

 

(ii)           will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities throughout the Security Period.

 

(c)                                  Nothing in any Finance Document obliges an Existing Lender to:

 

(i)            accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28 (Changes to the Lenders); or

 

(ii)           support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Finance Documents or otherwise.

 

28.5                        Procedure for transfer

 

(a)                                 Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.

 

(b)                                 The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

 

(c)                                  Subject to Clause 28.9 (Pro rata interest settlement), on the Transfer Date:

 

(i)            to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the “Discharged Rights and Obligations”);

 

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(ii)           each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

 

(iii)          the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Mandated Lead Arrangers and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and

 

(iv)          the New Lender shall become a Party as a “Lender”.

 

28.6                        Procedure for assignment

 

(a)                                 Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender.  The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

 

(b)                                 The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

 

(c)                                  Subject to Clause 28.9 (Pro rata interest settlement), on the Transfer Date:

 

(i)            the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;

 

(ii)           the Existing Lender will be released from the obligations (the “Relevant Obligations”) expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and

 

(iii)          the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.

 

(d)                                 Lenders may utilise procedures other than those set out in this Clause 28.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 28.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 28.2 (Conditions of assignment or transfer).

 

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28.7                        Copy of Transfer Certificate or Assignment Agreement to Borrower

 

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

 

28.8                        Security over Lenders’ rights

 

In addition to the other rights provided to Lenders under this Clause 28 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

 

(a)                                 any charge, assignment, pledge or other Security to secure obligations to a federal reserve or central bank; and

 

(b)                                 in the case of any Lender which is a fund, any charge, assignment, pledge or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

 

except that no such charge, assignment, pledge or Security shall:

 

(i)            release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment, pledge or Security for the Lender as a party to any of the Finance Documents; or

 

(ii)           require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

 

28.9                        Pro rata interest settlement

 

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.5 (Procedure for transfer) or any assignment pursuant to Clause 28.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

 

(a)                                 any interest or fees in respect of the relevant Contribution which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

 

(b)                                 the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

 

(i)            when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

 

(ii)           the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

 

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(c)                                  In this Clause 28.9 (Pro rata interest settlement) references to “Interest Period” shall be construed to include a reference to any other period for accrual of fees.

 

29                                  CHANGES TO THE OBLIGORS

 

29.1                        Assignment or transfer by Obligors

 

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

29.2                        Release of security

 

(a)                                 If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:

 

(i)            the disposal is permitted by the terms of any Finance Document;

 

(ii)           all Lenders agree to the disposal;

 

(iii)          the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or

 

(iv)          the disposal is being effected by enforcement of a Security Document,

 

the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document.  However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).

 

(b)                                 If the Security Agent is satisfied that a release is allowed under this Clause 29.2 (Release of security) (at the request and expense of the Borrower) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release.  Each other Finance Party irrevocably authorizes the Security Agent to enter into any such document.  Any release will not affect the obligations of any other Obligor under the Finance Documents.

 

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SECTION 10

 

THE FINANCE PARTIES

 

30                                  THE FACILITY AGENT AND THE MANDATED LEAD ARRANGERS

 

30.1                        Appointment of the Facility Agent

 

(a)                                 Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

 

(b)                                 Each other Finance Party authorizes the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.

 

(c)                                  Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.

 

30.2                        Instructions

 

(a)                                 The Facility Agent shall:

 

(i)            unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:

 

(A)                               all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

 

(B)                               in all other cases, the Required Lenders; and

 

(ii)           not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).

 

(b)                                 The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Required Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

 

(c)                                  Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Required Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

 

(d)                                 The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security 

 

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that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

 

(e)                                  Without prejudice to the remainder of this Clause 30.2 (Instructions), in the absence of instructions, the Facility Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties.  The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.

 

(f)                                   The Facility Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

 

30.3                        Duties of the Facility Agent

 

(a)                                 The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

(b)                                 Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

 

(c)                                  Without prejudice to Clause 28.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.

 

(d)                                 Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

(e)                                  If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

 

(f)                                   If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Mandated Lead Arrangers or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.

 

(g)                                  The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

 

30.4                        Role of the Mandated Lead Arrangers

 

Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.

 

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30.5                        No fiduciary duties

 

(a)                                 Nothing in any Finance Document constitutes the Facility Agent or the Mandated Lead Arrangers as a trustee or fiduciary of any other person.

 

(b)                                 Neither the Facility Agent nor the Mandated Lead Arrangers shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.

 

30.6                        Application of receipts

 

Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 36.5 (Application of receipts; partial payments).

 

30.7                        Business with the Group

 

The Facility Agent and the Mandated Lead Arrangers may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

 

30.8                        Rights and discretions

 

(a)                                 The Facility Agent may:

 

(i)            rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;

 

(ii)           assume that:

 

(A)                               any instructions received by it from the Required Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

 

(B)                               unless it has received notice of revocation, that those instructions have not been revoked; and

 

(iii)          rely on a certificate from any person:

 

(A)                               as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

 

(B)                               to the effect that such person approves of any particular dealing, transaction, step, action or thing,

 

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

 

(b)                                 The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:

 

(i)            no Default has occurred (unless it has actual knowledge of a Default arising under Clause 27 (Events of Default);

 

(ii)           any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

 

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(iii)          any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

 

(c)                                  The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

 

(d)                                 Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.

 

(e)                                  The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

 

(f)                                   The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

 

(i)            be liable for any error of judgment made by any such person; or

 

(ii)           be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

 

unless such error or such loss was caused by the Facility Agent’s gross negligence or willful misconduct.

 

(g)                                  Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.

 

(h)                                 Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Mandated Lead Arrangers is obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

(i)                                     Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

 

30.9                        Responsibility for documentation

 

Neither the Facility Agent nor the Mandated Lead Arrangers is responsible or liable for:

 

(a)                                 the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

 

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(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(c)                                  any determination as to whether any information provided or to be provided to any Finance Party or Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

 

30.10                 No duty to monitor

 

Neither the Facility Agent nor any Mandated Lead Arranger shall be bound to inquire:

 

(a)                                 whether or not any Default has occurred;

 

(b)                                 as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or

 

(c)                                  whether any other event specified in any Transaction Document has occurred.

 

30.11                 Exclusion of liability

 

(a)                                 Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 36.11 (Disruption to Payment Systems etc.) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

 

(i)            any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

 

(ii)           exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(iii)          any shortfall which arises on the enforcement or realization of the Security Property; or

 

(iv)          without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

 

(A)                               any act, event or circumstance not reasonably within its control; or

 

(B)                               the general risks of investment in, or the holding of assets in, any jurisdiction,

 

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or 

 

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systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

 

(b)                                 No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property (other than any claim based on, or any act or omission resulting from gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

 

(c)                                  The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Facility Agent for that purpose.

 

(d)                                 Nothing in this Agreement shall oblige the Facility Agent or the Mandated Lead Arrangers to carry out:

 

(i)            any “know your customer” or other checks in relation to any person; or

 

(ii)           any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

 

on behalf of any Finance Party and each Finance Party confirms to the Facility Agent and the Mandated Lead Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Mandated Lead Arrangers.

 

(e)                                  Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent’s liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss.  In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.

 

30.12                 Lenders’ indemnity to the Facility Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or willful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 36.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) in acting as 

 

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Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.

 

30.13                 Resignation of the Facility Agent

 

(a)                                 The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.

 

(b)                                 Alternatively, the Facility Agent may resign by giving 15 days’ notice to the other Finance Parties and the Borrower, in which case the Required Lenders may appoint a successor Facility Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(c)                                  If the Required Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent (with effect from its written acceptance) with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(d)                                 If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 30 (The Facility Agent and the Mandated Lead Arrangers ) and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent’s normal fee rates and those amendments will bind the Parties.

 

(e)                                  The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.

 

(f)                                   The Facility Agent’s resignation notice shall only take effect upon the appointment of a successor.

 

(g)                                  Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 (Indemnity to the Facility Agent) and this Clause 30 (The Facility Agent and the Mandated Lead Arrangers ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent.  Any fees for the account of the 

 

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retiring Facility Agent shall cease to accrue from (and shall be payable on) that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

(h)                                 The Required Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Facility Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrower.

 

(i)                                     The consent of the Borrower, the Parent Guarantor or any other Obligor, is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.

 

30.14                 Confidentiality

 

(a)                                 In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

 

(b)                                 If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

 

30.15                 Relationship with the other Finance Parties

 

(a)                                 Subject to Clause 28.9 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender or Hedge Counterparty at the opening of business (in the place of the Facility Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office or, as the case may be, the Hedge Counterparty:

 

(i)            entitled to or liable for any payment due under any Finance Document on that day; and

 

(ii)           entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

 

unless it has received not less than five Business Days’ prior notice from that Lender or Hedge Counterparty to the contrary in accordance with the terms of this Agreement.

 

(b)                                 Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.

 

(c)                                  Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents.  Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 38.5 (Electronic communication) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of 

 

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Clause 38.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 38.5 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

 

30.16                 Credit appraisal by the Finance Parties

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Mandated Lead Arrangers that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

 

(a)                                 the financial condition, status and nature of each member of the Group;

 

(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(c)                                  whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(d)                                 the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

 

(e)                                  the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

 

30.17                 Facility Agent’s management time

 

Any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Facility Agent) and Clause 16 (Costs and Expenses) shall include the cost of utilising the Facility Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 (Fees and Sinosure Premium).

 

30.18                 Deduction from amounts payable by the Facility Agent

 

If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed.  For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

 

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30.19                 Reliance and engagement letters

 

Each Secured Party confirms that each of the Mandated Lead Arrangers and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Mandated Lead Arrangers or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

 

30.20                 Full freedom to enter into transactions

 

Without prejudice to Clause 30.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:

 

(a)                                 to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)                                 to deal in and enter into and arrange transactions relating to:

 

(i)            any securities issued or to be issued by any Obligor or any other person; or

 

(ii)           any options or other derivatives in connection with such securities; and

 

(c)                                  to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

31                                  THE SECURITY AGENT

 

31.1                        Appointment and trust

 

(a)                                 Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted or required under any applicable law) trustee in connection with the Security Property and confirms that the Security Agent shall have a lien on the Security Property and the proceeds of the enforcement of the Security Documents for all moneys payable to the beneficiaries of the Security Documents.

 

(b)                                 The Security Agent accepts its appointment under paragraph (a) above as trustee of the Security Property with effect from the date of this Agreement and declares that it holds the Security Property in trust for the Secured Parties on the terms contained in this Agreement 

 

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and shall deal with the Security Property in accordance with this Clause 31 (The Security Agent) and the other provisions of the Finance Documents.

 

(c)                                  Each other Finance Party authorizes the Security Agent to (i) perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions, and (ii) execute each of the Security Documents and all other documents that may be approved by the Facility Agent and/or the Required Lenders for execution by it.

 

(d)                                 Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.

 

31.2                        Enforcement through Security Agent only

 

The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

 

31.3                        Instructions

 

(a)                                 The Security Agent shall:

 

(i)            unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Facility Agent acting on the instructions of:

 

(A)                               all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

 

(B)                               in all other cases, the Required Lenders; and

 

(ii)           not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).

 

(b)                                 The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Facility Agent acting on the instructions of the Required Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

 

(c)                                  Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Facility Agent acting on the instructions of the Required Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

 

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(d)                                 The Security Agent may refrain from acting in accordance with any instructions of the Facility Agent acting on the instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.

 

(e)                                  Without prejudice to the remainder of this Clause 31.3 (Instructions), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

 

(f)                                   The Security Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document.  This paragraph (f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.

 

31.4                        Duties of the Security Agent

 

(a)                                 The Security Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

(b)                                 The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party.

 

(c)                                  Except where a Finance Document specifically provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

(d)                                 If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

 

(e)                                  The Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

 

31.5                        No fiduciary duties

 

(a)                                 Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Obligor.

 

(b)                                 The Security Agent shall not be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account.

 

31.6                        Business with the Group

 

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

 

31.7                        Rights and discretions

 

(a)                                 The Security Agent may:

 

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(i)            rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;

 

(ii)           assume that:

 

(A)                               any instructions received by it from the Facility Agent acting on the instructions of the Required Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

 

(B)                               unless it has received notice of revocation, that those instructions have not been revoked; and

 

(iii)          rely on a certificate from any person:

 

(A)                               as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

 

(B)                               to the effect that such person approves of any particular dealing, transaction, step, action or thing,

 

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

 

(b)                                 The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Secured Parties) that:

 

(i)            no Default has occurred;

 

(ii)           any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

 

(iii)          any notice or request made by the Borrower (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

 

(c)                                  The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

 

(d)                                 Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.

 

(e)                                  The Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

 

(f)                                   The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

 

(i)            be liable for any error of judgment made by any such person; or

 

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(ii)           be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,

 

unless such error or such loss was caused by the Security Agent’s gross negligence or willful misconduct.

 

(g)                                  Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.

 

(h)                                 Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

(i)                                     Notwithstanding any provision of any Finance Document to the contrary, the Security Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

 

31.8                        Responsibility for documentation

 

The Security Agent is not responsible or liable for:

 

(a)                                 the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

 

(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(c)                                  any determination as to whether any information provided or to be provided to any Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

 

31.9                        No duty to monitor

 

The Security Agent shall not be bound to inquire:

 

(a)                                 whether or not any Default has occurred;

 

(b)                                 as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or

 

(c)                                  whether any other event specified in any Transaction Document has occurred.

 

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31.10                 Exclusion of liability

 

(a)                                 Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:

 

(i)            any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless caused by its gross negligence or willful misconduct;

 

(ii)           exercising, or not exercising ,any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

 

(iii)          any shortfall which arises on the enforcement or realization of the Security Property; or

 

(iv)          without prejudice to the generality of paragraphs (i)  to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

 

(A)                               any act, event or circumstance not reasonably within its control; or

 

(B)                               the general risks of investment in, or the holding of assets in, any jurisdiction,

 

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

 

(b)                                 No Party other than the Security Agent, that Receiver or that Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.5 (Third party rights).

 

(c)                                  The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Security Agent if the Security Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Security Agent for that purpose.

 

(d)                                 Nothing in this Agreement shall oblige the Security Agent to carry out:

 

(i)            any “know your customer” or other checks in relation to any person; or

 

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(ii)           any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

 

on behalf of any Finance Party and each Finance Party confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.

 

(e)                                  Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent, any Receiver or Delegate, any liability of the Security Agent, any Receiver or Delegate arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss.  In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.

 

31.11                 Lenders’ indemnity to the Security Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Security Agent and every Receiver and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct) duly justified in acting as Security Agent, Receiver or Delegate under the Finance Documents (unless the Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.

 

31.12                 Resignation of the Security Agent

 

(a)                                 The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.

 

(b)                                 Alternatively, the Security Agent may resign by giving 15 days’ notice to the other Finance Parties and the Borrower, in which case the Required Lenders may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

(c)                                  If the Required Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).

 

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(d)                                 The retiring Security Agent shall make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.  The Borrower shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.

 

(e)                                  The Security Agent’s resignation notice shall only take effect upon:

 

(i)                                     the appointment of a successor; and

 

(ii)                                  the transfer of all the Security Property to that successor.

 

(f)                                   Upon the appointment of a successor, the retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 31.23 (Winding up of trust) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 (Indemnity to the Security Agent) and this Clause 31 (The Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent.  Any fees for the account of the retiring Security Agent shall cease to accrue from (and shall be payable on) that date).  Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

(g)                                  The Required Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above.  In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.

 

(h)                                 The consent of the Borrower (or any other Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.

 

31.13                 Confidentiality

 

(a)                                 In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.

 

(b)                                 If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

 

31.14                 Credit appraisal by the Finance Parties

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

 

(a)                                 the financial condition, status and nature of each member of the Group;

 

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(b)                                 the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(c)                                  whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

 

(d)                                 the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

 

(e)                                  the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

 

31.15                 Security Agent’s management time

 

(a)                                 Any amount payable to the Security Agent under Clause 14.5 (Indemnity to the Security Agent) and Clause 16 (Costs and Expenses) shall include the cost of utilising the Security Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 11 (Fees and Sinosure Premium).

 

(b)                                 Without prejudice to paragraph (a) above, in the event of:

 

(i)            a Default;

 

(ii)           the Security Agent being requested by an Obligor or the Facility Agent acting on the instructions of the Required Lenders to undertake duties which the Security Agent and the Borrower agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

 

(iii)          the Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances,

 

the Borrower shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.

 

(c)                                  If the Security Agent and the Borrower fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrower (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of any investment bank shall be final and binding upon the Parties.

 

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31.16                 Reliance and engagement letters

 

Each Secured Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

 

31.17                 No responsibility to perfect Transaction Security

 

The Security Agent shall not be liable for any failure to:

 

(a)                                 require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Security Assets; or

 

(b)                                 obtain any license, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security; or

 

(c)                                  require any further assurance in relation to any Security Document.

 

31.18                 Insurance by Security Agent

 

(a)                                 The Security Agent shall not be obliged:

 

(i)                                     to insure any of the Security Assets;

 

(ii)                                  to require any other person to maintain any insurance; or

 

(iii)                               to verify any obligation to arrange or maintain insurance contained in any Finance Document,

 

and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.

 

(b)                                 Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Facility Agent acting on the instructions of the Required Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.

 

31.19                 Custodians and nominees

 

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it with reasonable care under this Agreement or be bound to supervise the proceedings or acts of any person.

 

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31.20                 Delegation by the Security Agent

 

(a)                                 Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.

 

(b)                                 That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit and commercially reasonable in the interests of the Secured Parties.

 

(c)                                  No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate selected by it with reasonable care.

 

31.21                 Additional Security Agents

 

(a)                                 The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

 

(i)            if it considers that appointment to be in the best interests of the Secured Parties; or

 

(ii)           for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or

 

(iii)          for obtaining or enforcing any judgment in any jurisdiction,

 

and the Security Agent shall give prior notice to the Borrower and the Finance Parties of that appointment.

 

(b)                                 Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.

 

(c)                                  The commercially reasonable remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

 

31.22                 Acceptance of title

 

The Security Agent shall be entitled to accept without inquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Security Assets and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.

 

31.23                 Winding up of trust

 

If the Security Agent, with the approval of the Facility Agent determines that:

 

(a)                                 all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and

 

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(b)                                 no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,

 

then

 

(i)            the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

 

(ii)           any Security Agent which has resigned pursuant to Clause 31.12 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Security Document.

 

31.24                 Powers supplemental to Trustee Acts

 

The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.

 

31.25                 Disapplication of Trustee Acts

 

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents.  Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

 

31.26                 Application of receipts

 

(a)                                 Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Agent receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 31 (The Security Agent), the “Recoveries”) shall be transferred to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments).

 

(b)                                 Paragraph (a) above is without prejudice to the rights of the Security Agent, each Receiver and each Delegate:

 

(i)            under Clause 14.5 (Indemnity to the Security Agent) or any other indemnity in favour of the Security Agent under the Finance Documents to be indemnified out of the Security Assets; and

 

(ii)           under any Finance Document to credit any moneys received or recovered by it to any suspense account.

 

(c)                                  Any transfer by the Security Agent to the Facility Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Agent.

 

(d)                                 The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) of this Clause 31.26 (Application of receipts) in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.

 

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31.27                 Deductions from receipts

 

(a)                                 Before transferring any moneys to the Facility Agent under Clause 31.26 (Application of receipts), the Security Agent may, in its discretion:

 

(i)            deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Agent or any Receiver or Delegate and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;

 

(ii)           set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and

 

(iii)          pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

 

(b)                                 For the purposes of sub-paragraph (i) of paragraph (a) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.

 

31.28                 Prospective liabilities

 

Following enforcement of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments) in respect of:

 

(a)                                 any sum to the Security Agent, any Receiver or any Delegate; and

 

(b)                                 any part of the Secured Liabilities,

 

that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.

 

31.29                 Investment of proceeds

 

Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 36.5 (Application of receipts; partial payments) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent’s discretion in accordance with the provisions of this Clause 31.29 (Investment of proceeds).

 

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31.30                 Currency conversion

 

(a)                                 For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.

 

(b)                                 The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

 

31.31                 Good discharge

 

Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Secured Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

 

31.32                 Full freedom to enter into transactions

 

Without prejudice to Clause 31.6 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:

 

(a)                                 to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)                                 to deal in and enter into and arrange transactions relating to:

 

(i)            any securities issued or to be issued by any Obligor or any other person; or

 

(ii)           any options or other derivatives in connection with such securities; and

 

(c)                                  to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

32                                  ECA AGENT

 

32.1                        The ECA Agent

 

(a)                                 Each Lender appoints and authorizes the ECA Agent to act as its agent under and in connection with this Agreement and the other Finance Documents, in relation to each Sinosure Insurance Policy and all Sinosure Matters with power to take such actions as:

 

(i)            are specified under any Finance Document as being for the ECA Agent to take on behalf of the Lenders insured under the Sinosure Insurance Policy;

 

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(ii)           are specifically delegated to the ECA Agent by the terms of the Sinosure Insurance Policy; or

 

(iii)          are reasonably incidental thereto,

 

and if expressly authorized in writing by each Lender, the ECA Agent may execute and deliver on its behalf the Sinosure Insurance Policy and all documents that are necessary or desirable in connection with such agreement, and where the ECA Agent has acted in accordance with the express written instructions of the Lenders, each Lender agrees severally to be bound by the terms and conditions of each Sinosure Insurance Policy as if it had executed and delivered such agreement for and in its own name.

 

(b)                                 Without limiting the foregoing:

 

(i)            each Lender authorizes the ECA Agent to exercise those rights, powers and discretions which are expressly given to the ECA Agent by this Agreement and the other Finance Documents, together with any other reasonably incidental rights, powers and discretions; and

 

(ii)           each Lender appoints the ECA Agent solely for the purpose of:

 

(A)                               providing, revealing and disclosing, such information and details relating to any Obligor, the Finance Documents and the facilities granted pursuant thereto, to Sinosure as Sinosure may require from time to time for the purpose of issuing and administering the Sinosure Insurance Policies; and

 

(B)                               making a claim on behalf of the Lenders under the Sinosure Insurance Policies and directing payment of the insurance proceeds under the Sinosure Insurance Policies which shall be held by the Security Agent in trust for the Lenders and for application by the Facility Agent in accordance with Clause 36 (Payment Mechanics) of this Agreement.

 

32.2                        Lenders’ indemnity to the ECA Agent

 

(a)                                 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the ECA Agent, within three Business Days of demand, against any cost, loss or liability incurred by it (otherwise than by reason of the ECA Agent’s gross negligence or wilful misconduct) duly justified in acting as ECA Agent under the Finance Documents (unless the ECA Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

(b)                                 Subject to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the ECA Agent pursuant to paragraph (a) above.

 

(c)                                  Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the ECA Agent to an Obligor.

 

33                                  SINOSURE SPECIFIC PROVISIONS

 

33.1                        No actions without Lender consent

 

(a)                                 Except where the ECA Agent reasonably believes that this is inconsistent with the terms of any Sinosure Insurance Policy, the ECA Agent agrees:

 

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(i)            not to take any action under the relevant Sinosure Insurance Policy without the consent of all the Lenders (which consent shall not be unreasonably withheld or delayed), unless the ECA Agent has reasonably determined that such action would not be detrimental to the insurance coverage provided to the Lenders thereunder; and

 

(ii)           to take such actions under the relevant Sinosure Insurance Policy (including with respect to any amendment, modification or supplement to that Sinosure Insurance Policy) as may be directed by all the Lenders from time to time;

 

provided that, notwithstanding anything herein or in the relevant Sinosure Insurance Policy to the contrary, the ECA Agent shall not be obliged to take any such action or to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties or the exercise of any of its rights or powers under this Agreement or the relevant Sinosure Insurance Policy if:

 

(A)                               it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; or

 

(B)                               such action would be contrary to applicable law.

 

(b)                                 If, in respect of any Sinosure Matters in relation to or arising out of any of the Finance Documents, where the approval, consent, authorization or instruction of Sinosure is required under the terms of the Finance Documents or the relevant Sinosure Insurance Policy, the ECA Agent wishes to take any step or action under or in relation to which conflicts with, or in contrary to, the provisions of the relevant Sinosure Insurance Policy and/or the approval, consent, authorization or instruction of Sinosure, such step or action may only be taken with consent of all Lenders.

 

33.2                        Limitation on obligation of ECA Agent to request instructions

 

The ECA Agent shall not have any obligation to request the Facility Agent or the Required Lenders or any other Finance Party to give it any instructions or to make any determination.

 

33.3                        Ratification of unauthorized action of ECA Agent

 

Any action which the ECA Agent takes or purports to take at a time when it had not been authorized to do so shall, if subsequently ratified, be as valid as regards every Finance Party as if the ECA Agent had been expressly authorized in advance.

 

33.4                        Cooperation with the ECA Agent

 

(a)                                 Each Lender and each Obligor undertakes to cooperate with the ECA Agent to comply with any legal requirements imposed on the ECA Agent in connection with the performance of its duties under this Agreement or any other Finance Document and shall supply any information reasonably requested by the ECA Agent in connection with the proper performance of those duties.

 

(b)                                 The ECA Agent undertakes to provide timely notice to Sinosure with respect to any matters that require consent from the Required Lenders.

 

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33.5                        Nature of the ECA Agent’s duties

 

The ECA Agent’s duties under the Finance Documents are limited to coordinating and communicating with Sinosure. Unless otherwise specifically required under this Agreement, the ECA Agent is not tasked with responsibilities relating to payment, collection or receipt of funds.

 

33.6                        Lenders’ representations

 

Each Lender represents and warrants to the ECA Agent, with effect from the date of the relevant Sinosure Insurance Policy, that:

 

(a)                                 no information provided by such Lender in writing to the ECA Agent or to Sinosure prior to the date of this Agreement was untrue or incorrect in any material respect except to the extent that such Lender, in the exercise of reasonable care and due diligence prior to giving such information, could not have discovered the error or omission;

 

(b)                                 it has not taken (or failed to take), and agrees that it shall not take (or fail to take), any action that would result in the ECA Agent being in breach of any of its obligations in its capacity as ECA Agent under the relevant Sinosure Insurance Policy or the other Finance Documents, or result in the relevant Lenders being in breach of any of their respective obligations as insured parties under the relevant Sinosure Insurance Policy, or which would otherwise prejudice the ECA Agent’s ability to make a claim on behalf of the Lenders under the relevant Sinosure Insurance Policy;

 

(c)                                  it has reviewed the relevant Sinosure Insurance Policy and is aware of the provisions thereof; and

 

(d)                                 the representations and warranties made by the ECA Agent on behalf of each Lender under the relevant Sinosure Insurance Policy are true and correct with respect to such Lender in all respects.

 

33.7                        Provision of information

 

The ECA Agent shall provide to Sinosure any information which it receives from any Obligor or the Facility Agent pursuant to the Finance Documents and which it is obliged to provide to Sinosure under the terms of the relevant Sinosure Insurance Policy.

 

33.8                        Lender communications

 

Each Lender shall promptly forward to the ECA Agent a copy of any communication relating to Sinosure Matters which that Lender sends to, or receives from, any Obligor or Sinosure directly.

 

33.9                        Claims under Sinosure Insurance Policies

 

Each Lender acknowledges and agrees that, unless otherwise provided for in the relevant Sinosure Insurance Policy, it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with any of the Sinosure Insurance Policies except through the ECA Agent and that all of the rights of the Lenders under any of the Sinosure Insurance Policies shall only be exercised by the ECA Agent.

 

33.10                 Application of receipts

 

(a)                                 Except as expressly stated to the contrary in any Finance Document, any moneys which the ECA Agent receives or recovers shall be transferred to the Facility Agent as soon as 

 

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practicable upon receipt by the ECA Agent, for application in accordance with Clause 36 (Payment Mechanics) of this Agreement.

 

(b)                                 The parties agree that any unpaid Sinosure Premium and any unpaid fees, costs and expenses of Sinosure shall constitute amounts then due and payable in respect of the Loan under the Finance Documents for the purposes of the amounts then due and payable in respect of Clause 36 (Payment Mechanics) of this Agreement.

 

33.11                 Assignment to Sinosure

 

Each of the Parties agrees that, upon the issuance of the Compensation Notice by Sinosure in accordance with the terms of any Sinosure Insurance Policy:

 

(a)                                 the obligations of the Borrower, any other Obligor or any other party to the Finance Documents shall not be reduced or affected in any manner;

 

(b)                                 each of the Lenders shall assign to Sinosure:

 

(i)            such part of their respective contributions and (to the extent that there remain any) of their respective contributions as is equal to the amount to be paid to it by Sinosure under the relevant Sinosure Insurance Policy as set out in the Compensation Notice; and

 

(ii)           the rights of the Lenders to recover against the Borrower, any other Obligors or any other party to the Finance Documents pursuant to the Finance Documents or any relevant laws;

 

in each case, by means of a substitution certificate or such other evidence of assignment as may be reasonably required by Sinosure, provided that this shall not be construed as depriving any Lender of its rights to recover any part of the Total Commitments, the Loan or otherwise of the Unpaid Sum still owing to it after receipt of the relevant Sinosure Insurance Policy insurance proceeds;

 

(c)                                  Sinosure shall, upon being validly assigned rights under the Finance Documents pursuant to Clause 28.1 (Assignment and transfers by the Lenders), and to the extent of such assignment, be an assignee and as such shall be entitled to the rights and benefits of the Lenders under this Agreement and the other Finance Documents in respect of such payment to the extent of its interest;

 

(d)                                 until such assignment, each of the Lenders shall hold in trust for Sinosure any payments under this Agreement and each of the other Finance Documents and pay or transfer such payment to Sinosure in accordance with the relevant Sinosure Insurance Policy;

 

(e)                                  without prejudice to the indemnity provisions in Clause 14 (Other Indemnities), the Borrower and/or any other Obligor shall indemnify Sinosure in respect of any actual, reasonable costs or expenses (including reasonable legal fees) suffered or incurred by Sinosure in connection with the assignment referred to in this Clause 33.11 or in connection with any review by Sinosure of any Event of Default or dispute between the Borrower and/or any other Obligor and the Finance Parties occurring prior to the assignment referred to in this Clause 33.11;

 

(f)                                   with respect to the obligations of the Borrower and the other Obligors owed to the Facility Agent and/or the Lenders under the Finance Documents, such obligations shall additionally be owed to Sinosure by way of subrogation of the rights of the Lenders;

 

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(g)                                  the Borrower agrees to cooperate with the Facility Agent, the ECA Agent and the Lenders, as the case may be, in giving effect to any subrogation or assignment referred to in this Clause 33.11 and to take all actions requested by the Facility Agent, any Lender, the ECA Agent or Sinosure, in each case to the extent capable of being done by it, to implement or give effect to such subrogation or assignment;

 

(h)                                 the Borrower hereby acknowledges, for the benefit of the Lenders and Sinosure, that any payments made by Sinosure to an Lender (or to the Facility Agent or the ECA Agent on their respective behalfs) pursuant to a Sinosure Insurance Policy, will not satisfy, reduce, release or prejudice any of the Borrower’s obligations under the Finance Documents in whole or in part, which obligations shall remain due and payable notwithstanding the receipt or application of those payments;

 

(i)                                     on the date of any subrogation to, or (as applicable) assignment of any rights referred to in this Clause 33.11:

 

(i)            all further rights and benefits (including the right to receive commission in respect thereof but not any duty or other obligations) whatsoever of the relevant Lender in relation to the portion of the Loan or the rights and benefits to which such assignment or rights of subrogation relate under or arising out of this Agreement shall, to the extent of such assignment or rights of subrogation, be vested in and be for the benefit of Sinosure; and

 

(ii)           references in this Agreement to the Lenders shall, where relevant in the context thereafter be construed so as to include Sinosure in relation to such rights and benefits as are assigned to, or to which Sinosure has rights of subrogation; and

 

(j)                                    the representations and warranties made in this Agreement in favour of the relevant Lender shall survive any assignment or transfer pursuant to this Clause 33.11 and shall also inure to the benefit of Sinosure;

 

provided that nothing in this Clause 33.11 shall be construed as depriving the Lenders of any rights they may have against the Borrower or any other Obligor in respect of the Lenders’ rights under Clauses 14 (Other indemnities) and 13 (Increased costs).

 

33.12                 Cooperation with Sinosure; Events of Default

 

(a)                                 Each of the ECA Agent, the Facility Agent and the Security Agent shall provide to Sinosure any information which it receives from the Borrower and any other Obligor pursuant to the Finance Documents.

 

(b)                                 Each of the ECA Agent, the Facility Agent and the Security Agent agrees that it shall consult with Sinosure wherever reasonably practical prior to issuing a notice pursuant to Clause 27 (Events of Default), provided that Sinosure’s consent shall not be required in order for any such notice of default to be issued (other than by Sinosure to the extent required under any Sinosure Insurance Policy).

 

(c)                                  Notwithstanding anything to the contrary in any Finance Document, if an Event of Default has occurred and is continuing, the Facility Agent shall put to the vote of the Required Lenders the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 27 (Events of Default) of this Agreement should be invoked.  Should the Required Lenders’ vote be in favour of any of actions described in the preceding sentence, (i) the Facility Agent shall inform the ECA Agent and the ECA Agent shall discuss in a timely manner with Sinosure and obtain Sinosure’s consent before taking any step to 

 

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enforce the Finance Documents and (ii) after obtaining the aforementioned consent from Sinosure, the Facility Agent and the Security Agent shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose.

 

(d)                                 Failing agreement between the Facility Agent (acting on behalf of the Required Lenders) and the ECA Agent (acting on behalf of Sinosure), the Facility Agent and the Security Agent shall be entitled to act in accordance with the instructions of the Required Lenders, including in relation to any waiver of an Event of Default and enforcement of remedies related thereto, provided that this does not result in any Sinosure Insurance Policy being lost, cancelled, unenforceable or invalid.

 

33.13                 Sinosure Override

 

Notwithstanding anything to the contrary in this Agreement or any other Finance Document, nothing in this Agreement shall permit or oblige any Lender to act (or omit to act) in a manner that is inconsistent with any requirement of Sinosure under or in connection with any Sinosure Insurance Policy and, in particular:

 

(a)                                 each of the Lenders and if applicable, the ECA Agent shall be authorized to take all such actions as they may deem necessary to ensure that all requirements of Sinosure under or in connection with each of the Sinosure Insurance Policies are complied with;

 

(b)                                 no Lender shall be obliged to do anything if, in its opinion (upon consultation with the ECA Agent), to do so could result in a breach of any requirements of Sinosure under or in connection with a Sinosure Insurance Policy or affect the validity of a Sinosure Insurance Policy;

 

(c)                                  each of the Lenders will agree to accept the instructions as advised to them by the ECA Agent or Sinosure and to act in conformity therewith in connection with their obligations under this Agreement; and

 

(d)                                 in the event of any conflict or inconsistency between the terms of this Agreement and any Sinosure Insurance Policy, the terms of the relevant Sinosure Insurance Policy shall prevail.

 

33.14                 Sinosure Premium and Sinosure

 

Without prejudice to Clause 7.10 (Refund of Sinosure Premium on voluntary prepayment), the Borrower:

 

(a)                                 agrees, and each Lender acknowledges and agrees, that:

 

(i)            the amount of any Sinosure Premium will be calculated in accordance with the percentage included in the relevant defined term as of the date of this Agreement, but otherwise subject to the terms of the relevant Sinosure Insurance Policy and Sinosure’s internal regulations; and

 

(ii)           no Lender is in any way involved in the calculation or payment of any part of any Sinosure Premium;

 

(b)                                 agrees that their obligation to pay any Sinosure Premium or any part of any Sinosure Premium in accordance with the relevant Sinosure Insurance Policy shall be an absolute and unconditional obligation and, once paid, shall not be affected by any failure by the Borrower to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the Loan;

 

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(c)                                  acknowledges that it shall pay an amount equivalent to each Sinosure Premium to Sinosure on the relevant due date, and no Sinosure Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the relevant Sinosure Insurance Policy and Clause 7.10 (Refund of Sinosure Premium on voluntary prepayment);

 

(d)                                 agrees that if, for any reason whatsoever, any additional premium is or becomes payable to Sinosure in respect of any Sinosure Insurance Policy, the Borrower shall promptly pay such additional premium in full and the Borrower shall fully cooperate with the Facility Agent and the ECA Agent on their reasonable request to take all steps necessary on the part of the Borrower to ensure that each Sinosure Insurance Policy remains in full force and effect throughout the Facility Period; and

 

(e)                                  shall indemnify Sinosure in relation to any costs or expenses (including reasonable legal fees) suffered or incurred by Sinosure (other than as a result of Sinosure’s gross negligence or wilful misconduct) in connection with any transfer to Sinosure undertaken pursuant to Clause 33.11 (Assignment to Sinosure) or in connection with any review by Sinosure of or in relation to any Event of Default and/or amendment or supplement to any of the Finance Documents and/or a request for a consent or approval from Sinosure; and

 

(f)                                   undertakes to pay any fees in relation to the application for any letter of interest or letter of intent in relation to the Sinosure Insurance Policy.

 

33.15                 Liability for Sinosure Premiums

 

(a)                                 The Borrower shall be responsible and shall bear the cost of the Sinosure Premium of each Sinosure Insurance Policy and shall pay the relevant Sinosure Premium for each Advance on the Utilisation Date relating to that Advance.

 

33.16                 Sinosure Insurance Policies

 

(a)                                 The Borrower will not, without the ECA Agent’s prior written consent, do or omit to do anything which may to its knowledge adversely prejudice the Lenders’ rights under any Sinosure Insurance Policy.

 

(b)                                 The ECA Agent and the Lenders are responsible for complying with the terms of each Sinosure Insurance Policy from which each Lender benefits.

 

33.17                 Sinosure Requirements

 

Each Obligor must execute all such other documents and instruments and do all such other acts and things as the ECA Agent, acting on the instructions of Sinosure and/or any Finance Party may reasonably require:

 

(a)                                 in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

 

(b)                                 in order for the beneficiaries under each Sinosure Insurance Policy to comply with and continue to benefit from that Sinosure Insurance Policy or to maintain the effectiveness of that Sinosure Insurance Policy.

 

33.18                 Protection of each of the Sinosure Insurance Policies

 

(a)                                 If at any time in the reasonable opinion of the ECA Agent, any provision of a Finance Document contradicts or conflicts with any provision of a Sinosure Insurance Policy or Sinosure requires any further action to be taken or documents to be entered into for such

 

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Sinosure Insurance Policy to remain in full force and effect, the Borrower shall use commercially reasonable efforts to take such action as the ECA Agent or Sinosure shall reasonably require to remove any contradiction or conflict and to ensure such Sinosure Insurance Policy remains in full force and effect.

 

(b)                                 In addition, the Borrower shall comply with any instructions given by Sinosure to the ECA Agent in relation to such Sinosure Insurance Policy and the transactions contemplated in such Sinosure Insurance Policy provided that such instructions are in compliance with that Sinosure Insurance Policy.

 

33.19                 Notification to Sinosure

 

(a)                                 The Borrower will deliver a notice to each of the Facility Agent and the ECA Agent promptly after it becomes aware of the occurrence of any political or commercial risk covered by a Sinosure Insurance Policy and will:

 

(i)            pay any additional premium payable to Sinosure in relation to the relevant Sinosure Insurance Policy; and

 

(ii)           cooperate with the ECA Agent on its reasonable request to take all steps necessary on the part of the Borrower to ensure that the relevant Sinosure Insurance Policy remains in full force and effect throughout the Facility Period which shall include providing the ECA Agent with any information, reasonably requested by the ECA Agent, relating to any material commercial facts which could result in a Material Adverse Change.

 

(b)                                 In addition, the Borrower shall promptly supply to the ECA Agent copies of all financial or other information reasonably required by the ECA Agent to satisfy any request for information made by Sinosure pursuant to a Sinosure Insurance Policy.

 

(c)                                  The Borrower agrees that it shall be reasonable for the ECA Agent to make a request under this Clause 33.19 (Notification to Sinosure) if it is required to do so as a condition of maintaining a Sinosure Insurance Policy in full force and effect.

 

33.20                 Prior consultation with Sinosure

 

(a)                                 The Borrower acknowledges that the ECA Agent may, under the terms of each Sinosure Insurance Policy be required:

 

(i)            to consult with Sinosure, prior to the exercise of certain decisions under the Finance Documents to which that Borrower is a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and

 

(ii)           to follow certain instructions given by Sinosure.

 

(b)                                 Each Lender will be deemed to have acted reasonably if it has acted on the instructions of the ECA Agent (given by Sinosure to the ECA Agent in accordance with the terms of a Sinosure Insurance Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.

 

33.21                 Demand under Sinosure Insurance Policies

 

Notwithstanding any other terms as set forth herein and the other Finance Documents, the ECA Agent shall make a written demand to Sinosure under a Sinosure Insurance Policy only 

 

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after the Facility Agent has first made a written demand for payment of the relevant amount of the Unpaid Sum to the Guarantors under the relevant Guaranties.

 

33.22                 Replacement of the ECA Agent

 

(a)                                 After consultation with the Borrower, any Lender may, with the prior consent of the Lenders (other than any Lender which is also the ECA Agent) constituting the Required Lenders and Sinosure and by giving 30 days’ notice to the ECA Agent, replace the ECA Agent by appointing a successor ECA Agent.

 

(b)                                 The retiring ECA Agent shall make available to the successor ECA Agent such documents and records and provide such assistance as the successor ECA Agent may reasonably request for the purposes of performing its functions as ECA Agent under the Finance Documents.

 

(c)                                  The appointment of the successor ECA Agent shall take effect on the date specified in the notice from the Required Lenders to the retiring ECA Agent. As from this date, the retiring ECA Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) above) and any agency fees for the account of the retiring ECA Agent shall cease to accrue from (and shall be payable on) that date.

 

(d)                                 Any successor ECA Agent and each of the other Parties shall have the same rights and obligations among themselves as they would have had if such successor had been an original Party.

 

34                                  CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision of this Agreement will:

 

(a)                                 interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

 

(b)                                 oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

(c)                                  oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

 

35                                  SHARING AMONG THE FINANCE PARTIES

 

35.1                        Payments to Finance Parties

 

If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 36 (Payment Mechanics) (a “Recovered Amount”) and applies that amount to a payment due to it under the Finance Documents then:

 

(a)                                 the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;

 

(b)                                 the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 36 (Payment Mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

 

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(c)                                  the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 36.5 (Application of receipts; partial payments).

 

35.2                        Redistribution of payments

 

The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 36.5 (Application of receipts; partial payments) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.

 

35.3                        Recovering Finance Party’s rights

 

On a distribution by the Facility Agent under Clause 35.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

 

35.4                        Reversal of redistribution

 

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

 

(a)                                 each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and

 

(b)                                 as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

 

35.5                        Exceptions

 

(a)                                 This Clause 35 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.

 

(b)                                 A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

 

(i)            it notified that other Finance Party of the legal or arbitration proceedings; and

 

(ii)           that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

 

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SECTION 11

 

ADMINISTRATION

 

36                                  PAYMENT MECHANICS

 

36.1                        Payments to the Facility Agent

 

(a)                                 On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make an amount in dollars equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time specified by the Facility Agent as being customary for settlement of transactions in dollars in the place of payment.

 

(b)                                 Payment shall be made to such account and with such bank as the Facility Agent, in each case, specifies.

 

36.2                        Distributions by the Facility Agent

 

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 36.3 (Distributions to an Obligor) and Clause 36.4 (Clawback and pre-funding), be made available by the Facility Agent as soon as practicable after receipt by the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrower in a Utilisation Request.

 

36.3                        Distributions to an Obligor

 

The Facility Agent may (with the consent of the Obligor or in accordance with Clause 37 (Set-Off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

 

36.4                        Clawback and pre-funding

 

(a)                                 Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

(b)                                 Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

 

(c)                                  If the Facility Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

 

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(i)            the Borrower shall on demand refund it to the Facility Agent; and

 

(ii)           the Lender by whom those funds should have been made available or, if the Lender fails to do so, the Borrower, shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

 

36.5                        Application of receipts; partial payments

 

(a)                                 Subject to the paragraphs below and except as any Finance Document may otherwise provide, any payment (in an amount sufficient to fully repay or prepay the Loan and all amounts owing under the Finance Documents (other than the Hedging Agreements)) that is received or recovered by any Finance Party (other than any Hedge Counterparty) under, in connection with, or pursuant to any Finance Document shall be paid to the Facility Agent which shall apply the same in the following order:

 

(i)            first, in or towards payment of any amounts then due and payable under any of the Finance Documents (other than the Hedging Agreements) to the Lenders;

 

(ii)           secondly, in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document (other than the Hedging Agreements) to the Lenders but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them;

 

(iii)          thirdly, in or towards payment of:

 

(A)                               any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(B)                               thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(iv)          finally, any surplus shall be paid to the Borrower or to any other person who appears to be entitled to it;

 

(b)                                 If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by the Obligors under the Finance Documents (other than the Hedging Agreements), the Facility Agent shall apply that payment towards the obligations of the Borrower  and the other Obligors under the Finance Documents (other than the Hedging Agreements) in the following order:

 

(i)            first, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents (other than the Hedging Agreements);

 

(ii)           secondly, in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;

 

(iii)          thirdly, in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement;

 

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(iv)          fourthly, in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties), but unpaid under the Finance Documents (other than the Hedging Agreements);

 

(v)           finally, in or towards payment of:

 

(A)                               any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and

 

(B)                               thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;

 

(c)                                  The Facility Agent shall, if so directed by all the Lenders and the Hedge Counterparties, vary the order set out in sub-paragraphs (ii) to (v) of paragraph (b) above.

 

(d)                                 Paragraphs (a) and (c) above will override any appropriation made by an Obligor.

 

(e)                                  Notwithstanding the foregoing, no amount received from a Guarantor in respect of its obligations under Clause 17 (Guarantee and Indemnity) shall be applied to any Excluded Hedging Obligations.

 

36.6                        No set-off by Obligors

 

(a)                                 All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

(b)                                 Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.

 

36.7                        Business Days

 

(a)                                 Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

(b)                                 During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

36.8                        Currency of account

 

(a)                                 Subject to paragraphs (b) and (c) below, dollars are the currency of account and payment for any sum due from an Obligor under any Finance Document.

 

(b)                                 Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

(c)                                  Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

 

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36.9                        Change of currency

 

(a)                                 Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then:

 

(i)            any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrower); and

 

(ii)           any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

 

(b)                                 If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

 

36.10                 Currency Conversion

 

(a)                                 For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.

 

(b)                                 The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

 

36.11                 Disruption to Payment Systems etc.

 

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:

 

(a)                                 the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

 

(b)                                 the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

 

(c)                                  the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

 

(d)                                 any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties  as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 44 (Amendments and Waivers);

 

(e)                                  the Facility Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any

 

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actions pursuant to or in connection with this Clause 36.11 (Disruption to Payment Systems etc.); and

 

(f)                                   the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

 

37                                  SET-OFF

 

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents other than a Hedging Agreement (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

37A                         BAIL-IN

 

37A.1    Contractual recognition of bail-in

 

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

(a)                                 any Bail-In Action in relation to any such liability, including (without limitation):

 

(i)            a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

 

(ii)           a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

 

(iii)          a cancellation of any such liability; and

 

(b)                                 a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

 

38                                  NOTICES

 

38.1                        Communications in writing

 

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

 

38.2                        Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:

 

(a)                                 in the case of the Borrower, the Owner Guarantors and the Parent Guarantor, that specified in Schedule 1 (The Parties);

 

(b)                                 in the case of each Lender, each Obligor, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;

 

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(c)                                  in the case of the Facility Agent, that specified in Schedule 1 (The Parties);

 

(d)                                 in the case of the Security Agent, that specified in Schedule 1 (The Parties); and

 

(e)                                  in the case of the ECA Agent, that specified in Schedule 1 (The Parties),

 

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.

 

38.3                        Delivery

 

(a)                                 Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

(i)            if by way of fax, when received in legible form; or

 

(ii)           if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under Clause 38.2 (Addresses), if addressed to that department or officer.

 

(b)                                 Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 (The Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).

 

(c)                                  All notices from or to an Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.

 

(d)                                 Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.

 

(e)                                  Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

 

38.4                        Notification of address and fax number

 

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 38.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

 

38.5                        Electronic communication

 

(a)                                 Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:

 

(i)            notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

 

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(ii)           notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.

 

(b)                                 Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication.

 

(c)                                  Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.

 

(d)                                 Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

 

(e)                                  Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 38.5 (Electronic communication).

 

(f)                                   Each Obligor may satisfy its obligation under the Finance Documents to which it is a party to deliver any information via telecopier, email or other electronic means (including by way of the Facility Agent’s Debtdomain system).  All Lenders confirm that they have consented to the use of the Facility Agent’s Debtdomain system as an accepted method of communication under or in connection with the Finance Documents and agree that Debtdomain system will be the primary method of communication between the Facility Agent, the ECA Agent and the Lenders.  The Lenders acknowledge that a communication made via Debtdomain will be effective once the communication is posted to Debtdomain by the Facility Agent or ECA Agent.

 

38.6                        English language

 

(a)                                 Any notice given under or in connection with any Finance Document must be in English.

 

(b)                                 All other documents provided under or in connection with any Finance Document must be:

 

(i)            in English; or

 

(ii)           if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

38.7                        Hedging Agreement

 

Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility.

 

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39                                  CALCULATIONS AND CERTIFICATES

 

39.1                        Accounts

 

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

39.2                        Certificates and determinations

 

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

39.3                        Day count convention

 

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

 

40                                  PARTIAL INVALIDITY

 

If, at any time, any provision of a Finance Document 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 under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

41                                  REMEDIES AND WAIVERS

 

No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of a Secured Party shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.

 

42                                  SETTLEMENT OR DISCHARGE CONDITIONAL

 

Any settlement or discharge under any Finance Document between any Finance Party and any Obligor shall be conditional upon no security or payment to any Finance Party by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any bankruptcy or insolvency law or otherwise.

 

43                                  IRREVOCABLE PAYMENT

 

If the Facility Agent considers that an amount paid or discharged by, or on behalf of, an Obligor or by any other person in purported payment or discharge of an obligation of that Obligor to a Finance Party under the Finance Documents is capable of being avoided or otherwise set aside on the bankruptcy, liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.

 

174

 

44                                  AMENDMENTS AND WAIVERS

 

44.1                        Required consents

 

Neither this Agreement nor any other Finance Documents nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Obligors party thereto and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with obligations incurred hereunder being directly affected in the case of following paragraphs (i) to (iii)) and, in the case of the following paragraph (vii), to the extent that any such Lender would be required to make an Advance in excess of its pro rata portion provided for in this Agreement or would receive a payment or prepayment of the Loan that (in any case) is less than its pro rata portion provided for in this Agreement, in each case, as a result of any such amendment, modification or waiver referred to in the following clause (vii)):

 

(i)            extend the final scheduled maturity of the Loan, extend the timing for or reduce the principal amount of any Repayment Date, or reduce the rate or extend the time of payment of fees or interest on the Loan, or reduce the principal amount thereof (except to the extent repaid in cash);

 

(ii)           release any of the Security Assets (except as expressly provided otherwise in the Finance Documents) under the Security Documents;

 

(iii)          amend, modify or waive any provision of this Clause 44 (Amendments and Waivers) or amend Clauses 2.2 (Finance Parties’ rights and obligations), 3 (Purpose), 7.2 (Change of control), 7.7 (Termination etc. of Sinosure Insurance Policies) or 18.10 (Use of proceeds; Margin regulations) or 18.17 (Sanctions) or 21.9 (Use of proceeds; Margin regulations) or 21.16 (Sanctions) or 28 (Changes to the Lenders);

 

(iv)          an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments ratably under the Facility;

 

(v)           reduce the percentage specified in the definition of Required Lenders or otherwise amend or modify the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Loan are included on the date of this Agreement),

 

(vi)          consent to the assignment or transfer by any Obligor of any of its respective rights and obligations under this Agreement,

 

(vii)         amend, modify or waive any provision in this Agreement to the extent providing for payments or prepayments of Loan to be applied pro rata among the Lenders entitled to such payments or prepayments of the Loan, or

 

(viii)        release any Guarantor from any guarantee to the extent same owns a Ship (other than as provided in this Agreement), provided, further, that no such change, waiver, discharge or termination shall (A) without the consent of the Facility Agent, amend, modify or waive any provision of Clause 30 (The Facility Agent and the Mandated Lead Arrangers) as same applies to the Facility Agent or any other provision as same relates to the rights or obligations of the Facility Agent, or (B) without the consent of the Security Agent, amend, modify or waive any provision relating to the rights or obligations of the Security Agent.

 

175

 

44.2                        Non-Consenting Lender

 

If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by paragraphs (i) through (viii), inclusive, of Clause 44.1 (Required Consents), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required (any such Lender, a “Non-Consenting Lender”) is not obtained, then the Borrower shall have the right, so long as all Non-Consenting Lenders whose individual consent is required are treated as described in either paragraphs (a) or (b) below, to:

 

(a)                                 replace each such Non-Consenting Lender with one or more Replacement Lenders pursuant to Clause 7.8 (Right of replacement and repayment and cancellation in relation to a single Lender) so long as at the time of such replacement, each such Replacement Lender consents to the proposed  change, waiver, discharge or termination; or

 

(b)                                 repay the outstanding Loan of such Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s consent, in accordance with Clause 44.1 (Required consents)

 

provided that, unless the Vessel Loans that are repaid pursuant to preceding paragraph (b) are immediately replaced in full at such time through the addition of new Lenders or the increase of the outstanding Vessel Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding paragraph (b), the Required Lenders (determined before giving effect to the proposed action) shall specifically consent thereto, provided, further, that in any event the Borrower shall not have the right to replace a Lender or repay such Lender’s Vessel Loan solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Clause 44.1 (Required consents).

 

44.3                        Other exceptions

 

(a)                                 An amendment or waiver which relates to the rights or obligations of a Servicing Party or the a Mandated Lead Arranger (each in their capacity as such) may not be effected without the consent of that Servicing Party or that Mandated Lead Arranger, as the case may be.

 

(b)                                 The Borrower and the Facility Agent, the Mandated Lead Arrangers, the ECA Agent, CEXIM or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.

 

(c)                                  An amendment or waiver which relates to the rights or obligations of a Hedge Counterparty (in its capacity as such) may not be effected without the consent of that Hedge Counterparty.

 

44.4                        Rights of a Defaulting Lender

 

Notwithstanding anything to the contrary herein, any Lender that is a Defaulting Lender shall not have any right to approve or disapprove of any amendment, waiver or consent hereunder; provided that, except as otherwise provided in Clause 15.3 (Defaulting Lender), (i) the Commitments of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender, and (ii) no payment to such Defaulting Lender shall be decreased or postponed without the consent of such Defaulting Lender.

 

45                                  CONFIDENTIAL INFORMATION

 

45.1                        Confidential Information

 

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 45.2 (Disclosure of Confidential

 

176

 

Information) and Clause 45.3 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

45.2                        Disclosure of Confidential Information

 

Any Finance Party may disclose:

 

(a)                                 to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

(b)                                 to any person:

 

(i)            to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;

 

(ii)           with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;

 

(iii)          appointed by any Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of Clause 30.15 (Relationship with the other Finance Parties));

 

(iv)          who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;

 

(v)           to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

 

(vi)          to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;

 

(vii)         to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.8 (Security over Lenders’ rights);

 

177

 

(viii)        who is a Party, a member of the Group or any related entity of a Transaction Obligor;

 

(ix)          as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or

 

(x)           with the consent of the Parent Guarantor;

 

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

 

(A)                               in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

(B)                               in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

(C)                               in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

 

(c)                                  to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement in such form as may be agreed between the Borrower and the relevant Finance Party;

 

(d)                                 to any Rating Agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such Rating Agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the Rating Agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and

 

(e)                                  to Sinosure.

 

178

 

45.3                        Disclosure to numbering service providers

 

(a)                                 Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

 

(i)            names of Obligors;

 

(ii)           country of domicile of Obligors;

 

(iii)          place of incorporation/formation of Obligors;

 

(iv)          date of this Agreement;

 

(v)           Clause 47 (Governing Law);

 

(vi)          the names of the Facility Agent, the Security Agent and the Mandated Lead Arrangers;

 

(vii)         date of each amendment and restatement of this Agreement;

 

(viii)        amount of Total Commitments;

 

(ix)          currency of the Facility;

 

(x)           type of Facility;

 

(xi)          ranking of Facility;

 

(xii)         a Termination Date;

 

(xiii)        changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and

 

(xiv)        such other information agreed between such Finance Party and the Borrower,

 

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

(b)                                 The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

 

(c)                                  Each Obligor represents that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

 

45.4                        Entire agreement

 

This Clause 45 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

45.5                        Inside information

 

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated

 

179

 

or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

45.6                        Notification of disclosure

 

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

 

(a)                                 of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 45.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

(b)                                 upon becoming aware that Confidential Information has been disclosed in breach of this Clause 45 (Confidential Information).

 

45.7                        [Intentionally left blank]

 

46                                  COUNTERPARTS

 

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

180

 

SECTION 12

 

GOVERNING LAW AND ENFORCEMENT

 

47                                  GOVERNING LAW

 

This Agreement and the other Finance Documents (except as otherwise provided in a Finance Document) and any non-contractual obligations arising out of or in connection with them are governed by English law.

 

48                                  ENFORCEMENT

 

48.1                        Jurisdiction

 

(a)                                 The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any other Finance Documents to which the Obligor is a party (including a dispute regarding the existence, validity or termination of this Agreement or such Finance Document or any non-contractual obligation arising out of or in connection with this Agreement or such Finance Document) (a “Dispute”).

 

(b)                                 The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.

 

(c)                                  This Clause 48.1 (Jurisdiction) is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

48.2                        Service of process

 

(a)                                 Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

 

(i)            irrevocably appoints Cheesewrights as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

 

(ii)           agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

 

(b)                                 If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower (on behalf of all the Obligors) must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.

 

49                                  PATRIOT ACT NOTICE

 

49.1                        PATRIOT Act notice

 

Each of the Secured Parties hereby notifies the Obligors that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Secured Parties, each of the Secured Parties is required to obtain, verify and record certain information and documentation that identifies each Obligor, which information includes the name and address of each Obligor and such other information that will allow each of the Secured Parties to identify each Obligor in accordance with the PATRIOT Act.

 

181

 

EXECUTION PAGES

 

WHEREFORE, the Parties have caused this Facility Agreement executed on 1 December 2015 and dated as of 30 November 2015, as supplemented by a supplemental agreement dated 28 December 2015 and as amended and restated by an Amending and Restating Deed to be executed on                                    2016.

 

182

 

	
GENER8 MARITIME SUBSIDIARY VII INC., as   Borrower
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 MARITIME, INC., as Parent   Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 STRENGTH LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 SUPREME   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 SUCCESS   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

183

 

	
GENER8 ANDRIOTIS   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 CHIOTIS   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GENER8 MILTIADES   LLC, as Owner   Guarantor and Hedge Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

184

 

	
CITIBANK, N.A., as Global Co-ordinator
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,   NEW YORK BRANCH, as Global   Co-ordinator
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

185

 

	
CITIBANK, N.A., as Bookrunner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

186

 

	
CITIBANK, N.A., as Mandated Lead Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF   CHINA, as Mandated Lead   Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BANK OF CHINA, NEW YORK   BRANCH, as Mandated Lead   Arranger
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

187

 

	
CITIBANK,   N.A., LONDON BRANCH, as Original   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF CHINA, as Original Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BANK OF CHINA, NEW YORK BRANCH, as Original Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

188

 

	
CITIBANK, N.A., LONDON BRANCH, as Hedge   Counterparty
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

189

 

	
CITIBANK, N.A., LONDON   BRANCH, as ECA Co-ordinator   and ECA Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC, NEW YORK BRANCH, as Facility Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
NORDEA BANK FINLAND PLC, NEW   YORK BRANCH, as Security   Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

190

 

SCHEDULE 1 
 THE PARTIES

 

PART A

 

THE OBLIGORS

 

	
Name of Borrower
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 MARITIME SUBSIDIARY VII INC.
    	
 
    	
REPUBLIC OF MARSHALL
   ISLANDS
    	
 
    	
78649
    	
 
    	
299 PARK AVENUE,
   2nd Floor
   NEW YORK, NY 10171-0002
   Attn: Chief Financial Officer
   Telephone: (212) 763-5600
   Facsimile: (212) 763-5608
   E-mail: finance@gener8maritime.com

With a copy to:

Kramer Levin Naftalis & Frankel LLP
   1177 Avenue of the Americas
   New York, NY 10036
   Attention: Kenneth Chin, Esq.

Telephone: +1 212 715 9100
   Facsimile: +1 212 715 8000
    

 

	
Name of Parent
   Guarantor
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 MARITIME INC.
    	
 
    	
REPUBLIC OF MARSHALL
   ISLANDS
    	
 
    	
31343
    	
 
    	
299 PARK AVENUE, 
   2nd Floor

NEW YORK, NY 10171-0002

Attn: Chief Financial Officer

Telephone: (212) 763-5600

Facsimile: (212) 763-5608

E-mail: finance@gener8maritime.com

 

With a copy to:

 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Attention: Kenneth Chin, Esq.

 

Telephone: +1 212 715 9100

Facsimile: +1 212 715 8000
    

 

191

 

	
Name of Owner
   Guarantor / Hedge
   Guarantor
    	
 
    	
Place of Incorporation
   or Formation
    	
 
    	
Registration number
   (or equivalent, if any)
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
GENER8 STRENGTH LLC

GENER8 SUPREME LLC

GENER8 SUCCESS LLC

GENER8 ANDRIOTIS LLC

GENER8 CHIOTIS LLC

GENER8 MILTIADES LLC

 
    	
 
    	
REPUBLIC OF MARSHALL
   ISLANDS
    	
 
    	
963430

963435

963434

963431

963432

963433

 
    	
 
    	
299 PARK AVENUE, 
   2nd Floor

NEW YORK, NY 10171-0002

Attn: Chief Financial Officer

Telephone: (212) 763-5600

Facsimile: (212) 763-5608

E-mail: finance@gener8maritime.com

 

With a copy to:

 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Attention: Kenneth Chin, Esq.

 

Telephone: +1 212 715 9100

Facsimile: +1 212 715   8000
    

 

192

 

PART B

 

THE ORIGINAL LENDERS

 

	
Name of Commercial Lender
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch,
   Citigroup Centre, Canada Square,
   London, E14 5LB
   c/o Citibank International Limited,
   Poland Branch
   7/9 Traugutta str., 1st Floor
   00-985 Warsaw, Poland
   Attention: Loan Operations Department
   (Kara Catt / Romina Coates — EAF Middle Office)
   Telephone: +44 207986 4881
   Facsimile: +44 207 655 2380
   E-mail: cibuk.loans@citi.com

With a copy to:

388 Greenwich Street,
   New York, NY, 10013
   Attention: Meghan O’Connor
   Telephone: +1 212 816 8557
   Facsimile: N/A
   E-mail: meghan.oconnor@citi.com
    
	
 
    	
 
    	
 
    
	
THE EXPORT-IMPORT BANK OF CHINA
    	
 
    	
No.30 Fu Xing Men Nei St., Xicheng District
   Beijing, China100031
   Attention: Transport Finance Department(Jenny Mi/ Wei Zhenyu)
   Telephone: +86 10 83578412/83579512
   Facsimile: +86 10 83578428/9
   Email: mijie@eximbank.gov.cn/
   weizhenyu@eximbank.gov.cn
    
	
 
    	
 
    	
 
    
	
BANK OF CHINA, NEW YORK BRANCH
    	
 
    	
Bank of China, New York Branch
   410 Madison Avenue
   New York, NY 10017
   Attention: Operation Service Department

(Ms. Wenzhen   Zhang)

Telephone: +1 646 231 3143
   Facsimile: +1 212 371 4185
   E-mail: synloanadmin.nyb@bocusa.com

wzhang@bocusa.com
    

 

193

 

PART C

 

HEDGE COUNTERPARTIES

 

	
Name of Hedge Counterparties
    	
 
    	
Address for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch,

Citigroup Centre, Canada Square,

London, E14 5LB

c/o Citibank International Limited, 

Poland Branch

7/9 Traugutta str., 1st Floor 

00-985 Warsaw, Poland

Attention: Loan Operations Department

(Kara Catt / Romina Coates – EAF Middle Office)

Telephone: +44 207986 4881

Facsimile:    +44 207 655 2380 

E-mail: cibuk.loans@citi.com

 

With a copy to:

 

388 Greenwich Street, 

New York, NY, 10013 

Attention: Meghan O’Connor

Telephone: +1 212 816 8557 

Facsimile: N/A

E-mail:    meghan.oconnor@citi.com
    

 

194

 

PART D

 

THE SERVICING PARTIES

 

	
Name of Facility Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,
   NEW YORK BRANCH
    	
 
    	
1211 Avenue of the   Americas,

23rd Floor,

New York, NY 10036
   Attn:  Shipping Offshore and Oil Services

 

Telephone:    +1 212 318 9636
   Facsimile:   +1 212 421 4420
   E-mail: dlny-ny-cadloan@nordea.com

   with a copy to:

 

Essendropsgate 7
   P.O. Box 1166 Sentrum
   NO-0107 Oslo, Norway

 

Facsimile: +47 22 48 66 78
    E-mail: agency.soosid@nordea.com
    

 

	
Name of Security Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
NORDEA BANK FINLAND PLC,
   NEW YORK BRANCH
    	
 
    	
1211 Avenue of the   Americas,

23rd Floor,

New York, NY 10036
   Attn:  Shipping Offshore and Oil Services

 

Telephone:    +1 212 318 9636
   Facsimile:   +1 212 421 4420
   E-mail: dlny-ny-cadloan@nordea.com

   with a copy to:

 

Essendropsgate 7
   P.O. Box 1166 Sentrum
   NO-0107 Oslo, Norway

 

Facsimile: +47 22 48 66 78
    E-mail: agency.soosid@nordea.com
    

 

	
Name of ECA Agent
    	
 
    	
Address   for Communication
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A.,
   LONDON BRANCH
    	
 
    	
Citibank N.A., London Branch

c/o Citibank International Limited, 
   Poland Branch

7/9 Traugutta   str., 1st Floor

00-985 Warsaw, Poland

Attention: Loan Operations Department

(Kara Catt/ Romina Coates — EAF Middle Office)
    

 

195

 

	
 
    	
 
    	
Facsimile:    +44 207 655 2380

Telephone: +44   207986 4881

E-mail:   cibuk.loans@citi.com
    

 

196

 

SCHEDULE 2

 

CONDITIONS PRECEDENT

 

PART A

 

CONDITIONS PRECEDENT TO INITIAL UTILISATION REQUEST

 

1                                         Obligors

 

1.1                               A copy of the Constitutional Documents of each Obligor.

 

1.2                               A copy of a resolution of the board of directors (or equivalent) of each Obligor:

 

(a)                                 approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;

 

(b)                                 authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

 

(c)                                  authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices (including, if relevant, a Utilisation Request) to be signed and/or dispatched by it under, or in connection with, the Finance Documents to which it is a party.

 

1.3                               A specimen of the signature of each person authorized by the resolution referred to in paragraph 1.2 above.

 

1.4                               A copy of a resolution signed by the holder of the issued shares in each of the Owner Guarantors, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Owner Guarantor is a party.

 

1.5                               A certificate of an authorized signatory of the relevant Obligor certifying that each copy (but not an original) document relating to it specified in paragraphs 1 and 2 this Part A of Schedule 2 (Conditions Precedent) and every other copy document (but not an original) delivered by it under this Schedule, is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

2                                         Shipbuilding Contracts and other Documents

 

2.1                               Copies of the Shipbuilding Contracts (which shall for the avoidance of doubt, include the Intercompany Ship Delivery Agreement) and the Merger Agreement and of all documents signed or issued by an Obligor or its Affiliate or the Seller (or any of them) under or in connection with it.

 

3                                         Finance Documents

 

3.1                               A duly executed copy of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent).

 

3.2                               A duly executed copy of any other document required to be delivered by each Finance Document if not otherwise referred to this Schedule 2 (Conditions Precedent).

 

197

 

4                                         Security

 

4.1                               A duly executed copy of the Account Security in relation to each Account and of the Shares Security in respect of the Borrower and each Owner Guarantor (and of each document to be delivered under each of them).

 

4.2                               If applicable, a duly executed copy of each Assignment of Hedging Agreement in respect of the Borrower or the Parent Guarantor (as the case may be) (and of each document to be delivered under each of them).

 

4.3                               Documentary evidence that the Security intended to be created on or prior to the date of the first Utilisation Request by each of the Finance Documents has been duly perfected under applicable law.

 

5                                         Legal opinions

 

5.1                               A legal opinion of Watson Farley & Williams which shall be addressed to the Facility Agent, the Security Agent, the Lenders and Sinosure on such matters concerning English laws.

 

5.2                               A legal opinion of Watson Farley & Williams LLP which shall be addressed to the Facility Agent, the Security Agent, the Lenders and Sinosure on such matters concerning the laws of the Marshall Islands.

 

5.3                               A legal opinion of Global Law Office which shall be addressed to the Facility Agent from lawyers (either issued or in a form acceptable to the Facility Agent) on such matters concerning the laws of the PRC in respect of Sinosure and/or the Sinosure Insurance Policies.

 

5.4                               Favourable legal opinions by lawyers appointed by the Facility Agent on such matters concerning the laws of such relevant jurisdictions as the Facility Agent may require, substantially in the form distributed to the Original Lenders before signing this Agreement.

 

6                                         Other documents and evidence

 

6.1                               The Original Financial Statements of the Parent Guarantor.

 

6.2                               Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees and Sinosure Premium) and Clause 16 (Costs and Expenses) have been paid or will be paid by the first Utilisation Date.

 

6.3                               Such evidence as the Facility Agent and Sinosure may require for the Finance Parties to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the transactions contemplated by the Finance Documents.

 

6.4                               A copy of Sinosure’s written approval notice in respect of the transactions contemplated by the Finance Documents, in form and substance satisfactory to the Lenders and CEXIM.

 

6.5                               Evidence that any process agent referred to in Clause 48.2 (Service of process) has accepted its appointment.

 

6.6                               Evidence of written support by the competent Chinese Embassy and China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) for the export of the Ships by the relevant Seller.

 

198

 

PART B

 

CONDITIONS PRECEDENT TO UTILISATION —  ADVANCE

 

In this Part:

 

“Relevant Advance” means the Advance for which a drawing has been requested under the relevant Utilisation Request.

 

“Relevant Ship” means the Ship to which the proposed Advance relates.

 

“Relevant Owner Guarantor” means the Owner Guarantor owning the Relevant Ship.

 

1                                         Borrower and Relevant Owner Guarantor

 

A certificate of an authorized signatory of the Borrower and the Relevant Owner Guarantor certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at the Utilisation Date for the Relevant Advance (and in particular, that there are no further amendments and/or supplements to the Shipbuilding Contract other than those previously provided to the Facility Agent pursuant to Part A of this Schedule 2 (Conditions Precedent) or pursuant to Part B of this Schedule 2 (Conditions Precedent)).

 

2                                         Finance Documents

 

2.1                               A duly executed copy of each Security Document (other than the Mortgage and the relevant Manager’s Undertakings) if not previously provided pursuant to Part A of this Schedule 2 (Conditions Precedent).

 

2.2                               A duly executed copy of any other document required to be delivered by each Finance Document if not previously provided pursuant to Part A of this Schedule 2 (Conditions Precedent).

 

3                                         Ship and other security

 

3.1                               Such documentary evidence as the Facility Agent and its legal advisers may require in relation to the due authorization and execution of the relevant Shipbuilding Contracts by each of the parties thereto.

 

3.2                               Such documentary evidence as the Facility Agent and its legal advisers may require in relation to evidencing that the relevant Owner Guarantor is the buyer (and shall be the legal and beneficial owner) of the Relevant Ship.

 

3.3                               A duly executed original of the Mortgage in respect of the relevant Ship and of each document to be delivered under or pursuant thereto together with documentary evidence that the Mortgage in respect of the Relevant Ship has been duly registered as a valid first preferred or first priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.

 

3.4                               Documentary evidence that the Relevant Ship:

 

(a)                                 has been unconditionally delivered by the relevant Seller to, and accepted by, the Relevant Owner Guarantor under the Shipbuilding Contract relating to the Relevant Ship and that the full purchase price payable and all other sums due to such Seller under the said Shipbuilding Contract, other than the sums to be financed pursuant to the Utilisation of the Delivery

 

199

 

Advance, have been, or upon the Utilisation of the Delivery Advance, will be, paid to such Seller;

 

(b)                                 is definitively and if applicable, permanently registered in the name of the Relevant Owner Guarantor under the Approved Flag;

 

(c)                                  is in the absolute and unencumbered ownership of the Relevant Owner Guarantor save as contemplated by the Finance Documents;

 

(d)                                 maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and

 

(e)                                  is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.

 

3.5                               Documents establishing that the Relevant Ship will, as from the Utilisation Date of the Relevant Advance, be managed commercially by its Approved Commercial Manager and managed technically by its Approved Technical Manager on terms acceptable to the Facility Agent acting with the authorization of all of the Lenders together with:

 

(a)                                 to the extent commercially practicable, a Manager’s Undertaking for each of the Approved Managers for the Relevant Ship; and

 

(b)                                 copies of the relevant Pool Agreement (if applicable and including all relevant novations, amendments, supplements thereto), the relevant Approved Technical Manager’s Document of Compliance and of the Relevant Ship’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to the Relevant Ship including without limitation an ISSC.

 

3.6                               An opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances as the Facility Agent may reasonably require.

 

3.7                               Two Appraisals of the Relevant Ship stated to be for the purposes of this Agreement and dated not earlier than 14 Business Days before the Utilisation Date, evidencing the Fair Market Value of the Relevant Ship.

 

3.8                               Copy of any Charter to which the Relevant Ship is subject (including without limitation, any charter pursuant to the relevant Pool Agreement (if any).

 

3.9                               The Relevant Ship’s INMARSAT number (or equivalent).

 

4                                         Legal opinions

 

Legal opinions of the legal advisers to the Facility Agent in the jurisdiction of the Approved Flag of the Relevant Ship, the Republic of the Marshall Islands, the PRC and such other relevant jurisdictions as the Facility Agent may require.

 

5                                         Other documents and evidence

 

5.1                               Evidence that the fees, costs and expenses then due from Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Utilisation Date for the Delivery Advance.

 

200

 

5.2                               Evidence satisfactory to the Facility Agent that the Parent Guarantor and/or one or more of its Subsidiaries has made payment, or has procured the payment:

 

(a)                                 to the Seller, of the difference between (i) the Contract Price payable under the Shipbuilding Contract relating to the Relevant Ship and (ii) the sums to be financed pursuant to the Utilisation of the relevant Advance, to the Seller; and

 

(b)                                 to the Debt Service Reserve Account, an amount equal to the aggregate of:

 

(i)                                     the first Repayment Instalment and the amount of interest payable on the first due date for payment of interest relating to the Vessel Loan relating to the Relevant Advance; and

 

(ii)                                  the next Repayment Instalment and amount of interest payment on the next due date for payment of interest in respect of each utilised Vessel Loan,

 

provided that payment of such amounts may, if requested by the Borrower, be financed by the proceeds of the Relevant Advance in accordance with and upon fulfilment of the conditions set out in Clause 3.1(c) (Purpose).

 

5.3                               Evidence satisfactory to the ECA Agent that the relevant Sinosure Premium payable by the Borrower for the Relevant Advance, have been paid or will be paid by the Utilisation Date of the Relevant Advance.

 

5.4                               Evidence satisfactory to the Facility Agent that the Relevant Owner Guarantor is or will be the legal and beneficial owner of the Relevant Ship pursuant to its Shipbuilding Contract by the Utilisation Date of the Relevant Advance.

 

5.5                               Certified copies of the duly executed Sinosure Insurance Policy relating to the Relevant Ship together with such documentary evidence as the ECA Agent and its legal advisers may require in relation to the due authorisation and execution by Sinosure of such Sinosure Insurance Policy.

 

5.6                               Confirmation from the ECA Agent that it has not been notified by Sinosure of cancellation of any existing Sinosure Insurance Policy in relation to any Ship.

 

5.7                               A certified English translation in respect of any other documents referred to above as may be required by the Facility Agent.

 

201

 

SCHEDULE 3

 

UTILISATION REQUEST

 

From:               GENER8 MARITIME SUBSIDIARY VII INC.

 

To:                             NORDEA BANK FINLAND PLC, NEW YORK BRANCH as Facility Agent

 

Dated:           [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] 
 (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

2                                         We wish to borrow the Advance under Vessel Loan relating to Ship [·] on the following terms:

 

	
Proposed Utilisation Date:
    	
[·] (or, if   that is not a Business Day, the next Business Day)
    
	
 
    	
 
    
	
Amount:
    	
[·] or, if   less, the Available Commitment of all Lenders in relation to such Vessel Loan
    
	
 
    	
 
    
	
Interest Period:
    	
[·]
    

 

3                                         We confirm that each condition specified in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent) of this Agreement as they relate to the Advance to which this Utilisation Request refers is satisfied on the date of this Utilisation Request.

 

4                                         The proceeds of this Advance should be credited to: [account].

 

5                                         This Utilisation Request is irrevocable.

 

	
Yours faithfully
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[·]
    	
 
    
	
authorized signatory for
    	
 
    
	
GENER8   MARITIME SUBSIDIARY VII INC.
    	
 
    

 

202

 

SCHEDULE 4

 

COMMITMENTS

 

	
 
    	
 
    	
LENDER
    	
 
    	
COMMITMENT ($)
    	
 
    
	
Ship A
    	
 
    	
Citibank, N.A., London   Branch (“Citibank”)
    	
 
    	
6,696,202.50
    	
 
    
	
 
    	
 
    	
The Export-Import Bank of China (“CEXIM”)
    	
 
    	
33,481,012.50
    	
 
    
	
 
    	
 
    	
Bank of China, New York Branch (“BOC”)
    	
 
    	
26,784,810.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP A ($)
    	
 
    	
 
    	
 
    	
66,962,025.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship B
    	
 
    	
Citibank
    	
 
    	
6,696,202.50
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
33,481,012.50
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
26,784,810.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP B ($)
    	
 
    	
 
    	
 
    	
66,962,025.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship C
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP C ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    

 

203

 

	
 
    	
 
    	
LENDER
    	
 
    	
COMMITMENT ($)
    	
 
    
	
Ship D
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP D ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship E
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP E ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ship F
    	
 
    	
Citibank
    	
 
    	
6,282,586.13
    	
 
    
	
 
    	
 
    	
CEXIM
    	
 
    	
31,412,930.62
    	
 
    
	
 
    	
 
    	
BOC
    	
 
    	
25,130,344.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENT FOR SHIP F ($)
    	
 
    	
 
    	
 
    	
62,825,861.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COMMITMENTS OF THE LENDERS
    	
 
    	
 
    	
 
    	
385,227,495.00
    	
 
    

 

204

 

SCHEDULE 5

 

FORM OF TRANSFER CERTIFICATE

 

To:                             [·] as Facility Agent

 

From:               [The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

 

Dated:           [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Transfer Certificate.  Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

2                                         We refer to Clause 28.5 (Procedure for transfer) of the Agreement:

 

(a)                                 The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender’s rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender’s Commitment and Contribution in the Loan under the Agreement as specified in the Schedule in accordance with Clause 28.5 (Procedure for transfer) of the Agreement.

 

(b)                                 The proposed Transfer Date is [·].

 

(c)                                  The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 38.2 (Addresses) of the Agreement are set out in the Schedule.

 

3                                         The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 28.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

 

4                                         This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

5                                         This Transfer Certificate and any non-contractual obligations arising out of or in connection with it, are governed by English law.

 

6                                         This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

 

7                                         The New Lender confirms that, immediately following the effective date of this Transfer Certificate, it will be a FATCA Exempt Party.

 

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to

 

205

 

perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

 

206

 

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

 

[Facility Office address, fax number and attention details

 

for notices and account details for payments.]

 

	
[Existing Lender]
    	
[New Lender]
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
Name:
    
	
Title:
    	
 
    	
Title:
    

 

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

 

	
[Facility Agent]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
				

 

207

 

SCHEDULE 6

 

FORM OF ASSIGNMENT AGREEMENT

 

To:                             [·] as Facility Agent and [·] as Borrower, for and on behalf of each Obligor

 

From:               [the Existing Lender] (the “Existing Lender”) and [the New Lender] (the “New Lender”)

 

Dated: [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is an Assignment Agreement.  Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

 

2                                         We refer to Clause 28.6 (Procedure for assignment):

 

(a)                                 The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender’s Commitment and Contribution in the Loan under the Agreement as specified in the Schedule.

 

(b)                                 The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitments and Contribution in the Loan under the Agreement specified in the Schedule.

 

(c)                                  The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

 

(d)                                 All rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender’s title and of any rights or equities which the Borrower or any other [Transaction] Obligor had against the Existing Lender.

 

3                                         The proposed Transfer Date is [·].

 

4                                         On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.

 

5                                         The Facility Office and address, fax, number and attention details for notices of the New Lender for the purposes of Clause 38.2 (Addresses) are set out in the Schedule.

 

6                                         The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 28.4 (Limitation of responsibility of Existing Lenders).

 

7                                         This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 28.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower (on behalf of each [Transaction] Obligor) of the assignment referred to in this Assignment Agreement.

 

208

 

8                                         This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.

 

9                                         This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

10                                  This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.

 

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions.  It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

 

209

 

THE SCHEDULE

 

Commitment rights and obligations to be transferred by assignment, release and accession

 

[insert relevant details]

 

[Facility office address, fax number and attention details for notices
 and account details for payments]

 

	
[Existing Lender]
    	
[New Lender]
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
Name:
    
	
Title:
    	
 
    	
Title:
    

 

This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

 

Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.

 

	
[Facility Agent]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
				

 

210

 

SCHEDULE 7

 

FORM OF COMPLIANCE CERTIFICATE

 

To:                             NORDEA BANK FINLAND PLC, NEW YORK BRANCH as Facility Agent

 

From:               GENER8 MARITIME, INC.

 

Dated:           [·]

 

Dear Sirs

 

GENER8 MARITIME SUBSIDIARY VII INC.  — Facility Agreement dated [·] (the “Agreement”)

 

1                                         We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

2                                         We confirm that:  [Insert details of covenants to be certified]

 

3                                         We confirm that as at the date hereof:

 

(a)                                 no [Event of] Default is continuing.](1)

 

(b)                                 no event which would result in an Material Adverse Effect has occurred or would result from the proposed Advance; and

 

(c)                                  the Repeating Representations to be made by each Obligor are true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which they shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under Clause 18.7 (Financial statements; Financial Condition; Undisclosed Liabilities) which shall be made with reference to the latest financial statements provided under the Agreement and as at the last day of the financial period in relation to which such financial statements relate).

 

	
Yours faithfully,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[·]
    	
 
    
	
authorized signatory for
    	
 
    
	
GENER8 MARITIME, INC.
    	
 
    
	
 
    	
 
    
	
[insert applicable certification language]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf of
    	
 
    
	
[name of Auditors of the   Parent Guarantor]
    	
 
    

 

(1) If this statement cannot be made, the certificate should identify any [Event of] Default that is continuing and the steps, if any, being taken to remedy it.

 

211

 

SCHEDULE 8

 

DETAILS OF SHIPS

 

	
Ship
    	
 
    	
Hull
   Number
    	
 
    	
Owner Guarantor
    	
 
    	
Builder
    	
 
    	
Shipbuilding Contract
    	
 
    	
Ship Name
    	
 
    	
Approved Classification
    	
 
    	
Scheduled
   Delivery
   Date
    	
 
    	
Maximum
   Contract Price
   (USD)
    	
 
    
	
Ship A
    	
 
    	
H1384
    	
 
    	
Gener8 Strength LLC
   (“Owner Guarantor A”)
    	
 
    	
SWS(2)
    	
 
    	
Shipbuilding Contract   dated 21 March 2014 (Supplement dated 21 March 2014 and Addendum   No.1 dated 21 March 2014) signed by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Strength
    	
 
    	
ABS/CCS
    	
 
    	
10/29/15
    	
 
    	
99,203,000.00
    	
 
    
	
Ship B
    	
 
    	
H1385
    	
 
    	
Gener8 Supreme LLC
   (“Owner Guarantor B”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 21 March 2014 (Supplement dated 21 March 2014 and Addendum   No.1 dated 21 March 2014) signed by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Supreme
    	
 
    	
ABS/CCS
    	
 
    	
1/6/16
    	
 
    	
99,203,000.00
    	
 
    
	
Ship C
    	
 
    	
H1355
    	
 
    	
Gener8 Success LLC
   (“Owner Guarantor C”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Success
    	
 
    	
ABS/CCS
    	
 
    	
3/30/16
    	
 
    	
93,075,350.00
    	
 
    
	
Ship D
    	
 
    	
H1356
    	
 
    	
Gener8 Andriotis LLC
   (“Owner Guarantor D”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Andriotis
    	
 
    	
ABS/CCS
    	
 
    	
4/30/16
    	
 
    	
93,075,350.00
    	
 
    

 

(2) Shanghai Waigaoqiao Shipbuilding Co., Ltd.

 

212

 

	
Ship
    	
 
    	
Hull
   Number
    	
 
    	
Owner Guarantor
    	
 
    	
Builder
    	
 
    	
Shipbuilding Contract
    	
 
    	
Ship Name
    	
 
    	
Approved Classification
    	
 
    	
Scheduled
   Delivery
   Date
    	
 
    	
Maximum
   Contract Price
   (USD)
    	
 
    
	
Ship E
    	
 
    	
H1357
    	
 
    	
Gener8 Chiotis LLC (“Owner Guarantor E”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Chiotis
    	
 
    	
ABS/CCS
    	
 
    	
8/23/16
    	
 
    	
93,075,350.00
    	
 
    
	
Ship F
    	
 
    	
H1358
    	
 
    	
Gener8 Miltiades LLC (“Owner Guarantor F”)
    	
 
    	
SWS
    	
 
    	
Shipbuilding Contract   dated 17 December 2013 (Supplement dated 17 December 2013) signed   by Navig8 Crude Tankers Inc.
    	
 
    	
Gener8 Miltiades
    	
 
    	
ABS/CCS
    	
 
    	
11/1/16
    	
 
    	
93,075,350.00
    	
 
    

 

213

 

SCHEDULE 9

 

ERISA PLANS AND CONTRIBUTIONS

 

General Maritime Corporation 401(k) Plan and Trust

 

214

 

SCHEDULE 10

 

SUBSIDIARIES

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    
	
GMR Zeus LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Atlas LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Hercules LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Ulysses LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Poseidon LLC
    	
 
    	
Gener8 Maritime Subsidiary   II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Victory Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Vision Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
GMR Spartiate LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Maniate LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR St Nikolas LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR George T LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Kara G LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Harriet G LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Orion LLC
    	
 
    	
Gener8 Maritime Subsidiary   II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Argus LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Spyridon LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Horn LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Phoenix LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    

 

215

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    
	
GMR Strength LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Daphne LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Defiance LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Elektra LLC
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Companion Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Compatriot Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Consul Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary II Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Gener8 Maritime   Subsidiary III Ltd.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
Gener8 Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Minotaur LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Agamemnon LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100%
    	
 
    	
Republic of Liberia
    
	
GMR Hope LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
GMR Chartering LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100%
    	
 
    	
New York
    
	
Gener8 Maritime   Management LLC
    	
 
    	
Gener8 Maritime   Subsidiary NEW IV Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
General Maritime   Management (Portugal) LLC
    	
 
    	
Gener8 Maritime   Management LLC
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Unique Tankers LLC
    	
 
    	
Gener8 Maritime   Management LLC
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
General Maritime   Management (Portugal) Limitada
    	
 
    	
Gener8 Maritime   Management (Portugal) LLC
    	
 
    	
100%
    	
 
    	
Portugal
    
	
General Maritime   Crewing Pte. Limited
    	
 
    	
Gener8 Maritime   Management (Portugal) LLC
    	
 
    	
100%
    	
 
    	
Singapore
    
	
General Maritime   Crewing Pte. Limited (India Division Office; not a separate entity)
    	
 
    	
Gener8 Maritime Crewing   Pte. Limited
    	
 
    	
100%
    	
 
    	
India
    

 

216

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    
	
General Maritime   Crewing Pte. Limited
    	
 
    	
Gener8 Maritime Crewing   Pte. Limited
    	
 
    	
100%
    	
 
    	
Russia
    
	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Neptune LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Athena LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Apollo LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Ares LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Hera LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Constantine LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Oceanus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Nautilus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the Marshall   Islands
    
	
Gener8 Macedon LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Noble LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Ethos LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Perseus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Theseus LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Hector LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Nestor LLC
    	
 
    	
Gener8 Maritime   Subsidiary VIII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    

 

217

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    
	
Gener8 Strength LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Supreme LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Andriotis LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Miltiades LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Success LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Chiotis LLC
    	
 
    	
Gener8 Maritime   Subsidiary VII Inc.
    	
 
    	
100%
    	
 
    	
Republic of the Marshall   Islands
    
	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Concord Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Contest Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Concept Ltd.
    	
 
    	
Gener8 Maritime   Subsidiary VI Inc.
    	
 
    	
100%
    	
 
    	
Bermuda
    
	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
Gener8   Maritime, Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Strength Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Supreme Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Andriotis Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Miltiades Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Success Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Chiotis Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 1 Inc.
    	
 
    	
Gener8 Maritime Subsidiary   Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 2 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    

 

218

 

	
Name of Subsidiary
    	
 
    	
Direct Owner(s)
    	
 
    	
Percent (%)
   Ownership
    	
 
    	
Jurisdiction of
   Organization
    
	
Gener8 Tankers 3 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 4 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 5 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 6 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 7 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
Gener8 Tankers 8 Inc.
    	
 
    	
Gener8 Maritime   Subsidiary Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Cavaliere Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the Marshall   Islands
    
	
STI Dundee Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Edinburgh Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Esles Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Glasgow Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Newcastle Shipping   Company Limited
    	
 
    	
Gener8 Maritime Subsidiary   V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    
	
STI Perth Shipping   Company Limited
    	
 
    	
Gener8 Maritime   Subsidiary V Inc.
    	
 
    	
100%
    	
 
    	
Republic of the   Marshall Islands
    

 

219

 

SCHEDULE 11

 

FINANCIAL INDEBTEDNESS

 

1                                         Approximately $622,317,313 remaining instalment payments as of 12 May 2016 due under the shipbuilding contracts for 21 VLCCs.

 

2                                         Letter of credit of $1,385,378 dated as of 30 June 2015 by and among Fisher-Park Lane Owner LLC, as landlord and General Maritime Corporation, as tenant.

 

220

 

SCHEDULE 12

 

INSURANCES

 

NONE.

 

221

 

SCHEDULE 13

 

EXISTING TRANSACTIONS

 

1.              Corporate Administration Agreement, dated 17 December 2013, between Navig8 Crude Tankers Inc. and Navig8 Asia Pte Ltd (amended on 25 March 2014 and 7 May 2015)

 

2.              Project Structuring Agreement, dated 17 December 2013, between Navig8 Limited and Navig8 DMCC (amended on 25 March 2014)

 

3.              Plan Approval and Construction Supervision Agreement Relating to Hull No’s. NTP0137 and NTP0138, dated 25 March 2014, between Navig8 Crude Tankers Inc. and Navig8 Shipmanagement Pte Ltd.

 

222

 

SCHEDULE 14

 

NON-CASH CHARGES

 

1.              noncash interest expense and amortization of debt discount and commissions and other fees and charges, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements, associated with Financial Indebtedness for such period (whether amortized or immediately expensed) less any gains on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements;

 

2.              all amounts attributable to impairment charges on intangible assets, including, without limitation, amortization of intangible assets (including goodwill) for such period;

 

3.              any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans;

 

4.              non-cash restricted stock compensation, including, without limitation, any restricted stock units; and

 

5.              losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any gains on such minority interests or investments for such period.

 

223

 

SCHEDULE 15

 

TIMETABLES

 

	
Delivery of a duly completed Utilisation   Request (Clause 5.1 (Delivery of a   Utilisation Request))
    	
Five (5) Business   Days before the intended Utilisation Date (Clause 5.1 (Delivery   of a Utilisation Request)) or the expiry of the preceding Interest   Period (Clause 9.1 (Interest Periods))
    
	
 
    	
 
    
	
Facility Agent notifies the Lenders of the   Advance in accordance with Clause 5.4 (Lenders’ participation)
    	
Four (4) Business   Days before the intended Utilisation Date.
    
	
 
    	
 
    
	
LIBOR is fixed
    	
Quotation Day as of 11:00 am New York time
    

 

224

 

SCHEDULE 16

 

FORM OF MT 199

 

Swift message to accompany MT103 payment for US$ [·] sent under swift reference number [·].

 

TO THE ATTENTION OF [Bank Name] ([Swift Address]), ADDRESS: [Street Address], ATTENTION: [Name, Telephone, Email]

 

Re: The Shipbuilding Contract dated [·] (as AMENDED, NOVATED and/or supplemented from time to time, the “Shipbuilding Contract”) made between [Original Buyer Name] WITH ADDRESS AT [·] (THE “ORIGINAL BUYER”) AND [Shipyard Name] WITH ADDRESS AT [·] [(the “Seller”)]/[(the “Builder”) AND [·] (together with the Builder, the “Seller”)] TO BE NOVATED TO [New Buyer Name] AS NEW BUYER (THE “BUYER”) FOR THE CONSTRUCTION OF [Shipyard Name] HULL [·] TO BE NAMED [·] (THE “VESSEL”).

 

We confirm having irrevocably remitted to you for value [DATE] an amount of US$ [·] (United States Dollars [·] only) being PART OF the delivery instalment in respect of the purchase of the Vessel by the Buyer from the Seller pursuant to the Shipbuilding Contract.

 

This amount is to be held to the sole order of [NORDEA BANK FINLAND PLC, NEW YORK BRANCH] under reference — [Shipyard Name] HULL [Hull Number] (to be named [Vessel Name]) delivery instalment.

 

You are hereby instructed to hold these funds and release them to the Builder only upon presentation to you by the Seller of a fax copy of the protocol of delivery and acceptance for the Vessel duly signed by the authorised representatives of the Seller and the Buyer and countersigned by any one of the following:

 

[Name, Nationality, Passport Number]

[Name, Nationality, Passport Number]

[Name, Nationality, Passport Number]

 

EACH OF [Law firm’s name], ACTING SINGLY ON BEHALF OF [NORDEA BANK FINLAND PLC, NEW YORK BRANCH].

 

These monies, when released, may only be used for payment to the account of the Seller with [Seller Bank Name, Address] in or towards satisfaction of the balance of the purchase price for the Vessel, payment instructions:

 

1.              BANK: [·]

2.              ACCOUNT NO.: [·]

3.              CORRESPONDENT BANK: [·]

4.              BENEFICIARY: [·]

5.              REFERENCE: [·]

 

In the event that all or any part of the amount so remitted has not been released in accordance with the foregoing instructions by close of business on [date, to be not later than 5 business days after the scheduled delivery date], then all of the money held by you must be immediately returned by remitting the same to [NORDEA BANK FINLAND PLC, NEW YORK BRANCH (swift code NDEAUS3NXXX)], for THE account of [Borrower] Account number [·] under reference: attn CREDIT ADMINISTRATION DEPARTMENT RE: [Borrower Name] — return of purchase price of the vessel [·].

 

If you have any questions please contact [·] telephone no. [·] AT [NORDEA BANK FINLAND PLC, NEW YORK BRANCH.]

 

225Exhibit 10.1

 

Execution Version

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT is made and dated as of June 27, 2016 and is entered into by and between PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as Hercules Technology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender (in such capacity, the “Agent”).

 

RECITALS

 

A.            Borrower has requested Lender to make available to Borrower a loan in an aggregate principal amount of up to Forty Million Dollars ($40,000,000) (the “Term Loan”); and

 

B.            Lender is willing to make the Term Loan on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, Borrower, Agent and Lender agree as follows:

 

SECTION 1.  DEFINITIONS AND RULES OF CONSTRUCTION

 

1.1          Unless otherwise defined herein, the following capitalized terms shall have the following meanings:

 

“Account Control Agreement(s)” means any agreement entered into by and among the Agent, Borrower and a third party Bank or other institution (including a Securities Intermediary) in which Borrower maintains a Deposit Account or an account holding Investment Property and which grants Agent a perfected first priority security interest in the subject account or accounts.

 

“ACH Authorization” means the ACH Debit Authorization Agreement delivered by Borrower in substantially the form of Exhibit H, which account numbers shall be redacted for security purposes if and when filed publicly by the Borrower.

 

“Additional Project Document” shall mean any material contract or agreement relating to the development, construction, testing, operation, maintenance, repair, financing or use of any Project entered into by Borrower with any other Person subsequent to the date of this

 

 

Agreement (including any contract(s) or agreement(s) entered into in substitution for any Project Document that has been terminated in accordance with its terms or otherwise).

 

“Advance(s)” means a Term Loan Advance.

 

“Advance Date” means the funding date of any Advance.

 

“Advance Request” means a request for an Advance submitted by Borrower to Agent in substantially the form of Exhibit A, which account numbers shall be redacted for security purposes if and when filed publicly by the Borrower.

 

“Affiliate” means (a) any Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question, (b) any Person directly or indirectly owning, controlling or holding with power to vote ten percent (10%) or more of the outstanding voting securities of another Person, (c) any Person ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held by another Person with power to vote such securities, or (d) any Person related by blood or marriage to any Person described in subsection (a), (b) or (c) of this paragraph.  As used in the definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Agent” has the meaning given to it in the preamble to this Agreement.

 

“Agreed Targeted Operating Results” means the agreed targeted operating results, as of the Closing Date, in form and substance acceptable to Agent and Lenders and delivered to the Agent and Lenders on June 9, 2016, which delivery was confirmed by email from Agent to Borrower on June 22, 2016.

 

“Agreement” means this Loan and Security Agreement, as amended from time to time.

 

“Amortization Date” means July 3, 2017; provided however, if the Interest Only Extension Conditions are satisfied, then January 2, 2018.

 

“Assignee” has the meaning given to it in Section 11.13.

 

“Borrower Products” means all products, software, service offerings, technical data or technology currently being designed, manufactured or sold by Borrower or which Borrower intends to sell, license, or distribute in the future including any products or service offerings under development, collectively, together with all products, software, service offerings, technical data or technology that have been sold, licensed or distributed by Borrower since its incorporation.

 

“Business Day” means any day other than Saturday, Sunday and any other day on which banking institutions in the State of California are closed for business.

 

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“Cash” means all cash, cash equivalents and liquid funds.

 

“Change in Control” means (a) any reorganization, recapitalization, consolidation or merger (or similar transaction or series of related transactions) of Borrower, sale or exchange of outstanding shares (or similar transaction or series of related transactions) of Borrower in which the holders of Borrower’s outstanding shares immediately before consummation of such transaction or series of related transactions do not, immediately after consummation of such transaction or series of related transactions, retain shares representing more than fifty percent (50%) of the voting power of the surviving entity of such transaction or series of related transactions (or the parent of such surviving entity if such surviving entity is wholly owned by such parent), in each case without regard to whether Borrower is the surviving entity, or (b) any “change in control,” “change of control” or similar definition or provision in any Material Financing Agreement (Covenant).

 

“Claims” has the meaning given to it in Section 11.10.

 

“Closing Date” means the date of this Agreement.

 

“Closing Facility Charge” means Three Hundred Seventy Five Thousand Dollars ($375,000).

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means the property described in Section 3.

 

“Common Stock” means the Common Stock of the Borrower.

 

“Confidential Information” has the meaning given to it in Section 11.12.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation, in each case of another Person, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all net obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

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“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Copyrights” means all copyrights, whether registered or unregistered, held pursuant to the laws of the United States of America, any State thereof, or of any other country.

 

“Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit that is not evidenced by an instrument.

 

“Designated Competitor” means any Person identified in writing by Borrower to the Agent and acknowledged in writing by the Agent.

 

“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.

 

“Due Diligence Fee” means $60,000, which fee is due to Lender on or prior to the Closing Date, and shall be deemed fully earned on such date regardless of the early termination of this Agreement.

 

“Environmental Laws” means any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

“Event of Default” has the meaning given to it in Section 9.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Lender or Agent or required to be withheld or deducted from a payment to a Lender or Agent, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Lender or Agent being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Term Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.10, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office,

 

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(c) Taxes attributable to such Lender or Agent’s failure to comply with Section 2.10(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Facility Charge” means the Closing Facility Charge and, if applicable, the Tranche III Facility Charge.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.

 

“Financial Statements” has the meaning given to it in Section 7.1.

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

 

“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized under the laws of any state within the United States of America.

 

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.

 

“Governmental Authority” means any federal, state, local or foreign government or political subdivision or any court, agency, authority, department, commission, board, bureau or instrumentality thereof, or central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Hazardous Materials” means any substances or materials (i) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants or toxic substances under any applicable Environmental Law, (ii) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (iii) the presence of which require investigation or remediation under any applicable Environmental Law, (iv) the discharge, emission or release of which requires a permit or license under any applicable Environmental Law, (v) which are found by a court of competent jurisdiction to constitute a nuisance or a trespass to neighboring properties or found by any Governmental Authority of competent jurisdiction to pose a health or safety hazard to Persons, (vi) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance of the type listed in any other part of this definition, or (vii) which contain asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas in percentages or at levels which make them subject to applicable Environmental Laws.

 

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“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business due within one hundred twenty (120) days), including reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Initial End of Term Charge” shall have the meaning assigned to such term in Section 2.6.

 

“Incremental End of Term Charge” shall have the meaning assigned to such term in Section 2.6.

 

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents; Licenses; trade secrets and inventions; mask works; Borrower’s applications therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill associated with any of the foregoing, together with Borrower’s rights to sue for past, present and future infringement of Intellectual Property and the goodwill associated therewith.

 

“Interest Only Extension Conditions” shall mean satisfaction of each of the following events:  (a) no default or Event of Default shall have occurred and is continuing; and (b) for the twelve month period ending March 31, 2017, Borrower shall have (i) achieved at least 90% of revenue under GAAP as set forth in the Agreed Targeted Operating Results and (ii) not exceeded 110% Net Loss as set forth in the Agreed Targeted Operating Results (i.e. Net Loss shall not be 10% worse than set forth in the Agreed Targeted Operating Results), in each case calculated consistent with the methodology in the Agreed Targeted Operating Results and in accordance to GAAP and subject to verification by Agent (including supporting documentation reasonably requested by Agent).

 

“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person.

 

“IP Security Agreement” means that certain Intellectual Property Security Agreement executed and delivered by Borrower to Agent and dated as of the Closing Date.

 

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“IRS” means the United States Internal Revenue Service.

 

“Joinder Agreements” means for each Qualified Subsidiary, a completed and executed Joinder Agreement in substantially the form attached hereto as Exhibit G.

 

“Lender” has the meaning given to it in the preamble to this Agreement.

 

“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest.

 

“Loan” means the Advances made under this Agreement.

 

“Loan Documents” means this Agreement, the Notes (if any), the ACH Authorization, the Account Control Agreements, the Joinder Agreements, all UCC Financing Statements, the IP Security Agreement, and any other documents executed in connection with the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.

 

“Material Additional Project Document” shall mean any Additional Project Document if (i) the aggregate cost or value of goods and services to be acquired by Borrower pursuant thereto could reasonably be expected to exceed $750,000 or the equivalent in any calendar year or (ii) the aggregate amount of termination fees or liquidated damages which could be incurred by Borrower in respect of such Additional Project Document in any single calendar year could reasonably be expected to exceed $750,000 or the equivalent.

 

“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of Borrower and its Subsidiaries taken as a whole; or (ii) the ability of Borrower to perform or pay the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lender to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the Collateral or the priority of such Liens.

 

“Material Financing Agreement (Covenant)” means any document or agreement governing Indebtedness or any operating lease or similar sale-leaseback financing (including without limitation, any Operating Lease), in each case of Borrower or its Subsidiaries and in each case exceeding $3,000,000 in principal amount outstanding.

 

“Material Financing Agreement (Notice)” means any document or agreement governing Indebtedness or any operating lease or similar sale-leaseback financing (including without limitation, any Operating Lease), in each case of Borrower or its Subsidiaries and in each case exceeding $1,000,000 in principal amount outstanding.

 

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“Maximum Term Loan Amount” means Forty Million and No/100 Dollars ($40,000,000).

 

“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.

 

“Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net income (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period, calculated in a manner consistent with the calculation used for “Net Income” in the Agreed Targeted Operating Results.

 

“Net Loss” means negative Net Income, calculated in a manner consistent with the calculation used for “Net Loss” in the Agreed Targeted Operating Results.

 

“Note(s)” means a Term Note.

 

“Operating Lease” means, for any Project, the material lease documents that meet all of the following requirements:  (a) are entered into in the ordinary course of business by Borrower and consistent with past practices or industry norms, (b) provide for the lease financing of such Project, (c) have terms, conditions and structures that are not materially adverse to Agent and Lenders relative to the Operating Leases of Borrower that exist as of the Closing Date and (d) are secured solely with the assets of such Project or any other Project with the same lessor under an Operating Lease (i.e. the Equipment comprising a Project, the power purchase agreements and other project finance documents that are entered into specifically in connection with a Project and the generation of power from a Project and cash proceeds of such lease financing used to secure the obligations of Borrower under a Project).

 

“Other Connection Taxes” means, with respect to any Lender, Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

 

“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement Borrower now holds or hereafter acquires any interest.

 

“Patents” means all letters patent of, or rights corresponding thereto, in the United States of America or in any other country, all registrations and recordings thereof, and all

 

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applications for letters patent of, or rights corresponding thereto, in the United States of America or any other country.

 

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender or Agent arising under this Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date which is disclosed in Schedule 1A; (iii) Indebtedness of (A) up to $200,000 outstanding at any time and (B) in addition to the Indebtedness in clause (A), incurred pursuant to sale-leaseback transactions for certain hydrogen tube trailers in an amount not to exceed $4,000,000 in the aggregate, in each case secured by a Lien described in clause (vii) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the cost of the Equipment financed with such Indebtedness; (iv) Indebtedness to trade creditors incurred in the ordinary course of business, including Indebtedness incurred in the ordinary course of business with corporate credit cards; (v) Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated Indebtedness;  (vii) reimbursement obligations in connection with letters of credit issued for the account of any Borrower to support obligations of such Borrower under an Operating Lease; provided that such reimbursement obligations (a) shall not exceed, in respect of any Project, the value of such Project and (b) shall be solely secured by Liens under clause (xiv)(A) of the definition of “Permitted Liens”; (viii) other Indebtedness in an amount not to exceed $1,000,000 at any time outstanding, (ix) intercompany Indebtedness as long as either (A) each of the Subsidiary obligor and the Subsidiary obligee under such Indebtedness is a Qualified Subsidiary that has executed a Joinder Agreement or (B) such loans to all non-Qualified Subsidiaries does not exceed $500,000 in the aggregate following the Closing Date; (x) guarantees of Indebtedness of a Borrower by any Borrower; provided such Indebtedness so guaranteed was otherwise permitted to be incurred hereunder; (xi) Indebtedness incurred or owed by Borrower pursuant to Operating Leases, to the extent constituting Indebtedness under GAAP, to finance or refinance the acquisition, development, construction, and operation of Projects; (xi) Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’ compensation, health, disability or other employee benefits or property, casualty, liability insurance, self insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business or consistent with past practice; (xiii) Indebtedness in respect of or guarantee of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees, workers’ compensation claims, letters of credit, bank guarantees and banker’s acceptances, warehouse receipts or similar instruments and similar obligations (other than in respect of other Indebtedness for borrowed money) including, without limitation, those incurred to secure health, safety and environmental obligations, in each case (a) provided in the ordinary course of business or consistent with past practice and (b) recourse for, and any pledge of security granted in connection therein is limited solely to, the assets of such Project; (xiv) Indebtedness in respect of treasury, depositary, cash management and netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements or otherwise in connection with securities accounts and deposit accounts, in each case, in the ordinary course of business; (xv) Indebtedness consisting of the financing of insurance premiums in the ordinary course of business; (xvi) endorsement of instruments or other payment items for deposit in the ordinary course of business; (xvii) all lease obligations associated with any Project incurred in connection with a sale-leaseback transaction entered into in respect of such Project as long as

 

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such obligations meet the requirements hereunder applicable to an Operating Lease; (xviii) unsecured Indebtedness in the form of accrued but unpaid dividends pursuant to Permitted Series C Repurchases; and (xix) extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose materially more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted Investment” means: (i) Investments existing on the Closing Date which are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (b) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of deposit issued by any bank with assets of at least $500,000,000 maturing no more than one year from the date of investment therein, and (d) money market accounts; (iii) repurchases of stock from existing or former employees, directors, or consultants of Borrower under the terms of applicable repurchase agreements and in connection with withholding taxes or stock option exercises in an aggregate amount not to exceed $2,000,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases; (iv) Investments accepted in connection with Permitted Transfers; (v) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business; (vi) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subparagraph (vi) shall not apply to Investments of Borrower in any Subsidiary; (vii) Investments consisting of loans not involving the net transfer on a substantially contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of capital stock of Borrower pursuant to employee stock purchase plans or other similar agreements approved by Borrower’s Board of Directors; (viii) Investments consisting of travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business in an aggregate amount not to exceed $1,000,000; (ix) Investments in Domestic Subsidiaries in aggregate amount not to exceed $500,000 per fiscal year and $1,500,000 in the aggregate; (x) Investments in Foreign Subsidiaries in an aggregate amount not to exceed $1,000,000 per fiscal year and $3,000,000 in the aggregate; (xi) joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the nonexclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed $500,000 in the aggregate in any fiscal year; (xii) repurchase of stock pursuant to Permitted Series C Repurchases; and (xiii) additional Investments that do not exceed $500,000 in the aggregate.

 

“Permitted Liens” means any and all of the following: (i) Liens in favor of Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; provided, that Borrower maintains adequate reserves therefor in accordance with GAAP; (iv) Liens securing claims or demands of

 

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materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of Borrower’s business and imposed without action of such parties; provided, that the payment thereof is not yet required; (v) Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder; (vi) the following deposits, to the extent made in the ordinary course of business:  deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; (vii) Liens on Equipment or software or other intellectual property constituting purchase money Liens and Liens in connection with capital leases securing Indebtedness permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in connection with Subordinated Indebtedness; (ix) leasehold interests in leases or subleases and licenses granted in the ordinary course of business and not interfering in any material respect with the business of the licensor; (x) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on or before the date they become due; (xi) Liens on insurance proceeds securing the payment of financed insurance premiums that are promptly paid on or before the date they become due (provided that such Liens extend only to such insurance proceeds and not to any other property or assets); (xii) statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms; (xiii) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do not materially impair the value or marketability of the related property; (xiv) (A) Liens on cash in Project Restricted Accounts, and (B) security deposits in connection with real property leases in an aggregate amount not to exceed $750,000; (xv) Liens on the assets of a Project and cash collateral that secure (A) Indebtedness of a Borrower in respect of such Project pursuant to an Operating Lease relating to such Project and/or (B) reimbursement obligations relating to letters of credit supporting the Indebtedness of such Borrower under such Operating Lease; provided that in each case the aggregate cash collateral pledged in respect of any Project shall not exceed the value of such Project; and provided further than any cash securing such Liens shall not be in addition to cash pledged in connection with such Project in any Project Restricted Account; (xvi) the filing of UCC (or equivalent) financing statements solely as a precautionary measure in connection with operating leases or consignment of goods; (xvii) Liens not otherwise permitted hereunder to the extent that (A) the aggregate outstanding amount (or in the case of Indebtedness, the principal amount) of the obligations secured thereby at any time does not exceed $200,000 and (B) such Liens are released within 90 days; (xviii) Liens of bailees in assets or properties held in a bailment arrangement in the ordinary course of business as permitted hereunder; (xix) utility and similar deposits in the ordinary course of business in an aggregate amount not to exceed $250,000 per year; and (xx) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (i) through (xix) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness or an Operating

 

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Lease being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase.

 

“Permitted Series C Repurchases” means all dividends, stock repurchases, and any other monetary payments, without duplication, required to be made pursuant to the Series C Repurchase Agreement, in an aggregate amount not to exceed $1,400,000.

 

“Permitted Transfers” means (i) sales of Inventory in the ordinary course of business (including on an intercompany basis with (A) other Borrowers or (B) Hypulsion SAS (Plug Power Europe) in an amount not to exceed $1,000,000 per year), (ii) non-exclusive licenses and non-exclusive cross-licensing or similar arrangements for the use of Intellectual Property in the ordinary course of business, (iii) dispositions of worn-out, obsolete or surplus Equipment at fair market value in the ordinary course of business, (iv) the sale or issuance of any stock of Borrower permitted under this Agreement; (v) the use or transfer of Cash in the ordinary course of business in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, (vi) Permitted Liens and Permitted Investments, in each case, to the extent considered transfers of assets or property, (vii) transfers of Equipment in connection with sale-leaseback transactions under Operating Leases; (viii) sales or other dispositions among the Borrowers in the ordinary course of business for the fair market value of such assets and in every case in accordance with GAAP and applicable law, (ix) dispositions or sales of cash equivalents or other assets that were cash equivalents when the original Investment was made, in each case, (a) for the fair market value thereof and (b) so long as Agent has a perfected first priority security interest in all Proceeds thereof, (x) sales, discounting or forgiveness of accounts receivable in the ordinary course of business or in connection with the collection or compromise thereof in the ordinary course of business, (xi) the sale, disposal, abandonment, cancellation or lapse of Intellectual Property rights, or any issuances or registrations, or applications for issuances or registrations, of any Intellectual Property rights, in each case, (a) done in the ordinary course of business and (b) which, in the reasonable good faith determination of the Borrower are uneconomical, or not material to the conduct of the business of the Borrower and/or its Subsidiaries, and (xii) other transfers of assets having a fair market value of not more than $500,000 in the aggregate in any fiscal year.

 

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.

 

“Preferred Stock” means at any given time any equity security issued by Borrower that has any rights, preferences or privileges senior to Borrower’s Common Stock.

 

“Prepayment Charge” shall have the meaning assigned to such term in Section 2.5.

 

“Project” means a fuel cell energy project.

 

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“Project Documents” means, for any Project subject to Indebtedness or an Operating Lease: (a) all material agreements and contracts relating to the acquisition, construction, development, ownership, operation and maintenance of such Project, in each case other than an Operating Lease, and (b) all Material Additional Project Documents.

 

“Project Restricted Accounts” means, with respect to any Project, the deposit account(s) and/or securities account(s) that have been established pursuant to or in connection with an Operating Lease relating to such Project for the purpose of securing such Operating Leases and collecting, allocating and distributing proceeds generated by such Project.  For the avoidance of doubt, Borrower shall comply with Section 7.12(b) with respect to any allocation or distribution of such proceeds.

 

“Qualified Subsidiary” means any direct or indirect Subsidiary representing (a) individually, more than 5% of the consolidated assets or consolidated revenue of the Borrower and its Subsidiaries, on a consolidated basis and (b) collectively with all non-Qualified Subsidiaries, more than 10% of the consolidated assets or consolidated revenue of the Borrower and its Subsidiaries, on a consolidated basis; provided that only tangible assets (and no acquisition accounting for intangible assets) shall be used in the calculation of such Subsidiaries’ assets.

 

“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto.

 

“Required Lenders” means at any time, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans then outstanding.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Obligations” means Borrower’s obligations under this Agreement and any Loan Document, including any obligation to pay any amount now owing or later arising.

 

“Series C Repurchase Agreement” means that certain Securities Purchase Agreement, dated as of May 8, 2013, between Plug Power Inc. and Air Liquide Investissements d’Avenir et de Demonstration, as in effect on the Closing Date.

 

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts and on terms and conditions satisfactory to Agent in its sole discretion.

 

“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or otherwise, in which Borrower owns or controls 50% or more of the outstanding voting securities, including each entity listed on Schedule 1 hereto.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

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“Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a Term Loan Advance to the Borrower in a principal amount not to exceed the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1.

 

“Term Loan Advance” means any Term Loan funds advanced under this Agreement.

 

“Term Loan Interest Rate” means for any day a per annum rate of interest equal to the greater of either (i) 10.45% plus the prime rate as reported in The Wall Street Journal minus 4.00%, and (ii) 10.45%.

 

“Term Loan Maturity Date” means June 3, 2019.

 

“Term Note” means a Promissory Note in substantially the form of Exhibit B.

 

“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.

 

“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States of America, any State thereof or any other country or any political subdivision thereof.

 

“Tranche II Milestone” means (a) no Event of Default shall have occurred and is continuing; and (b) for the six month period ending September 30, 2016, Borrower shall have (i) achieved at least 85% of revenue under GAAP set forth in the Agreed Targeted Operating Results, and (ii) not exceeded 115% of the Net Loss set forth in the Agreed Targeted Operating Results (i.e. Net Loss shall not be 15% worse than set forth in the Agreed Targeted Operating Results), in each case calculated consistent with the methodology used in the Agreed Targeted Operating Results and subject to verification by Agent (including supporting documentation reasonably requested by Agent).

 

“Tranche III Milestone” means (a) no Event of Default shall have occurred and is continuing, (b) Borrower shall have achieved the Tranche II Milestone; and (c) Borrower shall have achieved certain performance milestones to be mutually agreed upon after the Closing Date between Borrower and Lender, such performance milestones being subject to approval by Lender’s investment committee in its sole discretion.

 

“Tranche III Facility Charge” means One Hundred Twenty Five Thousand Dollars ($125,000).

 

“Tranche III Term Loan Advance” has the meaning given to it in Section 2.2(a).

 

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“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of California; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

“Unrestricted Cash Milestone” means (a) no Event of Default shall have occurred and is continuing; and (b) Borrower shall have achieved (i) two consecutive fiscal quarters of Net Income of $1 or more, and (ii) at least 80% of each of its forecasted (x) Net Income and (y) cash flow from operations (as calculated in accordance with GAAP), in each case, measured quarterly on a trailing three month basis on the last day of any fiscal quarter and as set forth in the Agreed Targeted Operating Results, and in each case subject to verification by Agent (including supporting documentation reasonably requested by Agent).

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.10(g)(ii)(2)(III).

 

“Withholding Agent” means the Borrower and the Agent.

 

Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement.  Unless otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP, consistently applied. Unless otherwise defined herein or in the other Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in the UCC.

 

SECTION 2.  THE LOAN

 

2.1          [RESERVED]

 

2.2          Term Loan.

 

(a)           Advances.  Subject to the terms and conditions of this Agreement, Lender will severally (and not jointly) make in an amount not to exceed its respective Term Commitment, and Borrower agrees to draw, a Term Loan Advance of up to $25,000,000 on the Closing Date.  Beginning on October 12, 2016, and continuing until December 12, 2016, and following achievement of the Tranche II Milestone, Borrower may request

 

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additional Term Loan Advances in an aggregate amount up to $5,000,000.  Beginning on June 27, 2016, and continuing until June 27, 2017, and following achievement of the Tranche III Milestone, Borrower may request additional Term Loan Advances in an aggregate amount up to $10,000,000 (the “Tranche III Term Loan Advances”).  In each case, Term Loan Advances must be in minimum increments of $1,000,000.  The aggregate outstanding Term Loan Advances may be up to the Maximum Term Loan Amount.

 

(b)           Advance Request.  To obtain a Term Loan Advance, Borrower shall complete, sign and deliver an Advance Request (at least three (3) Business Days before the Advance Date other than the Closing Date, which shall be at least one (1) Business Day) to Agent.  Lender shall fund the Term Loan Advance in the manner requested by the Advance Request provided that each of the conditions precedent set forth in Section 2.2(a) and Article 4 and applicable to such Term Loan Advance is satisfied as of the requested Advance Date.

 

(c)           Interest.  Term Loan Interest Rate.  The principal balance shall bear interest thereon from such Advance Date at the Term Loan Interest Rate based on a year consisting of 360 days, with interest computed daily based on the actual number of days elapsed.  The Term Loan Interest Rate will float and change on the day the prime rate changes from time to time.

 

(d)           Payment.  Borrower will pay interest on each Term Loan Advance in arrears on the first Business Day of each month, beginning the month after the Advance Date.  Borrower shall repay the aggregate Term Loan principal balance that is outstanding on the day immediately preceding the Amortization Date, in equal monthly installments of principal and interest (mortgage style) beginning on the Amortization Date and continuing on the first Business Day of each month thereafter until the Secured Obligations (other than inchoate indemnity obligations) are repaid.  The entire Term Loan principal balance and all accrued but unpaid interest hereunder, shall be due and payable on Term Loan Maturity Date.  Borrower shall make all payments under this Agreement without setoff, recoupment or deduction and regardless of any counterclaim or defense except as otherwise required by law.  Lender will initiate debit entries to the Borrower’s account as authorized on the ACH Authorization (i) on each payment date of all periodic obligations payable to Lender under each Term Advance and (ii) legal fees and costs incurred by Agent or Lender in connection with Section 11.11 of this Agreement; provided, however, that Agent shall provide Borrower with an invoice detailing such fees and costs within thirty (30) days of debiting sums pursuant to this clause (ii).

 

2.3          Maximum Interest.  Notwithstanding any provision in this Agreement or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans)

 

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(the “Maximum Rate”).  If a court of competent jurisdiction shall finally determine that Borrower has actually paid to Lender an amount of interest in excess of the amount that would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrower shall be applied as follows:  first, to the payment of the Secured Obligations consisting of the outstanding principal; second, after all principal is repaid, to the payment of Lender’s accrued interest, reasonable documented out-of-pocket costs, expenses, professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess (if any) shall be refunded to Borrower.

 

2.4          Default Interest.  In the event any payment is not paid on the scheduled payment date, an amount equal to five percent (5%) of the past due amount shall be payable on demand. In addition, upon the occurrence and during the continuation of an Event of Default hereunder, all outstanding Secured Obligations, including principal, interest, compounded interest, and professional fees, shall bear interest at a rate per annum equal to the rate set forth in Section 2.2(c) plus five percent (5%) per annum.  In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forth in Section 2.2(c) or Section 2.4, as applicable.

 

2.5          Prepayment.  At its option upon at least seven (7) Business Days prior notice to Agent, Borrower may prepay all, but not less than all, of the outstanding Advances by paying the entire outstanding principal balance and all accrued and unpaid interest thereon, together with a prepayment charge equal to the following percentage of the Advance amount being prepaid: if such Advance amounts are prepaid in any of the first eighteen (18) months following the Closing Date, 2.00%; and thereafter, 1.00% (each, a “Prepayment Charge”).  Borrower agrees that the Prepayment Charge is a reasonable calculation of Lender’s lost profits in view of the difficulties and impracticality of determining actual damages resulting from an early repayment of the Advances.  Borrower shall prepay the outstanding amount of all principal and accrued interest through the prepayment date and the Prepayment Charge upon the occurrence of a Change in Control. Notwithstanding the foregoing, Agent and Lender agree to waive the Prepayment Charge if Agent and Lender (in its sole, absolute and unfettered discretion) agree in writing to refinance the Advances prior to the Maturity Date.

 

2.6          End of Term Charge.  On the earliest to occur of (i) the Term Loan Maturity Date, (ii) the date that Borrower prepays the outstanding Secured Obligations (other than any inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) in full, or (iii) the date that the Secured Obligations become due and payable, Borrower shall pay Lender a charge of $2,475,000 (the “Initial End of Term Charge”); provided, however, if any Tranche III Term Loan Advance is drawn, the charge shall increase by $825,000 (the “Incremental End of Term Charge”) to $3,300,000.  Notwithstanding the required payment date of such charge, (i) the Initial End of Term Charge shall be deemed earned by Lender as of the Closing Date and

 

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(ii) the Incremental End of Term Charge shall be deemed earned by Lender as of the date of the first Tranche III Term Loan Advance.

 

2.7          Credit of Facility Charge. If the Maximum Term Loan Amount (i.e., $40,000,000) is funded and, following funding, remains outstanding through the Term Loan Maturity Date, Lender will credit to Borrower an amount equal to the Facility Charge so that Borrower’s final payments in full of the Secured Obligations on the Term Loan Maturity Date will be reduced by the amount of the Facility Charge. Notwithstanding the foregoing, the Facility Charge is fully earned and owed on the Closing Date.

 

2.8          Notes.  If so requested by Lender by written notice to Borrower, then Borrower shall execute and deliver to Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of Lender pursuant to Section 11.13) (promptly after the Borrower’s receipt of such notice) a Note or Notes to evidence Lender’s Loans.

 

2.9          Pro Rata Treatment.  Each payment (including prepayment) on account of any fee and any reduction of the Term Loans shall be made pro rata according to the Term Commitments of the relevant Lender.

 

2.10        Taxes.

 

(a)           Defined Terms.  For purposes of this Section 2.10, the term “applicable law” includes FATCA.

 

(b)           Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the Lender or Agent, as applicable, receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(c)           Payment of Other Taxes by the Borrower.  The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse it for the payment of, any Other Taxes.

 

(d)           Indemnification by the Borrower.  The Borrower shall indemnify the Lender or Agent, as applicable, within 10 days after demand therefor, for the full amount

 

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of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Lender or Agent, as applicable, or required to be withheld or deducted from a payment to such Lender or Agent, as applicable, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)           Indemnification by the Lenders.  Each Lender shall severally indemnify the Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so) and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this paragraph (e).

 

(f)            Evidence of Payments.  As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.10, the Borrower shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.

 

(g)           Status of Lenders.

 

(i)            Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrower and Agent, at the time or times reasonably requested by Borrower or Agent, such properly completed and executed documentation reasonably requested by Borrower or Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by Borrower or Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower or Agent as will enable Borrower or Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.10(g)(ii)(1), (ii)(2) and (ii)(4) below) shall

 

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not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)           Without limiting the generality of the foregoing,

 

1.                                      any Lender that is a U.S. Person shall deliver to Borrower and Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

2.                                      any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Agent (in such number of copies as shall be requested by Borrower or Agent) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Agent), whichever of the following is applicable:

 

I.                                        in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

II.                                   executed copies of IRS Form W-8ECI;

 

III.                              in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of

 

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the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E; or

 

IV.                               to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner;

 

3.                                      any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrower or Agent to determine the withholding or deduction required to be made; and

 

4.                                      if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Agent as may be necessary for Borrower and Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause 4, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower and Agent in writing of its legal inability to do so.

 

(h)           Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.10 (including by the payment of additional amounts pursuant to this Section 2.10), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

(i)            Survival.  Each party’s obligations under this Section 2.10 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Term Commitment and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

SECTION 3.  SECURITY INTEREST

 

3.1          As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower grants to Agent a security interest in all of Borrower’s right, title, and interest in and to the following personal property whether now owned or hereafter acquired (collectively, the “Collateral”):  (a) Receivables; (b) Equipment; (c) Fixtures; (d) General Intangibles; (e) Inventory; (f) Investment Property; (g) Deposit Accounts; (h) Cash; (i) Goods; and all other tangible and intangible personal property of Borrower whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Borrower and wherever located, and any of Borrower’s property in the possession or under the control of Agent; and, to the extent not

 

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otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.

 

3.2          Notwithstanding the broad grant of the security interest set forth in Section 3.1, above, nor anything else in any of the Loan Documents, the Collateral shall not include (a) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock of any Foreign Subsidiary (or of any holding company, substantially all the assets of which consist directly or indirectly of securities of one or more Foreign Subsidiaries) which shares entitle the holder thereof to vote for directors or any other matter, (b) any “intent to use” trademarks at all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording of a statement of use with the United States Patent and Trademark Office or otherwise, (c) any permits, state or local franchises, charters, authorizations or licenses issued to any Borrower as the holder or licensee thereof, or any Operating Lease to which any Borrower is lessee thereof (and solely any equipment leased under such leases or another Operating Lease with the same lessor, if such Operating Lease so provides), or any other contracts or other agreements to which any Borrower is a party (including, without limitation, any Operating Lease with any of Manufacturer and Traders Trust Company, BB&T EFC Energy, LLC, Wells Fargo Equipment Finance, Inc., Generate Capital, Inc. and PNC Energy Capital LLC or their respective Affiliates) and any equipment or other property subject thereto, now existing or entered into in the future, in each case only (x) to the extent and for so long as the terms of such permit, franchise, charter, authorization, license, lease, contract or other agreement effectively (after giving effect to Sections 9 406 through 9 409, inclusive, of the UCC in the applicable state (or any successor provision or provisions) or any other applicable laws) prohibits the creation by such Borrower of a security interest in such permit, license, lease, contract or other agreement or any equipment or other property subject thereto in favor of the Agent or would result in an effective invalidation, termination or breach of the terms of any such permit, license, lease, contract or other agreement (after giving effect to Sections 9 406 through 9 409, inclusive, of the UCC in the applicable state (or any successor provision or provisions) or any other applicable laws), in each case unless and until any required consents are obtained and (y) solely to the extent of the underlying obligations secured thereby; provided that if and when the prohibition which prevents the granting of a Lien is removed, terminated or otherwise becomes unenforceable as a matter of law (including, without limitation, the termination of any such security interest resulting from the satisfaction of the obligations secured thereby), and notwithstanding any previous release of Lien provided by the Agent requested in connection with respect to any such obligations, the Collateral will be deemed to include, and at all times to have included, such permits, state or local franchises, charters, authorizations, licenses, leases, contracts or other agreements without further action or notice by any Person, (d) [reserved], (e) any equipment securing purchase money indebtedness or Indebtedness relating to capital leases if the granting of a Lien to any third party is prohibited by the agreement(s) setting forth the terms and conditions applicable to such Indebtedness, but only if such Indebtedness and the Liens securing the same are permitted by this Agreement, provided that if and when the prohibition which prevents the granting of a Lien in any such equipment is removed, terminated or otherwise becomes unenforceable as a matter of law (including, without

 

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limitation, the termination of any such security interest resulting from the satisfaction of the Indebtedness secured thereby), and notwithstanding any previous release of Lien provided by the Agent requested in connection with respect to any such Indebtedness, the Collateral will be deemed to include, and at all times shall have included, such equipment without further action or notice by any Person; and (f) any Deposit Accounts that constitute Project Restricted Accounts, but only so long as such Project Restricted Accounts are prohibited from being pledged to the Agent and Lenders pursuant to the applicable Operating Lease.

 

3.3          Agent agrees that the security interest granted in Section 3.1 shall continue until the Secured Obligations (other than contingent indemnification or reimbursement obligations that are not yet due and payable) have been paid in full and Lender has no further commitment or obligation hereunder or under the other Loan Documents to make any further Advances, at which time Agent shall promptly terminate the security interest and, at Borrower’s expense, take all actions reasonably requested by Borrower to evidence such termination, including the prompt return of any possessory collateral held by Agent.

 

SECTION 4.  CONDITIONS PRECEDENT TO LOAN

 

The obligations of Lender to make the Loan hereunder are subject to the satisfaction by Borrower of the following conditions:

 

4.1          Initial Advance.  On or prior to the Closing Date, Borrower shall have delivered to Agent the following:

 

(a)           executed copies of the Loan Documents, Account Control Agreements required for Borrower to be in compliance with Section 7.18 on and after the Closing Date, a legal opinion of Borrower’s counsel, and all other documents and instruments reasonably required by Agent to effectuate the transactions contemplated hereby or to create and perfect the Liens of Agent with respect to all Collateral, in all cases in form and substance reasonably acceptable to Agent;

 

(b)           certified copy of resolutions of Borrower’s board of directors or other governing body evidencing approval of the Loan and other transactions evidenced by the Loan Documents;

 

(c)           certified copies of the Certificate of Incorporation and the Bylaws, as amended through the Closing Date, of Borrower;

 

(d)           a certificate of good standing for Borrower from its state of incorporation and similar certificates from all other jurisdictions in which it does business and where the failure to be qualified would have a Material Adverse Effect;

 

(e)           payment of the Due Diligence Fee (to the extent not already paid), the Closing Facility Charge and reimbursement of Agent’s and Lender’s current expenses reimbursable pursuant to this Agreement and which have been invoiced to Borrower prior to the date hereof;

 

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(f)            the Agreed Targeted Operating Results;

 

(g)           payoff letter in form and substance reasonably satisfactory to Agent from Generate Lending, LLC with respect to the payoff and release of all security interest under the Indebtedness owed to Generate Lending, LLC prior to the Closing Date;

 

(h)           with respect to each Project, each of the following documents:

 

(i)            copies of all Project Documents;

 

(ii)           copies of all material documents entered into in connection with any Project; and

 

(iii)          such other material information regarding such Project as Agent may request;

 

(iv)          documentation satisfactory to Agent with respect to the “conversion” of the Generate Lending, LLC loan agreement to an Operating Lease; and

 

(v)           such other documents as Agent may reasonably request.

 

4.2          All Advances.  On each Advance Date:

 

(a)           Agent shall have received (i) an Advance Request for the relevant Advance as required by Section 2.2(b) duly executed by Borrower’s Chief Executive Officer or Chief Financial Officer, and (ii) any other documents Agent may reasonably request.

 

(b)           The representations and warranties set forth in this Agreement shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.

 

(c)           Borrower shall be in compliance with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance no Event of Default shall have occurred and be continuing.

 

(d)           Each Advance Request shall be deemed to constitute a representation and warranty by Borrower on the relevant Advance Date as to the matters specified in paragraphs (b) and (c) of this Section 4.2 and as to the matters set forth in the Advance Request.

 

4.3          No Default.  As of the Closing Date and each Advance Date, (i) no fact or condition exists that would (or would, with the passage of time, the giving of notice, or

 

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both) constitute an Event of Default; and (ii) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing.

 

4.4          Tranche III Facility Charge.  Upon draw by Borrower of any Tranche III Term Loan Advance, Borrower shall pay to Agent the Tranche III Facility Charge.

 

4.5          Post-Closing Conditions.

 

(a)           Within thirty (30) days of the Closing Date, Borrower shall have delivered to Agent all Account Control Agreements required hereunder (other than Account Control Agreements required for Borrower to be in compliance with Section 7.18 on the Closing Date).

 

(b)           Within thirty (30) days of the Closing Date, Borrower shall have resolved, to the reasonable satisfaction of Agent, the issues with respect to Borrower’s Intellectual Property set forth on the exhibit with respect to Item 4 of the Perfection Certificate.  Borrower represents and warrants that such issues, individually or in the aggregate, are not material to Borrower’s business.

 

SECTION 5.  REPRESENTATIONS AND WARRANTIES OF BORROWER

 

Borrower represents and warrants that:

 

5.1          Corporate Status.  Borrower is a corporation, limited liability company or limited partnership duly organized, legally existing and in good standing under the laws of its state of jurisdiction, and is duly qualified as a foreign corporation in all jurisdictions in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse Effect.  Borrower’s present name, former names (if any), locations, place of formation, tax identification number, organizational identification number and other information are correctly set forth in Exhibit C, as may be updated by Borrower in a written notice (including any Compliance Certificate) provided to Agent after the Closing Date.

 

5.2          Collateral.  Borrower owns the Collateral, free of all Liens, except for Permitted Liens.  Borrower has the power and authority to grant to Agent a Lien in the Collateral as security for the Secured Obligations.

 

5.3          Consents.  Borrower’s execution, delivery and performance of this Agreement and all other Loan Documents, (i) have been duly authorized by all necessary corporate action of Borrower, (ii) will not result in the creation or imposition of any Lien upon the Collateral, other than Permitted Liens and the Liens created by this Agreement and the other Loan Documents, (iii) do not violate any provisions of Borrower’s Certificate or Articles of Incorporation (as applicable), bylaws, or any law, regulation, order, injunction, judgment, decree or writ to which Borrower is subject and (iv) except as described on Schedule 5.3, do not violate in any material respect any contract or agreement

 

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or require the consent or approval of any other Person which has not already been obtained, including for the avoidance of doubt, any counterparty of Borrower under a Material Financing Agreement (Notice).  The individual or individuals executing the Loan Documents are duly authorized to do so.

 

5.4          Material Adverse Effect.  No event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. Borrower is not aware of any event likely to occur that is reasonably expected to result in a Material Adverse Effect.

 

5.5          Actions Before Governmental Authorities.  There are no actions, suits or proceedings at law or in equity or by or before any governmental authority now pending or, to the knowledge of Borrower, threatened in writing against or affecting Borrower or its property, that is reasonably expected to result in a Material Adverse Effect.

 

5.6          Laws.

 

(a)           Borrower is not in violation of any law, rule or regulation (including Environmental Laws), or in default with respect to any judgment, writ, injunction or decree of any governmental authority, where such violation or default is reasonably expected to result in a Material Adverse Effect.  No event of default or event that with the passage of time could result in an event of default exists under any Project Documents, Material Financing Agreement (Covenant) or the Series C Repurchase Agreement.  In addition, to the knowledge of Borrower with respect to any Person other than Borrower or its Subsidiaries, no event of default or event that with the passage of time would result in an event of default exists under any provision of the Project Documents, the Series C Repurchase Agreement, or any other agreement or instrument evidencing material Indebtedness, or any other material agreement to which it is a party or by which it is bound that default is reasonably be expected to result in a Material Adverse Effect.  Borrower, its Affiliates and, to the knowledge of the Borrower and its Affiliates, any agent or other party acting on behalf of Borrower or its Affiliates are in compliance with all applicable anti-money laundering, economic sanctions and anti-bribery laws and regulations, and none of the funds to be provided under this Agreement will be used, directly or indirectly, for any activities in violation of such laws and regulations.

 

(b)           There are no past or present events, conditions, circumstances, activities, practices, incidents, actions or plans which could reasonably be expected to interfere with or prevent continued material compliance, or which could reasonably be expected to give rise to any common law or statutory liability, under, relating to or in connection with any Environmental Law, or otherwise form the basis of any material claim, action, suit, proceeding, hearing or investigation under applicable law based on or related to the manufacture, processing, distribution, use, treatment, storage, transport or handling, or the release or threatened release into the environment, of any Hazardous Material with respect to any Borrower or their respective Subsidiaries, or any of their respective

 

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businesses, in each case that could reasonably be expected to have a Material Adverse Effect.

 

(c)           Borrower and its Subsidiaries (i) are in compliance with any and all applicable Environmental Laws, (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect on Borrower and its Subsidiaries, taken as a whole. Borrower and its Subsidiaries are not aware of any existing liabilities concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a Material Adverse Effect on the capital expenditures, earnings or competitive position of Borrower and its Subsidiaries. To the knowledge of Borrower, no property which is or has been owned, leased, used, operated or occupied by Borrower or its Subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.), or otherwise designated as a contaminated sit under applicable state or local law. There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a Material Adverse Effect on Borrower and its Subsidiaries, taken as a whole.

 

5.7          Information Correct and Current.  No information, report, Advance Request, financial statement, certificate, exhibit or schedule furnished, by or on behalf of Borrower to Agent in connection with any Loan Document or included therein or delivered pursuant thereto contained, or, when taken as a whole, contains or will contain any material misstatement of fact or, when taken together with all other such information or documents, omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are or will be made, not materially misleading at the time such statement was made or deemed made. Additionally, any and all financial or business projections provided by Borrower to Agent, whether prior to or after the Closing Date, shall be (i) provided in good faith and based on the most current data and information available to Borrower, and (ii) the most current of such projections provided to Borrower’s Board of Directors (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the control of Borrower, that no assurance is given that any particular projections will be realized and that actual results may differ materially).

 

5.8          Tax Matters.  Except as described on Schedule 5.8 and except those being contested in good faith with adequate reserves under GAAP, (a) Borrower has filed all federal, state and local tax returns that it is required to file, (b) Borrower has duly paid or

 

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fully reserved for all taxes or installments thereof (including any interest or penalties) as and when due, which have or may become due pursuant to such returns, and (c) Borrower has paid or fully reserved for any tax assessment received by Borrower for the three (3) years preceding the Closing Date, if any, (including any taxes being contested in good faith and by appropriate proceedings), in each case in excess of $150,000 and as to which adequate reserves (determined in accordance with GAAP) have been established.

 

5.9          Intellectual Property Claims.  Borrower is the sole owner of, or otherwise has the right to use, the Intellectual Property material to Borrower’s business.  Except as described on Schedule 5.9, (i) each of the material Copyrights, Trademarks and Patents is valid and enforceable, (ii) no material part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and (iii) no claim has been made in writing to Borrower that any material part of the Intellectual Property violates the rights of any third party. Exhibit D is a true, correct and complete list of each of Borrower’s Patents, registered Trademarks, registered Copyrights, and material agreements under which Borrower licenses Intellectual Property from third parties (other than shrink-wrap software licenses), together with application or registration numbers, as applicable, owned by Borrower or any Subsidiary, in each case as of the Closing Date. Borrower is not in material breach of, nor has Borrower failed to perform any material obligations under, any of the foregoing contracts, licenses or agreements and, to Borrower’s knowledge, no third party to any such contract, license or agreement is in breach thereof or has failed to perform any obligations thereunder, except as would not reasonably be expected to result in a Material Adverse Effect.

 

5.10        Intellectual Property.  Except as described on Schedule 5.10, Borrower has all material rights with respect to Intellectual Property necessary or material in the operation or conduct of Borrower’s business as currently conducted and proposed to be conducted by Borrower.  Without limiting the generality of the foregoing, and in the case of Licenses, except for restrictions that are unenforceable under Division 9 of the UCC, Borrower has the right, to the extent required to operate Borrower’s business, to freely transfer, license or assign Intellectual Property necessary or material in the operation or conduct of Borrower’s business as currently conducted and proposed to be conducted by Borrower, without condition, restriction or payment of any kind (other than license payments in the ordinary course of business) to any third party, and Borrower owns or has the right to use, pursuant to valid licenses, all software development tools, library functions, compilers and all other third-party software and other items that are material to Borrower’s business and used in the design, development, promotion, sale, license, manufacture, import, export, use or distribution of Borrower Products except customary covenants in inbound license agreements and equipment leases where Borrower is the licensee or lessee.

 

5.11        Borrower Products.  Except as described on Schedule 5.11, no Intellectual Property owned by Borrower or Borrower Product has been or is subject to any actual or, to the knowledge of Borrower, threatened in writing litigation, proceeding (including any proceeding in the United States Patent and Trademark Office or any corresponding foreign

 

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office or agency) or outstanding decree, order, judgment, settlement agreement or stipulation that restricts in any manner Borrower’s use, transfer or licensing thereof or that may affect the validity, use or enforceability thereof. There is no decree, order, judgment, agreement, stipulation, arbitral award or other provision entered into in connection with any litigation or proceeding that obligates Borrower to grant licenses or ownership interest in any future Intellectual Property related to the operation or conduct of the business of Borrower or Borrower Products.  Borrower has not received any written notice or claim, or, to the knowledge of Borrower, oral notice or claim, challenging or questioning Borrower’s ownership in any Intellectual Property (or written notice of any claim challenging or questioning the ownership in any licensed Intellectual Property of the owner thereof) or suggesting that any third party has any claim of legal or beneficial ownership with respect thereto nor, to Borrower’s knowledge, is there a reasonable basis for any such claim.  To Borrower’s knowledge, neither Borrower’s use of its Intellectual Property nor the production and sale of Borrower Products infringes the Intellectual Property or other rights of others.

 

5.12        Financial Accounts.  Exhibit E, as may be updated by the Borrower in a written notice provided to Agent after the Closing Date, is a true, correct and complete list of (a) all banks and other financial institutions at which Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions at which Borrower or any Subsidiary maintains an account holding Investment Property, and such exhibit correctly identifies the name, address and telephone number of each bank or other institution, the name in which the account is held, a description of the purpose of the account, the complete account number therefor, and whether and to what extent such account is restricted and not subject to the Lien of Agent under this Agreement.

 

5.13        Employee Loans.  Borrower has no outstanding loans to any employee, officer or director of the Borrower nor has Borrower guaranteed the payment of any loan made to an employee, officer or director of the Borrower by a third party, other than as permitted under clause (viii) of the definition of “Permitted Investments”.

 

5.14        Capitalization and Subsidiaries.  Borrower’s capitalization as of the Closing Date is set forth on Schedule 5.14 annexed hereto.  Borrower does not own any stock, partnership interest or other securities of any Person, except for Permitted Investments.  Attached as Schedule 5.14, as may be updated by Borrower in a written notice provided after the Closing Date, is a true, correct and complete list of each Subsidiary.

 

5.15        Investment Company Act; Public Utility Holding Company Act; Federal Power Act.  Borrower and its Subsidiaries are not required to register under the provisions of the Investment Company Act of 1940, as amended, and neither the entering into or performance by Borrower of any of the Loan Documents to which it is a party, or the issuance of any Note, violates any provisions of such Act or requires any consent, approval, or authorization of, or registration with, any Governmental Authority pursuant to any of the provisions of such Act.  Borrower and its Subsidiaries are not (i) a “holding company” or a “subsidiary company” of a “holding company,” as such terms are defined in the Public

 

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Utility Holding Company Act of 1935, as amended, (ii) a “public utility,” as such term is defined in the Federal Power Act, as amended, or (iii) subject to regulation as a “retail electricity supplier,” an “electric supplier” or a “public utility” under the laws of any state or jurisdiction.

 

5.16        Project Financing Arrangements. Attached hereto as Schedule 5.16 is a true, complete and correct list of Borrower’s Projects, including (i) a description of each such Project; (ii) a list of the material Project Documents to which any Borrower is a party or otherwise relating to each such Project; (iii) all Indebtedness and leasehold obligations owing by Borrower under any Material Financing Agreement (Notice); (iv) a list of all Material Financing Agreements (Notice); and (v) a list and description of all Project Restricted Accounts by Borrower or its lender, lessor or collateral agent in connection with the Indebtedness or lease financing of such Project. With respect to each Project:

 

(a)           The Material Financing Agreements (Notice) listed on Schedule 5.16 in respect of such Project have been duly and validly executed and delivered by the parties thereto, are in full force and effect and have not been amended, modified, supplemented or terminated, except as expressly set forth on Schedule 5.16.  The copies of all Material Financing Documents provided to the Lender by Borrower are true, correct and complete in all material respects.

 

(b)           There exists no uncured breach or default under any Project Document or any Material Financing Agreement (Notice), and no party to any Project Document or any Material Financing Agreement (Notice) has the right to terminate any such Project Document or Material Financing Agreement (Notice), or otherwise accelerate the maturity of any payments due thereunder.

 

5.17        Restricted Cash Reports.  Attached hereto as Schedule 5.17 is a true, correct and complete report that sets forth, on a quarterly basis, the amounts scheduled to be distributed or paid to Borrower from the Project Restricted Account for each Project as in existence on the date hereof, assuming that Borrower meets its current revenue and expense projections for each such Project.

 

5.18        Foreign Subsidiary Voting Rights. No decision or action in any governing document of any Foreign Subsidiary of Borrower or of any entity solely holding the equity interests of any Foreign Subsidiary of Borrower requires a vote of greater than 50.1% of the equity interests or voting rights of such Foreign Subsidiary or entity solely holding the equity interests of such Foreign Subsidiary.

 

SECTION 6.  INSURANCE; INDEMNIFICATION

 

6.1          Coverage.  Borrower shall cause to be carried and maintained commercial general liability insurance, on an occurrence form, against risks customarily insured against in Borrower’s line of business.  Such risks shall include the risks of bodily injury, including death, property damage, personal injury, advertising injury, and contractual liability per the

 

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terms of the indemnification agreement found in Section 6.3.  Borrower must maintain a minimum of $2,000,000 of commercial general liability insurance for each occurrence.  Borrower has and agrees to maintain a minimum of $2,000,000 of directors’ and officers’ insurance for each occurrence and $5,000,000 in the aggregate.  So long as there are any Secured Obligations outstanding (other than inchoate indemnification or reimbursement obligations or other obligations which, by their terms, survive termination of this Agreement), Borrower shall also cause to be carried and maintained insurance upon the Collateral, insuring against all risks of physical loss or damage howsoever caused, in an amount not less than the full replacement cost of the Collateral, provided that such insurance may be subject to standard exceptions and deductibles.

 

6.2          Certificates.  Borrower shall deliver to Agent certificates of insurance that evidence Borrower’s compliance with its insurance obligations in Section 6.1 and the obligations contained in this Section 6.2.  Borrower’s insurance certificate shall state Agent (shown as “Hercules Capital, Inc., as Agent”) is an additional insured for commercial general liability, a loss payee for all risk property damage insurance, subject to the insurer’s approval, and a loss payee for property insurance and additional insured for liability insurance for any future insurance that Borrower may acquire from such insurer.  Attached to the certificates of insurance will be additional insured endorsements for liability and lender’s loss payable endorsements for all risk property damage insurance.  All certificates of insurance will provide for a minimum of thirty (30) days advance written notice to Agent of cancellation (other than cancellation for non-payment of premiums, for which ten (10) days’ advance written notice shall be sufficient) or any other change adverse to Agent’s interests.  Any failure of Agent to scrutinize such insurance certificates for compliance is not a waiver of any of Agent’s rights, all of which are reserved.

 

6.3          Indemnity.  Borrower agrees to indemnify and hold Agent, Lender and their officers, directors, employees, agents, in-house attorneys, representatives and shareholders (each, an “Indemnified Person”) harmless from and against any and all claims, reasonable documented costs and expenses, damages and liabilities (including such claims, costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort and claims, costs, expenses, damages and liabilities arising from Environmental Laws and/or Hazardous Substances), including reasonable documented attorneys’ fees and disbursements and other costs of investigation or defense (including those incurred upon any appeal) (collectively, “Liabilities”), that may be instituted or asserted against or incurred by such Indemnified Person as the result of credit having been extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or failures to act in connection therewith, or arising out of the disposition or utilization of the Collateral, excluding in all cases Liabilities to the extent resulting solely from any Indemnified Person’s gross negligence or willful misconduct. Borrower agrees to pay, and to save Agent and Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Agent or Lender) that may be payable or determined to be payable with

 

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respect to any of the Collateral or this Agreement.  In no event shall any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). This Section 6.3 shall survive the repayment of indebtedness under, and otherwise shall survive the expiration or other termination of, this Agreement.

 

SECTION 7.  COVENANTS OF BORROWER

 

Borrower agrees as follows:

 

7.1          Financial Reports.  Borrower shall furnish to Agent the financial statements and reports listed hereinafter (the “Financial Statements”):

 

(a)           as soon as practicable (and in any event within 30 days) after the end of each month (or within 45 days after the end of a month that coincides with the end of a calendar quarter), unaudited interim and year-to-date financial statements as of the end of such month (prepared on a consolidated basis), including balance sheet and related statements of income and cash flows accompanied by a report detailing any material contingencies (including the commencement of any material litigation by or against Borrower) or any other occurrence that would reasonably be expected to have a Material Adverse Effect, all certified by Borrower’s Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, (ii) that they are subject to normal year end adjustments, and (iii) they do not contain certain non-cash items that are customarily included in quarterly and annual financial statements;

 

(b)           as soon as practicable (and in any event within 45 days) after the end of each calendar quarter, unaudited interim and year-to-date financial statements as of the end of such calendar quarter (prepared on a consolidated and consolidating basis, if applicable), including balance sheet and related statements of income and cash flows accompanied by a report detailing any material contingencies (including the commencement of any material litigation by or against Borrower) or any other occurrence that would reasonably be expected to have a Material Adverse Effect, certified by Borrower’s Chief Executive Officer or Chief Financial Officer to the effect that they have been prepared in accordance with GAAP, except (i) for the absence of footnotes, and (ii) that they are subject to normal year end adjustments

 

(c)           as soon as practicable (and in any event within ninety (90) days) after the end of each fiscal year, unqualified audited financial statements as of the end of such year (prepared on a consolidated and consolidating basis, if applicable), including balance sheet and related statements of income and cash flows, and setting forth in comparative form the corresponding figures for the preceding fiscal year, certified by a firm of independent certified public accountants selected by Borrower and reasonably acceptable to Agent, accompanied by any management report from such accountants delivered to Borrower;

 

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(d)           as soon as practicable (and in any event within 30 days) after the end of each month, a Compliance Certificate in the form of Exhibit F;

 

(e)           as soon as practicable (and in any event within 30 days) after the end of each month, a report showing agings of accounts receivable and accounts payable;

 

(f)            promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports that Borrower has made generally available to holders of its Preferred Stock and copies of any regular, periodic and special reports or registration statements that Borrower files with the SEC or any governmental authority that may be substituted therefor, or any national securities exchange;

 

(g)           at Agent’s request, copies of all notices, minutes, consents and other materials that Borrower provides to its directors in connection with meetings of the Board of Directors, provided that in all cases Borrower may exclude confidential compensation information, any attorney-client privileged information and any information that may raise a conflict of interest with respect to Agent or the Lenders; and

 

(h)           financial and business projections promptly following their approval by Borrower’s Board of Directors, and in any event, within 30 days after to the end of Borrower’s fiscal year, as well as budgets, operating plans and other financial information reasonably requested by Agent.

 

Borrower shall not (without the consent of Agent, such consent not to be unreasonably withheld or delayed), make any material change in its (a) accounting policies or reporting practices, except as required by GAAP or (b) fiscal years or fiscal quarters. The fiscal year of Borrower shall end on December 31.

 

The executed Compliance Certificate may be sent via email to Agent at legal@herculestech.com and tpandjiris@herculestech.com.  All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to financialstatements@herculestech.com with a copy to legal@herculestech.com and tpandjiris@herculestech.com provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to Agent at: (866) 468-8916, attention Chief Credit Officer.

 

Notwithstanding the foregoing, documents required to be delivered pursuant to the Sections 7.1(b) and 7.1(c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at Borrower’s website address or on which such financial statements and/or other documents are posted on the SEC’s website on the Internet at www.sec.gov.

 

7.2          Management Rights.  Borrower shall permit any representative that Agent or Lender authorizes, including its attorneys and accountants, to inspect the Collateral and

 

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examine and make copies and abstracts of the books of account and records of Borrower at reasonable times and upon reasonable notice during normal business hours; provided, however, that so long as no Event of Default has occurred and is continuing, such examinations shall be limited to no more often than twice per fiscal year.  In addition, in connection with any such examination, any such representative shall have the right to meet with management and officers of Borrower to discuss such books of account and records.  In addition, Agent or Lender shall be entitled at reasonable times and intervals to consult with and advise the management and officers of Borrower concerning significant business issues affecting Borrower.  Such consultations shall not unreasonably interfere with Borrower’s business operations.  The parties intend that the rights granted Agent and Lender shall constitute “management rights” within the meaning of 29 C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Agent or Lender with respect to any business issues shall not be deemed to give Agent or Lender, nor be deemed an exercise by Agent or Lender of, control over Borrower’s management or policies.

 

7.3          Further Assurances.  Borrower shall from time to time execute, deliver and file, alone or with Agent, any financing statements, security agreements, collateral assignments, notices, control agreements, or other documents to perfect or give the highest priority to Agent’s Lien on the Collateral (subject to Permitted Liens) as Agent may reasonably request from time to time; provided that, notwithstanding any other provision of this Agreement, at no time shall leasehold mortgages be required with respect to leased property valued at or holding less than $500,000, valued at the lower of book or market.  Borrower shall from time to time procure any instruments or documents as may be reasonably requested by Agent, and take all further action that may be necessary and that Agent may reasonably request, to perfect and protect the Liens granted hereby and thereby in accordance with the Loan Documents.  In addition, and for such purposes only, Borrower hereby authorizes Agent to execute and deliver on behalf of Borrower and to file such financing statements (including an indication that the financing statement covers “all assets or all personal property” of Borrower in accordance with Section 9-504 of the UCC) without the signature of Borrower either in Agent’s name or in the name of Agent as agent and attorney-in-fact for Borrower.  Borrower shall protect and defend Borrower’s title to the Collateral and Agent’s Lien thereon against all Persons claiming any interest adverse to Borrower or Agent other than Permitted Liens.

 

7.4          Indebtedness; Operating Leases.  Borrower shall not create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or any obligations under an Operating Lease or take any actions which impose on Borrower an obligation to prepay any Indebtedness or any Operating Lease, except for (a) the conversion of Indebtedness into equity securities and the payment of cash in lieu of fractional shares in connection with such conversion, (b) purchase money Indebtedness or obligations under any Operating Lease pursuant to its then applicable payment or rent schedule or (c) prepayment by any Subsidiary of (i) inter-company Indebtedness owed by such Subsidiary

 

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to any Borrower, or (ii) if such Subsidiary is not a Borrower, intercompany Indebtedness owed by such Subsidiary to another Subsidiary that is not a Borrower.

 

7.5          Collateral.  Borrower shall at all times keep the Collateral and all other property and assets used in Borrower’s business or in which Borrower now or hereafter holds any interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any known legal process affecting the Collateral, such other property and assets, in each case, with a value in excess of $250,000, or any Liens thereon, provided however, that the Collateral and such other property and assets may be subject to Permitted Liens except that there shall be no Liens whatsoever on Intellectual Property.  Borrower shall not agree with any Person other than Agent or Lender not to encumber its property (other than holders of Permitted Liens). Borrower shall cause its Subsidiaries to protect and defend such Subsidiary’s title to its assets from and against all Persons claiming any interest adverse to such Subsidiary, and Borrower shall cause its Subsidiaries at all times to keep such Subsidiary’s property and assets free and clear from any legal process or Liens whatsoever (except for Permitted Liens, provided however, that there shall be no Liens whatsoever on Intellectual Property), and shall give Agent prompt written notice of any known legal process affecting such Subsidiary’s assets with a value in excess of $250,000.

 

7.6          Investments.  Borrower shall not directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments.

 

7.7          Distributions.  Borrower shall not, and shall not allow any Subsidiary to (a) repurchase or redeem any class of stock or other equity interest other than (i) pursuant to employee, director or consultant repurchase plans, employee stock option plans, the Series C Repurchase Agreement (solely in connection with the right to convert preferred stock into common stock pursuant to such agreement and any cash to be paid in connection thereto to not exceed the specified cumulative limit in the definition “Permitted Series C Repurchases”) or agreements entered into in the ordinary course of business, or other similar agreements or in connection with withholding taxes (including in connection with restricted stock agreements) incurred solely in connection with the foregoing, provided, however, in each case the repurchase or redemption price does not exceed the original consideration paid for such stock or equity interest (other than the net exercise of any stock options), or (b) declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest, except that (i) a Subsidiary may pay dividends or make distributions to Borrower and (ii) so long as no Event of Default has occurred and is continuing, Borrower may pay cash dividends pursuant to Permitted Series C Repurchases (subject to, for the avoidance of doubt, the cumulative limit indicated in such definition), or (c) lend money to any employees, officers or directors or guarantee the payment of any such loans granted by a third party in excess of $100,000 in the aggregate outstanding other than Permitted Investments or (d) waive, release or forgive any Indebtedness owed by any employees, officers or directors in excess of $100,000 in the aggregate.

 

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7.8          Transfers.  Except for Permitted Transfers, Borrower shall not, and shall not allow any Subsidiary to, voluntarily or involuntarily transfer, sell, lease, license, lend or in any other manner convey any equitable, beneficial or legal interest in any material portion of its assets or in any material portion of the assets of any Project.

 

7.9          Mergers or Acquisitions.  Borrower shall not merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of (a) a Subsidiary which is not a Borrower into another Subsidiary or into Borrower or (b) a Borrower into another Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person.

 

7.10        Taxes.  Borrower and its Subsidiaries shall pay when due all material taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties) now or hereafter imposed or assessed against Borrower, Agent, Lender or the Collateral or upon Borrower’s ownership, possession, use, operation or disposition thereof or upon Borrower’s rents, receipts or earnings arising therefrom.  Borrower shall file on or before the due date therefor all personal property tax returns in respect of the Collateral.  Notwithstanding the foregoing, Borrower may contest, in good faith and by appropriate proceedings, taxes for which Borrower maintains adequate reserves therefor in accordance with GAAP.

 

7.11        Corporate Changes.  Neither Borrower nor any Subsidiary shall change its corporate name, legal form or jurisdiction of formation without twenty (20) days’ prior written notice to Agent.  Neither Borrower nor any Subsidiary shall suffer a Change in Control. Neither Borrower nor any Subsidiary shall relocate its chief executive office or its principal place of business unless: (i) it has provided prior written notice to Agent; and (ii) in the case of any Domestic Subsidiaries, such relocation shall be within the United States of America.  Neither Borrower nor any Qualified Subsidiary shall relocate any item of Collateral (other than (x) sales of Inventory in the ordinary course of business, (y) relocations of Equipment having a value of up to $250,000 in any fiscal year in each customer site, and (z) relocations of Collateral from a location described on Exhibit C to another location described on Exhibit C) unless (i) it has provided prompt written notice to Agent, (ii) such relocation is within the continental United States of America and, (iii) if such relocation is to a third party bailee, it has delivered a bailee agreement in form and substance reasonably acceptable to Agent.

 

7.12        Deposit Accounts.

 

(a)           Subject to Section 4.5, neither Borrower nor any Qualified Subsidiary shall maintain any Deposit Accounts, or accounts holding Investment Property (other than, in each case, any Project Restricted Accounts or other Deposit Accounts excluded pursuant to Section 3.2), except with respect to which Agent has an Account Control Agreement.

 

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(b)           All released funds (either cash, cash equivalents or investment securities) in a Project Restricted Account or other Deposit Accounts excluded pursuant to Section 3.2 shall, immediately upon release (either by law or contract), be transferred to an account subject to an Account Control Agreement in favor of Agent. For the avoidance of doubt, funds will be considered released when such funds are no longer required to serve as collateral pursuant to the same Operating Lease.  Furthermore, no funds used as collateral of one Operating Lease shall be used as collateral for another Operating Lease.

 

(c)           Promptly, and in any event within three (3) Business Days following maturity, satisfaction or termination of any Operating Lease, all funds in each Project Restricted Account or other Deposit Accounts excluded pursuant to Section 3.2 associated with such Operating Lease shall be transferred to an account subject to an Account Control Agreement in favor of Agent.

 

7.13        Joinders.

 

(a)           Borrower shall notify Agent of each Subsidiary formed subsequent to the Closing Date and, within 15 days of formation, shall cause any such Qualified Subsidiary to execute and deliver to Agent a Joinder Agreement.

 

(b)           Upon any existing Subsidiary becoming a Qualified Subsidiary as required in Section 7.13(a) (a) such Subsidiary shall take all actions and steps required by Agent in order to perfect Agent’s security interest in such Subsidiary’s assets, including without limitation all such steps under any local laws, and (b) notwithstanding Section 3.2 to the contrary, Borrower or any other Subsidiary of Borrower shall grant Agent 100% of all outstanding shares of capital stock of such new Qualified Subsidiary or any Subsidiary that directly or indirectly holds securities of such new Qualified Subsidiary.

 

7.14        Project Documents.

 

(a)           Borrower shall not amend, modify or waive any provision or term of any Project Document or any Material Financing Agreement (Covenant), in a manner materially adverse to Agent.

 

(b)           Borrower shall not enter into any Material Additional Project Document unless the transactions contemplated by such Material Additional Project Document could not reasonably be expected to result in a Material Adverse Effect and are, in the Borrower’s reasonable judgment, in the best interest of the applicable Project.  Upon Agent’s request, Agent shall have received copies of such Material Additional Project Documents concurrently with delivery of the then-next Compliance Certificate.

 

7.15        Notification of Event of Default.  Borrower shall notify Agent promptly and in any case within three (3) Business Days of Borrower obtaining knowledge of the occurrence of any Event of Default, and any termination, default or event of default or any

 

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allegation or notice thereof under any Project Document, Material Financing Agreement (Notice) or under any subordination agreement.

 

7.16            Foreign Subsidiary Voting Rights.  Borrower shall not, and shall not permit any Subsidiary, to amend or modify any governing document of any Foreign Subsidiary of Borrower or of any entity solely holding the equity interests of any Foreign Subsidiary of Borrower the effect of which is to require a vote of greater than 50.1% of the equity interests or voting rights of such entity for any decision or action of such entity.

 

7.17            Use of Term Loan Proceeds.  The proceeds of the Term Loans shall be used to pay related fees and expenses in connection with this Agreement and for working capital and other general corporate purposes.

 

7.18            Minimum Cash.  At all times prior to achievement of the Unrestricted Cash Milestone, Borrower shall maintain unrestricted Cash in account(s) located in the United States of America subject to an Account Control Agreement in favor of Agent in an amount equal to (a) 75% of the outstanding Secured Obligations plus (b) an amount equal to any outstanding accounts payable of Borrower or any of its Subsidiaries that is more than one hundred fifty (150) days past the billing date for such accounts payable.  From and after the date on which the Borrower achieves the Unrestricted Cash Milestone, Borrower shall only be required to maintain unrestricted Cash in account(s) located in the United States of America subject to an Account Control Agreement in favor of Agent in an amount equal to (a) 50% of the outstanding Secured Obligations plus (b) an amount equal to any outstanding accounts payable of Borrower or any of its Subsidiaries that is more than one hundred fifty (150) days past the billing date for such accounts payable.  Borrower shall provide Agent evidence of compliance with the financial covenants under this Section 7.18 in each Compliance Certificate and upon request in form and substance reasonably acceptable to Agent and supporting documentation reasonably requested by Agent, including certification of such compliance by the Chief Executive Officer or Chief Financial Officer of Borrower.

 

7.19            Limited Subsidiaries.  Borrower agrees that (a) Plug Power Canada Inc., Plug Power Holding Inc., Plug Power Capital Inc. or H Power Corp. (i) shall collectively have no assets in excess of $10,000 and none shall incur any liabilities, (b) Emerging Power Inc. shall solely hold the equity interests of Emergent Power Inc., (c) Hypulsion U.S. Holding, Inc. shall solely hold the equity interests of Hypulsion SAS (Plug Power Europe), (d) any Domestic Subsidiary that is not a Qualified Subsidiary shall not have any assets or incur any liabilities until it has entered into a Joinder Agreement, and (e) any Subsidiary that is or becomes a Qualified Subsidiary shall enter into a Joinder Agreement within 15 days and become a co-borrower under this Agreement.

 

SECTION 8.  [RESERVED]

 

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SECTION 9.  EVENTS OF DEFAULT

 

The occurrence of any one or more of the following events shall be an Event of Default:

 

9.1          Payments.  Borrower fails to pay (i) any scheduled payment of principal or interest due under this Agreement or any of the other Loan Documents on the due date or (ii) any other payment due on the Secured Obligations hereunder within three (3) Business Days; provided, however, that an Event of Default shall not occur on account of a failure to pay due solely to an administrative or operational error of Agent or Lender or Borrower’s bank if Borrower had the funds to make the payment when due and makes the payment within three (3) Business Days following Borrower’s knowledge of such failure to pay; or

 

9.2          Covenants.  Borrower breaches or defaults in the performance of any covenant or Secured Obligation under this Agreement, or any of the other Loan Documents or any other agreement among Borrower, Agent and Lender, and (a) with respect to a default under any covenant under this Agreement (other than under Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.12, 7.15, 7.17, 7.18 and 7.19), any other Loan Document or any other agreement among Borrower, Agent and Lender, such default continues for more than fifteen (15) Business Days after the earlier of the date on which (i) Agent or Lender has given notice of such default to Borrower and (ii) Borrower has actual knowledge of such default or (b) with respect to a default under any of Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.12, 7.15, 7.17, 7.18 and 7.19, the occurrence of such default; or

 

9.3          Material Adverse Effect.  A circumstance has occurred that has had a Material Adverse Effect.  Agent shall provide written notice to Parent stating its belief that a Material Adverse Effect has occurred.  Agent shall provide three (3) calendar days written notice to Parent before exercising any right or remedy or causing a Default or an Event of Default to occur with respect to this Section 9.3, whereby during such time, Agent shall make itself available to discuss in good faith any proposed solution to such Material Adverse Effect, and Parent may take such action otherwise permitted under the Loan Documents (i) as required so that the event or circumstance that is the basis for such Material Adverse Effect no longer exists (to the extent curable), (ii) to show evidence that no Material Adverse Effect has occurred or (iii) to provide a plan detailing how it will mitigate the effect of such event or circumstance that, based on such plan, in the foreseeable future will provide Parent the ability to overcome such Material Adverse Effect, which, in each case, at such time such evidence is shown and plans are provided, the Agent shall promptly re-determine in good faith whether an Event of Default still exists with respect to this Section 9.3. If not, any proposed or expected violation of this Section 9.3 will immediately be deemed to be waived and cured, without any further action.  Further, no Event of Default shall be triggered under this Section 9.3 if the circumstance arises out of: (i) war, act of terrorism, civil unrest or similar event; or (ii) any adverse change, effect or circumstance resulting from an action required or permitted by this Agreement; or

 

9.4          Representations.  Any representation or warranty made by Borrower in any Loan Document shall have been false or misleading in any material respect when made or when deemed made; or

 

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9.5          Insolvency.  Borrower (A) (i) shall make an assignment for the benefit of creditors; or (ii) shall be unable to pay its debts as they become due, or be unable to pay or perform under the Loan Documents, or shall become insolvent; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of Borrower or of all or any substantial part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its business as its business has normally been conducted, or terminate substantially all of its employees; or (vii) Borrower or its directors or majority shareholders shall take any action initiating any of the foregoing actions described in clauses (i) through (vi); or (B) either (i) forty-five (45) days shall have expired after the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against Borrower in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) forty-five (45) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or

 

9.6          Attachments; Judgments.  Any portion of Borrower’s assets is attached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment of money (not covered by independent third party insurance as to which liability has not been rejected by such insurance carrier), individually or in the aggregate, of at least $500,000, or Borrower is enjoined or in any way prevented by court order from conducting any part of its business; or

 

9.7              Other Obligations.  The occurrence (beyond any applicable grace or cure periods) of any default under any agreement or obligation of Borrower (including without limitation its Operating Leases and the Project Documents) in an aggregate principal amount or annual potential revenues in excess of $500,000; or

 

9.8              Stop Trade.  At any time, an SEC stop trade order or NASDAQ market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a public market, provided that Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another public market within sixty (60) days of such notice.

 

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SECTION 10.  REMEDIES

 

10.1        General.  Upon and during the continuance of any one or more Events of Default, (i) Agent may, and at the direction of the Required Lenders shall, accelerate and demand payment of all or any part of the Secured Obligations together with a Prepayment Charge and declare them to be immediately due and payable (provided, that upon the occurrence of an Event of Default of the type described in Section 9.5, all of the Secured Obligations shall automatically be accelerated and made due and payable, in each case without any further notice or act), (ii) Agent may, at its option, sign and file in Borrower’s name any and all collateral assignments, notices, control agreements, security agreements and other documents it deems necessary or appropriate to perfect or protect the repayment of the Secured Obligations, and in furtherance thereof, Borrower hereby grants Agent an irrevocable power of attorney coupled with an interest, and (iii) Agent may notify any of Borrower’s account debtors to make payment directly to Agent, compromise the amount of any such account on Borrower’s behalf and endorse Agent’s name without recourse on any such payment for deposit directly to Agent’s account.  Agent may, and at the direction of the Required Lenders shall, exercise all rights and remedies with respect to the Collateral under the Loan Documents or otherwise available to it under the UCC and other applicable law, including the right to release, hold, sell, lease, liquidate, collect, realize upon, or otherwise dispose of all or any part of the Collateral and the right to occupy, utilize, process and commingle the Collateral.  All Agent’s rights and remedies shall be cumulative and not exclusive.

 

10.2        Collection; Foreclosure.  Upon the occurrence and during the continuance of any Event of Default, Agent may, and at the direction of the Required Lenders shall, at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in such order as Agent may elect.  Any such sale may be made either at public or private sale at its place of business or elsewhere.  Borrower agrees that any such public or private sale may occur upon ten (10) calendar days’ prior written notice to Borrower.  Agent may require Borrower to assemble the Collateral and make it available to Agent at a place designated by Agent that is reasonably convenient to Agent and Borrower.  The proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be applied by Agent in the following order of priorities:

 

First, to Agent and Lender in an amount sufficient to pay in full Agent’s and Lender’s reasonable documented costs and professionals’ and advisors’ fees and expenses as described in Section 11.11;

 

Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations (including principal, interest, and the Default Rate interest), in such order and priority as Agent may choose in its sole discretion; and

 

Finally, after the full and final payment in Cash of all of the Secured Obligations (other than inchoate obligations), to any creditor holding a junior Lien on the

 

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Collateral, or to Borrower or its representatives or as a court of competent jurisdiction may direct.

 

Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.

 

10.3        No Waiver.  Agent shall be under no obligation to marshal any of the Collateral for the benefit of Borrower or any other Person, and Borrower expressly waives all rights, if any, to require Agent to marshal any Collateral.

 

10.4        Cumulative Remedies.  The rights, powers and remedies of Agent hereunder shall be in addition to all rights, powers and remedies given by statute or rule of law and are cumulative.  The exercise of any one or more of the rights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies with respect to any other rights, powers and remedies of Agent.

 

SECTION 11.  MISCELLANEOUS

 

11.1        Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

11.2        Notice.  Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or other communication (including the delivery of Financial Statements) that is required, contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the day of transmission by electronic mail or hand delivery or delivery by an overnight express service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States of America mails, with proper first class postage prepaid, in each case addressed to the party to be notified as follows:

 

(a)           If to Agent:

 

HERCULES CAPITAL, INC.
 Legal Department
 Attention:  Chief Legal Officer and Tony Pandjiris
 400 Hamilton Avenue, Suite 310
 Palo Alto, CA 94301
 email: legal@herculestech.com, tpandjiris@herculestech.com
 Telephone:  650-289-3060

 

with a copy (which shall not constitute notice) to:

 

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LATHAM & WATKINS LLP

505 Montgomery Street, Suite 2000

San Francisco, CA 94111

Attention: Haim Zaltzman

Telephone: 415-395-8870

email: haim.zaltzman@lw.com

 

(b)           If to Lender:

 

HERCULES CAPITAL, INC.
 Legal Department
 Attention:  Chief Legal Officer and Tony Pandjiris
 400 Hamilton Avenue, Suite 310
 Palo Alto, CA 94301
  email: legal@herculestech.com, tpandjiris@herculestech.com
 Telephone:  650-289-3060

 

with a copy (which shall not constitute notice) to:

LATHAM & WATKINS LLP

505 Montgomery Street, Suite 2000

San Francisco, CA 94111

Attention: Haim Zaltzman

Telephone: 415-395-8870

email: haim.zaltzman@lw.com

 

(c)           If to Borrower:

 

PLUG POWER INC.

Attention:  Paul Middleton

968 Albany Shaker Road

Latham, NY 12110

email: pmiddleton@plugpower.com 
 Telephone: 518-738-0281

 

with a copy (which shall not constitute notice) to:

GOODWIN PROCTER LLP

100 Northern Avenue

Boston, MA 02110

Attention: Robert P. Whalen

Telephone: 617-570-1394

email: rwhalen@goodwinprocter.com

 

or to such other address as each party may designate for itself by like notice.

 

11.3        Entire Agreement; Amendments.

 

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(a)           This Agreement and the other Loan Documents constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety any prior proposals, term sheets, non-disclosure or confidentiality agreements, letters, negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof or thereof (including Agent’s revised proposal letter dated May 25, 2016).

 

(b)           Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.3(b).  The Required Lenders and Borrower party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Agent and the Borrower party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or the Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (A) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder) or extend the scheduled date of any payment thereof, in each case without the written consent of each Lender directly affected thereby; (B) eliminate or reduce the voting rights of any Lender under this Section 11.3(b) without the written consent of such Lender; (C) reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release a Borrower from its obligations under the Loan Documents, in each case without the written consent of all Lenders; or (D) amend, modify or waive any provision of Section 11.17 without the written consent of the Agent.  Any such waiver and any such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, the Lender, the Agent and all future holders of the Loans.

 

11.4        No Strict Construction.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

11.5        No Waiver.  The powers conferred upon Agent and Lender by this Agreement are solely to protect its rights hereunder and under the other Loan Documents and its interest in the Collateral and shall not impose any duty upon Agent or Lender to exercise any such powers.  No omission or delay by Agent or Lender at any time to enforce

 

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any right or remedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by Borrower at any time designated, shall be a waiver of any such right or remedy to which Agent or Lender is entitled, nor shall it in any way affect the right of Agent or Lender to enforce such provisions thereafter.

 

11.6        Survival.  All agreements, representations and warranties contained in this Agreement and the other Loan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit of Agent and Lender and shall survive the execution and delivery of this Agreement.  Section 6.3 shall survive the termination of this Agreement.

 

11.7        Successors and Assigns.  The provisions of this Agreement and the other Loan Documents shall inure to the benefit of and be binding on Borrower and its permitted assigns (if any).  Borrower shall not assign its obligations under this Agreement or any of the other Loan Documents without Agent’s express prior written consent, and any such attempted assignment shall be void and of no effect.  Agent and Lender may assign, transfer, or endorse its rights hereunder and under the other Loan Documents without prior notice to Borrower, and all of such rights shall inure to the benefit of Agent’s and Lender’s successors and assigns; provided that as long as no Event of Default has occurred and is continuing, neither Agent nor any Lender may assign, transfer or endorse its rights hereunder or under the Loan Documents to any party that is a Designated Competitor of Borrower, it being acknowledged that in all cases, any transfer to an Affiliate of any Lender or Agent shall be allowed.

 

11.8        Governing Law.  This Agreement and the other Loan Documents have been negotiated and delivered to Agent and Lender in the State of California, and shall have been accepted by Agent and Lender in the State of California.  Payment to Agent and Lender by Borrower of the Secured Obligations is due in the State of California.  This Agreement and the other Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

 

11.9        Consent to Jurisdiction and Venue.  All judicial proceedings (to the extent that the reference requirement of Section 11.10 is not applicable) arising in or under or related to this Agreement or any of the other Loan Documents may be brought in any state or federal court located in the State of California.  By execution and delivery of this Agreement, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa Clara County, State of California; (b) waives any objection as to jurisdiction or venue in Santa Clara County, State of California; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other Loan Documents.  Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective and received as set forth in Section 11.2.  Nothing herein shall affect the right to serve process

 

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in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

 

11.10      Mutual Waiver of Jury Trial / Judicial Reference.

 

(a)           Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert Person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws.  EACH OF BORROWER, AGENT AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST BORROWER.  This waiver extends to all such Claims, including Claims that involve Persons other than Agent, Borrower and Lender; Claims that arise out of or are in any way connected to the relationship among Borrower, Agent and Lender; and any Claims for damages, breach of contract, tort, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement, any other Loan Document.

 

(b)           If the waiver of jury trial set forth in Section 11.10(a) is ineffective or unenforceable, the parties agree that all Claims shall be resolved by reference to a private judge sitting without a jury, pursuant to Code of Civil Procedure Section 638, before a mutually acceptable referee or, if the parties cannot agree, a referee selected by the Presiding Judge of the Santa Clara County, California.  Such proceeding shall be conducted in Santa Clara County, California, with California rules of evidence and discovery applicable to such proceeding.

 

(c)           In the event Claims are to be resolved by judicial reference, either party may seek from a court identified in Section 11.9, any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial reference.

 

11.11      Professional Fees.  Borrower promises to pay Agent’s and Lender’s fees and reasonable documented expenses necessary to finalize the loan documentation, including but not limited to reasonable documented attorneys’ fees, UCC searches, filing costs, and other miscellaneous expenses; provided that Agent and Lender shall use best efforts to limit such fees and expenses to no more than $125,000 and, in any event, such fees and expenses shall not exceed $250,000, in each case solely as of the Closing Date.  In addition, Borrower promises to pay any and all reasonable documented attorneys’ and other professionals’ fees and expenses incurred by Agent and Lender after the Closing Date in connection with or related to:  (a) the Loan; (b) the administration, collection, or enforcement of the Loan; (c) the amendment or modification of the Loan Documents;

 

47

 

(d) any waiver, consent, release, or termination under the Loan Documents; (e) the protection, preservation, audit, field exam, sale, lease, liquidation, or disposition of Collateral or the exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative, arbitration, or out of court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof; and (g) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout, foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, including representing Agent or Lender in any adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s estate, and any appeal or review thereof.

 

11.12      Confidentiality.  Agent and Lender acknowledge that certain items of Collateral and information provided to Agent and Lender by Borrower are confidential and proprietary information of Borrower, if and to the extent such information either (x) is marked as confidential by Borrower at the time of disclosure, or (y) should reasonably be understood to be confidential (the “Confidential Information”).  Accordingly, Agent and Lender agree that any Confidential Information it may obtain in the course of acquiring, administering, or perfecting Agent’s security interest in the Collateral shall not be disclosed to any other Person or entity in any manner whatsoever, in whole or in part, without the prior written consent of Borrower, except that Agent and Lender may disclose any such information:  (a) to its own directors, officers, employees, accountants, counsel and other professional advisors and to its Affiliates if Agent or Lender in their reasonable good faith discretion determines that any such party should have access to such information in connection with such party’s responsibilities in connection with the Loan or this Agreement and, provided that such recipient of such Confidential Information either (i) agrees to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions that reasonably protect against the disclosure of Confidential Information which are no less restrictive than the terms of this Section 11.12; (b) if such information is generally available to the public; (c) if required or appropriate in any report, statement or testimony required by law or order of any Governmental Authority submitted to any governmental authority having or claiming to have jurisdiction over Agent or Lender; (d) if required or appropriate in response to any summons or subpoena or in connection with any litigation, to the extent permitted or deemed advisable by Agent’s or Lender’s counsel; (e) to comply with any legal requirement or law applicable to Agent or Lender; (f) to the extent reasonably necessary in connection with the exercise of any right or remedy under any Loan Document, including Agent’s sale, lease, or other disposition of Collateral after the occurrence of an Event of Default; (g) to any participant or assignee of Agent or Lender or any prospective participant or assignee; provided, that such participant or assignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or (h) otherwise with the prior written consent of Borrower; provided, that any disclosure made in violation of this Agreement shall not affect the obligations of Borrower or any of its Affiliates or any guarantor under this Agreement or the other Loan Documents.

 

11.13      Assignment of Rights.  Borrower acknowledges and understands that Agent or Lender may, subject to Section 11.7, sell and assign all or part of its interest hereunder

 

48

 

and under the Loan Documents to any Person or entity (an “Assignee”).  After such assignment the term “Agent” or “Lender” as used in the Loan Documents shall mean and include such Assignee, and such Assignee shall be vested with all rights, powers and remedies of Agent and Lender hereunder with respect to the interest so assigned; but with respect to any such interest not so transferred, Agent and Lender shall retain all rights, powers and remedies hereby given.  No such assignment by Agent or Lender shall relieve Borrower of any of its obligations hereunder.  Lender agrees that in the event of any transfer by it of the Note(s) (if any), it will endorse thereon a notation as to the portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the date to which interest shall have been last paid thereon.  Agent, acting solely for this purpose as an agent of the Borrower, shall maintain a register for the recordation of the names and addresses of the Lenders, and the Term Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

11.14      Revival of Secured Obligations.  This Agreement and the Loan Documents shall remain in full force and effect and continue to be effective if any petition is filed by or against Borrower for liquidation or reorganization, if Borrower becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is appointed for all or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is recovered from Agent or Lender.  The Loan Documents and the Secured Obligations and Collateral security shall continue to be effective, or shall be revived or reinstated, as the case may be, if at any time payment and performance of the Secured Obligations or any transfer of Collateral to Agent, or any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise be restored or returned by, or is recovered from, Agent, Lender or by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer of Collateral had not been made.  In the event that any payment, or any part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated until the Secured Obligations (other than contingent obligations for which no claim has been asserted) are fully satisfied.

 

11.15      Counterparts.  This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument. Delivery of an executed counterpart signature page of this Agreement by telecopier or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

49

 

11.16      No Third Party Beneficiaries.  No provisions of the Loan Documents are intended, nor will be interpreted, to provide or create any third-party beneficiary rights or any other rights of any kind in any Person other than Agent, Lender and Borrower unless specifically provided otherwise herein, and, except as otherwise so provided, all provisions of the Loan Documents will be personal and solely among Agent, the Lender and the Borrower.

 

11.17      Agency.

 

(a)           Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its behalf as the Agent hereunder and under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

 

(b)           Lender agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so), according to its respective Term Commitment percentages (based upon the total outstanding Term Loan Commitments) in effect on the date on which indemnification is sought under this Section 11.17, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing.  The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder.

 

(c)           Agent in Its Individual Capacity.  The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent and the term “Lender” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each such Person serving as Agent hereunder in its individual capacity.

 

(d)           Exculpatory Provisions.  The Agent shall have no duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Agent shall not:

 

(i)             be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing;

 

(ii)          have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is

 

50

 

required to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and

 

(iii)       except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as the Agent or any of its Affiliates in any capacity.

 

(e)           The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Lender or as the Agent shall believe in good faith shall be necessary, under the circumstances or (ii) in the absence of its own gross negligence or willful misconduct.

 

(f)            The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent.

 

(g)           Reliance by Agent.  Agent may rely, and shall be fully protected in acting, or refraining to act, upon, any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document that it has no reason to believe to be other than genuine and to have been signed or presented by the proper party or parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties.  In the absence of its gross negligence or willful misconduct, Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to Agent and conforming to the requirements of this Agreement or any of the other Loan Documents.  Agent may consult with counsel, and any opinion or legal advice of such counsel shall be full and complete authorization and protection in respect of any action taken, not taken or suffered by Agent hereunder or under any Loan Documents in accordance therewith.  Agent shall have the right at any time to seek instructions concerning the administration of the Collateral from any court of competent jurisdiction.  Agent shall not be under any obligation to exercise any of the rights or powers granted to Agent by this Agreement and the other Loan Documents at the request or direction of Lenders unless Agent shall have been provided by Lender with adequate security and

 

51

 

indemnity against the costs, expenses and liabilities that may be incurred by it in compliance with such request or direction.

 

11.18      Publicity.  None of the parties hereto nor any of its respective member businesses and Affiliates shall, without the other parties’ prior written consent (which shall not be unreasonably withheld or delayed), publicize or use (a) the other party’s name (including a brief description of the relationship among the parties hereto), logo or hyperlink to such other parties’ web site, separately or together, in written and oral presentations, advertising, promotional and marketing materials, client lists, public relations materials or on its web site (together, the “Publicity Materials”); (b) the names of officers of such other parties in the Publicity Materials; and (c) such other parties’ name, trademarks, servicemarks in any news or press release concerning such party; provided however, notwithstanding anything to the contrary herein, no such consent shall be required (i) to the extent necessary to comply with the requests of any regulators, legal requirements or laws applicable to such party, pursuant to any listing agreement with any national securities exchange (so long as such party provides prior notice to the other party hereto to the extent reasonably practicable) and (ii) to comply with Section 11.12.

 

11.19      Multiple Borrowers.

 

(a) Borrower’s Agent. Each of the Borrowers hereby irrevocably appoints Plug Power Inc. as its agent, attorney-in-fact and legal representative for all purposes, including requesting disbursement of the Term Loan and receiving account statements and other notices and communications to Borrowers (or any of them) from the Agent or any Lender. The Agent may rely, and shall be fully protected in relying, on any request for the Term Loan, disbursement instruction, report, information or any other notice or communication made or given by the Company, whether in its own name or on behalf of one or more of the other Borrowers, and the Agent shall not have any obligation to make any inquiry or request any confirmation from or on behalf of any other Borrower as to the binding effect on it of any such request, instruction, report, information, other notice or communication, nor shall the joint and several character of the Borrowers’ obligations hereunder be affected thereby.

 

(b)  Waivers.  Each Borrower hereby waives:  (i) any right to require the Agent to institute suit against, or to exhaust its rights and remedies against, any other Borrower or any other person, or to proceed against any property of any kind which secures all or any part of the Secured Obligations, or to exercise any right of offset or other right with respect to any reserves, credits or deposit accounts held by or maintained with the Agent or any Indebtedness of the Agent or any Lender to any other Borrower, or to exercise any other right or power, or pursue any other remedy the Agent or any Lender may have; (ii) any defense arising by reason of any disability or other defense of any other Borrower or any guarantor or any endorser, co-maker or other person, or by reason of the cessation from any cause whatsoever of any liability of any other Borrower or any guarantor or any endorser, co-maker or other person, with respect to all or any part of the Secured Obligations, or by reason of any act or omission of the Agent or others which directly or indirectly results in

 

52

 

the discharge or release of any other Borrower or any guarantor or any other person or any Secured Obligations or any security therefor, whether by operation of law or otherwise; (iii) any defense arising by reason of any failure of the Agent to obtain, perfect, maintain or keep in force any Lien on, any property of any Borrower or any other person; (iv) any defense based upon or arising out of any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against any other Borrower or any guarantor or any endorser, co-maker or other person, including without limitation any discharge of, or bar against collecting, any of the Secured Obligations (including without limitation any interest thereon), in or as a result of any such proceeding.  Until all of the Secured Obligations have been paid, performed, and discharged in full, nothing shall discharge or satisfy the liability of any Borrower hereunder except the full performance and payment of all of the Secured Obligations.  If any claim is ever made upon the Agent for repayment or recovery of any amount or amounts received by the Agent in payment of or on account of any of the Secured Obligations, because of any claim that any such payment constituted a preferential transfer or fraudulent conveyance, or for any other reason whatsoever, and the Agent repays all or part of said amount by reason of any judgment, decree or order of any court or administrative body having jurisdiction over the Agent or any of its property, or by reason of any settlement or compromise of any such claim effected by the Agent with any such claimant (including without limitation any other Borrower), then and in any such event, each Borrower agrees that any such judgment, decree, order, settlement and compromise shall be binding upon such Borrower, notwithstanding any revocation or release of this Agreement or the cancellation of any note or other instrument evidencing any of the Secured Obligations, or any release of any of the Secured Obligations, and each Borrower shall be and remain liable to the Agent and the Lenders under this Agreement for the amount so repaid or recovered, to the same extent as if such amount had never originally been received by the Agent or any Lender, and the provisions of this sentence shall survive, and continue in effect, notwithstanding any revocation or release of this Agreement.  Each Borrower hereby expressly and unconditionally waives all rights of subrogation, reimbursement and indemnity of every kind against any other Borrower, and all rights of recourse to any assets or property of any other Borrower, and all rights to any collateral or security held for the payment and performance of any Secured Obligations, including (but not limited to) any of the foregoing rights which Borrower may have under any present or future document or agreement with any other Borrower or other person, and including (but not limited to) any of the foregoing rights which any Borrower may have under any equitable doctrine of subrogation, implied contract, or unjust enrichment, or any other equitable or legal doctrine.

 

(c)  Consents.  Each Borrower hereby consents and agrees that, without notice to or by Borrower and without affecting or impairing in any way the obligations or liability of Borrower hereunder, the Agent may, from time to time before or after revocation of this Agreement, do any one or more of the following in its sole and absolute discretion:  (i) accept partial payments of, compromise or settle, renew, extend the time for the payment, discharge, or performance of, refuse to enforce, and release all or any parties to, any or all of the Obligations; (ii) grant any other indulgence to any Borrower or any other Person in

 

53

 

respect of any or all of the Secured Obligations or any other matter; (iii) accept, release, waive, surrender, enforce, exchange, modify, impair, or extend the time for the performance, discharge, or payment of, any and all property of any kind securing any or all of the Secured Obligations or any guaranty of any or all of the Secured Obligations, or on which the Agent at any time may have a Lien, or refuse to enforce its rights or make any compromise or settlement or agreement therefor in respect of any or all of such property; (iv) substitute or add, or take any action or omit to take any action which results in the release of, any one or more other Borrowers or any endorsers or guarantors of all or any part of the Secured Obligations, including, without limitation one or more parties to this Agreement, regardless of any destruction or impairment of any right of contribution or other right of Borrower; (v) apply any sums received from any other Borrower, any guarantor, endorser, or co-signer, or from the disposition of any Collateral or security, to any Indebtedness whatsoever owing from such person or secured by such Collateral or security, in such manner and order as the Agent determines in its sole discretion, and regardless of whether such Indebtedness is part of the Secured Obligations, is secured, or is due and payable.  Each Borrower consents and agrees that the Agent shall be under no obligation to marshal any assets in favor of Borrower, or against or in payment of any or all of the Secured Obligations.  Each Borrower further consents and agrees that the Agent shall have no duties or responsibilities whatsoever with respect to any property securing any or all of the Secured Obligations.  Without limiting the generality of the foregoing, the Agent shall have no obligation to monitor, verify, audit, examine, or obtain or maintain any insurance with respect to, any property securing any or all of the Secured Obligations.

 

(d)  Independent Liability.  Each Borrower hereby agrees that one or more successive or concurrent actions may be brought hereon against such Borrower, in the same action in which any other Borrower may be sued or in separate actions, as often as deemed advisable by Agent. Each Borrower is fully aware of the financial condition of each other Borrower and is executing and delivering this Agreement based solely upon its own independent investigation of all matters pertinent hereto, and such Borrower is not relying in any manner upon any representation or statement of the Agent or any Lender with respect thereto.  Each Borrower represents and warrants that it is in a position to obtain, and each Borrower hereby assumes full responsibility for obtaining, any additional information concerning any other Borrower’s financial condition and any other matter pertinent hereto as such Borrower may desire, and such Borrower is not relying upon or expecting the Agent to furnish to it any information now or hereafter in the Agent’s possession concerning the same or any other matter.

 

(e)  Subordination.  All Indebtedness of a Borrower now or hereafter arising held by another Borrower is subordinated to the Secured Obligations and the Borrower holding the Indebtedness shall take all actions reasonably requested by Agent to effect, to enforce and to give notice of such subordination.

 

(SIGNATURES TO FOLLOW)

 

54

 

IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered this Loan and Security Agreement as of the day and year first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
PLUG   POWER INC.
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/   Paul Middleton
    
	
 
    	
 
    
	
 
    	
Print   Name:
    	
Paul   Middleton
    
	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Financial Officer and Senior Vice 
    
	
 
    	
President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMERGING   POWER INC.
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/   Paul Middleton
    
	
 
    	
 
    
	
 
    	
Print   Name:
    	
Paul   Middleton
    
	
 
    	
 
    
	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMERGENT   POWER INC.
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/   Paul Middleton
    
	
 
    	
 
    
	
 
    	
Print   Name:
    	
Paul   Middleton
    
	
 
    	
 
    
	
 
    	
Title:
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted in Palo Alto, California:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AGENT:
    
	
 
    	
 
    
	
 
    	
HERCULES   CAPITAL, INC.
    
	
 
    	
 
    
	
 
    	
Signature:
    	
/s/   Jennifer Choe
    

 

 

	
 
    	
Print   Name:
    	
Jennifer   Choe
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Assistant   General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
LENDER:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HERCULES   CAPITAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
Signature:
    	
/s/   Jennifer Choe
    
	
 
    	
 
    	
 
    
	
 
    	
Print   Name:
    	
Jennifer   Choe
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Assistant   General Counsel
    

 

 

Table of Exhibits and Schedules

 

	
Exhibit A:
    	
 
    	
Advance Request
    
	
 
    	
 
    	
Attachment to Advance   Request
    
	
 
    	
 
    	
 
    
	
Exhibit B:
    	
 
    	
Term Note
    
	
 
    	
 
    	
 
    
	
Exhibit C:
    	
 
    	
Name, Locations, and   Other Information for Borrower
    
	
 
    	
 
    	
 
    
	
Exhibit D:
    	
 
    	
Borrower’s Patents,   Trademarks, Copyrights and Licenses
    
	
 
    	
 
    	
 
    
	
Exhibit E:
    	
 
    	
Borrower’s Deposit   Accounts and Investment Accounts
    
	
 
    	
 
    	
 
    
	
Exhibit F:
    	
 
    	
Compliance Certificate
    
	
 
    	
 
    	
 
    
	
Exhibit G:
    	
 
    	
Joinder Agreement
    
	
 
    	
 
    	
 
    
	
Exhibit H:
    	
 
    	
ACH Debit Authorization   Agreement
    
	
 
    	
 
    	
 
    
	
Schedule 1
    	
 
    	
Subsidiaries
    
	
Schedule 1.1
    	
 
    	
Commitments
    
	
Schedule 1A
    	
 
    	
Existing Permitted   Indebtedness
    
	
Schedule 1B
    	
 
    	
Existing Permitted   Investments
    
	
Schedule 1C
    	
 
    	
Existing Permitted   Liens
    
	
Schedule 5.3
    	
 
    	
Consents, Etc.
    
	
Schedule 5.5
    	
 
    	
Actions Before   Governmental Authorities
    
	
Schedule 5.8
    	
 
    	
Tax Matters
    
	
Schedule 5.9
    	
 
    	
Intellectual Property   Claims
    
	
Schedule 5.10
    	
 
    	
Intellectual Property
    
	
Schedule 5.11
    	
 
    	
Borrower Products
    
	
Schedule 5.14
    	
 
    	
Capitalization
    
	
Schedule 5.16
    	
 
    	
Project Matters
    
	
Schedule 5.17
    	
 
    	
Restricted Cash Reports
    

 

 

EXHIBIT A

 

ADVANCE REQUEST

 

	
To:
    	
Agent:
    	
 
    	
Date:                    ,   20      
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Hercules Capital,  Inc.   (the “Agent”)
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
400 Hamilton Avenue, Suite  310
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Palo   Alto, CA 94301
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
email:   legal@herculestech.com, tpandjiris@herculestech.com
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Attn: Chief Legal Officer   and Tony Pandjiris
    	
 
    	
 
    	
 
    	
 
    

 

Plug Power Inc. (“Borrower”) hereby requests, on behalf of itself and each other Borrower (as defined in the Agreement) from Hercules Capital,  Inc. (“Lender”) an Advance in the amount of                                            Dollars ($                                ) on                             ,            (the “Advance Date”) pursuant to the Loan and Security Agreement among Borrower, Agent and Lender (the “Agreement”). Capitalized words and other terms used but not otherwise defined herein are used with the same meanings as defined in the Agreement.

 

Please:

 

(a)           Issue a check payable to Borrower                                                                                                              

 

or

 

(b)           Wire Funds to Borrower’s account                                         [IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

 

	
 
    	
Bank:
    	
                                                            
    	
 
    
	
 
    	
Address:
    	
                                                            
    	
 
    
	
 
    	
 
    	
                                                            
    	
 
    
	
 
    	
ABA Number:
    	
                                                            
    	
 
    
	
 
    	
Account Number:
    	
                                                            
    	
 
    
	
 
    	
Account Name:
    	
                                                            
    	
 
    
	
 
    	
Contact Person:
    	
                                                            
    	
 
    
	
 
    	
Phone Number
    	
                                                            
    	
 
    
	
 
    	
To Verify Wire Info:
    	
                                                            
    	
 
    
	
 
    	
Email address:
    	
                                                            
    	
 
    

 

Borrower represents that the conditions precedent to the Advance set forth in the Agreement are satisfied and shall be satisfied upon the making of such Advance, including but not limited to:  (i) that no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing; (ii) that the representations and warranties set forth in the Agreement are and shall be true and correct in all material respects on and as of the

 

 

Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date; (iii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as of the Advance Date, no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents.  Borrower understands and acknowledges that Agent has the right to review the financial information supporting this representation and, based upon such review in its reasonable discretion, Lender may decline to fund the requested Advance.

 

Borrower hereby represents that Borrower’s corporate status and locations have not changed since the date of the Agreement or, if the Attachment to this Advance Request is completed, are as set forth in the Attachment to this Advance Request.

 

Borrower agrees to notify Agent promptly before the funding of the Loan if any of the matters which have been represented above shall not be true and correct on the Borrowing Date and if Agent has received no such notice before the Advance Date then the statements set forth above shall be deemed to have been made and shall be deemed to be true and correct as of the Advance Date.

 

Executed as of [                 ], 20[    ].

 

	
 
    	
BORROWER: PLUG POWER INC.
    
	
 
    	
 
    
	
 
    	
SIGNATURE:
    	
 
    
	
 
    	
TITLE:
    	
 
    
	
 
    	
PRINT NAME:
    	
 
    

 

 

EXHIBIT B

 

THIS NOTE IS BEING ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (“OID”) WITHIN THE MEANING OF SECTION 1273(A) OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR REQUESTS REGARDING THE ISSUE PRICE OF THIS NOTE, THE AMOUNT OF OID ON THIS NOTE, THE ISSUE DATE OF THIS NOTE AND THE YIELD TO MATURITY OF THIS NOTE, A HOLDER MAY CONTACT THE BORROWER (AS DEFINED BELOW) AT THE FOLLOWING ADDRESS: 968 ALBANY SHAKER ROAD, LATHAM, NY 12110, ATTENTION: PAUL MIDDLETON; TELEPHONE: 518-738-0281.

 

SECURED TERM PROMISSORY NOTE

 

	
$[   ],000,000
    	
Advance Date:            ,   20[  ]
    
	
 
    	
Maturity Date:                    , 20[ ]
    

 

FOR VALUE RECEIVED, PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (collectively, the “Borrower”) hereby promises to pay Hercules Capital, Inc., a Maryland corporation or its registered assigns (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as the holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of [  ] Million Dollars ($[  ],000,000) or such lesser outstanding principal amount as Lender has advanced to Borrower, together with accrued but unpaid interest thereon at a rate as set forth in Section 2.2(c) of the Loan Agreement based upon a year consisting of 360 days, with interest computed daily based on the actual number of days in each month.

 

This Promissory Note is the Note referred to in, and is executed and delivered in connection with, that certain Loan and Security Agreement dated as of June 27, 2016, by and among Borrower, Hercules Capital, Inc., a Maryland corporation (the “Agent”) and the several banks and other financial institutions or entities from time to time party thereto as lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof.  All payments shall be made in accordance with the Loan Agreement.  All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein.  An Event of Default under the Loan Agreement shall constitute a default under this Promissory Note.

 

Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under the UCC or any applicable law.  Borrower agrees to make all payments under this Promissory Note without setoff, recoupment or deduction and regardless of any counterclaim or defense.  This Promissory Note has been negotiated and delivered to Lender and is payable in the State of California.  This Promissory Note shall be governed by and construed and enforced in accordance with, the laws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.

 

 

BORROWER FOR ITSELF AND
 ON BEHALF OF ITS QUALIFIED SUBSIDIARIES:  PLUG POWER INC.

 

	
 
    	
By:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMERGING   POWER INC.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMERGENT   POWER INC.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
Title:
    

 

 

EXHIBIT C

 

Exhibit C: Name, Locations, and Other Information for Borrower

 

EXHIBIT C

 

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

 

1.  Borrower represents and warrants to Agent that Borrower’s current name and organizational status as of the Closing Date is as follows:

 

	
Name:
    	
Plug   Power Inc.
    
	
 
    	
 
    
	
Type   of organization:
    	
Corporation
    
	
 
    	
 
    
	
State   of organization:
    	
Delaware
    
	
 
    	
 
    
	
Organization   file number:
    	
3083208
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Emerging   Power Inc.
    
	
 
    	
 
    
	
Type   of organization:
    	
Corporation
    
	
 
    	
 
    
	
State   of organization:
    	
Delaware
    
	
 
    	
 
    
	
Organization   file number:
    	
5507010
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Emergent   Power Inc.
    
	
 
    	
 
    
	
Type   of organization:
    	
Corporation
    
	
 
    	
 
    
	
State   of organization:
    	
Delaware
    
	
 
    	
 
    
	
Organization   file number:
    	
5509405
    

 

2.  Borrower represents and warrants to Agent that for five (5) years prior to the Closing Date, Borrower did not do business under any other name or organization or form except the following:

 

Name:  ReliOn (Trade name) 
 Used during dates of:  2014-current

 

 

Name:  Hypulsion (Trade name)
 Used during dates of:  2015-current

 

3.  Borrower represents and warrants to Agent that its chief executive office is located at:

 

	
Complete Street and Mailing Address, including County
   and Zip Code
    	
 
    	
Company/Subsidiary
    
	
968 Albany-Shaker Road; Latham, NY 12110
    	
 
    	
Plug Power Inc.
    
	
968 Albany-Shaker Road; Latham, NY 12110
    	
 
    	
Emerging Power Inc.
    
	
15913 E. Euclid Avenue; Spokane WA 99216
    	
 
    	
Emergent Power Inc.
    

 

4.  Borrower hereby represents and warrants to Agent that the street addresses, cities, states and postal codes of its current locations (other than its chief executive office) are as follows:

 

	
Complete Mailing Address, including County and Zip Code
    	
 
    	
Company/Subsidiary
    
	
1160 Naperville Drive; Romeoville, IL 60466
    	
 
    	
Plug Power Inc.
    
	
2038B South Alex Road; West Carrollton, OH 45449
    	
 
    	
Plug Power Inc.
    
	
Customer Locations (25)
    	
 
    	
Plug Power Inc.
    
	
Offsite Warehouse  

 

Stone Management; 2622 7th Ave #1; Watervliet,   NY 12189
    	
 
    	
Plug Power Inc.
    

 

 

EXHIBIT D

 

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

 

Copyrights

 

None.

 

Patents

 

	
Borrower/
   Grantor
    	
 
    	
Title
    	
 
    	
App. No.
   App. Date
    	
 
    	
Patent / Pub. No.
   Issue / Pub. Date
    	
 
    	
Status
    	
 
    	
Registered
   Owner
    	
 
    	
Current Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel dispensing system and method
    	
 
    	
11605630

 

11/28/2006
    	
 
    	
7412994

 

8/19/2008
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Digital input current control for switch mode power   supplies
    	
 
    	
10893075

 

7/16/2004
    	
 
    	
7288924

 

10/30/2007
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Hybrid power supply apparatus for battery   replacement applications
    	
 
    	
10684622

 

10/14/2003
    	
 
    	
7207405

 

4/24/2007
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel dispensing system and method
    	
 
    	
10699615

 

10/31/2003
    	
 
    	
7171989

 

2/6/2007
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Self-regulated cooling system for switching power   supplies using parasitic effects of switching
    	
 
    	
10020449

 

12/11/2001
    	
 
    	
6775162

 

8/10/2004
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Hybrid power supply control system and method
    	
 
    	
09957360

 

9/20/2001
    	
 
    	
6534950

 

3/18/2003
    	
 
    	
Issued
    	
 
    	
Cellex Power Products, Inc.
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Emergent Power Inc.
    	
 
    	
Membrane electrode assemblies and associated fuel   cells
    	
 
    	
14468228

 

8/25/2014
    	
 
    	
20150056534

 

2/26/2015
    	
 
    	
Published
    	
 
    	
Emergent Power Inc.
    	
 
    	
Assignment from inventors to Emergent Power Inc.   recorded 6/17/2016
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel storage enclosure
    	
 
    	
29183557

 

6/12/2003
    	
 
    	
D487931

 

3/30/2004
    	
 
    	
Issued
    	
 
    	
General Hydrogen Corporation
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    

 

 

	
Borrower/
   Grantor
    	
 
    	
Title
    	
 
    	
App. No.
   App. Date
    	
 
    	
Patent / Pub. No.
   Issue / Pub. Date
    	
 
    	
Status
    	
 
    	
Registered
   Owner
    	
 
    	
Current Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel storage enclosure
    	
 
    	
29183547

 

6/11/2003
    	
 
    	
D487807

 

3/23/2004
    	
 
    	
Issued
    	
 
    	
General Hydrogen Corporation
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Capacitor bank for electrical generator
    	
 
    	
11477448

 

6/30/2006
    	
 
    	
7477505

 

1/13/2009
    	
 
    	
Issued
    	
 
    	
General Hydrogen Corporation
    	
 
    	
Merger document recorded 6/27/2016; now in name of   Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel cell catalyst electrodes
    	
 
    	
10187033

 

6/27/2002
    	
 
    	
7220693

 

5/22/2007
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Alcohol fueled direct oxidation fuel cells
    	
 
    	
10187082

 

6/27/2002
    	
 
    	
7141322

 

11/28/2006
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Sensor for electro-active materials
    	
 
    	
10122170

 

4/15/2002
    	
 
    	
6836123

 

12/28/2004
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Activation of electrochemical cells with catalyst   electrodes
    	
 
    	
10072592

 

2/11/2002
    	
 
    	
6805983

 

10/19/2004
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Electrochemical method to improve the performance of   H2/air PEM fuel cells and direct methanol fuel cells
    	
 
    	
10097216

 

3/14/2002
    	
 
    	
6730424

 

5/4/2004
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel cell reactant and cooling flow fields   integrated into a single separator plate
    	
 
    	
09928719

 

8/13/2001
    	
 
    	
6727014

 

4/27/2004
    	
 
    	
Issued
    	
 
    	
H Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel cell using water-soluble fuel
    	
 
    	
09039878

 

3/16/1998
    	
 
    	
6048634

 

4/11/2000
    	
 
    	
Issued
    	
 
    	
H. Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Hydrogen-air fuel cell
    	
 
    	
08878015

 

6/18/1997
    	
 
    	
5776625

 

7/7/1998
    	
 
    	
Issued
    	
 
    	
H. Power Corporation
    	
 
    	
Assignment document recorded 6/23/2016; now in the   name of Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Pressure relief control system for a fuel cell   system having a pressurized fuel flow
    	
 
    	
11823602

 

6/28/2007
    	
 
    	
7892689

 

2/22/2011
    	
 
    	
Issued
    	
 
    	
Plug Power Inc.
    	
 
    	
No assignment from inventors to company
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fault management in a fuel cell-based system
    	
 
    	
11823554

 

6/28/2007
    	
 
    	
7862947

 

1/4/2011
    	
 
    	
Issued
    	
 
    	
Plug Power Inc.
    	
 
    	
No assignment from inventors to company
    

 

 

	
Borrower/
   Grantor
    	
 
    	
Title
    	
 
    	
App. No.
   App. Date
    	
 
    	
Patent / Pub. No.
   Issue / Pub. Date
    	
 
    	
Status
    	
 
    	
Registered
   Owner
    	
 
    	
Current Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Anode humidification
    	
 
    	
11823552

 

6/28/2007
    	
 
    	
7479335

 

1/20/2009
    	
 
    	
Issued
    	
 
    	
Plug Power Inc.
    	
 
    	
No assignment from inventors to company
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Fuel cell system
    	
 
    	
09405689

 

9/24/1999
    	
 
    	
6299996

 

10/9/2001
    	
 
    	
Issued
    	
 
    	
Plug Power Inc.
    	
 
    	
No assignment from inventors to company
    

 

Trademarks

 

	
Borrower/Grantor
    	
 
    	
Trademark
    	
 
    	
App. No.
   App. Date
    	
 
    	
Status
    	
 
    	
Registered Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
PP

 

    	
 
    	
86973790

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
PLUG POWER
    	
 
    	
86973793

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
PLUG POWER PP

 

    	
 
    	
86973782

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
INFINITE DRIVE
    	
 
    	
86973773

 

13-APR-2016
    	
 
    	
Pending
   Intent To Use
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENFUEL
    	
 
    	
86973803

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENKEY
    	
 
    	
86973812

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENSURE
    	
 
    	
86973775

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENCARE
    	
 
    	
86973809

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENDRIVE
    	
 
    	
86973817

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    

 

 

	
Borrower/Grantor
    	
 
    	
Trademark
    	
 
    	
App. No.
   App. Date
    	
 
    	
Status
    	
 
    	
Registered Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
GENSURE
    	
 
    	
86973821

 

13-APR-2016
    	
 
    	
Pending
    	
 
    	
Plug Power Inc.
    

 

 

 

EXHIBIT E

 

BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

 

a.              The following is a complete list of all stocks, bonds, debentures, notes, commodity contracts and other securities owned by Company and any subsidiary of the Company:

 

	
Name of Issuer
    	
 
    	
Description and Value of Security
    	
 
    	
Company/Subsidiary
    	
 
    
	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

b.              The following are all financial institutions at which Company and its subsidiaries maintain deposit accounts:

 

	
Bank Name
    	
 
    	
Account Number
    	
 
    	
Branch
   Address
    	
 
    	
Company/
   Subsidiary
    	
 
    	
Purpose of
   Account
    
	
M&T   Bank
    	
 
    	
9861393941
    	
 
    	
125 Wolf Road, Albany   NY 12205

 

(518) 482-6595
    	
 
    	
Plug Power Inc.
    	
 
    	
Concentration
    
	
Silicon   Valley Bank
    	
 
    	
3300804356
    	
 
    	
3003 Tasman Drive,   Santa Clara CA 95054

 

(408) 654-7400
    	
 
    	
Plug Power Inc.
    	
 
    	
Concentration
    
	
M&T   Bank
    	
 
    	
15004224962834
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962842
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962850
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962800
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962818
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962826
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T   Bank
    	
 
    	
15004224962868
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    

 

 

	
M&T Bank
    	
 
    	
15004224962925
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
M&T Bank
    	
 
    	
9861393958
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
Wilmington Trust
    	
 
    	
114006-000
    	
 
    	
1100 North Market   Street, Wilmington DE 19890-0001

 

(302) 651-1000
    	
 
    	
Plug Power Inc.
    	
 
    	
Money Market
    
	
Silicon   Valley Bank
    	
 
    	
41276
    	
 
    	
3003 Tasman Drive,   Santa Clara CA 95054
    	
 
    	
Plug Power Inc.
    	
 
    	
Money Market
    
	
Silicon   Valley Bank
    	
 
    	
3301140267
    	
 
    	
3003 Tasman Drive,   Santa Clara CA 95054
    	
 
    	
Emergent Power Inc.
    	
 
    	
Money Market
    
	
BNP   Paribas
    	
 
    	
0089200010253592
    	
 
    	
France
    	
 
    	
Hypulsion
    	
 
    	
Concentration
    
	
Wilmington Trust
    	
 
    	
108894-0000
    	
 
    	
1100 North Market   Street, Wilmington DE 19890-0001
    	
 
    	
Plug Power Inc.
    	
 
    	
Service Escrow /   Restricted
    
	
Wilmington Trust
    	
 
    	
112130-000
    	
 
    	
1100 North Market   Street, Wilmington DE 19890-0001
    	
 
    	
Plug Power Inc.
    	
 
    	
Service Escrow / Restricted
    
	
Wilmington   Trust
    	
 
    	
113864-000
    	
 
    	
1100 North Market   Street, Wilmington DE 19890-0001
    	
 
    	
Plug Power Inc.
    	
 
    	
Service Escrow / Restricted
    
	
PNC   Bank
    	
 
    	
4116436576
    	
 
    	
995 Dalton Ave

Cincinnati, OH 45203

 

(513) 421-9191
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted
    
	
SunTrust
    	
 
    	
1000192072675
    	
 
    	
P.O. Box 305183, 
    	
 
    	
Plug Power 
    	
 
    	
Collateral / 
    

 

 

	
 
    	
 
    	
 
    	
 
    	
Nashville TN 37230-5183

 

(800) 786-8787
    	
 
    	
Inc.
    	
 
    	
Restricted
    
	
BB&T
    	
 
    	
 
    	
 
    	
600 Washington Ave,   Suite 201; Towson, MD 21204

 

(410) 494-1001
    	
 
    	
Plug Power Inc.
    	
 
    	
Security Deposit / restricted
    
	
M&T Bank
    	
 
    	
15004235112329
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Collateral / Restricted — Related   to M&T Amendment
    
	
M&T Bank
    	
 
    	
15004235112311
    	
 
    	
125 Wolf Road, Albany   NY 12205
    	
 
    	
Plug Power Inc.
    	
 
    	
Money Market — Related   to M&T Amendment
    
	
SunTrust
    	
 
    	
1000194715420
    	
 
    	
P.O. Box 305183,   Nashville TN 37230-5183
    	
 
    	
Plug Power Inc.
    	
 
    	
Generate Deposit (to be closed   upon DACA termination)
    

 

 

EXHIBIT F

 

COMPLIANCE CERTIFICATE

 

Hercules Capital, Inc. (as “Agent”)
 400 Hamilton Avenue, Suite 310
 Palo Alto, CA 94301

 

Reference is made to that certain Loan and Security Agreement dated as of June 27, 2016 and the Loan Documents (as defined therein) entered into in connection with such Loan and Security Agreement all as may be amended from time to time (hereinafter referred to collectively as the “Loan Agreement”) by and among the several banks and other financial institutions or entities from time to time party thereto (collectively, the “Lender”) and Hercules Capital, Inc., as agent for the Lender (the “Agent”) and Plug Power Inc. (the “Company”), as Borrower and each other Borrower party thereto. All capitalized terms not defined herein shall have the same meaning as defined in the Loan Agreement.

 

The undersigned is an Officer of the Company, knowledgeable of all of Borrower’s financial matters, and is authorized to provide certification of information regarding the Borrower; hereby certifies, in such capacity, and not in his individual capacity, that in accordance with the terms and conditions of the Loan Agreement, the Borrower is in compliance for the period ending              of all covenants, conditions and terms and hereby reaffirms that all representations and warranties contained therein are true and correct in all material respects on and as of the date of this Compliance Certificate with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, after giving effect in all cases to any standard(s) of materiality contained in the Loan Agreement as to such representations and warranties.  Attached are the required documents supporting the above certification.  The undersigned further certifies that the attached documents are prepared in accordance with GAAP (except for the absence of footnotes with respect to unaudited financial statement and subject to normal year end adjustments) and are consistent from one period to the next except as explained below.

 

	
REPORTING REQUIREMENT
    	
 
    	
REQUIRED
    	
 
    	
CHECK IF
   ATTACHED
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Interim Financial Statements
    	
 
    	
Monthly within 30 days (45 days if month-end   coincides with quarter-end)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Monthly Account statements (including Project   Restricted Accounts)
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Interim Financial Statements
    	
 
    	
Quarterly within 45 days
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Audited Financial Statements
    	
 
    	
FYE within 90 days
    	
 
    	
 
    

 

 

The undersigned hereby confirms that Schedule 1 attached hereto is a true, correct and complete calculation of the financial covenants set forth in Section 7.18 of the Loan Agreement, as of the date first set forth above.

 

The undersigned hereby also confirms the accounts disclosed in Schedule 2 represent all depository accounts and securities accounts presently open in the name of each Borrower or Borrower Subsidiary/Affiliate, as applicable.

 

 

	
 
    	
Very   Truly Yours,
    
	
 
    	
 
    
	
 
    	
PLUG   POWER INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    

 

 

SCHEDULE 1

 

FINANCIAL COVENANT CALCULATIONS

 

For all periods prior to achievement of the Unrestricted Cash Milestone:

 

	
(1) unrestricted Cash in U.S. accounts   subject to Account Control Agreement
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(2) outstanding Secured Obligations
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(3) product of item (2) multiplied by 0.75
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(4) outstanding accounts payable of Borrower or any of its Subsidiaries   that is more than one hundred fifty (150) days past the billing date for such   accounts payable
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(5) sum of item (3) plus item (4) above
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
Is item (1) greater than or equal to item   (5)?
    	
 
    	
o Yes (in   compliance)

o No (not in   compliance)
    

 

For all periods on and after achievement of the Unrestricted Cash Milestone:

 

	
(1) unrestricted Cash in U.S. accounts   subject to Account Control Agreement
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(2) outstanding Secured Obligations
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(3) product of item (2) multiplied by 0.50
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(4) outstanding accounts payable of Borrower or any of its Subsidiaries   that is more than one hundred fifty(150) days past the billing date for such   accounts payable
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
(5) sum of item (3) plus item (4) above
    	
 
    	
$            
    
	
 
    	
 
    	
 
    
	
Is item (1) greater than or equal to item   (5)?
    	
 
    	
o Yes (in   compliance)

o No (not in   compliance)
    

 

 

SCHEDULE 2

 

BANK ACCOUNT INFORMATION

 

Bank Account Information (as of                   )

 

UNRESTRICTED ACCOUNTS (HERCULES DACA ACCOUNTS)

 

	
Bank
    	
 
    	
Account
    	
 
    	
Amount
    	
 
    	
Purpose
    	
 
    	
New (Y/N)*
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

PLEDGED ACCOUNTS

 

	
Bank
    	
 
    	
Account
    	
 
    	
Amount
    	
 
    	
Purpose
    	
 
    	
New (Y/N)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

RESTRICTED ACCOUNTS

 

	
Bank
    	
 
    	
Account
    	
 
    	
Amount
    	
 
    	
Purpose
    	
 
    	
New (Y/N)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Grand Total
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

* “New” means new account opened since last Compliance Certificate.

 

 

EXHIBIT G

 

FORM OF JOINDER AGREEMENT

 

This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [            ], 20[    ], and is entered into by and between                                  , a                         corporation (“Subsidiary”), and HERCULES CAPITAL, INC., a Maryland corporation (as “Agent”).

 

RECITALS

 

A.  Subsidiary’s Affiliates, Plug Power Inc., a Delaware corporation (“Company”), Emerging Power Inc., a Delaware corporation, Emergent Power Inc., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”) have entered into that certain Loan and Security Agreement dated as of June 27, 2016, with the several banks and other financial institutions or entities from time to time party thereto as lender (collectively, the “Lender”) and the Agent, as such agreement may be amended, restated or modified (the “Loan Agreement”), together with the other agreements executed and delivered in connection therewith; and

 

B.  Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from Borrower’s execution of the Loan Agreement and the other agreements executed and delivered in connection therewith, including, but not limited to the IP Security Agreement (as defined in the Loan Agreement).

 

AGREEMENT

 

NOW THEREFORE, Subsidiary and Agent agree as follows:

 

1.              The recitals set forth above are incorporated into and made part of this Joinder Agreement.  Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement.

 

2.              By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the Loan Agreement the same as if it were the Borrower (as defined in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided however, that (a) with respect to (i) Section 5.1 of the Loan Agreement, Subsidiary represents that it is an entity duly organized, legally existing and in good standing under the laws of [           ], (b) neither Agent nor Lender shall have any duties, responsibilities or obligations to Subsidiary arising under or related to the Loan Agreement or the other Loan Documents, (c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not be required to maintain separate insurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Company satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separate Financial Statements.  To the extent that Agent or Lender has any duties, responsibilities or obligations arising under or related to the Loan Agreement or the other Loan Documents, those duties, responsibilities or obligations shall flow only to Company and not to Subsidiary or any other Person or entity.  By way of example (and not an exclusive list): (i) Agent’s providing notice to Company in accordance with the Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or make any other demand on Lender.

 

 

3.              Subsidiary agrees not to certificate its equity securities unless it or the holder of its equity securities promptly delivers such certificate or certificates to Agent in order to perfect Agent’s security interest in such equity securities.

 

4.              Subsidiary acknowledges that it benefits, both directly and indirectly, from the Loan Agreement, and hereby waives, for itself and on behalf on any and all successors in interest (including without limitation any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder Agreement are avoidable as a fraudulent conveyance.

 

5.              As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Subsidiary grants to Agent a security interest in all of Subsidiary’s right, title, and interest in and to the Collateral and the Intellectual Property Collateral (as defined in the IP Security Agreement).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

[SIGNATURE PAGE TO JOINDER AGREEMENT]

 

	
SUBSIDIARY:
    	
 
    
	
 
    	
 
    
	
 
    	
.
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Telephone:                                
    	
 
    
	
 
    	
email:                                   
    	
 
    
	
 
    
	
AGENT:
    
	
 
    
	
 
    
	
HERCULES CAPITAL, INC.
    
	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
400   Hamilton Ave., Suite 310
    	
 
    
	
 
    	
Palo   Alto, CA 94301
    	
 
    
	
 
    	
email:   legal@herculestech.com, tpandjiris@herculestech.com
    
	
 
    	
Telephone:  650-289-3060
    	
 
    
						

 

 

EXHIBIT H

 

ACH DEBIT AUTHORIZATION AGREEMENT

 

Hercules Capital, Inc. 
 400 Hamilton Avenue, Suite 310
 Palo Alto, CA  94301

 

Re:  Loan and Security Agreement dated as of June 27, 2016 (the “Agreement”) by and among Plug Power Inc. (“Company”), each other Borrower party thereto and Hercules Capital, Inc., as agent (“Agent”) and the lenders party thereto (collectively, the “Lender”)

 

In connection with the above referenced Agreement, the Company hereby authorizes the Agent to initiate debit entries for the periodic payments due under the Agreement.  The Borrower authorizes the depository institution named below to debit to such account.

 

[IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

 

	
DEPOSITORY NAME
    	
 
    	
BRANCH
    
	
 
    	
 
    	
 
    
	
CITY
    	
 
    	
STATE AND ZIP CODE
    
	
 
    	
 
    	
 
    
	
TRANSIT/ABA NUMBER
    	
 
    	
ACCOUNT NUMBER
    

 

This authority will remain in full force and effect until terminated in writing by Company and Agent.

 

	
 
    	
 
    
	
 
    	
 
    
	
PLUG POWER INC.
    	
 
    
	
(Company)(Please Print)
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    
				

 

 

EXHIBIT I-1

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of June 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), among PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as Hercules Technology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender (in such capacity, the “Agent”).

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name: 
    	
 
    
	
 
    	
Title: 
    	
 
    
	
Date:                            ,   20[  ]
    	
 
    

 

 

EXHIBIT I-2

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of June 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), among PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as Hercules Technology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name: 
    	
 
    
	
 
    	
Title: 
    	
 
    
	
Date:                            ,   20[  ]
    	
 
    

 

 

EXHIBIT I-3

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of June 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), among PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as Hercules Technology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name: 
    	
 
    
	
 
    	
Title: 
    	
 
    
	
Date:                            ,   20[  ]
    	
 
    

 

 

EXHIBIT I-4

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of June 27, 2016 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), among PLUG POWER INC., a Delaware corporation, EMERGING POWER INC., a Delaware corporation, EMERGENT POWER INC., a Delaware corporation and each of their Qualified Subsidiaries (hereinafter collectively referred to as the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (collectively, referred to as “Lender”) and HERCULES CAPITAL, INC., formerly known as Hercules Technology Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender (in such capacity, the “Agent”).

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

DATE:                        , 20[  ]

 

 

SCHEDULE 1.1

 

COMMITMENTS

 

	
LENDER
    	
 
    	
TRANCHE
    	
 
    	
TERM COMMITMENT
    	
 
    
	
Hercules Capital, Inc.
    	
 
    	
Tranche I
    	
 
    	
$
    	
25,000,000
    	
 
    
	
Hercules Capital, Inc.
    	
 
    	
Tranche II
    	
 
    	
$
    	
5,000,000
    	
 
    
	
Hercules Capital, Inc.
    	
 
    	
Tranche III
    	
 
    	
$
    	
10,000,000
    	
 
    
	
 
    	
 
    	
TOTAL COMMITMENTS
    	
 
    	
$
    	
40,000,000
    	
 
    

 

 

Schedule 1: Subsidiaries

 

	
Loan Party/Subsidiary
    	
 
    	
Ownership
    
	
Plug Power Canada Inc., a corporation incorporated   in British Columbia
    	
 
    	
Plug Power Inc.- 100%
    
	
Plug Power Holding Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Hypulsion U.S. Holding, Inc., a Delaware   corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Hypulsion SAS (Plug Power Europe), a société par   actions simplifiée
    	
 
    	
Hypulsion U.S.   Holding, Inc. - 100%
    
	
Emerging Power Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Emergent Power Inc., a Delaware corporation
    	
 
    	
Emerging Power Inc. –   100%
    
	
Plug Power Capital Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
H Power Corp., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    

 

 

Schedule 1A:        Existing Permitted Indebtedness

 

Lease Agreement between Plug Power Inc. and 968 Albany Shaker Road Associates, LLC dated as of January 24, 2013.

 

 

Schedule 1B: Existing Permitted Investments

 

See Schedule 1.

 

 

Schedule 1C: Existing Permitted Liens

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Plug Power Inc.
    	
 
    	
NMHG Financial Services, Inc.
    	
 
    	
UCC
    	
 
    	
9/15/11
    	
 
    	
20113547414
    	
 
    	
DE – SOS
    	
 
    	
All of the equipment now or hereafter leased by Lessor to   Lessee; and all accessions, additions, replacements, and substitutions   thereto and therefore; and all proceeds including insurance proceeds thereof.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
7/2/14
    	
 
    	
20142617645
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (8) pages)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
9/29/14
    	
 
    	
20143894292
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (8) pages)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
9/29/14
    	
 
    	
20143894334
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (8) 
    

 

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
pages)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
10/3/14
    	
 
    	
20143990470
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (3) pages)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
10/3/14
    	
 
    	
`20143990637
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (1) page)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/19/14
    	
 
    	
20145179460
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (1) page)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/19/14
    	
 
    	
20145179551
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (equipment listed on Schedule A thereto – (3) pages)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power 
    	
 
    	
Manufacturers and Traders 
    	
 
    	
UCC
    	
 
    	
12/22/14
    	
 
    	
20145207543
    	
 
    	
DE – SOS
    	
 
    	
5 Hydrogen Fuel Cell Units Model 2420-36; 5 Hydrogen 
    

 

39

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Inc.
    	
 
    	
Trust Company
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Fuel Cell Units Model 3330-24F
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/22/14
    	
 
    	
20145207550
    	
 
    	
DE – SOS
    	
 
    	
1 Hydrogen Fuel Cell Units Model 2310-36; 1 Hydrogen Fuel Cell   Units Model 3330-24F
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/22/14
    	
 
    	
20145207592
    	
 
    	
DE – SOS
    	
 
    	
1 Hydrogen Fuel Cell Units Model 3330-24F
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
4/1/15
    	
 
    	
20151379642
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (meaning units of personal property described on Equipment Schedule   009 dated March 31, 2015, to Master Equipment Lease dated June 30,   214) together with any and all proceeds of the Equipment or other tangible   and intangible property of Lessee resulting from the sale or other   disposition of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power 
    	
 
    	
Manufacturers and Traders 
    	
 
    	
UCC
    	
 
    	
4/1/15
    	
 
    	
20151379816
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and 
    

 

40

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Inc.
    	
 
    	
Trust Company
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
interest in and to the Equipment (meaning units of personal   property described on Equipment Schedule 010 dated March 31, 2015, to   Master Equipment Lease dated June 30, 214) together with any and all   proceeds of the Equipment or other tangible and intangible property of Lessee   resulting from the sale or other disposition of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
4/1/15
    	
 
    	
20157379857
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (meaning units of personal property described on Equipment Schedule   011 dated March 31, 2015, to Master Equipment Lease dated June 30,   214) together with any and all proceeds of the Equipment or 
    

 

41

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
other tangible and intangible property of Lessee resulting from   the sale or other disposition of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
6/26/15
    	
 
    	
20152769254
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (meaning units of personal property described on Equipment Schedule   012 dated June 26, 2015, to Master Equipment Lease dated June 30,   214) together with any and all proceeds of the Equipment or other tangible   and intangible property of Lessee resulting from the sale or other disposition   of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
6/30/15
    	
 
    	
20152824422
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (meaning units of personal property described on 
    

 

42

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Equipment Schedule 013 dated June 30, 2015, to Master   Equipment Lease dated June 30, 214) together with any and all proceeds   of the Equipment or other tangible and intangible property of Lessee   resulting from the sale or other disposition of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
PNC Energy Capital LLC
    	
 
    	
UCC
    	
 
    	
7/21/15
    	
 
    	
20153150488
    	
 
    	
DE – SOS
    	
 
    	
All Debtor’s right, title and interest in, to and under the   amounts on deposit in the Collection Account and all of the Assigned Rights,   including any proceeds (in the form of cash, property or otherwise) therefrom   or relating thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
PNC Energy Capital LLC
    	
 
    	
UCC
    	
 
    	
7/21/15
    	
 
    	
20153150587
    	
 
    	
DE – SOS
    	
 
    	
Equipment listed on Schedule A thereto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power,
    	
 
    	
BB&T EFC Energy, LLC
    	
 
    	
UCC
    	
 
    	
9/9/15
    	
 
    	
20153949830
    	
 
    	
DE-SOS
    	
 
    	
Leased Equipment and systems; 
    

 

43

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Inc.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
subleases, chattel paper, accounts, security deposits and   general intangibles relating to Leased Equipment; cash comprising the   security deposit; Debtor’s right, title and interest in PPA. Equipment   schedule attached thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power, Inc.
    	
 
    	
BB&T EFC Energy, LLC
    	
 
    	
UCC
    	
 
    	
9/29/15
    	
 
    	
20154382890
    	
 
    	
DE-SOS
    	
 
    	
Leased Equipment and systems; subleases, chattel paper,   accounts, security deposits and general intangibles relating to Leased   Equipment; cash comprising the security deposit; Debtor’s right, title and   interest in PPA. Equipment schedule attached thereto.
    

 

44

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Plug Power, Inc.
    	
 
    	
BB&T EFC Energy, LLC
    	
 
    	
UCC
    	
 
    	
12/16/15
    	
 
    	
20156066756
    	
 
    	
DE-SOS
    	
 
    	
Leased Equipment and systems; subleases, chattel paper,   accounts, security deposits and general intangibles relating to Leased   Equipment; cash comprising the security deposit; Debtor’s right, title and   interest in PPA. Equipment schedule attached thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Wells Fargo Equipment Finance, Inc.
    	
 
    	
UCC
    	
 
    	
12/18/15
    	
 
    	
20156137383
    	
 
    	
DE – SOS
    	
 
    	
Collateral Description Attached – various pieces of equipment   together with all accessories, accessions, attachments, whether now owned or   hereafter acquired, and all substitutions, renewals replacements and   improvements thereto, together with the proceeds thereof.
    

 

45

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
Plug Power Inc.
    	
 
    	
Wells Fargo Equipment Finance, Inc.
    	
 
    	
UCC
    	
 
    	
12/18/15
    	
 
    	
20156137581
    	
 
    	
DE – SOS
    	
 
    	
All the Debtor’s right, title and interest in, to and under all   of the Assigned Rights, including any proceeds (in the form of cash, property   or otherwise) therefrom or relating thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power, Inc.
    	
 
    	
BB&T EFC Energy, LLC
    	
 
    	
UCC
    	
 
    	
12/28/15
    	
 
    	
20156290265
    	
 
    	
DE-SOS
    	
 
    	
Equipment and systems; subleases, chattel paper, accounts,   security deposits and general intangibles relating to Leased Equipment; cash   comprising the security deposit; Debtor’s right, title and interest in PPA.   Equipment schedule attached thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/31/15
    	
 
    	
20156363278
    	
 
    	
DE – SOS
    	
 
    	
All of Lessee’s right, title and interest in and to the   Equipment (meaning units of personal property described on 
    

 

46

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Equipment Schedule 014 dated December 31, 2015, to Master   Equipment Lease dated June 30, 214) together with any and all proceeds   of the Equipment or other tangible and intangible property of Lessee   resulting from the sale or other disposition of the Equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Manufacturers and Traders Trust Company
    	
 
    	
UCC
    	
 
    	
12/31/15
    	
 
    	
20156363385
    	
 
    	
DE – SOS
    	
 
    	
All of Debtor’s right, title and interest in and to, but not its   obligations under, (a) Exhibit F-5 dated, as of December 21,   2015 (the “Sublease Schedule”), to Master Lease Agreement dated as of   June 30, 2014, each by and between Debtor and Volkswagen Group of   America Chattanooga Operations, LLC, and (b) the Master Sublease, 
    

 

47

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
solely as it relates to the Sublease Schedule.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Dietz & Watson, Inc.
    	
 
    	
UCC
    	
 
    	
1/4/16
    	
 
    	
20160022630
    	
 
    	
DE – SOS
    	
 
    	
All of Debtor’s rights to that certain escrow reserve account,   all funds contained therein and proceeds thereof maintained with Wilmington   Trust, National Association, as Escrow Agent, as security for Debtor’s   performance of Debtor’s services under that certain Genkey Agreement between   Debtor and Secured Party dated May 27, 2015, as amended, pursuant to   that certain Master Escrow Agreement dated December 22, 2015 by and   among Debtor, Secured Party, Manufacturers and Traders Trust Company, and Wilmington   Trust, National 
    

 

48

 

	
Debtor
   Name
    	
 
    	
Secured Party
    	
 
    	
Type of Search
    	
 
    	
Date Filed
    	
 
    	
File Number
    	
 
    	
Jurisdiction
    	
 
    	
Collateral
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Association, as Escrow Agent.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plug Power Inc.
    	
 
    	
Harbor Capital, LLC
    	
 
    	
UCC
    	
 
    	
1/11/2016
    	
 
    	
20160197762
    	
 
    	
DE – SOS
    	
 
    	
All present and future Goods leased by Harbor Capital, LLC to   Plug Power, Inc., including, but not limited to the listed equipment   thereto and related equipment, and any replacement, substitution, etc.   Equipment Description listed in Attachment A thereto.
    

 

49

 

Schedule 5.3: Consents, Etc.

 

None.

 

 

Schedule 5.5: Actions Before Governmental Authorities

 

None.

 

 

Schedule 5.8: Tax Matters

 

None.

 

 

Schedule 5.9: Intellectual Property Claims

 

None.

 

 

Schedule 5.10: Intellectual Property

 

None.

 

 

Schedule 5.11: Borrower Products

 

None.

 

 

Schedule 5.14: Capitalization

 

	
Loan Party/Subsidiary
    	
 
    	
Ownership
    
	
Plug Power Inc., a Delaware corporation
    	
 
    	
Publicly owned
    
	
Plug Power Canada Inc., a corporation incorporated   in British Columbia
    	
 
    	
Plug Power Inc.- 100%
    
	
Plug Power Holding Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Hypulsion U.S. Holding, Inc., a Delaware   corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Hypulsion SAS (Plug Power Europe), a société par   actions simplifiée
    	
 
    	
Hypulsion U.S.   Holding, Inc. - 100%
    
	
Emerging Power Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
Emergent Power Inc., a Delaware corporation
    	
 
    	
Emerging Power Inc. –   100%
    
	
Plug Power Capital Inc., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    
	
H Power Corp., a Delaware corporation
    	
 
    	
Plug Power Inc.- 100%
    

 

 

Schedule 5.16: Project Matters

 

(i) Description of Projects:

 

·                  Walmart — Deployment of Plug Power Inc.’s signature turnkey solution, GenKey, which incorporates GenDrive fuel cell systems, GenFuel hydrogen fueling infrastructure, GenCare aftermarket service, and GenFuel hydrogen gas to power the systems.  The projects are sold to a bank then leased back to Plug Power for use at the customer’s location.

·                  Volkswagen — Deployment of Plug Power Inc.’s signature turnkey solution, GenKey, which incorporates GenDrive fuel cell systems, GenFuel hydrogen fueling infrastructure, GenCare aftermarket service, and GenFuel hydrogen gas to power the systems.  The projects are sold to a bank then leased back to Plug Power for use at the customer’s location.

·                  The Home Depot  — Deployment of Plug Power Inc.’s signature turnkey solution, GenKey, which incorporates GenDrive fuel cell systems, GenFuel hydrogen fueling infrastructure, GenCare aftermarket service, and GenFuel hydrogen gas to power the systems.  The projects are sold to a bank then leased directly to the customer for use at their location.

·                  Dietz & Watson - Deployment of Plug Power Inc.’s signature turnkey solution, GenKey, which incorporates GenDrive fuel cell systems, GenFuel hydrogen fueling infrastructure, GenCare aftermarket service, and GenFuel hydrogen gas to power the systems.  The projects are sold to a bank then leased directly to the customer for use at their location.

 

(ii) Material Project Documents:

 

·                  Amended and Restated Power Purchase Agreement between Plug Power Inc. and Wal-Mark Stores East, LP dated as of September 1, 2015

·                  GenKey Agreement between Plug Power Inc. and Home Depot U.S.A., Inc. dated as of February 24, 2015

·                  GenKey Agreement between Plug Power Inc. and Deitz and Watson dated as of May 27, 2015 as amended by First Amendment to GenKey Agreement, dated as of October 2015, by and between Dietz & Watson, Inc. and Plug Power Inc.

·                  Master Equipment Lease among Volkswagen Group of America, Chattanooga Operations, LLC and Plug Power Inc. effective June 30, 2014

 

 

(iv) Material Financing Agreements:

 

·                  Master Equipment Lease between Plug Power Inc. and Manufactures and Traders Trust Company (“M&T”) dated as of June 30, 2014, as amended by the First Amendment to Master Equipment Lease between Plug Power Inc. and M&T dated as of December 19, 2014, as further amended by the Second Amendment to Master Equipment Lease between Plug Power Inc. and M&T dated as of December 30, 2015, and as further amended by the Waiver and Third Amendment to Master Equipment Lease, dated as of June 7, 2016, between M&T and Plug Power Inc..

·                  Master Lease Agreement dated as of July 20, 2015, between PNC Energy Capital LLC and Plug Power Inc..

·                  Master Lease Agreement No. 9990001924 between BB&T EFC Energy, LLC and Plug Power Inc. dated as of September 8, 2015.

·                  Master Lease Agreement dated as of December 18, 2015 between Wells Fargo Equipment Finance, Inc. and Plug Power Inc.

·                  Master Escrow Agreement dated December 22, 2015 among Dietz & Watson, Inc., M&T, Plug Power Inc. and Wilmington Trust, National Association (“Wilmington”).

·                  Master Escrow Agreement dated February 24, 2015 among Home Depot U.S.A., Inc., M&T, and Wilmington Trust, National Association.

·                  SunTrust LC Number 70001470 issued to Wells Fargo Equipment Finance, Inc.

 

58

 

·                  SunTrust LC Number 70001499 issued to BB&T EFC Energy, LLC

·                  SunTrust LC Number 70001492 issued to BB&T EFC Energy, LLC

·                  SunTrust LC Number 70001519 issued to BB&T EFC Energy, LLC

·                  Master Lease Agreement between Plug Power Inc. and Generate Capital, Inc. (“Generate”) dated as of June 3, 2016, as amended by the First Amendment to Master Lease Agreement between Plug Power Inc. and Generate dated as of June 13, 2016.

 

59

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