Document:

ex10_1.htm

Exhibit 10.1

 

EQUITY PURCHASE AGREEMENT

 

by and among

 

General Maritime Corporation,

 

Oaktree Principal Fund V, L.P.,

 

Oaktree Principal Fund V (Parallel), L.P.,

 

Oaktree FF Investment Fund, L.P. - Class A,

 

and

 

OCM Asia Principal Opportunities Fund, L.P.

 

 

Dated: December 15, 2011

 

  

  

  

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	
Section 1.

	
Definitions

	
2

	 	 	 
	
Section 2.

	
Purchase of Reorganized Equity

	
11

	 	2.1	
Oaktree Commitment; Participation Offering

	
11

	
 

	2.2	
The Commitment Fee; Expense Reimbursement and Break-Up Fee

	
12

	
 

	2.3	
Closing

	
14

	 	 	 
	
Section 3.

	
Representations and Warranties of the Company

	
14

	
 

	3.1	
Organization of the GMR Parties

	
14

	
 

	3.2	
Due Authorization, Execution and Delivery; Enforceability

	
15

	
 

	3.3	
Due Issuance and Authorization of Oaktree Commitment Shares

	
15

	
 

	3.4	
Capitalization of the Company; Due Issuance and Authorization of Reorganized Equity

	
16

	
 

	3.5	
Capitalization of Subsidiaries

	
16

	
 

	3.6	
Consents

	
16

	
 

	3.7	
Legal Proceedings

	
17

	
 

	3.8	
No Conflicts

	
17

	
 

	3.9	
Company SEC Documents

	
17

	
 

	3.10	
Absence of Certain Changes or Events

	
19

	
 

	3.11	
Environmental

	
19

	
 

	3.12	
Title to Real and Personal Property

	
20

	
 

	3.13	
Intellectual Property

	
20

	
 

	3.14	
Internal Controls

	
21

	
 

	3.15	
No Registration

	
21

	
 

	3.16	
Contracts

	
21

	
 

	3.17	
Licenses

	
22

	
 

	3.18	
Compliance With Laws and Regulations

	
22

	
 

	3.19	
Tax Matters

	
22

	
 

	3.20	
Employee Benefits

	
23

	
 

	3.21	
Labor Relations

	
24

	
 

	3.22	
Customers and Suppliers

	
24

	
 

	3.23	
Affiliate Transactions

	
25

	
 

	3.24	
Insurance

	
25

	
 

	3.25	
No Broker’s Fees

	
25

	
 

	3.26	
No Unlawful Payments

	
25

	
 

	3.27	
Compliance with Money Laundering Laws

	
25

	
 

	3.28	
Compliance with Sanctions Laws

	
26

	
 

	3.29	
Arm’s Length

	
26

	 	 	 
	
Section 4.

	
Representations and Warranties of Oaktree

	
26

	
 

	4.1	
Organization

	
26

	
 

	4.2	
Due Authorization, Execution and Delivery; Enforceability

	
26

	
 

	4.3	
Consents

	
26

 

i  

  

  

 

	
 

	4.4	
No Conflicts

	
27

	
 

	4.5	
Legal Proceedings

	
27

	
 

	4.6	
Financial Ability to Acquire Oaktree Commitment Shares

	
27

	
 

	4.7	
Oaktree Facility

	
27

	
 

	4.8	
No Registration Under the Securities Act

	
28

	
 

	4.9	
Acquisition for Investment

	
28

	
 

	4.10	
Independent Investigation; Retention of Tax Advisors

	
28

	
 

	4.11	
Accredited Investor

	
28

	
 

	4.12	
No Broker’s Fees

	
28

	 	 	 
	
Section 5.

	
Covenants of the Company

	
29

	
 

	5.1	
Participation Offering

	
29

	
 

	5.2	
Operation of Business

	
29

	
 

	5.3	
No Inconsistent Actions

	
29

	
 

	5.4	
Notification

	
30

	
 

	5.5	
Milestones

	
30

	
 

	5.6	
Use of Proceeds

	
30

	
 

	5.7	
Access to Information

	
30

	
 

	5.8	
Amendments to Organizational Documents

	
31

	
 

	5.9	
Existing Equity

	
31

	
 

	5.10	
Securityholders Agreement; Registration Agreement

	
31

	
 

	5.11	
Bonuses and Severance

	
31

	
 

	5.12	
Paydown of Prepetition Senior Facilities

	
32

	
 

	5.13	
DIP Budget

	
32

	
 

	5.14	
Use of Property; Rejection and Assumption of Contracts

	
32

	
 

	5.15	
Exit Facilities

	
32

	
 

	5.16	
Fiduciary Obligations

	
32

	 	 	 
	
Section 6.

	
Covenants of Oaktree.

	
32

	
 

	6.1	
Oaktree Pre-Confirmation Hearing Representation

	
32

	
 

	6.2	
Limitations on Transfer

	
33

	
 

	6.3	
Confidentiality Agreement

	
33

	
 

	6.4	
Oaktree Organization

	
33

	 	 	 
	
Section 7.

	
Additional Covenants

	
33

	
 

	7.1	
Legends

	
33

	
 

	7.2	
Further Assurances

	
33

	
 

	7.3	
Cooperation

	
34

	
 

	7.4	
Solicitation of Alternative Transaction

	
34

	 	 	 
	
Section 8.

	
Conditions to the Parties’ Obligations

	
34

	
 

	8.1	
Approval Order

	
34

	
 

	8.2	
Confirmation Order

	
34

	
 

	8.3	
Disclosure Statement

	
35

	
 

	8.4	
No Restraint

	
35

	
 

	8.5	
HSR Act; Regulatory Approvals

	
35

 

ii  

  

  

 

	
Section 9.

	
Conditions to Oaktree’s Obligations

	
35

	
 

	9.1	
[Intentionally Omitted]

	
35

	
 

	9.2	
Plan

	
35

	
 

	9.3	
Required Consents

	
35

	
 

	9.4	
Commitment Fee; Expense Reimbursement

	
35

	
 

	9.5	
[Intentionally Omitted]

	
35

	
 

	9.6	
Milestones

	
35

	
 

	9.7	
No Default

	
36

	
 

	9.8	
Material Adverse Effect

	
36

	
 

	9.9	
Execution of Documents

	
36

	
 

	9.10	
Cash

	
36

	
 

	9.11	
Valid Issuance

	
36

	
 

	9.12	
Other Conditions

	
37

	
 

	9.13	
No Breach of Restructuring Support Agreement

	
37

	
 

	9.14	
Plan Indemnity

	
37

	
 

	9.15	
Officers’ Certificate

	
37

	 	 	 
	
Section 10.

	
Conditions to the Company’s Obligations

	
37

	
 

	10.1	
Required Consents

	
38

	
 

	10.2	
Other Conditions

	
38

	
 

	10.3	
Exit Facilities and Treatment of Supporting Oaktree Lenders’ Claims

	
38

	 	 	 
	
Section 11.

	
Termination

	
38

	
 

	11.1	
Termination by Either Party

	
38

	
 

	11.2	
Termination by Oaktree

	
38

	
 

	11.3	
Termination by the Company

	
40

	
 

	11.4	
Termination of the Restructuring Support Agreement

	
40

	
 

	11.5	
Effect of Termination

	
40

	 	 	 
	
Section 12.

	
Miscellaneous

	
41

	
 

	12.1	
Notices

	
41

	
 

	12.2	
Assignment

	
43

	
 

	12.3	
Entire Agreement

	
43

	
 

	12.4	
Interpretation

	
43

	
 

	12.5	
Waivers and Amendments

	
43

	
 

	12.6	
Governing Law; Jurisdiction; Venue; Process

	
43

	
 

	12.7	
Waiver of Trial by Jury

	
44

	
 

	12.8	
Counterparts

	
44

	
 

	12.9	
Headings

	
44

	
 

	12.10	
Severability

	
44

	
 

	12.11	
Specific Performance

	
44

	
 

	12.12	
Limitation on Damages

	
45

	
 

	12.13	
Survival

	
45

	
 

	12.14	
Schedule Updates

	
45

 

iii  

  

  

 

EQUITY PURCHASE AGREEMENT

 

THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is made as of December 15, 2011, by and among General Maritime Corporation, a Marshall Islands corporation (the “Company”), Oaktree Principal Fund V, L.P., Oaktree Principal Fund V (Parallel), L.P., Oaktree FF Investment Fund, L.P. - Class A, and OCM Asia Principal Opportunities Fund, L.P., each a Cayman Islands exempted limited partnership (each, an “Oaktree Fund,” and collectively, “Oaktree”).

 

W I T N E S S E T H:

 

WHEREAS, on November 17, 2011, the Company filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and the Company’s Chapter 11 case is being administered under Case No. 11-15285 (MG) (the “Chapter 11 Case”);

 

WHEREAS, in connection with the restructuring contemplated under that certain Restructuring Support Agreement of the Company filed on November 17, 2011 (as amended from time to time, the “Restructuring Support Agreement”), the Company has determined that its successful reorganization requires, among other things, deleveraging its balance sheet by means of a significant new equity investment;

 

WHEREAS, in accordance with the deadlines in the Restructuring Support Agreement, the Company intends to propose a plan of reorganization on the terms set forth in the plan term sheet (the “Plan Term Sheet”) attached as an exhibit to the Restructuring Support Agreement and that is otherwise in form and substance reasonably acceptable to Oaktree (the “Plan”), to effectuate this deleveraging by (i) converting all of the Supporting Oaktree Lenders’ claims under the Oaktree Facility into equity (subject to dilution on terms set forth in the Plan and consistent with the Plan Term Sheet) of Reorganized GMR to be outstanding on the Effective Date pursuant to, and subject to the Restructuring Transactions set forth in the Plan, and (ii) selling Reorganized Equity, subject to the Restructuring Transactions set forth in the Plan, which together with the equity issued pursuant to clause (i) shall equal 100% of the equity of Reorganized GMR;

 

WHEREAS, the Company has determined that a direct equity investment by Oaktree in an amount equal to $175 million (the “Equity Investment Amount”) in exchange for the issuance by Reorganized GMR of the Reorganized Equity, is the most appropriate method at this time by which to effectuate the deleveraging and obtain the necessary new equity investment;

 

WHEREAS, in consideration of the agreements from the Company under the Restructuring Support Agreement, the issuance of the Commitment Fee and the payment of the Expense Reimbursement and Break-Up Fee, as applicable, Oaktree is willing, on the terms and subject to the conditions set forth herein, to fund the Equity Investment Amount on the Effective Date in exchange for the issuance by Reorganized GMR to Oaktree of the Reorganized Equity;

 

  

1

  

 

WHEREAS, the Company may, in connection with the Plan and in Oaktree’s sole discretion, permit third parties (the “Equity Investment Participants”) to participate in the investment of the Equity Investment Amount (the “Participation Offering”) on terms and conditions agreed to by Oaktree and the Company, whereby in lieu of Oaktree investing the entire Equity Investment Amount, the Equity Investment Participants would subscribe for such number of shares of Reorganized Equity as permitted by Oaktree.  In the event that any Equity Investment Participants subscribe for shares of Reorganized Equity in a Participation Offering, Oaktree would subscribe for only those shares of Reorganized Equity representing that portion of the Equity Investment Amount not purchased by such Equity Investment Participants; and

 

WHEREAS, the Parties agree that any valuations of the Company’s assets or estates, whether implied or otherwise, arising from this Agreement shall not be binding for any other purpose, including determining recoveries under the Plan, and that this Agreement does not limit the Parties’ rights regarding valuation in the Chapter 11 Case.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained in this Agreement, the Parties hereby agree as follows:

 

Section 1.            Definitions

 

For purposes of this Agreement, the following terms will have the meanings set forth below, and capitalized terms used but not defined herein shall have the meanings ascribed to them in the Restructuring Support Agreement:

 

“2010 Credit Facility” means the Amended and Restated Credit Agreement, dated as of May 6, 2010, among the Company, as parent, Arlington Tankers, Ltd. and General Maritime Subsidiary Corporation as guarantors, General Maritime Subsidiary II Corporation as borrower, various lenders, and Nordea Bank Finland Plc, New York Branch as administrative agent and collateral agent, as amended or restated from time to time.

 

“2010 Exit Facility” means the new loans extended in respect of the 2010 Credit Facility as of the Effective Date, on terms consistent in all material respects with the Restructuring Support Agreement and otherwise acceptable in accordance with Section 1(e) of the Restructuring Support Agreement.

 

“2011 Credit Facility” means the Second Amended and Restated Credit Agreement, dated as of May 6, 2011, among the Company, as parent, Arlington Tankers, Ltd. and General Maritime Subsidiary II Corporation as guarantors, General Maritime Subsidiary Corporation as borrower, various lenders, and Nordea Bank Finland Plc, New York Branch as administrative agent and collateral agent, as amended or restated from time to time.

 

“2011 Exit Facility” means the new loans extended in respect of the 2011 Credit Facility as of the Effective Date, on terms consistent in all material respects with the Restructuring Support Agreement and otherwise acceptable in accordance with Section 1(e) of the Restructuring Support Agreement.

 

“Accounts Payable Threshold” has the meaning set forth in Section 9.10.

 

  

2

  

 

“Actual Knowledge of Oaktree” means the actual knowledge of Stephen A. Kaplan, B. James Ford and Adam C. Pierce, after reasonable inquiry with such persons’ direct reports within Oaktree.

 

“Actual Knowledge of the Company” means the actual knowledge of Jeffrey D. Pribor, John P. Tavlarios, John C. Georgiopoulos, Peter C. Georgiopoulos and Leo Vrondissis and Christopher F. Allwin, after reasonable internal inquiry with such persons’ direct reports within the Company.

 

“Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code.

 

“Agreement” has the meaning set forth in the preface above.

 

“Alternative Transaction” means the consummation of a restructuring transaction with respect to all or substantially all of the assets of the Company in one or a series of related transactions (but for the avoidance of doubt, not a credit bid by the Supporting Credit Facility Lender under the DIP Credit Agreement), other than pursuant to the Plan.

 

“Amended Organizational Documents” means the amended and restated articles of incorporation and by-laws or other applicable organizational documents of Reorganized GMR with such terms as set forth in the Plan Term Sheet and to be filed in connection with the Plan in substantially the form reasonably acceptable to Oaktree.

 

“Approval Motion” means the motion filed by the Company on November 22, 2011 with the Bankruptcy Court requesting that the Bankruptcy Court approve the Company’s entry into this Agreement.

 

“Approval Order” means that order entered by the Bankruptcy Court (a) authorizing the Company and Oaktree to enter into and perform this Agreement, and authorizing the Company to (i) issue the Commitment Fee on the Effective Date, (ii) pay the Expense Reimbursement and (iii) pay the Break-Up Fee, as applicable, and (b) granting the Approval Motion, which shall not deviate in form or substance in a manner that is materially adverse to Oaktree, without Oaktree’s consent, from the form of order filed with the Bankruptcy Court as an attachment to the Approval Motion.

 

“Approvals” means all governmental approvals and authorizations that are required under applicable law, including the Bankruptcy Code, for the Company to take corporate action.

 

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as applicable to the Chapter 11 Case.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York, or any other court having jurisdiction over the Chapter 11 Case.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as applicable to the Chapter 11 Case, promulgated under 28 U.S.C. § 2075 and the general, local and chambers rules of the Bankruptcy Court.

 

  

3

  

 

“Bonus Pool” means the bonus pool established in the amount of $650,000 to be allocated among the Company’s eligible non-Insider (as defined in section 101(31) of the Bankruptcy Code) United States employees.

 

“Break-Up Fee” means a break-up fee payable, in accordance with Section 2.2, to Oaktree or a designated Affiliate of any Oaktree Fund in cash in an amount equal to $12.5 million, which fee upon entry of the Approval Order shall constitute an allowed administrative expense obligation of the Company pursuant to the Bankruptcy Code but shall be junior, and subject to the prior satisfaction in full (as provided in Section 2.2) of all outstanding obligations under the Prepetition Senior Facilities (including, for the avoidance of doubt, all obligations under Interest Rate Protection Agreements and Other Hedging Agreements as defined thereunder) and the DIP Credit Agreement, including any related adequate protection obligations.

 

“Business Day” means any day other than a Saturday, Sunday or “legal holiday” (as defined in Bankruptcy Rule 9006(a)).

 

“Cash” means the amount of cash and cash equivalents (including marketable securities) held by the GMR Parties as determined on a consolidated basis in accordance with GAAP.

 

“Chapter 11 Case” has the meaning set forth in preface above.

 

“Claim” has the meaning assigned to it in section 101(5) of the Bankruptcy Code.

 

“Closing” means the closing of the sale and purchase of the Oaktree Commitment Shares pursuant to Section 2.1 hereof.

 

“Closing Date” has the meaning set forth in Section 2.3(a).

 

“COBRA” means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code, and any similar state law.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commission” has the meaning set forth in Section 3.9(a).

 

“Commitment Fee” means the penny warrants exercisable at any time, and from time to time, for a period of 5 years for all or a portion of 5.0% of the Reorganized Equity upon terms satisfactory to Oaktree and the Company, to be delivered to Oaktree or a designated Affiliate of any Oaktree Fund in accordance with in accordance with Section 2.2.

 

“Commitment Fee Warrant Shares” means the shares of Reorganized Equity underlying the Commitment Fee.

 

“Company” has the meaning set forth in the preface above.

 

“Company Intellectual Property” has the meaning set forth in Section 3.13(a).

 

  

4

  

 

“Company SEC Documents” has the meaning set forth in Section 3.9(a).

 

“Confirmation Order” has the meaning set forth in Section 8.2.

 

“DIP Budget” means the budget for the GMR Parties periodically approved pursuant to the DIP Credit Agreement.

 

“DIP Credit Agreement” means that certain Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of November 17, 2011, among the Company and all of its subsidiaries party thereto from time to time, as guarantors, General Maritime Subsidiary Corporation and General Maritime Subsidiary II Corporation, as borrowers, various lenders and Nordea Bank Finland plc, New York Branch, as administrative agent and collateral agent.

 

“Disclosure Information” means the Company’s financial projections and Budget (as defined in the Plan Term Sheet), including any variance analysis with respect to the Budget, valuation analyses, liquidation analyses, a list of Joining Parties (as defined in the Restructuring Support Agreement), information regarding the Company’s insurance policies, information relating to any bonus or severance program to be honored or established during the Chapter 11 Case or approved and administered in connection with the Plan, a list of all of the Company’s material tax liabilities, a list all contracts, agreements, leases or other arrangements to which the Company is a party and which will be assumed or rejected by the Company during the Chapter 11 Case or in connection with the Plan, including any cure costs to be paid in connection with such assumption (to the extent that such information is determined by the parties hereto prior to the termination of any confidentiality agreement contemplated by Section 5.7(a)), any information pertaining to the GMR Parties, which is not designated as “professional eyes only”, provided by the Company to third parties for the purpose of soliciting proposals for an Alternative Transaction and covenants and other terms to be negotiated in respect of the New Senior Loans (as defined in the Plan Term Sheet), in each case, shared with Oaktree pursuant to the terms of a confidentiality agreement contemplated by Section 5.7(a).

 

“Disclosure Statement” has the meaning set forth in the Restructuring Support Agreement.

 

“Effective Date” means the Business Day that the Plan becomes effective pursuant to the terms of the Plan, which date shall not occur on a date later than that specified in the Milestones, unless agreed to by Oaktree in its sole discretion (subject only to the last sentence of Section 2.3(a)).

 

“Employee Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA) and each other benefit or compensation plan, program, agreement or arrangement maintained, sponsored, contributed or required to be contributed to by any GMR Party or any ERISA Affiliate or with respect to which any GMR Party or any ERISA Affiliate has any current or potential liability or obligation.

 

  

5

  

 

“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, including, without limitation, (a) any and all 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 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, whenever in effect, all federal, state, local, international and foreign statutes, regulations, ordinances, laws, treaties, protocols, rules, regulations, codes, binding and enforceable guidelines or written policies, and similar provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law concerning public health and safety, worker health and safety, pollution or protection of the environment, or relating to Hazardous Materials.

 

“Equity Incentive Program” means a post-Effective Date equity incentive program providing for the issuance of equity interests of Reorganized GMR representing, in the aggregate, 10% of the common equity interests of Reorganized GMR or such other amount as agreed to between Oaktree and the Company, on a fully-diluted basis, to eligible employees, directors or officers of the Company, as set forth in the Plan.  The form, amount, allocation and vesting schedule of such common equity interests pursuant to such equity incentive program will be (i) mutually agreed upon by Oaktree and the Company and be set forth in a schedule to the Plan to be filed with the Bankruptcy Court prior to confirmation of the Plan or (ii) to the extent not determined in accordance with the preceding sub-clause (i) as of the date that is fourteen (14) days before the commencement of the hearing on confirmation of the Plan, determined by the new board of directors established after the Effective Date.

 

“Equity Investment Amount” has the meaning set forth in the preface above.

 

“Equity Investment Participant” has the meaning set forth in the preface above.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means each Subsidiary of the Company and each Person that is or at any relevant time was considered a single employer with any GMR Party under Section 414 of the Code.

 

“Exchange Act” has the meaning set forth in Section 3.9(a).

 

“Expense Reimbursement” means the reimbursement of all reasonable and documented advisor fees, and out-of-pocket costs and expenses, in each case, of Houlihan Lokey Capital, Inc. and Kirkland & Ellis LLP, and the reasonable and documented out-of-pocket expenses of Oaktree (including reasonable travel expenses), which have been or are incurred in anticipation of, during or otherwise in connection with the Chapter 11 Case, including in connection with the negotiation, preparation and implementation of the transactions contemplated under the Plan, this Agreement, the Equity Commitment Letter, the Term Sheet or the Restructuring Support Agreement, payable to Oaktree or a designated Affiliate of any Oaktree Fund (including, for the avoidance of doubt, Oaktree’s costs and expenses incurred in connection with collecting the Break-Up Fee).

 

  

6

  

 

“GAAP” means United States generally accepted accounting principles, consistently applied.

 

“GMR Parties” means the Company, together with each of its Subsidiaries.

 

“Governmental Authority” means any (i) government; (ii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal); or (iii) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, in the case of any of clause (i) through (iii), whether federal, state, local, municipal, foreign, supranational or of any other jurisdiction.

 

“Hazardous Materials” shall mean: (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, or for which liability or standards of conduct may be imposed, under Environmental Laws.

 

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (i) patents, patent applications and patent disclosures; (ii) trademarks, service marks, trade dress, trade names, corporate names, logos and slogans (and all translations, transliterations, adaptations, derivations and combinations of the foregoing) and Internet domain names, together with all goodwill associated therewith; (iii) copyrights and copyrightable work; (iv) registrations and applications for any of the foregoing; (v) trade secrets, confidential information, know-how, manufacturing processes and methods, customer lists, formulae, and inventions; (vi) computer software (including source code, executable code, data, databases and documentation); and (vii) all other intellectual property.

 

“Knowledge of the Company” means the actual knowledge of Jeffrey D. Pribor, John P. Tavlarios, John C. Georgiopoulos, Peter C. Georgiopoulos, Leo Vrondissis and Christopher F. Allwin and, in each case, all facts of which any such Person or Persons, after reasonable inquiry (which inquiry shall include any inquiry that an officer of such title would reasonably conduct), should be aware.

 

  

7

  

 

“Material Adverse Effect” means any change, effect, event, development, circumstance or state of facts which has had or would reasonably be expected to have a materially adverse effect on (i) the condition (financial or otherwise), business, performance, operations or property of the GMR Parties taken as a whole, without regard to the duration or persistence, (ii) the ability of the Company, subject to the Approvals, to perform its obligations under this Agreement, or (iii) subject to the Approvals, the validity or enforceability of this Agreement, against the Company; provided, however, that Material Adverse Effect shall specifically exclude any change, effect, event, development, circumstance or state of facts arising from (a) general worldwide economic, political or financial market conditions, including acts of war, acts of terrorism or natural disasters, so long as such change, effect, event, development, circumstance or state of facts does not disproportionately and adversely affect the GMR Parties in any material respect as compared to similarly situated companies in the industries in which the GMR Parties operate, (b) conditions affecting the Company in the industry where the Company operates (except to the extent such change, effect, event, development, circumstance or state of facts has a disproportionate adverse effect on the Company and its Subsidiaries relative to other participants in such industry, taken as a whole), (c) the fact of the delisting of the Company’s equity interests from the New York Stock Exchange, (d) the fact of the deregistration of the Company’s equity interests by the Commission, (e) the fact of the pursuit, filing or prosecution of the Chapter 11 Case, (f) the negotiation, announcement or consummation of this Agreement, including, but not limited to the announcement of the identity of Oaktree or any communication by the Company or Oaktree of any plans or intentions regarding the operation of the Company’s business, prior to or following the Closing, (g) any act or omission of the Company required by the terms of this Agreement, or otherwise taken with the prior written consent of Oaktree, or (h) any change in applicable law or GAAP.

 

“Material Contract” has the meaning set forth in Section 3.16.

 

“Material Permits” has the meaning set forth in Section 3.17.

 

“Milestones” means the deadlines specified in the milestones set forth on Exhibit D to the Restructuring Support Agreement, which exhibit is incorporated into this Agreement by reference and expressly made a term hereof as extended or waived by Oaktree in order to accommodate court schedules or otherwise, it being understood that Oaktree is the only Party that may modify the Milestones (and such modification shall be in the sole discretion of Oaktree, subject only to the last sentence of Section 2.3(a)).

 

“Money Laundering Laws” has the meaning set forth in Section 3.27.

 

“Most Recent Unaudited Financial Statements” has the meaning set forth in Section 3.9(b).

 

“Oaktree” has the meaning set forth in the preface above.

 

“Oaktree Commitment Shares” has the meaning set forth in Section 2.1(a).

 

“Oaktree Conversion Shares” has the meaning set forth in Section 2.1(a).

 

“Oaktree Fees” has the meaning set forth in Section 2.2(a).

 

“Oaktree Fund” has the meaning set forth in the preface above.

 

“Oaktree Shares” has the meaning set forth in Section 2.1(a).

 

  

8

  

 

“OCM Marine Investments” means OCM Marine Investments CTB, Ltd., a Cayman Islands exempt company.

 

“Participation Offering” has the meaning set forth in the preface above.

 

“Participation Offering Shares” means the shares of Reorganized Equity acquired by the Equity Investment Participants in the Participation Offering, if any.

 

“Participation Offering Term Sheet” has the meaning set forth in Section 2.1(b).

 

“Party” means the Company or any Oaktree Fund, individually, and “Parties” means the Company and Oaktree, collectively.

 

“PBGC” has the meaning set forth in Section 3.20.

 

“Pension Plan” has the meaning set forth in Section 3.20.

 

“Permitted Liens” has the meaning set forth in the DIP Credit Agreement.

 

“Permitted Update” has the meaning set forth in Section 12.14.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Authority.

 

“Plan” has the meaning set forth in the Restructuring Support Agreement.

 

“Plan Term Sheet” has the meaning set forth in the preface above.

 

“Prepetition Senior Facilities” means the 2011 Credit Facility, together with the 2010 Credit Facility.

 

“Purchased Shares” means the Oaktree Commitment Shares and the Participation Offering Shares, if any, acquired in accordance with Section 2.1.

 

“Registration Agreement” means a registration rights agreement or similar agreement, governing certain rights and obligations among securityholders of Reorganized GMR with respect to the registration of securities of Reorganized GMR for offering or sale, which agreement may be entered into, in the event a Participation Offering is conducted and the Equity Investment Participants thereunder acquire Reorganized Equity, in form and substance consistent in all material respects with the Participation Offering Term Sheet and otherwise reasonably acceptable to Oaktree.

 

“Reorganized Equity” means the shares of common stock or other equity securities of Reorganized GMR authorized to be issued pursuant to the Plan and the Amended Organizational Documents, which shall be subject to the Restructuring Transactions as set forth in the Plan.

 

  

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“Reorganized GMR” means General Maritime Corporation, a Marshall Islands Corporation, as reorganized pursuant to the Plan on or after the Effective Date.

 

“Restructuring Support Agreement” has the meaning set forth in the preface above.

 

“Restructuring Transactions” means the transactions contemplated by the Plan and the Restructuring Support Agreement.

 

“SEC Financial Statements” has the meaning set forth in Section 3.9(b).

 

“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Securityholders Agreement” means a securityholders agreement or similar agreement, governing certain rights and obligations among securityholders of Reorganized GMR, which agreement may be entered into in the event a Participation Offering is conducted and the Equity Investment Participants thereunder acquire Reorganized Equity, in form and substance consistent in all material respects with the Participation Offering Term Sheet and otherwise reasonably acceptable to Oaktree.

 

“Subsidiary” means, with respect to any entity, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company or other business entity, a majority of the partnership, limited liability company or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, limited liability company or other business entity.

 

“Tax” and “Taxes” means any (i) federal, state, local and foreign taxes, charges, fees, levies or other similar assessments or liabilities (including, without limitation, income, receipts, revenue, ad valorem, value added, excise, real or personal property, sales, occupation, service, stamp, transfer, registration, natural resources, severance, premium, windfall or excess profits, environmental, customs, duties, use, licensing, withholding, employment, social security, unemployment, disability, payroll, share, capital, surplus, alternative, minimum, add-on minimum, estimated, franchise or any other taxes, charges, fees, levies or other similar assessments or liabilities of any kind whatsoever), whether computed on a separate, consolidated, unitary or combined basis or in any other manner, and includes any interest, fines, penalties, assessments, deficiencies or additions thereto, (ii) any and all liability for amounts described in (i) of any member of an affiliated, consolidated, combined or unitary group of which any of the GMR Parties (or any predecessor thereof) is or was a member, and (iii) any and all liability for amounts described in (i) of any Person imposed on any of the GMR Parties as a transferee or successor, by contract, pursuant to any law, rule or regulation, or otherwise.

 

  

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“Tax Return” means any federal, state, local, foreign and other applicable return, declaration, report, claim for refund, information return or statement or other document (including any related or supporting schedules, statements or information) with respect to any Tax filed or required to be filed with the U.S. Internal Revenue Service or any other Governmental Authority or taxing authority or agency or in connection with the determination, assessment or collection of any Tax of any party or the administration of any laws, regulations or administrative requirements relating to any Tax.

 

“Vessel” means, collectively, all sea going vessels and tankers at any time owned by the GMR Parties, and, individually, any of such vessels.

 

“Update” has the meaning set forth in Section 12.14.

 

Section 2.                      Purchase of Reorganized Equity.

 

2.1          Oaktree Commitment; Participation Offering. On the Effective Date:

 

(a)           In consideration for payment by Oaktree to the Company of the Equity Investment Amount net of the cash proceeds received by the Company in connection with a Participation Offering pursuant to Section 2.1(b), if any, Oaktree shall purchase a number of shares of Reorganized Equity equal to 100% of the Reorganized Equity outstanding immediately after the Effective Date (not taking into account the Commitment Fee, and subject to the dilution as a result of the Equity Incentive Program), minus (i) the Participation Offering Shares, if any, and (ii) the shares of Reorganized Equity issued in respect of the Supporting Oaktree Lenders’ allowed Claims under the Oaktree Facility in accordance with the Plan (the “Oaktree Conversion Shares”).  The allocation of the Reorganized Equity among the Oaktree Conversion Shares, the Oaktree Commitment Shares and the Participation Offering Shares shall be as provided for in the Plan.  The shares of Reorganized Equity so purchased by Oaktree under this Section 2.1(a) are referred to herein as the “Oaktree Commitment Shares.”  The Oaktree Commitment Shares together with the Oaktree Conversion Shares and the Commitment Fee Warrant Shares are collectively referred to herein as the “Oaktree Shares”).  For the avoidance of doubt, if the Participation Offering is not consummated on or before the Closing Date (and no Person acquires any Reorganized Equity on or before the Closing Date), then, (i) on the Closing Date, subject to the terms and conditions hereof, Oaktree shall pay to the Company the entire Equity Investment Amount in consideration for the issuance and sale by the Company of the Oaktree Commitment Shares and (ii) any and all proceeds from the sale of Participation Offering Shares, if any, following the Closing, shall be paid to Oaktree or its designee rather than the Company.

 

  

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(b)           The Company hereby agrees and acknowledges that the decision to conduct a Participation Offering (including the identity of the Equity Investment Participants and the amounts that may be invested by any such Person) shall be made by Oaktree in its sole discretion.  If Oaktree determines to conduct a Participation Offering, Oaktree shall determine the terms and conditions of a Participation Offering, and will prepare a term sheet setting forth such terms and conditions (the “Participation Offering Term Sheet”); provided, however, that if any portion of the Participation Offering is a rights offering or other offering of securities by the Company or otherwise imposes material obligations upon the Company, the form, terms, conditions, structure and process of such offering shall be subject to the reasonable consent of the Company.  The Parties agree that the Participation Offering will occur in accordance with the Participation Offering Term Sheet in connection with consummation of the Plan; provided, that the Participation Offering, if any, shall not cause the Company to fail to meet any of the Milestones in accordance with the terms of the Restructuring Support Agreement (unless such Milestone is extended or waived by Oaktree in its sole discretion in order to accommodate court schedules or otherwise, or extended in accordance with the last sentence of Section 2.3(a).  If any portion of the Participation Offering is a rights offering or other offering of securities by the Company or otherwise imposes material obligations upon the Company, then (x) the Company shall provide copies of all documents, instruments, agreements and other materials to be entered into, delivered, distributed or otherwise used in connection with the Participation Offering for review and comment by Oaktree and (y) the Company shall prepare the definitive documents for the Participation Offering which shall not deviate in any material respect from the Participation Offering Term Sheet without Oaktree’s consent and will be filed with the Bankruptcy Court in connection with the Plan.  Notwithstanding the foregoing, the parties hereto acknowledge and agree that (i) any Participation Offering will be conducted in compliance with all applicable laws, including, but not limited to, securities laws and Money Laundering Laws, (ii) in no event shall the Company be required to issue or sell any Purchased Shares or any other securities to any Person subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department and (iii) each participant in any Participation Offering shall provide such customary representations and warranties to the Company as the Company may reasonably request.

 

(c)           The Company shall deliver to Oaktree and each Equity Investment Participant, if any, all of the Purchased Shares purchased by such Person, as applicable, pursuant to Sections 2.1(a) and 2.1(b), in a manner consistent with, and pursuant to, the procedures set forth in the Plan.  Notwithstanding anything to the contrary in this Agreement, Oaktree, may in its sole discretion designate that some or all of the Oaktree Shares be issued in the name of and delivered to, one or more Affiliates of any Oaktree Fund.

 

2.2          The Commitment Fee; Expense Reimbursement and Break-Up Fee.

 

(a)           The Company acknowledges and agrees that Oaktree has expended considerable time and expense in connection with this Agreement and the Restructuring Support Agreement and the negotiation thereof, that Oaktree incurs considerable risk in providing its commitment under the terms of this Agreement, and that this Agreement and the Restructuring Support Agreement provide value to, and are beneficial to, the Company’s estate.  The Company further acknowledges and agrees in accordance with the Approval Order (once entered), that the Company’s delivery of the Commitment Fee shall be paid on the Effective Date and its compliance with the requirements of Section 2.2(b)(iii) shall be a condition precedent to the Effective Date, and that the delivery of the Commitment Fee and payment of the Expense Reimbursement and Break-Up Fee, as applicable, are integral to this Agreement and the Restructuring Support Agreement and Oaktree’s agreement to proceed with the transactions contemplated hereby and the Restructuring.  Accordingly, subject to entry of the Approval Order, the Company hereby agrees to provide the following consideration to Oaktree or a designated Affiliate of any Oaktree Fund in exchange for Oaktree’s agreement to enter into and perform its obligations under this Agreement pursuant to the terms hereof:

 

  

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(i)            the Commitment Fee;

 

(ii)           the Break-Up Fee; and

 

(iii)          the Expense Reimbursement (collectively, with the Commitment Fee and the Break-Up Fee, the “Oaktree Fees”).

 

(b)           Subject only to entry of the Approval Order, the Company shall pay the Oaktree Fees as follows:

 

(i)            the Commitment Fee shall be delivered to Oaktree or a designated Affiliate of any Oaktree Fund on the Effective Date; provided, that, for the avoidance of doubt, the Commitment Fee shall not be paid to Oaktree if the Closing does not occur;

 

(ii)            in the event that this Agreement is terminated by the Company pursuant to Section 11.3(c), and/or the Company terminates the Restructuring Support Agreement pursuant to Section 13(a)(ii) thereof, on or before the consummation of an Alternative Transaction, the Company shall pay the Break-Up Fee to Oaktree or a designated Affiliate of any Oaktree Fund, following the satisfaction of the outstanding obligations under the Prepetition Senior Facilities and the DIP Credit Agreement in full, in cash or other treatment acceptable to the Supporting Credit Facility Lenders.  The Company shall direct that the Break-Up Fee is paid directly to Oaktree or a designated Affiliate of any Oaktree Fund on or before the consummation of an Alternative Transaction following the satisfaction of the outstanding obligations under the Prepetition Senior Facilities and the DIP Credit Agreement in full, in cash or other treatment acceptable to the Supporting Credit Facility Lenders; and

 

(iii)           the Expense Reimbursement shall be paid within five (5) Business Days of invoice during the course of the Chapter 11 Case through and including the Closing Date or, in the event the Effective Date does not occur, through and including the date of termination of this Agreement. The Expense Reimbursement upon entry of the Approval Order shall be allowed administrative expense obligations of the Company under the Bankruptcy Code but shall be junior and subject to the outstanding obligations under the Prepetition Senior Facilities and the DIP Credit Agreement, including any related adequate protection obligations.  The only Expense Reimbursement required to be paid by the Company prior to Closing pursuant to this Section 2.2(b)(iii), shall be the reasonable and documented out-of-pocket expenses of Oaktree (including reasonable travel expenses) and the monthly fees and expenses of Houlihan Lokey Capital, Inc. and Kirkland & Ellis LLP, and any additional fees relating to the consummation of any transaction (including fees of Houlihan Lokey Capital, Inc.) shall not be payable unless and until the Closing is consummated (it being understood that such additional fees shall be paid by the Company at the Closing).

 

  

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2.3          Closing.

 

(a)           Subject to the satisfaction or, if permissible, waiver of the conditions set forth in Section 8, Section 9 and Section 10, the Closing shall take place on the Effective Date, at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036, or at such other time and place as the Parties may agree (the date on which the Closing occurs, the “Closing Date”).  For the avoidance of doubt, the Parties agree that the consummation of the Participation Offering, if any, will not be a condition to the closing of the transactions otherwise contemplated by this Agreement, and the Participation Offering shall not otherwise impede or delay the Closing; provided that in the event that Oaktree and any Person are not able to consummate the intended participation by such Person in the Participation Offering at or prior to the Closing, nothing in this Agreement shall prevent Oaktree from transferring Oaktree Commitment Shares to such Person as determined by Oaktree in its sole discretion.  Notwithstanding anything to the contrary herein or the Restructuring Support Agreement, Oaktree shall not have the discretion to extend the Milestones with respect to the occurrence of the Closing or the Effective Date to a date that is later than that specified in the Milestones without the written consent of the Company, which consent shall not be unreasonably withheld.

 

(b)           At the Closing, (i) Reorganized GMR shall deliver the Oaktree Commitment Shares to be purchased by, and sold to, Oaktree pursuant to Section 2.1, (ii) Oaktree, in full payment for the Oaktree Commitment Shares to be purchased by, and sold to, Oaktree pursuant to Section 2.1, shall pay to the Company as provided in Section 2.1, by wire transfer of immediately available funds, cash in the amount equal to the Equity Investment Amount, net of the cash proceeds received by the Company in connection with a Participation Offering pursuant to Section 2.1(b), if any, to the account or accounts designated by the Company, and (iii) all other transactions contemplated by the Plan shall be consummated.

 

Section 3.            Representations and Warranties of the Company.  The Company represents and warrants to Oaktree as follows:

 

3.1          Organization of the GMR Parties.  Each GMR Party (a) is duly organized and validly existing under the laws of the jurisdiction of its formation or organization, (b) is duly qualified or licensed to do business as a foreign corporation and is in good standing under the laws of each jurisdiction where the nature of the property owned or leased by it or the nature of the business conducted by it makes such qualification or license necessary, except where any such failure to be so qualified or licensed would not result in, and would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect and (c) subject to the Approvals, has all power and authority to own and operate its properties, to lease the property it operates under lease and to conduct its business as now or currently proposed to be conducted.

 

  

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3.2          Due Authorization, Execution and Delivery; Enforceability.  Except as set forth on Schedule 3.2, subject to the Confirmation Order, the Approvals (including the Approval Order), the authorization of the transactions contemplated in the Participation Offering Term Sheet (if any) and Section 5.8 of this Agreement, the Company has the requisite corporate power and authority to enter into, execute and deliver this Agreement and to perform its obligations hereunder, including the issuance of the Oaktree Commitment Shares and the Participation Offering Shares, if any, and has taken all necessary corporate action required for the due authorization, execution, delivery and performance by it of this Agreement, including the issuance of the Oaktree Commitment Shares and the Participation Offering Shares, if any; provided, that in no event shall the number of Oaktree Shares and Participation Offering Shares exceed, in the aggregate, the number of shares authorized for issuance under the Amended Organizational Documents of Reorganized GMR (as required by the Plan).  Subject to the Approvals (including the Approval Order), this Agreement has been duly and validly executed and delivered by the Company and constitutes the legally valid and binding obligation of the Company, enforceable against it in accordance with the terms herein, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity.

 

3.3          Due Issuance and Authorization of Oaktree Commitment Shares.  The Oaktree Commitment Shares issued and delivered to Oaktree pursuant to the terms of this Agreement and in accordance with the Plan will be, upon issuance, duly authorized, validly issued, fully paid and non-assessable, and will be free and clear of all transfer taxes, liens (other than liens created or otherwise imposed by or on Oaktree and restrictions imposed by the Securities Act or any other applicable securities laws), preemptive rights (other than those preemptive rights granted to Oaktree and its Affiliates pursuant to the Investment Agreement, dated as of March 29, 2011, as amended, between OCM Marine Investments and the Company) and encumbrances (other than encumbrances created or otherwise imposed by or on Oaktree and restrictions imposed by the Securities Act or any other applicable securities laws) with respect to the issue thereof.  The Commitment Fee Warrant Shares underlying the Commitment Fee will be, upon issuance, duly authorized, and, when issued and delivered by the Company, in the manner provided for in the Commitment Fee and against payment of the purchase price set forth therein, validly issued, fully paid and non-assessable, and will be free and clear of all transfer taxes, liens (other than liens created or otherwise imposed by or on Oaktree), preemptive rights (other than those preemptive rights granted to Oaktree and its Affiliates pursuant to the Investment Agreement, dated as of March 29, 2011, as amended, between OCM Marine Investments and the Company) and encumbrances (other than encumbrances created or otherwise imposed by or on Oaktree and restrictions imposed by the Securities Act or any other applicable securities laws) with respect to the issue thereof.

 

  

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3.4         Capitalization of the Company; Due Issuance and Authorization of Reorganized Equity.  As of the Effective Date, and prior to giving effect to the Restructuring Transactions, the authorized capital stock of the Company will consist only of shares of Reorganized Equity as disclosed in the Plan.  As of the Effective Date, after giving effect to the Restructuring Transactions, the Oaktree Shares and Participation Offering Shares, if any, the number and par value per share of which shall be set forth in the Plan, and the Commitment Fee Warrant Shares and the equity interests, if any, reserved for issuance under the Equity Incentive Program, shall represent the only issued and outstanding capital stock of the Company.  Except as set forth on Schedule 3.4, as of the Effective Date, all of the issued and outstanding (i) Oaktree Shares, assuming the accuracy of the representations and warranties of Oaktree set forth in Sections 4.8 – 4.11, will not be issued in violation of the Securities Act or any other applicable securities laws (including state “blue sky” laws) and (ii) Participation Offering Shares, if any, assuming that any Equity Investment Participants in the Participation Offering provide the same representations and warranties as set forth in Sections 4.8 – 4.11, will not be issued in violation of the Securities Act or any other applicable securities laws (other than with respect to state “blue sky” laws).  Except for the Commitment Fee and Equity Incentive Program, and except as contemplated by the Plan, as of the Effective Date, the Company will not have issued, granted or entered into any commitment to issue or grant any options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of Reorganized Equity.  As of the Effective Date and except as contemplated by the Plan (including the Restructuring Transactions set forth therein) and the Equity Incentive Program, the GMR Parties will not have agreed to repurchase or redeem any securities of the Company and shall not have granted any authorized stock appreciation, phantom stock, profit participation or similar rights or any registration rights with respect to securities of the Company.

 

3.5          Capitalization of Subsidiaries.  As of the Effective Date, all of the outstanding equity interests of each Subsidiary of the Company will have been duly authorized and validly issued and, with respect to each corporate Subsidiary, will be fully paid and non-assessable.  As of the Effective Date, all of the outstanding equity interests of each Subsidiary of the Company will be owned, beneficially and of record, by the Company or by Subsidiaries wholly owned, directly or indirectly, by the Company, free and clear of all liens, other than liens under the 2010 Exit Facility, the 2011 Exit Facility or created or otherwise imposed by or on Oaktree, and other than restrictions imposed by the Securities Act or any other applicable securities laws.  As of the Effective Date, except as contemplated by the Plan, there will be no (i) outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other similar contracts or commitments with respect to any equity interests in any Subsidiary of the Company, (ii) no voting trusts, proxies or other agreements or understandings with respect to the voting of any equity of any Subsidiary of the Company, or (iii) outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to any equity interests of any Subsidiary of the Company or any repurchase, redemption or other obligation to acquire for value any equity interests of the Company or any Subsidiary of the Company.  Except as set forth on Schedule 3.5, no GMR Party holds any equity, partnership, joint venture or other interest in any Person.

 

3.6          Consents.  Except (i) as set forth on Schedule 3.6, (ii) for provisions in agreements that provide that the pursuit, filing or prosecution of the Chapter 11 Case is a breach of such agreement, (iii) as required by the transactions contemplated in the Participation Offering Term Sheet (if any), and (iv) for such filings and approvals as may be required under the Securities Act and any other applicable securities laws, and subject to the governmental approvals required under the Bankruptcy Code (including the Approval Order), none of the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated by the Plan by the Company will require any consent of, authorization by, exemption from, filing or registration with or notice to any Governmental Authority or any other Person, in each case, that is material to the Company.

 

  

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3.7          Legal Proceedings.  Except (i) as set forth on Schedule 3.7, (ii) as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and all subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by the Company with the Commission prior to the date hereof, or (iii) for claims of creditors or other parties in, or the pursuit, filing and prosecution of, the Chapter 11 Case: (a) there are no material actions, suits or proceedings to which any GMR Party is a party or to which any material property of such GMR Party is subject, and no such actions, suits or proceedings are, to the Knowledge of the Company, threatened, and (b) to the Knowledge of the Company, no material investigations are pending or threatened by any Governmental Authority against any GMR Party or involving any material property of any GMR Party.

 

3.8          No Conflicts.  Subject to the governmental approvals required under the Bankruptcy Code (including the Approval Order and assuming the consummation of the other transactions contemplated by the Plan), the execution, delivery and performance of this Agreement, including the issuance of the Oaktree Commitment Shares and the Participation Offering Shares (if any), and the consummation of the transactions contemplated hereunder, will not (a) except as set forth on Schedule 3.8, conflict with or result in any breach of any provision of the Company’s organizational documents (as amended to date, without giving effect to any amendment pursuant to Section 5.8 hereof and provided that in no event shall the number of Oaktree Shares and Participation Offering Shares exceed, in the aggregate, the number of shares authorized for issuance under the Amended Organizational Documents of Reorganized GMR (as required by the Plan)), (b) except as set forth on Schedule 3.8 and except for provisions in agreements that provide that the pursuit, filing or prosecution of the Chapter 11 Case is a breach of such agreement, conflict in any respect with or result in any breach of the terms, conditions or provisions of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture, instrument or other contract to which any GMR Party is a party or by which any GMR Party’s properties or assets are bound as in effect on the Effective Date, (c) except as set forth on Schedule 3.8, result in the imposition or creation of any lien or any other encumbrance (other than (i) encumbrances pursuant to, or otherwise imposed by, the 2010 Exit Facility and 2011 Exit Facility, (ii) encumbrances created by Oaktree and (iii) restrictions imposed by the Securities Act or any other applicable securities laws) upon or with respect to any of the material assets, properties, rights or businesses owned or used by any GMR Party, or (d) except as set forth on Schedule 3.8 and subject to such filings and approvals as may be required under the Securities Act or any other applicable securities laws, result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to any GMR Party or by which any GMR Party’s material properties or assets are bound.

 

3.9          Company SEC Documents.

 

(a)           The Company has filed all reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the “Commission”) required to be filed by the Company pursuant to the Securities Act or the Securities Exchange Act of 1934, as amended (together with the rules and regulations thereunder, the “Exchange Act”) since January 1, 2008 (the “Company SEC Documents”).  As of their respective effective dates (in the case of Company SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective dates of filing (in the case of all other Company SEC Documents), the Company SEC Documents complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and except to the extent amended or superseded by a subsequent filing with the SEC prior to the date of this Agreement, as of such respective dates, none of the Company SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Except as set forth on Schedule 3.9(a), none of the Subsidiaries of the Company is subject to the periodic reporting requirements of the Exchange Act.  Except as set forth on Schedule 3.9(a), as of the date hereof: (i) there are no outstanding or unresolved comments in comment letters from the Commission staff with respect to any of the Company SEC Documents, and (ii) to the Knowledge of the Company none of the Company SEC Documents is the subject of ongoing Commission review or outstanding Commission investigation.

 

  

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(b)           The financial statements of the GMR Parties included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (the “Most Recent Unaudited Financial Statements”) and the financial statements of the GMR Parties included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “SEC Financial Statements”) at the time filed complied as to form in all material respects with applicable accounting requirements (including GAAP) and with the published rules and regulations of the Commission with respect thereto, and the SEC Financial Statements and the Most Recent Unaudited Financial Statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto), and fairly present in all material respects (subject, in the case of the Most Recent Unaudited Financial Statements, to normal recurring audit adjustments) the consolidated financial position of the GMR Parties as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.

 

(c)           Except (i) as set forth on Schedule 3.9(c)(i), (ii) as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and all subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by the Company with the Commission prior to the date hereof, (iii) for any transactions contemplated by the Plan or otherwise contemplated by this Agreement, (iv) as and to the extent disclosed or reserved against on the balance sheet included in the SEC Financial Statements, or (v) as incurred in the ordinary course of business since the date of the balance sheet included in the Most Recent Unaudited Financial Statements (except as set forth on Schedule 3.9(c)(v), none of which is material and none of which relates to breach of contract, breach of warranty, tort, infringement, or violation of law), the Company does not have any material obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether or not known to any GMR Party, whether due or to become due and regardless of when asserted) required to be disclosed as a liability pursuant to GAAP.

 

  

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3.10        Absence of Certain Changes or Events.  Except (a) as set forth on Schedule 3.10, or (b) as disclosed (i) in a filing by the Company on the Bankruptcy Court’s docket in connection with the Chapter 11 Case as of the date of this Agreement or (ii) in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and all subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by the Company with the Commission prior to the date hereof, (x) since December 31, 2010 the GMR Parties have, in all material respects, conducted their respective businesses in the ordinary course of business consistent with past practices and (y) from December 31, 2010 to the date of this Agreement there has not been any Material Adverse Effect.

 

3.11        Environmental.  Except as set forth on Schedule 3.11, (a) the GMR Parties are and have been for the past three (3) years in compliance in all material respects with all applicable Environmental Laws, and the GMR Parties are not liable for any material penalties, fines or forfeitures for failure to comply with any of the foregoing, (b) all licenses, permits, registrations, approvals or other authorizations required under any Environmental Law for the operation of the business of the GMR Parties and the operation of their Vessels have been secured and maintained and the GMR Parties are and have been for the past three (3) years in compliance in all material respects therewith, (c) the GMR Parties are not in any respect in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree with respect to Environmental Laws to which any of the GMR Parties is a party or which would affect the ability of the GMR Parties to operate any Vessel, 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, (d) the GMR Parties have not received or been subject to any Environmental Claims and there are no Environmental Claims pending or, to the knowledge of the GMR Parties, threatened, against the GMR Parties in respect of which an unfavorable decision, ruling or finding has resulted or could reasonably be expected to result in a material liability pursuant to any Environmental Laws (other than Environmental Claims that have been fully and finally adjudicated or otherwise determined with no material continuing or future obligations and all fines, penalties and other costs, if any, payable by the GMR Parties in respect thereof have been paid in full or which are fully covered by insurance (including permitted deductibles)), (e) there are no facts, circumstances, conditions or occurrences on any Vessel, property or other facility currently or formerly owned or operated by the GMR Parties that is reasonably likely (1) to result in an Environmental Claim against the GMR Parties or any Vessel, property or other facility owned or operated by the GMR Parties, in respect of which an unfavorable decision, ruling or finding has resulted or could reasonably be expected to result in a material liability pursuant to any applicable Environmental Law, or (2) to cause such Vessel, 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, 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 been generated, used, treated or stored on, transported to or from, released on or from, disposed of, or handled, and no Person has been exposed to any such Hazardous Materials, at any location, including any Vessel, property or other facility at any time owned or operated by the GMR Parties, where such occurrence or event has given or could reasonably be expected to give rise to a material liability pursuant to any Environmental Laws (other than such liabilities resulting from Environmental Claims that have been fully and finally adjudicated or otherwise determined with no material continuing or future obligations and all fines, penalties and other costs, if any, payable by the GMR Parties in respect thereof have been paid in full or which are fully covered by insurance (including permitted deductibles)), (g) the GMR Parties have not assumed, undertaken, provided an indemnity with respect to, or otherwise become subject to, any material liability of any other Person relating to Environmental Laws, and (h) to their knowledge, the GMR Parties have no material liability with respect to the presence or alleged presence of asbestos in any product or item or at or upon any property or facility.

 

  

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3.12       Title to Real and Personal Property. No GMR Party owns any real property. Each GMR Party has good title to all material tangible and material intangible properties (i) reflected on the balance sheet included in the Most Recent Unaudited Financial Statements, (ii) located on any of the premises of such GMR Party, or (iii) used in the conduct of the businesses of such GMR Party, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except for Permitted Liens.  Subject to assumption of such agreement pursuant to the Bankruptcy Code, all of the material leases and material subleases to which any GMR Party is a party are in full force and effect and enforceable by such GMR Party in accordance with their terms, and no GMR Party has received any written notice of any claim that has been asserted by anyone adverse to the rights of a GMR Party under any of such material leases or material subleases, or affecting or questioning the rights of such GMR Party to the continued possession of the leased or subleased property under any such material lease or material sublease.

 

3.13        Intellectual Property.

 

(a)           Schedule 3.13(a)(i) sets forth as of the date hereof, a complete and correct list of (i) all of the patented or registered Intellectual Property and pending patent applications and applications for registrations of other Intellectual Property owned by any GMR Party, and (ii) all unregistered trademarks and service marks owned by any GMR Party and currently used in connection with any material product or service of the GMR Parties, and (iii) all unregistered copyrights owned by any GMR Party embodied in or necessary to any material product or service of the GMR Parties.  Subject to the Approvals, except as set forth on Schedule 3.13(a)(ii), and subject to any Permitted Liens (as such term is defined in the DIP Credit Agreement) the GMR Parties own and possess all right, title and interest in and to all of the Intellectual Property set forth on Schedule 3.13(a)(i) and own and possess all right, title and interest in and to, or otherwise have the right to use pursuant to, to the Knowledge of the Company, valid and enforceable licenses, all other Intellectual Property that is used in, or necessary for, the operation of its and their respective businesses as presently conducted (collectively, “Company Intellectual Property”), without, to the Knowledge of the Company, infringement upon or conflict with the material rights of any other Person with respect thereto.

 

(b)           The conduct of the businesses of the GMR Parties as currently conducted does not infringe, misappropriate or otherwise conflict with, and has not infringed, misappropriated or otherwise conflicted with, in any material respect, any Intellectual Property of any third Person, and to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected to result in any of the foregoing nor any current or anticipated claims against any GMR Party relating to the foregoing.  To the Knowledge of the Company, no third Person has infringed, misappropriated or otherwise conflicted with, in any material respect, any Company Intellectual Property, and to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected to result in any of the foregoing or of any current or anticipated claims against a third Person relating to the foregoing.

 

  

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3.14       Internal Controls. The GMR Parties maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

3.15        No Registration. Assuming the truth and accuracy of the representations and warranties of Oaktree set forth in Sections 4.8 – 4.11, the offering and issuance by the Company of the Oaktree Commitment Shares shall be exempt from registration under the Securities Act or any other applicable securities laws or regulations (including state “blue sky” laws).  Assuming that any Equity Investment Participants in the Participation Offering provide the same representations and warranties as set forth in Sections 4.8 – 4.11, the offering and issuance by the Company of the Participation Offering Shares, if any, shall be exempt from registration under the Securities Act or any other applicable securities laws or regulations (other than with respect to “blue sky” laws).

 

3.16       Contracts. Except as set forth on Schedule 3.16(a), no GMR Party is a party to or bound by, nor are any of its assets or properties bound by, (i) any outstanding contract, agreement or arrangement (in each case, whether written or oral) that is filed as an exhibit to the Company SEC Documents, or is or would be required to be filed by the Company pursuant to the Exchange Act (without giving effect to any deregistration by the Company as a result of the Company filing a Form 15 with the Commission), other than those that are required to be filed under Exhibit 23, Exhibit 31, Exhibit 100 or Exhibit 101 pursuant to Regulation S-K promulgated under the Exchange Act, (ii) (x) any outstanding time charter contract, agreement or arrangement, and (y) any other outstanding contract, agreement or arrangement (in each case, whether written or oral), that involves obligations of any Person in excess of $2,000,000, or (iii) any outstanding contract, agreement or arrangement (in each case, whether written or oral) that provides for any non-competition, exclusivity, or other similar restriction which limits the ability of any GMR Party to conduct any line of business or operate within any geographic area with respect to any GMR Party (each of the agreements described in clauses (i) – (iii), a “Material Contract”).  Except as specifically set forth on Schedule 3.16(b), and except for provisions in agreements that provide that the pursuit, filing or prosecution of the Chapter 11 Case is a breach of such agreement, a GMR Party has performed, in all material respects, all obligations required to be performed by it and is not, and to the Knowledge of the Company no other party is, in default under or in material breach of or in receipt of any claim of such default under or breach of, any Material Contract, and no event has occurred which with the passage of time or the giving of notice or both would result in a default, breach or event of noncompliance under any such Material Contract.  The Company has made available to Oaktree a correct and complete copy of, or, if oral, a reasonably complete and accurate written description of, each Material Contract, together with all amendments, waivers or other changes thereto.

 

  

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3.17       Licenses. The GMR Parties possess all licenses, certificates, registrations, approvals, authorities or permits issued by appropriate Governmental Authorities or other Persons necessary to conduct their businesses as now conducted or as proposed to be conducted and to own, lease and operate their respective assets, except for such licenses, certificates, registrations, approvals, authorities or permits, the lack of which would not have a Material Adverse Effect (collectively, the “Material Permits”).  Except as set forth on Schedule 3.17, no GMR Party has been a party to or subject to any proceeding seeking to revoke, suspend or otherwise limit any Material Permit within the last three (3) years.

 

3.18       Compliance With Laws and Regulations.  Except with respect to Environmental Laws, Taxes and ERISA, which are the subjects of Sections 3.11, 3.19 and 3.20, respectively and except as set forth on Schedule 3.18, or as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and all subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by the Company with the Commission prior to the date hereof, no GMR Party is, or has been within the last three (3) years, in violation in any material respect of any law, ordinance, statute, rule, regulation, decision or order of any Governmental Authority applicable to such GMR Party or any properties or assets thereof.

 

3.19       Tax Matters.

 

(a)           Except as set forth on Schedule 3.19(a), (i) all Tax Returns required to be filed by or on behalf of the GMR Parties have been duly and timely filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed (after giving effect to any valid extensions of time in which to make such filings); (ii) each such Tax Return is true, correct, accurate and prepared in accordance with applicable law; (iii) all income and other material Taxes payable by or on behalf of any GMR Party have been fully and timely paid except to the extent such Taxes are being contested in good faith by appropriate proceedings and are identified on Schedule 3.19(a), and adequate reserves or accruals for Taxes have been provided in the balance sheet included as part of the Most Recent Unaudited Financial Statements in respect of any period for which Tax Returns have not yet been filed or for which Taxes are not yet due and owing; (iv) the GMR Parties have timely withheld and paid to the appropriate Governmental Authority all amounts required to have been withheld and paid in connection with amounts paid or owing to any shareholder, employee, creditor, independent contractor or other third party and have complied with all applicable Tax Return filing and information reporting obligations with respect thereto; and (v) no agreement, waiver or other document or arrangement extending or having the effect of extending the period for assessment or collection of a material amount of Taxes (including any applicable statute of limitation), has been executed or filed with any Governmental Authority by or on behalf of any GMR Party.

 

(b)           Except as set forth on Schedule 3.19(b), all deficiencies asserted or assessments made as a result of any examinations by any Governmental Authority of the Taxes or Tax Returns of or covering or including the GMR Parties have been fully paid.  There is no audit, claim, action, suit, proceeding, investigation or request for a private letter ruling or other formal or informal tax guidance pending with respect to any of the GMR Parties in respect of any Taxes in any jurisdiction, nor has there been any such activity during the five-year period ending on the Effective Date.  None of the GMR Parties have been informed of the commencement or anticipated commencement of any such activity, nor are any of the GMR Parties aware that any such activity is contemplated by any taxing authority.  None of the GMR Parties has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which period (after giving effect to such extension or waiver) has not expired.

 

  

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(c)           None of the GMR Parties is (i) is a party to any “reportable transaction” within the meaning of Section 1.6011-4 of the Treasury Regulations or (ii) is or has ever been a “United States Real Property Holding Company” within the meaning of Section 897 of the Code.

 

(d)           With respect to each taxable year of each of the GMR Parties that ends within the five years preceding the Effective Date, each of the GMR Parties has at all times qualified for a complete exemption from U.S. federal income taxation on income from the international operation of ships under Section 883 of the Code.  With respect to each such taxable year, none of the income of the GMR Parties, including income exempt from U.S. federal income taxation under Section 883 of the Code, is effectively connected with the conduct of a trade or business in the United States within the meaning of Section 887(b)(4) of the Code.

 

(e)           Schedule 3.19(e) lists each GMR Party and whether each such entity is treated for Tax purposes as a corporation, association, partnership or other entity, or whether such entity is disregarded for Tax purposes.

 

3.20        Employee Benefits.  Each Employee Benefit Plan has been maintained, funded and administered, in all material respects, in accordance with its terms, the requirements of any applicable collective bargaining agreement, and in compliance in all material respects with all applicable laws, including ERISA and the Code.  Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code is the subject of a favorable determination letter or opinion letter from the Internal Revenue Service.  With respect to each Employee Benefit Plan there have been no non-exempt “prohibited transactions” (as defined in Section 406 of ERISA or Section 4975 of the Code) and no breach of fiduciary duty (as determined under ERISA), and there is no pending or, to the Knowledge of the Company, threatened litigation, action, audit, investigation, proceeding or claim (other than routine claims for benefits).  The Company and the ERISA Affiliates have complied and are in compliance in all material respects with the requirements of COBRA.  Neither the Company nor any ERISA Affiliate has incurred any material liability or obligation (whether or not asserted) to a “multiemployer plan” (as defined in Section 3(37) of ERISA) on account of any “partial withdrawal” or “complete withdrawal” (within the meaning of Sections 4205 and 4203 of ERISA, respectively) and neither the Company nor any ERISA Affiliate is bound by any material contract or has any liability or obligation described in Section 4204 of ERISA.  With respect to each  Employee Benefit Plan that is or was subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code (each a “Pension Plan”): (a) the minimum funding standard under Section 302 of ERISA and Sections 412 and 430 of the Code has been satisfied and no waiver of any minimum funding standard or any extension of any amortization period has been requested or granted; all amounts due to the Pension Benefit Guaranty Corporation (“PBGC”) pursuant to Section 4007 of ERISA have been paid; no notice of intent to terminate has been filed and no amendment to treat a Pension Plan as terminated has been adopted, and the PBGC has not instituted proceedings to treat any Pension Plan as terminated, (b) no accumulated funding deficiency, whether or not waived, exists, and (c) no Pension Plan is considered to be in “at risk” status under Section 430 of the Code.  Neither the Company nor any ERISA Affiliate has any current or potential material liability or obligation under Sections 4062, 4063 or 4064 of ERISA.

 

  

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3.21        Labor Relations.  Except as set forth on Schedule 3.21, no GMR Party is a party to or bound by any collective bargaining agreement or relationship with any labor union.  Except as set forth on Schedule 3.21, there is (i) no unfair labor practice charge or complaint pending against any GMR Party or, to the Knowledge of the Company, threatened against any of them before the National Labor Relations Board or any similar Governmental Authority, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any GMR Party or, to the Knowledge of the Company, threatened against any of them, (ii) no strike, slowdown, work stoppage, picketing, or other material labor dispute pending against any GMR Party or, to the Knowledge of the Company, threatened against any GMR Party, and (iii) to the Knowledge of the Company, no ongoing or threatened union organizing or decertification activities or proceedings with respect to the employees of any GMR Party (and, with respect to the matters specified in clauses (ii) and (iii) above, no such matters have occurred within the past two (2) years).  The GMR Parties have complied in all material respects with their respective payment obligations to all of their respective employees in respect of all wages, salaries, commissions, bonuses, benefits and other compensation due and payable to such employees under any agreement or plan of such GMR Party or any applicable statute or other law.  With respect to the transactions contemplated by this Agreement, all bargaining obligations with any employee representative have been or prior to Closing will be satisfied.  Within the past three (3) years, none of the GMR Parties has implemented any plant closing or mass layoff of employees in violation of the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar plant closing or mass layoff foreign, state or local law, regulation or ordinance.

 

3.22        Customers and Suppliers

 

(a)           Schedule 3.22(a) contains a correct and complete list of the top twenty (20) customers and the top twenty (20) vendors and suppliers of the GMR Parties, quantified by the value of products and services provided or agreed to be provided to such customers or by such vendors and suppliers, in each case, during the period from January 1, 2011 through November 30, 2011, to the extent invoiced.

 

(b)           As of the date hereof, to the Actual Knowledge of the Company and except as set forth on Schedule 3.22(b), no such customer or supplier intends to terminate or materially reduce its business with any GMR Party.

 

  

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3.23        Affiliate Transactions.  Except as set forth on Schedule 3.23, (a) there are no agreements, understanding, arrangements (in each case whether written or oral), liabilities or obligations between any GMR Party, on the one hand, and any current or former equityholder, member, partner, officer, director or manager of any GMR Party or any Affiliate of any such Person, on the other hand, except for normal advances to employees, officers, directors or managers in the ordinary course of business which are consistent in amount with past practice, payment of compensation to directors and for employment to employees, officers and managers in the ordinary course of business which is consistent in amount with past practice, and participation in benefit plans or programs by employees, officers, directors or managers in the ordinary course of business, (b) no GMR Party provides or causes to be provided any assets (other than the compensation and other rights contemplated in clause (a) foregoing), services or facilities (other than the use by employees, officers, directors or managers of the office space and other facilities leased by the GMR Parties in the ordinary course of business) to any Person described in clause (a) foregoing, (c) no Person described in clause (a) foregoing provides or causes to be provided any assets, services (other than in such Person’s capacity as an employee, officer, director or manager) or facilities to any GMR Party and (d) no GMR Party beneficially owns, directly or indirectly, any interests of any Person described in clause (a) foregoing.  Except for the ownership by any equityholder of the Company of the equity interests owned by such Person, no such Person nor any of its Affiliates (other than the GMR Parties), as the case may be, have any interest of any nature in any of the assets and properties used for or related to the business or operations of the GMR Parties.

 

3.24        Insurance.  The GMR Parties have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are customary for companies whose businesses are similar to the GMR Parties; and as of the date hereof, (a) no GMR Party has received written notice from any insurer or agent of such insurer that capital improvements or other material expenditures are required or necessary to be made in order to continue such insurance and (b) to the Knowledge of the Company, there is no reason to believe that any GMR Party will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

 

3.25        No Broker’s Fees.  Except as set forth on Schedule 3.25, no GMR Party is a party to any contract, agreement or understanding with any Person (other than this Agreement) that would give rise to any claim against any GMR Party for a brokerage commission, finder’s fee or like payment in connection with the transactions contemplated hereby.

 

3.26        No Unlawful Payments.  No GMR Party nor, to the Knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of any GMR Party has (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (b) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (c) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, or (d) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

3.27        Compliance with Money Laundering Laws.  The operations of the GMR Parties are and have been at all times conducted in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any applicable related or similar laws (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any Governmental Authority or any arbitrator involving any GMR Party with respect to Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

 

  

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3.28        Compliance with Sanctions Laws.  None of the GMR Parties nor any of their respective directors, officers or employees nor, to the Knowledge of the Company, any agent or other Person acting on behalf of any GMR Party is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. The Company will not directly or indirectly use the proceeds of any Purchased Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiary of the Company, joint venture partner or other Person for the purpose of financing the activities of any Person that, to the Knowledge of the Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

 

3.29        Arm’s Length.  The Company acknowledges and agrees that Oaktree is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the transactions contemplated hereby (including in connection with determining the terms of the Participation Offering, if any) and not as financial advisors or fiduciaries to, or agents of, the Company or any other Person.  Additionally, Oaktree is not advising the Company or any other Person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Company has had the opportunity to consult with its own advisors concerning such matters and Oaktree shall have no responsibility or liability to the Company with respect thereto.  Any review by Oaktree of the Company or the transactions contemplated hereby will be performed solely for the benefit of Oaktree and shall not be on behalf of the Company.

 

Section 4.            Representations and Warranties of Oaktree. Each Oaktree Fund, severally and not jointly, represents and warrants to the Company as follows:

 

4.1          Organization.  Such Oaktree Fund is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation.  Except with respect to the limited partnership units of OCM Marine Holdings TP, L.P. to be held by the Company, OCM Marine Holdings TP, L.P. is wholly-owned by the Oaktree Funds, and OCM Marine Investments is a wholly-owned subsidiary of OCM Marine Holdings TP, L.P.

 

4.2          Due Authorization, Execution and Delivery; Enforceability. Such Oaktree Fund has the requisite power and authority to enter into, execute and deliver this Agreement and to perform its obligations hereunder and has taken all necessary action required for the due authorization, execution, delivery and performance by it of this Agreement.  This Agreement has been duly and validly executed and delivered by such Oaktree Fund and constitutes its valid and binding obligation, enforceable against it in accordance with the terms herein, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity.

 

4.3          Consents. Subject to the Approvals and such filings and approvals as may be required under federal securities laws and applicable state securities laws, none of the execution, delivery or performance of this Agreement by such Oaktree Fund will require any consent of, authorization by, exemption from, filing with or notice to any Governmental Authority or any other Person.

 

  

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4.4          No Conflicts.  The execution, delivery and performance of this Agreement by such Oaktree Fund will not (a) conflict with or result in any breach of any provision of its organizational documents, (b) conflict with or result in the breach of the terms, conditions or provisions of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture, instrument or other contract to which such Oaktree Fund is a party or by which any of such Oaktree Fund’s properties or assets are bound or (c) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to such Oaktree Fund or by which such Oaktree Fund’s properties or assets are bound.

 

4.5          Legal Proceedings.  There are no actions, suits or proceedings to which such Oaktree Fund is a party or to which any property of such Oaktree Fund is subject that, individually or in the aggregate, have prohibited, delayed or adversely impacted or, if determined adversely to such Oaktree Fund, would reasonably be expected to prohibit, delay or adversely impact such Oaktree Fund’s performance of its obligations under this Agreement, and no such actions, suits or proceedings are, to the knowledge of such Oaktree Fund, threatened.  To the knowledge of such Oaktree Fund, no investigations are threatened by any Governmental Authority that, individually or in the aggregate, would reasonably be expected to prohibit, delay or adversely impact such Oaktree Fund’s performance of its obligations under this Agreement.

 

4.6          Financial Ability to Acquire Oaktree Commitment Shares.  As of the date hereof and until the date the transactions contemplated by this Agreement are consummated, Oaktree shall have access to uncalled capital commitments plus cash on hand, in each case, in an amount equal to $175 million in order to satisfy each and all of its obligations under this Agreement.  Oaktree has provided true and correct evidence to the Company’s legal counsel and financial advisors (on a confidential basis) in summary form (including, but not limited to, in one or more electronic spreadsheets) that Oaktree has sufficient unencumbered cash or other immediately available funds or marketable securities held on the date hereof in one or more bank or brokerage accounts, or sufficient unused capital commitments from its partners, to enable it to make payment of the Equity Investment Amount, and funds and/or capital commitments in an amount equal to the Equity Investment Amount shall continue to be unencumbered or unused, as the case may be, until the earlier to occur of the termination of this Agreement pursuant to its terms, or the consummation of the transactions contemplated by this Agreement.

 

4.7          Oaktree Facility. As of the date hereof, OCM Marine Investments holds all indebtedness of the Company and its subsidiaries that is currently outstanding pursuant to the Oaktree Facility, and such indebtedness is unencumbered, except for those encumbrances expressly imposed by the Oaktree Facility.

 

  

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4.8          No Registration Under the Securities Act.  Such Oaktree Fund understands (a) that the Oaktree Commitment Shares to be purchased by it pursuant to the terms of this Agreement have not been registered under the Securities Act, (b) that, except as provided in the Securityholders Agreement or the Registration Agreement, if any, the Company shall not be required to effect any registration or qualification of the Oaktree Commitment Shares under the Securities Act or any state securities law, (c) that the Oaktree Commitment Shares will be issued in reliance upon exemptions contained in the Securities Act or interpretations thereof and in the applicable state securities laws, in each case to the extent that section 1145 of the Bankruptcy Code is not applicable, and (d) that the Oaktree Commitment Shares may not be offered for sale, sold or otherwise transferred, in each case to the extent that section 1145 of the Bankruptcy Code is not applicable, except pursuant to a registration statement or in a transaction exempt from or not subject to registration under the Securities Act.

 

4.9          Acquisition for Investment.  The Oaktree Commitment Shares are being acquired under this Agreement by such Oaktree Fund solely for its own account, for investment and not with a view toward resale or other distribution within the meaning of the Securities Act; provided, however, that the disposition of such Oaktree Fund’s property shall at all times be under its control.  Such Oaktree Fund will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of any of the Oaktree Commitment Shares (or solicit any offers to buy, purchase, or otherwise acquire or take a pledge of any of the Oaktree Commitment Shares), except pursuant to a registration statement or in a transaction exempt from or not subject to registration under the Securities Act and any applicable state securities laws.

 

4.10        Independent Investigation; Retention of Tax Advisors.  Such Oaktree Fund has made its own inquiry and investigation into the Company and has undertaken such investigation and had access to such information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.  Such Oaktree Fund has consulted its own tax advisors with regard to its purchase of Oaktree Commitment Shares contemplated hereunder and the tax consequences thereof, and has not relied on any advice from the Company or its representatives regarding the tax consequences of an investment in the Oaktree Commitment Shares. Notwithstanding the foregoing, nothing contained herein will operate to modify or limit in any respect the representations and warranties of the Company or to relieve the Company from any obligations to Oaktree for breach thereof or the making of misleading statements or the omission of material facts in violation of applicable law in connection with the transactions contemplated hereby.

 

4.11        Accredited Investor.  Such Oaktree Fund is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Oaktree Commitment Shares, and Oaktree is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Oaktree Commitment Shares.  In evaluating the suitability of an investment in the Oaktree Commitment Shares, Oaktree has not relied upon any representations or warranties of any Person by or on behalf of the Company other than those representations and warranties that are expressly set forth in this Agreement, whether oral or written.

 

4.12        No Broker’s Fees.  Except for the advisory fees and expenses of Houlihan Lokey Capital, Inc. (which, for the avoidance of doubt, is not acting in a broker or similar capacity in relation to Oaktree or any of its Affiliates), such Oaktree Fund is not a party to any contract, agreement or understanding with any Person (other than this Agreement) that would give rise to a Claim against the Company for a brokerage commission, finder’s fee or like payment in connection with the transactions contemplated hereby.

 

  

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Section 5.            Covenants of the Company.

 

5.1          Participation Offering.  If a Participation Offering is conducted in accordance with Section 2.1 and the Plan, the Company shall use its commercially reasonable efforts to effectuate the Participation Offering (if any) and the issuance and sale of the Participation Offering Shares and the other transactions contemplated by this Agreement and the Plan in accordance with this Agreement and the Plan, the Securities Act and any state or foreign securities laws.  For the avoidance of doubt, the Parties agree that the consummation of the Participation Offering, if any, will not be a condition to the closing of the transactions otherwise contemplated by this Agreement, and the Participation Offering, if any, shall not otherwise impede or delay the Closing; provided, that in the event that Oaktree and any Person are not able to consummate the intended participation by such Person in the Participation Offering at or prior to the Closing, nothing in this Agreement shall prevent Oaktree from transferring Oaktree Commitment Shares to such Person as determined by Oaktree in its sole discretion.

 

5.2          Operation of Business.  Subject to the terms and conditions of this Agreement and in accordance with the terms hereof, and subject to the Approvals and the transactions contemplated by the Plan, from the date hereof through the pendency of the Chapter 11 Case, the Company will, and will cause its Subsidiaries (including, for the avoidance of doubt, any Subsidiary that is not a debtor-in-possession in the Chapter 11 Case) to continue to operate in the ordinary course of business consistent with past practice and the DIP Budget and use its commercially reasonably efforts to keep intact the assets, operations and relationships of its business and will promptly inform Oaktree about any change, effect, event, development, circumstance or state of facts that could reasonably be expected to result in a Material Adverse Effect. Without limiting the foregoing, the Company will not, and will cause its Subsidiaries not to, enter into, materially modify or terminate any Material Contract without the prior written consent of Oaktree (which shall not be unreasonably withheld); provided, however that in the event that Oaktree does not expressly grant or deny any request from the Company for consent pursuant to this Section 5.2 with respect to the entry into, material modification or termination of a Material Contract within three (3) days after the request by the Company for such consent, Oaktree will be deemed to have consented to such request; provided, further that the Company may, without the prior written consent of Oaktree, enter into any time charter contract, agreement or arrangement, which has a duration of less than six (6) months.

 

5.3          No Inconsistent Actions.  Subject to the terms and conditions of this Agreement (including but not limited to the provisions of Section 7.4 hereof) and the Restructuring Support Agreement and in accordance with the terms thereof, the Company shall not, and shall cause its Subsidiaries not to, take any actions that are materially inconsistent with this Agreement or the Restructuring Support Agreement.

 

  

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5.4          Notification.  The Company shall promptly notify Oaktree in writing of the occurrence, or failure to occur, of any of the following, or any event of which the Company is aware which occurrence or failure would be reasonably likely to cause any of the following: (i) any breach of or inaccuracy in any of the representations and warranties contained in Section 3, (ii) any breach of any covenant in this Agreement made by the Company, or (iii) any condition set forth in Section 8 or Section 9 not to be satisfied.

 

5.5          Milestones.  The Company shall use reasonable commercial efforts to meet each of the Milestones in accordance with the terms of the Restructuring Support Agreement (unless such Milestone is extended or waived by Oaktree in order to accommodate court schedules or otherwise, it being understood that Oaktree is the only Party entitled to waive or modify the Milestones, subject only to the last sentence of Section 2.3(a)).  The satisfaction of the Milestones shall constitute a condition to Oaktree’s obligations to consummate the transactions contemplated by this Agreement in accordance with Section 9.6.

 

5.6          Use of Proceeds.  The Company shall apply the net proceeds from the sale of the shares of Reorganized Equity as provided in the Plan.

 

5.7           Access to Information.

 

(a)           Subject to applicable law and subject to the execution by the Company and Oaktree or its advisors, and continued effectiveness of an agreement (in form and substance reasonably acceptable to each of the Company and Oaktree) regarding maintaining the confidentiality of any information provided in connection with the transactions contemplated by this Agreement, upon reasonable notice, the Company shall (and shall cause its Subsidiaries to) afford Oaktree and its directors, officers, employees, investment bankers, attorneys, accountants and other advisors or representatives, reasonable access, upon reasonable notice during normal business hours, and at other reasonable times, throughout the period prior to the Effective Date, to its and its Subsidiaries’ employees, properties, books, contracts, records, lenders and advisors and, during such period, the Company shall (and shall cause its Subsidiaries to) furnish promptly to Oaktree and its advisors all information concerning its business, properties and personnel as may reasonably be requested by Oaktree, including, for the avoidance of doubt, the same information and material shared with the lenders in connection with the DIP Credit Agreement; provided, however, that if at any time one or more advisors of Oaktree is party to an effective confidentiality agreement contemplated by this Section 5.7(a) and Oaktree is not party to such an effective confidentiality agreement, then the Company shall only be required to provide such advisor(s) with access to information pursuant to this Section 5.7(a) in lieu of any other party listed above; provided, further, that (except as expressly provided for in any effective confidentiality agreement contemplated by this Section 5.7(a)), the Company or its representatives may designate certain information (other than any Disclosure Information) to be provided by the Company in accordance with the terms of this Agreement as “professional eyes only” in its sole discretion, in which case such information will only be provided by the Company or the Company’s representatives to Oaktree’s financial and legal advisors on the condition that such financial and legal advisors do not share any such information designated as “professional eyes only” with Oaktree or any of its other representatives. Nothing in this Section 5.7 shall require the Company to deliver to Oaktree any information or materials in connection with an Alternative Transaction.  All such information and materials regarding an Alternative Transaction shall be governed by Section 7.4 and not this Section 5.7.

 

  

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(b)           Notwithstanding anything to the contrary herein, the Company shall not be required to deliver to Oaktree any information or materials that are (i) subject to the attorney-client privilege or other similar privilege, absent entry into a common interest, joint defense or similar agreement in form and substance reasonably acceptable to the Company and any parties to such agreement, or (ii) confidential information of a third party, the disclosure of which is restricted by a confidentiality agreement between any GMR Party and such third-party.

 

(c)           The Parties agree and acknowledge that the receipt of any confidential information in accordance with the terms of this Agreement is not a violation of any existing agreement between the Parties not to receive non-public information, including pursuant to (x) the Oaktree Facility and (y) the Investment Agreement, dated as of March 29, 2011, as amended, between OCM Marine Investments and the Company.

 

5.8          Amendments to Organizational Documents.  On or prior to the Effective Date, the Company shall, and shall cause its Subsidiaries to, amend, restate or issue, as the case may be, their certificates of incorporation, bylaws and any other required organizational documents, including to give effect to the Participation Offering, if any, and the terms and governance rights set forth in the Plan and the Securityholders Agreement and Registration Agreement, in each case, as reasonably determined by Oaktree.

 

5.9          Existing Equity.  On the Effective Date and effective as of immediately prior to the issuance of the Oaktree Shares and Participation Offering Shares, if any, and in accordance with the Plan, the Company shall cancel and extinguish all equity interests in the Company existing as of such time (including any options, warrants, rights to acquire equity interests or other securities exercisable for, or convertible into, equity interests in the Company), and the Company shall have provided documentation satisfactory to Oaktree evidencing the foregoing.

 

5.10        Securityholders Agreement; Registration Agreement.  On the Effective Date, in the event a Participation Offering is conducted and the participants thereunder acquire Reorganized Equity and the Participation Offering Term Sheet contemplates the execution of a Securityholders Agreement and a Registration Agreement, the Company shall execute and deliver a Securityholders Agreement and a Registration Agreement, in each case, consistent with the Participation Offering Term Sheet and otherwise in form and substance reasonably acceptable to Oaktree.

 

5.11       Bonuses and Severance.  During the Chapter 11 Case and except as may be agreed to in the Plan, the Company shall not, and shall cause its Subsidiaries not to, propose in a filing with the Bankruptcy Court, establish or administer any bonus or severance plan or make any payments thereunder without Oaktree’s prior written consent; provided, however, that the Company may pay bonuses and severance to non-insider employees without the prior written consent of Oaktree up to an aggregate amount of $300,000.  Notwithstanding the foregoing, the Company shall be permitted to establish and administer the Bonus Pool, provided that the allocation of amounts payable from the Bonus Pool to the recipients thereof shall be subject to the prior written consent of Oaktree (which consent shall not be unreasonably withheld), it being understood that such amounts will not, if paid, apply to the amount set forth in the immediately preceding sentence.

 

  

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5.12        Paydown of Prepetition Senior Facilities.  On the Effective Date, the Company shall, in accordance with the Plan, repay, in cash, $75,000,000 of the amounts outstanding under the Prepetition Senior Facilities using the cash proceeds received in connection with the sale of Purchased Shares.

 

5.13       DIP Budget.  Following entry of the Approval Order, the Company hereby agrees that it shall not, and shall cause its Subsidiaries not to, modify, or otherwise propose or support any modifications to the DIP Budget, without the prior written consent of Oaktree (which consent shall not be unreasonably withheld); provided, that Oaktree shall be deemed to have provided its consent pursuant to this Section 5.13 if Oaktree or its advisors do not notify the Company otherwise within three (3) days of receipt of such budget from the Company.

5.14        Use of Property; Rejection and Assumption of Contracts.  Following entry of the Approval Order, the Company hereby agrees that it shall not, and shall cause its Subsidiaries not to, without Oaktree’s prior written consent (not to be unreasonably withheld) (i) file any pleadings or motions with the Bankruptcy Court seeking to use any of the material properties or assets of the GMR Parties outside the ordinary course of business or (ii) reject or assume any material contract, agreement, lease or other arrangement to which any GMR Party is a party.  Notwithstanding the foregoing and for the avoidance of doubt, the Company hereby agrees and acknowledges that Oaktree will have any and all rights with respect to the assumption or rejection of contracts and unexpired leases under the Plan that are set forth in the Plan Term Sheet.

 

5.15        Exit Facilities.  The Company shall promptly provide copies of all material drafts and final execution copies of all documents, instruments, agreements and other materials to be entered into, delivered or otherwise used in connection with the 2011 Exit Facility and the 2010 Exit Facility for review and comment by Oaktree.

 

5.16        Fiduciary Obligations.  Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require the Company or any director or officer of the Company, in such person’s capacity as a director or officer of the Company, to take any action, or to refrain from taking any action, in each case, which is inconsistent with its fiduciary obligations under applicable law; provided, however, that Section 11.3(c), and not this Section 5.16, shall govern any determination by the Company’s board of directors to terminate this Agreement on the basis of fiduciary obligations or duties; provided, further that any action or inaction taken by the Company (other than in connection with Section 5.7 or Section 7.4) pursuant to this Section 5.16 that would, in the absence of this Section 5.16, constitute a breach of this Agreement, shall not impair any right of Oaktree to terminate this Agreement in accordance with Section 11.

 

Section 6.            Covenants of Oaktree.

 

6.1          Oaktree Pre-Confirmation Hearing Representation.  On a date to be agreed by the Company and Oaktree prior to the commencement of the hearing on confirmation of the Plan, Oaktree shall inform the Company, assuming the Company’s compliance with Section 5.4 from and after the date of this Agreement, whether, to the Actual Knowledge of Oaktree, Oaktree believes there has been a Material Adverse Effect on or before the date on which Oaktree provides such confirmation; provided that no such confirmation by Oaktree shall modify this Agreement for any purpose, including (a) for the purpose of determining whether the condition set forth in Section 9.8 has been satisfied or (b) with respect to any of the rights of Oaktree under Section 11.2.

 

  

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6.2          Limitations on Transfer.  Oaktree shall not sell, transfer, assign, pledge, grant a participation interest in, or otherwise dispose of, directly or indirectly, its right, title, or interest in respect of Oaktree’s interest in the Oaktree Facility in whole or in part to a transferee that also participates in the Participation Offering hereunder, unless such transferee complies with Section 6 of the Restructuring Support Agreement.

 

6.3          Confidentiality Agreement. In the event Oaktree and the Company execute a confidentiality agreement as contemplated by Section 5.7 of this Agreement, Oaktree shall comply with the requirements of such agreement, and any material and intentional breach of the terms of such agreement by Oaktree shall be deemed to be a breach of this Agreement.  For purposes of this Section 6.3, an intentional material breach by Oaktree means a breach solely by Oaktree or its employees and does not include any breach by any non-employees of Oaktree.

 

6.4          Oaktree Organization.  Except with respect to the limited partnership units of OCM Marine Holdings TP, L.P. to be held by the Company, the Oaktree Funds shall continue to hold all of the outstanding equity interests of OCM Marine Holdings TP, L.P., and OCM Marine Investments shall remain a wholly-owned subsidiary of OCM Marine Holdings TP, L.P.

 

Section 7.            Additional Covenants.  The Company and Oaktree hereby agree to do the following:

 

7.1          Legends.  The Parties agree that, to the extent that section 1145 of the Bankruptcy Code is not applicable to the issuance thereof, the certificates evidencing the Purchased Shares to be purchased hereunder will bear the following legend:

 

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS (“STATE ACTS”) AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR STATE ACTS COVERING SUCH SECURITIES OR THE SECURITIES ARE SOLD AND TRANSFERRED IN A TRANSACTION THAT IS EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.”

 

7.2          Further Assurances.  From time to time after the date of this Agreement, each Party shall execute, acknowledge and deliver to each other Party such other instruments, documents and certificates, and shall take such other actions as the other Party may reasonably request, in order to consummate the transactions contemplated by this Agreement, the Restructuring Support Agreement and the Plan.

 

  

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7.3          Cooperation.  From the date of this Agreement until the earlier of the Effective Date or such time as this Agreement is terminated in accordance with Section 11, Oaktree shall use its commercially reasonable efforts to cause the conditions set forth in Section 8 and Section 10 to be satisfied and Oaktree shall reasonably cooperate in good faith with the Company in the preparation and completion of the Plan and in furtherance of the transactions thereunder.  Subject to Section 7.4, from the date of this Agreement until the earlier of the Effective Date or such time as this Agreement is terminated in accordance with Section 11, the Company shall diligently prosecute confirmation of the Plan and shall use its commercially reasonable efforts to cause the conditions set forth in Section 8 and Section 9 to be satisfied.

 

7.4          Solicitation of Alternative Transaction.  Notwithstanding anything herein to the contrary, Oaktree acknowledges and agrees that, following the commencement of the Chapter 11 Case and up to the beginning of the hearing regarding confirmation of the Plan, the Company may solicit, initiate, respond to, evaluate, discuss, negotiate, encourage and seek proposals concerning an Alternative Transaction, and no GMR Party shall have any liability to Oaktree or any of its Affiliates under or relating to this Agreement by virtue of soliciting, initiating, responding to, evaluating, discussing, negotiating, encouraging and seeking proposals concerning an Alternative Transaction; provided, that nothing in this Section 7.4 shall abrogate, limit or otherwise modify the Company’s obligations to pay the Expense Reimbursement and the Break-Up Fee in accordance with Section 2.2.  Subject to the execution by the Company and Oaktree (or its advisors), and the continued effectiveness, of a confidentiality agreement as contemplated by Section 5.7 of this Agreement, the Company hereby agrees to provide to Oaktree periodic reports concerning the status of discussions and negotiations concerning an Alternative Transaction (if any); provided, however, that if at any time one or more advisors of Oaktree is party to an effective confidentiality agreement contemplated by Section 5.7 and Oaktree is not party to such an effective confidentiality agreement, then the Company shall only be required to provide such advisor(s) with the information provided pursuant to this Section 7.4 in lieu of any other party listed above.

 

Section 8.            Conditions to the Parties’ Obligations.  The obligations of each of Oaktree and the Company to consummate the Closing are subject to the satisfaction or waiver in writing of each of the following conditions as of the Effective Date:

 

8.1          Approval Order.  The Bankruptcy Court shall have entered the Approval Order, such order shall be final and non-appealable, shall not have been appealed within fourteen (14) days of entry or, if such order is appealed, shall not have been stayed pending appeal, and there shall not have been entered by any court of competent jurisdiction any reversal, modification or vacatur, in whole or in part, of the Approval Order;

 

8.2          Confirmation Order.  An order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code (the “Confirmation Order”) that is consistent in all material respects with the Plan and otherwise reasonably acceptable to Oaktree shall have been entered by the Bankruptcy Court, such order shall be final and non-appealable, shall not have been appealed within fourteen (14) days of entry or, if such order is appealed, shall not have been stayed pending appeal, and there shall not have been entered by any court of competent jurisdiction any reversal, modification or vacatur, in whole or in part, of the Approval Order;

 

  

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8.3          Disclosure Statement.  The Disclosure Statement (including any modifications and supplements thereto), as approved by the Bankruptcy Court, shall be consistent in all material respects with the Plan and otherwise in form and substance reasonably acceptable to Oaktree;

 

8.4          No Restraint.  No judgment, injunction, decree or other legal restraint shall prohibit the consummation of the Plan, the Participation Offering (if any), the issuance or sale of the Purchased Shares, or any other transactions contemplated by this Agreement; and

 

8.5          HSR Act; Regulatory Approvals.  If the purchase of Purchased Shares by any Person pursuant to this Agreement is subject to the terms of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the laws of any relevant foreign jurisdiction, the applicable waiting period shall have expired or been terminated thereunder with respect to such purchase.

 

Section 9.            Conditions to Oaktree’s Obligations.  The obligations of Oaktree to consummate the Closing are subject to the satisfaction (or the waiver in writing by Oaktree in its sole discretion) of each of the following conditions as of the Effective Date:

 

9.1          [Intentionally Omitted].

 

9.2          Plan.  The Plan (including the treatment and classification of the Claims of Oaktree and any Affiliates of any Oaktree Fund against the Company), including any modifications and supplements thereto, shall be consistent in all material respects with the Plan Term Sheet and otherwise in form and substance reasonably acceptable to Oaktree, and the conditions to confirmation and the conditions to the Effective Date of the Plan shall have been satisfied or waived in accordance with the Plan and all transactions contemplated by the Plan shall have been consummated or will be consummated simultaneously with the Closing;

 

9.3          Required Consents.  All governmental and third party notifications, filings, consents, waivers and approvals necessary for the consummation of the transactions contemplated by this Agreement shall have been obtained;

 

9.4          Commitment Fee; Expense Reimbursement.  The Company shall have (i) delivered to Oaktree the Commitment Fee and (ii) paid to Oaktree the Expense Reimbursement, in each case, pursuant to the terms of Section 2.2;

 

9.5          [Intentionally Omitted];

 

 

9.6          Milestones.  The Company shall have met all of the Milestones in accordance with the terms of the Restructuring Support Agreement (as any such Milestone may be extended or waived by Oaktree in its sole discretion in order to accommodate court schedules or otherwise  (subject only to the last sentence of Section 2.3(a)));

 

  

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9.7          No Default.  No Event of Default (as defined in the DIP Credit Agreement) shall have occurred and be continuing under the DIP Credit Agreement;

 

9.8          Material Adverse Effect.  Since the date of this Agreement, a Material Adverse Effect shall not have occurred;

 

9.9          Execution of Documents.  All documents arising from or related to the restructuring of the Company in accordance with the Plan (including the Securityholders Agreement and the Registration Agreement, as applicable, and each of the 2011 Exit Facility and the 2010 Exit Facility), which in each case shall be consistent in all material respects with the Plan Term Sheet or otherwise acceptable to Oaktree in accordance with this Agreement (and, for the avoidance of doubt, the references in Exhibit 1 to the Plan Term Sheet to terms that are to be “mutually agreed” means the mutual agreement of the Company, Oaktree and the lenders under the Prepetition Senior Facilities);

 

9.10        Cash.  As of the Closing Date, and after giving effect to (i) all of the Restructuring Transactions contemplated by the Plan, including the payment of the Equity Investment Amount and the consummation of the Participation Offering, if any, and (ii) all payments due under the Plan (including (x) all payments made on or before the Closing Date pursuant to the terms of the Plan in respect of all outstanding professional fees, and including all other Expense Reimbursement payments payable hereunder and (y) all cure costs payable before, at or after the Closing Date) and the payment obligations set forth in Section Paydown of Prepetition Senior Facilities, the GMR Parties shall have Cash in an amount no less than $20 million, plus the amount by which the aggregate of the accounts payable (as determined in accordance with GAAP) plus all accrued expenses (as determined in accordance with GAAP, net of accrued expenses that are not reasonably expected to become accounts payable, as determined in a manner consistent with the Company’s past practices), in each case, of the GMR Parties, exceeds $10 million (the “Accounts Payable Threshold”) as of the Closing Date; provided, however, that in the event that the Effective Date does not occur on or before April 30, 2012, the Accounts Payable Threshold will be increased to $12 million;

 

9.11        Valid Issuance.  (a) The Oaktree Shares issued and delivered to Oaktree hereunder (and in accordance with the Plan) shall be, upon issuance, duly authorized, validly issued, fully paid and non-assessable, and will be free and clear of all taxes, liens (other than liens created or otherwise imposed by or on Oaktree), preemptive rights (other than those preemptive rights granted to Oaktree and its Affiliates pursuant to the Investment Agreement, dated as of March 29, 2011, as amended, between OCM Marine Investments and the Company) and encumbrances (other than encumbrances created or otherwise imposed by or on Oaktree and encumbrances imposed by the Securities Act) with respect to the issue thereof, and (b) the Commitment Fee Warrant Shares underlying the Commitment Fee will be, upon issuance, duly authorized, and, when issued and delivered by the Company in accordance with the Plan, in the manner provided for in the Commitment Fee and against payment of the purchase price set forth therein, validly issued, fully paid and non-assessable, and will be free and clear of all taxes, liens (other than liens created or otherwise imposed by or on Oaktree), preemptive rights (other than those preemptive rights granted to Oaktree and its Affiliates pursuant to the Investment Agreement, dated as of March 29, 2011, as amended, between OCM Marine Investments and the Company) and encumbrances (other than encumbrances created or otherwise imposed by or on Oaktree and encumbrances imposed by the Securities Act) with respect to the issue thereof;

 

  

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9.12        Other Conditions.  (a) The Company shall have performed, in all material respects, its obligations hereunder required to be performed by it on or prior to the Effective Date, (b) the representations and warranties of the Company in this Agreement that are not qualified as to materiality or Material Adverse Effect shall be true and correct in all material respects on the date hereof and on the Effective Date as if made at and as of the Effective Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct in all material respects as of such date) and (c) the representations and warranties that are qualified as to materiality or Material Adverse Effect shall be true and correct in all respects, on the date hereof and on the Effective Date as if made at and as of the Effective Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct in all respects as of such date).  In the event that, to the Actual Knowledge of Oaktree on the date hereof, there is a breach of the representation set forth in Section 3.10(y), such breach shall not be a basis for (i) the assertion by Oaktree of a failure of a closing condition set forth herein to be satisfied, (ii) Oaktree asserting a claim for any legal remedy in equity or at law, and (iii) Oaktree’s termination of this Agreement;

 

9.13        No Breach of Restructuring Support Agreement.  Neither the Company nor the Supporting Credit Facility Lenders shall be in material breach of any of their respective obligations under the Restructuring Support Agreement;

 

9.14        Plan Indemnity.  The Plan shall provide Oaktree, solely in its capacity as the Plan Sponsor (as defined in the Plan Term Sheet), with an indemnity by the Company for any losses incurred by Oaktree (together with its Affiliates, and the equityholders, partners, directors, officers, employees, agents, representatives, successors and assigns of each of the foregoing) in its capacity as Plan Sponsor (subject to customary carve-outs) that is reasonably acceptable to Oaktree; and

 

9.15        Officers’ Certificate. The Company shall have delivered to Oaktree a certificate of the Chief Executive Officer and Chief Financial Officer of the Company, dated as of the Effective Date, (i) attaching a certified copy of resolutions duly adopted by the Board of Directors of the Company authorizing and approving its execution, delivery and performance of this Agreement, the Plan and the Restructuring Support Agreement and the transactions contemplated thereby, which resolutions remain in full force and effect as of the Effective Date, and (ii) certifying satisfaction of the conditions set forth in this Section 9.

 

Section 10.          Conditions to the Company’s Obligations.  The obligations of the Company hereunder are subject to the satisfaction (or the waiver in writing by the Company in its sole discretion) of the following conditions as of the Effective Date:

 

  

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10.1        Required Consents.  All governmental notifications, filings, consents, waivers and approvals necessary for the consummation of the transactions contemplated by this Agreement shall have been obtained; and

 

10.2        Other Conditions.  (a) Oaktree shall have performed, in all material respects, its obligations hereunder required to be performed by it on or prior to the Effective Date, (b) the representations and warranties of Oaktree in this Agreement that are not qualified as to materiality or material adverse effect shall be true and correct in all material respects on the date hereof and on the Effective Date as if made at and as of the Effective Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct in all material respects as of such date) and (c) the representations and warranties that are qualified as to materiality or material adverse effect shall be true and correct in all respects, on the date hereof and on the Effective Date as if made at and as of the Effective Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct in all respects as of such date).

 

10.3        Exit Facilities and Treatment of Supporting Oaktree Lenders’ Claims.  Each of the 2011 Exit Facility and the 2010 Exit Facility shall have been executed and delivered by the parties thereto (other than the Company) and all of the Supporting Oaktree Lenders’ claims under the Oaktree Facility shall have received the consideration required to be provided in satisfaction of such claims pursuant to the Plan.

 

Section 11.          Termination.

 

11.1        Termination by Either Party.  Each Party shall have the right, but not the obligation, to terminate this Agreement by notice to the other Party:

 

(a)           if Oaktree and the Company agree to terminate this Agreement by mutual written consent;

 

(b)           if the lenders under the Prepetition Senior Facilities (or a steering committee acting on their behalf) have directed the Company to commence an Acceptable Sale Process pursuant to the terms of the DIP Credit Agreement, and such direction has not been withdrawn or otherwise rendered ineffective by the Bankruptcy Court within ten (10) Business Days; or

 

(c)           if there shall be any final non-appealable order entered by a Governmental Authority of competent jurisdiction having valid enforcement authority permanently restraining, prohibiting or enjoining the GMR Parties or Oaktree from consummating the transactions contemplated hereby.

 

11.2        Termination by Oaktree. Oaktree shall have the right, but not the obligation, to terminate this Agreement by notice to the Company:

 

(a)           if the Company has failed to meet any of the Milestones in accordance with the terms of the Restructuring Support Agreement, including, for the avoidance of doubt, entry of the Approval Order on or before December 15, 2011 (unless such Milestone is extended or waived by Oaktree in its sole discretion in order to accommodate court schedules or otherwise, it being understood that, subject only to the last sentence of Section 2.3(a), Oaktree is the only party entitled to modify or waive the Milestones;

 

  

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(b)           if the Definitive Documents (as defined in the Plan Term Sheet) filed by the Company with the Bankruptcy Court include terms that are inconsistent with the Plan Term Sheet in any material respect, unless otherwise reasonably acceptable to Oaktree;

 

(c)           if Company files any motion or other request for relief seeking (A) to voluntarily dismiss the Chapter 11 Case, (B) conversion of the Chapter 11 Case to chapter 7 of the Bankruptcy Code, (C) appointment of a trustee or an examiner with expanded powers pursuant to section 1104 of the Bankruptcy Code in the Chapter 11 Case or (D) to effectuate a plan of reorganization other than the Plan or seek any other relief that, if approved, would render the Plan incapable of consummation on the terms set forth herein;

 

(d)           if any court (including the Bankruptcy Court) declares that any material provision of this Agreement is unenforceable in whole or in part;

 

(e)           if the Bankruptcy Court enters an order (A) dismissing the Chapter 11 Case, (B) converting the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code, (C) appointing a trustee or an examiner with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code in the Chapter 11 Case or (D) the effect of which would render the Plan incapable of consummation on the terms set forth in the Restructuring Support Agreement;

 

(f)           if the Company files any motion, or the Bankruptcy Court enters any order, approving a payment to any party (whether in cash or other property or whether as adequate protection, settlement of a dispute, or otherwise) that would be materially inconsistent with the treatment of such party under this Agreement;

 

(g)           if any Event of Default (as defined in the DIP Credit Agreement) by the Company occurs under the DIP Credit Agreement and such breach is not cured or waived within five (5) Business Days after the occurrence of such event of default;

 

(h)           upon the failure of any of the conditions set forth in Section 8 or Section 9 to be satisfied (except where such failure is the result of Oaktree’s failure to satisfy its obligations under this Agreement), which failure is not cured within seven (7) days following the date of Oaktree’s delivery to the Company of notification thereof;

 

(i)             any material breach by the Company of any of its obligations under this Agreement, and any such breach is not cured or waived within five (5) Business Days after receipt by the Company of written notice thereof from Oaktree;

 

(j)             any court of competent jurisdiction or other competent governmental or regulatory authority shall have issued an order making illegal or otherwise restricting, preventing, or prohibiting the Restructuring (as defined in the Restructuring Support Agreement) in a manner that cannot be reasonably remedied by the Company;

 

  

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(k)           upon the occurrence of a material breach by the Company or the Supporting Credit Facility Lenders of any of their obligations under the Restructuring Support Agreement, and the failure to cure such breach upon the terms set forth in the Restructuring Support Agreement; or

 

(l)            upon the termination of the Restructuring Support Agreement by Oaktree pursuant to Section 13(c)(viii) thereof.

 

11.3       Termination by the Company.  The Company shall have the right, but not the obligation, to terminate this Agreement by notice to Oaktree:

 

(a)           any material breach by Oaktree of any of its obligations under this Agreement, and any such breach is not cured or waived within five (5) Business Days after receipt by Oaktree of written notice thereof from the Company;

 

(b)           upon the termination of the Restructuring Support Agreement by the Company pursuant to Section 13(a)(i) thereof;

 

(c)           if the Company’s board of directors determines, in good faith and upon the advice of its advisors, in its sole discretion, that continued pursuit of the Plan is inconsistent with its fiduciary duties; or

 

(d)           the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any injunction, judgment, decree, charge, ruling or order preventing consummation of a material portion of the Restructuring.

 

11.4       Termination of the Restructuring Support Agreement. Notwithstanding anything to the contrary herein, this Agreement shall automatically terminate, without further any action by any party, upon the termination of the Restructuring Support Agreement (in accordance with the terms thereof); provided, that exercise of such specific termination right as set forth in the Restructuring Support Agreement is not as a result of the material breach of the Restructuring Support Agreement by one of the Parties, it being understood and agreed that in any case that the Company shall be obligated to pay the Break-Up Fee in accordance with Section 2.2 upon a termination of the Restructuring Support Agreement pursuant to Section 13(a)(ii) thereof; and it being further understood that nothing in this Section 11.4 shall have any effect upon Oaktree’s and the Company’s rights to terminate this Agreement pursuant to Section 11.1, Section 11.2 or Section 11.3.

 

11.5        Effect of Termination.

 

(a)           In the event of termination of this Agreement in accordance with this Section 11, the provisions of this Agreement shall immediately become void and of no further force and effect (other than Section 2.2 (subject to the prior satisfaction of the outstanding obligations under the Prepetition Senior Facilities and the DIP Credit Agreement in full, in cash or other treatment acceptable to the Supporting Credit Facility Lenders), this Section 11, Section 12 and other than in respect of any liability of any Party for any breach of this Agreement prior to such termination, which shall in each case expressly survive any such termination).

 

  

40

  

 

(b)           No termination of this Agreement pursuant to Section 11 shall be effective until written notice thereof is given to the non-terminating party specifying the provision hereof pursuant to which such termination is made.

 

Section 12.          Miscellaneous.

 

12.1        Notices.  All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt, by electronic mail or by facsimile transmission against facsimile confirmation or mailed by prepaid first class certified mail, return receipt requested, or mailed by overnight courier prepaid, to the Parties at the following addresses and facsimile numbers:

If to Oaktree:

 

Oaktree Capital Management, L.P.

333 South Grand Ave., 28th Floor

Los Angeles, California 90071

Facsimile:  (213) 830-6300

Attention:          B. James Ford

Adam Pierce

jford@oaktreecapital.com, apierce@oaktreecapital.com

 

with copies (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

333 South Hope Street

Los Angeles, California 90071

Facsimile: (213) 680-8500

Attention:          Damon R. Fisher and Peter P. Massumi

damon.fisher@kirkland.com, peter.massumi@kirkland.com

 

and

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Facsimile: (212) 446-4900

Attention:          Edward O. Sassower and Brian E. Schartz

edward.sassower@kirkland.com, brian.schartz@kirkland.com

 

  

41

  

 

If to the Company, to:

 

General Maritime Corporation

299 Park Avenue

New York, New York 10171

Facsimile: (212) 763-5607

Attention:         Chief Financial Officer

jeffrey.pribor@generalmaritimecorp.com

 

with copies (which shall not constitute notice) to:

 

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Facsimile:  (212) 715-8000

Attention:         Kenneth H. Eckstein, Douglas H. Mannal and Shari K. Krouner

keckstein@kramerlevin.com, dmannal@kramerlevin.com, skrouner@kramerlevin.com

 

All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section 12.1, by electronic mail to the electronic mail address as provided in this Section 12.1, or by facsimile transmission to the facsimile number as provided in this Section 12.1, be deemed given on the day so delivered, or, if delivered after 5:00 p.m. local time of the recipient or on a day other than a Business Day, then on the next proceeding Business Day, (ii) if delivered by mail in the manner described above to the address as provided in this Section 12.1, be deemed given on the earlier of the third (3rd) Business Day following mailing or upon receipt and (iii) if delivered by overnight courier to the address as provided for in this Section 12.1, be deemed given on the earlier of the first (1st) Business Day following the date sent by such overnight courier or upon receipt, in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 12.1.  Either Party from time to time may change its address, electronic mail address, facsimile number or other information for the purpose of notices to that Party by giving notice specifying such change to the other Party.

 

  

42

  

 

12.2        Assignment.  This Agreement will be binding upon and inure to the benefit of each of the Parties, and neither this Agreement nor any of the rights, interests or obligations hereunder may or will be assigned by any Party without the prior written consent of the other Party; provided that, this Agreement, or Oaktree’s obligations hereunder, may be assigned, delegated or transferred, in whole or in part, by Oaktree to any one or more Persons without the prior written consent of the Company so long as any such assignee assumes the obligations of Oaktree hereunder and agrees in writing to be bound by the terms of this Agreement in the same manner as Oaktree.  Notwithstanding the foregoing, in the event of any such assignment by Oaktree under this Section 12.2 without the prior written consent of the Company, Oaktree shall remain obligated under this Agreement, and this Agreement shall remain fully enforceable against Oaktree.

 

12.3        Entire Agreement.  This Agreement contains the entire agreement among the Company and Oaktree with respect to the transactions contemplated by this Agreement and supersedes all prior agreements and representations, written or oral, with respect thereto (including that commitment letter delivered by OCM Marine Investments, prior to the date hereof which is hereby terminated and shall be deemed to be of no further force or effect, it being understood that all other terms and conditions set forth in the Restructuring Support Agreement shall remain in full force and effect).

 

12.4        Interpretation.  Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (d) the term “Section” refers to the specified Section of this Agreement and (e) the word “including” means “including without limitation”.

 

12.5       Waivers and Amendments.  This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only by a written instrument signed by the Company and Oaktree.  No delay on the part of any Party in exercising any right, power or privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any Party of any right, power or privilege pursuant to this Agreement, or any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement.  The rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any rights or remedies which any Party otherwise may have at law or in equity.

 

12.6        Governing Law; Jurisdiction; Venue; Process.  THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.  EACH PARTY HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

  

43

  

 

12.7        Waiver of Trial by Jury.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

 

12.8        Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  All such counterparts will be deemed an original, will be construed together and will constitute one and the same instrument.

 

12.9        Headings.  The headings in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement.

 

12.10      Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other circumstance and of the remaining provisions contained herein will not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties hereto will be enforceable to the fullest extent permitted by law.

 

12.11      Specific Performance.  The Company and Oaktree acknowledge and agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, and (b) remedies at law would not be adequate to compensate the non-breaching party. Accordingly, the Company and Oaktree agree that each of them shall have the right, in addition to any other rights and remedies existing its favor, to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce its rights hereunder not only by an action or actions for damages but also by an action or actions for specific performance, injunctive and/or other equitable relief. The right to equitable relief, including specific performance or injunctive relief, shall exist notwithstanding, and shall not be limited by, any other provision of this Agreement.  Each of the Company and Oaktree hereby waives any defense that a remedy at law is adequate and any requirement to post bond or other security in connection with actions instituted for injunctive relief, specific performance or other equitable remedies.  Notwithstanding the foregoing, if this Agreement is terminated by the Company in accordance with Section 11.3(c), and (i) for so long as no material breach of this Agreement by the Company is outstanding as of the time the Company exercises such termination right, (ii) the Company subsequently consummates an Alternative Transaction, and (iii) the Company pays the Break-Up Fee and Expense Reimbursement to Oaktree in accordance with Section 2.2, then Oaktree shall have no right of specific performance under this Section 12.11 or other claim for breach of this Agreement.

 

  

44

  

 

12.12      Limitation on Damages.  Notwithstanding anything to the contrary contained in this Agreement, payment of any and all monetary remedies to Oaktree (including equitable remedies that involve monetary damage, such as restitution of disgorgement, other than specific performance to enforce any payment or performance due hereunder) in respect of losses or damages of any kind, including, but not limited to, actual, special, consequential, incidental and punitive damages, in connection with any breach by the Company of a representation or warranty of the Company set forth in this Agreement or non-performance by the Company, partial or total, of any covenant or agreement made by the Company and set forth in this Agreement shall be limited to an amount equal to $12,500,000; provided, however, that this Section 12.12 shall not be applicable to any material and intentional breach by the Company of any representation or warranty of the Company set forth in this Agreement or intentional non-performance by the Company, partial or total, of any covenant or agreement made by the Company and set forth in this Agreement.

 

12.13      Survival.  The representations, warranties, covenants, and agreements made herein shall survive the execution and delivery of this Agreement until the Closing and, for the avoidance of doubt, shall not survive the Closing.  The representations, warranties, covenants, and agreements made herein shall not be affected by any examination made for or on behalf of any of the Parties or the knowledge of any of their officers, directors, securityholders, employees, agents or representative or the acceptance of any certificate or opinion; provided, however, this sentence shall not modify any representations or warranties that are made to the “knowledge”, “Knowledge” or “Actual Knowledge” of any person(s) or entity(ies).  All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument, unless otherwise expressly indicated therein.

 

12.14     Schedule Updates.  From and after the date hereof but in any event not later than the Closing Date, the Company shall supplement the Schedules it delivers hereunder, and deliver the same to Oaktree, with respect to any matter arising between the date hereof and the Closing Date that would be required to be disclosed on the Schedules if such representation or warranty were being made on and as of the Closing Date (except where such representation or warranty speaks by its terms as of a different date) (an “Update”).  Any Update provided under this Section 12.14 or notification provided under Section 5.4 shall not correct or modify any representation, warranty or disclosure made as of the date hereof or as of the Closing Date or otherwise modify this Agreement for any purpose, including (i) for the purpose of determining whether the condition set forth in Section 9.12 has been satisfied or (ii)  any of the rights of Oaktree under Section 11.2; provided, however, that the Company may update the Schedules without the prior consent of Oaktree only as follows:

 

(a)           if the Company enters into a time charter contract, agreement or arrangement with a duration of less than six (6) months after the date hereof without the consent of Oaktree, the Company may update Schedule 3.16 to include such time charter contracts, agreements or arrangements;

 

  

45

  

 

(b)           if the Company enters into, materially modifies or terminates any Material Contract with the prior written consent of Oaktree (or if such consent is deemed to have been given in accordance with Section 5.2), the Company may update Schedule 3.16 to reflect such entry into, material modification of or termination of such Material Contract changes; and

 

(c)           if the Company takes any specific action, or forbears from taking any specific action, after obtaining the express prior written consent of Oaktree (it being understood that Oaktree shall not be deemed, solely for the purpose of this Section 12.14(c), to have consented to any specific action or forbearance from the taking of any specific action unless the request delivered by the Company to Oaktree in writing specifically requests consent to such specific action or forbearance), the Company may update the Schedules to reflect the fact of such specific action or the fact of such specific forbearance from action (it being understood that the Company may not update the Schedules with respect to any matter arising as a consequence of such action).

 

Notwithstanding anything in this Section 12.14 to the contrary, in the event that the Company is permitted to make any update pursuant to clauses (a), (b) or (c) above (a “Permitted Update”), then such Permitted Update shall modify this Agreement for the purposes of determining whether (x) the closing condition set forth in Section 9.12 has been satisfied and (y) Oaktree’s rights under Section 11.2 are applicable, and such Permitted Update shall not be a basis for (A) the assertion by Oaktree of a failure of a closing condition set forth herein to be satisfied, (B) Oaktree asserting a claim for any legal remedy in equity or at law, or (C) Oaktree’s termination of this Agreement.  For the avoidance of doubt, the action described in the written request by the Company to Oaktree must be specific and, for example, shall not include actions that are described in the DIP Budget unless the Company has separately and specifically requested consent with respect to such action.

 

[Signature Pages Follow]

 

  

46

  

 

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above.

 

 

	 	GENERAL MARITIME CORPORATION	 
	 	 	 	 
	
 

	By:/s/ Jeffrey D. Pribor
	 	Name:  Jeffrey D. Pribor
	 	Title: Executive Vice President, Chief Financial Officer
	 	 	 	 

 

	 	OAKTREE PRINCIPAL FUND V, L.P.	 
	 	 	 
	 	By:       Oaktree Principal Fund V GP, L.P.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree Principal Fund V GP Ltd.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree Capital Management, L.P.	 
	 	Its:        Director	 

 

	 	 	 	 
	
 

	
By: 

	/s/ B. James Ford	 
	 	Name: B. James Ford
	 	Title:  Managing Director

 

	
 

	
By: 

	/s/Adam C. Pierce	 
	 	Name: Adam C. Pierce
	 	Title: Senior Vice President
	 	 	 	 

 

[Signature Page to Equity Purchase Agreement]

 

  

  

  

 

	 	OAKTREE PRINCIPAL FUND V (PARALLEL), L.P.	 
	 	 	 
	 	By:       Oaktree Principal Fund V GP, L.P.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree Principal Fund V GP Ltd.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree Capital Management, L.P.	 
	 	Its:        Director	 

 

	 	 	 	 
	
 

	
By: 

	/s/ B. James Ford	 
	 	Name: B. James Ford
	 	Title:  Managing Director

 

	
 

	
By: 

	/s/Adam C. Pierce	 
	 	Name: Adam C. Pierce
	 	Title: Senior Vice President
	 	 	 	 

 

 

	 	OAKTREE FF INVESTMENT FUND, L.P. - CLASS A	 
	 	 	 
	 	By:       Oaktree FF Investment Fund GP, L.P.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree FF Investment Fund GP Ltd.	 
	 	Its:        General Partner	 
	 	 	 
	 	By:       Oaktree Capital Management, L.P.	 
	 	Its:        Director	 

 

	 	 	 	 
	
 

	
By: 

	/s/ B. James Ford	 
	 	Name: B. James Ford
	 	Title:  Managing Director

 

	
 

	
By: 

	/s/Adam C. Pierce	 
	 	Name: Adam C. Pierce
	 	Title: Senior Vice President
	 	 	 

 

[Signature Page to Equity Purchase Agreement]

 

  

  

  

 

	 	
OCM ASIA PRINCIPAL OPPORTUNITIES FUND, L.P.

	 
	 	 	 
	 	By:   OCM Asia Principal Opportunities Fund GP, L.P.	 
	 	Its:    General Partner	 
	 	 	 
	 	By:   OCM Asia Principal Opportunities Fund GP Ltd.	 
	 	Its:    General Partner	 
	 	 	 
	 	By:   Oaktree Capital Management, L.P.	 
	 	Its:   Director	 

 

	 	 	 	 
	
 

	
By: 

	/s/ B. James Ford	 
	 	Name: B. James Ford
	 	Title:  Managing Director

 

	
 

	
By: 

	/s/Adam C. Pierce	 
	 	Name: Adam C. Pierce
	 	Title: Senior Vice Presidentex10_1.htm

EXHIBIT 10.1

 

COLLECTIVE BARGAINING AGREEMENT

 

By and Between

 

AIR METHODS CORPORATION

 

And

 

OFFICE AND PROFESSIONAL EMPLOYEES

INTERNATIONAL UNION, LOCAL 109

 

Effective Date: December 15, 2011

Amendable Date:  January 1, 2014

  

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TABLE OF CONTENTS

 

	 	 	Page No.
	 	 	 
	ARTICLE 1	Purpose of Agreement 	1
	 	 	 
	ARTICLE 2   	Recognition      	2
	 	 	 
	ARTICLE 3 	Agency Shop & Check Off  	3
	 	 	 
	ARTICLE 4   	Management Rights	5
	 	 	 
	ARTICLE 5   	Non-Discrimination	5
	 	 	 
	ARTICLE 6   	Grievance Procedure	6
	 	 	 
	ARTICLE 7 	System Board of Adjustment	8
	 	 	 
	ARTICLE 8   	No Strike / No Lockout	10
	 	 	 
	ARTICLE 9 	Discipline and Discharge	11
	 	 	 
	ARTICLE 10	Union Representation	12
	 	 	 
	ARTICLE 11	Seniority	13
	 	 	 
	ARTICLE 12	Seniority List	14
	 	 	 
	ARTICLE 13	Reduction in Workforce	15
	 	 	 
	ARTICLE 14	Job Posting and Bidding	17
	 	 	 
	ARTICLE 15	Training	18
	 	 	 
	ARTICLE 16	Schedules of Service	20
	 	 	 
	ARTICLE 17	Workover	22
	 	 	 
	ARTICLE 18	Pilot Status	23
	 	 	 
	ARTICLE 19 	Pilot Classifications	24
	 	 	 
	ARTICLE 20 	Fees & Physical Exams	25

 

  

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	ARTICLE 21 	Moving Expenses	26
	 	 	 
	ARTICLE 22 	Travel Pay	27
	 	 	 
	ARTICLE 23  	Leaves of Absence	28
	 	 	 
	ARTICLE 24  	On-the-Job Injury	31
	 	 	 
	ARTICLE 25	Holidays	32
	 	 	 
	ARTICLE 26   	Sick Leave	32
	 	 	 
	ARTICLE 27	Vacation	33
	 	 	 
	ARTICLE 28	Health Insurance	34
	 	 	 
	ARTICLE 29 	401(k) Plan	35
	 	 	 
	ARTICLE 30	Jury Duty	36
	 	 	 
	ARTICLE 31	Bereavement Leave	36
	 	 	 
	ARTICLE 32	Severance Pay	37
	 	 	 
	ARTICLE 33	Bulletin Boards	38
	 	 	 
	ARTICLE 34	General and Miscellaneous	38
	 	 	 
	ARTICLE 35	Equipment and Facilities	41
	 	 	 
	ARTICLE 36	Productive Work Environment	42
	 	 	 
	ARTICLE 37	Savings Clause	42
	 	 	 
	ARTICLE 38	Duration	43
	 	 	 
	APPENDIX A 	Base Pay, Methodology for Determining Where a Pilot Initially Fits in the Scale, Base Assignment, ACCRA Geographic Differential Pay, Initial Training, Relief Pilots, Supplemental Pay, Definitions	 
	 	 	 
	APPENDIX B   	Base ACCRA Ratings	 

 

  

iii

  

 

PARTIES TO AGREEMENT

This Agreement is entered into between Air Methods Corporation, hereinafter called the “Company” and the Office and Professional Employees International Union, and its Local 109, hereinafter jointly called the “Union” or the “OPEIU.”

 

ARTICLE 1

Purpose of Agreement

Section 1.1

The purpose of this Agreement is, in the mutual interest of the Company and its Pilots, to provide for the operation of the services of the Company under methods that will further, to the fullest extent possible, the safety of air transportation and the efficiency of operation.

Section 1.2

No Pilot covered by this Agreement will be interfered with, restrained, coerced or discriminated against by the Company or the Union, its officers, or its agents because of membership or non-membership in the Union, or any lawful activity under the Railway Labor Act not in violation of this Agreement.

Section 1.3

It is understood, whenever in this Agreement, Pilots or jobs are referred to in the male gender, it shall be recognized as referring to both male and female Pilots.

Section 1.4

This Agreement sets forth the entire understanding and agreement of the parties and may not be modified in any respect except by writing subscribed to by the parties.  This Agreement supersedes all previous agreements, commitments, or practices, oral or written, between the Company and the Union and/or the Pilots, and expresses all of the obligations of and restrictions imposed upon each of the respective parties during its term.  The waiver of any provision of this Agreement or any breach of this Agreement by either party during the term of the Agreement shall not constitute a precedent for the future waiver of any breach or provision.  Nothing in this Agreement shall prohibit the parties from bargaining on any issue they desire if both parties mutually agree to do so during the term of this Agreement.

Section 1.5

This document, together with all exhibits, memoranda of understanding, letters of agreement, and letters of interpretation incorporates the complete agreement between the parties on all issues specifically addressed herein.

Section 1.6

The parties agree that any past practices established prior to the date of this Agreement shall not create any contractual or legal obligation to continue such practices following the effective date of this Agreement.

  

1

  

 

ARTICLE 2

Recognition

Section 2.1

This Agreement is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended, by and between Air Methods Corporation (the “Company”) and the Office and Professional Employees International Union (the “Union”) representing employees composed of the craft and class of Flight Deck Crew Members (hereafter called “Pilots”) as certified by the National Mediation Board in Case Number R-6949, September 16, 2003.

The Company hereby recognizes the Union as the sole collective bargaining agent and authorized representative for those employees described in Section 1 above, to represent them and, on their behalf, to negotiate and conclude agreements with the Company as to hours of work, wages, and other conditions of employment in accordance with the provisions of the Railway Labor Act, as amended.  This Collective Bargaining Agreement and any formal letters of agreement between the Company and the Union may be collectively referred to as the “Agreement.”

Section 2.2

This Agreement covers all emergency medical revenue flying performed by the Company with Pilots on its payroll.  All emergency medical revenue flying covered by this Agreement shall be performed by Pilots whose names appear on the Air Methods Corporation Pilot’s System Seniority List.  If Air Methods Corporation establishes a non-emergency medical service, OPEIU may process representation rights for the Pilots of that service in accordance with applicable regulations.  Air Methods Corporation will not oppose OPEIU’s petitioner status in those proceedings.

Section 2.3

In the event the Company sells all or part of its helicopter operations to another carrier during the term of this Agreement, in advance of such sale, the Company shall give notice of the existence of this Agreement to such Successor Carrier and shall make reasonable effort to persuade such Successor Carrier to agree to the continuation of the terms set forth in this Agreement.  In the event the Successor Carrier does not adopt the terms of this Agreement, the Company shall not be liable for any differences (in hours, wages, benefits, or all other working conditions) after the effective date of the change of ownership.

Section 2.4

In the event the Company acquires all or substantially all of the assets or equity of another carrier, or another air carrier acquires all or substantially all of the assets or equity of the Company, the Company will meet promptly with the Union to discuss the effects of the transaction on the bargaining unit.  These discussions shall not be pursuant to Section 6 of the Railway Labor Act, and reaching an agreement with the Union shall not be a prerequisite for closing, or any other aspect of the transaction or operations pursuant to the transaction.

  

2

  

 

ARTICLE 3

Agency Shop & Dues Check Off

Section 3.1

Membership in the Union is not compulsory.  Pilots have a right to join, not join, maintain, or drop their membership in the Union as they see fit.  Neither party shall exert any pressure on or discriminate against any Pilot as regards such matters

Section 3.2

Each Pilot covered by this Agreement who was hired prior to or after the execution of this Agreement shall become a member or an agency fee payer within sixty (60) days after his/her date of hire or the effective date of this agreement and shall be required as a condition of continued employment by the Company to pay an equivalent agency fee, so long as this agreement remains in effect.  The agency fee referred to in the Section shall be equal to the Union’s regular and usual initiation fee and its regular, uniform and usual monthly dues.  Notwithstanding the foregoing, nothing herein shall be construed to be in violation of or in conflict with the provisions of the Railway Labor Act.

Section 3.3

During the life of this Agreement, the Company agrees that upon receipt of a properly executed Authorization of Payroll Deductions, voluntarily executed by a Pilot, it will make bi-weekly deductions from the Pilot’s earnings after other deductions authorized by the Pilot or are

required by law have been made, to cover the current standard bi-weekly assessments and/or initiation fees or agency fees uniformly levied in accordance with the Constitution and bylaws of the Union as set forth in the Railway Labor Act.

Any authorizations for payroll deductions under this Article shall be effective the first day of the month following its receipt by the Payroll Department and shall apply to the next paycheck for which dues deduction or agency fees is made.

Section 3.4

The Company remittance to the Union will be accompanied by a list of the Pilots’ names and employee numbers of the Pilots for whom the deductions have been made in that particular month and the individual amounts deducted.  Deductions shall be remitted to the designated Financial Officer of the Union not later than the tenth of each month.

Section 3.5

Collection of dues or agency fees not deducted because of insufficient current earnings missed because of clerical error or inadvertent error in the accounting procedures, agency fees missed due to delay in receipt of the Authorization for Payroll Deductions, shall be the responsibility of the Union and shall not be the subject of payroll deductions from subsequent paychecks, and the Company shall not be responsible in any way for such missed collections.  It shall be the Union’s responsibility to verify apparent errors with the individual Pilot prior to contacting the Payroll Department.  The total or balance of unpaid dues, assessments and/or initiation fees or agency fees due and owed the Union at the time a Pilot terminates his employment shall be deducted from the final paycheck in accordance with applicable law.

 

  

3

  

 

Section 3.6

An Authorization for Payroll Deduction under this Article shall be irrevocable for the term of this Agreement or for a period of one (1) year from the date the Authorization is first executed, whichever occurs sooner.  Revocation shall become effective when the Pilot serves written notice on the Payroll Department to revoke such Authorization for Payroll Deductions.  An Authorization for Payroll Deduction shall automatically be revoked if:

	
A.

	
The Pilot transfers to a position with the Company not covered by the Agreement;

 

	
B.

	
The Pilot’s service with the Company is terminated;

 

	
C.

	
The Pilot is furloughed; or

 

	
D.

	
The Pilot is on an authorized Leave of Absence.

    

Section 3.7

Upon written demand from the Union, the Company shall terminate any employee within the bargaining unit who fails to tender the sum due the Union under Section Two of the Article within thirty (30) days from the date such sum is due provided the Union informs the Company and the employee in writing and allows him/her and additional fifteen (15) days after the 30th day of delinquency.  If the employee fails to resolve his/her dues delinquency with the Union during this fifteen (15) day period and after notification to the Company by the Union, the Company will terminate the employee effective the end of that payroll period.

Section 3.8

Any dispute between the Company and the Union arising out of the interpretation or application of this Article, when reduced to writing as a grievance, shall be subject to the Grievance Procedure by initially referring the grievance to Step Three.  The grievance thereafter may be processed in accordance with the provisions of Articles 6 and 7 in this Agreement.

Section 3.9

The Union agrees to hold the Company harmless and to indemnify the Company against suits, claims, liabilities, and reasonable and customary attorney's fees which arise out of or by reason of any action taken by the Company under the terms of this Article.

Section 3.10

It is further agreed between the parties that the Union shall notify each Pilot of their Beck rights as provided by law.

  

4

  

 

ARTICLE 4

Management Rights

Section 4.1

The Union recognizes that the management of the business of the Company and the direction of the working force are vested exclusively with the Company, subject to the expressed provisions of this Agreement.

Section 4.2

Except as restricted by an express provision of this Agreement, the Company shall retain all rights to manage and operate its business and work force, including but not limited to the right to sell, or discontinue or diminish in whole or part to determine where and when to operate scheduled or unscheduled flights; to determine its marketing methods and strategies; and to determine the type of aircraft it will utilize to negotiate customer contracts consistent with their requirement, to determine the number of workover hours to be worked, the qualifications of Pilots it may employ and to adopt, modify and rescind reasonable work and safety rules.

Section 4.3

The exercise of any right reserved herein to manage in a particular manner, or the non-exercise of such right, shall not operate as a waiver of the Company’s rights hereunder, or preclude the Company from exercising the right in a different manner or at a future date.

 

Section 4.4

It is further agreed that the rights specified herein may not be impaired by an arbitrator or arbitration even though the parties may agree to arbitrate the issue involved in a specific manner as provided in the Grievance and Arbitration Procedure set forth elsewhere in this Agreement.

Section 4.5

Under any contract of services or joint venture agreement/arrangement where the Company’s Operating Certificates are utilized for emergency medical service, the flight deck crew members will be covered by this contract.

ARTICLE 5

Non Discrimination

There shall be no discrimination by the Company or the Union in the application of the terms of this Agreement because of race, color, religion, national origin, age, sex or handicap.  The Company and the Union will comply with applicable laws prohibiting discrimination.

 

  

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ARTICLE 6

Grievance Procedure

Section 6.1

Disputes relating to the interpretation or application of the specific provisions of this Agreement may be the subject of a grievance. Any such grievance shall be processed in the following manner:

	
Step 1.

	
The Pilot shall first attempt to resolve the grievance with his immediate supervisor within ten (10) calendar days from the date of the occurrence of the event giving rise to the grievance, or within ten (10) calendar days of the date the Pilot knew or should have known of such event. The supervisor shall give his answer within ten (10) calendar days from that date, after receiving permission to resolve said grievance from either the applicable Operations Manager, Program Director or Designee.

	
Step 2.

	
If the grievance is not resolved at Step 1 to the satisfaction of the grievant, the grievance shall be reduced to writing and presented to the designated representative of the Company within seven (7) calendar days after the receipt of the immediate supervisor’s answer. The written grievance must state the nature of the grievance, the circumstances out of which the grievance arose, the remedy or correction requested and the specific provisions of the Agreement alleged to have been violated. The Company representative will give his answer to the grievant in writing with a copy to the Union within seven (7) calendar days after the receipt of the grievance.

	
Step 3.

	
In the event the decision by the Company representative is unacceptable to the aggrieved employee or union, it may be appealed in writing to the designated representative of the Company within seven (7) calendar days of the receipt of the decision. The appeal must include a statement of the reasons the grievant believes the decision was erroneous. The Company’s representative shall render a decision on the appeal in writing within seven (7) calendar days of receipt of the appeal.  The Company and International Union will designate one senior official each of whom is authorized to and must meet and confer on any grievance to endeavor to resolve the grievance before the grievance is advanced to the System Board of Adjustments.  In the event the grievance cannot be resolved, the Union may request review at the System Board of Adjustment, provided the request for review is made within 14 calendar days of receipt by the Union of written notice from the Company of the failed grievance resolution.

Section 6.2

In the event a non-probationary Pilot who has been discharged wishes to grieve such discharge, the grievance must be presented at Step 2 within seven (7) calendar days after the termination.

 

  

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Section 6.3

All provisions of this Article shall apply to Union grievances except such grievances shall be presented to the designated Company representative at Step 2.

Section 6.3.1

Any grievance not presented and processed in the manner, and within the time limits set forth above, shall be waived and deemed null and void provided, however, at any time in advance of the expiration of such time limit the parties may agree, by mutual written consent, to extend any time limit for a specified period of time. Compliance with all time limits specified in this Article shall be determined by the date of mailing as established by postmark.

Section 6.4

Any grievance relating to the pay of a Pilot shall only be retroactive to ninety (90) days prior to the date the written grievance was submitted to the Company by the Union.

Section 6.5

The Company and the Union agree to furnish to the other party the names of their designated representatives charged with administration of the grievance procedure within thirty (30) calendar days after the execution of this Agreement.  Any changes in these representatives shall be furnished to the other party in writing.

Section 6.6

The Union and the Company may, by mutual agreement in writing, elect to bypass any or all steps in this Article and proceed to the System Board of Adjustment in accordance with Article 7 of this Agreement.

Section 6.7

All grievances resolved at any step of this grievance procedure prior to the Systems Board of Adjustment shall be on a non-precedent basis unless mutually agreed otherwise.

Section 6.8

If a grievant is exonerated, his personnel file shall be cleared of all references to the incident in question, consistent with applicable Federal regulations and may not be used in future disciplinary actions against the Pilot.  A grievant that is cleared of all charges shall be made whole in every respect.

  

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ARTICLE 7

System Board of Adjustment

Section 7.1

In compliance with Section 204, Title II of the Railway Labor Act, as amended, this Agreement establishes a System Board of Adjustment, which shall be called the Air Methods Pilots’ System Board of Adjustment, hereinafter called “the Board.”

Section 7.2

The Board has jurisdiction over timely filed and appropriately processed grievances arising out of the interpretation and application of the specific provisions of this Agreement relating to rates of pay, rules, working conditions, discipline and discharge.  The procedures set forth in this Article are the exclusive and mandatory forum for all such disputes.

Section 7.3

The Board does not have jurisdiction over any dispute unless all of the procedures required by the Grievance Procedure provided for in this Agreement have been timely and completely exhausted in the dispute, and the dispute has been properly submitted to the Board pursuant to the provisions of this Article.

Section 7.4

Neither the Systems Board nor Arbitrator shall have any jurisdiction to modify, add to or otherwise alter or amend any of the terms of this Agreement or to make any decision that has such an effect.

Section 7.5

The Board shall consist of four members, two of whom shall be selected and appointed by the Company and two of whom shall be selected and appointed by the President of the Local Union.  In disciplinary cases, no Board member from either side shall have previously made an authoritative decision regarding the merits of the controversy, including decisions to appeal the matter to a higher level.  If this occurs the Board member(s) will not participate as a Board member and a alternate Board member(s) will participate in the System Board of Adjustment.  A Board member appointed by the Union shall serve as chairman and a Board member appointed by the Company shall serve as vice-chairman in even years, and a Board member appointed by the Company shall serve as chairman and a Board member appointed by the Union shall serve as vice-chairman in odd years.  The vice-chairman shall act as chairman in his absence.

Each Board member has a vote in connection with all actions taken by the Board.  In the event the four Board members cannot reach a decision with respect to a particular dispute, the Board will select a neutral member who will decide the dispute.  In the event the Board cannot agree on a neutral member, within seven (7) calendar days thereafter either party may request that the Federal Mediation and Conciliation Services (FMCS) submit a list of seven (7) arbitrators, all of whom are members of the National Academy of Arbitrators.  The Arbitrators shall be selected in accordance with the rules of  FMCS.  The Board hearing before the third party neutral member shall be conducted in accordance with the FMCS rules.

  

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Section 7.6

The Board will meet quarterly in a location determined by mutual agreement, provided that at such time there are cases on file with the Board for its consideration.

Section 7.7

Any expenses incurred by Board members appointed by one of the parties to this Agreement will be paid by that party.  The fees and expenses of any neutral member of the Board shall be borne equally by the Company and the Union.

 

Section 7.8

Disputes may only be submitted to the Board by the President of the Local Union or a duly designated officer of the Union or the Company’s Vice President of Human Resources or designee.

Section 7.9

Decisions by the Board are final and binding on the Company, the Union and the affected Pilots, provided they conform to Section 7.4 above.

Section 7.10

The party appealing a final decision under the Grievance Procedure in this Agreement shall submit the dispute for consideration by the Board within fourteen (14) calendar days of that decision as provided in Section 6.1, Step 3. A list of potential witnesses, including all papers and exhibits known to the appealing party shall be submitted to the Board seven (7) days prior to a scheduled Board of Adjustment.  Neither party will intimidate or coerce any witness so identified.  If the appeal is not made within this fourteen (14) day period, the Board does not have jurisdiction over the dispute.  The Company will identify new witnesses or exhibits to the Union not later than seven (7) days prior to the Arbitration, if those witnesses or exhibits had not been provided to the System Board.

Section 7.11

All disputes referred to the Board shall be sent to the Vice President of Human Resources for the Company and his/her office shall assign a docket number according to the order in which the dispute is received.  However, grievances involving suspension or discharge shall be given preference for disposition.  All grievances that have been properly submitted to the System Board at least 10 days prior to the scheduled hearing date shall be included on the docket and be heard by the Board at that time.

Section 7.12

The appealing party will ensure that a copy of the petition is served on the members of the Board.  Each case submitted to the Board must state:

 

	
A.

	
The question or questions at issue;

 

	
B.

	
a statement of the facts with supporting documents;

 

  

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C.

	
a reference to the applicable provisions of the Agreement alleged to have been breached;

 

	
D.

	
the position of the aggrieved party; and

	
E.

	
the remedy requested.

 

Section 7.13

Decisions by the Board shall be rendered no later than thirty (30) calendar days after the close of the hearing or receipt of post-hearing briefs.

Section 7.14

The Company and the Union shall, in good faith, attempt to make a joint submission of their dispute to the Board.  If the parties are unable to agree on a joint submission, the appealing party shall file a submission with the Board containing all of the information described in Article 6, Section 1, and the responding party may do the same.  Any party filing a submission with the Board pursuant to this Article shall serve a copy of its submission with the other party.

Section 7.15

The parties agree that each Board member is free to discharge his duties in an independent manner without fear of retaliation from the Company or the Union because of any action taken by him in good faith in his capacity as a Board member.

ARTICLE 8

No Strike / No Lockout

Section 8.1

Neither the Union or any of its agents (stewards) nor any of its members will collectively, concertedly, or in any manner engage in a strike, sick-out, boycott, sympathy strike, slow down or work stoppage of any kind during the term of this Agreement.  During the term of this Agreement, the Company agrees not to lock out any of the employees covered by this Agreement.  It is further understood that the duly-authorized representatives of the Union shall use their best efforts on behalf of the Union to actively encourage the employees engaging in a violation of this Section to cease such conduct.  If the Company knows one of its Customers will have a primary picket line, the Company will notify the Pilot before dispatching the Pilot to the location.  A Pilot may refuse to take an assignment to cross a picket line if he has reasonable safety concerns based on verifiable incidents of picket line misconduct at the site.  In such cases, the Company reserves the right to meet Customer needs however it deems appropriate.

Section 8.2

Employees found to be in violation of the terms of this Section shall be subject to discharge.  Such discharge shall not be subject to the grievance procedure  or System Board of Adjustment and Arbitration provisions of this Agreement, except as to the question of whether the Pilot engaged in such a violation.

  

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ARTICLE 9

Discipline and Discharge

Section 9.1

Pilots may be subject to disciplinary action, up to and including discharge for just cause including violation or infraction of Company rules or policies, or for violating this Agreement.  The Company will use a system of progressive discipline except for those items identified in Section 9.2.A.  The Company may suspend a Pilot with pay prior to notifying him of the nature of the charge against him.  Within seven (7) calendar days of the date of suspension the Company will inform the Pilot in writing, with a copy to the Union, of the nature of the charge and its decision on the type of discipline that should be imposed.

Section 9.2

If an incident occurs, or is believed to have occurred, which could result in discipline or discharge, the Pilot involved may be asked to attend an investigatory meeting.  Upon the Pilot’s request he shall be entitled to Union representation at the investigatory meeting.  The Pilot shall be informed of the reason(s) for the meeting in sufficient time to discuss it with a Union representative prior to the meeting being held.  At the conclusion of the investigatory meeting the Pilot will be notified in writing of the decision and may be held out of service by the Company, with or without pay.

	
A.

	
A Pilot may be immediately removed from the payroll and suspended without pay or discharged if he violates the FAA Drug/Alcohol policy or commits other acts of serious misconduct.

	
B.

	
In the event the Pilot feels he has been unjustly disciplined or discharged, the Pilot or Union may appeal in writing the Company’s decision to the Company designee within seven (7) calendar days of the adverse action against the Pilot. Such appeal will be taken at Step 2 of the Grievance Procedure.

Section 9.3

In a case where a Pilot is called into a meeting where as a result disciplinary action could be taken against him, the Pilot may request to be accompanied by his Steward, and such a request will be granted by the Company. Request for a steward or alternate shall be honored if they are available within a reasonable time not to exceed forty-eight (48) hours, provided the Company incurs no workover or travel costs whatsoever. If a Pilot at the base, while on duty, is selected to attend such meeting as a representative of the Pilot being investigated, he shall suffer no loss in pay.  If called to take a mission, the Pilot and the one being investigated shall reschedule said meeting at the earliest possible time. The parties agree that there shall be no delay in the duty Pilot taking the mission.

Section 9.4

Disciplinary records involving safety matters shall not serve as a basis for any disciplinary action after five (5) years from the date of issuance.

 

  

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Section 9.5

Customer complaints or correspondence of a derogatory nature shall not serve as the basis for discipline after twelve (12) months from the date of issuance unless within the twelve (12) month period there has been a recurrence of the same or similar nature.

Section 9.6

The parties recognize that flight safety is paramount to the well-being of the business, patients and employees.  The Pilots acknowledge it is essential to abide by all applicable FAR’s.  The parties further agree that neither will rely upon any discipline administered prior to the execution of the 2006 Agreement.

ARTICLE 10

Union Representation

Section 10.1

In the event it is necessary for a Union representative to enter the premises owned or leased by the Company to discuss the application of this Agreement, the Union representative shall notify the manager for the particular location, and they shall arrange a mutually satisfactory time, date and place for the visit within a five (5) day period thereafter.  The Union representative shall not take any action that would interrupt or in any way interfere with the Company’s operations or the job duties of any employee.  Such visits shall comply with customer or base entrance requirements.

Section 10.2

The Company will not be obligated to deal with any Union representative who has not been designated in writing to be an authorized representative of the Union.

Section 10.3

The Union may elect or appoint Pilots to be primary job steward(s) and alternate(s) to conduct Union business and shall notify the Company, in writing, of their election, appointment or removal.  Pilots who have been designated as primary stewards (and the alternate steward in the absence of the primary steward) shall be granted reasonable time to investigate, present and process grievances during their normal duty hours without loss of pay, provided it does not cause a delay in meeting mission requirements.  Stewards or alternates who serve their fellow Pilots shall be considered Union representatives.

Section 10.4

The Company and the Union desire that complaints and grievances shall be settled whenever possible with supervisors at the location where the complaint or grievance originates.  It is understood and agreed that a steward’s activities shall fall within the scope of the following functions:

	
A.

	
To consult with a Pilot(s) regarding a presentation of a complaint or grievance that the Pilot(s) desires to present.  Stewards shall be permitted to present grievances to management and attempt to resolve any grievance.

 

  

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B.

	
To present a grievance or complaint to a Pilot’s immediate supervisor in an attempt to settle the matter.  Stewards shall be granted the right to consult with Pilots at their base for the purpose of enforcing the provisions of this Agreement.

	
C.

	
To investigate a complaint or grievance as defined in the grievance procedure.

Section 10.5

The Company and the Union agree that a minimum amount of time shall be spent in the performance of steward duties.

ARTICLE 11

Seniority

Section 11.1

Seniority of a new hire Pilot shall begin on the date the Pilot is entered on the Company's payroll.

A.           It is understood and agreed Pilots who are employed by AMC at the time of this Agreement shall be placed on the Company seniority list using their original date of hire with AMC or, if applicable, their original date of hire from a previously acquired Company.

	
B.

	
In the event of future acquisitions or mergers, the Company will meet promptly with the Union for the purpose of integrating the Pilot groups.

Section 11.2

There shall be two (2) types of seniority, Company Seniority and Bidding Seniority.

	
A.

	
Company Seniority – Company Seniority shall be defined as a Pilot's length of service with the Company or present customer, regardless of location, and except as provided for elsewhere in this Agreement, shall govern pay rates, and accrual or granting of paid days off pursuant to Vacation - Article 27 of this Agreement.  Company Seniority shall be adjusted for Leaves of Absence as provided for in Leaves of Absence - Article 23 of this Agreement.

	
B.

	
Bidding Seniority – Bidding Seniority shall be defined as a Pilot’s length of uninterrupted Pilot credited service with the Company less all time spent outside of the bargaining unit as defined in Section 3 of this Article.  Bidding Seniority shall govern all Pilots covered by this Agreement in bidding for job assignments and vacancies as provided for in this Agreement.

Section 11.3

A Pilot who is promoted to a non-flying or supervisory position shall stop accruing bidding seniority, unless they return to flying duties within twelve (12) calendar months.  Such Pilot shall continue to accrue Company Seniority and retain his Bidding Seniority less all time spent outside the bargaining unit.

  

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If said Pilot returns to flying duty, it shall be in accordance with his Bidding Seniority.  In the event there is no vacancy, he shall be assigned to other duties if they exist and such Pilot chooses to accept them, or placed on layoff status until a bid opportunity becomes available and the Pilot is awarded the job.  If a Pilot is terminated while in a supervisory or non-flying position, such Pilot shall have no rights under this Agreement.

Section 11.4

A Pilot’s seniority shall be nullified and his/her employment shall be terminated if any of the following occur:

 

	
A.

	
Resignation or retirement;

 

	
B.

	
Discharge for cause;

	
C.

	
Failure to inform the designated Company representative in person or by certified mail of his intention to return to work as provided for in the Reductions in Workforce - Article 13, Section 5(A);

	
D.

	
Failure to return to work on or before a date specified in the notice of recall from the designated Company representative after a layoff as provided for in the Reductions in Workforce - Article 13, Section 5(B);

	
E.

	
A Pilot’s seniority and recall rights shall terminate after being on furlough for a period of three (3) calendar years.

Section 11.5

Disputes arising over seniority shall be handled in accordance with Grievance Procedure and System Board of Adjustment outlined in this Agreement.

ARTICLE 12

Seniority List

Section 12.1

The Air Methods Corporation Pilot System Seniority List shall consist of the seniority number, name, and bidding seniority date of all Pilots covered by this Agreement.  The Company will post the Seniority List on its web page.  Thereafter Pilots may post the Seniority List on the bulletin boards, where permitted, and/or in the Union information book.  Copies of the Seniority List will be furnished to the Union.  All Seniority lists shall include the date that they are published.

Section 12.2

When two or more Pilots are employed on the same date, they shall be placed on the seniority list according to the last four digits in their Social Security number. The Pilot with the lowest last four digits will be awarded the most senior position.

	
A.

	
In the event more than one Pilot is hired from a newly acquired contract such Pilots shall be placed at the bottom of the seniority list in order of their time in service with the previous company.

  

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Section 12.3

The Company agrees to update the seniority list each six (6) months, beginning with the effective date of this Agreement with a copy to the Union. A Pilot shall have a period of thirty (30) days after the posting of the seniority list to protest to the Company any omission or incorrect posting affecting his seniority. Pilots on vacation, leave of absence, or furlough shall be permitted thirty (30) days after their return to duty to make any protest concerning his seniority.  Once the thirty (30) day period has expired without a protest, the posting will be considered correct and shall not be subject to further protest, unless the omission or incorrect posting was the result of a clerical error on the part of the Company.

ARTICLE 13

Reductions in Workforce

Section 13.1

If there is a loss of a contract, base closure, or other reduction in the workforce, a Pilot’s seniority, pursuant to Seniority – Article 11 of this Agreement, shall govern the layoff.  Pilots with the least seniority at the affected base(s) shall be laid off first.  The Company shall give at least fourteen (14) days notice of an impending layoff unless prevented from doing so due to causes beyond its control, or eighty-four (84) hours pay in lieu thereof.

Section 13.2

At the point of being placed on furlough status the Pilot shall avail himself of all available job postings on the Company website.  The Pilot shall bid on the postings and indicate his order of preference.  Provided the Pilot possesses the requisite credential he shall be offered the positions in order of his preference before the position is filled by outside applicants.  The Company shall not be permitted to hire a new Pilot until all furloughed qualified Pilots are recalled. Pilots will be recalled from furlough in seniority order, with the most senior laid-off Pilot being recalled first.

Section 13.3

Pilots shall continue to accrue Bidding Seniority and Company Seniority while on furlough.  c/a language

Section 13.4

Affected Pilots are required to file their proper mailing address, email address, and telephone number(s) with the Human Resources Department at the time of the layoff or furlough and will promptly notify the Company of any address changes. Failure to do so will forfeit that Pilots' rights under this Article.

 

  

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Section 13.5

Furloughed Pilots shall be notified of a recall in order of their seniority by e-mail with confirmed response, telephone or certified mail to the most recent telephone number and address provided by the Pilot. Notification by telephone must be accomplished by positive telephone contact with the Pilot and the call must be followed up with official notification by certified mail.  The date of recall notification shall be the earlier of the date on which telephone contact was made or the recall letter was mailed.  Notices sent to the last address of record shall be considered conclusive evidence of notice to that Pilot.

	
A.

	
Each Pilot accepting recall shall answer his recall notice no later than three (3) business days after receipt of such notice in e-mail with confirmed response, telephone, or by certified mail.

	
B.

	
A furloughed Pilot will not be allowed more than twenty one (21) calendar days after the date of recall notification to report to duty from furlough.

	
C.

	
Pilots who fail to respond to a recall notice within the time limits set forth above, Pilots who refuse recall, or Pilots who reject a recall notice shall forfeit all recall rights and have their names removed from the Seniority List.

	
D.

	
The offer of recall shall be made in order of seniority status from the furloughed Pilots.  However, if the senior furloughed Pilot declines on the offer of recall it shall be made in descending order to the remaining furloughed Pilots with the understanding that the junior qualified Pilot shall be obligated to accept the offer.  If such Pilot refuses the offer of recall, he shall forfeit all rights under this Article.  In such circumstances, the offer shall be made in ascending order to the remaining Pilots.  If no opening exists within the Company such Pilot may displace the least senior Pilot in the Company consistent with the hospital based Customer approval, if applicable, provided he is qualified (as defined in Job Posting and Bidding Section 14.2.F(1), or accept a furlough until such time a position becomes available within the timeframe outlined in Section 13.5(E) of this Article.

	
E.

	
Seniority and recall rights shall terminate if a furloughed Pilot is not recalled within three (3) years from the commencement of his layoff.

Section 13.6

The Employer and Union will abide by the provisions of USERRA and its interpretations in the case of a base closure or a reduction in force, which impacts a Pilot who is deployed to duty.  The Employer’s guideline(s) will be a reference for handling any Pilot’s circumstances and the Employer and Union agree to seek further guidance from the U.S. Department of Labor, as necessary.

 

  

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ARTICLE 14

Job Posting and Job Bidding

Section 14.1

A Pilot may bid when a new job or permanent vacancy occurs, or when a new job or crew position is created.  All vacancies will be posted on the Company Web Page within seven (7) calendar days after the vacancy occurs.  The notice shall provide as much information as is available regarding the vacant position, including the job location and closing date for bid application.  This Article does not allow a senior Pilot to bid a job that is already filled or to displace a junior Pilot from a job he is currently filling.  The parties agree that a vacancy does not exist if the Customer changes aircraft type and requests that the assigned Pilots remain on the job.

	
A.

	
Vacancies resulting from LOA’s will be considered temporary and will be posted and assigned as such.  Pilots accepting such temporary positions will be subject to replacement by the returning LOA Pilot, at which time the displaced Pilot will be eligible to bid on any other job opening within the Company.

	
B.

	
If the Company and physician agree there is a reasonable expectation of a Pilot returning to work within ninety (90) days from a medical leave of absence, he will be allowed to bid on any open position and shall be awarded the job in accordance with Section 14.2.C.  If such Pilot is awarded the job and is unable to return to duty within the allotted ninety (90) days, the next senior qualified Pilot(s) who bid on the open position shall be offered the job.

Section 14.2

Bidding procedures are as follows:

	
A.

	
When an open position occurs, the Company will post the position on the Company website.  During the first fourteen (14) calendar days from the date of the initial posting, only Company Pilots will be considered for the position in accordance with 14.2.C of this Article.  After the fourteen (14) day period, the Company may consider an outside candidate and make an offer of contingent employment, which if accepted, closes the position.  In the event the candidate is not successful with the contingent requirements, the position will reopen and be available to all applicants, with priority given in all cases to Pilots on the Company seniority roster.  Pilots who are on the seniority roster and lose their job through no fault of their own after the 14 days the position was posted internally, shall be given priority job placement over anyone in order of seniority.

	
B.

	
The Company will make the awards within seven (7) calendar days after the bidding has closed or the last hospital based customer interview, if required, is conducted.

	
C.

	
The senior qualified Pilot, as defined in Section 14.2, Paragraph F of this Article that bids on the vacancy, who successfully completes the hospital based customer interview, if required, shall be awarded the job, except for those positions covered in Section 14.4 of this Article.

	
D.

	
A Pilot responding to more than one (1) vacancy shall indicate his order of preference on the bid and shall be awarded his highest available preference.

 

  

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E.

	
In the event that a Pilot voluntarily bids on and is awarded a new position, the Company reserves the right to require a Pilot to remain in that new position for a period of twelve (12) months; or eighteen (18) months if Company paid relocation or training costs are incurred.

	
F.

	
The term “senior qualified” as used in this Article means that a Pilot has been trained by the Company in the aircraft category and class, and meets the customer or Company requirements listed in the Job Posting and has the highest bidding seniority in accordance with Article 11.2(B).  Such Pilot must hold the necessary Airman Certificate and endorsements, and holds or is able to obtain the appropriate Medical Certificate for the position.  If there are no successful applicants within category and class, a Pilot who holds the necessary Airman Certificate and endorsements but has not been trained in category and class by the Company may apply for a cross-category position (e.g. airplane to helicopter).

Section 14.3

A Pilot will be assigned to his new position within ninety (90) days of the position being awarded to him, unless the Company and Pilot agree otherwise.

Section 14.4

The following positions shall be posted at the base where they occur and not be subject to the bidding procedure described above; Lead Pilot,  Senior Lead Pilot, Check Airman, and Training Captain.  Such positions shall be filled at the sole discretion of the Company.  The Company shall interview Pilots who have applied for the position(s) and all other applicants who have done likewise thereafter to determine their qualifications.

Section 14.5

For the purposes of this Article, “awarded” shall be defined as being determined to be the successful bidder to fill a vacancy, “assigned” shall be defined as being transferred to the new base and commencing a work schedule.

ARTICLE 15

Training

Section 15.1 – Recurrent Training

	
A.

	
In accordance with applicable Federal Aviation Regulations (FAR’s), the Company will develop and maintain a computerized training system whereby a Pilot can complete the assigned classroom portions of his required recurrent ground training at his normally assigned work location. In addition and in accordance with Subpart G of FAR 135, the Company will utilize a system of written or oral examinations to accomplish the testing required where written or oral exams are required.  The Company’s Training Department will provide adequate computerized training materials, or resource materials provided electronically at the base that clearly detail the information upon which the Pilot will be tested for recurrent ground training.  In no circumstances will the Pilot be tested on materials or information that is not reasonably available for the Pilot to study at his normally assigned base.  The Pilot will be required to successfully complete recurrent ground training by the assigned completion deadline.

 

  

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B.

	
The Company shall make available to all Pilots the equipment and personnel necessary to maintain the necessary qualifications and certifications to operate their assigned aircraft.  The Company shall endeavor to provide this training opportunity within a 150-mile radius of the Pilot’s assigned base.  It is incumbent upon the Pilot to ensure that he maintains his qualifications.  If the Company determines that the Pilot does not possess the necessary qualifications or certifications to operate the aircraft he shall be removed from flight status without pay and shall remain off flight status until the necessary qualifications or certifications have been obtained, however such removal shall be with pay if the lapse of qualifications or certifications was due to circumstances beyond the Pilot’s control.  If, at the end of 30 days the Pilot remains unqualified or does not have his certification(s), his employment with Air Methods Corporation may be terminated, unless due to circumstances beyond the Pilot’s control.

	
C.

	
The Training Department is responsible for scheduling training dates and locations.  If a Pilot is unable to attend training during the scheduled training dates due to illness, injury, a reasonable unforeseen absence, or previously approved excused absence, the Pilot and the Training Department will agree to alternative dates to complete the training.

Section 15.2 – Upgrade/Transition/Special Training

The Company will schedule such training consistent with customer service requirements and the availability of qualified training personnel.  While the Company will make a reasonable effort to schedule such training during the Pilot’s normal work shift, all scheduled training will be done in conjunction with business requirements and the availability of training personnel.  However, if unable to do so, the Pilot will be paid in accordance with Section 15.5(A).  The Company will make every effort to schedule training immediately before or after the Pilot’s work schedule or shift.

Section 15.3 – Training Failures

It is recognized that not all Pilots reach the required level of proficiency in the same amount of time.  Therefore, when it becomes apparent to the Company that a Pilot will require time in excess of that usually required to reach proficiency the Company Training Department will, in consultation with the Pilot, determine the cause of his inability to reach the required proficiency level and establish a plan for correcting the problem.  The Company Training Department iwill reasonably determine the appropriate amount of additional training to correct any deficiencies and when to cease remedial training.

	
A.

	
A Pilot who fails any portion of training, written exam, oral exam or flight check will be removed from his work schedule, with pay, until he has been successfully retested by the Company.  A Pilot who fails training, an oral exam, or flight check may request a change of instructor/check airman.  The new instructor/check airman will be assigned by the Company.  However, if a Pilot elects to request a change of instructor/check airman, the Pilot will be removed from revenue flying and the payroll, but permitted to use unused vacation until such time that the Pilot successfully completes re-training, an oral exam or flight check.  Such re-training or re-testing shall be conducted as soon as practical.

 

  

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B.

	
In the event a Pilot fails a subsequent portion of training, written exam, oral exam, or flight check the Company will make a determination as to his/her continued employment.  If the Company determines that retraining is inappropriate the Company reserves the right to terminate said Pilot.

	
C.

	
If a Pilot is unable to successfully complete upgrade or transition training, the Pilot will be allowed to return to his previous position, if that position still exists, and he successfully performs a check ride in his previously assigned aircraft.  If the Pilot's previous position has been filled or no longer exists, the Pilot will be offered the opportunity to apply for any position for which he is currently qualified to perform on the Open Position List (“OPL”).

	
D.

	
A Pilot who fails any portion of his new hire training will be subject to termination by the Company.

Section 15.4 – Travel and Accommodations

	
A.

	
In the event a Pilot is based away from home during a special assignment or at the direction of the Company, the Company shall in all cases provide single hotel room accommodations to each Pilot, excluding FEMA response.

	
B.

	
All travel expenses shall be paid by the Company.  All travel will be performed in accordance with Company travel policy and in accordance with applicable IRS rules.

Section 15.5 – Training Pay and Per Diem

	
A.

	
All required training performed on a Pilot’s off duty day will be paid for a minimum of four (4) hours at the overtime rate of time and one-half of the Pilot’s base rate, and will be paid at that rate for all actual time spent in that training, as defined in Appendix A, Section 8.

	
B.

	
All Pilots shall be paid per diem when applicable, at the rate of $36.00 per day and in accordance with IRS rules.

Section 15.6

During training, qualified personnel may fly a revenue producing flight(s) with the trainee accompanying him, and such flight(s) will not be considered a violation of the Agreement.  The term “qualified personnel” is not restricted to members of the class and craft of Flight Deck Crew Members and may include qualified Management personnel.  The Company shall comply with Articles 16 and 17 when exercising its rights under this section.

ARTICLE 16

Schedules of Service

Section 16.1

Pilots at each base shall determine the appropriate schedules of service consistent with Company and customer service requirements.  They shall forward their schedule to the appropriate Company official.  A normal schedule shift shall not exceed twelve (12) hours.  This section will not relieve any Pilot from accepting any flight that may extend the shift beyond the scheduled twelve (12) hours as long as the flight can be conducted in accordance with the applicable FAR’s and Company duty time policies.

  

20

  

 

Section 16.2

The parties to this Agreement will maintain schedules of service which provide for one (1) day off for each day scheduled.

 

	Example:	7 days on - 7 days off
	 	4 days on - 4 days off

 

Section 16.3

Other work schedules will be discussed between the parties. However, both parties recognize schedules of service will meet customer requirements.

Section 16.4

The schedule in Section 16.2 of this Article shall be considered standard. Any other schedules shall be considered non-standard. Non-standard schedules shall be filled on a voluntary basis. Vacancies in a standard schedule resulting from temporary Pilot absences caused by illness, injury, vacation, holidays, training or leaves of absences shall not be considered a non-standard schedule.

Section 16.5

Pilots shall be allowed to trade or swap standard schedules provided it is approved by the appropriate Manager and a copy of the revised schedule is submitted to the Human Resources Department.  Under no circumstance shall a trade or swap result in a workover shift for either Pilot.

Section 16.6 – Customer Requested Work Schedules

In the event a customer or prospective customer requires the Company to operate on a non-standard schedule, other than one (1) day schedule for each day off, the parties shall meet to agree upon an applicable rate of pay.  In the event the parties are unable to reach agreement, the Company shall not assume the work in question.

Section 16.7

To facilitate customer and Company needs the oncoming Pilot will be duty-ready, as defined in Appendix A, Section 8, at the beginning of his scheduled shift.

  

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ARTICLE 17

Workover

Section 17.1 –  Workover Assignment Procedure

The Union recognizes the importance of the Company's ability to provide 24/7 coverage to remain competitive in the marketplace and will use their best efforts to achieve this.

Before offering workover shift(s) to Pilots at a particular base, the Company reserves the right to utilize Relief or Part-time Pilots.  If no Relief Pilots or Part-time Pilots are available, workover shift(s) shall be offered as follows:

	
1.

	
The workover shift(s) will be offered to the Pilots at the base where it occurs.  If more than one (1) Pilot volunteers for the workover shift(s) it will be offered to the senior Pilot first and rotated thereafter among the other volunteers, at that base, in the descending order of seniority.

	
2.

	
In the event there are insufficient Pilots stationed at the base where the workover shift(s) occurs the Company will solicit volunteers from bases that are local in nature, as defined in Appendix A, Section 8, to fill the workover shifts, using the same method described above.

	
3.

	
In the event there are no volunteers from bases local in nature, as defined in Appendix A, Section 8, the Company may use Pilots from other bases who have volunteered to work additional shifts.

	
  

	
a)

	
Pilots who would like to be contacted for such assignments will be required to post their name on a list maintained on the Company Web Site.

	
  

	
b)

	
The Pilot who volunteers for the largest number of consecutive shifts shall be awarded the assignment.

	
4.

	
The Company reserves the right to limit Pilots to twenty-one (21) shifts per calendar month, and the number of shifts shall also be limited by applicable FAR’s. This provision is designed to assure an equitable distribution amongst the applicable Pilots.

	
5.

	
If the previous options do not provide a solution to the vacancy, the Company may utilize qualified management personnel to fill these open shifts.

Section 17.2 – Emergency Workover Assignment

	
A.

	
Emergency workover shall be defined as an unplanned vacancy for which the Company did not have seven (7) days advance notice of (i.e. injury, illness, and bereavement).  In which case, absent volunteers, the following procedures shall be utilized to fill such vacancies.

	
B.

	
In any calendar year in which the number of uncovered Pilot duty shifts does not exceed two (2) at a location, due to a lack of volunteers, the Company will not have the ability to require workover at that location.

 

  

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C.

	
In the event such uncovered shifts exceed two (2) in any calendar year at a location, required workover may be assigned in an emergency situation on the basis of reverse seniority and rotated thereafter. The Company may only use this option to cover vacancies where less than seven (7) days advance notice of the vacancy was received.

	
D.

	
For the purposes of Emergency workover, the Company shall not require any Pilot to perform more than two (2) Emergency workover shifts or more than twenty one (21) total shifts in any calendar month.

	
E.

	
The Company will report to the Union the number of uncovered shifts each month.

	
F.

	
No Pilot can be forced on an emergency workover at a base other than his assigned base. Pilots who are forced to perform a workover shall be reimbursed for any verifiable non-refundable expenses they incurred on the day of the workover only.

Section 17.3 – Workover Shift/ Pay

Pilots shall receive one-and-one-half times (1-1/2 X) their normal daily rate, excluding supplemental pay and ACCRA.  A workover shift/pay is defined as being scheduled for and reporting for work on a regularly scheduled day off that was not the result of a trade or swap.

Section 17.4 – Overtime

All work or activities performed at the request of the Company (i.e. meetings, training, flights) between 12 and 14 hours will be paid at the Base Hourly Rate as defined in Appendix A, Section 8.  All work performed in excess of fourteen (14) hours in a work shift shall be paid at the Overtime Hourly Rate as defined in Appendix A, Section 8.  Such payment shall be based on the actual time the Pilot logs out of the Company’s electronic tracking system, rounded to the nearest quarter hour.

Section 17.5 – Company Meeting Pay

Pilots who are required by the Company to attend meetings on their scheduled day off shall be compensated at the overtime hourly rate as defined in Appendix A, Section 8.  Pilots shall be paid a minimum of two (2) hours for attending such meetings.

ARTICLE 18

Pilot Status

Section 18.1

A newly employed Pilot shall be on a 180 calendar day probationary status during which time such a person may be discharged by the Company without recourse. After accumulating 180 calendar days, such employee shall be considered a non-probationary employee and his/her hire date shall revert back to the most recent date of hire.

Section 18.2

A newly employed Pilot shall be entitled to all the rights and benefits as any other Pilot of the terms of this Agreement, except that the Company shall retain the right to discharge a probationary Pilot at any time within their probationary period, without recourse to the grievance procedure and/or System Board of Adjustment.

  

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Section 18.3

Once a month, the Company will provide the local Union office with a list of Pilots who have been hired, terminated, resigned, transferred or promoted to a management position, and/or on a military leave of absence during the prior quarter. This listing shall include the home address and phone number of said Pilots.

 

Section 18.4

A Union representative, if available, will be introduced to a new Pilot once they are assigned to a base for the purposes of explaining the obligations and benefits of this Agreement.

ARTICLE 19

Pilot Classification

Section 19.1

A full-time Pilot is a Pilot who is assigned to a regular work schedule, per Article 16, at a specific base or program.

Section 19.2

There are two groups of Relief Pilots: National and Program/Area, both of which are full time Pilots who do not hold a regular work schedule and fill vacancies at any base as directed by the Company.

A National Relief Pilot shall have an ACCRA rating based upon the ACCRA rating of Denver, CO (as identified in Appendix “A”, Section 4) and a Program/Area Relief Pilot shall have an ACCRA rating based upon an average of the bases within the assigned Area.

For the purposes of travel and mileage calculations for the Program/Area Relief Pilot(s), the Company shall determine a primary location within the Area as the start point.  Travel within 50 miles (100 miles round trip) of that primary location start point shall be considered local in nature, will not require an overnight stay and the Pilot shall not be eligible for compensation, per diem or mileage reimbursement.  When a Program/Area Relief Pilot is required to travel the day before or the day after his assignment or more than 50 miles one-way from the primary location start point of his assigned Area to his shift assignment the Pilot shall be compensated at the  base hourly rate, as defined in Appendix A, Section 8, for actual hours spent in travel and is eligible for per diem or mileage reimbursement, if applicable.

For the purposes of National Relief Pilot(s), travel within 50 miles (100 miles round trip) of their home address shall be considered local in nature, will not require an overnight stay, and the Pilot shall not be eligible for compensation, per diem or mileage reimbursement.  When a National Relief Pilot is required to travel the day before or the day after his assignment, the National Relief Pilot shall be compensated for twelve (12) hours pay and is eligible for per diem or mileage reimbursement, if applicable.

All Relief Pilots shall receive workover shift  pay, as defined in Appendix A, Section 8, after completing 182.5 work shifts, less sick and vacation time, in a calendar year.

  

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Section 19.3

A Temporary Full Time Pilot is a Pilot temporarily assigned to cover a specific vacancy arising due to a Full Time Pilot's leave of absence.  Such Pilots will be allowed to bid for any open position after serving for six months as a Temporary Full Time Pilot.  A Temporary Full Time Pilot's status shall coincide with the reinstatement rights of the Full Time Pilot returning from his/her leave of absence. A newly hired Temporary Full Time Pilot shall not qualify for benefits under the Severance pay provisions of this Contract.

Section 19.4

A Part Time/Per Diem Pilot is a Pilot who is offered work consistent with the Company's Customer Service or operational requirements. Such Pilots shall not have a regular work schedule, nor be eligible to participate in Company benefit programs as defined elsewhere in this Contract, unless provided for under either State or Federal statute, to include the Severance pay provision, nor shall they have any job bidding rights. Such Pilots shall be paid on a per diem basis in accordance with the published pay scale. Such Pilots shall have no rights under the Grievance and System Board of Adjustment procedures until having completed ninety (90) work schedules. Any Part Time/Per Diem Pilot who works twelve (12) or more work schedules per month for three (3) consecutive months shall become full-time. At no time shall the total number of Part Time/Per Diem Pilots exceed four percent (4%) of the full time Pilot staff.

Section 19.5

The Company shall not use Temporary Full Time or Part Time/Per Diem Pilots to avoid filling Full Time Pilot positions.  The Company shall not use Part Time/Per Diem Pilots to cover vacant shifts when a current and qualified Full Time or Relief Pilot is available.

ARTICLE 20

Fees and Physical Examinations

Section 20.1

It shall be the responsibility of each Pilot to maintain an appropriate and current FAA medical certificate.  The Pilot shall make every reasonable effort to obtain and provide his current certificate to the Company by the 20th of the month in which it is due.  If for reasons beyond the Pilot’s control, the Pilot is unable to provide the Company with a copy of his current FAA medical certificate by the 20th of the month in which it is due, the Pilot will coordinate with the training department/flight records specialist to communicate the delay.  Under all circumstances it shall be the Pilots’ responsibility to provide the training department/flight records specialist with their current FAA medical certificate no later than the last business day of the month in which the medical certificate is due.

Section 20.2

It shall be the responsibility of each Pilot to maintain the appropriate FAA Pilot certificate(s) required for his duty position.  The Pilot shall provide the most current certificate(s) to the Company, and immediately report any changes that affect the validity of those certificates.

 

  

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Section 20.3

It shall be the responsibility of each Pilot to arrange his required medical examinations by a qualified Aero Medical Examiner of the Pilot’s choice, as required by the Federal Aviation Regulations.  Examinations will be scheduled while the Pilot is off duty.  The Company will reimburse a Pilot for the cost of the Class I  or Class II medical examination.  Any additional physical exams and/or tests required by the Company or a customer beyond those required as provided for in Section 20.4 of this Article, shall be paid for by the Company.

 

Section 20.4

When the Company believes that there are  grounds to question a Pilot’s physical or mental condition to remain on flight status, the Company may require that such Pilot be examined by a FAA designated Aero Medical Examiner (AME) selected by the  Pilot.

The Company shall pay for this medical examination or tests required by the Company pursuant to this Article.  The Pilot agrees to sign a medical release to allow a copy of the results to be given to the Company and the Pilot shall also be provided a copy of this report.    A Pilot who fails to pass such an examination may have a review of the case.  Such review will be conducted by the Medical Certification Branch of the FAA.  The Pilot may, at his expense, have a second medical examination conducted and submitted along with the Company’s medical examination to  this Branch of the FAA.

Section 20.5

A Pilot who is medically unable to perform his duties shall be placed on a leave of absence as described elsewhere in this Agreement.

Section 20.6

moved to 34.10

ARTICLE 21

Moving Expense

Section 21.1

The Company shall provide a paid move to Pilots whom are required to move as a result of being assigned to a base other than where the Pilot has established his residence, provided that the Pilot moves within a fifty (50) mile radius of his new base and the new base is at least fifty (50) miles away from the previously assigned base.  All moving expense will be governed by IRS Publication 521.

Section 21.2

In order to receive a Company paid move, Pilots must complete such move within six (6) months from the date of the new assignment and shall be entitled to the following reimbursement upon presentation of reasonable documentation:

	
A.

	
Actual moving expenses, including insurance and normal packing charges, for normal household effects, up to a maximum of $3500.00.

 

  

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Section 21.3

Pilots shall be allowed the following en route expenses when properly substantiated by receipts during the period of en-route travel:

 

	
A.

	
For Pilot only - $36.00/day

 

	
B.

	
For Pilot and family - $72.00/day

The period of en-route travel shall continue after arrival until the day the household effects arrive or until the end of the fifth day, whichever comes first.

Section 21.4

For the purpose of determining necessary travel time, the Company will allow one (1) travel day for each five hundred (500) miles or fraction thereof, to a maximum of five (5) travel days when driving a vehicle.  The Pilot is expected to move during his days off and be prepared to work on his regular work shift.  The most direct AAA mileage between the two (2) cities will determine travel time.

Section 21.5

In addition to moving expenses, such Pilot will be reimbursed at the IRS relocation rate for one vehicle driven to the new location.

Section 21.6

To be eligible to obtain reimbursement from the Company, a Pilot must meet the requirements of Section 21.1 of this Article and have completed his probationary period.

 

SECTION 22

Travel Pay

Section 22.1

Mileage shall be paid to the Pilot at the applicable rate established by the Internal Revenue Service under the following circumstances:

	
A.

	
Use of a personal vehicle when requested by the Company to relocate to another base or location other than a Pilot’s normal base for purposes of assignment on a temporary basis.  The mileage will be calculated from the point of departure to the next base and not the Pilot’s home.

	
B.

	
In the event a Pilot is required to report to a base other than his assigned base, mileage will be calculated from the assigned base to the new work location.

	
C.

	
Pilots shall not be required to use their personal vehicles when distances between the Pilots’ home to the temporary assigned base are in excess of one hundred (100) miles.

 

  

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Section 22.2

Pilots shall be paid at their regular rate of pay for travel on a scheduled  duty day.  In the event a Pilot travels on an off work day, such Pilot will be compensated at the applicable workover rate.

Section 22.3

When transportation or lodging are not provided by the Company, reasonable and actual expenses will be allowed.  Within five (5) calendar days after returning to his home base or at the close of each week in the event the Pilot is away for a period longer than one (1) week, the Pilot shall submit expense receipts for payment.  The per diem shall be consistent with Company policy.

ARTICLE 23

Leaves of Absence

Section 23.1

A Leave of Absence (LOA) is intended to account for a reasonable period of time that a Pilot may be required to be absent from the job for reasons other than vacation or paid bereavement leave.  A LOA may fall into one of the following categories:

	
A.

	
Personal LOA – (a reasonable time not to exceed thirty (30) calendar days) without pay may be granted to a Pilot for urgent personal matters.  Except as approved by the applicable operational official, a Pilot may be granted no more than one (1) personal LOA in a 2-year period.  To be eligible for such a Leave a Pilot has to have completed six (6) months of service.  Approved personal LOA start and end dates shall be in writing.  Such leaves may be extended for additional periods, if approved by the Company.

	
B.

	
Pregnancy Disability Leave (PDL) – PDL shall be granted consistent with the applicable statute requirements for Pilots who reside in California and the Company’s separate policy on same.

	
C.

	
Military LOA – Military leaves of absence and reemployment rights upon return from such leave shall be granted in accordance with applicable laws.  All orders for military duty, including National Guard and Reserve duty, shall be provided to the Human Resources Department in accordance with applicable laws.

	
D.

	
Family & Medical LOA, and California Family Rights Act (CFRA) – Leave granted under the Family and Medical Leave Act or the California statute, will be granted to eligible Pilots as required by law.

	
  

	
1.

	
A Pilot on a medical leave of absence due to a serious non-occupational health condition of the Pilot, who does not return to work during the twelve (12) week period provided for under the Company’s short term disability benefit,  shall be granted an additional medical leave for the duration of the illness or injury, up to twelve (12) months, if the Company and Physician agree there is a reasonable expectation for the Pilot to return to duty within twelve (12) months from the  expiration  of short term disability.  At the end of the first twelve (12) month leave of absence an additional twelve (12) months shall be granted if the Company and Physician agree there is a reasonable expectation for a Pilot to return to duty within twenty four (24) months from the expiration of short term disability.

 

  

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2.

	
Pilots who are unable to work as a result of a non-job related illness or injury shall be placed on Medical LOA.  Such Pilot shall retain insurance coverage for a period of six (6) months.  During this period the Company shall continue to provide employer paid disability, life and accidental death and dismemberment insurance coverage at no cost to the Pilot.  The Pilot’s portion of medical, dental, and vision premiums will continue to be the responsibility of the Pilot.  If a Pilot who is on Medical LOA is not receiving compensation from Air Methods or if the compensation received does not fully cover the Pilot’s portion of the medical, dental, and vision premiums, the Pilot will be required to remit their portion of said premiums, on a monthly basis, no later than the fifteenth day of the month following commencement of Medical LOA.  Failure to provide payment by the fifteenth of the month following the commencement of Medical LOA will result in the termination of medical, dental, and vision benefits and the initiation of offering medical insurance under COBRA.  Once the applicable time period has been exhausted, the Pilot will be eligible for medical insurance under COBRA.

	
E.

	
Union Leave of Absence – A Pilot who accepts a temporary position with the Union (up to one (1) month) will be permitted to return to his original position upon release from such temporary assignment.  At no time will the Company authorize the release of more than two (2) Pilots under this provision.

	
  

	
1.

	
When requested by the Union, one (1) Pilot who is elected or appointed to a full-time position with the Union shall be granted an indefinite leave of absence.  A Pilot leaving full-time service of the Union, for any reason, must return to duty within thirty (30) days or be terminated.  Such Pilot upon returning to work with the Company will be entitled to return to his previous position at his last assigned base or apply for any open position for which the Pilot is qualified.

	
  

	
2.

	
By mutual agreement, the Company may grant up to three (3) Pilots an unpaid leave of absence for a one (1) week period of time so that Pilots selected by the Union may perform work for the Union, such as attendance at Union conventions and conferences.

	
  

	
3.

	
The Union shall reimburse the Company for compensating the Pilot for all time spent on a ULOA.

Section 23.2

A Pilot who wishes to apply for a Leave of Absence must submit his request in writing to his supervisor.  This written request must include the expected duration of the leave, the purpose of the leave (if it does not violate any applicable statutes), and where the Pilot may be contacted during the leave.  It is the Pilot’s responsibility to keep Human Resources informed of any changes in his contact information for the duration of the approved leave.

  

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Section 23.3

All requests for leaves of absence must be submitted in writing and must be approved by the applicable operational official.   Except as provided by the applicable operational officer, a Pilot will not be granted a leave of absence (except a Military LOA, Workers Compensation LOA, or Union LOA) without first using all vacation.

Section 23.4

Prior to returning to duty from medical leave, a Pilot may be required to present a physician’s statement to the Company verifying that he is medically fit to perform all Pilot duties.

Section 23.5

In the event of a reduction in force, a Pilot on a leave of absence who would otherwise be furloughed will have his leave of absence cancelled.  The Pilot will be notified that his rights under this Article have been changed to those of a furloughed Pilot.

Section 23.6

A Pilot returning from a leave of absence will be returned to his duty position if it still exists, or any other vacant position where his qualifications permit.  Any Pilot returning from a leave of absence who requires training prior to return to flying will be scheduled for required training prior to return to flight duty not to exceed three (3) weeks.  Pay shall resume when the Pilot commences training.

Section 23.7

All leaves of absence shall specify the date on which the Pilot will return to duty unless mutually agreed otherwise or by operation of law.

Section 23.8

All leaves of absence shall be without pay unless otherwise specified in this Agreement or required by statute.

Section 23.9

Failure of any Pilot to return to active status at the end of any leave of absence shall be deemed a voluntary resignation and his name will be removed from the seniority list.

Section 23.10

Any Pilot on a leave of absence who enters into a business of his own without first obtaining written permission from the Company will be terminated and will forfeit his seniority rights.

Section 23.11

During any approved leave of absence, a Pilot will retain and accrue Company and Bidding Seniority.

  

30

  

 

ARTICLE 24

On The Job Injury (OJI) Leave

Section 24.1

A Pilot is eligible for all state and federal workers compensation benefits with respect to injuries or illnesses arising out of and in the course of employment with the Company.

Section 24.2

A Pilot must report the occurrence of an OJI to his supervisor as soon as possible, depending upon the nature of the accident or resulting injuries.

Section 24.3

All health, accident and life insurance benefits shall continue to be available to an injured Pilot on the same basis as an active employee.

Section 24.4

The Company may require an injured Pilot to submit to a physical examination in accordance with the provisions of Article 20.

Section 24.5

Prior to returning to duty from an OJI Leave, a Pilot shall be required to present a physician’s statement to the Company verifying that he is medically fit to perform all Employee duties.  In the event there is a dispute concerning the Employee’s fitness for duty, the procedures of Article 20 shall be utilized to resolve the dispute.  Upon return from an OJI Leave, a Pilot shall be returned to his former position if the position still exists, or to any other position where his seniority permits.

Section 24.6

All Pilots are entitled to a copy of any and all accident reports and any and all written or recorded statements made or taken with regard to an OJI within seventy-two (72) hours of a written request.

Section 24.7

All Pilots are entitled to a copy of any and all medical records, maintained by the Company at no cost, resulting from OJIs within five (5) days of a written request.

Section 24.8

Employee shall not be terminated or otherwise discharged from employment, except for cause, while recovering from OJI injuries.

 

  

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Section 24.9

A Pilot has the right to select his own Vocational Rehabilitation Counselor while recovering from an OJI consistent with State regulations.

ARTICLE 25

Holidays

Section 25.1

The Company recognizes the following holidays:

New Years Day; Presidents Day; Memorial Day; Independence Day; Labor Day; Thanksgiving Day; Friday After Thanksgiving; Christmas Day

Section 25.2

To be eligible for holiday pay a Pilot must work on the holiday.

Section 25.3

The Pilot will receive his Work Shift pay plus his Base Hourly Rate for each hour worked on the holiday.  A Pilot working on a workover shift on a holiday will receive his Workover Shift pay plus his Base Hourly Rate for actual hours worked on the holiday. [Note:  this language conforms to the definitions in Appendix A, Section 8.  There is no intent to change the meaning of Section 25.3, or to change any existing practices in relation to Section 25.3].

ARTICLE 26

Sick Leave

Section 26.1

Sick Leave is granted to a Pilot to provide him an opportunity to recover from a non-job related illness and/or injury.

Section 26.2

Each Pilot shall earn up to sixty (60) hours of sick leave each calendar year.  Sick leave shall be earned at the rate of 2.3076 hours per pay period.  Sick leave shall be earned on all hours worked on workover, vacation, sick leave used, holidays, jury duty, and bereavement leave. Unused sick leave shall be earned up to a maximum of one hundred twenty (120) hours.

  

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ARTICLE 27

Vacations

Section 27.1

All Pilots shall be eligible to receive vacation on the following schedule:

 

	 Vacation Hours	 Months of Service   	 Hourly Accrual Rate
	 	 	 
	84 Hours/Year   	0 thru 60   	.0383562
	126 Hours/Year     	61 thru 120	.0575342
	168 Hours/Year	121 thru 180	.0767123
	210 Hours/Year 	181 and above 	.0958904

 

	
●

	
Vacation accrual will be applied to the first 2190 hours worked in a calendar year.

	
●

	
Vacation balance will continue to be reported on the bi-weekly pay stub.

	
●

	
Maximum Vacation Balance: 264 hours.

	
●

	
All pilots shall receive vacation based upon the above listed accrual rate.

	
●

	
Any Pilot who, at the date of ratification of the 2006 Agreement, receives more vacation than the above schedule shall be grandfathered at their current vacation accrual rate.

Section 27.2

Vacation pay, when cashed out, shall be based upon the Pilot's current rate of pay.

 

Section 27.3

When a Pilot reaches the maximum vacation accrual according to the above schedule they shall not accrue any further vacation allowance.  Once reaching the maximum accrual the Pilot will be paid seventy two (72) hours of his accrued vacation.

Section 27.4

At each Base location, Pilots will submit initial vacation requests by November 30 for desired vacations to be taken in the following year.  The Company shall grant such requests in order of seniority, provided Pilots had or will have the requested time available on the books.

After the initial vacation schedule has been accomplished, Pilots may submit vacation requests for any desired week/days on a first come, first served basis.  Vacations may be changed/swapped by mutual agreement of the Pilot and Company.  When possible, vacation requests will be submitted to the immediate supervisor at least sixty (60) calendar days in advance of the requested time off.  Vacation requests received at least sixty (60) calendar days in advance of the requested time off that do not reduce base staffing levels below 75%  shall be granted.  The Company reserves the right to decline any vacation request when such vacation request would reduce full staffing levels to below 75%.  The Company may grant vacation requests which will reduce staffing levels to below 75% provided sufficient  voluntary work over from the base is assured and such allowances are consistent with all published regulatory and program rest requirements.

  

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Section 27.5

Vacation will only be earned based upon compensable hours, which include holiday, vacation, sick leave, jury duty, or bereavement leave.

Section 27.6

Vacation pay may be cashed out based upon a quarterly schedule published by Payroll.

Section 27.7 – Cancellation of Vacation

If a Pilot volunteers to cancel a scheduled vacation at the Company’s request, he shall be reimbursed for all verifiable non-refundable expenses incurred.  Such Pilot shall also have the following options:

	
1.

	
Reschedule his vacation to any remaining available weeks/days in the same calendar year.

	
2.

	
In lieu of the above option, the Pilot may choose to be paid the full value of his cancelled vacation period at the rate of one and one-half (11⁄2) times his rate of pay.  Payment for this vacation will be made by issuing a separate check to the Pilot within ten (10) days from election of this option.

ARTICLE 28

Health, Dental and Life/AD&D Insurance Benefits

Section 28.1

For the term of this Agreement, the Company shall offer Pilots health, dental, vision, LTD, STD,  life and AD&D insurance as described in the summary plan descriptions furnished to the Union.  In the event that the Company elects to change carriers, or administrators, it will endeavor to provide benefits that are comparable benefit value to those currently provided. The parties recognize in an effort to contain health care costs, it may be necessary to modify benefit levels,  prior to doing so the Company will meet with the Union to review the proposed changes and solicit suggestions.  The plans offered to the Pilots shall be the same as offered to all other non-represented employees.

Section 28.2

The Company will extend its best efforts to assist Pilots in resolving any claim disputes which do arise under the above plans after the member has followed the claims appeals process of the respective carrier or administrator. No matter relating to a claims dispute which is not the direct result of negligence by the Company shall be submitted to the grievance and/or Systems Board of Adjustment provisions of this Agreement.

Section 28.3

A Pilot shall be eligible to participate in the group benefits listed above on the first day of the month coinciding with or following the date of initial hire. To be eligible for coverage in the above plans a Pilot must work or be paid consistent with the definitions in Article 19, Sections 19.1 through 19.4. Any Pilot who fails to meet the above definitions shall not have coverage in the following month.

  

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Section 28.4

Pilots who participate in one of the Company Health and/or Dental Plans shall have the following amounts withheld from each bi-weekly paycheck for 2011-2012 plan year.  Thereafter, rates will be subject to adjustment based on annual renewal expense.

	  	 	
EPO Plan 

100 CA Only

	 	 	
PPO Plan

90/70

	 	 	
PPO Plan

80/60

	 	 	
High 

Deductable

	 	 	
Dental

	 
	
Employee Only

	 	$	55.51	 	 	$	55.51	 	 	$	45.82	 	 	$	29.23	 	 	$	2.33	 
	
Employee + Spouse

	 	$	117.58	 	 	$	117.58	 	 	$	90.10	 	 	$	59.97	 	 	$	5.60	 
	
Employee + Children

	 	$	95.34	 	 	$	95.34	 	 	$	77.76	 	 	$	48.05	 	 	$	5.23	 
	
Employee + Family

	 	$	151.08	 	 	$	151.08	 	 	$	125.23	 	 	$	72.26	 	 	$	9.26	 

Future Health and Dental Plan annual rate increases for Pilots shall not exceed ten percent (10%) per year based on the 2011-2012 plan year Employee contribution schedule.  In no case shall the annual percentage increase for a Pilot exceed that of the percentage increase for the Company. Any changes that occur after publication of this Agreement shall be posted on the Air Methods Corporation Portal.

Section 28.5

Pilots shall be covered at one and one-half (1 1⁄2) times their total annual salary in Life Insurance and Accidental Death and Dismemberment Insurance under the provisions of the plan defined in the Company Benefit Plan.

ARTICLE 29

Company 401(k) Plan

Section 29.1 – Plan Modifications

The Company reserves the right to amend from time to time the Plan to cover the eligible Pilots to conform to the applicable State and Federal statutes.  Any amendments shall be furnished to the Pilots and Union.  The Company shall pay all costs associated with the administration of the Plan.

Section 29.2 – Enrollment

Enrollment in the plan shall be quarterly, provided that in the first year of employment said Pilot worked at least one thousand (1,000) hours.

Section 29.3 – Vesting

 

	Years	Percent of Vesting
	 	 
	One year 	33 1/3 percent
	Two years   	66 2/3 percent
	Three years   	100 percent

 

  

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Section 29.4 – Contribution

For those Pilots who contribute to this Plan, the Company shall contribute seventy percent (70%) on the first eight percent (8%) contributed by the Pilot.   All Company and  employee contributions shall be deposited into the respective employee’s 401(k) account on the same day the wages are paid.

ARTICLE 30

Jury Duty

Section 30.1

The purpose of jury pay is to make the Pilots’ pay whole while meeting their civic duty.  Pilots who are required by proper court order or summoned to be absent from work in connection with jury duty will be paid the earnings he would have received for a regularly scheduled shift up to a maximum of seven (7) work schedules per calendar year.

Section 30.2

Jury pay is not applicable when a Pilot is on a leave of absence, vacation, or layoff.

Section 30.3

In the event a Pilot is released from Jury Duty on a duty day, he shall proceed to his base or assignment the following day commensurate with his crew reset requirements.

Section 30.4

Pilots under subpoena for reasons benefiting the Company will be compensated for all lost time provided the Pilot was scheduled to work.

Section 30.5

Vacation time may be used any time a Pilot is required by subpoena to appear in a matter not benefiting the Company.

ARTICLE 31

Bereavement Leave

Section 31.1

The Company shall grant a bereavement leave for each individual for the death of a member of the Pilot’s immediate family.  Pilots on bereavement leave shall be paid for each duty day missed, up to a maximum of four (4) days or forty-eight (48) hours, whichever is less, per occurrence.  Pilots may use accrued but unused Vacation beyond the four (4) days or forty-eight (48) hours bereavement leave.  For the purposes of this Article, a Pilot’s immediate family shall include his current spouse, in-laws, children, step-children, parents, grandparents, grandchildren, siblings and legal guardian.

  

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Section 31.2

The Company shall grant bereavement leave for each individual for the death of a member of the Pilot’s extended family of one (1) day or twenty-four (24) duty hours, whichever is less.  A Pilot’s extended family includes aunt, uncle, nephew and niece.  Pilots may use accrued but unused Vacation beyond the one (1) day or twenty-four (24) duty hours bereavement leave. T/A 01/29/09

Section 31.3

Funeral leave is not compensable when the Pilot is on scheduled days off, leave of absence, layoff, or suspension.

ARTICLE 32

Severance Pay

Section 32.1

A Pilot who is laid off and is placed on furlough with the Company shall receive severance pay according to the schedule in Section 32.2 below.  Except if one or more of the following conditions exist he shall receive no severance pay.

	
1.

	
He refuses to accept a job or assignment within his category of Pilot with the Company;

 

	
2.

	
He is dismissed for cause or resigns or retires.

Section 32.2

Severance pay will be paid within seven (7) days following the Pilot's furlough based on the following schedule:

 

 

	Full Years of Company Service	Calendar Weeks
	 	 
	One (1) full year of service but less than four (4)     	Two (2) weeks
	 	 
	Four (4) full years of service but less than eight (8) 	Four (4) weeks
	 	 
	Eight (8) full years of service but less than twelve (12)	Six (6) weeks
	 	 
	Twelve (12) full years of service but less than fifteen (15)	Eight (8) weeks
	 	 
	Fifteen (15) full years of service or more 	Ten (10) weeks

 

Section 32.3

The Company will attempt to give Pilot(s) two (2) weeks advance notice of a base closure or loss of contract.

 

  

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Section 32.4

Medical and Dental insurance, if any, shall continue for thirty (30) calendar days following the Pilot's layoff or furlough, provided the Pilot pays the appropriate contribution amounts.  The Pilot will thereafter be eligible for COBRA coverage at that time.

ARTICLE 33

Union Bulletin Boards & Communications

Section 33.1

The Company shall permit the Union to display an unlocked bulletin board at each base that is Company owned.  The Union shall purchase the bulletin boards and shall be responsible for their installation.  The bulletin boards shall only be placed in areas that have been agreed to by the Company in advance.  The provision shall not be applicable if such bulletin boards are not permitted or authorized by a customer who owns the premises.

Section 33.2

The bulletin boards used by the Union and Pilots covered by this Agreement shall be for posting notices of Union social and recreational affairs, meetings and elections.

Section 33.3

General distributions, posted notices and official business will bear the seal or signature of an officer of the Union or a Pilot representative and will not contain anything defamatory, derogative, inflammatory, negative, or of a personal nature attacking the Company or its representatives.

Section 33.4

The Company may refuse to permit any posting that would violate any of the provisions of this Agreement.  Any notices posted that are not in accordance with this Article shall be removed by the Union or by the Company upon notice to the Union.

Section 33.5

If no bulletin board is permissible, the Union may maintain an information book which shall remain in the Pilot’s reference area or office.

SECTION 34

General and Miscellaneous

Section 34.1

Any deviation from this Agreement shall be made by mutual consent between the Company and the Union.  Such consent must be in writing and signed by both parties.

  

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Section 34.2

All orders or notices to Pilots covered by this Agreement involving a transfer, promotion, demotion, layoff, or leave of absence shall be given in writing to such Pilot with a copy to the Union within ten (10) calendar days.

Section 34.3

The pay period is currently fourteen (14) days (bi-weekly).  If the Company wishes to change the pay period timing, it shall meet and discuss the change with the Union prior to implementation.

Section 34.4

This Agreement prohibits a Pilot from engaging in any activities that are in competition with the Company and flying activities that interfere with their service to the Company.  This provision shall not be construed to prohibit Pilots from affiliating with the Armed Forces of the United States or other additional employment providing the Pilot complies with the Company Policy on Outside Employment (rev. September 10, 2008).

Section 34.5

The Company shall make a copy of the current contract available to all Pilots on the Air Methods’ website.  In addition, the Company shall share in the cost of printing this Agreement up to a maximum of $2,500.00 per Contract period.

Section 34.6

A Pilot’s primary responsibility is to ensure the safe operation of the aircraft.  A Pilot may also be required to assist in minor aircraft maintenance other than that specifically authorized; washing of aircraft, couriering of parts, or other non-flying duties.  In no case shall a Pilot be required to operate a ground ambulance or perform facility repairs.

This provision does not restrict a Pilot from performing non-flying duties related to the promotion of the profession such as conducting educational classes, public relations presentations, or events of that nature.

Section 34.7

If a Pilot’s personal items are damaged due to an aircraft accident or other unusual circumstance beyond the Pilot’s control, a claim may be submitted to the Company and paid consistent with its insurance policy.  However, the Company reserves the right to require proof of loss and value of the item covered in the claim.

Section 34.8

Any Pilot leaving the service of the Company shall, upon request to the Human Resource department, be provided with a letter setting forth the Company’s record of his job title, stating his length of service and rate of pay at the date he left the Company.

  

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Section 34.9

Pilots covered by this Agreement shall be governed by all reasonable Company rules, regulations and orders previously or hereafter issued by proper authorities of the Company which are not in conflict with the terms and conditions of this Agreement, and which have been made available to the Pilots and Union.

Section 34.10

To the extent the Company adopts a new rule or Policy, or materially amends, supplements or otherwise modifies any of the Company’s current rules or Policies, the Company shall promptly provide a copy of such new rule, Policy or amendment, as applicable, to the Union after adoption thereof.  The Company will also provide a marked version of any amended rules or Policies, which shall reflect any revisions thereto. Notwithstanding the foregoing, the Company need not provide the Union with a copy of any new Policy or amendment if the Pilots would not be subject to the terms thereof.

Section 34.11

In the event the Company adopts an identification card or badge system, the Company shall provide the identification card or badge at no cost to the Pilot.  However, if the Pilot loses the identification card or badge he/she will be obligated to replace it at the cost of $10.00.

Section 34.12

In the event that a Pilot reports or the Company discovers a Pilot has been overpaid or mistakenly been reimbursed expenses, the Company will be allowed to recover the overpayments or reimbursed expenses through payroll deductions or by other instruments that evidence indebtedness.  The Pilot’s obligation will be limited to ninety (90) days prior to the discovery of the error or overpayment.  In cases of misrepresentation or fraud, the ninety (90) day limitation does not apply.

Section 34.13

Each Pilot must comply with applicable OSHA and Company safety requirements associated with Personal Protective Equipment (PPE) in the performance of job duties.  In addition, each Pilot must accept reasonable requests for flights and must comply with Company and/or Program specific guidelines for the transportation of patients or passengers with communicable diseases.

Section 34.14

Each Pilot must secure and maintain the necessary information or credentials for State or Local licensing.  The Company will reimburse any associated expenses incurred to meet the requirement of this section.

  

40

  

 

ARTICLE 35

Equipment and Facilities

Section 35.1

The Company shall furnish each Pilot with the following:

  

	
1.

	
A helmet if required

	
2.

	
If a helmet is not required, effective upon execution of the Contract the Company will provide a one-time $100.00 allowance toward the purchase of an individual headset upon proof of purchase.  Such allowance will not be applicable to previously purchased headsets.  In either case a backup headset(s) will be provided in each aircraft as a primary means of communication.

	
3.

	
An appropriate name tag, badge, embroidery, or other suitable means to identify each Pilot on their uniform.

	
4.

	
A minimum of two suitable work uniforms deemed appropriate by the Company or Customer. Such uniforms shall be given to Pilots new to a program and be replaced annually as necessary.

	
5.

	
One jacket, suitable for the local climate as deemed by the Company or Customer, and replaced as necessary.

	
6.

	
Up to two (2) department or Customer ball caps annually if provided by the department or Customer and requested by the Pilot.

	
7.

	
The Company shall reimburse, upon proof of purchase, up to one hundred dollars ($100.00) per year to each active Pilot on the payroll, for the purpose of purchasing Company or Customer required acceptable footwear.

Section 35.2

The Company will endeavor to provide reasonably quiet quarters with a rest facility for duty Pilots only.

Section 35.3

At each base the Company will provide internet access for appropriate weather source and/or required Company information. An area shall be designated for the completion of Company paperwork.

Section 35.4

Pilots who are required to spend the night away from their assigned base location shall be provided with single room hotel accommodations.

  

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Section 35.5

The Company shall provide a VCR or DVD player, and television in an area accessible by the Pilot, if not already provided by the department or Customer.  Where standard broadcast signal is not available, the Company will provide basic cable or satellite.  The parties agree that at no time is it permissible for “R-18” (MA) material to be viewed on Company provided equipment and this would be considered a violation of the Company Productive Work Environment policy and Article 36 of the Agreement.

ARTICLE 36

Productive Work Environment Policy

Section 36.1

It is agreed that the Company, as a responsible corporate citizen, is committed to maintaining a hospitable, cooperative work environment that promotes professionalism, common courtesy and mutual respect among all levels of employees, supervisors, managers, and executives.  To advance that commitment, the Company has adopted and will communicate to employees the productive work environment policy that strictly prohibits sexual and workplace harassment on the basis of race, color, creed, gender, religion, national origin, age, sexual orientation or disability or any other status protected by either Federal or State statute.  This policy shall not be amended during the term of this Agreement unless required by law.

Section 36.2

The Union agrees to support the provisions of the Air Methods corporate productive work environment policy.  Each Pilot will be required to read, understand and sign an acknowledgment of this policy, which will be placed in his personnel file.

ARTICLE 37

Savings Clause

Section 37.1

Should any part of this Agreement be rendered or declared invalid by reason of any existing or subsequently enacted legislation, act of government agency, or by any decree of a court of competent jurisdiction, such invalidation of such part or portion of this Agreement shall not invalidate the remaining portions hereof, and they shall remain in full force and effect.

Section 37.2

In the event that any provisions of this Agreement are in conflict with or are rendered inoperative or unlawful by virtue of any duly enacted law or regulation or any governmental agency or commission having jurisdiction over the Company, the Union and Company will meet and attempt to negotiate changes necessary, pertaining only to those provisions so affected or directly related thereto.

  

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ARTICLE 38

Duration

This Agreement shall be effective upon notice of ratification through December 31, 2013 and shall automatically renew itself from year to year thereafter, unless written notice of intended change is served in accordance with Section 6, Title I of the Railway Labor Act by either party at least sixty (60) days prior to the amendable date or any anniversary thereof.

APPENDICES

Appendix A, Section 1 – Base Pay

Upon contract ratification of this Agreement, all Pilots shall be placed onto the Base Pay Schedule commensurate with their current base rate of pay.   Effective 07/01/2011, each Pilot shall move to the 2011 year column to the row corresponding with their pay step. On January 1, 2012 and January 1, 2013, each pilot shall advance to the row corresponding with their pay step.  On the Pilot’s anniversary date with the Company, each Pilot will move to the next row corresponding with their years of service for years 2011, 2012 and 2013.  The anniversary date is defined as the date a Pilot entered service with the Company as a Pilot in Command or Co-Pilot.

	
Current Rate

of Pay

	 	 	
Step

	 	 	
2011

	 	 	
2012

	 	 	
2013

	 
	$	55,973	 	 	 	0-1	 	 	$	57,092	 	 	$	58,234	 	 	$	59,399	 
	$	56,883	 	 	 	1-2	 	 	$	58,021	 	 	$	59,181	 	 	$	60,365	 
	$	57,808	 	 	 	2-3	 	 	$	58,964	 	 	$	60,143	 	 	$	61,346	 
	$	58,748	 	 	 	3-4	 	 	$	59,923	 	 	$	61,121	 	 	$	62,344	 
	$	59,703	 	 	 	4-5	 	 	$	60,897	 	 	$	62,115	 	 	$	63,357	 
	$	60,674	 	 	 	5-6	 	 	$	61,887	 	 	$	63,125	 	 	$	64,388	 
	$	61,661	 	 	 	6-7	 	 	$	62,894	 	 	$	64,152	 	 	$	65,435	 
	$	62,663	 	 	 	7-8	 	 	$	63,916	 	 	$	65,195	 	 	$	66,498	 
	$	63,682	 	 	 	8-9	 	 	$	64,956	 	 	$	66,255	 	 	$	67,580	 
	$	64,718	 	 	 	9-10	 	 	$	66,012	 	 	$	67,333	 	 	$	68,679	 
	$	65,770	 	 	 	10-11	 	 	$	67,085	 	 	$	68,427	 	 	$	69,796	 
	$	66,839	 	 	 	11-12	 	 	$	68,176	 	 	$	69,539	 	 	$	70,930	 
	$	67,926	 	 	 	12-13	 	 	$	69,285	 	 	$	70,670	 	 	$	72,084	 
	$	69,031	 	 	 	13-14	 	 	$	70,412	 	 	$	71,820	 	 	$	73,256	 
	$	70,153	 	 	 	14-15	 	 	$	71,556	 	 	$	72,987	 	 	$	74,447	 
	$	71,294	 	 	 	15-16	 	 	$	72,720	 	 	$	74,174	 	 	$	75,658	 
	$	72,453	 	 	 	16-17	 	 	$	73,902	 	 	$	75,380	 	 	$	76,888	 
	$	73,631	 	 	 	17-18	 	 	$	75,104	 	 	$	76,606	 	 	$	78,138	 
	$	74,828	 	 	 	18-19	 	 	$	76,325	 	 	$	77,851	 	 	$	79,408	 
	$	76,045	 	 	 	19-20	 	 	$	77,566	 	 	$	79,117	 	 	$	80,700	 
	$	77,282	 	 	 	20-21	 	 	$	78,828	 	 	$	80,404	 	 	$	82,012	 
	$	78,538	 	 	 	21-22	 	 	$	80,109	 	 	$	81,711	 	 	$	83,345	 
	$	79,815	 	 	 	22-23	 	 	$	81,411	 	 	$	83,040	 	 	$	84.700	 
	$	81,113	 	 	 	23-24	 	 	$	82,735	 	 	$	84,390	 	 	$	86,078	 
	$	82,432	 	 	
>24

	 	 	$	84,081	 	 	$	85,762	 	 	$	87,478	 

 

  

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Within a reasonable period of time after contract ratification of this Agreement:

	
(i)

	
A Pilot who has been on AMC’s payroll since December 31, 2010 shall receive a lump sum payment of 2% of his annual base salary under the Current Rate of Pay Column; and

	
(ii)

	
A Pilot who is not receiving excess ACCRA as identified by the Company will receive a lump sum payment equal to 1.5% of base salary for six (6) months as indicated in the Current Rate of Pay Column.

Appendix A, Section 2 – Methodology for Determining Where a Pilot Initially Fits in the Scale

The Company reserves the right, based on previous experience of a Pilot(s), to place them on the above scale up to the five (5) year level or step. Thereafter the Pilot annually shall be advanced to the next step, and as with all Pilots, shall proceed on the steps and rows according to the Base Pay Schedule in Appendix A, Section 1.  Any disputes relative to that placement shall not be subject to the grievance and/or Systems Board of Adjustment provision located elsewhere in this Agreement. Such placement on the scale will be made utilizing written documentation of active years in aircraft aviation experience.  The Company reserves the right to determine the adequacy of the documentation.

Appendix A, Section 3 –  Base Assignment

The Pilot shall be paid based upon the applicable schedule for the base to which he/she is assigned or relocated.

Appendix A, Section 4 – ACCRA Geographic Differential Pay

Effective with the implementation of the above schedule the Company shall determine the ACCRA impact for each current base using the most recent available quarterly ACCRA data when a Tentative Agreement is reached between the parties. The above schedule shall be considered 100% under the ACCRA system and all current bases shall be adjusted according to their respective ACCRA rating as per the table below. If no ACCRA data is available for a current or new base location, the Company shall utilize the Sperling’s rating service to determine the Pay scale adjustment rating.  If no Sperling data is available, the five (5) nearest reporting cities to that base may be used to derive an ACCRA average provided that there are five (5) locations in close proximity of that base. Close proximity shall be considered within 75 miles. The Company reserves the right to develop recruitment and/or retention systems which will be paid above the schedule. Such schedules or systems will be paid to all Pilots at the base in question. In the event the Pilot voluntarily leaves his/her original base their pay will be based on their actual date of hire for purposes of step increases. The ACCRA impact rating effective at the execution of this agreement shall remain unchanged for the duration of the Contract. The ACCRA rating shall not be applicable for workover pay.

 

  

44

  

 

The ACCRA pay differential adjustments identified by the Company as of 2011 shall remain in effect for CBA anniversary years 2012 and 2013.  However, Pilots who qualified for ACCRA payments prior to July 1, 2011 that are in excess of the ACCRA payments identified by the Company as of 2011, hereinafter referred to as “Grandfathered Pilots”, shall receive ACCRA differential payments as follows:

	
a.

	
Grandfathered Pilots assigned to a base where the assignment was effective prior to July 1, 2011 shall receive Base Pay plus ACCRA payment in effect for that base on June 30, 2011.

	
b.

	
Any Grandfathered Pilot that accepts reassignment, voluntary or as a result of base closure, shall immediately have his ACCRA adjusted to the new base assignment ACCRA rating and will no longer be considered a “Grandfathered Pilot” at the former base ACCRA rating.

	
c.

	
Until the date on which a Grandfathered Pilot’s ACCRA payment is equal to the ACCRA payment amount determined by the Company as of 2011 for such base, the Grandfathered Pilot’s ACCRA payment shall be reduced by the amount of any increase a Grandfathered Pilot receives in Base Pay.

	
d.

	
Grandfathered Pilots shall receive a $1,000 payment for the contract years January 2012 and January 2013, but will not qualify for such payment if the Pilot is reassigned or otherwise loses his ACCRA “Grandfathered Pilot” status.

Pilots hired or reassigned after the ratification of this Agreement will be paid at the 2011 ACCRA index.  All ACCRA payments will be identified on a Pilot’s pay stub.

 

 

	Location ACCRA rating	Pay scale adjustment
	 	 
	0  – 105%       	100%
	105.1 – 115%  	110%
	115.1 – 125% 	120%
	125.1 – 135%	130%
	135.1 – 150%  	140%
	Greater than 150%	160%

                                                                                                                                                                                                                                           

Appendix A, Section 5 – Initial Training

During initial training Pilots shall be paid at the starting rate commensurate with the assigned base.

Appendix A, Section 6 – Relief Pilots

National Relief Pilots shall receive the ACCRA rating for Denver, Colorado.  A Relief Pilot who is assigned to a Program or area shall have ACCRA determined based upon an average of the bases with in the assigned area.

Appendix A, Section 7 – Supplemental Pay

Pilots performing duties in the following positions shall receive the indicated annual supplemental pay (divided by 26 and paid through the normally occurring pay period cycle).  Pilots who receive supplemental pay shall not receive any additional compensation (workover) for performing those duties associated with that position on an off work day.

 

	A.           Lead Pilot 	$3,000 annually
	B.           Senior Lead Pilot 	$4,200 annually
	C.           Check Airmen	$3,000 annually
	D.           Training Captain	$2,500 annually
	E.           ATP	$   600 annually

 

  

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Pilots who receive supplemental pay shall not receive any additional compensation, such as premium pays, overtime, or workover, for performing those duties associated with that position on an off work day. Pilot(s) who currently receive IFR supplemental pay shall continue to do so for the duration of this agreement.

Appendix A, Section 8 – Definitions

Work Shift:       The Pilot’s salary is based upon 182 1⁄2 work shifts per year.  A “work shift” is defined as a minimum of 12 and up to a fourteen (14) hours of duration.  A “work shift” does not include training, meetings and travel to or from training or meetings on an off work day.

Base Pay:   A Pilot’s annual annual rate of pay as identified in Appendix A, Section 1 and not including Supplemental Pay, ACCRA Geographical Differential Pay, Overtime Pay, Workover Shift Pay or any other additional compensation.

Base Hourly Rate:        A Pilot’s base hourly rate shall be calculated by dividing his  base pay as identified in Appendix A, Section 1, by 2190 hours.

Workover Shift Pay:    Is defined as one and one half (1 1⁄2) times a Pilot’s base hourly rate times twelve (12) hours.  Workover Pay does not include supplemental pay and ACCRA.

Overtime Hourly Rate:  Is defined as the Base Hourly Rate (defined in Appendix A) times one and one half.

Workover Shift:   Is defined as being scheduled for and reporting for a potential revenue producing shift on a regularly scheduled day off that was not the result of a trade or swap.

 

Duty Ready:     To facilitate customer and Company needs the oncoming Pilot will be duty ready at the beginning of their scheduled shift.  Duty ready is defined as being available to initiate and conduct revenue or non-revenue flights.  The expectation is that a Pilot will accomplish all required Federal Aviation Regulation and General Operations Manual actions within the time period that precedes their duty shift.

Local In Nature:   Is defined as within a fifty (50) mile radius of the primary location.

FEMA (Short Notice) Disaster Response Pay:  A Pilot who volunteers for disaster response must commit to a seven (7) day rotation, which includes travel time on either end of the duty period.  A Pilot will be paid their hourly rate of pay commencing two hours before their scheduled commercial departure time, or for those who travel to the disaster site by car* or in a Company aircraft, commencing at the start of their travel.  Travel time is compensated but will not be counted toward hours worked (unless the Pilot is flying the aircraft to the disaster site).  Travel time will be the actual time of the trip and should not include any time zone adjustments.

A Pilot on flight status will be paid the workover hourly rate for hours worked while on shift.  A Pilot off flight status will be paid at the normal hourly rate of pay (which excludes supplemental pay) for the hours spent off shift.

  

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When a Pilot is released by management from the disaster work site, they will be paid their normal rate (excluding supplemental pay) of pay until the first available flight lands at the home destination plus two (2) hours*.

*If an employee drives to and from the disaster area, travel time should be reported and verification from Mapquest.com should be provided with the timesheet documenting the estimated travel time.

A Pilot must log all travel time and work shifts while on disaster relief and provide a copy of their original work schedule (prior to disaster duty) to payroll.  A Pilot will not be paid for any missed shifts that they gave up due to covering in a disaster.

Appendix B –  Base ACCRA Ratings

The Company will use the ACCRA ratings in effect on November 20, 2011.

	
Location

	
 Base State

	
ACCRA

	
Formula

	
Soldotna

	
 AK

	
120.6%

	
120.0%

	
Wolf Lake (Wasilla)

	
 AK

	
123.2%

	
120.0%

	
Auburn

	
 AL

	
98.9%

	
100.0%

	
Birmingham

	
 AL

	
82.4%

	
100.0%

	
Danville

	
 AL

	
88.0%

	
100.0%

	
Evergreen

	
 AL

	
83.2%

	
100.0%

	
Greenville

	
 AL

	
85.4%

	
100.0%

	
Huntsville

	
 AL

	
93.3%

	
100.0%

	
Rainbow City

	
 AL

	
92.1%

	
100.0%

	
Semmes

	
 AL

	
88.0%

	
100.0%

	
Sylacauga

	
 AL

	
83.5%

	
100.0%

	
Casa Grande

	
 AZ

	
92.1%

	
100.0%

	
Chandler

	
 AZ

	
106.7%

	
110.0%

	
Chinle

	
 AZ

	
80.1%

	
100.0%

	
Cottonwood

	
 AZ

	
102.0%

	
100.0%

	
Douglas

	
 AZ

	
85.9%

	
100.0%

	
Flagstaff

	
 AZ

	
121.5%

	
120.0%

	
Florence

	
 AZ

	
92.1%

	
100.0%

	
Gilbert

	
 AZ

	
113.1%

	
110.0%

	
Glendale

	
 AZ

	
101.8%

	
100.0%

	
Globe

	
 AZ

	
89.5%

	
100.0%

	
Kearney

	
 AZ

	
87.4%

	
100.0%

	
Kingman

	
 AZ

	
96.1%

	
100.0%

	
Lake Havasu City

	
 AZ

	
103.9%

	
100.0%

	
Marana

	
 AZ

	
106.0%

	
110.0%

	
Mesa

	
 AZ

	
102.3%

	
100.0%

	
North Tucson

	
 AZ

	
93.8%

	
100.0%

	
Parker

	
 AZ

	
92.4%

	
100.0%

	
Payson

	
 AZ

	
100.9%

	
100.0%

	
Phoenix

	
 AZ

	
102.4%

	
100.0%

	
Prescott

	
 AZ

	
112.5%

	
110.0%

 

  

 

47

  

 

	Location	 Base State	
ACCRA

	Formula
	
Prescott Valley

	
 AZ

	
102.7%

	
100.0%

	
Safford

	
 AZ

	
89.8%

	
100.0%

	
Show Low

	
 AZ

	
98.0%

	
100.0%

	
Sierra Vista

	
 AZ

	
101.9%

	
100.0%

	
Springerville

	
 AZ

	
94.4%

	
100.0%

	
Sun City

	
 AZ

	
94.0%

	
100.0%

	
Texarkana

	
 AR

	
83.9%

	
100.0%

	
Tucson

	
 AZ

	
93.8%

	
100.0%

	
Willcox

	
 AZ

	
86.2%

	
100.0%

	
Winslow

	
 AZ

	
89.1%

	
100.0%

	
Anaheim

	
 CA

	
143.0%

	
140.0%

	
Bakersfield

	
 CA

	
104.0%

	
100.0%

	
Banning

	
 CA

	
105.0%

	
100.0%

	
Carlsbad

	
 CA

	
174.0%

	
160.0%

	
El Cajon

	
 CA

	
125.1%

	
130.0%

	
Ft. Hunter Liggett/King City

	
 CA

	
115.0%

	
110.0%

	
Fullerton

	
 CA

	
149.0%

	
140.0%

	
Hemet

	
 CA

	
97.0%

	
100.0%

	
Hesperia

	
 CA

	
108.0%

	
110.0%

	
Imperial

	
 CA

	
107.0%

	
110.0%

	
Loma Linda

	
 CA

	
120.0%

	
120.0%

	
Merced

	
 CA

	
103.0%

	
100.0%

	
Modesto

	
 CA

	
112.0%

	
110.0%

	
Mojave

	
 CA

	
87.0%

	
100.0%

	
Oxnard

	
 CA

	
136.0%

	
140.0%

	
Palo Alto

	
 CA

	
241.0%

	
160.0%

	
Rancho Cucamonga

	
 CA

	
133.0%

	
130.0%

	
Rialto

	
 CA

	
113.0%

	
110.0%

	
San Diego

	
 CA

	
139.0%

	
140.0%

	
Stanford

	
 CA

	
229.0%

	
160.0%

	
Thermal

	
 CA

	
94.0%

	
100.0%

	
Truckee

	
 CA

	
168.0%

	
160.0%

	
Twentynine Palms

	
 CA

	
98.0%

	
100.0%

	
Victorville

	
 CA

	
108.0%

	
110.0%

	
Aurora

	
 CO

	
104.0%

	
100.0%

	
Colorado Springs

	
 CO

	
97.1%

	
100.0%

	
Denver

	
 CO

	
110.1%

	
110.0%

	
Durango

	
 CO

	
123.7%

	
120.0%

	
Englewood

	
 CO

	
105.0%

	
100.0%

	
Firestone

	
 CO

	
106.0%

	
110.0%

	
Frederick

	
 CO

	
104.8%

	
100.0%

	
Frisco

	
 CO

	
144.3%

	
140.0%

	
Greeley

	
 CO

	
100.7%

	
100.0%

	
Lonetree

	
 CO

	
132.8%

	
130.0%

	
Pueblo

	
 CO

	
82.5%

	
100.0%

	
Hartford

	
 CT

	
108.0%

	
110.0%

	
Norwich

	
 CT

	
113.5%

	
110.0%

 

  

 

48

  

 

	Location	 Base State	ACCRA	Formula
	
Georgetown

	
 DE

	
106.4%

	
110.0%

	
Newark

	
 DE

	
120.5%

	
120.0%

	
Bartow

	
 FL

	
93.4%

	
100.0%

	
Brooksville

	
 FL

	
81.5%

	
100.0%

	
Clermont

	
 FL

	
106.2%

	
110.0%

	
Defuniak Springs

	
 FL

	
94.9%

	
100.0%

	
Ft. Walton Beach

	
 FL

	
96.9%

	
100.0%

	
Gainesville

	
 FL

	
96.5%

	
100.0%

	
Havana

	
 FL

	
85.5%

	
100.0%

	
Inverness

	
 FL

	
90.8%

	
100.0%

	
Jacksonville

	
 FL

	
94.2%

	
100.0%

	
Key West

	
 FL

	
177.0%

	
160.0%

	
LaBelle

	
 FL

	
87.0%

	
100.0%

	
Lake City

	
 FL

	
90.7%

	
100.0%

	
Longwood

	
 FL

	
103.9%

	
100.0%

	
Marianna

	
 FL

	
85.9%

	
100.0%

	
Martin County

	
 FL

	
78.3%

	
100.0%

	
Miami

	
 FL

	
114.6%

	
110.0%

	
New Port Richey

	
 FL

	
85.0%

	
100.0%

	
Niceville / Ft. Walton Beach

	
 FL

	
102.2%

	
100.0%

	
Odessa

	
 FL

	
99.1%

	
100.0%

	
Pensacola

	
 FL

	
93.2%

	
100.0%

	
Perry

	
 FL

	
84.8%

	
100.0%

	
Quincy

	
 FL

	
84.0%

	
100.0%

	
Sarasota

	
 FL

	
96.9%

	
100.0%

	
Sebring

	
 FL

	
88.1%

	
100.0%

	
St. Cloud

	
 FL

	
97.7%

	
100.0%

	
Stuart

	
 FL

	
93.2%

	
100.0%

	
Tallahassee

	
 FL

	
97.7%

	
100.0%

	
Tampa

	
 FL

	
95.3%

	
100.0%

	
Wildwood

	
 FL

	
82.6%

	
100.0%

	
Atlanta

	
 GA

	
105.3%

	
110.0%

	
Augusta

	
 GA

	
89.9%

	
100.0%

	
Canton

	
 GA

	
95.3%

	
100.0%

	
Cartersville

	
 GA

	
93.9%

	
100.0%

	
Columbus/Ft. Benning

	
 GA

	
89.9%

	
100.0%

	
Conyers

	
 GA

	
89.0%

	
100.0%

	
Covington

	
 GA

	
90.8%

	
100.0%

	
Fort Benning

	
 GA

	
91.9%

	
100.0%

	
Gainesville

	
 GA

	
98.9%

	
100.0%

	
Griffin

	
 GA

	
89.9%

	
100.0%

	
Jasper

	
 GA

	
95.7%

	
100.0%

	
Jefferson

	
 GA

	
94.6%

	
100.0%

	
Kennesaw

	
 GA

	
100.5%

	
100.0%

	
Newnan (Newman)

	
 GA

	
91.9%

	
100.0%

	
Springfield

	
 GA

	
90.8%

	
100.0%

	
Vidalia

	
 GA

	
85.3%

	
100.0%

	
Cherokee

	
 IA

	
80.7%

	
100.0%

 

  

49

  

 

	Location	 Base State	ACCRA	Formula
	
Des Moines/Mercy

	
 IA

	
85.1%

	
100.0%

	
Iowa City

	
 IA

	
98.9%

	
100.0%

	
Knoxville

	
 IA

	
84.9%

	
100.0%

	
Mason City

	
 IA

	
84.6%

	
100.0%

	
Sioux City

	
 IA

	
82.0%

	
100.0%

	
Waterloo 

	
 IA

	
82.5%

	
100.0%

	
West Burlington

	
 IA

	
83.0%

	
100.0%

	
Boise

	
 ID

	
103.8%

	
100.0%

	
Idaho Falls

	
 ID

	
92.1%

	
100.0%

	
Lewiston

	
 ID

	
92.8%

	
100.0%

	
McCall

	
 ID

	
109.1%

	
110.0%

	
Mountain Home 

	
 ID

	
91.2%

	
100.0%

	
Pocatell o

	
 ID

	
88.7%

	
100.0%

	
Twin Fal  ls (Boise)

	
 ID

	
89.6%

	
100.0%

	
Cahokia

	
 IL

	
79.3%

	
100.0%

	
Champaign

	
 IL

	
93.3%

	
100.0%

	
Chicago

	
 IL

	
116.2%

	
120.0%

	
Colona

	
 IL

	
84.2%

	
100.0%

	
Effingham

	
 IL

	
88.1%

	
100.0%

	
Granite City

	
 IL

	
83.0%

	
100.0%

	
Joliet

	
 IL

	
103.7%

	
100.0%

	
Litchfield

	
 IL

	
81.6%

	
100.0%

	
Maywood

	
 IL

	
105.4%

	
110.0%

	
McHenry

	
 IL

	
109.1%

	
110.0%

	
Rockford

	
 IL

	
86.2%

	
100.0%

	
Sparta

	
 IL

	
81.2%

	
100.0%

	
Springfield

	
 IL

	
84.4%

	
100.0%

	
Streator

	
 IL

	
82.6%

	
100.0%

	
Evansville

	
 IN

	
84.2%

	
100.0%

	
Ft. Wayne

	
 IN

	
83.3%

	
100.0%

	
Indianapolis

	
 IN

	
90.6%

	
100.0%

	
Lafayette

	
 IN

	
89.2%

	
100.0%

	
Muncie

	
 IN

	
77.6%

	
100.0%

	
Rochester

	
 IN

	
81.7%

	
100.0%

	
South Bend

	
 IN

	
81.0%

	
100.0%

	
Terre Haute

	
 IN

	
81.2%

	
100.0%

	
Olathe  

	
 KS

	
102.8%

	
100.0%

	
Parsons  

	
 KS

	
75.3%

	
100.0%

	
Ashland

	
 KY

	
82.3%

	
100.0%

	
Elizabethtown

	
 KY

	
93.6%

	
100.0%

	
Frankfort

	
 KY

	
88.0%

	
100.0%

	
Glasgow

	
 KY

	
81.8%

	
100.0%

	
Hazard

	
  KY

	
79.1%

	
100.0%

	
Lebanon

	
 KY

	
82.5%

	
100.0%

	
London

	
 KY

	
85.1%

	
100.0%

	
Louisville

	
 KY

	
85.1%

	
100.0%

	
Mt. Sterling

	
 KY

	
83.5%

	
100.0%

 

  

50

  

 

	Location	 Base State	ACCRA	Formula
	
Prestonburg

	
 KY

	
81.5%

	
100.0%

	
Sellersburg (Salyersvile)

	
 KY

	
77.5%

	
100.0%

	
Somerset

	
 KY

	
81.4%

	
100.0%

	
Ruston

	
 LA

	
86.1%

	
100.0%

	
Worcester

	
 MA

	
110.7%

	
110.0%

	
Hagerstown

	
 MD

	
103.7%

	
100.0%

	
Lansing

	
 MI

	
81.7%

	
100.0%

	
Saginaw

	
 MI

	
77.8%

	
100.0%

	
Alexandria

	
 MN

	
97.2%

	
100.0%

	
Anoka

	
 MN

	
108.1%

	
110.0%

	
Blaine

	
 MN

	
109.0%

	
110.0%

	
Duluth

	
 MN

	
98.7%

	
100.0%

	
Eden Prairie

	
 MN

	
127.3%

	
130.0%

	
Hibbing

	
 MN

	
91.0%

	
100.0%

	
Hutchinson

	
 MN

	
99.9%

	
100.0%

	
Mankato

	
 MN

	
94.2%

	
100.0%

	
Rice Lake

	
 MN

	
88.3%

	
100.0%

	
Rochester

	
 MN

	
100.7%

	
100.0%

	
St. Cloud

	
 MN

	
96.4%

	
100.0%

	
Branson

	
 MO

	
93.7%

	
100.0%

	
Cape Girardeau

	
 MO

	
88.5%

	
100.0%

	
Chesterfield

	
 MO

	
124.1%

	
120.0%

	
Columbia

	
 MO

	
94.2%

	
100.0%

	
Farmington

	
 MO

	
86.5%

	
100.0%

	
Joplin

	
 MO

	
83.7%

	
100.0%

	
LaMonte

	
 MO

	
82.9%

	
100.0%

	
Nevada

	
 M O

	
82.5%

	
100.0%

	
Osage Beach

	
 MO

	
99.7%

	
100.0%

	
Springfield

	
 MO

	
83.0%

	
100.0%

	
St. Joseph

	
 MO

	
83.8%

	
100.0%

	
St. Louis

	
 MO

	
90.0%

	
100.0%

	
Sullivan

	
 MO

	
88.1%

	
100.0%

	
Warrenton

	
 MO

	
93.0%

	
100.0%

	
Gulfport

	
 MS

	
92.8%

	
100.0%

	
Hattiesburg

	
MS

	
89.4%

	
100.0%

	
Tupelo

	
 MS

	
90.1%

	
100.0%

	
Billings

	
 MT

	
100.0%

	
100.0%

	
Missoula

	
 MT

	
114.2%

	
110.0%

	
Asheville

	
 NC

	
106.8%

	
110.0%

	
Blueridge/Hickory

	
 NC

	
97.6%

	
100.0%

	
Chapel Hill

	
 NC

	
129.4%

	
130.0%

	
Charlotte

	
 NC

	
98.4%

	
100.0%

	
Concord

	
 NC

	
96.9%

	
100.0%

	
Durham

	
 NC

	
99.9%

	
100.0%

	
Elkin

	
 NC

	
90.2%

	
100.0%

	
Elm City

	
 NC

	
85.4%

	
100.0%

	
Fayetteville

	
 NC

	
94.0%

	
100.0%

 

  

51

  

 

	Location	 Base State	ACCRA	Formula
	
Franklin

	
 NC

	
95.5%

	
100.0%

	
Greenville

	
 NC

	
97.6%

	
100.0%

	
Lexington

	
 NC

	
83.6%

	
100.0%

	
Morganton

	
 NC

	
94.4%

	
100.0%

	
Raleigh

	
 NC

	
106.4%

	
110.0%

	
Siler City

	
 NC

	
92.3%

	
100.0%

	
Smithfield

	
 NC

	
92.6%

	
100.0%

	
Wilmington

	
 NC

	
107.7%

	
110.0%

	
Winston Salem

	
 NC

	
92.4%

	
100.0%

	
Lincoln

	
 NE

	
93.3%

	
100.0%

	
Norfolk

	
 NE

	
84.7%

	
100.0%

	
Omaha

	
 NE

	
89.0%

	
100.0%

	
Scottsbluff

	
 NE

	
81.9%

	
100.0%

	
Alamogordo

	
 NM

	
87.2%

	
100.0%

	
Carlsbad

	
 NM

	
83.5%

	
100.0%

	
Farmington

	
 NM

	
100.5%

	
100.0%

	
Hobbs

	
 NM

	
83.7%

	
100.0%

	
Las Cruces

	
 NM

	
92.5%

	
100.0%

	
Roswell

	
 NM

	
83.8%

	
100.0%

	
Silver City

	
 NM

	
91.4%

	
100.0%

	
Truth or Consequences

	
 NM

	
82.5%

	
100.0%

	
Boulder City

	
 NV

	
113.2%

	
110.0%

	
Gardnerville

	
 NV

	
115.2%

	
120.0%

	
Henderson

	
 NV

	
117.2%

	
120.0%

	
Las Vegas

	
 NV

	
109.0%

	
110.0%

	
Mesquite

	
 NV

	
105.7%

	
110.0%

	
Pahrump

	
 NV

	
99.2%

	
100.0%

	
Reno

	
 NV

	
109.6%

	
110.0%

	
Albany

	
 NY

	
105.9%

	
110.0%

	
Glen

	
 NY

	
98.5%

	
100.0%

	
Harris

	
 NY

	
109.7%

	
110.0%

	
Hornell

	
 NY

	
91.3%

	
100.0%

	
New Windsor

	
 NY

	
122.7%

	
120.0%

	
Sidney

	
 NY

	
95.3%

	
100.0%

	
Valhalla

	
 NY

	
187.0%

	
160.0%

	
Wallkill

	
 NY

	
120.4%

	
120.0%

	
Akron

	
 OH

	
85.8%

	
100.0%

	
Cincinnati

	
 OH

	
90.9%

	
100.0%

	
Cleveland

	
 OH

	
89.9%

	
100.0%

	
Columbus

	
 OH

	
89.2%

	
100.0%

	
Dayton

	
 OH

	
84.9%

	
100.0%

	
Lebanon

	
 OH

	
97.3%

	
100.0%

	
Marysville

	
 OH

	
93.2%

	
100.0%

	
Middlefield

	
 OH

	
99.4%

	
100.0%

	
Portsmouth

	
 OH

	
82.0%

	
100.0%

	
Salem/Youngstown

	
 OH

	
88.1%

	
100.0%

 

  

52

  

 

	Location	 Base State	ACCRA	Formula
	
Urbana

	
 OH

	
86.5%

	
100.0%

	
West Chester

	
 OH

	
94.6%

	
100.0%

	
Youngstown

	
 OH

	
75.9%

	
100.0%

	
Chicasha

	
 OK

	
78.9%

	
100.0%

	
Drumright

	
 OK

	
81.7%

	
100.0%

	
Keefton (Muskagee)

	
 OK

	
78.5%

	
100.0%

	
Oklahoma City

	
 OK

	
84.3%

	
100.0%

	
Pryor

	
 OK

	
81.4%

	
100.0%

	
Riverside (Tulsa)

	
 OK

	
89.8%

	
100.0%

	
Seminole

	
 OK

	
79.3%

	
100.0%

	
Tulsa

	
 OK

	
89.8%

	
100.0%

	
Aurora (Portland)

	
 OR

	
97.3%

	
100.0%

	
Bend

	
 OR

	
119.4%

	
120.0%

	
Eugene

	
 OR

	
112.2%

	
110.0%

	
Hillsboro (Portland)

	
 OR

	
118.2%

	
120.0%

	
LaGrande

	
 OR

	
96.4%

	
100.0%

	
Ontario (Boise)

	
 OR

	
93.1%

	
100.0%

	
Portland

	
 OR

	
118.6%

	
120.0%

	
Allentown

	
 PA

	
95.2%

	
100.0%

	
Bluebell

	
 PA

	
154.8%

	
160.0%

	
Doylestown

	
 PA

	
143.7%

	
140.0%

	
East Stroudsburg

	
 PA

	
103.2%

	
100.0%

	
Johnstown

	
 PA

	
78.3%

	
100.0%

	
Kutztown

	
 PA

	
98.8%

	
100.0%

	
Lansdale

	
 PA

	
118.4%

	
120.0%

	
Lehighton

	
 PA

	
90.5%

	
100.0%

	
Nazareth

	
 PA

	
102.3%

	
100.0%

	
Philadelphia

	
 PA

	
105.7%

	
110.0%

	
Pottsville

	
 PA

	
85.3%

	
100.0%

	
Reading

	
 PA

	
84.5%

	
100.0%

	
Sayre

	
 PA

	
87.1%

	
100.0%

	
Somerset

	
 PA

	
90.4%

	
100.0%

	
Temple

	
 PA

	
97.3%

	
100.0%

	
Weatherly

	
 PA

	
91.0%

	
100.0%

	
West Chester

	
 PA

	
128.4%

	
130.0%

	
West Mifflin

	
 PA

	
88.4%

	
100.0%

	
Anderson

	
 SC

	
89.4%

	
100.0%

	
Camden

	
 SC

	
95.1%

	
100.0%

	
Columbia

	
 SC

	
99.2%

	
100.0%

	
Conway

	
 SC

	
96.7%

	
100.0%

	
North Charleston

	
 SC

	
94.6%

	
100.0%

	
Orangeburg

	
 SC

	
87.7%

	
100.0%

	
Rock Hill

	
 SC

	
90.7%

	
100.0%

	
Walterboro

	
 SC

	
89.8%

	
100.0%

	
Rapid City

	
 SD

	
98.3%

	
100.0%

	
Sioux Falls

	
 SD

	
93.6%

	
100.0%

	
Clarksville

	
 TN

	
90.6%

	
100.0%

	
Lebanon 

	
 TN

	
94.6%

	
100.0%

 

  

53

  

 

	Location 	 Base State	ACCRA	Formula
	
Mt. Pleasant

	
 TN

	
83.3%

	
100.0%

	
Nashville

	
 TN

	
95.4%

	
100.0%

	
Shelbyville

	
 TN

	
84.1%

	
100.0%

	
Tullahoma

	
 TN

	
85.3%

	
100.0%

	
Abilene

	
 TX

	
82.9%

	
100.0%

	
El Paso

	
 TX

	
83.3%

	
100.0%

	
Ft. Worth

	
 TX

	
89.0%

	
100.0%

	
Kerrville

	
 TX

	
88.4%

	
100.0%

	
Midland

	
 TX

	
86.7%

	
100.0%

	
New Braunfels

	
 TX

	
89.0%

	
100.0%

	
San Antonio

	
 TX

	
83.4%

	
100.0%

	
Snyder

	
 TX

	
75.9%

	
100.0%

	
Tyler

	
 TX

	
90.5%

	
100.0%

	
Ogden

	
 UT

	
88.9%

	
100.0%

	
Orem

	
 UT

	
102.7%

	
100.0%

	
Park City

	
 UT

	
173.4%

	
160.0%

	
Salt Lake City

	
 UT

	
102.9%

	
100.0%

	
Charlottesville

	
 VA

	
107.7%

	
110.0%

	
Christiansburg

	
 VA

	
93.9%

	
100.0%

	
Fredericksburg

	
 VA

	
118.3%

	
120.0%

	
New River Valley (Radford)

	
 VA

	
93.9%

	
100.0%

	
Petersburg

	
 VA

	
93.0%

	
100.0%

	
Richmond

	
 VA

	
103.9%

	
100.0%

	
Roanoke

	
 VA

	
87.1%

	
100.0%

	
West Point

	
 VA

	
104.5%

	
100.0%

	
Wytheville

	
 VA

	
90.1%

	
100.0%

	
Arlington

	
 WA

	
120.6%

	
120.0%

	
Bellingham

	
 WA

	
124.0%

	
120.0%

	
Kelso (Portland)

	
 WA

	
98.8%

	
100.0%

	
Longview (Portland)

	
 WA

	
103.9%

	
100.0%

	
Olympia

	
 WA

	
116.5%

	
120.0%

	
Seattle

	
 WA

	
149.1%

	
140.0%

	
The Dalles WA (Dallesport)

	
 WA

	
96.7%

	
100.0%

	
Cameron

	
 WI

	
90.4%

	
100.0%

	
Eau Claire

	
 WI

	
90.2%

	
100.0%

	
Fond du Lac

	
 WI

	
92.3%

	
100.0%

	
Green Bay

	
 WI

	
91.4%

	
100.0%

	
LaCrosse

	
 WI

	
88.2%

	
100.0%

	
Madison

	
 WI

	
109.3%

	
110.0%

	
Marshfield

	
 WI

	
88.6%

	
100.0%

	
Milwaukee

	
 WI

	
88.6%

	
100.0%

	
New Richmond

	
 WI

	
104.1%

	
100.0%

	
Rhinelander

	
 WI

	
88.3%

	
100.0%

	
Waukesha

	
 WI

	
100.7%

	
100.0%

	
Beckley

	
 WV

	
82.0%

	
100.0%

	
Bluefield

	
 WV

	
80.8%

	
100.0%

 

  

54

  

 

	Location	 Base State	ACCRA	Formula
	
Buckhannon

	
 WV

	
85.6%

	
100.0%

	
Charleston

	
 WV

	
89.4%

	
100.0%

	
Huntington

	
 WV

	
80.6%

	
100.0%

	
Martinsburg

	
 WV

	
98.6%

	
100.0%

	
Morgantown

	
 WV

	
92.9%

	
100.0%

	
Casper

	
 WY

	
96.1%

	
100.0%

	
Cheyenne

	
 WY

	
93.2%

	
100.0%

	
Rock Springs

	
 WY

	
94.0%

	
100.0%

 

 

55

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00197-of-00352.parquet"}]]