Exhibit 10.1

 

EXECUTION COPY

 

 

 

 

 

 

CREDIT AGREEMENT

 

PROVIDING FOR A SENIOR SECURED TERM LOAN OF
$130,000,000

 

BY AND AMONG

 

SEACOR MARINE FOREIGN HOLDINGS INC.,

as Borrower,

 

SEACOR MARINE HOLDINGS INC.,

as Parent Guarantor

 

THE ENTITIES IDENTIFIED ON SCHEDULE 1-A,

as Subsidiary Guarantors

 

DNB BANK ASA, NEW YORK BRANCH,
as Facility Agent and Security Trustee

 

THE FINANCIAL INSTITUTIONS IDENTIFIED ON SCHEDULE 1-B,

as Lenders and Swap Banks

 

*         *         *

 

DNB MARKETS, INC., CLIFFORD CAPITAL PTE. LTD. AND NIBC BANK N.V.,
as Mandated Lead Arrangers

 

DNB MARKETS, INC.,
as Coordinator and Bookrunner

 

 

 

 

as of September 26, 2018

 

 

 

 

TABLE OF CONTENTS

Page

 

1.

DEFINITIONS

1

     
 

1.1

Specific Definitions

1

 

1.2

Computation of Time Periods; Other Definitional Provisions

23

 

1.3

Accounting Terms

23

 

1.4

Certain Matters Regarding Materiality

24

 

1.5

Forms of Documents

24

     
2.

REPRESENTATIONS AND WARRANTIES

24

     
 

2.1

Representations and Warranties

24

     
3.

THE FACILITY

28

     
 

3.1

Purposes

28

 

3.2

The Loan

28

 

3.3

Drawdown Notice

28

 

3.4

Effect of Drawdown Notice

29

 

3.5

Cancellation of Commitments

29

 

3.6

Fees

29

 

3.7

Hedging

29

     
4.

CONDITIONS PRECEDENT

31

     
 

4.1

Conditions Precedent to Effectiveness

31

 

4.2

Conditions to Drawdown Date

36

 

4.3

[Intentionally Omitted]

36

 

4.4

Breakfunding Costs

36

 

4.5

Satisfaction after Drawdown

37

     
5.

REPAYMENT AND PREPAYMENT

37

     
 

5.1

Repayment

37

 

5.2

Voluntary Prepayment

37

 

5.3

Borrower’s Obligations Absolute

37

 

5.4

Mandatory Prepayment

37

 

5.5

Interest and Costs with Prepayments/Application of Prepayments

38

     
6.

INTEREST AND RATE

38

     
 

6.1

Applicable Rate

38

 

6.2

Default Rate

38

 

6.3

Maximum Interest

38

 

6.4

Discontinuation of LIBOR

38

     
7.

PAYMENTS

39

     
 

7.1

Place of Payments, No Set Off

39

 

7.2

Tax Credits

39

 

7.3

Exclusion of Gross-up for Taxes

39

 

7.4

Delivery of Tax Forms

40

 

7.5

FATCA Information

40

 

7.6

FATCA Withholding

41

 

7.7

FATCA Mitigation

42

 

i

 

 

TABLE OF CONTENTS

(continued)

Page

 

 

7.8

Computations; Banking Day

42

     
8.

EVENTS OF DEFAULT

42

     
 

8.1

Events of Default

42

 

8.2

Application of Moneys

46

 

8.3

Indemnification

46

     
9.

COVENANTS

47

     
 

9.1

Affirmative Covenants

47

 

9.2

Negative Covenants

53

 

9.3

Asset Maintenance

56

     
10.

ASSIGNMENT

57

     
11.

ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.

59

     
 

11.1

Illegality

59

 

11.2

Increased Costs

59

 

11.3

Market disruption

60

 

11.4

Notification of market disruption

61

 

11.5

Alternative rate of interest during market disruption

61

 

11.6

Lender’s Certificate Conclusive

61

 

11.7

Compensation for Losses

61

     
12.

CURRENCY INDEMNITY

61

     
 

12.1

Currency Conversion

61

 

12.2

Change in Exchange Rate

61

 

12.3

Additional Debt Due

61

 

12.4

Rate of Exchange

61

     
13.

EXPENSES

62

     
 

13.1

[Intentionally Omitted]

62

 

13.2

Expenses

62

     
14.

APPLICABLE LAW, JURISDICTION AND WAIVER

62

     
 

14.1

Applicable Law

62

 

14.2

Jurisdiction

62

 

14.3

Waiver of Immunity

63

 

14.4

Waiver of Jury Trial

63

     
15.

THE FACILITY AGENT / THE SECURITY TRUSTEE

63

     
 

15.1

Appointment of Agent

63

 

15.2

Security Trustee as Trustee

63

 

15.3

Distribution of Payments

64

 

15.4

Holder of Interest

64

 

15.5

No Duty to Examine, Etc

64

 

15.6

Facility Agent and Security Trustee as Lenders

64

 

15.7

Obligations of Facility Agent and Security Trustee

64

 

ii

 

 

TABLE OF CONTENTS

(continued)

Page

 

 

15.8

Discretion of Facility Agents and Security Trustee

65

 

15.9

Assumption re Event of Default

65

 

15.10

No Liability of Agents and the Lenders

65

 

15.11

Indemnification of Facility Agent and Security Trustee

65

 

15.12

Consultation with Counsel

66

 

15.13

Resignation

66

 

15.14

Representations of Lenders

66

 

15.15

Notification of Event of Default

66

 

15.16

Sharing of Payments, Etc

67

     
16.

NOTICES AND DEMANDS

67

     
 

16.1

Notices

67

     
17.

MISCELLANEOUS

68

     
 

17.1

Right of Set-off

68

 

17.2

Time of Essence

68

 

17.3

Unenforceable, etc., Provisions–Effect

68

 

17.4

References

68

 

17.5

Further Assurances

69

 

17.6

Prior Agreements, Merger

69

 

17.7

Entire Agreement; Amendments

69

 

17.8

Assumption re Event of Default

69

 

17.9

Indemnification

70

 

17.10

USA Patriot Act Notice; Bank Secrecy Act

70

 

17.11

CEA Eligible Contract Participant

71

 

17.12

Contractual Recognition of Bail-In

71

 

17.13

Confidentiality

71

 

17.14

Counterparts; Electronic Delivery

72

 

17.15

Headings

72

 

17.16

Publication

72

 

17.17

Termination; Release

72

     
18.

Guarantee and Indemnity

73

     
 

18.1

Guarantee and Indemnity

73

 

18.2

Continuing Guarantee

73

 

18.3

Reinstatement

73

 

18.4

Waiver of Defenses

74

 

18.5

Other Waivers

74

 

18.6

Acknowledgment of Benefits

75

 

18.7

Immediate Recourse

75

 

18.8

Appropriations

75

 

18.9

Deferral of Subsidiary Guarantors’ Rights

75

 

18.10

Additional Security

76

 

18.11

Independent Obligations

76

 

18.12

Limitation of Liability

76

 

18.13

Applicability of Provisions of Guarantee to Other Security

76

 

18.14

Keepwell

76

 

18.15

Subordination

77

 

iii

 

 

EXHIBITS

 

 

A

Form of Note

 

B

Form of Parent Guaranty

 

C-1

Form of Marshall Islands Mortgage

 

C-2

Form of United Kingdom Mortgage

 

C-3

Form of Cayman Islands Mortgage

 

C-4

Form of United States Mortgage

 

C-5

Form of United Kingdom Deed of Covenants

 

C-6

Form of Cayman Islands Deed of Covenants

 

C-7

Form of United States Mortgage (SEACOR Marine LLC)

 

D

Form of Earnings Assignment

 

E

Form of Insurances Assignment

 

F

Form of Charters Assignment

 

G

Form of Interest Rate Agreement Assignment

 

H

Form of Assignment and Assumption Agreement

 

I

Form of Account Control Agreement

 

J

Form of Earnings Account Pledge

 

K

Form of Vessel Manager’s Undertaking

 

L

Form of Compliance Certificate

 

M

Form of Drawdown Notice

 

N-1

Form of Membership Pledge Agreement (New York law)

 

N-2

Form of Share Charge (English law)

   

SCHEDULE 1

PARTIES
   

SCHEDULE 2

INDEBTEDNESS
   

SCHEDULE 3

LIENS
   

SCHEDULE 4

VESSELS
   

SCHEDULE 5

INVESTMENTS
   

SCHEDULE 6

AFFILIATE TRANSACTIONS

 

iv

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”) is made as of the 26th day of September, 2018, by and among (i) SEACOR Marine Foreign Holdings Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands (“Borrower”), as borrower, (ii) SEACOR Marine Holdings Inc., a corporation incorporated under the laws of the State of Delaware (the “Parent Guarantor”), as parent guarantor, (iii) the entities identified on Schedule 1-A hereto as subsidiary guarantors, (iv) DNB BANK ASA, New York Branch (“DNB Bank”), as facility agent for the Creditors (in such capacity, the “Facility Agent”), as security trustee for the Creditors (in such capacity, the “Security Trustee”), (v) the banks, financial institutions and institutional lenders whose names and addresses are set out in Schedule 1-B hereto, as lenders (together with any assignee pursuant to the terms of Section 10 hereof, the “Lenders”, and each separately, a “Lender”), (vi) the Swap Banks, (vii) DNB Markets, Inc., Clifford Capital Pte. Ltd. and NIBC Bank N.V. as mandated lead arrangers, and (viii) DNB Markets, Inc. as coordinator and bookrunner.

 

WITNESSETH THAT:

 

WHEREAS, the Lenders have severally agreed to make available to the Borrower a senior secured term loan facility in the amount of $130,000,000 to, among other things, refinance the Vessels (as defined herein).

 

WHEREAS, subject to the terms and conditions set forth herein, the Lenders agree to lend such amounts on the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as set forth below:

 

1.

DEFINITIONS

 

1.1     Specific Definitions. In this Agreement the words and expressions specified herein, including in the preamble hereof, shall, except where the context otherwise requires, have the meanings attributed to them below:

 

Acceptable Accounting Firm means (i) Grant Thornton LLP and any other “big four” accounting firm or (ii) such other independent certified public accountants of recognized national standing selected by Borrower, and reasonably satisfactory to the Facility Agent;
   

Account Bank

means DNB Bank ASA, acting through its New York Branch and its London Branch and any other financial institution approved by the Majority Lenders;

   

Account Control Agreement

means the account control agreement by and among the Borrower, the Account Bank and the Security Trustee in respect of the Earnings Account Pledge entered into pursuant to Section 4.1(aa) substantially in the form set out in Exhibit I;

   

Additional Credit Support Vessels

means the vessels listed on Schedule 4-B hereto;

 

1

 

 

Administrative Questionnaire

means an administrative questionnaire in a form supplied by the Facility Agent;

   

Affiliate

means with respect to any Person, any other Person that directly or indirectly controls, is controlled by or under common control with such Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as applied to any Person means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of that Person whether through ownership of voting securities or by contract or otherwise;

   

Annex VI

means the Regulations for the Prevention of Air Pollution from Ships to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997);

   

Anti-Money Laundering Laws

means (i) any U.S. anti-money laundering laws and regulations, including the U.S. Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957), and the Bank Secrecy Act, as amended by the USA PATRIOT Act, and implementing regulations, and (ii) all other non-U.S. anti-money laundering laws and regulations that are applicable to any Credit Party or any Creditor;

   

Applicable Rate

means any rate of interest applicable to the Loan from time to time pursuant to Section 6.1;

   

Appraised Value

means, with respect to any Vessel, an average of the values provided by two (or three if the two valuations differ by more than 10%) Approved Brokers, one of which shall be Fearnley Offshore A/S or Clarkson Valuations Limited, for such Vessel on a stand-alone arm’s length, willing buyer, willing seller basis, free and clear of any Liens, charters or other encumbrances and with no value given to any pooling arrangements. No appraisal shall be dated more than thirty (30) days prior to the date on which such appraisal is required pursuant to this Agreement;

   

Approved Broker(s)

means Fearnley Offshore A/S, Clarkson Valuations Limited, Dufour, Laskay & Strouse, Inc. and IHS-Markit or any other Person proposed by the Borrower and approved by the Facility Agent, such approval not to be unreasonably withheld, conditioned or delayed;

   

Approved Classification Society

means Lloyds, DNV GL, American Bureau of Shipping and Bureau Veritas;

   

Assigned Moneys

means sums assigned to and/or received by the Security Trustee or any Lender pursuant to any Security Document;

 

2

 

 

Assignment and Assumption Agreement(s)

means the Assignment and Assumption Agreement(s) executed pursuant to Section 10 substantially in the form set out in Exhibit H;

     

Assignment Notices

means notices with respect to:

     
  (i) the Earnings Assignments substantially in the form set out in Exhibit 1 thereto;
     
  (ii) the Insurances Assignments substantially in the form set out in Exhibit 3 thereto;
     
  (iii) the Charter Assignments substantially in the form set out in Exhibit 1 thereto; and
     
  (iv) the Interest Rate Agreement Assignments in the form set out in Exhibit 1 thereto;
     

Assignments

means the Earnings Assignments, the Insurances Assignments, the Charter Assignments and the Interest Rate Agreement Assignments;

     

Availability Period

means the period from the date of this Agreement and ending October 3, 2018;

     

Bail-In Action

means the exercise of any Write-down and Conversion Powers;

     

Bail-In Legislation

(a)

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

     
  (b) in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;
     

Banking Day(s)

means any day excluding Saturday, Sunday and any day on which banks located in Amsterdam, the Netherlands, New York, New York, Oslo, Norway and Singapore, Singapore are authorized or required by law or other governmental action to close;

 

3

 

 

Blocked Person

means any of the following currently or in the future: (i) an individual, entity or vessel named on a Blocked Persons List, or any entity or vessel 50% or more owned or controlled in the aggregate by, directly or indirectly, such individuals or entities, or (ii) (A) an agency or instrumentality of, or an entity or vessel 50% or more owned or controlled by, or acting on behalf of or at the direction of (to the extent acting in such capacity), directly or indirectly, the government of a Sanctioned Country, (B) an entity whose principal office is located in or that is organized under the laws of a Sanctioned Country, or (C) any individual who is national or permanent resident of a Sanctioned Country; provided, however, that to the extent that any individual, entity or vessel is operating in a Sanctioned Country pursuant to and in compliance with a valid specific or general license from OFAC for such operations or otherwise in compliance with the applicable Sanctions Laws, such individual, entity or vessel shall not be deemed to be a “Blocked Person” based on such operations;

   

Blocked Persons List

means the “Specially Designated Nationals List and Blocked Persons List” maintained by OFAC and any other similar or equivalent list of sanctioned individuals or entities maintained by a Governmental Authority having jurisdiction over any Transaction Party, as the same may be amended, supplemented or substituted from time to time;

   

Borrower

shall have the meaning ascribed thereto in the preamble;

   

Cash Equivalents

means any of the following: (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than three (3) months from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within three (3) months after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $1,000,000,000; and (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $5,000,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s;

 

4

 

 

Change of Control

means:

     
  (a) with respect to the Parent Guarantor, any event or series of events occurs pursuant to which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power or ownership interest of the Parent Guarantor;
     
  (b) with respect to the Borrower, any event or series of events occurs pursuant to which the Parent Guarantor ceases to own and control, directly or indirectly, 100% of the voting power or ownership interest of the Borrower;
     
  (c) with respect to any Subsidiary Guarantor (other than Falcon Diamond LLC, Falcon Pearl LLC, SEACOR Hawk LLC and SEACOR Eagle LLC), any event or series of events occurs pursuant to which the Parent Guarantor ceases to own and control, directly or indirectly, 100% of the voting power or ownership interest of such Subsidiary Guarantor;
     
  (d) with respect to each of Falcon Diamond LLC, Falcon Pearl LLC, SEACOR Hawk LLC and SEACOR Eagle LLC, any event or series of events occurs pursuant to which the Parent Guarantor ceases to own and control, directly or indirectly, 72% or more of the voting power or ownership interest of such Subsidiary Guarantor; or
     
  (e) with respect to any Vessel Owning Entity (other than any Subsidiary Guarantor or any of Falcon Diamond LLC, Falcon Pearl LLC, SEACOR Hawk LLC and SEACOR Eagle LLC), any event or series of events occurs pursuant to which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Parent Guarantor, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power or ownership interest of such Vessel Owning Entity;
     
  (f) individuals who at the beginning of any period of two consecutive calendar years constituted the board of directors or equivalent governing body of the Parent Guarantor (together with any new directors (or equivalent) whose election by such board of directors or equivalent governing body or whose nomination for election was approved by a vote of at least two-thirds of the members of such board of directors or equivalent governing body then still in office who either were members of such board of directors or equivalent governing body at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least 50% of the members of such board of directors or equivalent governing body then in office;

 

5

 

 

Charter

means, in respect of a Vessel, any charter or other contract for its employment, whether or not already in existence;

   

Charter Assignments

means the assignments in respect of a Charter with an initial term or duration in excess of (or capable of exceeding, by virtue of any optional extension) 12 months over each Vessel executed by the relevant Credit Party in favor of the Security Trustee, substantially in the form set out in Exhibit F;

   
   

Chase Facility

means that certain $131,099,286.35 credit facility entered into on February 8, 2018 by and among (i) Falcon Global USA LLC, as borrower, (ii) various subsidiaries of Falcon Global USA LLC, as guarantors, (iii) the lenders party thereto, and (iv) JP Morgan Chase Bank, N.A., as agent, issuing bank and security trustee;

   

Classification Society

means any Approved Classification Society or another member of the International Association of Classification Societies approved by the Facility Agent, with whom a Vessel is entered and who conducts periodic physical surveys and/or inspections of such Vessel;

   

Closing Date

means the date on which all of the conditions precedent in Section 4.1 are satisfied (or waived in accordance with this Agreement);

   

Code

means the Internal Revenue Code of 1986, as amended, and any successor statute thereto and any regulation promulgated thereunder;

   

Collateral

means all property or other assets, real or personal, tangible or intangible, whether now owned or hereafter acquired in which the Security Trustee or any Creditor has been granted a security interest pursuant to a Security Document;

   

Commitment(s)”

means, in relation to a Lender, the portion of the Loan set out opposite its name in Schedule 1-B hereto or, as the case may be, in any relevant Assignment and Assumption Agreement, as such amount shall be reduced from time to time pursuant to Section 5;

   

Compliance Certificate

means a certificate attached hereto as Exhibit or such other form as the Facility Agent may agree;

 

6

 

 

Convertible Bond

means the notes issued under that certain $175,000,000 note purchase agreement entered into as of November 30, 2015 among (i) the Parent Guarantor, as issuer, and (ii) investment funds managed and controlled by The Carlyle Group, as purchasers (as amended on April 20, 2018);

   

Credit Parties

means the Borrower, the Parent Guarantor and the Subsidiary Guarantors;

   

Credit Support Vessels

means the vessels listed on Schedule 4-A hereto;

   

Creditors

means the Lenders, the Facility Agent, the Security Trustee, the Swap Banks, and each separately, a “Creditor”;

   

Deed of Covenants

means the deed of covenants in respect of each relevant Vessel, executed by the relevant Vessel Owning Entity in favor of the Security Trustee, pursuant to Section 4.1(j), substantially in the form set out in Exhibit C-5 or C-6, as the case may be, or such other deed of covenants acceptable to all Lenders;

   

Default

means any event that would, with the giving of notice or passage of time, constitute an Event of Default;

   

Default Rate

means a rate per annum equal to two percent (2%) over the Applicable Rate then in effect;

   

Designated Jurisdiction

means the Republic of Marshall Islands, the United States, the United Kingdom, England and Wales, Cayman Islands or such other jurisdiction as may be approved by the Facility Agent, such approval not to be unreasonably withheld, conditioned or delayed;

   

DNB Bank

shall have the meaning ascribed thereto in the preamble;

   

DOC

means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code;

   

Dollars” and the sign “$

means the legal currency, at any relevant time hereunder, of the United States of America and, in relation to all payments hereunder, in same day funds settled through the New York Clearing House Interbank Payments System (or such other Dollar funds as may be determined by the Facility Agent to be customary for the settlement in New York City of banking transactions of the type herein involved);

   

Drawdown Date

means the date, being a Banking Day, on which the conditions in Section 4.2 are satisfied or waived in accordance with this Agreement and the Loan is made available to the Borrower in accordance with Section 3;

 

7

 

 

Drawdown Notice

shall have the meaning ascribed thereto in Section 3.3;

   

Earnings Assignment(s)

means the assignment in respect of the earnings of each Vessel from any and all sources (including requisition compensation), executed by the relevant Subsidiary Guarantor in favor of the Security Trustee pursuant to Section 4.1(k), substantially in the form set out in Exhibit D;

   

Earnings Account

means the deposit account with account no. 14556001 maintained by the Borrower with the Account Bank;

   

Earnings Account Pledge

means the pledge of Earnings Account executed by the Borrower in favor of the Security Trustee pursuant to Section 4.1(y) substantially in the form set out in Exhibit J;

   

EEA Member Country

means any member state of the European Union, the United Kingdom, Iceland, Liechtenstein and Norway;

   

Environmental Approval(s)

shall have the meaning ascribed thereto in Section 2.1(p);

   

Environmental Claim(s)

shall have the meaning ascribed thereto in Section 2.1(p);

   

Environmental Law(s)

shall have the meaning ascribed thereto in Section 2.1(p);

   

Equity Interest

means:

 

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

 

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

   

ERISA

means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute and regulation promulgated thereunder;

   

ERISA Affiliate

means a trade or business (whether or not incorporated) which is under common control with any Credit Party or any Subsidiary thereof within the meaning of Sections 414(b), (c), (m) or (o) of the Code or which would be considered a member of a “controlled group” with any Credit Party or any Subsidiary thereof under Section 4001 of ERISA;

 

8

 

 

ERISA Funding Event

means (i) any failure by any Plan to satisfy the minimum funding standards (for purposes of Section 412 of the Code or Section 302 of ERISA), whether or not waived; (ii) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iii) the failure by any Credit Party, Subsidiary thereof or ERISA Affiliate to make any required contribution to a Multiemployer Plan; (iv) a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430(i) of the Code); (v) the incurrence by any Credit Party, Subsidiary thereof or ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (vi) the receipt by any Credit Party, Subsidiary thereof or ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Credit Party, Subsidiary thereof or ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or in endangered or critical status within the meaning of Section 432 of the Code or Section 305 of ERISA; (vii) any “reportable event”, as defined in Section 4043 of ERISA with respect to a Plan (other than an event for which the 30-day notice period to the PBGC is waived); or (viii) the existence with respect to any Plan of a non-exempt “prohibited transaction” for purposes of Section 406 of ERISA or Section 4975 of the Code;

   

ERISA Termination Event

means (i) the imposition of any lien under Section 430(k) of the Code or any other lien in favor of the PBGC or any Plan or Multiemployer Plan on any asset of any Credit Party, Subsidiary thereof or ERISA Affiliate thereof in connection with any Plan or Multiemployer Plan; (ii) the receipt by any Credit Party, Subsidiary thereof or ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to administer any Plan or Multiemployer Plan under Section 4042 of ERISA; (iii) the filing of a notice of intent to terminate a Plan under Section 4041 of ERISA; (iv) the institution of proceeding to terminate a Plan or a Multiemployer Plan; (v) the incurrence by any Credit Party, Subsidiary thereof or ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan; or (vi) the occurrence of any other event or condition which might constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan;

   

EU Bail-In Legislation Schedule

means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

   

Event of Default

shall have the meaning ascribed thereto in Section 8.1;

 

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Exchange Act

means the Securities and Exchange Act of 1934, as amended;

   

Executive Orders

means the directives issued to federal agencies by the President of the United States of America;

   

Existing Indebtedness

means, collectively, all Indebtedness outstanding under:

 

(i) that certain amended and restated loan agreement, dated April 28, 2017, between, inter alios, DNB Bank, as facility agent and security trustee, and Sea-Cat Crewzer LLC and Sea-Cat Crewzer II LLC, as joint and several borrowers, in respect of which approximately $36,379,250.00 in the principal amount and accrued interest is outstanding as of the Closing Date;

 

(ii) each certain loan agreement, dated June 6, 2013, between, inter alios, DNB Bank, as facility agent and security trustee, and each of SEACOR Hawk LLC and SEACOR Eagle LLC, as borrower, in respect of which approximately $12,207,309.53 in the aggregate principal amount and accrued interest is outstanding as of the Closing Date, and

 

(iii) that certain loan agreement, dated August 3, 2015, between, inter alios, DNB Bank, as facility agent and security trustee, and Falcon Global International LLC, Falcon Pearl LLC and Falcon Diamond LLC, as joint and several borrowers, in each case, as amended, supplemented or otherwise modified prior to the Closing Date, in respect of which approximately $52,675,333.50 in the principal amount and accrued interest is outstanding as of the Closing Date;

   

Excluded Hedging Obligations

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

   

Facility Agent

shall have the meaning ascribed thereto in the preamble;

 

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Fair Market Value

means, (i) with respect to any Vessel, the Appraised Value of such Vessel and (ii) with respect to any other asset (including any Equity Interests of any Person), the price at which a willing buyer, not an Affiliate of the seller, and a willing seller who does not have to sell, would agree to purchase and sell such asset, as determined in good faith by the Credit Party which is selling or owns such asset;

   

FATCA

means:

 

(a) Sections 1471 through 1474 of the Code and any regulations thereunder issued by the United States Treasury;

 

(b) any treaty, law or regulation of any jurisdiction, or relating to an intergovernmental agreement between jurisdictions, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

 

(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the IRS, the U.S. government or any governmental or taxation authority in any other jurisdiction;

   

FATCA Deduction

means a deduction or withholding from a payment under this Agreement or any Security Document required by or under FATCA;

   

FATCA Exempt Party

means a FATCA Relevant Party who is entitled under FATCA to receive payments free from any FATCA Deduction;

   

FATCA Non-Exempt Party

means a FATCA Relevant Party who is not a FATCA Exempt Party;

   

FATCA Non-Exempt Lender

means any Lender who is a FATCA Non-Exempt Party;

   

FATCA Relevant Party

means each Creditor;

   

Fee Letter

means any letter or letters between any of the Creditors (or any of its Affiliates) and any Credit Party setting out any of the fees payable by such Credit Party in connection with the loan facility contemplated by this Agreement;

   

Final Payment Date

means the earlier of (i) the fifth anniversary of the Drawdown Date and (ii) September 30, 2023;

   

Foreign Plan

an employee benefit plan, program, policy, scheme or arrangement that is not subject to U.S. law and is maintained or contributed to by any Credit Party or Subsidiary thereof or for which any Credit Party or Subsidiary thereof has or could have any liability;

 

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Foreign Termination Event

the occurrence of an event with respect to the funding or maintenance of a Foreign Plan that could reasonably be expected to result in a lien on, or seizure of, any collateral hereunder;

   

Foreign Underfunding

the excess, if any, of the accrued benefit obligations of a Foreign Plan (based on those assumptions used to fund that Foreign Plan or, if that Foreign Plan is unfunded, based on those assumptions used for financial accounting statement purposes or, if accrued benefit obligations are not calculated for financial accounting purposes, based on such reasonable assumptions as may be approved by the relevant Credit Party’s independent auditors for these purposes) over the sum of (i) the assets of such Foreign Plan and (ii) the liability related to such Foreign Plan accrued by the relevant Credit Party for financial accounting statement purposes which could reasonably be expected to result in a liability to any Credit Party in the aggregate in excess of US$5,000,000;

   

GAAP

shall have the meaning ascribed thereto in Section 1.3;

   

Governmental Authority

means any nation or government, any state or other political subdivision thereof and any agency, authority, commission, board, bureau or instrumentality exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government;

   

Gross Interest Bearing Debt

means, on any date of determination, the total amount of Indebtedness of the Parent Guarantor and its Subsidiaries on a consolidated basis outstanding on such date minus the aggregate amount of Indebtedness under all Warehouse Financing Facilities and the Chase Facility;

   

Group

means the Parent Guarantor and its Subsidiaries;

   

Hedging Obligation

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

   

Historical Financial Statements

means as of the Closing Date (i) the audited financial statements of the Parent Guarantor for the period ending December 31, 2017 and (ii) the unaudited financial statements of the Parent Guarantor as of the most recent fiscal quarter ended after the date of the most recent audited financial statements and at least 90 days prior to the Closing Date;

   

IAPPC

means a valid international air pollution prevention certificate for a Vessel issued under Annex VI;

 

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Indebtedness

means, with respect to any Person at any date of determination (without duplication), (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii)  the face amount of letters of credit or other similar instruments (including reimbursement obligations with respect thereto), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereof or the completion of such services, except trade payables, (v) all obligations on account of principal of such Person as lessee under capitalized leases that are properly classified as a liability on a balance sheet in accordance with GAAP, (vi) all indebtedness of other Persons secured by a lien on any asset of such Person, whether or not such indebtedness is assumed by such Person; provided that the amount of such indebtedness shall be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such indebtedness, and (vii) all indebtedness of other Persons guaranteed by such Person to the extent guaranteed; the amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that the amount outstanding at any time of any indebtedness issued with original issue discount is the face amount of such indebtedness less the remaining unamortized portion of the original issue discount of such indebtedness at such time as determined in conformity with GAAP; and provided further that Indebtedness shall not include any liability for current or deferred federal, state, local or other taxes, or any current trade payables;

   

Indemnitee

shall have the meaning ascribed thereto in Section 17.9;

   

Information

means all information received from the Credit Parties relating to any of them or any of their respective businesses in connection with this Agreement that was not otherwise available to the Facility Agent or any Lender on a non-confidential basis prior to such disclosure by the Credit Parties; provided, that, in the case of information received from the Credit Parties after the Closing Date, such information is clearly identified at the time of delivery as confidential;

   

Insurances Assignment(s)

means the assignments in respect of the insurances over each Vessel executed by the Subsidiary Guarantors in favor of the Security Trustee pursuant to Section 4.1(k), substantially in the form set out in Exhibit E;

   

Intercompany Debt

shall have the meaning ascribed thereto in Section 9.2(n)(ii);

 

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Interest Period

means each three (3) month period commencing on the Drawdown Date or the last day of the preceding Interest Period with respect to the Loan and ending on the same day in the third calendar month thereafter; provided, however, that each such Interest Period which commences on the last Banking Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Banking Day of the appropriate subsequent calendar month;

   

Interest Rate Agreement(s)

means any counter-indemnity, interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement entered into between the Borrower with a Swap Bank, which is designed to protect the Borrower against fluctuations in interest rates applicable under this Agreement, including but not limited to, that certain ISDA Master Agreement together with the Schedule thereto to be made between the Borrower and the Swap Bank, as counterparties;

   

Interest Rate Agreement Assignments

means the assignments in respect of any Interest Rate Agreements executed by the Borrower in favor of the Security Trustee pursuant to Section 4.1(k), substantially in the form set out in Exhibit G;

   

Inventory of Hazardous Material

shall have the meaning ascribed thereto in Resolution MEPC.269(68) of the International Maritime Organization;

   

Investment

means (i) any capital contribution to any Person, (ii) any purchase of any stock, bonds, notes, debentures, other securities or assets constituting a business unit of any Person, (iii) any loan, credit or advance made to any Person, or (iv) any other investment in any Person; provided, that for clarity, purchases and other acquisitions of spares, materials, equipment and intangible property relating to vessels in the ordinary course are not deemed to be Investments;

   

IRS

means the Internal Revenue Service of the United States Department of the Treasury;

   

ISM Code

means the International Safety Management Code for the Safe Operating of Ships and for Pollution Prevention constituted pursuant to Resolution A.741(18) of the International Maritime Organization and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto;

   
ISPS Code means the International Ship and Port Facility Security Code adopted by the International Maritime Organization at a conference in December 2002, and amending the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto;

 

14

 

 

ISSC means the International Ship Security Certificate issued pursuant to the ISPS Code;
   

Lease Obligations

means the amount of all lease or charter obligations calculated in accordance with GAAP and reflected on the balance sheet of any Credit Party;

   

Lender(s)

shall have the meaning ascribed thereto in the preamble;

   

LIBOR

means, with respect to any Interest Period for the Loan, the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) (rounded upward to the nearest 1/16th of one percent (1%)) of Dollars for a period equivalent to the relevant Interest Period at or about 11:00 a.m. (London time) on the second London Banking Day before the first day of such period as displayed on page LIBOR01 or LIBOR 02 of the Reuters Screen (or any such replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters, provided that if such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower); provided further that if on such date no such rate is so displayed for the relevant Interest Period, LIBOR for such period shall be the rate quoted to the Lenders by the Reference Bank at the request of the Lenders as the offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to the relevant Interest Period to prime banks in the London Interbank Market at or about 11:00 a.m. (London time) on the second Banking Day before the first day of such period (it being understood and agreed by the Borrower that in the event LIBOR is less than zero, it shall be deemed zero);

   

Lien

means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), charge or security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement or similar notice under the Uniform Commercial Code or the comparable law of any jurisdiction);

   

Loan

means the senior secured term loan to be made available by the Lenders to the Borrower pursuant to this Agreement;

 

15

 

 

Majority Lenders

means, at any time, one or more Lenders who have or hold Commitments that exceed 66 2/3% of the aggregate total Commitments of all Lenders at such time;

   

Management Agreement

means with respect to each Vessel, that certain ship management agreement between each Subsidiary Guarantor and the relevant Vessel Manager as in effect on the Closing Date, the form of which has been disclosed to the Facility Agent prior to the Closing Date, or any replacement thereof with the prior written consent of the Facility Agent, such consent not to be unreasonably withheld, conditioned or delayed;

   

Mandatory Costs

means in relation to the Loan or an unpaid sum the rate per annum notified by any Lender to the Facility Agent to be the cost to that Lender of compliance with the requirements of the Financial Conduct Authority (UK) and/or the Prudential Regulation Authority (UK) or, in any case, any similar institution which replaces all or any of their functions whose requirements such Lender complies with;

   

Margin

means 3.75% per annum;

   

Material Adverse Effect

means (i) a material adverse effect on (A) the ability of the Security Parties, taken as a whole, to meet any of their respective obligations with regard to any Transaction Document, the Loan and the financing arrangements established in connection therewith, or (B) the business, property, assets, liabilities operations, condition (financial or otherwise) or prospects of the Security Parties, taken as a whole, or (ii) a material impairment of the validity or enforceability of any Transaction Document;

   

Materials of Environmental Concern

shall have the meaning ascribed thereto in Section 2.1(p);

   

Mortgage(s)

means the first preferred/priority ship mortgage on each of the Vessels, executed by the relevant Vessel Owning Entity in favor of the Security Trustee pursuant to Section 4.1(j), substantially in the form set out in Exhibit C-1, C-2, C-3, C-4 or C-7, as the case may be, or such other first preferred/priority ship mortgage given in compliance with such other jurisdiction as all Lenders may approve;

   

MTSA

means the Maritime & Transportation Security Act, 2002, as amended, inter alia, by Public Law 107-295;

   

Multiemployer Plan

means, at any time, a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Credit Party, Subsidiary thereof or ERISA Affiliate is making or accruing an obligation to make contributions (or is required to make or accrue an obligation to make contributions) or has within any of the six preceding plan years made or accrued an obligation to make contributions (or has been required to make or accrue an obligation to make contributions);

 

16

 

 

Net Insurance Proceeds

means an amount equal to: (i) any cash payments or proceeds received by any Credit Party (a) under any casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any Vessel pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such Vessel to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred by any Credit Party in connection with the adjustment or settlement of any claims of such Credit Party in respect thereof, and (b) any bona fide direct costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith;

   

Note

means the promissory note to be executed by the Borrower, to the Facility Agent or its registered assigns pursuant to Section 4.1(c), to evidence the Loan, substantially in the form set out in Exhibit A;

   

OFAC

means the U.S. Department of the Treasury’s Office of Foreign Assets Control;

   

Operator

means, in respect of a Vessel, the Person who operates such Vessel and falls within the definition of “Company” set out in rule 1.1.2 of the ISM Code;

   

Parent Guaranty

means the guaranty to be granted by the Parent Guarantor in favor of the Security Trustee pursuant to Section 4.1(c), substantially in the form set out in Exhibit B;

   

Parent Guarantor

shall have the meaning ascribed thereto in the preamble;

   

Patriot Act

shall have the meaning ascribed thereto in Section 17.10;

   

PBGC

means the Pension Benefit Guaranty Corporation;

   

Permitted Indebtedness

shall have the meaning ascribed thereto in Section 9.2(n);

   

Permitted Liens

shall have the meaning ascribed thereto in Section 9.2(a);

   

Person

means any individual, sole proprietorship, corporation, partnership (general or limited), limited liability company, business trust, bank, trust company, joint venture, association, joint stock company, trust or other unincorporated organization, whether or not a legal entity, or any government or agency or political subdivision thereof;

 

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Plan

means any employee benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect to which any Credit Party, Subsidiary thereof or ERISA Affiliate is or, within the six-year period prior to the date of this Agreement was, (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA;

   

Pledge Agreement

means a share pledge, membership interest pledge, or share charge pursuant to which the capital stock or membership interests, as the case may be, of each Subsidiary Guarantor are pledged to the Security Trustee, substantially in the form set out in Exhibit N-1 or N-2, as the case may be;

   

Post-Closing Letter of Undertaking

means that certain letter agreement to be entered into on or about the Drawdown Date between the Facility Agent and the Borrower;

   

Qualified ECP Guarantor

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

   

Reference Bank

means DNB Bank;

   

Refinancing

means the repayment in full of the Existing Indebtedness with proceeds of the Loan and the termination of all commitments, security interests and guarantees in connection therewith;

   

Regulation T

means Regulation T of the Board of Governors of the Federal Reserve System, as in effect from time to time;

   

Regulation U

means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time;

   

Regulation X

means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time;

   

Related Fund

means, with respect to any Lender that is an investment fund (the “first fund”), any other investment fund that invests in commercial loans which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund;

 

18

 

 

Related Party

means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates;

     

Relevant Parents

means the entities identified as such on Schedule 1-A hereto or any other entity that owns any Subsidiary Guarantor and enters into a Pledge Agreement in accordance with the terms hereof;

     

Relevant Prepayment Amount

means:

   
  (i) in respect of any Vessel (other than FALCON DIAMOND and FALCON PEARL) an amount equal to the higher of:
     
  (a) the least of:
     
    (x) 10% of the principal amount of the Loan then outstanding;
     
    (y) the Fair Market Value of the Vessel sold or lost divided by the aggregate Fair Market Value all Vessels mortgaged to the Security Trustee multiplied by the principal amount of the Loan then outstanding; and
     
    (z) Net Insurance Proceeds received in connection with a less described in Section 5.4(a); and
     
  (b) an amount sufficient to satisfy the asset maintenance test set forth in Section 9.3, after giving effect to the sale or loss of the relevant Vessel; or
     
  (ii) in respect of FALCON DIAMOND and FALCON PEARL, an amount equal to the higher of:
     
  (a) the least of:
     
    (x) 10% of the principal amount of the Loan then outstanding; and
     
    (y) Net Insurance Proceeds received in connection with a loss described in Section 5.4(a); and
     
  (b) the Fair Market Value of FALCON DIAMOND or FALCON PEARL, as the case may be, sold or lost divided by the aggregate Fair Market Value of all Vessels mortgaged to the Security Trustee multiplied by the principal amount of the Loan then outstanding; and

 

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  (c) an amount sufficient to satisfy the asset maintenance test set forth in Section 9.3, after giving effect to the sale or loss of the relevant Vessel;
     
  it being understood and agreed that for purposes of this calculation, the Fair Market Value of a Vessel shall be based on valuations most recently provided pursuant to Section 9.1(s);
     

Repeating Representations

means those representations and warranties included in Sections 2.1(a) (Due Organization and Power), 2.1(b) (Authorization and Consents), 2.1(c) (Binding Obligations), 2.1(d) (No Violation), 2.1(e) (Filings; Stamp Taxes), 2.1(n) (Pari Passu Ranking), 2.1(w) (Citizenship), 2.1(x) (Investment Company), 2.1(l) (ERISA), 2.1(u) (Solvency) and 2.1(z) (Sanctions and Anti-Money Laundering);

     

Resolution Authority

means any body which has authority to exercise any Write-down and Conversion Powers;

     

Responsible Officer

means, as applied to any Person, any individual holding the position of chief executive officer, president, vice president, chief financial officer, secretary or treasurer of such Person (or, in each case, the equivalent thereof) or, with respect to any Person that is not a corporation and/or that does not have officers, any individual holding any such position of the general partner, the sole member, managing member or similar governing body of such Person;

     

Sanctioned Country

means a country against which OFAC enforces country-specific Sanctions Laws that broadly prohibit dealings in such country (as of the date hereof, Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine);

     

Sanctions Laws

means (i) all U.S. laws, rules, regulations or Executive Orders relating to economic or financial sanctions or trade embargoes, including, but not limited to any such laws, rules, regulations or Executive Orders administered and enforced by OFAC, and (ii) any similar Singapore, European Union, United Kingdom, United Nations or other non-U.S. laws, rules, regulation or orders relating to economic or financial sanctions or trade embargoes administered by any other Governmental Authority that are applicable to (A) a Credit Party or any Subsidiary thereof in the operation of its business or (B) a Lender but only to the extent that compliance with such laws, rules or regulations does not conflict with any of the provisions listed in (i) and (ii)(A) hereof;

     

SEACOR Marine

means SEACOR Marine LLC, a Delaware limited liability company;

 

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Security Document(s)

means the Pledge Agreements, the Mortgages, the Deeds of Covenants, the Assignments, the Earnings Account Pledge, the Account Control Agreement, and any other documents that may be executed as security for the Loan and the Borrower’s obligations in connection therewith;

   

Security Party(ies)

means the Credit Parties and the Relevant Parents;

   

Security Trustee

shall have the meaning ascribed thereto in the preamble;

   

SMC

means the safety management certificate issued in respect of a vessel in accordance with rule 13 of the ISM code;

   

Specified Dividend

means a distribution of up to $28,738,106.97 from the Borrower directly or indirectly to the Parent Guarantor;

   

Subsidiary(ies)

means, with respect to any Person, any business entity of which more than 50% of the outstanding voting stock or other equity interest is owned directly or indirectly by such Person and/or one or more other Subsidiaries of such Person;

   

Subsidiary Guarantors

means the entities identified on Schedule 1-A and any other entity that accedes into this Agreement as a Subsidiary Guarantor in accordance with the terms hereof;

   

Swap Bank(s)

means each of the financial institutions identified as a swap bank on Schedule 1-B hereof or any Affiliate of such financial institution;

   

Taxes

means any present or future income or other taxes, levies, duties, charges, fees, deductions or withholdings of any nature now or hereafter imposed, levied, collected, withheld or assessed by any taxing authority whatsoever, except for (i) taxes on or measured by the overall net income of any Creditor, and franchise taxes and branch profits taxes of any Creditor, imposed by its jurisdiction of incorporation or formation, or its principal office or its applicable lending office, the United States of America, the State or City of New York or any governmental subdivision or taxing authority of any thereof or by any other taxing authority having jurisdiction over such Creditor (unless and only to the specific extent such jurisdiction is asserted by reason of the activities of the Borrower) or (ii) any taxes imposed under FATCA;

   

Total Capital

means the sum of the liabilities (other than Indebtedness under all Warehouse Financing Facilities and the Chase Facility) and shareholders’ equity of the Parent Guarantor and its Subsidiaries on consolidated basis, in each case determined in accordance with GAAP;

 

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Total Debt

means the sum of Gross Interest Bearing Debt and Lease Obligations of the Parent Guarantor and its Subsidiaries;

   

Transaction Document

means each of this Agreement, the Note, the Security Documents, the Parent Guaranty, any Interest Rate Agreement, any Fee Letter, the Vessel Manager’s Undertaking and any other document designated as such by the Facility Agent and the Borrower;

   

Transaction Party

means each Security Party, any Vessel Manager that is a member of the Group or any other member of the Group who executes a Transaction Document;

   

Vessel(s)

means the Credit Support Vessels, the Additional Credit Support Vessels and any other additional vessel mortgaged to the Security Trustee pursuant to the terms of this Agreement and each of them;

   

Vessel Manager

means Boston Putford Offshore Safety Ltd., SEACOR Offshore Dubai LLC, SEACOR Marine and/or any other entity controlled by SEACOR Marine which will commercially and technically manage the Vessels at all times, or any other management company appointed with the prior written consent of the Facility Agent, such consent not to be unreasonably withheld, conditioned or delayed;

   

Vessel Manager’s Undertaking

means each of the undertakings made or to be made by the Vessel Manager in favor of the Facility Agent in respect of a Vessel, substantially in the form set out in Exhibit K;

   

Vessel Owning Entity

means each Subsidiary Guarantor, SEACOR Marine and the owner of any other vessel mortgaged to the Security Trustee pursuant to the terms of this Agreement;

   

Warehouse Financing Facilities

means financings of special purpose vehicles, directly or indirectly wholly-owned by the Parent Guarantor or otherwise consolidated in the financial statements of the Parent Guarantor in accordance with GAAP, that are non-recourse to the Parent Guarantor;

   

Withdrawal Liability(ies)

means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA;

 

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Write-down and Conversion Powers

means:
       
  (a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and
     
  (b) in relation to any other applicable Bail-In Legislation:
       
    (i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
       
    (ii) any similar or analogous powers under that Bail-In Legislation.

 

1.2          Computation of Time Periods; Other Definitional Provisions. In this Agreement, the Note, the Security Documents and any Interest Rate Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”; words importing either gender include the other gender; references to “writing” include printing, typing, lithography and other means of reproducing words in a tangible visible form; the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to articles, sections (or subdivisions of sections), exhibits, annexes or schedules are to this Agreement, the Note or such Security Document or any Interest Rate Agreement, as applicable; references to agreements and other contractual instruments (including any Transaction Document) shall be deemed to include all subsequent amendments, amendments and restatements, supplements, extensions, replacements and other modifications to such instruments (without, however, limiting any prohibition on any such amendments, extensions and other modifications by the terms of the Transaction Documents); references to any matter that is “approved” or requires “approval” of a party means approval given in the sole and absolute discretion of such party unless otherwise specified; words importing the plural include the singular and vice versa.

 

1.3          Accounting Terms. Unless otherwise specified herein, all accounting terms used in this Agreement, the Note, the Security Documents and any Interest Rate Agreement shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Facility Agent or the Lenders, as the case may be, under this Agreement shall be prepared, in accordance with generally accepted accounting principles for the United States (“GAAP”) as amended from time to time including amendments to GAAP made as a result of the conformity of GAAP to International Financial Reporting Standards in effect.

 

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1.4          Certain Matters Regarding Materiality. To the extent that any representation, warranty, covenant or other undertaking of any Credit Party in this Agreement is qualified by reference to those which are not reasonably expected to result in a “Material Adverse Effect” or language of similar import, no inference shall be drawn therefrom that the Facility Agent, Security Trustee or Lenders have knowledge or approves of any noncompliance by such Credit Party with any governmental rule.

 

1.5          Forms of Documents. Except as otherwise expressly provided in this Agreement, references to documents or certificates “substantially in the form” of Exhibits to another document means that such documents or certificates are duly completed in the form of the related Exhibits with substantive changes subject to the provisions of Section 17.7 of this Agreement, as the case may be, or the correlative provisions of the Security Documents and any Interest Rate Agreement.

 

2.

REPRESENTATIONS AND WARRANTIES

       

2.1          Representations and Warranties. In order to induce the Creditors to enter into this Agreement, each Credit Party hereby represents and warrants to the Creditors on the date hereof that:

 

(a)           Due Organization and Power. Each Credit Party is duly formed or incorporated, validly existing and in good standing under the laws of its jurisdiction of formation, has all requisite power to carry on its business as now being conducted and to enter into and perform its obligations under the Transaction Documents to which it is a party, and has complied in all material respects with all statutory, regulatory and other requirements relative to such business and such agreements;

 

(b)           Authorization and Consents. All necessary corporate or limited liability company action has been taken by each Credit Party to authorize, and all necessary consents and authorities have been obtained and remain in full force and effect to permit, such Credit Party to enter into and perform its obligations under the Transaction Documents to which it is a party;

 

(c)           Binding Obligations. Each Transaction Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legal, valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except to the extent that such enforcement may be limited by equitable principles, principles of public policy or applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors’ rights;

 

(d)           No Violation. The execution, delivery, and performance by each Credit Party of the provisions of each of the Transaction Documents to which it is party do not contravene any applicable law or regulation existing on the Closing Date that is material to the conduct of such Credit Party’s business or any contractual restriction binding on such Credit Party or its articles of incorporation, memorandum of association, certificate of formation, by-laws or operating agreement (or equivalent instruments) thereof;

 

(e)           Filings; Stamp Taxes. Other than the recording of the Mortgages in the relevant Designated Jurisdictions, as the case may be, and the filing of Uniform Commercial Code financing statements in respect of the Assignments and the Pledge Agreements, and the payment and filing or recording fees consequent thereto, it is not necessary for the legality, validity, enforceability or admissibility into evidence of the Transaction Documents to which it is party, that any of them or any document relating thereto be registered, filed, recorded or enrolled with any court or authority in any relevant jurisdiction or that any stamp, registration or similar Taxes be paid on or in relation to the Transaction Documents;

 

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(f)           Litigation. There is no action, suit or proceeding pending or, to the knowledge of any Credit Parties, threatened in writing against it or any Credit Party before any court, board of arbitration or administrative agency which is reasonably likely to result in a Material Adverse Effect;

 

(g)           No Default. No Credit Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any material agreement by which it is bound, and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect;

 

(h)           Vessels. With respect to each Vessel owned by a Subsidiary Guarantor, the relevant Subsidiary Guarantor hereby represents and warrants that such Vessel is:

 

 

(i)

in the sole and absolute ownership of such Subsidiary Guarantor and duly registered in its name under the laws and flag of the relevant Designated Jurisdiction, unencumbered, save and except for the relevant Mortgage recorded against it, the Assignments, Permitted Liens and as permitted hereby and thereby;

 

 

(ii)

classed in the highest classification and rating for vessels of the same age and type with its Classification Society without any material outstanding recommendations or adverse notations affecting class; and

 

 

(iii)

insured in accordance with the provisions of the relevant Mortgage or Deed of Covenants, as applicable, and the requirements thereof in respect of such insurances will have been complied with;

 

(i)           Insurance. Each Credit Party maintains the insurance required by Section 9.1(v);

 

(j)           Financial Information. The Historical Financial Statements have been prepared in accordance with GAAP and accurately and fairly present in all material respects the financial condition of the parties covered thereby as of the respective dates thereof and the results of the operations thereof for the period or respective periods covered by such financial statements, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments. As of the Closing Date, no Credit Party has any contingent obligations, liabilities for taxes or other outstanding financial obligations that are not reflected in the Historical Financial Statements or the notes thereto and which in any such case is material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Credit Parties, taken as a whole;

 

(k)           Tax Returns. Each Credit Party has filed all tax returns required to be filed by it and has paid all Taxes payable by it which have become due, other than those not yet delinquent and except for those (i) Taxes being contested in good faith and by appropriate proceedings or other acts and for which adequate reserves shall have been set aside on its books or (ii) where the failure to file or pay would not along or in the aggregate result in a Material Adverse Effect;

 

(l)           ERISA. No ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding exists or has occurred, or is reasonably expected to exist or occur, that, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or which could reasonably be expected to exist or occur, could reasonably be expected to result in a Material Adverse Effect. None of the Credit Parties is a “benefit plan investor” within the meaning of Section 3(42) of ERISA;

 

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(m)           Chief Executive Offices. (i) the chief executive office and chief place of business of each Credit Party (other than any Credit Party incorporated in the United Kingdom) and the office in which the records relating to such party’s earnings and other receivables are kept is located at 7910 Main Street, 2nd Floor, Houma, LA 70360, and (ii) the chief executive office and chief place of business of each Credit Party incorporated in the United Kingdom and the office in which the records relating to such party’s earnings and other receivables are kept is located at Columbus Buildings, Waveney Road, Lowestoft, Suffolk NR321BN, United Kingdom;

 

(n)           Pari Passu Ranking. Its payment obligations under the Transaction Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally;

 

(o)           Equity Ownership. On the Closing Date, the Parent Guarantor indirectly and beneficially owns (i) seventy-two percent (72%) of each of Falcon Pearl LLC, Falcon Diamond LLC, SEACOR Hawk LLC, SEACOR Eagle LLC, C-Lift LLC and Falcon Global International LLC and (ii) one hundred percent (100%) of each other Security Party and SEACOR Marine;

 

(p)           Environmental Matters and Claims. (a) Except as heretofore disclosed in writing to the Facility Agent or where the failure to comply would not alone or in the aggregate result in a Material Adverse Effect, (i) each of the Borrower and the Vessel Manager will, when required under applicable law to operate its business as then being conducted, be in compliance with all applicable United States federal and state, local, foreign and international laws, regulations and conventions relating to pollution prevention, protection of human health (to the extent related to exposure to Materials of Environmental Concern) or protection of the environment (including, without limitation, ambient air, surface water, ground water, navigable waters, waters of the contiguous zone, ocean waters and international waters), including, without limitation, laws, regulations and conventions to which either is a party relating to (1) emissions, discharges, releases or threatened releases of pollutants, contaminants, wastes, toxic substances, hazardous materials, oil, hazardous substances, petroleum and petroleum products and by-products (“Materials of Environmental Concern”), or (2) the processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, the “Environmental Laws”); (ii) each of the Borrower and the Vessel Manager will, when required under applicable Environmental Law, have all permits, licenses, approvals, rulings, variances, exemptions, clearances, consents or other authorizations required under applicable Environmental Laws (“Environmental Approvals”) and will, when required under applicable Environmental Law be in compliance with all such Environmental Approvals required to operate their business as then being conducted; and (iii)  each of the Borrower and the Vessel Manager has not received any notice of any claim, action or cause of action by any person, entity or Governmental Authority, alleging potential liability for, or a requirement to incur, Governmental Authority investigation costs, cleanup costs, response and/or remedial costs (whether incurred by a Governmental Authority or otherwise), natural resource damages, property damages, personal injuries, attorneys’ fees and expenses, or fines or penalties, in each case arising out of, based on or resulting from (1) the presence, or release or threat of release into the environment, of any Materials of Environmental Concern at any location, whether or not owned by such person, or (2) any violation, or alleged violation, of any Environmental Law or Environmental Approval (“Environmental Claim”) (other than Environmental Claims that have been fully and finally adjudicated or otherwise determined and all fines and penalties, if any, payable by it in respect thereof have been paid in full or which are fully covered by insurance (including permitted deductibles)); and (b) except as heretofore disclosed in writing to the Facility Agent there is no Environmental Claim pending or threatened in writing against any of the Transaction Parties and there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge or disposal of any Materials of Environmental Concern, that could form the basis of any Environmental Claim against the Borrower the adverse disposition of which is reasonably like to result in a Material Adverse Effect;

 

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(q)           Liens. As of the Closing Date, no Credit Party (other than the Parent Guarantor) has any Liens that are not Permitted Liens;

 

(r)           Indebtedness. As of the Closing Date, no Credit Party (other than the Parent Guarantor) has Indebtedness that is not Permitted Indebtedness;

 

(s)           [Intentionally Omitted];

 

(t)           No Proceedings to Dissolve. There are no proceedings or actions pending or contemplated by it, or to its best knowledge contemplated by any third party, to dissolve or terminate any Credit Party;

 

(u)           Solvency. With respect to each Credit Party, upon the incurrence of any Indebtedness pursuant to this Agreement, (i) the sum of its assets, at a fair valuation, does and will exceed its liabilities, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, (ii) the present fair market salable value of its assets is not and shall not be less than the amount that will be required to pay its probable liability on its then existing debts, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, as they mature, (iii) it does not and will not have unreasonably small working capital with which to continue its business and (iv) it has not incurred, does not intend to incur and does not believe it will incur, debts beyond its ability to pay such debts as they mature;

 

(v)           Compliance with Laws. Each Credit Party is in compliance with all applicable laws of all Governmental Authorities, except where the failure to comply would not alone or in the aggregate result in a Material Adverse Effect;

 

(w)           Citizenship.

 

 

(i)

If it is a Subsidiary Guarantor owning a Vessel registered in the Marshall Islands, it is a “non-resident limited liability company” under the laws of the Republic of the Marshall Islands, as such term is utilized in the Business Corporations Act and Secured Transactions Act of 2007 (in each case, of the Republic of the Marshall Islands);

 

 

(ii)

if it is a Subsidiary Guarantor owning a Vessel registered in the United States, it is a citizen of the United States within the meaning of 46 U.S.C. 50501(a), as amended, of the United States Code; and

 

 

(iii)

if it is a Subsidiary Guarantor owning a Vessel registered in the United Kingdom, it is a company within the meaning of Section 1 of the Companies Act 2006, as amended, of the United Kingdom;

 

(x)           Investment Company. No Credit Party is required to be registered as an “investment company” (as defined in the Investment Company Act of 1940, as amended);

 

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(y)           Use of Proceeds; Margin Stock. The proceeds of the Loan will be used for the purposes set forth in Section 3.1 and will not be used by any Credit Party to purchase or carry margin stock within the meanings of Regulations T, U or X of the Board of Governors of the Federal Reserve System. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System;

 

(z)           Sanctions and Anti-Money Laundering Laws. Each Credit Party is in compliance with applicable Sanctions Laws and Anti-Money Laundering Laws. No Credit Party (i) is a Blocked Person, or (ii) has received notice of or is aware of any claim, action, suit, proceeding or investigation against it by any Governmental Authority in connection with the enforcement of the Sanctions Laws. No Credit Party is engaging in a transaction or dealing with any individual, entity or Sanctioned Country in a manner that would constitute a violation of applicable Sanctions Laws. None of the Credit Parties are using any proceeds from the Loan, directly or, to its knowledge, indirectly, to lend, contribute, provide or otherwise make available funds (1) to a Blocked Person (except to the extent licensed or otherwise approved by OFAC or other applicable Governmental Authority), (2) to a Person for the purpose of engaging in any activities that would result in a violation of Sanctions Laws or Anti-Money Laundering Laws by any Credit Party or to the knowledge of the Credit Parties, any Related Party thereof, or (3) for any purposes that would result in a violation of Sanctions Laws or Anti-Money Laundering Laws by any Credit Party or, to the knowledge of the Credit Parties, any Related Party;

 

(aa)          Material Adverse Change. Since December 31, 2017, no event, circumstance or change has occurred that constitutes a Material Adverse Effect; and

 

(bb)          Repetition. The representations and warranties made herein and in any certificate or other document delivered pursuant hereto or in connection herewith shall survive the making of the Loan and the issuance of the Note. Each of such representations and warranties shall be deemed to be made by each Credit Party by reference to the facts and circumstances then existing on the date of the Drawdown Notice and the Drawdown Date, and all Repeating Representations shall be deemed to be made by each such Credit Party (other than the Parent Guarantor) by reference to the facts and circumstances then existing on the first day of each Interest Period.

 

3.

THE FACILITY

 

3.1          Purposes. The Borrower shall apply proceeds of the Loan (i) to consummate the Refinancing, (ii) to make the Specified Dividend, and (iii) for general corporate purposes, including working capital and acquisitions; provided, that no proceeds of the Loan shall be used to repay or prepay in part or whole any principal under the Convertible Bond.

 

3.2          The Loan. Each of the Lenders, relying upon each of the representations and warranties set out in Section 2 and the other Transaction Documents hereby severally and not jointly agrees with the Borrower that, subject to and upon the terms of this Agreement, it will, on the Drawdown Date in a single drawing, make its Commitment available to the Borrower in the account specified in the Drawdown Notice. Any portion of the Commitment that is not utilized on the Drawdown Date shall be automatically cancelled and the amount of the Commitment reduced accordingly.

 

3.3          Drawdown Notice. The Borrower shall serve a notice by e-mail (a “Drawdown Notice”), substantially in the form of Exhibit M, on the Facility Agent no later than 12:00 p.m. (noon) (New York time) two (2) Banking Days prior to the date of the proposed Drawdown Date. The Drawdown Notice shall (a) be in writing addressed to the Facility Agent, (b) be effective on receipt by the Facility Agent, (c) specify the proposed Drawdown Date which shall be a Banking Day within the Availability Period, (d) specify the principal amount of the Loan to be borrowed, (e) specify the disbursement instructions and (f) be irrevocable.

 

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3.4          Effect of Drawdown Notice. Delivery of the Drawdown Notice shall be deemed to constitute a warranty (a) by each of the Credit Parties that the representations and warranties stated in Section 2 (updated mutatis mutandis) hereof and by each of the Security Parties and the Vessel Owning Entities that the representations and warranties stated by it in the other Transaction Documents to which it is a party are in each case true and correct on and as of the date of the Drawdown Notice and will be true and correct on and as of the Drawdown Date as if made on such date (unless an earlier date is set forth therein), and (b) that no Event of Default nor any Default has occurred and is continuing.

 

3.5          Cancellation of Commitments

 

(a)           The Commitments which are unutilized at the end of the Availability Period shall then be automatically cancelled.

 

(b)           The Borrower may cancel any unused Commitments (in increments of $1,000,000) upon ten (10) Banking Days’ prior notice to the Facility Agent. No amount of the Commitments so cancelled under this Agreement may be subsequently reinstated.

 

3.6          Fees.

 

(a)           Commitment Fee. The Borrower shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 40% of the Margin per annum on that Lender’s available and undrawn Commitment from time to time for the period beginning on the date hereof and ending on the last day of the Availability Period, due and payable on the last day of the Availability Period or if earlier, the day all Commitments are fully drawn, reduced to zero or otherwise terminated.

 

(b)           Other Fees. The Borrower shall pay all other fees in the amount and at the times agreed in any Fee Letter.

 

3.7          Hedging.

 

(a)           The Borrower shall, within fourteen (14) days following the Drawdown Date, enter into Interest Rate Agreements with any Swap Bank and shall from that time onwards maintain such Interest Rate Agreements in accordance with this Section 3.7.

 

(b)           Each Interest Rate Agreement shall:

 

 

(i)

be in a form and on terms and conditions agreed by the Facility Agent;

 

 

(ii)

be with a Swap Bank and each Swap Bank shall also be a Lender (or an Affiliate of such Lender);

 

 

(iii)

be for a term ending on (or before) the Final Payment Date;

 

 

(iv)

have settlement dates coinciding with the interest payment dates of the Loan; and

 

 

(v)

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

 

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(c)           The rights of the Borrower under any Interest Rate Agreement to which it is a party shall be assigned by way of security under an Interest Rate Agreement Assignment.

 

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

 

(e)           Neither a Swap Bank nor the Borrower may amend, supplement, extend or waive the terms of any Interest Rate Agreement without the consent of the Facility Agent.

 

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

 

(g)           If, at any time, the aggregate notional principal amount of the transactions in respect of the Interest Rate Agreement exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed the Loan, as the case may be, at that time, the Borrower must promptly notify the Facility Agent and must, at the request of the Facility Agent (acting on the instructions of the Majority Lenders), reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Facility Agent (acting on the instructions of the Majority Lenders) so that it no longer exceeds or will not exceed the Loan, as the case may be, then or that will be outstanding and shall provide evidence that the transactions have been so reduced. The aggregate notional principal amount of the transactions in respect of the Interest Rate Agreements shall at all times be greater than or equal to 50% of the principal amount of the Loan then outstanding.

 

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

 

(i)           A Swap Bank may only suspend making payments under a transaction in respect of an Interest Rate Agreement if the Borrower is in breach of its payment obligations under any transaction in respect of that Interest Rate Agreement.

 

(j)           Each Swap Bank consents to, and acknowledges notices of, the assigning by way of security by each of the Borrower pursuant to the relevant Interest Rate Agreement of its rights under the Interest Rate Agreement to which it is party in favour of the Security Trustee.

 

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

 

(l)           The Security Trustee shall not be liable for the performance of the Borrower’s obligations under an Interest Rate Agreement to which it is a party.

 

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4.

CONDITIONS PRECEDENT

 

4.1          Conditions Precedent to Effectiveness. The effectiveness of this Agreement and the obligation of the Lenders to make the Loan available to the Borrower under this Agreement shall be expressly subject to the satisfaction, or waiver in accordance with this Agreement, of the following conditions precedent:

 

(a)           Corporate Authority. The Facility Agent shall have received the following documents in form and substance satisfactory to the Facility Agent:

 

 

(i)

copies, certified as true and complete by an officer, director or managing member (as applicable) of each Security Party and Vessel Owning Entity, of the resolutions of the directors, members or managers thereof evidencing approval of the Transaction Documents to which each is a party and authorizing an appropriate person or persons or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals and authorizations;

 

 

(ii)

copies, certified as true and complete by an officer, director or managing member (as applicable) of the relevant Security Party and Vessel Owning Entity, of all documents evidencing any other necessary action (including actions by such parties thereto other than the Security Parties and the Vessel Ownings Entities as may be required by the Lenders), approvals or consents with respect to the Transaction Documents ;

 

 

(iii)

copies, certified as true and complete by an officer, director or managing member (as applicable) of each Security Party and Vessel Owning Entity, of the certificate of formation, articles of incorporation, memorandum of association, operating agreement or by-laws, as the case may be, or equivalent instruments thereof;

 

 

(iv)

a copy, certified as true and complete by an officer of the Parent Guarantor, of the corporate organizational chart of the Parent Guarantor showing all of the Borrower and Subsidiary Guarantors;

 

 

(v)

[Intentionally Omitted];

 

 

(vi)

certificate of an authorized officer, director or managing member (as applicable) of each Security Party (other than the Parent Guarantor) certifying as to the record ownership of all of its issued and outstanding capital stock or limited liability company membership interests, as the case may be or a certified copy of the register of members;

 

 

(vii)

in the case of each Subsidiary Guarantor incorporated in England and Wales, an original of any power of attorney granted by that Subsidiary Guarantor authorizing a specified person or persons to execute the Transaction Documents to which it is a party;

 

 

(viii)

certificate of the jurisdiction of formation of each Security Party and Vessel Owning Entity as to the good standing thereof;

 

 

(ix)

copies, certified as true and complete by an officer, managing member or director (as applicable) of each of the Security Parties and the Vessel Owning Entities, of the names and true signatures of the officers or directors (as applicable) of such Security Parties and Vessel Owning Entities signing each Transaction Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder; and

 

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(x)

a certificate signed by the Chairman, President, Executive Vice President, Treasurer, Comptroller, Controller or chief financial officer of (A) the Borrower (or its managing member) to the effect that no Default or Event of Default shall have occurred and be continuing and (B) each of the Security Parties and Vessel Owning Entities (or its managing member) to the effect that the representations and warranties of such Security Party and Vessel Owning Entity contained in this Agreement and the other Transaction Documents are true and correct as of the date of such certificate (unless an earlier date is set forth therein).

 

(b)           This Agreement. Each Credit Party shall have duly executed and delivered this Agreement to the Facility Agent;

 

(c)           The Note. The Borrower shall have duly executed and delivered a Note to the Facility Agent;

 

(d)           Parent Guaranty. The Parent Guarantor shall have duly executed and delivered the Parent Guaranty to the Security Trustee;

 

(e)           Pledge Agreement. Each of the Relevant Parents and the Borrower shall have duly executed and delivered the Pledge Agreement to which it is a party to the Facility Agent, pursuant to which the capital stock or membership interests in each of the Subsidiary Guarantors shall have been pledged in favor of the Security Trustee for the benefit of the Creditors;

 

(f)           [Intentionally Omitted].

 

(g)           Fees. The Creditors shall have received payment in full of all fees and expenses due to each thereof pursuant to the terms hereof on the date when due including, without limitation, all fees and expenses due under Sections 3.6 and 13;

 

(h)           The Vessels. The Facility Agent shall have received evidence satisfactory to it that each Vessel:

 

 

(i)

is in the sole and absolute ownership of a Vessel Owning Entity and duly registered in such Vessel Owning Entity’s name under the laws and flag of the relevant Designated Jurisdiction, unencumbered, save and except for the relevant Mortgage recorded against it, the Assignments, and Permitted Liens;

 

 

(ii)

is classed in the highest classification and rating for vessels of the same age and type with the respective Classification Society without any material outstanding recommendations affecting class;

 

 

(iii)

is operationally seaworthy and in every way fit for its intended service; and

 

 

(iv)

insured in accordance with the provisions of the applicable Mortgage and Section 9.1(v) hereof and all requirements of the applicable Mortgage and Section 9.1(v) hereof in respect of such insurance have been fulfilled (including, but not limited to, letters of undertaking from the insurance brokers, including confirmation notices of assignment, notices of cancellation and loss payable clauses acceptable to the Facility Agent);

 

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(i)           Mortgages. Each Vessel Owning Entity shall have duly executed, and delivered to the Facility Agent, the Mortgage over its respective Vessel and in the case of all Vessels flagged in the United Kingdom or Cayman Islands, the Deed of Covenants;

 

(j)           Recording of the Mortgages. The Facility Agent shall have received satisfactory evidence that the Mortgage over each Vessel has been duly recorded under the laws of the relevant Designated Jurisdiction and constitutes a first preferred mortgage lien under the laws of the relevant Designated Jurisdiction;

 

(k)           Assignments. The Borrower shall have delivered to the Facility Agent duly executed copies of the following:

 

 

(i)

an Insurances Assignment over each Vessel;

 

 

(ii)

an Earnings Assignment over each Vessel;

 

 

(iii)

a Charter Assignment with respect to any Charter in excess of (or capable of exceeding, by virtue of any optional extension) 12 months over each Vessel (on a commercially reasonable basis if the relevant vessel employment agreement expressly prohibits such assignment);

 

 

(iv)

an Interest Rate Agreement Assignment relating to any Interest Rate Agreement that the Borrower has entered into;

 

 

(v)

the Assignment Notices with respect to the above mentioned Assignments;

 

(l)           [Intentionally Omitted];

 

(m)           Vessels Liens. Each Vessel Owning Entity shall deliver to the Facility Agent evidence satisfactory to it and to its counsel that, save for the liens created by the Mortgage and the Assignments, there are no liens, charges or encumbrances of any kind whatsoever on its Vessels, or on its earnings except as permitted hereby or by any of the Security Documents;

 

(n)           Compliance with ISM Code, ISPS Code, Annex VI and MTSA. Each Vessel Owning Entity shall deliver to the Facility Agent evidence satisfactory to it and to its counsel that each of its Vessels complies and the Operator complies with the requirements of the ISM Code, ISP Code, Annex VI and MTSA including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto and the Facility Agent shall have received a copy of the DOC, SMC, ISSC and IAPPC for such Vessel;

 

(o)           No Threatened Withdrawal of DOC, ISSC, SMC or IAPPC. Each Vessel Owning Entity shall deliver to the Facility Agent a certificate of such Vessel Owning Entity certifying that there is no actual or, to the best of such Vessel Owning Entity’s knowledge, threatened withdrawal of any Operator’s DOC, ISSC, SMC, IAPPC or other certification or documentation related to the ISM Code, ISPS Code, Annex VI or otherwise required for the operation of each of its Vessels or in respect to any of such Vessel Owning Entity’s Vessels;

 

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(p)        Evidence of Current COFR. The Facility Agent shall have received evidence of current compliance with any applicable requirement for a Certificate of Financial Responsibility pursuant to the Oil Pollution Act 1990 for each Vessel, as applicable;

 

(q)        Vessel Appraisals. The Facility Agent shall have received two appraisals of the Fair Market Value of each Vessel in form and substance satisfactory to the Facility Agent, and the aggregate Fair Market Value (as evidenced by such appraisals) of all the Vessels to be mortgaged to the Security Trustee shall be not less than $260,000,000;

 

(r)           Insurance Report. The Facility Agent shall have received a detailed report from a firm of independent marine insurance consultants appointed by the Facility Agent in respect of the insurances on each Vessel, in form and substance satisfactory to the Facility Agent, the cost of such report to be for the account of the Borrower;

 

(s)       Vessel Manager Documents. Each Vessel Manager shall have duly executed and delivered to the Facility Agent the Vessel Manager’s Undertaking relating to the relevant Vessel together with a copy of the Management Agreement;

 

(t)           Filings.

 

 

(i)

Each Security Party and Vessel Owning Entity shall have duly delivered to the Facility Agent the Uniform Commercial Code financing statements for filing with the State of Delaware, the District of Columbia and in such other jurisdictions as the Facility Agent may reasonably require; and

 

 

(ii)

Each Security Party and Vessel Owning Entity incorporated in England and Wales shall have duly delivered to the Facility Agent evidence of registration with the Companies House of the relevant Security Documents as the Facility Agent may reasonably require;

 

(u)         Financial Statements. The Parent Guarantor shall deliver, to the extent not publicly filed with the SEC, to the Facility Agent the Historical Financial Statements and a Compliance Certificate by the Parent Guarantor;

 

(v)        Licenses, Consents and Approvals. The Facility Agent shall have received satisfactory evidence that all necessary licenses, consents and approvals in connection with the transactions contemplated by the Transaction Documents have been obtained;

 

(w)         Know Your Customer Requirements. The Facility Agent shall have received documentation to the satisfaction of each Lender in connection with its know your customer requirements, including but not limited to:

 

 

(i)

completed company profile form provided by the Facility Agent;

 

 

(ii)

completed FATCA form provided by the Facility Agent;

 

 

(iii)

completed FinCEN UBO certification form provided by the Facility Agent;

 

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(iv)

certificates of incorporation or similar documents, certified by the respective secretary or assistant secretary of such entity;

 

 

(v)

articles of incorporation or similar documents, resolution of the board of directors or similar governing body, incumbency certificate or similar properly authorized and executed document setting forth the names and titles of the primary officers who are authorized to act on behalf of each Security Party and Vessel Owning Entity generally (rather than only for specific matters).

 

 

(vi)

a chart or other diagram on the company’s letterhead that sets forth the ownership structure of the Security Parties and Vessel Owning Entities, including any person or entity that is the beneficial owner of 25% or more of the voting equity securities in each such Person. To the extent such a 25% or more beneficial owner itself has a more than 25% or more voting securities beneficial owner, the chart or diagram shall include that owner. For these purposes, “beneficial owner” should be deemed to include a person that has economic ownership of securities, if not legal ownership;

 

 

(vii)

with respect to each beneficial owner identified in the ownership structure chart in paragraph (vi) above who is a natural person, a form of current and valid identification (e.g., passport, driver’s license or other government issued identification);

 

 

(viii)

the names of all members of the board of directors or similar governing body of each Security Party and Vessel Owning Entity on company letterhead, which shall identify the chairperson;

 

 

(ix)

with respect to each Security Party and Vessel Owning Entity, such entity’s applicable IRS Form W-8 or W-9 and tax identification number; and

 

 

(x)

a form of current and valid identification of the controlling person.

 

(x)           [Intentionally Omitted];

 

(y)           Earnings Account. The Borrower shall have established the Earnings Account into which Assigned Moneys are to be paid;

 

(z)           Earnings Account Pledge. The Borrower shall have executed and delivered to the Facility Agent an Earnings Account Pledge relating to the Earnings Account;

 

(aa)          Account Control Agreement. The Borrower, the Account Bank and the Security Trustee shall have executed and delivered to the Facility Agent the Account Control Agreement;

 

(bb)          Legal Opinions. The Facility Agent shall have received legal opinions addressed to the Lenders from (i) Watson Farley & Williams LLP, special counsel to the Security Parties and Vessel Owning Entities, as to matters of New York law, Delaware law, Marshall Islands law and United States maritime law, (ii) Stephenson Harwood LLP, special counsel to the Creditors, as to matters of English law and (iii) Conyers Dill & Pearman, special counsel to the Creditors, as to matters of Cayman Islands law, in each case in such form as the Facility Agent may require, as well as such other legal opinions as the Facility Agent shall have required as to all or any matters under the laws of the United States of America, the State of New York, the State of Delaware, the Republic of the Marshall Islands, the United Kingdom, England and Wales and Cayman Islands in a form acceptable to the Facility Agent and its counsel;

 

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(cc)          Charters. The Facility Agent shall have received certified copies of all Charters;

 

(dd)          Inventory of Hazardous Materials. The Facility Agent shall have received a copy of the Inventory of Hazardous Materials with respect to each Vessel, commencing on the date of the first drydocking of such Vessel after the Closing Date; and

 

(ee)          Process Agent. Each Security Party and Vessel Owning Entity (other than those incorporated in the United States) shall have appointed a process agent in the State of New York and the Facility Agent shall have received evidence of the acceptance of such appointment from such process agent.

 

4.2          Conditions to Drawdown Date. The obligation of the Lenders to make the Loan available to the Borrower under this Agreement shall be expressly and separately subject to the satisfaction, or waiver in accordance with this Agreement, of the following further conditions precedent:

 

(a)           Drawdown Notice. The Facility Agent having received a Drawdown Notice in accordance with the terms of Section 3.3.

 

(b)           Representations and Warranties. The representations stated in Section 2 and in the other Transaction Documents (updated mutatis mutandis to such date) being true and correct as if made on and as of that date (unless an earlier date is set forth therein);

 

(c)           No Event of Default. No Default or Event of Default having occurred and being continuing;

 

(d)           No Change in Laws. The Lenders being satisfied that no change in any applicable laws, regulations, rules or in the interpretation thereof shall have occurred which make it unlawful for any Transaction Party to make any payment as required under the terms of the Transaction Documents;

 

(e)           No Material Adverse Effect. There having occurred no matter or event which might result in a Material Adverse Effect since December 31, 2017;

 

(f)           Refinancing of Existing Indebtedness. Confirmation that the Refinancing shall be consummated concurrently with drawdown on the Drawdown Date to the reasonable satisfaction of the Facility Agent; and

 

(g)           Post-Closing Letter of Undertaking. The Facility Agent having received a duly executed Post-Closing Letter of Undertaking.

 

4.3          [Intentionally Omitted].

 

4.4          Breakfunding Costs. In the event that, on the date specified for the making of the Loan in the Drawdown Notice, any Lender shall not be obliged under this Agreement to make the Loan or any portion thereof available resulting from the failure of any conditions precedent under Section 4.1 or 4.2 hereof to be satisfied, the Borrower shall indemnify and hold such Lender fully harmless against any losses which such Lender may sustain as a result of borrowing or agreeing to borrow funds to meet the drawdown requirement of such Drawdown Notice and the certificate of such Lender shall, absent manifest error, be conclusive and binding on the Borrower as to the extent of any such losses.

 

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4.5          Satisfaction after Drawdown. Without prejudice to any of the other terms and conditions of this Agreement, in the event the Lenders, in their sole discretion, make the Loan prior to the satisfaction of all or any of the conditions referred to in Sections 4.1 and 4.2 (other than in the case of a waiver of such conditions in accordance with this Agreement), the Borrower hereby covenants and undertakes to satisfy or procure the satisfaction of such condition or conditions within fourteen (14) days after the Drawdown Date (or such longer period as the Majority Lenders, in their sole discretion, may agree).

 

5.

REPAYMENT AND PREPAYMENT

 

5.1          Repayment.

 

(a)           Quarterly Installments. On each quarterly date from the Drawdown Date, the Borrower shall repay the principal amount of the Loan in an amount equal to $3,250,000.

 

(b)           Maturity. The Borrower shall repay the outstanding principal amount of the Loan, together with accrued but unpaid interest thereon and any fees and other amounts owing to any Creditor on the Final Payment Date.

 

5.2          Voluntary Prepayment. Subject to delivery of the notices and the minimum payment amounts required by this Section 5.2, the Borrower may, at its option, on any Banking Day, prepay all or any portion of the Loan. The Borrower shall compensate the Lenders for any loss, cost or expense incurred by them as a result of a prepayment made on any day other than the last day of the applicable Interest Period in accordance with the provisions of Section 5.5 or 11.5, as the case may be. Prepayments made on the last day of the applicable Interest Period shall be without penalty or premium. Any prepayment shall be in a minimum amount of One Million Dollars ($1,000,000) or the full amount of the Loan then outstanding. The Borrower shall deliver to the Facility Agent notice of such prepayment not less than five (5) Banking Days prior to the date on which the Borrower intends to make such prepayment (which notice shall be irrevocable and shall specify the date and amount of such prepayment).

 

5.3          Borrower’s Obligations Absolute. The Borrower’s obligations to pay each Creditor hereunder and under the Note shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms hereof and thereof, under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or may have had against any Creditor. If (and only if) requested by a Lender, the Borrower shall promptly deliver to such Lender a Note evidencing such Lender’s portion of the Loan.

 

5.4          Mandatory Prepayment.

 

(a)           Sale or Loss. On (i) the day of receipt by any Credit Party of sale proceeds of a Vessel or (ii) the earlier of (x) one hundred and eighty (180) days after the actual, constructive or compromised loss of a Vessel, or two hundred and seventy (270) days after the requisition of title, nationalization, confiscation or expropriation of a Vessel or (y) the date on which Net Insurance Proceeds in respect of such loss are received by any Credit Party, the Borrower shall either (A) repay the Loan in an amount equal to the Relevant Prepayment Amount or (B) pledge to the Security Trustee additional Collateral as may be satisfactory to the Majority Lenders in their sole discretion.

 

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(b)           Change of Control. If a Change of Control occurs, the Borrower shall immediately repay in full the outstanding principal amount of the Loan, together with accrued but unpaid interest thereon and any fees or other amounts owing to any Creditor.

 

5.5          Interest and Costs with Prepayments/Application of Prepayments. Any prepayment of the Loan made hereunder (including, without limitation, those made pursuant to Sections 5 and 9.3) shall be subject to the condition that on the date of prepayment by or on behalf of the Borrower all accrued interest to the date of such prepayment shall be paid in full with respect to the Loan or portions thereof being prepaid, together with any and all costs or expenses incurred by any Lender in connection with any breaking of funding for prepayments other than on the last day of the applicable Interest Period (as certified by the relevant Lender, which certification shall, absent any manifest error, be conclusive and binding on the Borrower). No amounts pre-paid or repaid will be available for re-borrowing.

 

6.

INTEREST AND RATE

 

6.1          Applicable Rate. The Borrower shall pay to the Lenders interest on the unpaid principal amount of the Loan for the period commencing on the Drawdown Date until but not including the stated maturity thereof (whether by acceleration or otherwise) or the date of prepayment thereof at the Applicable Rate, which shall be the rate per annum which is equal to the aggregate of (a) LIBOR for the relevant Interest Period plus (b) the Margin plus (c) Mandatory Costs, if any. Accrued interest on the Loan shall be payable in arrears on the last day of each Interest Period.

 

6.2          Default Rate. Notwithstanding the foregoing, the Borrower agrees that after the occurrence and during the continuance of an Event of Default, the Loan and any other outstanding amount under the Transaction Documents shall bear interest at the Default Rate. In addition, the Borrower hereby promises to pay interest at the Default Rate on any other amount payable by the Borrower hereunder or under any other Transaction Document which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise), for the period commencing on the due date thereof until but not including the date the same is paid. Any interest at the Default Rate (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of the then applicable Interest Period but will remain immediately due and payable.

 

6.3          Maximum Interest. Anything in this Agreement or the Note to the contrary notwithstanding, the interest rate on the Loan shall in no event be in excess of the maximum rate permitted by applicable law.

 

6.4          Discontinuation of LIBOR. Subject to the Facility Agent’s rights contained in this Agreement or the other Transaction Documents, this Agreement and the other Transaction Documents may be amended to replace LIBOR with: (a) a successor or alternative index rate as the Majority Lenders and the Borrower may reasonably determine or (b) absent such mutual selection by the Borrower and the Facility Agent, a comparable successor or alternative interbank rate for deposits in Dollars that is, at such time, broadly accepted as the prevailing market practice for syndicated leveraged loans of this type in lieu of LIBOR as reasonably determined by the Facility Agent; provided that (i) any such successor or alternative rate shall be applied by the Facility Agent in a manner consistent with market practice and (ii) to the extent such market practice is not administratively feasible for the Facility Agent, such successor or alternative rate shall be applied in a manner as otherwise reasonably determined by the Facility Agent in consultation with the Borrower.

 

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7.

PAYMENTS

 

7.1          Place of Payments, No Set Off. All payments to be made hereunder by the Borrower shall be made to the Facility Agent, not later than 3 p.m. New York time (any payment received after 3 p.m. New York time shall be deemed to have been paid on the next Banking Day) on the due date of such payment, at its office located at 200 Park Avenue, New York, New York 10166, USA or to such other office of the Facility Agent as the Facility Agent may direct, without set-off or counterclaim and free from, clear of, and without deduction or withholding for, any Taxes; provided, however, that if the Borrower shall at any time be required by applicable law to withhold or deduct any Taxes from any amounts payable to the Lenders hereunder, then the Borrower shall pay such additional amounts in Dollars as may be necessary in order that the net amounts received by the Lenders after withholding or deduction shall equal the amounts which would have been received if such withholding or deduction were not required and, in the event any withholding or deduction is made, whether for Taxes or otherwise, the Borrower shall promptly send to the Facility Agent such documentary evidence with respect to such withholding or deduction as may be required from time to time by the Lenders.

 

7.2          Tax Credits. If a Lender obtains the benefit of a credit against relief or remission for, or repayment of any Tax imposed by any taxing authority for all or part of the Taxes as to which the Borrower has paid additional amounts as aforesaid, then such Lender shall pay an amount to the Borrower which such Lender determines will leave it (after such payment) in the same position as it would have been had the Tax payment not been made by the Borrower. Each Lender agrees that in the event that Taxes are imposed on account of the situs of its loans hereunder, such Lender, upon acquiring knowledge of such event, shall, if commercially reasonable and if, in the opinion of such Lender, it is not prejudicial to it, shift such loans on its books to another office of such Lender so as to avoid the imposition of such Taxes. Nothing contained in this clause shall in any way prejudice the right of the Lenders to arrange their tax affairs in such way as they, in their sole discretion, deem appropriate. In particular, a Lender shall not be required to obtain such tax credit if this interferes with the way such Lender normally deals with its tax affairs.

 

7.3          Exclusion of Gross-up for Taxes. Borrower shall not be required to pay any additional amounts to or for the account of any Lender pursuant to Section 7.1 to the extent that:

 

(a)           the applicable Lender was not an original party to this Agreement and under applicable law (after taking into account relevant treaties and assuming that such Lender has provided all forms it may legally and truthfully provide) on the date such Lender became a party to this Agreement withholding of Taxes would have been required on such payment, provided that this exclusion shall not apply to the extent such withholding does not exceed the withholding that would have been applicable if such payment had been made to an applicable Lender that was an original party to this Agreement; or

 

(b)           the applicable Lender has changed its lending office and under applicable law (after taking into account relevant treaties and assuming that such Lender has provided all forms it may legally and truthfully provide) on the date such Lender changed its lending office withholding of Taxes would have been required on such payment, provided that this exclusion shall not apply to the extent such withholding does not exceed the withholding that would have been applicable to such payment and with respect to which such Lender would have been entitled to receive additional amounts pursuant to Section 7.1 hereof if such Lender had not changed its lending office; or

 

(c)           withholding would not have been required on such payment if such Lender had complied with its obligations to deliver certain tax forms pursuant to Section 7.4 below.

 

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7.4          Delivery of Tax Forms.

 

(a)           On or prior to the Closing Date (or in the case of a transferee Lender, the date that it becomes a party to this Agreement), and thereafter when reasonably requested by the Borrower, each Lender or transferee that is organized under the laws of a jurisdiction outside the United States, any state thereof or the District of Columbia (a “Non-U.S. Lender”) shall deliver to the Facility Agent two properly completed and duly executed copies of (as applicable) IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY or, upon request of the Borrower or the Facility Agent, any subsequent versions thereof or successors thereto, in each case claiming a reduced rate (which may be zero) of U.S. federal withholding tax under Sections 1441 and 1442 of the Code with respect to payments hereunder as such Non-U.S. Lender may properly claim. In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code, such Non-U.S. Lender shall, on or prior to the Closing Date (or in the case of a transferee Lender, the date that it becomes a party to this Agreement), and thereafter when reasonably requested by the Borrower, provide to the Borrower and the Facility Agent in addition to the applicable IRS Form W-8 required above a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of such Credit Party and is not a controlled foreign corporation related to such Credit Party (within the meaning of Section 864(d)(4) of the Code), and such Non-U.S. Lender agrees that it shall promptly notify the Facility Agent in the event any representation in such certificate is no longer accurate.

 

(b)            In the case of a Non-U.S. Lender that is a party to this Agreement on the Closing Date and that fails to provide an IRS Form W-8ECI or the certificate described in the last sentence of Section 7.4(a) with respect to a Credit Party that is a U.S. person , the IRS Form W-8BEN, W-8BEN-E or W-8IMY provided by such Non-U.S. Lender on or prior to the Closing Date shall claim the benefits of an income tax treaty providing for no U.S. federal withholding tax under Sections 1441 and 1442 of the Code with respect to payments hereunder with respect to such Credit Party.

 

(c)           On or prior to the date hereof (or in the case of a transferee Lender, the date that it becomes a party to this Agreement), and thereafter when reasonably requested by the Borrower, each Lender that is not a Non-U.S. Lender shall deliver to the Borrower and the Facility Agent executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

(d)           Any Lender shall when reasonably be requested by the Borrower provide such forms as are necessary to comply with the Common Reporting Standard issued by the Organisation for Economic Cooperation and Development (OECD), or similar legislation, regulations or guidance enacted in any jurisdiction that seeks to implement equivalent tax reporting and/or withholding tax regimes.

 

7.5          FATCA Information.

 

(a)           Subject to paragraph (c) below, each FATCA Relevant Party, within ten (10) Banking Days of a reasonable request by the Borrower or the Facility Agent, shall:

 

 

(i)

confirm to that other party whether it is a FATCA Exempt Party or is a FATCA Non-Exempt Party; and

 

 

(ii)

supply to the requesting party (with a copy to all other FATCA Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable “pass-thru percentage” or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of determining whether any payment to such party may be subject to any FATCA Deduction.

 

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(b)           If a FATCA Relevant Party confirms to the Borrower or the Facility Agent that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 showing that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall so notify the Borrower and the Facility Agent reasonably promptly.

 

(c)           Nothing in this Section 7.5 shall obligate any FATCA Relevant Party to do anything which would or, in its reasonable opinion, might, constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided that nothing in this paragraph shall excuse any FATCA Relevant Party from providing a true complete and correct applicable IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

 

(d)           If a FATCA Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance the provisions of this agreement or the provided information is insufficient under FATCA, then:

 

 

(i)

such party shall be treated as if it were a FATCA Non-Exempt Party; and

 

 

(ii)

if that party failed to confirm its applicable pass-thru percentage then such party shall be treated for the purposes of any Transaction Document (and payments made thereunder) as if its applicable pass-thru percentage is 100%,

 

until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

 

7.6          FATCA Withholding.

 

(a)           The Borrower or the Facility Agent making a payment to any FATCA Non-Exempt Party shall make such FATCA Deduction as it determines is required by law and shall render payment to the IRS or other applicable taxing authority within the time allowed and in the amount required by FATCA.

 

(b)           If a FATCA Deduction is required to be made by the Borrower or the Facility Agent to a FATCA Non-Exempt Party, the amount of the payment due from the Borrower or the Facility Agent shall be reduced by the amount of the FATCA Deduction reasonably determined to be required by the Borrower or the Facility Agent.

 

(c)           Each FATCA Relevant Party shall promptly upon becoming aware that a FATCA Deduction is required with respect to any payment owed to it (or that there is any change in the rate or basis of a FATCA Deduction) notify the Borrower or the Facility Agent accordingly, and no Credit Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction.

 

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(d)           Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the party making such FATCA Deduction shall deliver to the Facility Agent for delivery to the party on account of whom the FATCA Deduction was made evidence reasonably satisfactory to that party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the IRS or other applicable taxing authority.

 

(e)           The Facility Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Lender which relates to a payment by the Credit Parties (or that there is any change in the rate or the basis of such a FATCA Deduction) notify the Credit Parties and the relevant Lender.

 

7.7          FATCA Mitigation. Notwithstanding any other provision of this Agreement, if a FATCA Deduction is or will be required to be made by any party under Section 7.4 in respect of a payment to any FATCA Non-Exempt Lender, the FATCA Non-Exempt Lender may either:

 

  (i) transfer its entire interest in the Loan to a U.S. branch or Affiliate, or
     
 

(ii)

nominate one or more transferee lenders who upon becoming a Lender would be a FATCA Exempt Party, by notice in writing to the Facility Agent and the Borrower specifying the terms of the proposed transfer, and cause such transferee lender(s) to purchase all of the FATCA Non-Exempt Lender’s interest in the Loan.

 

7.8          Computations; Banking Day.

 

(a)           All computations of interest and fees shall be made by the Facility Agent or the Lenders, as the case may be, on the basis of a 360-day year, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which interest or fees are payable. Each determination by the Facility Agent or the Lenders of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(b)           Whenever any payment hereunder or under the Note shall be stated to be due on a day other than a Banking Day, such payment shall be due and payable on the next succeeding Banking Day unless the next succeeding Banking Day falls in the following calendar month, in which case it shall be payable on the immediately preceding Banking Day.

 

8.

EVENTS OF DEFAULT

 

8.1          Events of Default. The occurrence of any of the following events shall constitute an “Event of Default”:

 

(a)           Non-Payment.

 

 

(i)

Any payment of principal, interest or fees payable pursuant to this Agreement or any Fee Letter is not made on the due date thereof, unless such failure is caused by an administrative or technical error and payment is made within three (3) Banking Days of its due date; or

 

 

(ii)

any payment of any other amount payable pursuant to this Agreement or any other Transaction Document is not made on the due date, and such failure continues for ten (10) days.

 

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(b)           [Intentionally Omitted].

 

(c)           Representations. Any representation, warranty or other statement made by any Transaction Party in (i) this Agreement, (ii) any of the Security Documents, (iii) any Interest Rate Agreement or (iv) any other instrument, document or other agreement delivered in connection herewith or therewith, proves to have been untrue or misleading in any material respect when made or deemed made; or

 

(d)           Impossibility; Illegality. It becomes impossible or unlawful for any Transaction Party to fulfill any of its covenants or obligations under any Transaction Document or for any Creditor to exercise any of the rights vested in it under any Transaction Document; or

 

(e)           Mortgage. There is an event of default (after giving effect to applicable notice and cure periods) under any Mortgage; or

 

(f)           Certain Covenants. (i) Any Credit Party defaults in the performance or observance of any covenant contained in Sections 5.4 (Mandatory Prepayment), 5.5 (Interest and Costs with Prepayments/Application of Prepayments), 9.1(b) (Notice of Default, etc.), 9.1(f) (Corporate Existence), 9.1(l) (Environmental Matters), 9.1(v) (Insurances), 9.2(a) (Liens), 9.2(b) (Investments), 9.2(f) (Change of Flag, Class, Management or Ownership), 9.2(i) (Sale of Assets), 9.2(k) (Restricted Payments), 9.2(l) (Consolidation and Merger), 9.2(n) (Indebtedness), 9.2(o) (Sanctions and Anti-Money Laundering), 9.2(q) (Use of Proceeds), 9.2(s) (Restrictions on Chartering), 9.3 (Asset Maintenance) or 18.15 (Subordination) of this Agreement and sub-sections (a)(iii), (a)(iv)(1), (a)(iv)(2), (a)(v), (a)(xiii), (a)(xiv), (a)(xv), (a)(xvi) (it being understood that for the avoidance of doubt, no Event of Default shall arise until after the date of the expiration of the Cure Right provided therein), (b)(i), (b)(ii), (b)(iii), (b)(vii), (b)(viii), (b)(x), (b)(xi), (b)(xii), (b)(xiii) and (b)(xiv) of Section 4 of the Parent Guaranty or the Post-Closing Letter of Undertaking; or

 

(g)           Covenants. Any Security Party or Vessel Owning Entity defaults in the performance of any term, covenant or agreement contained in any Transaction Document to which it is a party or in any other instrument, document or other agreement delivered by it in connection herewith or therewith, in each case other than an Event of Default referred to elsewhere in this Section 8.1, or there occurs any other event which constitutes a default by any Security Party or Vessel Owning Entity under any Transaction Document to which it is a party and in each case such default continues unremedied for a period of twenty (20) days after the earlier of (x) actual knowledge thereof by a Responsible Officer of such Security Party or Vessel Owning Entity or (y) such Security Party or Vessel Owning Entity having been notified thereof in writing by the Facility Agent, in each case other than an Event of Default referred to elsewhere in this Section 8.1; or

 

(h)           Indebtedness. (i) Any default occurs in the payment when due (after giving effect to applicable notice and cure periods) of any Indebtedness of any Credit Party (other than the Parent Guarantor), or (ii) any other default occurs in respect of any Indebtedness of such Credit Party, the effect of which default is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries thereof (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness or indebtedness to become due prior to its stated maturity, and, in either case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been such payment default or other default, exceeds $10,000,000; or

 

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(i)           Parent Guarantor Indebtedness. The Parent Guarantor shall be in default in the payment when due (after giving effect to applicable notice and cure periods) of any Indebtedness other than Indebtedness under any Warehouse Financing Facilities and the Chase Facility, and the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been such payment default, exceeds $25,000,000; or

 

(j)           Bankruptcy. (i) Any Security Party or Vessel Owning Entity shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, receiver manager, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Security Party or Vessel Owning Entity shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Security Party or Vessel Owning Entity any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Security Party or Vessel Owning Entity thereof any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Security Party or Vessel Owning Entity shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; (v) any Security Party or Vessel Owning Entity shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) any Security Party or Vessel Owning Entity shall make a general assignment for the benefit of creditors;

 

(k)           Certain ERISA Transactions. An ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding shall exist or occur that, in the reasonable opinion of the Majority Lenders, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or could reasonably be expected to exist or occur, could reasonably be expected to result in a Material Adverse Effect; or

 

(l)           Judgments and Decrees. Any judgment, order or decree is made the effect whereof would be to render invalid this Agreement or any other Transaction Document or any material provision thereof or any Security Party or Vessel Owning Entity asserts in writing that any such agreement or provision thereof is invalid; or one or more judgments or decrees shall be entered against any Security Party or Vessel Owning Entity for an aggregate liability (net of amounts paid or covered by insurance) of, in the case of any Security Party (other than the Parent Guarantor) or Vessel Owning Entity, $10,000,000 or more or, in the case of the Parent Guarantor, $25,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof; or

 

(m)           Invalidity of Agreement, Note, Security Documents and any Interest Rate Agreement. (i) Any Transaction Document or any material provision thereof shall cease, for any reason, to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the obligations in accordance with the terms hereof or thereof), or any action or suit at law or in equity or other legal proceeding to cancel, revoke or rescind any Transaction Document or any material provision thereof shall be commenced by or on behalf of any Transaction Party or any Governmental Authority, or (ii) the Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby; or

 

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(n)           Business Suspended. Any Credit Party shall be enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting a material part of its business and such order shall continue in effect for more than forty-five (45) days; or

 

(o)           Loss or Suspension of License or Permit. There shall occur the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by any Security Party or Vessel Owning Entity if such loss, suspension, revocation or failure to renew would have a Material Adverse Effect; or

 

(p)           Classification Society Report. The Facility Agent shall have received a report by any Classification Society, or by any marine engineer or surveyor following an inspection that a Vessel is not in compliance with the requirements for the highest classification for vessels of like age and type or is not in compliance with the requirements of applicable law for use as intended under this Agreement and action shall not have been commenced within fifteen (15) days after written notice thereof shall have been given by the Facility Agent to the relevant Vessel Owning Entity and such corrective action shall not be diligently prosecuted or completed in a manner and time schedule consistent with industry standard; or

 

(q)           Termination of Operations; Sale of Assets. Any Security Party or Vessel Owning Entity ceases its operations or sells or otherwise disposes of all or substantially all of its assets or all or substantially all of the assets thereof are seized or otherwise appropriated; or

 

(r)           Inability to Pay Debts. Any Security Party or Vessel Owning Entity is unable to pay or admits its inability to pay its debts as they fall due or a moratorium shall be declared in respect of any material indebtedness of such Security Party or Vessel Owning Entity; or

 

(s)           Material Adverse Change. There has occurred an event or condition that has resulted in a Material Adverse Effect; or

 

(t)           Arrest of a Vessel. Any Vessel shall at any time be subject to an arrest, distress or detention in any place for thirty (30) days or more; or

 

(u)           Blocked Person. Any Transaction Party or any Subsidiary thereof or any Related Party becomes a Blocked Person; or

 

(v)           Delisting. The Parent Guarantor’s shares are involuntarily delisted from the New York Stock Exchange (or such other reputable international stock exchange approved in writing by the Facility Agent (acting on the instructions of the Majority Lenders)).

 

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Upon and during the continuance of any Event of Default, the Lenders’ obligation to make the Loan available shall cease and the Facility Agent, on behalf of the Majority Lenders, may, and shall upon the Majority Lenders’ instruction, by written notice to the Borrower declare the entire unpaid balance of the then outstanding Loan, accrued interest and any other sums payable by the Borrower hereunder or under the Note and under the other Transaction Documents due and payable, whereupon the same shall forthwith be due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; provided that upon the happening of an event specified in subsections (j) or (r) of this Section 8.1 with respect to the Borrower, the Loan, accrued interest and any other sums payable by the Borrower hereunder, under the Note and under the other Transaction Documents shall be immediately due and payable without declaration, presentment, demand, protest or other notice to the Borrower all of which are expressly waived. In such event, the Creditors or any Creditor may proceed to protect and enforce their rights by action at law, suit in equity or in admiralty or other appropriate proceeding, whether for specific performance of any covenant contained in this Agreement, in the Note, in any other Transaction Document, or in aid of the exercise of any power granted herein or therein, or the Lenders, a Lender or the Facility Agent may proceed to enforce the payment of the Note or to enforce any other legal or equitable right of the Lenders, or proceed to take any action authorized or permitted under the terms of any Security Document or of any Interest Rate Agreement or by applicable law for the collection of all sums due, or so declared due, including, without limitation, the right to appropriate and hold or apply (directly, by way of set-off or otherwise) to the payment of the obligations of the Borrower to the Creditors hereunder and/or under the Note (whether or not then due) all moneys and other amounts of the Borrower then or thereafter in possession of any Creditor, the balance of any deposit account (demand or time, matured or unmatured) of the Borrower then or thereafter with any Creditor and every other claim of the Borrower then or thereafter against any of the Creditors.

 

8.2          Application of Moneys. Except as otherwise provided in any Security Document or in any Interest Rate Agreement, all moneys received by the Facility Agent, the Security Trustee or any Lender under or pursuant to any Transaction Document after the happening of any Event of Default (unless cured to the satisfaction of the Lenders) shall be applied by the Facility Agent in the following manner:

 

  (i) first, in or towards the payment or reimbursement of any expenses or liabilities incurred by the Facility Agent or the Security Trustee hereunder, under the Note and under any of the other Transaction Documents;
     
 

(ii)

secondly, in or towards the payment or reimbursement of any expenses or liabilities incurred by any of the other Creditors in connection with the protection or enforcement of its rights and remedies hereunder, under the Note and under the other Transaction Documents;

 

 

(iii)

thirdly, in or towards payment of any interest owing in respect of the Loan;

 

 

(iv)

fourthly, in or towards repayment of principal of the Loan and in or towards payments of any amounts then owed under any Interest Rate Agreement, including but not limited to, any costs associated with unwinding any Interest Rate Agreement relative to the Borrower’s repayment obligations hereunder, ratably among the applicable Creditors in proportion to the respective amounts described in this paragraph held by them;

 

 

(v)

fifthly, in or towards payment of all other sums which may be owing to any Creditor under any Transaction Document; and

 

 

(vi)

sixthly, the surplus (if any) shall be paid to the Borrower or its designee.

 

8.3          Indemnification. Each Credit Party agrees to severally indemnify and hold the Creditors harmless against any loss, as well as against any costs or expenses (including legal fees and expenses), which any of the Creditors sustains or incurs as a consequence of any default in payment of the principal amount of the Loan, interest accrued thereon or any other amount payable hereunder, under the Note related thereto or under any other Transaction Documents, including, but not limited to, all actual losses incurred in liquidating or re-employing fixed deposits made by third parties or funds acquired to effect or maintain the Loan or any portion thereof. Any Creditor’s certification of such costs and expenses shall, absent any manifest error, be conclusive and binding on the Credit Parties.

 

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9.

COVENANTS

 

9.1          Affirmative Covenants. Each Credit Party (other than the Parent Guarantor) hereby covenants and undertakes with the Lenders that, from the Closing Date and so long as any principal, interest or other moneys are owing by it in respect of this Agreement or under any other Transaction Document to which it is a party, that it will:

 

(a)           Performance of Agreements. Duly perform and observe, and procure the observance and performance of all other parties thereto (other than the Creditors) of the terms of the Transaction Documents to which it is a party;

 

(b)           Notice of Default, etc. Promptly upon any Responsible Officer of any Credit Party obtaining actual knowledge thereof, inform the Facility Agent of the occurrence of (a) any Default or Event of Default, (b) any litigation, arbitration or governmental proceeding pending or threatened in writing against any Transaction Party not previously disclosed to the Lenders or any development in respect of a previously disclosed litigation, arbitration or governmental proceeding, which if adversely determined could reasonably be expected to have a Material Adverse Effect, including but not limited to, in respect of any Environmental Claim or any judgment entered against a Transaction Party, (c) the withdrawal, with respect to any Vessel owned by it, of such Vessel’s rating by its Classification Society or the issuance by the Classification Society of any material recommendation or notation affecting class and (d) any other event or condition which is reasonably likely to have a Material Adverse Effect;

 

(c)           [Intentionally Omitted];

 

(d)           Financial Information. deliver to the Facility Agent:

 

 

(i)

as soon as available but not later than one hundred twenty (120) days after the end of each fiscal year of the Borrower ending after the Closing Date, complete copies of the consolidated financial reports of the Borrower, all in reasonable detail, which shall include at least the consolidated balance sheet the Borrower as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be audited reports prepared by an Acceptable Accounting Firm;

 

 

(ii)

as soon as available but not later than ninety (90) days after the end of each of the first three full quarters of each fiscal year of the Borrower ending after the Closing Date, a quarterly interim consolidated balance sheet of the Borrower, and the related consolidated profit and loss statements and sources and uses of funds, all in reasonable detail, unaudited, but accompanied by the certification of the chief executive officer, chief financial officer or controller of the Borrower that such financial statements fairly present the financial condition of the Borrower as at the dates indicated, subject to changes resulting from audit and normal year-end adjustments; and

 

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(iii)

such other information and data with respect to the Borrower or any Subsidiary of the Borrower that is a Security Party as from time to time may be reasonably requested by the Facility Agent or any Lender;

 

provided that any delivery requirement under this Section shall be deemed satisfied by the posting of such information, materials or reports as applicable on EDGAR or any successor website maintained by the SEC (if the Borrower is permitted by law to post such materials on EDGAR).

 

(e)           Vessel Covenants. Except as otherwise permitted by this Agreement, with respect to each of the Vessels owned by it:

 

  (i) keep the Vessels registered in the name of the applicable Subsidiary Guarantor;
     
 

(ii)

keep the Vessels in good and safe condition and state of repair (ordinary wear and tear and/or loss or damage by casualty or condemnation excepted);

 

 

(iii)

keep the Vessels insured in accordance with the provisions of Section 9.1(v) hereof and of the relevant Mortgage recorded against it and ensure that the requirements thereof in respect of any insurances have been complied with;

 

 

(iv)

notify the Facility Agent of all material modifications to the Vessels and of the removal of any parts or equipment from the Vessels; and

 

 

(v)

provide the Facility Agent with all reasonably requested Vessel related information;

 

(f)           Corporate Existence. Except as otherwise permitted hereunder, do or cause to be done all things necessary to preserve and keep its separate identity and existence under the laws of its jurisdiction of incorporation or formation and all licenses, franchises, permits and assets necessary to the conduct of its business;

 

(g)           Books and Records. At all times keep proper books of record and account into which full and correct entries shall be made in accordance with GAAP;

 

(h)           Taxes and Assessments. Pay and discharge all taxes, assessments and governmental charges or levies imposed upon each Credit Party’s income or property prior to the date upon which penalties attach thereto; provided, however, that it shall not be required to pay and discharge, or cause to be paid and discharged, any such tax, assessment, charge or levy so long as the legality thereof shall be contested in good faith and by appropriate proceedings or other acts and it shall set aside on its books adequate reserves with respect thereto;

 

(i)           Inspection. Allow, upon ten (10) Banking Days’ notice from the Facility Agent, any representative or representatives designated by the Facility Agent, subject to applicable laws and regulations, at normal business hours, to visit and inspect subject to customary confidentiality arrangements any of its properties, and, on request, to examine its books of account, records, reports, agreements and other papers and to discuss its affairs, finances and accounts with its officers; provided, that (i) the Facility Agent shall only be allowed to conduct one such inspection per calendar year prior to the occurrence of an Event of Default and an unlimited amount of inspections during the continuance of an Event of Default; and (ii) the foregoing inspections by the Facility Agent shall not unreasonably interfere with the conduct of any Credit Party’s business (unless an Event of Default has occurred and is continuing);

 

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(j)           Inspection and Survey Reports. (i) If the Facility Agent shall so request, the relevant Credit Party or Vessel Owning Entity shall provide the Facility Agent (for distribution to the Lenders) with copies of all internally generated inspection or survey reports on each Vessel owned by it; provided, that in the event that any Vessel is reactivated out of cold stack, the Borrower shall provide (or cause to be provided), upon the reasonable request of the Facility Agent, the Facility Agent with copies of all inspections and survey reports to the extent required to be provided to the Classification Society or other such reports requested by the Facility Agent at the cost of the Borrower, and (ii) upon reasonable notice to the relevant Credit Party, each Credit Party shall permit the Facility Agent (acting through surveyors or other persons appointed by it for that purpose) at the cost of the Borrower to inspect the relevant Vessel and shall afford all proper facilities for such inspections; provided, that (A) the Facility Agent shall only be allowed to conduct one such inspection per calendar year prior to the occurrence of an Event of Default and (B) such inspections shall not unreasonably interfere with the operation of any Vessel, any relevant charterer’s quiet enjoyment of the applicable Vessel or that Vessel’s scheduled maintenance and docking schedule;

 

(k)           Compliance with Statutes, Agreements, etc. Except where failure to comply would not alone or in the aggregate result in a Material Adverse Effect, do or cause to be done, all things necessary to comply with all contracts or agreements to which it is a party, and all laws, and the rules and regulations thereunder, applicable to it, including, without limitation, those laws, rules and regulations relating to employee benefit plans and environmental matters;

 

(l)           Environmental Matters. Promptly upon the occurrence of any of the following conditions, provide to the Facility Agent notice thereof, specifying in reasonable detail the nature of such condition: (a) its receipt of any written communication that alleges that it is not in compliance with any applicable Environmental Law or Environmental Approval, if such failure to comply would reasonably be expected to have a Material Adverse Effect, (b) any Environmental Claim pending or threatened in writing against any it, which would reasonably be expected to have a Material Adverse Effect, or (c) any release, emission, discharge or disposal of any Material of Environmental Concern that would reasonably be expect to form the basis of any Environmental Claim against it, if such Environmental Claim could reasonably be expected to have a Material Adverse Effect. Upon the written request by the Facility Agent, it will submit to the Facility Agent at reasonable intervals, a report providing an update of the status of any issue or claim identified in any notice or certificate required pursuant to this subsection;

 

(m)           ERISA. Forthwith upon learning of the existence or occurrence of any ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding that, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or which could reasonably be expected to exist or occur, could reasonably be expected to result in a liability to the Credit Parties in the aggregate in excess of $5,000,000, furnish or cause to be furnished to the Facility Agent written notice thereof;

 

(n)           ISM Code, ISPS Code, Annex VI and MTSA Matters. With respect to each Vessel owned by it (i) procure that the Vessel Manager is and shall at all times remain the Operator thereof, (ii) procure that the Operator will comply with and ensure that each of the Vessels operated by it will comply with the requirements of the ISM Code, ISPS Code, Annex VI and MTSA in accordance with the implementation schedules thereof, including (but not limited to) the maintenance and renewal of valid certificates, and when required, security plans, pursuant thereto throughout the term of the Loan; (iii) procure that the Operator will immediately inform the Facility Agent if there is any threatened or actual withdrawal of its DOC, SMC, ISSC or IAPPC in respect of any Vessel operated by it; (iv) procure that the Operator will promptly inform the Facility Agent upon the issuance to the relevant Subsidiary Guarantor or Operator of a DOC and to any of the Vessels of an SMC, ISSC or IAPPC; and (v) maintain an Inventory of Hazardous Materials onboard at all times following the next drydock;

 

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(o)           Vessel Classification. Keep and cause to be kept each Vessel owned by it in a good and efficient state of repair so as to maintain her present class with its Classification Society and so as to comply with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws of the relevant Designated Jurisdiction, procure that each such Vessel’s Classification Society make available to the Security Trustee, upon its request, such information and documents in respect of such Vessel as are maintained in the records of such Classification Society, and procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of each such Vessel;

 

(p)           Vessel Management. Cause each of the Vessels owned by it to be managed both commercially and technically by the Vessel Manager;

 

(q)           Brokerage Commissions, etc. Indemnify and hold each of the Creditors harmless from any claim for any brokerage commission, fee, or compensation from any broker or third party hired by any Credit Party resulting from the transactions contemplated hereby;

 

(r)           [Intentionally Omitted];

 

(s)           Vessel Valuations. On or prior to the last day of June and December of each calendar year, the Borrower shall obtain and deliver to the Facility Agent appraisals of the Fair Market Value of the Vessels, such valuations to be at the Borrower’s cost. In the event that the Borrower fails or refuses to obtain the valuations required by this clause, the Facility Agent will be authorized to obtain such valuations from Approved Brokers, at the Borrower’s cost, which valuations shall be deemed the equivalent of valuations duly obtained by the Borrower pursuant to this clause, but the Facility Agent’s action in doing so shall not excuse any default of the Borrower hereunder. If an Event of Default has occurred and is continuing, the Borrower shall obtain appraisals of the Fair Market Value of the Vessels, such valuations to be at the Borrower’s cost, at such further frequency as may be reasonably required by the Majority Lenders;

 

(t)           Evidence of Current COFR. If the Facility Agent shall so request, provide, if applicable, the Facility Agent with copies of the current Certificate of Financial Responsibility pursuant to the Oil Pollution Act 1990 for any Vessel owned by it;

 

(u)           Additional Charters. If a Vessel is subject to any new Charter, the relevant Vessel Owning Entity shall, within 30 days of entering into such Charter, deliver a Charter Assignment with respect to any Charter in excess of (or capable of exceeding, by virtue of any optional extension) 12 months (but only on a commercially reasonable basis if the relevant vessel employment agreement expressly prohibits such assignment);

 

(v)           Maintenance of Insurance.

 

 

(i)

Maintain with financially sound and reputable insurance companies, insurance on all its properties and against all such risks and in at least such amounts as are usually insured against by companies of established reputation engaged in the same or similar business from time to time; provided, that it is understood and acknowledged that breach of warranty coverage is not required;

 

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(ii)

Maintain, at their own cost and expense, insurance with respect to its business generally and on the Vessels (including, without limitation, insurance required to be maintained under the terms of the relevant Mortgage) against risks (including, without limitation, marine hull and machinery (including excess value) insurance, marine protection and indemnity insurance, war risks insurance including acts of terrorism and piracy and war risks P&I and liability arising out of pollution), and in forms which are acceptable to the Facility Agent and placed through brokers and with insurance companies, underwriters, funds, mutual insurance associations, war risks and protection and indemnity risks associations, or clubs of recognized standing, in each case satisfactory to the Facility Agent. The Security Trustee and Facility Agent may act in all matters relating to insurances, including the granting or withholding of its consents and approvals on advice from an insurance advisor upon whose advice they may rely;

 

 

(iii)

Procure that the aggregate Hull and Machinery and Hull and Freight Interest Insurances insured value of each Vessel shall be equal to or greater than the greater of (i) 120% of the aggregate outstanding principal amount of the Loan (when aggregated with the insured value of the other Vessels then financed under this Agreement) and (ii) the Fair Market Value of such Vessel. The Hull and Machinery insured value of each Vessel shall be at least 80% of the Fair Market Value of such Vessel;

 

 

(iv)

Acknowledge and agree that the Security Trustee shall place, at the expense of the Borrower, mortgagee’s interest insurance and, if required by any Lender, mortgagee’s additional perils (pollution) insurance, on conditions acceptable to the Facility Agent in an amount for all Vessels together equal to 120% of the aggregate outstanding amount of the Loan (unless the Security Trustee agrees to a lower amount of coverage), and the Security Trustee on behalf of the Creditors agrees to obtain and maintain the same; and

 

 

(v)

Each Subsidiary Guarantor shall promptly assign its interest in hull and machinery insurances (if any) to the Facility Agent (or Security Trustee) pursuant to Insurances Assignments, substantially in the form of Exhibit E hereto;

 

(w)           Maintenance of Properties. Keep all material property necessary in its business in good working order and condition (loss or damage by casualty or condemnation excepted);

 

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(x)           Know Your Customer Requirements. Provide all documentation reasonably requested by Lenders in connection with their know your customer requirements, including but not limited to:

 

 

(i)

completed bank account opening mandates with telephone and fax indemnities to include the list of the all account holders’ authorized signatories and specimens of their signatures;

 

 

(ii)

certified list of directors, including titles, business and residential addresses and dates of birth;

 

 

(iii)

certified true copy of photo identification (i.e. passport or driving license) and evidence of residential address (i.e. utility bill or bank statement) for all authorized signatories;

 

 

(iv)

certificates of incorporation or similar documents, certified by the respective secretary or assistant secretary of such entity;

 

 

(v)

with respect to each Credit Party, such entity’s applicable IRS Form W-8 or W-9 and tax identification number, if applicable;

 

 

(vi)

completed form 4-329 for each account signatory;

 

 

(vii)

with respect to the Borrower, certificate of ultimate beneficial ownership, certified by the respective secretary or assistant secretary of such entity; and

 

 

(viii)

non-resident declaration forms, if applicable;

 

(y)           Accounts. On and after the establishment of the Earnings Account pursuant to Section 4.1(y) maintain the Earnings Account and deposit therein all Assigned Moneys;

 

(z)           Sanctions and Anti-Money Laundering Laws. Remain, and instruct each of its Subsidiaries, the Vessel Manager and any Related Party thereof to remain, in compliance with applicable Sanctions Laws and Anti-Money Laundering Laws;

 

(aa)          Additional Insurances Assignments. If any Credit Party obtains political risk insurance or other similar insurances, it shall enter into Insurances Assignments over such insurances, substantially in the form of Exhibit E hereto; and

 

(bb)          Sustainable Vessel Dismantling. In the event that any Subsidiary Guarantor undertakes to dismantle a Vessel owned by it (or to sell such Vessel with the intention of it being dismantled) with the prior written consent of the Facility Agent (or any other vessel owned by it), it shall comply with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and to the extent applicable, United States laws, as well as any other applicable vessel dismantling conventions on safe, sustainable, and socially and environmentally responsible dismantling of such Vessel that is taken out of service.

 

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9.2          Negative Covenants. Each Credit Party (other than the Parent Guarantor) hereby covenants and undertakes with the Lenders that, from the Closing Date and so long as any principal, interest or other moneys are owing in respect of this Agreement, under the Note or any other Transaction Documents, that it will not:

 

(a)           Liens. Create, assume or permit to exist, any Lien whatsoever upon any Collateral, except for the following (collectively, “Permitted Liens”):

 

 

(i)

the Mortgages, the Assignments and other Liens in connection with this Agreement and the Security Documents;

 

 

(ii)

Liens against a Vessel permitted to exist under the terms of the Mortgage;

 

 

(iii)

Liens for Taxes not yet due and payable or if obligations with respect to such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and adequate reserves have been made in accordance with GAAP;

 

 

(iv)

Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

 

(v)

Liens in the ordinary course of business for master’s and crews’ wages and salvage (including contract salvage);

 

 

(vi)

other Liens arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Vessel and which do not in the aggregate materially detract from the value of the Vessels or materially impair the use thereof in the operation of its business and which secure obligations not more than 30 days overdue and which do not result from any default or omission by a Credit Party;

 

 

(vii)

prior to the consummation of the Refinancing, Liens existing on the Closing Date in respect of the Existing Indebtedness;

 

 

(viii)

any Lien on any asset or property (other than any Vessel) of Falcon Diamond LLC, Falcon Pearl LLC, SEACOR Hawk LLC or SEACOR Eagle LLC granted in favor of any other Credit Party, so long as such Lien is subordinated to the Lien in favor of the Security Trustee;

 

 

(ix)

other Liens in existence on the Closing Date and set forth on Schedule 3 hereto;

 

(b)           Investments. Make any Investment, except for the following Investments:

 

 

(i)

Investments in cash and Cash Equivalents;

 

 

(ii)

Investments in securities of trade creditors or customers in the ordinary course of business that are received in settlement of bona fide disputes or pursuant to any plan of reorganization or liquidation or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers;

 

 

(iii)

Investments by one Credit Party to, or into, another Credit Party, so long as, to the extent such Investment is in the form of Intercompany Debt, such Indebtedness is (x) permitted under Section 9.2(e) and (y) subordinated to the obligations owed to the Lenders under the Transaction Documents pursuant to Section 18.15 hereof;

 

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(iv)

Investments by the Borrower in Subsidiaries that are not Credit Parties, so long as before and after giving effect thereto, there shall not have occurred an Event of Default that is continuing;

 

 

(v)

other Investments in existence on the Closing Date and set forth on Schedule 5 hereto;

 

(c)           [Intentionally Omitted];

 

(d)           [Intentionally Omitted];

 

(e)           Transaction with Affiliates. Enter into any transaction with an Affiliate, other than on an arms-length basis other than transactions for the benefit of such Credit Party; provided that the foregoing restriction shall not apply to (i) any transaction between or among any Credit Party and any other Credit Party; (ii) reasonable and customary fees paid to members of the board of directors (or similar governing body) of Parent Guarantor and its Subsidiaries; (iii) compensation arrangements for officers and other employees of Parent Guarantor and its Subsidiaries entered into in the ordinary course of business; (iv) transactions expressly permitted by Section 9.2(n)(ii) of this Agreement, and (v) other affiliate transactions existing on the Closing Date and set forth on Schedule 6 hereto;

 

(f)           Change of Flag, Class, Management or Ownership. Change (i) the flag of a Vessel owned by it other than to another Designated Jurisdiction (provided, that a new Mortgage is granted to the Security Trustee and registered with the registry of the new Designated Jurisdiction and any other necessary changes to the Security Documents are effected in a manner satisfactory to the Majority Lenders) or with the consent of the Majority Lenders, (ii) the Classification Society of a Vessel owned by it other than to an Approved Classification Society without the Majority Lenders’ prior written consent, (iii) the technical or commercial management of a Vessel owned by it other than to another Vessel Manager or (iv) the immediate or ultimate ownership of a Vessel owned by it;

 

(g)           Change in Business. Materially change the nature of its business or commence any business materially different from its current business;

 

(h)           Equity Interests. (i) purchase, cancel, redeem or retire any of its Equity Interests, (ii) increase or reduce its authorized Equity Interests; or (iii) issue any additional Equity Interests except to the extent such new Equity Interests are made subject to the terms of the Pledge Agreement immediately upon the issue thereof in a manner satisfactory to the Facility Agent;

 

(i)           Sale of Assets. Sell, assign, transfer, pledge or otherwise convey or dispose of any of the Vessels owned by it or any other of its assets pledged to the Security Trustee pursuant to this Agreement or a Security Document unless the applicable portion of the Loan is repaid in accordance with Section 5.4(a), except for (i) leases of, or charter contracts in respect of, the Vessels in the ordinary course of business and as permitted by Section 9.2(s) (Restrictions on Chartering) and (ii) disposals of property (but not any Vessel) that is no longer economically practicable to maintain or useful in the conduct of the business of the Credit Parties, taken as a whole;

 

(j)           Changes in Name. Change its name or principal place of business unless the Facility Agent shall have received five (5) Banking Days prior written notice of such change;

 

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(k)           Restricted Payments. (i) directly or indirectly declare or pay any dividend or make any distribution on account of its Equity Interests or (ii) purchase, repurchase, redeem, retire or otherwise acquire for value any Equity Interests of any Security Party (such dividend or distribution on account of equity interests referenced in item (i) hereof, or payment, purchase, repurchase, redemption, retirement or acquisition referenced in item (ii) hereof, “Restricted Payment”), except for (i) the Specified Dividend, (ii) any dividend or distribution to a Credit Party (other than the Parent Guarantor) or (iii) so long as before and after giving effect thereto, there shall not have occurred an Event of Default that is continuing, any other Restricted Payment. For the avoidance of doubt, the term “Restricted Payment” shall not include any payment of interest under any convertible debt or similar instrument of any Credit Party, including the Convertible Bond;

 

(l)           Consolidation and Merger. Consolidate with, or merge into, any corporation or other entity, or merge any corporation or other entity into it or enter into any demerger, amalgamation, consolidation or corporate reconstruction or restructuring, other than (x) a merger of any Subsidiary Guarantor with another Subsidiary Guarantor, or a merger of any Affiliate of a Subsidiary Guarantor into another Subsidiary Guarantor, in each case, so long as the surviving entity after such merger is a Subsidiary Guarantor and any necessary actions as reasonably requested by the Security Trustee to preserve the Security Trustee’s security interests are taken simultaneously upon the consummation of such transaction and (y) with the prior written consent of the Majority Lenders;

 

(m)           Change Fiscal Year. Change its fiscal year (other than as may be required to conform to GAAP);

 

(n)           Indebtedness. Create, incur, issue, or otherwise become directly or indirectly liable for any Indebtedness, other than the following (collectively, “Permitted Indebtedness”):

 

 

(i)

Indebtedness created pursuant to this Agreement;

 

 

(ii)

Indebtedness of any Credit Party extended by another Credit Party (such Indebtedness, “Intercompany Debt”), so long as such Indebtedness is subordinated pursuant to Section 18.15;

 

 

(iii)

normal trade credits in the ordinary course of business;

 

 

(iv)

Indebtedness of the Borrower or any Subsidiary Guarantor under Interest Rate Agreements entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;

 

 

(v)

prior to the consummation of the Refinancing, the Existing Indebtedness; and

 

 

(vi)

other Indebtedness existing on the Closing Date and set forth on Schedule 2 hereto.

 

(o)           Sanctions and Anti-Money Laundering Laws. (i) Engage in a trade or financial transaction or other dealing with any individual, entity or Sanctioned Country that would violate Sanctions Laws; or (ii) use any proceeds from the Loan, directly or, to its knowledge, indirectly, (1) to fund any trade or business involving any Blocked Person (except to the extent licensed or approved by OFAC or other applicable Governmental Authority), or (2) for the purpose of engaging in any activities that would result in a violation of Sanctions Laws or Anti-Money Laundering Laws by any Credit Party;

 

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(p)           Changes to Management Agreements. Amend, waive, terminate or otherwise modify any Management Agreement without the written consent of the Majority Lenders, such consent not to be unreasonably withheld, conditioned or delayed;

 

(q)           Use of Proceeds. Use the proceeds of the Loan in violation of Regulation T, U or X;

 

(r)           Accounts. Establish any operating accounts or earnings accounts in respect of the Assigned Moneys with any financial institution other than the Account Bank; and

 

(s)           Restrictions on Chartering. In relation to the Vessel owned by it, (i) let that Vessel on demise charter for any period, other than bareboat charters to Affiliates, (ii) permanently remove that Vessel from service unless it has first given notice to the Facility Agent and the asset maintenance test set forth in Section 9.3 is satisfied before and after such removal, or (iii) put the vessels FALCON DIAMOND and FALCON PEARL into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) for each such vessel unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Vessel or its earnings for the cost of such work or for any other reason.

 

9.3     Asset Maintenance. If the aggregate Fair Market Value of the Vessels mortgaged to the Security Trustee (evidenced by the valuations provided to the Facility Agent pursuant to Section 9.1(s) on or prior to the last day of June and December of each calendar year) is less than the one hundred forty percent (140%) (the “Required Percentage”) of the principal amount of the Loan then outstanding, the Borrower shall, within a period of fifteen (15) days (which period may be extended by the Facility Agent (acting with the consent of the Majority Lenders)) following receipt by the Borrower of written notice from the Facility Agent notifying the Borrower of such shortfall and specifying the amount thereof (which amount shall, in the absence of manifest error, be deemed to be conclusive and binding on the Borrower), either (i) pledge (or cause to be pledged) to the Security Trustee additional Collateral of sufficient value such that the aggregate Fair Market Value of the Vessels mortgaged to the Security Trustee plus the additional Collateral equals the Required Percentage of the outstanding amount of the Loan or (ii)  prepay such amount of the Loan (together with interest thereon and any other monies payable in respect of such prepayment pursuant to Section 5.5) as shall result in the Fair Market Value of the Vessels mortgaged to the Security Trustee being not less than the Required Percentage of the outstanding principal amount of the Loan.

 

9.4     Vessel Releases and Transfers

 

(a)     At any time after the second anniversary of the Closing Date, upon the written request of the Borrower to the Facility Agent, (i) any lien created pursuant to any Security Document in respect of any of the Additional Credit Support Vessels shall be released (for the avoidance of doubt, this section (a) shall not apply to the LIAM J MCCALL) and (ii) the relevant Vessel Owning Entity shall be released from this Agreement (if it owns no other Vessel mortgaged to the Security Trustee) and any Security Document to which it is party, provided, that before and after giving effect to any such release, (A) the aggregate Fair Market Value of the Vessels is more than two hundred percent (200%) of the principal amount of the Loan then outstanding and (B) no Event of Default has occurred or is continuing. For the avoidance of doubt, this paragraph (a) of Section 9.4 does not apply to the sale of a Vessel pursuant to paragraph (a) of Section 5.4.

 

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(b)     If, at any time, any Vessel Owning Entity enters into any vessel employment contract involving operations in Guyana, upon the written request of the Borrower to the Facility Agent, the relevant Vessel is permitted to be transferred to SEACOR Marine (and all liens created pursuant to the relevant Security Documents in respect of that Vessel or the relevant Vessel Owning Entity shall be released), provided, that before and after giving effect to such transfer and release, (i) the asset maintenance test set forth in Section 9.3 is satisfied (after taking into account the mortgages to be granted pursuant to sub-section (ii)(A) hereof) and (ii) no Event of Default has occurred or is continuing. In connection therewith, the Parent Guarantor shall, on the date of such release, or shall cause SEACOR Marine, as applicable, to (A) grant a first priority or preferred mortgage over such Vessel, (B) execute and deliver the documents in respect of the Assignments specified in Section 4.1(k) and (C) do all such acts and execute all such documents and instruments (including resolutions, officer’s certificates and legal opinions) as reasonably requested by the Security Trustee to maintain and ensure the Security Trustee’s first priority collateral position with respect to that Vessel.

 

(c)     If, at any time, any Vessel owned by SEACOR Marine or any other Vessel Owning Entity that is not a Subsidiary Guarantor permanently ceases operations in Guyana (including, without limitation, the LIAM J MCCALL), upon the written request of the Facility Agent to the Parent Guarantor, the Parent Guarantor shall, within 6 months of such written request, cause SEACOR Marine or such other Vessel Owning Entity to transfer the ownership of such Vessel to a Subsidiary selected by the Parent Guarantor. On the date of such transfer, the relevant Subsidiary shall (i) (if it is not already a Subsidiary Guarantor) accede into this Agreement as a Subsidiary Guarantor, (ii) grant in favor of the Security Trustee a first priority or preferred mortgage over such Vessel and (B) execute and deliver the documents in respect of the Assignments specified in Section 4.1(k), (iii) to cause its Equity Interests to be pledged in favor of the Security Trustee and (iv) do all such acts and execute all such documents and instruments (including resolutions, officer’s certificates and legal opinions) as reasonably requested by the Security Trustee to maintain and ensure its first priority collateral position with respect to that Vessel.

 

10.

ASSIGNMENT

 

(a)     This Agreement shall be binding upon, and inure to the benefit of, each of the Credit Parties and each of the Creditors and their respective successors and assigns, except that the Credit Parties may not assign any of their respective rights or obligations hereunder without the written consent of the Lenders.

 

(b)     Each Lender shall be entitled to assign its rights and obligations under this Agreement with the consent of the Borrower (such consent shall be deemed to have been given if no express refusal is received within five (5) Banking Days) and the Facility Agent; provided, no such consent of the Borrower shall be necessary in the case of the assignment to (i) an entity identified on a list agreed by the Borrower and delivered to the Mandated Lead Arrangers prior to the date hereof, (ii) to another Lender, (iii) an Affiliate, a Related Fund, another office or branch of any Lender, (iv) to a Mandated Lead Arranger, or an Affiliate of a Mandated Lead Arranger and made in connection with the facilitation of primary syndication or first utilization and (v) any Person during the continuance of any Event of Default; and, in any case, such Lender shall forthwith give notice of any such assignment to the Borrower and the Facility Agent and, provided no Event of Default has occurred and is continuing, pay the Facility Agent an assignment fee of $7,500 for each such assignment; provided, however, that any such assignment must be made pursuant to an Assignment and Assumption Agreement and any assignee that is not a Lender shall deliver to the Facility Agent an Administrative Questionnaire. Each of the Credit Parties will take all reasonable actions requested by the Facility Agent or any Lender to effect such assignment, including but not limited to, providing the documents required pursuant to Section 9.1(x). No Lender shall assign its rights and obligations under this Agreement to any natural Person, the Borrower or any of the Borrower’s Affiliates, or to any Lender that has not previously complied with its funding obligations under this Agreement.

 

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(c)     The aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loan of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Facility Agent) shall not be less than $2,000,000, unless each of the Facility Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed). Notwithstanding the foregoing, in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loan at the time owing to it no minimum amount need be assigned.

 

(d)     The Facility Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders and principal amount of (and stated interest on) the Loan owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Facility Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(e)     Upon its receipt of a duly completed Assignment and Assumption Agreement executed by an assigning Lender and an assignee, the assignment fee referred to above and any written consent to such assignment required, the Facility Agent shall accept such Assignment and Assumption Agreement and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to this Agreement, the Facility Agent shall have no obligation to accept such Assignment and Assumption Agreement and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

(f)     In addition, any Lender may at any time sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Facility Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that requires the consent of each Lender directly affected thereby pursuant to the terms of this Agreement and that directly affects such Participant.

 

(g)     Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amount of (and stated interest on) each Participant’s interest in the Loans or other obligations under this Agreement (“Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any obligations under this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such Loan or other obligation is registered under Section 5f.103-1(c) of the United States Treasury Regulations and Section 1.163-5(b) of the proposed United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as owner of such participant for all purposes of this Agreement notwithstanding any notice to the contrary.

 

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11.

ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.

 

11.1     Illegality. In the event that by reason of any change in or introduction of any applicable law, regulation or regulatory requirement or in the interpretation thereof, a Lender has a reasonable basis to conclude that it has become unlawful for any Lender to maintain or give effect to its obligations as contemplated by this Agreement, such Lender shall inform the Facility Agent and the Borrower to that effect, whereafter the liability of such Lender to make its portion of the Loan available shall forthwith cease and the Borrower shall be required either to repay to such Lender that portion of the Loan advanced by such Lender within sixty (60) days or, if such Lender so agrees, to repay such portion of the Loan to the Lender on the last day of the calendar month in accordance with and subject to the provisions of Section 11.7. In any such event, but without prejudice to the aforesaid obligations of the Borrower to repay such portion of the Loan, the Borrower and the relevant Lender shall negotiate in good faith with a view to agreeing on terms for making such portion of the Loan available from another jurisdiction or otherwise restructuring such portion of the Loan on a basis which is not unlawful.

 

11.2     Increased Costs.   (a) If, after the Closing Date, any change in or introduction of applicable law, regulation or regulatory requirement (including any applicable law, regulation or regulatory requirement which relates to capital adequacy or liquidity controls or which affects the manner in which a Lender allocates capital resources under this Agreement), Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV, or in the interpretation or application thereof by any governmental or other authority, shall:

 

  (i) subject any Lender to any Taxes (but excluding Taxes subject to the gross up Section under Section 7.1 and Taxes exempt from gross up pursuant to Section 7.3 or Section 7.6) with respect to its income from the Loan, or any part thereof;
     
 

(ii)

impose, modify or deem applicable any reserve requirements or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, a Lender; or

 

 

(iii)

impose on any Lender any other non-tax condition affecting the Loan or any part thereof,

 

and the result of the foregoing is either to increase the cost to such Lender of making available or maintaining the Loan or any part thereof or to reduce the amount of any payment received by such Lender, then and, in any such case, if such increase or reduction, in the opinion of such Lender, materially affects the interests of such Lender under or in connection with this Agreement:

 

(b)     such Lender shall notify the Facility Agent and the Borrower of the happening of such event, and

 

(c)     the Borrower agrees forthwith upon demand to pay to such Lender such amount as such Lender certifies to be necessary to compensate such Lender for such additional cost or such reduction in respect of the Loan.

 

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(d)     In this Section 11.2,

 

 

(i)

Basel III” means:

 

 

(A)

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

 

 

(B)

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

 

 

(C)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”;

 

 

(ii)

CRD IV” means:

 

 

(A)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;

 

 

(B)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and

 

 

(C)

any other law or regulation which implements Basel III.

 

11.3     Market disruption. The following provisions of Sections 11.4 and 11.5 apply if:

 

(a)     LIBOR is not available for an Interest Period on the date of determination of LIBOR;

 

(b)     at least one (1) Banking Day before the start of an Interest Period, the Lenders having Commitments amounting to 50% or more of the Loan notify the Facility Agent that such Lenders are unable to borrow Dollars from leading banks in the London Interbank Market in the ordinary course of business at published rates during the Interest Period; or

 

(c)     before close of business in London two (2) Banking Days before the start of an Interest Period, the Lenders having Commitments amounting to 50% or more of the Loan notify the Facility Agent that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR.

 

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11.4     Notification of market disruption. The Facility Agent shall promptly notify the Borrower and each of the Lenders, stating the circumstances falling within Section 11.3 which have caused its notice to be given (the “Market-Disruption Notification”); provided, however, that the level of detail of the Market-Disruption Notification shall be in the Facility Agent’s discretion and the Market-Disruption Notification itself shall, absent manifest error, be final, conclusive and binding on all parties hereto.

 

11.5     Alternative rate of interest during market disruption. For so long as the circumstances falling within Section 11.3 are continuing, the rate of interest on each Lender’s share of the Loan for the Interest Period shall be the percentage rate per annum which is the aggregate of (i) the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select, (ii) the Margin, and (iii) Mandatory Costs, if any.

 

11.6     Lender’s Certificate Conclusive. A certificate or determination notice of a the Facility Agent or any Lender, as the case may be, as to any of the matters referred to in this Section 11 shall, absent manifest error, be conclusive and binding on the Borrower.

 

11.7     Compensation for Losses. Where the Loan or any portion thereof is to be repaid by the Borrower pursuant to this Section 11, the Borrower agrees simultaneously with such repayment to pay to the relevant Lenders all accrued interest to the date of actual payment on the amount repaid and all other sums then payable by the Borrower to the relevant Creditor pursuant to this Agreement, together with such amounts as may be necessary and are certified by the relevant Lender to be necessary to compensate such Lender for any actual loss, premium or penalties incurred or to be incurred thereby on account of funds borrowed to make, fund or maintain the Loan or such portion thereof for the remainder (if any) of the then current Interest Period or Interest Periods, if any, but otherwise without penalty or premium.

 

12.

CURRENCY INDEMNITY

 

12.1     Currency Conversion. If, for the purpose of obtaining or enforcing a judgment in any court in any country, it becomes necessary to convert into any other currency (the “judgment currency”) an amount due in Dollars under any Transaction Document, then the conversion shall be made, in the discretion of the Facility Agent, at the rate of exchange prevailing either on the date of default or on the day before the day on which the judgment is given or the order for enforcement is made, as the case may be (the “conversion date”), provided that the Creditors shall not be entitled to recover under this Section 12.1 any amount in the judgment currency which exceeds at the conversion date the amount in Dollars due under any Transaction Document.

 

12.2     Change in Exchange Rate. If there is a change in the rate of exchange prevailing between the conversion date and the date of actual payment of the amount due, the Borrower shall pay such additional amounts (if any, but, in any event, not a lesser amount) as may be necessary to ensure that the amount paid in the judgment currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount then due under the Transaction Documents in Dollars; any excess over the amount due received or collected by any Lender shall be remitted to the Borrower.

 

12.3     Additional Debt Due. Any amount due from any Credit Party under this Section 12 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of the Transaction Documents.

 

12.4     Rate of Exchange. The term “rate of exchange” in this Section 12 means the rate at which the Facility Agent in accordance with its normal practices is able on the relevant date to purchase Dollars with the judgment currency and includes any premium and costs of exchange payable in connection with such purchase.

 

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13.

EXPENSES

 

13.1     [Intentionally Omitted].

 

13.2     Expenses. The Credit Parties agree, whether or not the transactions hereby contemplated are consummated, on demand to pay, or reimburse the Facility Agent, the Security Trustee and the Lenders for payment of, (i) the reasonable expenses of the Facility Agent, the Security Trustee and the Lenders incident to said transactions (and in connection with any supplements, amendments, waivers or consents relating thereto or incurred in connection with the enforcement or defense of any of the Creditors’ rights or remedies with respect thereto or in the preservation of the Creditors’ priorities under the documentation executed and delivered in connection therewith), including, without limitation, all costs and expenses of preparation, negotiation, execution and administration of this Agreement and the documents referred to herein, the reasonable and documented fees and disbursements of Lenders’ counsel in connection therewith, as well as the fees and expenses of any independent appraisers, surveyors, engineers, inspectors and other consultants retained by a Lender in connection with this Agreement and the transactions contemplated hereby and under the Security Documents, (ii) all costs and expenses, if any, in connection with the enforcement of this Agreement, the Note and the Security Documents and (iii) stamp and other similar taxes, if any, incident to the execution and delivery of the documents (including, without limitation, the Note) herein contemplated and to hold the Facility Agent, the Security Trustee and the Lenders free and harmless in connection with any liability arising from the nonpayment of any such stamp or other similar taxes. Such stamp or other similar taxes and, if any, interest and penalties related thereto as may become payable after the Closing Date shall be paid immediately by the Borrower to the Facility Agent, the Security Trustee or the Lenders, as applicable, when liability therefor is no longer contested by the Facility Agent, the Security Trustee or the Lenders or reimbursed immediately by the Borrower to the Facility Agent, the Security Trustee or the Lenders after payment thereof (if the Facility Agent, the Security Trustee of the Lenders, in their sole discretion, choose to make such payment).

 

14.

APPLICABLE LAW, JURISDICTION AND WAIVER

 

14.1     Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

14.2     Jurisdiction. Each of the Credit Parties hereby irrevocably submits to the jurisdiction of the courts of the State of New York and of the United States District Court for the Southern District of New York in any action or proceeding brought against it by any of the Creditors under this Agreement or under any document delivered hereunder and hereby irrevocably agrees that valid service of summons or other legal process on it may be effected by serving a copy of the summons and other legal process in any such action or proceeding on such Credit Party by mailing or delivering the same by hand to such Credit Party at the address indicated for notices in Section 16.1. The service, as herein provided, of such summons or other legal process in any such action or proceeding shall be deemed personal service and accepted by such Credit Party as such, and shall be legal and binding upon such Credit Party for all the purposes of any such action or proceeding. Final judgment (a certified or exemplified copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness of the Credit Parties to the Lenders) against such Credit Party in any such legal action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment. Each Credit Party will advise the Facility Agent promptly of any change of address for the purpose of service of process. Notwithstanding anything herein to the contrary, the Creditors may bring any legal action or proceeding in any other appropriate jurisdiction.

 

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14.3     Waiver of Immunity. TO THE EXTENT THAT ANY OF THE CREDIT PARTIES HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH CREDIT PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

 

14.4     Waiver of Jury Trial. IT IS MUTUALLY AGREED BY AND AMONG THE EACH OF THE CREDIT PARTIES AND EACH OF THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

 

15.

THE FACILITY AGENT / THE SECURITY TRUSTEE.

 

15.1     Appointment of Agent. Each of the Lenders and the Swap Banks hereby irrevocably appoints and authorizes the Facility Agent and the Security Trustee, respectively, to take such action as agent on its behalf and to exercise such powers under the Transaction Documents as are delegated to the Facility Agent and the Security Trustee, respectively by the terms hereof and thereof. Neither the Facility Agent, nor the Security Trustee nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted to be taken by it or them under any Transaction Document or in connection therewith, except for its or their own gross negligence or willful misconduct.

 

15.2     Security Trustee as Trustee. Each of the Creditors irrevocably appoints, designates and authorizes the Security Trustee as trustee on its behalf with regard to (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Creditors or any of them or for the benefit thereof under or pursuant to this Agreement or the other Transaction Documents (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to any Creditor in the Transaction Documents), (ii) all moneys, property and other assets paid or transferred to or vested in any Creditor or any agent of any Creditor or received or recovered by any Creditor or any agent of any Creditor pursuant to, or in connection with, the Transaction Documents whether from the Borrower or any other Credit Party or any other person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Creditor or any agent of any Creditor in respect of the same (or any part thereof). The Security Trustee hereby accepts such appointment and declares that it holds all such property on trust for the Creditors on the terms contained in this Agreement and the other Transaction Documents (but shall have no obligations under this Agreement or the other Transaction Documents except those expressly set forth herein and therein). Neither the Security Trustee nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted to be taken by it or them under this Agreement, the Note or the other Transaction Documents or in connection therewith, except for its or their own gross negligence or willful misconduct.

 

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15.3     Distribution of Payments. Whenever any payment is received by the Facility Agent or the Security Trustee from the Borrower or any other Credit Party for the account of the Lenders, or any of them, whether of principal or interest on the Note, commissions, fees under Sections 3.6 and 13, or otherwise, it will thereafter cause like funds relating to such payment to be promptly distributed ratably to the Lenders according to their respective Commitments, in each case to be applied according to the terms of this Agreement. Unless the Facility Agent or the Security Trustee, as the case may be, shall have received notice from the Borrower prior to the date when any payment is due hereunder that the Borrower will not make any payment on such date, the Facility Agent or the Security Trustee may assume that the Borrower has made such payment to the Facility Agent or the Security Trustee, as the case may be, on the relevant date and the Facility Agent or the Security Trustee may, in reliance upon such assumption, make available to the Lenders on such date a corresponding amount relating to such payment ratably to the Lenders according to their respective Commitments. If and to the extent that the Borrower shall not have so made such payment available to the Facility Agent or the Security Trustee, as the case may be, the Lenders and the Borrower (but without duplication) severally agrees to repay to the Facility Agent or the Security Trustee, as the case may be, forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Lenders until the date such amount is repaid to the Facility Agent or the Security Trustee, as the case may be, as calculated by the Facility Agent or Security Trustee to reflect its cost of funds.

 

15.4     Holder of Interest. The Facility Agent may treat each Lender as the holder of all of the interest of such Lender in the Loan unless and until the Facility Agent has received a copy of an Assignment and Assumption Agreement evidencing the transfer of all or any part of such Lender’s interest in the Loan.

 

15.5     No Duty to Examine, Etc. The Facility Agent shall not be under a duty to examine or pass upon the validity, effectiveness or genuineness of any of this Agreement, the other Transaction Documents or any instrument, document or communication furnished pursuant to this Agreement or in connection therewith or in connection with any other Transaction Document and the Facility Agent shall be entitled to assume that the same are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be.

 

15.6     Facility Agent and Security Trustee as Lenders. With respect to that portion of the Loan made available by it, each of the Facility Agent and the Security Trustee shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not an Facility Agent or the Security Trustee, as the case may be, and the term “Lender” or “Lenders” shall include the Facility Agent and the Security Trustee in their capacity as Lenders. Each of the Facility Agent and the Security Trustee and their respective Affiliates may accept deposits from, lend money to and generally engage in any kind of business with, the Borrower as if it were not the Facility Agent or the Security Trustee, as the case may be.

 

15.7     Obligations of Facility Agent and Security Trustee. The obligations of each of the Facility Agent and the Security Trustee, respectively, under this Agreement and the other Transaction Documents are only those expressly set forth herein and therein.

 

(b)     Neither the Facility Agent nor the Security Trustee shall at any time be under any duty to investigate whether an Event of Default, or a Default, has occurred or to investigate the performance of this Agreement or the other Transaction Documents by any Credit Party.

 

(c)     Promptly upon receipt thereof by the Facility Agent, the Facility Agent shall furnish each Lender with a copy of all financial reports and notices delivered to it by the Borrower hereunder.

 

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15.8     Discretion of Facility Agents and Security Trustee. Each of the Facility Agent and the Security Trustee, respectively, shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of the Transaction Documents, unless the Facility Agent or Security Trustee, as the case may be, shall have been instructed by the Majority Lenders to exercise such rights or to take or refrain from taking such action; provided, however, that neither the Facility Agent nor the Security Trustee shall be required to take any action which (in the Facility Agent’s and/or the Security Trustee’s sole discretion) may expose such Facility Agent or the Security Trustee, as the case may be, to personal liability or which is contrary to this Agreement or applicable law.

 

(b)     Each of the Facility Agent and the Security Trustee shall in all cases be fully protected in acting or refraining from acting under this Agreement or under any other Transaction Document in accordance with the instructions of the Majority Lenders (or, where expressly required hereby, all the Lenders), and any action taken or failure to act pursuant to such instructions shall be binding on all of the Lenders.

 

15.9     Assumption re Event of Default. Except as otherwise provided in Section 15.15, the Facility Agent shall be entitled to assume that no Event of Default or Default has occurred and is continuing, unless the Facility Agent has been notified by the Borrower of such fact or has been notified by a Lender that such Lender considers that an Event of Default or such an event (specifying in detail the nature thereof) has occurred and is continuing. In the event that the Facility Agent shall have been notified by any party in the manner set forth in the preceding sentence of any Event of Default or of any Default, the Facility Agent shall promptly notify the Lenders and shall take action and assert such rights and/or advise the Security Trustee to take such action or assert such rights under the Transaction Documents as the Majority Lenders shall request in writing.

 

15.10     No Liability of Agents and the Lenders. Neither the Facility Agent, nor the Security Trustee nor any Lender nor any Swap Bank shall be under any liability or responsibility whatsoever:

 

(a)     to any Credit Party or any other person or entity as a consequence of any failure or delay in performance by, or any breach by, any other Lender or any other person of any of its or their obligations under this Agreement or the other Transaction Documents;

 

(b)     to any Lender or Lenders or any Swap Bank as a consequence of any failure or delay in performance by, or any breach by any Credit Party of any of its obligations under this Agreement or the other Transaction Documents; or

 

(c)     to any Lender or Lenders or any Swap Bank for any statements, representations or warranties contained in this Agreement or the other Transaction Documents or in any document or instrument delivered in connection with the transaction hereby contemplated; or for the validity, effectiveness, enforceability or sufficiency of this Agreement or the other Transaction Documents or any document or instrument delivered in connection with the transactions hereby contemplated.

 

15.11     Indemnification of Facility Agent and Security Trustee. The Lenders and the Swap Banks agree to indemnify each of the Facility Agent and the Security Trustee (to the extent not reimbursed by the Borrower), pro rata according to the respective amounts of their interests in the Loan, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable legal fees and expenses incurred in investigating claims and defending itself against such liabilities) which may be imposed on, incurred by or asserted against, the Facility Agent or the Security Trustee, as the case may be, in any way relating to or arising out of this Agreement or the other Transaction Documents, any action taken or omitted by the Facility Agent or the Security Trustee, as the case may be, hereunder or thereunder or the preparation, administration, amendment or enforcement of, or waiver of any provision of, this Agreement or the other Transaction Documents, except that no Lender or Swap Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Facility Agent’s or Security Trustee’s, as the case may be, gross negligence or willful misconduct.

 

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15.12     Consultation with Counsel. Each of the Facility Agent and the Security Trustee may consult with legal counsel selected by the Facility Agent or Security Trustee, as the case may be and shall not be liable for any action taken, permitted or omitted by it in good faith in accordance with the advice or opinion of such counsel.

 

15.13     Resignation. Each of the Facility Agent and the Security Trustee may resign at any time by giving sixty (60) days’ written notice (the “Resignation Effective Date”) thereof to the Creditors and the Borrower. Upon any such resignation, the Majority Lenders shall have the right to appoint a successor Facility Agent or Security Trustee, as the case may be. If no successor Facility Agent or Security Trustee, as the case may be, shall have been so appointed by the Majority Lenders and shall have accepted such appointment within sixty (60) days after the retiring Facility Agent’s or Security Trustee’s, as the case may be, giving notice of resignation, then the retiring Facility Agent or Security Trustee, as the case may be, may, on behalf of the Creditors, appoint a successor Facility Agent or Security Trustee, as the case may be, which shall be a bank or trust company of recognized standing. The appointment by the Majority Lenders of any successor to the Facility Agent or Security Trustee shall (unless an Event of Default has occurred and is continuing) be subject to the prior written consent of the Borrower, such consent not to be unreasonably withheld. After any resignation of the Facility Agent or Security Trustee hereunder, the provisions of this Section 15 shall continue in effect for its benefit with respect to any actions taken or omitted by it while acting as Facility Agent or Security Trustee, as the case may be. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

15.14     Representations of Lenders. Each Creditor represents and warrants to each other Creditor that:

 

  (i) in making its decision to enter into this Agreement and to make its Commitment available hereunder, it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Borrower and the other Credit Parties, that it has made an independent credit judgment and that it has not relied upon any statement, representation or warranty by any other Creditor; and
     
 

(ii)

so long as any portion of its Commitment remains outstanding, it will continue to make its own independent evaluation of the financial condition and affairs of the Borrower and the other Credit Parties.

 

15.15     Notification of Event of Default. If the Facility Agent has received a notice from the Borrower or any Creditor about the occurrence of a Default or Event of Default, the Facility Agent shall promptly notify the Creditors of such Default or Event of Default.

 

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15.16     Sharing of Payments, Etc. If any Creditor shall obtain any payment (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Note or the Security Documents, or otherwise) on account of the amounts advanced and owing to it (other than pursuant to Sections 11.2 or 11.7 or otherwise in respect of any gross up for Taxes pursuant to Section 7.1) in excess of its ratable share of payments on account of the amounts advanced obtained by all the Creditors, such Creditor shall forthwith purchase from the other Creditors such participations in the amounts advanced owing to them as shall be necessary to cause such purchasing Creditor to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Creditor, such purchase from each Creditor shall be rescinded and such Creditor shall repay to the purchasing Creditor the purchase price to the extent of such recovery together with an amount equal to such Creditor's ratable share (according to the proportion of (i) the amount of such Creditor's required repayment to (ii) the total amount so recovered from the purchasing Creditor) of any interest or other amount paid or payable by the purchasing Creditor in respect of the total amount so recovered. The Borrower agrees that any Creditor so purchasing a participation from another Creditor pursuant to this Section 15.16 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Creditor were the direct creditor of the Borrower in the amount of such participation.

 

16.

NOTICES AND DEMANDS

 

16.1     Notices. All notices, requests, demands and other communications to any party hereunder shall be in writing (including prepaid overnight courier, facsimile transmission, electronic mail or similar writing) and shall be given to the Borrower and/or the Facility Agent and/or the Security Trustee at its respective address or facsimile number set forth below and to the Creditors at their addresses and facsimile numbers set forth in Schedule 1 hereto or at such other address or facsimile numbers as such party may hereafter specify for the purpose by notice to the other party hereto. Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 16.1 and telephonic confirmation of receipt thereof is obtained, or (ii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in this Section 16.1 or when delivery at such address is refused.If to Borrower:

 

c/o SEACOR Marine LLC

7910 Main St. 2nd Floor

Houma, Louisiana 70360

Attn: Executive Vice President

Facsimile No.: 985-876-5444

E-mail: jllorca@seacormarine.com

 

With a copy to:

SEACOR Marine Holdings Inc.

7910 Main St. 2nd Floor

Houma, Louisiana 70360

 

Attn: Legal Department

Facsimile No.: 985-876-5444

E-mail: aeverett@seacormarine.com

 

If to any of the other Credit Parties:

 

c/o SEACOR Marine Holdings Inc.

7910 Main St. 2nd Floor

Houma, Louisiana 70360

 

Attn: Legal Department

Facsimile No.: 985-876-5444

E-mail: aeverett@seacormarine.com

 

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If to the Facility Agent or Security Trustee:

 

DNB BANK ASA
200 Park Avenue, 31st Floor
New York, New York 10166
Telephone No.: (212) 681-3800
Attention: Credit Middle Office / Loan Services Department
Facsimile No.: (212) 681-4123

Email: nyloanscsd@dnb.no

 

17.

MISCELLANEOUS

 

17.1     Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, the Facility Agent and each Creditor and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held (including, but not limited to, the Earnings Account(s)) and other indebtedness at any time owing by the Facility Agent, such Creditor or such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under the Transaction Documents, irrespective of whether the Facility Agent or such Creditor shall have made any demand under this Agreement and although such obligations may be unmatured. The Facility Agent and each Creditor agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Facility Agent and each Creditor and their respective Affiliates under this Section 17.1 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Facility Agent, such Creditor, the Security Trustee and their respective Affiliates may have. Notwithstanding anything to the contrary set forth in Section 17 or elsewhere herein, the Facility Agent may not discriminate against the Creditors generally in favor of its own interests when exercising setoff rights against amounts received from the Borrower hereunder, including any amount in any Earnings Account.

 

17.2     Time of Essence. Time is of the essence with respect to this Agreement but no failure or delay on the part of any of the Facility Agent, the Security Trustee or the other Creditors to exercise any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by any of the Facility Agent, the Security Trustee or the other Creditors of any power or right hereunder preclude any other or further exercise thereof or the exercise of any other power or right. The remedies provided herein are cumulative and are not exclusive of any remedies provided by law.

 

17.3     Unenforceable, etc., Provisions–Effect. In case any one or more of the provisions contained in this Agreement or any other Transaction Document would, if given effect, be invalid, illegal or unenforceable in any respect under any law applicable in any relevant jurisdiction, said provision shall not be enforceable against the Borrower or other applicable Credit Party, but the validity, legality and enforceability of the remaining provisions herein or therein contained shall not in any way be affected or impaired thereby.

 

17.4     References. References herein to Articles, Sections, Exhibits and Schedules are to be construed as references to sections of, exhibits to, and schedules to, this Agreement or the other Transaction Documents as applicable, unless the context otherwise requires.

 

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17.5     Further Assurances. Each Credit Party agrees that if this Agreement or any of the other Transaction Documents shall, in the reasonable opinion of the Creditors, at any time be deemed by the Creditors for any reason insufficient in whole or in part to carry out the true intent and spirit hereof or thereof, it will execute or cause to be executed such other and further assurances and documents as in the opinion of the Creditors may be required in order to more effectively accomplish the purposes of this Agreement and/or the other Transaction Documents (including, without limitation, to create, perfect, vest in favor of the Security Trustee or protect the priority of security conferred or intended to be conferred by or pursuant to the Transaction Documents).

 

17.6     Prior Agreements, Merger. Any and all prior understandings and agreements heretofore entered into between the Credit Parties on the one part, and any of the Creditors, on the other part, relating to the transactions contemplated hereby, whether written or oral are superseded by and merged into this Agreement and the other agreements (the forms of which are exhibited hereto) to be executed and delivered in connection herewith to which the Credit Parties and the Creditors, as the case may be, are parties, which alone fully and completely express the agreements between the Credit Parties and the Creditors.

 

17.7     Entire Agreement; Amendments. This Agreement constitutes the entire agreement of the parties hereto. Neither this Agreement, the Note, any of the Security Documents nor any Interest Rate Agreement nor any terms hereof or thereof may be waived or amended unless such waiver or amendment is approved by the Credit Parties and the Majority Lenders, provided, that no such waiver or amendment shall, without the written consent of each Lender affected thereby, (i) reduce the interest rate (other than any waiver of any default interest) or extend the time of a scheduled payment of principal or interest or fees (but not prepayment) on the Loan or reduce the principal amount of the Loan hereunder, (ii) increase or decrease the Commitment of any Lender or subject any Lender to any additional obligation, (iii) amend, modify or waive any provision of this Section 17.7, (iv) amend the definition of Majority Lenders (including component parts thereof), (v) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement, or (vi) release any Transaction Party from any of its obligations under any Transaction Document except as expressly provided herein or in such Transaction Document; provided, further, that no such waiver or amendment shall amend, modify or otherwise affect the rights or duties of the Facility Agent or the Security Trustee without the prior written consent of the Facility Agent or the Security Trustee acting as such at the effective date of such agreement, as applicable. It is understood and agreed that Schedules 1-A and 4 may be amended by the Facility Agent and the Borrower from time to time to reflect the changes to the list of Subsidiary Guarantors and Vessels in accordance with the terms of this Agreement (including Section 9.4). It is acknowledged by the parties hereto as of the date hereof that Exhibits attached hereto are in substantially final form, but may be subject to additional review and modification as may be mutually agreed after the date hereof among the Borrower, the Majority Lenders and the Facility Agent.

 

17.8     Assumption re Event of Default. The Creditors shall be entitled to assume that no Event of Default or Default has occurred and is continuing, unless the Creditors have been notified by the Borrower of such fact. In the event that any Creditor shall have been notified, in the manner set forth in the preceding sentence, by the Borrower of any Event of Default or Default, such Creditor shall promptly notify the Facility Agent in writing, and the Majority Lenders may take action and assert such rights under this Agreement or under any other Transaction Document or as provided for under applicable law as they determine are appropriate.

 

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17.9     Indemnification. Neither any Creditor nor any of its directors, officers, agents or employees shall be liable to any Credit Party for any action taken or not taken thereby in connection herewith in the absence of its own gross negligence or willful misconduct. Each of the Credit Parties hereby jointly and severally agrees to indemnify the Creditors, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from and against any and all claims, losses, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of every nature and character (other than taxes) arising out of, in connection with, or as a result of the execution or delivery of the Transaction Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations under the Transaction Documents or the consummation of the transactions contemplated hereby including, without limitation, (a) any actual or proposed use by the Borrower of the proceeds of the Loan, (b) the reversal or withdrawal of any provisional credits granted by the Facility Agent upon the transfer of funds from lock box, bank agency, concentration accounts or otherwise under any cash management arrangements with the Borrower, (c) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort, or any other theory, and regardless of whether any Indemnitee is a party thereof, (d) any civil penalty or fine assessed by OFAC or another Governmental Authority against the Facility Agent or any other Creditor as a result of conduct of any Credit Party or any Related Party thereof that violates a Sanctions Law or Anti-Money Laundering Law, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with defense thereof or (e) with respect to the Credit Parties and their respective properties and assets, the violation of any Environmental Law, the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release or threatened release of any Materials of Environmental Concern or any action, suit, proceeding or investigation brought or threatened with respect to any Materials of Environmental Concern relating, in each case, to any circumstance or occurrence arising in relation to, or during the time of, the management, use, control ownership or operation of property or assets by the Credit Parties, in each case including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding; provided, however, the relevant Credit Party shall not be responsible for any liabilities, losses, damages and/or expenses under this Section 17.9 caused by an Indemnitee’s own gross negligence or willful misconduct. Notwithstanding anything herein to the contrary, the foregoing indemnification shall not apply to the extent that any claims, damages, expenses, obligations, penalties, actions, judgments, suits or costs arise with respect to any Vessel from and after such time as any Creditor (or any designee thereof) takes possession or control of such Vessel (except to the extent that any such matter arising under subsection 17.9(e) hereof relates to any circumstance or occurrence arising prior to such time). In litigation, or the preparation therefor, the Creditors and their Affiliates shall be entitled to select their own counsel and, if arising after the occurrence and during the continuation of an Event of Default, the Borrower agrees to pay promptly the reasonable fees and expenses of such counsel. To the extent that the respective interests of the Creditors in such litigation do not, and reasonably could not be expected to, conflict (such determination of existing or potential conflict to be made by the Creditors using their reasonable good faith judgment), the Creditors shall make reasonable efforts to use common counsel in connection with such litigation and the preparation therefor. If, and to the extent that the obligations of any Credit Party under this Section 17.9 are unenforceable for any reason, such Credit Party hereby agree to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law. The covenants contained in this Section 17.9 shall survive payment or satisfaction in full of the Loan and all other obligations under this Agreement and the other Transaction Documents.

 

17.10     USA Patriot Act Notice; Bank Secrecy Act. The Facility Agent hereby notifies each of the Credit Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Patriot Act”), and the policies and practices of the Facility Agent, each of the Creditors is required to obtain, verify and record certain information and documentation that identifies each of the Credit Parties, which information includes the name and address of each of the Credit Parties and such other information that will allow the Creditors to identify each of the Credit Parties in accordance with the Patriot Act. In addition, each of the Credit Parties shall comply, and cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act laws and regulations, as amended.

 

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17.11     CEA Eligible Contract Participant. Notwithstanding anything to the contrary in any Transaction Document, no Credit Party shall be deemed to guarantee, become jointly and severally obligated for or pledge assets in support of a “swap,” as defined in Section 1(a)(47) of the Commodity Exchange Act (“CEA”) of another Credit Party if at the time that swap is entered into, such Credit Party is not an “eligible contract participant” as defined in Section 1(a)(18) of the CEA.

 

17.12     Contractual Recognition of Bail-In.

 

Notwithstanding any other term of any Transaction Document or any other agreement, arrangement or understanding between the parties, each party acknowledges and accepts that any liability of any party to any other party under or in connection with the Transaction Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

(a)     any Bail-In Action in relation to any such liability, including (without limitation):

 

 

(i)

a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

 

 

(ii)

a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

 

 

(iii)

a cancellation of any such liability; and

 

(b)     a variation of any term of any Transaction Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

 

17.13     Confidentiality. Each of the Facility Agent, Security Trustee and the Creditors agree to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority or government agency purporting to have jurisdiction and/or supervision over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Transaction Document or any action or proceeding relating to this Agreement or any other Transaction Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section 17.13, to (i) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights and obligations under this Agreement, (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder or (iii) to any credit insurance provider; (g) on a confidential basis to any rating agency in connection with rating the Parent Guarantor or its Subsidiaries or the Loan; (h) with the consent of the Borrower; or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 17.13, or (y) becomes available to the Facility Agent, Security Trustee, any Creditor or any of their respective Affiliates on a non-confidential basis from a source other than a Credit Party. In addition, the Facility Agent, Security Trustee and the Creditors may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Facility Agent, Security Trustee and the Creditors in connection with the administration of this Agreement, the other Transaction Documents, and the Commitments. It is understood and agreed that any Person required to maintain the confidentiality of Information as provided in this Section 17.13 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information

 

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17.14     Counterparts; Electronic Delivery. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or electronic transmission shall be deemed as effective as delivery of an originally executed counterpart. In the event that any Credit Party delivers an executed counterpart of this Agreement by facsimile or electronic transmission, such Credit Party shall also deliver an originally executed counterpart as soon as practicable, but the failure of such Credit Party to deliver an originally executed counterpart of this Agreement shall not affect the validity or effectiveness of this Agreement.

 

17.15     Headings. In this Agreement, section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation of this Agreement.

 

17.16     Publication. The Facility Agent or any Mandated Lead Arranger may, at its option and sole expense, publish information about its participation (including its arranger and agent role) in the Loan and for such purpose only, use the logo and trademark of the Borrower, the Parent Guarantor or any other Credit Party.

 

17.17     Termination; Release.

 

(a)     This Agreement shall terminate and the Collateral shall be automatically released from the Lien of this Agreement when the Facility Agent notifies the Borrower that the principal of and interest and premium (if any) on the Loan, all fees and all other expenses or amounts payable under this Agreement shall have been paid in full (other than contingent indemnification obligations for which no claim or demand has been made and that, pursuant to the provisions of this Agreement or the Security Documents, survive the termination thereof). Upon termination hereof, the security interests granted by the Security Documents shall automatically terminate and all rights to the Collateral shall revert to the applicable Credit Party. Upon termination hereof or any release of Collateral in accordance with the provisions of this Agreement, the applicable Creditor shall promptly execute and deliver to such Credit Party all releases or other documents reasonably necessary and in form reasonably satisfactory to the Credit Party, any vessel registry or other registry, as applicable, and take such reasonable further actions for the release of such Collateral from the security interests created thereby, upon the written request and at the sole cost and expense of the Credit Parties, assign, transfer and deliver to the Credit Parties, against receipt and without recourse to or warranty of any kind (either express or implied) by such Creditor (except that such Creditor has not assigned or otherwise transferred its security interest in the Collateral), such of the Collateral to be released (in the case of a release) as may be in possession or control of such Creditor and as shall not have been sold or otherwise applied pursuant to the terms hereof, and, with respect to any other Collateral, with such endorsements or proper documents and instruments (including UCC-3 termination statements or releases) acknowledging the termination hereof or the release of such Collateral, as the case may be.

 

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(b)     If any of the Collateral is sold, transferred or otherwise disposed of by any Credit Party (other than to another Credit Party) in a transaction permitted by this Agreement, then the lien created pursuant to any Security Document in such Collateral shall be released, and the applicable Creditor, at the request and sole expense of such Credit Party, shall promptly execute and deliver to such Credit Party all releases or other documents reasonably necessary and in form reasonably satisfactory to the Credit Party and take such reasonable further actions for the release of such Collateral from the security interests created thereby, provided that the applicable Credit Party shall have delivered to such Creditor, at least five (5) Banking Days (or such shorter period of time acceptable to such Creditor) prior to the date of the proposed release, a certificate of a Responsible Officer of such Credit Party with request for release identifying the relevant Collateral and certifying that such transaction is in compliance with this Agreement and the Security Documents.

 

18.

Guarantee and Indemnity

 

18.1     Guarantee and Indemnity. In order to induce the Lenders to make the Loan to the Borrower, each Subsidiary Guarantor irrevocably and unconditionally jointly and severally:

 

(a)     guarantees to each Creditor, as a primary obligor and not merely as a surety, punctual payment and performance by the Borrower and each other Credit Party of all their respective obligations under the Transaction Documents;

 

(b)     undertakes with each Creditor that whenever the Borrower or any other Credit Party does not pay any amount (whether for principal, interest, fees, expenses or otherwise) when due (whether at stated maturity, by acceleration or otherwise) under or in connection with any Transaction Document, such Subsidiary Guarantor shall immediately on demand pay that amount as if it were the primary obligor; and

 

(c)     agrees with each Creditor that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Creditor immediately on demand against any cost, loss or liability it incurs as a result of the Borrower or any other Credit Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by such Subsidiary Guarantor under this indemnity will not exceed the amount it would have had to pay under this Section 18 if the amount claimed had been recoverable on the basis of a guarantee.

 

18.2     Continuing Guarantee. This guarantee is a continuing guarantee that shall remain in full force and effect until the irrevocable payment and performance in full by any Credit Party under the Transaction Documents, regardless of any intermediate payment or discharge in whole or in part. This guarantee constitutes a guarantee of punctual performance and payment and not merely of collection. Notwithstanding the foregoing, any Hedging Obligations guaranteed by the Subsidiary Guarantors under this Section 18 shall not include any Excluded Hedging Obligations.

 

18.3     Reinstatement. If any discharge, release or arrangement (whether in respect of the obligations of any Credit Party or any security for those obligations or otherwise) is made by a Creditor in whole or in part on the basis of any payment, security or other disposition which is rescinded, discharged, avoided or reduced, or must be restored or returned, upon insolvency, bankruptcy, reorganization, liquidation, administration or otherwise, without limitation, then the liability of each Subsidiary Guarantor under this Section 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

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18.4     Waiver of Defenses. The obligations of each Subsidiary Guarantor under this Section 18 and in respect of any security provided by or pursuant to the Security Documents are irrevocable, absolute and unconditional and shall not be affected or discharged by an act, omission, matter or thing which, but for this Section 18.4, would reduce, release or prejudice any of its obligations under this Section 18 or in respect of any security provided by or pursuant to the Security Documents (without limitation and whether or not known to it or any Creditor) including (and each Subsidiary Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to):

 

(a)     any time, waiver or consent granted to, or composition with, any Credit Party or other person;

 

(b)     the release of any other Credit Party or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

(c)     the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Credit Party or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any collateral;

 

(d)     any incapacity or lack of power, authority or legal personality of or dissolution or change in the corporate or company structure, shareholders, members or status of a Credit Party or any other person (including without limitation any change in the holding of such Credit Party’s or other person’s Equity Interests);

 

(e)     any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Transaction Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Transaction Document or other document or security;

 

(f)     any unenforceability, illegality or invalidity of any obligation of any person under any Transaction Document or any other document or security;

 

(g)     any bankruptcy, insolvency or similar proceedings;

 

(h)     any election of remedies by a Creditor that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Subsidiary Guarantor or other rights of such Subsidiary Guarantor to proceed against any Credit Party, any other guarantor or any other person or entity or any collateral;

 

(i)     any right of set-off or counterclaim against or in respect of the obligations of such Subsidiary Guarantor hereunder; or

 

(j)     any other circumstance whatsoever that might otherwise constitute a defense available to, or a legal or equitable discharge of, any Credit Party.

 

18.5     Other Waivers. Each Subsidiary Guarantor hereby unconditionally and irrevocably waives:

 

(a)     promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice and this guarantee and any requirement that a Creditor protect, secure, perfect or insure any security, Lien or any property subject thereto or exhaust any right or take any action against a Credit Party, any other guarantor or any other person or entity or any collateral;

 

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(b)     any right to revoke this guarantee; and

 

(c)     any duty on the part of a Credit Party to disclose to such Subsidiary Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of that Credit Party or any of their respective Subsidiaries now or hereafter known by any Creditor.

 

18.6     Acknowledgment of Benefits. Each Subsidiary Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Transaction Documents and that the waivers set forth in this Section 18 are knowingly made in contemplation of such benefits.

 

18.7     Immediate Recourse. Each Subsidiary Guarantor waives any right it may have of first requiring any Creditor (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Transaction Document or to enforce any security provided by or pursuant to the Security Documents) before claiming or commencing proceedings under this Section 18. This waiver applies irrespective of any law or any provision of a Transaction Document to the contrary.

 

18.8     Appropriations. Until all amounts which may be or become payable by the Credit Party under or in connection with the Transaction Documents have been irrevocably paid in full, each Creditor (or any trustee or agent on its behalf) may:

 

(a)     refrain from applying or enforcing any other moneys, security or rights held or received by that Creditor (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Subsidiary Guarantor shall be entitled to the benefit of the same; and

 

(b)     hold in an interest-bearing suspense account any moneys received from a Subsidiary Guarantor or on account of a Subsidiary Guarantor’s liability under this Section 18.

 

18.9     Deferral of Subsidiary Guarantors’ Rights. All rights which a Subsidiary Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against the Borrower, any other Credit Party or their respective assets shall be fully subordinated to the rights of the Creditors under the Transaction Documents and until all obligations under the Transaction Documents are paid in full and unless the Facility Agent otherwise directs, no Subsidiary Guarantor will exercise its rights which it may have (whether in respect of any Transaction Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Transaction Documents or by reason of any amount being payable, or liability arising, under this Section 18:

 

(a)     to be indemnified by any Credit Party;

 

(b)     to claim any contribution from any third party providing security for, or any other guarantor of, any Credit Party’s obligations under the Transaction Documents;

 

(c)     to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Creditors under the Transaction Documents or of any other guarantee or security taken pursuant to, or in connection with, the Transaction Documents by any Creditor;

 

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(d)     to bring legal or other proceedings for an order requiring any Credit Party to make any payment, or perform any obligation, in respect of which a Subsidiary Guarantor has given a guarantee, undertaking or indemnity under Section 18.1;

 

(e)     to exercise any right of set-off against any Credit Party; and/or

 

(f)     to claim or prove as a creditor of any Credit Party in competition with any Creditor.

 

If a Subsidiary Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Creditors by the Credit Party under or in connection with the Transaction Documents to be repaid in full on trust for the Creditors and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with the terms of this Agreement.

 

18.10     Additional Security. This guarantee and any other security or Lien given by each Subsidiary Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or security or any other right of recourse now or subsequently held by any Creditor or any right of set-off or netting or right to combine accounts in connection with the Transaction Documents.

 

18.11     Independent Obligations. The obligations of each Subsidiary Guarantor under or in respect of this guarantee are independent of any other obligations of any other Credit Party under or in respect of the Transaction Documents, and a separate action or actions may be brought and prosecuted against each Subsidiary Guarantor to enforce this guarantee irrespective of whether any action is brought against any other Credit Party or whether any other Credit Party is joined in any such action or actions.

 

18.12     Limitation of Liability. Each of the Subsidiary Guarantors and each of the Creditors hereby confirms that it is its intention that the obligations under this guarantee not constitute a fraudulent transfer or conveyance for purposes of the U.S. Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar law. To effectuate the foregoing intention, each of the Subsidiary Guarantors and each of the Creditors hereby irrevocably agrees that the obligations guaranteed by each Subsidiary Guarantor under this guarantee shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Subsidiary Guarantor that are relevant under such laws, result in the obligations of such Subsidiary Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

 

18.13     Applicability of Provisions of Guarantee to Other Security. Sections 18.2, 18.3, 18.4, 18.5, 18.6, 18.7, 18.8, 18.9, 18.10, 18.11 and 18.12 shall apply, with any necessary modifications, to any security or Lien which a Subsidiary Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the obligations under the Transaction Documents or any part of them.

 

18.14     Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Subsidiary Guarantor to honor all of its obligations under this Section 18 in respect of any Hedging Obligations (provided, that each Qualified ECP Guarantor shall be liable under this Section 18.14 only for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 18.14, or otherwise under this Section 18, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Each Qualified ECP Guarantor intends that this Section 18.14 constitute, and this Section 18 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Subsidiary Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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18.15     Subordination.

 

(a)     Subordination of Liabilities. Each Credit Party, for itself, its successors and assigns, hereby subordinates its claims with respect to all Intercompany Debt, and all amounts owing in respect thereof (all such claims and amounts in respect of such Intercompany Debt, “Subordinated Indebtedness”), of any other Credit Party owing to it, whether now existing or hereafter arising, to the prior payment in full in cash of all obligations due to the Creditors under any Transaction Document always subject to and in accordance with the subordination provisions set forth in this Section 18.15 (including any exceptions); provided, that notwithstanding anything contained herein to the contrary, each Credit Party may repay any Intercompany Debt in full or in part so long as no Event of Default shall have occurred and be continuing.

 

(b)     Payor Not to Make Payments with Respect to Subordinated Indebtedness in Certain Circumstances.

 

 

(i)

Upon the maturity of any Senior Indebtedness (including interest thereon or fees or any other amounts owing in respect thereof), whether at stated maturity, by acceleration or otherwise, all obligations owing in respect of the Senior Indebtedness shall first be paid in full in cash in accordance with the terms thereof, before any payment of any kind or character, whether in cash, property, securities or otherwise, is made on account of the Subordinated Indebtedness then outstanding.

 

 

(ii)

No Credit Party that is a payor under any Intercompany Debt shall, directly or indirectly (and no person or other entity on behalf of such Credit Party may), make any payment of any Subordinated Indebtedness until all Senior Indebtedness has been paid in full in cash if any Event of Default has occurred and is continuing or would result therefrom. Each Credit Party that is a holder of the Subordinated Indebtedness hereby agrees that, so long as any such Event of Default has occurred and is continuing, it will not sue for, or otherwise take any action to enforce the payor’s obligations to pay, amounts owing in respect of the Subordinated Indebtedness. Each Credit Party that is a holder of the Subordinated Indebtedness understands and agrees that to the extent that sub-clause (i) of this clause (b) or this sub-clause (ii) prohibits the payment of any Subordinated Indebtedness, such unpaid amount shall not constitute a payment default under the Subordinated Indebtedness and the holder(s) of the Subordinated Indebtedness may not sue for, or otherwise take action to enforce the payor’s obligation to pay such amount, provided that such unpaid amount shall remain an obligation of the payor to the holder(s) of the Subordinated Indebtedness pursuant to the terms of the Subordinated Indebtedness. Notwithstanding the foregoing, so long as an Event of Default is not continuing, each Credit Party will be entitled to make (and any person or other entity on behalf of the such Credit Party shall be entitled to make) and the holder(s) of any Subordinated Indebtedness will be entitled to receive, payments of principal and/or interest under the Subordinated Indebtedness.

 

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(iii)

In the event that, notwithstanding the provisions of the preceding sub-clauses (i) and (ii) of this clause (b), any Credit Party that is a payor under any Subordinated Indebtedness (or any Person on behalf of such Credit Party) makes (or the holder(s) of the Subordinated Indebtedness receives) any payment on account of the Subordinated Indebtedness at a time when payment is not permitted by said sub-clause (i) or (ii), such payment shall be held by the holder(s) of the Subordinated Indebtedness, in trust for the benefit of, and shall be paid forthwith over and delivered to, the Facility Agent, for application pro rata to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash in accordance with the terms of such Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

 

(c)     Subordination to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of a Credit Party. Upon any distribution of assets of any Credit Party upon dissolution, winding up, liquidation or reorganization of such Credit Party (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise):

 

 

(i)

the holders of all Senior Indebtedness shall first be entitled to receive payment in full in cash of all Senior Indebtedness in accordance with the terms thereof (including, without limitation, post-petition interest at the rate provided in the documentation with respect to the Senior Indebtedness, whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding) before the holder(s) of the Subordinated Indebtedness is entitled to receive any payment of any kind or character on account of the Subordinated Indebtedness;

 

 

(ii)

any payment or distributions of assets of such Credit Party of any kind or character, whether in cash, property or securities to which the holder(s) of any outstanding Subordinated Indebtedness would be entitled except for the provisions of this Section 18.15, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the Facility Agent, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; and

 

 

(iii)

in the event that, notwithstanding the foregoing provisions of this clause (c), any payment or distribution of assets of such Credit Party of any kind or character, whether in cash, property or securities, shall be received by the holder(s) of the Subordinated Indebtedness on account of Subordinated Indebtedness before all Senior Indebtedness is paid in full in cash in accordance with the terms thereof, such payment or distribution shall be received and held in trust for and shall be paid over to the Facility Agent for application to the payment of such Senior Indebtedness until all such Senior Indebtedness shall have been paid in full in cash in accordance with the terms thereof, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness.

 

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(d)     Obligation of the Payor Unconditional. Nothing contained in this Section 18.15 or in the Subordinated Indebtedness is intended to or shall impair, as between the payor of any Subordinated Indebtedness on the one hand and the holder(s) of the Subordinated Indebtedness on the other hand, the obligation of the payor, which is absolute and unconditional, to pay to the holder(s) of the Subordinated Indebtedness the principal of and interest on the Subordinated Indebtedness as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holder(s) of the Subordinated Indebtedness and creditors of the payor other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the holder(s) of the Subordinated Indebtedness from exercising all remedies otherwise permitted by applicable law upon an event of default under the Subordinated Indebtedness, subject to the provisions of this Section 18.15 and the rights, if any, under this Section 18.15 of the holders of Senior Indebtedness in respect of cash, property, or securities of the payor of any Subordinated Indebtedness received upon the exercise of any such remedy. Upon any distribution of assets of the payor of any Subordinated Indebtedness referred to in this Section 18.15, the holder(s) of the Subordinated Indebtedness shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to the holder(s) of the Subordinated Indebtedness, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of such payor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 18.15.

 

(e)     Subordination Rights Not Impaired by Acts or Omissions of Payor or Holders of Senior Indebtedness. No right of any present or future holders of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Credit Party or by any act or failure to act in good faith by any such holder, or by any noncompliance by any Credit Party with the terms and provisions of the Subordinated Indebtedness, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of the Senior Indebtedness may, without in any way affecting the obligations of the holder(s) of the Subordinated Indebtedness with respect hereto, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment of, change or extend the time of payment of, or renew, increase or otherwise alter, any Senior Indebtedness or amend, modify or supplement any agreement or instrument governing or evidencing such Senior Indebtedness or any other document referred to therein, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness including, without limitation, the waiver of default thereunder and the release of any collateral securing such Senior Indebtedness, all without notice to or assent from the holder(s) of the Subordinated Indebtedness.

 

(f)     Senior Indebtedness. The term “Senior Indebtedness” shall mean all obligations of the Credit Parties under, or in respect of, this Agreement and each other Transaction Document.

 

[Signature Pages Follow]

 

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IN WITNESS whereof, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the day and year first above written.

 

 

SEACOR MARINE HOLDINGS INC.,
as Parent Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

 

 

SEACOR MARINE FOREIGN HOLDINGS INC.,
as Borrower

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Executive Vice President

 
 

 

Aaron S. McCall LLC,
as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

Alya McCall LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President 

 

 

Michael G McCall LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

 

 

 

Falcon Pearl LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

Falcon Diamond LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

Putford Achiever Ltd.,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title:   Director

 

 

Putford Saviour Ltd.,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title:   Director

 

 

Putford Pride Ltd.,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title:   Director

 

 

Putford Jaguar Ltd.,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title:   Director

 

 

 

 

 

Sea-Cat Crewzer LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

Sea-Cat Crewzer II LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

SEACOR Hawk LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

SEACOR Eagle LLC,

as Subsidiary Guarantor

 
 

By: /s/ Jesús Llorca

Name: Jesús Llorca

Title:   Vice President

 

 

Putford Defender Limited,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title:   Director

 

 

Putford Phoenix Limited,

as Subsidiary Guarantor

 
 

By: /s/ John Anniss

Name: John Anniss

Title: Director

 

 

 

 

 

DNB BANK ASA, NEW YORK BRANCH
as Facility Agent, Security Trustee and Swap Bank

 
 

By: /s/ Mita Zalavadia

Name: Mita Zalavadia

Title:   Assistant Vice President

 
 

By:  /s/ Vadim Shutov

Name: Vadim Shutov

Title:    Assistant Treasurer 

 
 

DNB CAPITAL LLC,
as Lender

 
 

By: /s/ Philippe Wulfers

Name: Philippe Wulfers

Title:   First Vice President

 
 

By: /s/ Andrew J. Shohet

Name: Andrew J. Shohet 

Title:   First Vice President

 

 

 

 

CLIFFORD CAPITAL PTE. LTD.

as Lender

 

 

By: /s/ Low Li Ping, Audra

Name: Low Li Ping, Audra

Title:   Head of Origination and Structuring 

 

NIBC BANK N.V.

as Lender

 

 

By: /s/ Sven de Veij

Name: Sven de Veij

Title:   Managing Director

 
 
By: /s/ H.J. van West
Name: H.J. van West
Title:   Managing Director 
 

HANCOCK WHITNEY BANK,

as Lender

 

 

By: /s/ Tommy D. Pitre

Name: Tommy D. Pitre

Title:   Senior Vice President 

 

CITICORP NORTH AMERICA, INC.,
as Lender

 
 

By: /s/ Robert Malleck

Name: Robert Malleck

Title:   Vice President 

 

 

 

 

SCHEDULE 1

 

PARTIES

 

SCHEDULE 1-A

 

SECURITY PARTIES

 

(a)     Borrower

 

Party

Jurisdiction

SEACOR Marine Foreign Holdings Inc.

Marshall Islands

 

(b)     Parent Guarantor

 

SEACOR Marine Holdings Inc.

Delaware

 

(c)     Subsidiary Guarantors

 

Aaron S. McCall LLC

Delaware

Alya McCall LLC

Delaware

Michael G McCall LLC

Delaware

Falcon Pearl LLC

Marshall Islands

Falcon Diamond LLC

Marshall Islands

Putford Achiever Ltd.

England and Wales

Putford Saviour Ltd.

England and Wales

Putford Pride Ltd.

England and Wales

Putford Jaguar Ltd.

England and Wales

Sea-Cat Crewzer LLC

Marshall Islands

Sea-Cat Crewzer II LLC

Marshall Islands

SEACOR Hawk LLC

Delaware

SEACOR Eagle LLC

Delaware

Putford Defender Limited

England and Wales

Putford Phoenix Limited

England and Wales

 

(d)     Relevant Parents

 

Falcon Global International LLC

Marshall Islands

C-Lift LLC

Delaware

SEACOR Offshore Safety Ltd.

England and Wales

Boston Putford Offshore Safety Ltd.

England and Wales

SEACOR Offshore Vessel Holdings LLC

Delaware

 

 

 

 

SCHEDULE 1-B

 

LENDERS AND COMMITMENTS

 

Name/Notice Details

 

Commitment Amount

DNB CAPITAL LLC
200 Park Avenue, 31st Floor
New York, New York 10166

 

Attention: Mr. Philippe Wulfers

Telephone No.: (212) 681-3821 
Facsimile No.: (212) 681-3900

Email: philippe.wulfers@dnb.no

 

Loan Administration Department:
Attention:         Loan Services Department
Telephone:         (212) 681-3837 / (212) 681-3800
Facsimile:          (212) 681-4123

Email:               nyloanscsd@dnb.no

 

$55,500,000

CLIFFORD CAPITAL PTE. LTD.
One Raffles Quay #23-01 North Tower
Singapore 048583

 

Credit:

Attention: Desmond Wong / Loh Yao Sheng
Telephone No.: +65 6229 2926 / +65 6229 2924

 

Facsimile No: +65 6444 9600

Email: risk@cliffordcap.sg

 

Loan Administration:

Attention: Cindy Oh / Lee Li Ling
Telephone No.: +65 6229 2929 / +65 6229 2930

Facsimile No: +65 6444 9600

Email: fto@cliffordcap.sg

 

$30,000,000

NIBC BANK N.V.
Carnegieplein 4

2517 KJ Den Haag

The Netherlands

 

Credit:

Attention: Ekaterina Kouznetsova / Lucas Luik

Telephone: +31 (0)70 342 5618 / +31 (0)70 342 5714

Email: ekaterina.kouznetsova@nibc.com / lucas.luik@nibc.com

 

Administrative:

Attention: Loan Servicing

Telephone: +31 (0)70 342 9544

Email: loanservicing@nibc.com

 

$25,000,000

 

 

 

 

HANCOCK WHITNEY BANK
7910 Main Street

Houma, LA 70360

Telephone No.: (985) 853-7429

Attention: Mr. Tommy Pitre

Facimile No.: (985) 853-7479

Email: tommy.pitre@hancockwhitney.com

 

Loan Administration Department:

Attention: Specialized Lending Administrator

Telephone: (504) 552-4517

Facsimile: (504) 801-3850

Email: pscls@hancockwhitney.com

 

$10,000,000

CITICORP NORTH AMERICA, INC.
388 Greenwich Street, 22nd Floor

New York, NY 10013

 

Credit:

Attention: Rob Malleck / Kaan Balabaner

Telephone: +1 (212) 816 5435 / +1 (713) 821 4741

Facsimile: +1 (646) 291 1688

Email: Robert.mallek@citi.com / kaan.balabaner@citi.com

 

Administrative:

Attention: Saket Kumar Darshan / Bhasker Vinoliya

Telephone: +1 (201) 751 7571

Email: GLOriginationOps@citigroup.com

 

$9,500,000

 

SWAP BANKS

 

DNB BANK ASA, NEW YORK BRANCH
200 Park Avenue, 31st Floor
New York, New York 10166
Telephone No.: (212) 681-3800
Attention: Credit Middle Office / Loan Services Department
Facsimile No.: (212) 681-4123

Email: nyloanscsd@dnb.no

 

HANCOCK WHITNEY BANK

7910 Main Street

Houma, LA 70360

Telephone No.: (985) 853-7429

Attention: Mr. Tommy Pitre

Facimile No.: (985) 853-7479

Email: tommy.pitre@hancockwhitney.com

 

Loan Administration Department:

Attention: Specialized Lending Administrator

Telephone: (504) 552-4517

Facsimile: (504) 801-3850

Email: pscls@hancockwhitney.com

 

NIBC BANK N.V.
Carnegieplein 4

2517 KJ Den Haag

The Netherlands

Attention: Mirja Ciere

Telephone: +31 70 3429833

Email: Mirja.Ciere@nibc.com

 

 

 

 

 

SCHEDULE 2

 

INDEBTEDNESS

 

 

A promissory note dated September 13, 2018 made by SEACOR Marine Foreign Holdings Inc., in favor of Seabulk Overseas Transport, Inc. in the principal sum of $30,470,557, which shall be payable on September 13, 2028 (so long as such promissory note is subordinated pursuant to the terms similar to those contained in Section 18.15)

 

 

 

 

SCHEDULE 3

 

LIENS

 

None

 

 

 

 

SCHEDULE 4

 

SCHEDULE 4-A

 

CREDIT SUPPORT VESSELS

 

Asset Class / Name

Owner

Flag

Fast Supply Vessels

   

SEACOR Cheetah

Sea-Cat Crewzer LLC

Marshall Islands

SEACOR Cougar

Sea-Cat Crewzer LLC

Marshall Islands

SEACOR Leopard

Sea-Cat Crewzer II LLC

Marshall Islands

SEACOR Lynx

Sea-Cat Crewzer II LLC

Marshall Islands

Aaron S. McCall

Aaron S. McCall LLC

Marshall Islands

Alya McCall

Alya McCall LLC

Marshall Islands

Michael G McCall

Michael G McCall LLC

Marshall Islands

Liam J McCall

SEACOR Marine LLC

United States

     

Liftboats

   

Falcon Diamond

Falcon Diamond LLC

Marshall Islands

Falcon Pearl

Falcon Pearl LLC

Marshall Islands

     

Standby Vessels

   

Putford Achiever

Putford Achiever Ltd.

Cayman Islands

Putford Saviour

Putford Saviour Ltd.

Cayman Islands

Centrica Pride

Putford Pride Ltd.

United Kingdom

Putford Jaguar

Putford Jaguar Ltd.

United Kingdom

 

SCHEDULE 4-B

 

ADDITIONAL CREDIT SUPPORT VESSELS

 

Asset Class / Name

Owner

Flag

Fast Supply Vessels

   

John G McCall

SEACOR Marine LLC

United States

Michael Crombie McCall

SEACOR Marine LLC

United States

     

Liftboats

   

SEACOR Hawk

SEACOR Hawk LLC

United States

SEACOR Eagle

SEACOR Eagle LLC

United States

     

Standby Vessel

   

Putford Defender

Putford Defender Limited

United Kingdom

Putford Phoenix

Putford Phoenix Limited

United Kingdom

 

 

 

 

SCHEDULE 5

 

INVESTMENTS

 

None

 

 

 

 

SCHEDULE 6

 

AFFILIATE TRANSACTION

 

None

 

 

 

AGREED FORM

 

 

 

 

EXHIBIT A

 

 

 



 

 

 

 

PROMISSORY NOTE

 

SEACOR MARINE FOREIGN HOLDINGS INC.

as borrower

 

 

 

in favor of

 

 

 

DNB BANK ASA, NEW YORK BRANCH,

as Facility Agent

 

 

 



 

 

 

[___________], 2018

 

 

A-1

 

 

PROMISSORY NOTE

   
U.S. $130,000,000

[___________], 2018

 

New York, New York

   

FOR VALUE RECEIVED, the undersigned, SEACOR MARINE FOREIGN HOLDINGS INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands (the “Borrower”), with offices at c/o SEACOR Marine LLC, 7910 Main St., 2nd Floor, Houma, Louisiana 70360, as borrower, hereby promise to pay to DNB Bank ASA, New York Branch as agent for the benefit of the Lenders (as defined below), or its registered assigns (the “Facility Agent”), at its office at 200 Park Avenue, 31st Floor, New York, NY 10166, or as it may otherwise direct, the principal sum of One Hundred Thirty Million United States Dollars (U.S. $130,000,000) or, if less, such portion of the unpaid principal amount of the Loan (as defined in the Credit Agreement (as hereinafter defined)) from time to time outstanding made available by the Lenders to the Borrower pursuant to the Credit Agreement dated as of [__________], 2018 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”), by and among, inter alios, (i) the Borrower, as borrower, (ii) SEACOR Marine Holdings Inc., as parent guarantor, (iii) the entities listed on Schedule 1-A thereto as subsidiary guarantors, (iv) DNB Bank ASA, New York Branch, as facility agent and security trustee and (v) the financial institutions identified on Schedule 1-B thereto, as lenders (together with any bank or financial institution which becomes a lender pursuant to Section 10 thereto, the “Lenders”). The Borrower shall repay the indebtedness represented by this Note as provided in Section 5 of the Credit Agreement. This Note may be prepaid on such terms as provided in the Credit Agreement.

 

Words and expressions used herein (including those in the foregoing paragraph) and defined in the Credit Agreement shall have the same meaning herein as therein defined.

 

The Borrower shall also pay interest on such portion of the Loan from the date of drawdown until payment in full at the rates determined from time to time in accordance with Section 6 of the Credit Agreement, which provisions are incorporated herein with full force and effect as if they were fully set forth herein. Any principal payment not paid when due, whether on an installment payment date or by acceleration, shall bear interest thereafter at the Default Rate. All interest shall accrue and be calculated on the actual number of days elapsed and on the basis of a 360-day year.

 

Both principal and interest are payable in Dollars to the Facility Agent, for the account of the Lenders, as the Facility Agent may direct, in immediately available same day funds.

 

If this Note or any payment required to be made hereunder becomes due and payable on a day which is not a Banking Day, the due date thereof shall be extended until the next following Banking Day and interest shall be payable during such extension at the rate applicable immediately prior thereto, unless such next following Banking Day falls in the following calendar month, in which case the due date thereof shall be adjusted to the immediately preceding Banking Day.

 

This Note is the Note referred to in the Credit Agreement and is entitled to the security and benefits therein provided, including, but not limited to, such security as provided in the relevant Security Documents and any relevant Interest Rate Agreement. Upon the occurrence of any Event of Default under Section 8 of Credit Agreement, the principal hereof and accrued interest hereon may be declared to be (or, with respect to certain Events of Default, automatically shall become) immediately due and payable.

 

A-2

 

 

In the event that any holder of this Note shall institute any action for the enforcement or the collection of this Note, there shall be immediately due and payable, in addition to the unpaid balance hereof, all late charges and all costs and expenses of such action, including reasonable attorneys’ fees.

 

The Borrower hereby waives presentment, protest, demand for payment, diligence, notice of dishonor and of nonpayment, and any and all other notices or demands in connection with the delivery, acceptance, performance, default or enforcement of this Note, hereby waives and renounces all rights to the benefits of any statute of limitations and any moratorium, appraisement, exemption and homestead now provided or which may hereafter be provided by any federal or state statute, including, without limitation, exemptions provided by any federal or state statute, including, without limitation, exemptions provided by or allowed under any federal or state bankruptcy or insolvency laws, both as to themselves and as to all of their property, whether real or personal, against the enforcement and collection of the obligations evidenced by this Note and any and all extensions, renewals and modifications hereof and hereby consent to any extensions of time, renewals, releases of any party this Note, waiver or modification that may be granted or consented to by the holder of this Note.

 

The Borrower agrees that its liabilities hereunder are absolute and unconditional without regard to the liability of any other party and that no delay on the part of the holder hereof in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power or right.

 

If at any time this transaction would be usurious under applicable law, then regardless of any provision contained in the Credit Agreement or this Note or any other agreement made in connection with this transaction, it is agreed that (a) the total of all consideration which constitutes interest under applicable law that is contracted for, charged or received upon the Credit Agreement, this Note or any other agreement shall under no circumstances exceed the maximum rate of interest authorized by applicable law, if any, and any excess shall be credited to the Borrower and (b) if the Lenders elect to accelerate the maturity of, or if the Borrower prepays the indebtedness described in this Note, any amounts which because of such action would constitute interest may never include more than the maximum rate of interest authorized by applicable law and any excess interest, if any, provided for in the Credit Agreement, in this Note or otherwise, shall be credited to the Borrower automatically as of the date of acceleration or prepayment.

 

THE UNDERSIGNED AND, BY ITS ACCEPTANCE HEREOF, THE FACILITY AGENT EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ARISING IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE.

 

This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

[Signature Page Follows]

 

A-3

 

 

IN WITNESS WHEREOF, the undersigned Borrower has executed and delivered this Note on the date and year first above written.

 

 

SEACOR Marine Foreign Holdings Inc.,

as Borrower

 
 

By ______________________

     Name:

     Title:

 

A-4

 

 

EXHIBIT B

 

EXECUTION COPY

 

 



 

 

 

 

GUARANTY

 

 

 

by

 

 

 

SEACOR MARINE HOLDINGS INC.

 

 

 

in favor of

 

 

 

 

DNB BANK ASA, NEW YORK BRANCH,
as Security Trustee

 

 



 

 

 

September 28, 2018

 

 

B-1

 

 

GUARANTY

 

This GUARANTY (this “Guaranty”), dated as of September 28, 2018, is made by SEACOR MARINE HOLDINGS INC., a corporation incorporated and existing under the laws of the State of Delaware (the “Parent Guarantor”), in favor of DNB BANK ASA, New York Branch, a corporation organized under the laws of the Kingdom of Norway (“DNB”), as security trustee (the “Security Trustee”) for the Creditors under the Credit Agreement referred to in Recital (A) below.

 

WITNESSETH THAT:

 

WHEREAS:

 

(A)     Pursuant to the credit agreement dated as of September 26, 2018 (as the same may be further amended, supplemented or otherwise modified from time to time with the consent of the Parent Guarantor, the “Credit Agreement”) made by and among, inter alios, (i) SEACOR Marine Foreign Holdings Inc. (the “Borrower”), a corporation incorporated and existing under the laws of the Republic of the Marshall Islands, as borrower, (ii) DNB, as facility agent (the “Facility Agent”) and security trustee and (iii) the financial institutions identified on Schedule 1 thereto (together with any bank or financial institution which becomes a lender pursuant to Section 10 of the Credit Agreement), as lenders (the “Lenders”), the Lenders have agreed to provide to the Borrower a senior secured term loan facility in the aggregate amount of One Hundred Thirty Million United States Dollars ($130,000,000) (the “Loan”).

 

(B)     It is a condition under the Credit Agreement that the Parent Guarantor enter into this Guaranty and otherwise agree to be bound by the terms of this Guaranty.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which the Parent Guarantor hereby acknowledges, the Parent Guarantor hereby agrees as follows:

 

1.     DEFINITIONS

 

1.1     Specific Definitions. In this Guaranty, unless the context otherwise requires:

 

Cash Equivalents” means any of the following: (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than three (3) months from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within three (3) months after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $1,000,000,000; and (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $5,000,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s;

 

B-2

 

 

Cash and Cash Equivalents” means, on any date of determination, the sum of (a) cash and (b) Cash Equivalents, in each case that are held by the Parent Guarantor and its Subsidiaries on a consolidated basis free and clear of all Liens (other than Liens pursuant to the Transaction Documents and any statutory Liens in favor of a bank (including rights of set-off) incurred in the ordinary course of business on deposit accounts maintained with such bank and cash and Cash Equivalents in such accounts;

 

Consolidated Book Equity” means the consolidated book equity of the Parent Guarantor, calculated in accordance with GAAP and reflected on the balance sheet of the Parent Guarantor;

 

Consolidated EBITDA” means, for any accounting period, the consolidated net income of the Parent Guarantor and its Subsidiaries on a consolidated basis for that accounting period:

 

 

(a)

plus, to the extent reducing consolidated net income, the sum, without duplication, of:

 

 

(i)

provisions for all federal, state, local and foreign income taxes and any tax distributions;

     
  (ii)  Consolidated Net Interest Expense; and

 

 

(iii)

depreciation, depletion, amortization of intangibles and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortization of debt discounts) and any extraordinary losses;

 

 

(b)

minus, to the extent added in computing the consolidated net income of the Parent Guarantor for that accounting period, any non-cash income or non-cash gains (excluding any such non cash gain to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period);

 

Consolidated Net Interest Expense”     means the aggregate of all interest payments in respect of outstanding Indebtedness thereof that are due from the Parent Guarantor and its Subsidiaries on a consolidated basis during the relevant accounting period, determined on a consolidated basis in accordance with GAAP and as shown in the consolidated statements of income for the Parent Guarantor;

 

Financial Covenants” means the covenants set forth in Section 4(a)(xiv), Section 4(a)(xv) and Section 4(a)(xvi) of this Guaranty.

 

Gross Interest Bearing Debt” means, on any date of determination, the total amount of Indebtedness of the Parent Guarantor and its Subsidiaries on a consolidated basis outstanding on such date minus the aggregate amount of Indebtedness under all Warehouse Financing Facilities and the Chase Facility;

 

Lease Obligations” means the amount of all lease or charter obligations calculated in accordance with GAAP and reflected on the balance sheet of any Credit Party;

 

B-3

 

 

Total Capital” means the sum of the liabilities (other than Indebtedness under all Warehouse Financing Facilities and the Chase Facility) and shareholders’ equity of the Parent Guarantor and its Subsidiaries on consolidated basis, in each case determined in accordance with GAAP; and

 

Total Debt” means the sum of Gross Interest Bearing Debt and Lease Obligations of the Parent Guarantor and its Subsidiaries.

 

Unconsolidated JV Investments” means the amount of “investments, at equity, and advances to 50% or less owned companies” reflected on the consolidated balance sheet of the Parent Guarantor excluding any increase to such amount after June 30, 2018 in respect of any profits of such companies.

 

1.2     Defined Expressions. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings when used herein, including in the preamble and recitals hereof.

 

2.     GUARANTY

 

(a)     The Parent Guarantor hereby unconditionally and irrevocably:

 

(i)     guarantees to the Security Trustee for the account of the Creditors, as a primary obligor and not merely as a surety, punctual payment and performance by the Borrower and each other Credit Party of all their respective payment and performance obligations under the Transaction Documents;

 

(ii)     undertakes with the Security Trustee on behalf of the Creditors that whenever the Borrower or any other Credit Party does not pay any amount (whether for principal, interest, fees, expenses or otherwise) when due (whether at stated maturity, by acceleration or otherwise) under or in connection with any Transaction Document, the Parent Guarantor shall immediately on demand pay that amount as if it were the primary obligor; and

 

(iii)     agrees with the Security Trustee on behalf of the Creditors that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Creditor immediately on demand against any cost, loss or liability it incurs as a result of the Borrower or any other Credit Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by such Parent Guarantor under this indemnity will not exceed the amount it would have had to pay under this Guaranty if the amount claimed had been recoverable on the basis of a guarantee (all obligations referred to in clauses (i) through (iii) above are herein referred to as the “Obligations”).

 

B-4

 

 

(b)     This Guaranty is a guaranty of payment and not of collection and the Parent Guarantor expressly agrees that it shall not be necessary or required that any of the Creditors exercise any right, assert any claim or demand or enforce any remedy whatsoever against the Borrower or any of the other Credit Parties or any other Person before or as a condition to the obligations of the Parent Guarantor hereunder. This Guaranty is a primary obligation of the Parent Guarantor and shall be an absolute, unconditional, present, and continuing obligation and shall not be subject to any counterclaim, setoff, deduction, diminution, abatement, recoupment, suspension, deferment, reduction, or defense based on any claim the Parent Guarantor or any other person may have against the Borrower, any of the Credit Parties or any other person, and shall not be released, discharged or affected by any circumstance whatsoever, including without limitation: (a) the unenforceability, invalidity, irregularity or lack of genuineness of the Credit Agreement, the Note, any other Transaction Document or any of the obligations under the Credit Agreement, the Note and the other Transaction Documents; (b) any amendment, modification, termination, or removal of, or addition or supplement to, the Credit Agreement, the Note or any other Transaction Document, or any change in time, manner, or place of payment or performance of any Obligation; (c) any assignment, mortgage, release, exchange, addition, or transfer of any Collateral; (d) any failure, refusal, omission or delay on the part of the Borrower, any of the Credit Parties or any other Person to conform or comply with any term of the Credit Agreement, the Note or any other Transaction Document or any other agreement; (e) any waiver, consent, extension, indulgence, surrender, settlement, subordination, release, compromise, or other agreement, or the exercise or non-exercise of any right or remedy thereunder, with or without consideration; (f) the occurrence and/or continuance of any bankruptcy, insolvency, reorganization, liquidation, arrangement, adjustment of debt, relief of debtors, dissolution, or similar proceeding with respect to the Borrower, any of the Credit Parties, or any other Person, including without limitation any modification of the Borrower’s obligations under the Credit Agreement, the Note or any other Transaction Document in connection with any such proceeding; (g) any defect in the title, condition, compliance with specifications, design, operation, or fitness for use of, or any damage to or loss of, or governmental prohibition or restriction, condemnation, requisition, or seizure of, any Collateral for any reason; (h) any merger, consolidation, restructuring, termination of existence, sale of assets, or change in the ownership of any membership interests or shares of capital stock of either of the Borrower or the Parent Guarantor; (i) any present or future law, regulation, or order in any jurisdiction (whether of right or in fact) or any agency thereof affecting any term of any Obligation or any rights of any of the Creditors with respect thereto, including, without limitation, any law, regulation or order purporting to vary the terms of payment or to restrict the right or power of the Borrower or of the Parent Guarantor to make payment of its Obligations to the Creditors; or (j) any other circumstances whatsoever which might otherwise constitute a defense available to, or a discharge of, the Borrower or the Parent Guarantor.

 

 

3.

REPRESENTATIONS AND WARRANTIES

 

(a)     The Parent Guarantor hereby makes all of the representations and warranties expressly applicable to the Parent Guarantor set forth in Section 2 of the Credit Agreement as if they were set forth in this Guaranty.

 

 

4.

COVENANTS

 

(a)     The Parent Guarantor hereby covenants and undertakes with the Security Trustee on behalf of the Creditors that from the date hereof and so long as any principal, interest or other monies are owing by the Credit Parties under or in connection with the Credit Agreement, the Note, the other Transaction Documents, or any of them, it will:

 

(i)     duly perform and observe the terms of this Guaranty;

 

(ii)     obtain every consent and do all other acts and things which may from time to time be necessary or advisable for the continued due performance of all its obligations under this Guaranty and, if this Guaranty shall, in the reasonable opinion of the Creditors, at any time be deemed by the Creditors for any reason insufficient in whole or in part to carry out the purposes of this Guaranty hereof, it will execute or cause to be executed such other and further assurances and documents as in the reasonable opinion of the Creditors may be required in order to accomplish the purposes of this Guaranty;

 

B-5

 

 

(iii)     promptly upon any Responsible Officer of the Parent Guarantor obtaining actual knowledge thereof, inform the Facility Agent of the occurrence of (a) any Default or Event of Default, (b) any litigation, arbitration or governmental proceeding pending or threatened in writing against it not previously disclosed to the Lenders or any development in respect of a previously disclosed litigation, arbitration or governmental proceeding, which if adversely determined could reasonably be expected to have a Material Adverse Effect, including but not limited to, in respect of any Environmental Claim or any judgment entered against it and (c) any other event or condition which is reasonably likely to have a Material Adverse Effect;

 

(iv)     deliver to the Facility Agent:

 

(1)     as soon as available but not later than one hundred twenty (120) days after the end of each fiscal year of the Parent Guarantor ending after the Closing Date, complete copies of the consolidated financial reports of the Parent Guarantor (together with a calculation of Cash and Cash Equivalents and a Compliance Certificate), all in reasonable detail, which shall include at least the consolidated balance sheet of the Parent Guarantor as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be audited reports prepared by an Acceptable Accounting Firm;

 

(2)     as soon as available but not later than sixty (60) days after the end of each of the first three full quarters of each fiscal year of the Parent Guarantor ending after the Closing Date, a quarterly interim consolidated balance sheet of the Parent Guarantor (together with a Compliance Certificate), and the related consolidated profit and loss statements and sources and uses of funds, all in reasonable detail, unaudited, but accompanied by the certification of the chief executive officer, chief financial officer or controller of the Parent Guarantor that such financial statements fairly present the financial condition of Parent Guarantor as at the dates indicated, subject to changes resulting from audit and normal year-end adjustments;

 

(3)     as soon as they become available, but in any event prior to each fiscal year beginning after the Closing Date, the consolidated budget including the annual cash flow projections of the Parent Guarantor; and

 

(4)     such other information and data with respect to Parent Guarantor or any of its Subsidiaries as from time to time may be reasonably requested by the Facility Agent or any Lender;

 

provided that any delivery requirement under this Section 4(a)(iv) shall be deemed satisfied by the posting of such information, materials or reports as applicable on EDGAR or any successor website maintained by the SEC;

 

(v)     except as otherwise permitted by the Credit Agreement or hereunder, do or cause to be done all things necessary to preserve and keep its separate identity and existence under the laws of its jurisdiction of incorporation and all licenses, franchises, permits and assets necessary to the conduct of its business;

 

B-6

 

 

(vi)     at all times keep proper books of record and account into which full and correct entries shall be made in accordance with GAAP;

 

(vii)     pay and discharge all taxes, assessments and governmental charges or levies imposed upon its income or property prior to the date upon which penalties attach thereto; provided, however, that it shall not be required to pay and discharge, or cause to be paid and discharged, any such tax, assessment, charge or levy so long as the legality thereof shall be contested in good faith and by appropriate proceedings or other acts and it shall set aside on its books adequate reserves with respect thereto;

 

(viii)     allow, upon ten (10) Banking Days’ notice from the Facility Agent, any representative or representatives designated by the Facility Agent, subject to applicable laws and regulations, at normal business hours, to visit and inspect any of its properties, and, on request and subject to customary confidentiality arrangements, to examine its books of account, records, reports, agreements and other papers and to discuss its affairs, finances and accounts with its officers; provided that (i) the Facility Agent shall only be allowed to conduct one such inspection per calendar year prior to the occurrence of an Event of Default and an unlimited amount of inspections during the continuance of an Event of Default; and (ii), the foregoing inspections by the Facility Agent shall not unreasonably interfere with the conduct of the Parent Guarantor’s or any of its Subsidiary’s business (unless, with respect to Transaction Parties only, an Event of Default has occurred and is continuing);

 

(ix)     except where failure to comply would not alone or in the aggregate result in a Material Adverse Effect, do or cause to be done, all things necessary to materially comply with all contracts or agreements to which it is a party, and all laws, and the rules and regulations thereunder, applicable to it, including, without limitation, those laws, rules and regulations relating to employee benefit plans and environmental matters;

 

(x)     promptly upon the occurrence of any of the following conditions, provide to the Facility Agent notice thereof, specifying in reasonable detail the nature of such condition: (a) its receipt of any written communication that alleges that it is not in compliance with any applicable Environmental Law or Environmental Approval, if such failure to comply would reasonably be expected to have a Material Adverse Effect, (b) any Environmental Claim pending or threatened against it, which would reasonably be expected to have a Material Adverse Effect, or (c) any release, emission, discharge or disposal of any Material of Environmental Concern that would reasonably be expect to form the basis of any Environmental Claim against it, if such Environmental Claim could reasonably be expected to have a Material Adverse Effect. Upon the written request by the Facility Agent, it will submit to the Facility Agent at reasonable intervals, a report providing an update of the status of any issue or claim identified in any notice or certificate required pursuant to this subsection 4(a)(x);

 

(xi)     forthwith upon learning of the existence or occurrence of any ERISA Funding Event, ERISA Termination Event, Foreign Termination Event or Foreign Underfunding that, when taken together with all other ERISA Funding Events, ERISA Termination Events, Foreign Termination Events and Foreign Underfundings that exist or have occurred, or which could reasonably be expected to exist or occur, could reasonably be expected to result in a liability to the Parent Guarantor in the aggregate in excess of $5,000,000, furnish or cause to be furnished to the Facility Agent written notice thereof;

 

B-7

 

 

(xii)     provide all documentation reasonably requested by Lenders in connection with their know your customer requirements;

 

(xiii)     remain, and instruct each Subsidiary of the Parent Guarantor who is a Security Party, any Vessel Manager who is a Transaction Party and any Related Party thereof to remain, in compliance with applicable Sanctions Laws and Anti-Money Laundering Laws;

 

(xiv)     at all times maintain a minimum balance of Cash and Cash Equivalents equal to the greater of (i) Thirty Five Million Dollars ($35,000,000) and (ii) 7.5% of Total Debt;

 

(xv)     maintain as of the last day of each fiscal quarter of each fiscal year of the Parent Guarantor a ratio of (x) Gross Interest Bearing Debt to (y) Total Capital not exceeding 60%; and

 

(xvi)     maintain as of the last day of each fiscal quarter described below a ratio of (x) Consolidated EBITDA to (y) Consolidated Net Interest Expense of not less than:

 

  (1)     2.00:1.00 for the four consecutive fiscal quarters ending on March 31, 2020 through the four consecutive fiscal quarters ending on June 30, 2020,

 

  (2)     2.50:1.00 for the four consecutive fiscal quarters ending on September 30, 2020 through the four consecutive fiscal quarters ending on December 31, 2020, and

 

  (3)     3.00:1.00 for each four consecutive fiscal quarters of the Parent Guarantor thereafter;

 

provided, that notwithstanding the foregoing, if on any date on which the ratio under this Section 4(a)(xvi) is to be tested, Consolidated EBITDA is less than, but at least 20% of, the amount necessary for the Parent Guarantor to be in compliance with the required ratio level applicable for such date, the Parent Guarantor may (A) cause to be contributed an amount of Cash and Cash Equivalents (which shall be through the sale or issuance of equity of the Parent Guarantor or any other capital contribution to the Parent Guarantor) or (B) designate an existing amount of Cash and Cash Equivalents in excess of the Cash and Cash Equivalents that the Parent Guarantor is required to maintain under Section 4(a)(xiv) (the “Cure Amount” and, such contribution or designation, the “Cure Right”) as an increase to Consolidated EBITDA for such testing period and for calculating Consolidated EBITDA in each subsequent testing period which includes the fiscal quarter for which the Cure Right is exercised; provided, further, that (i) the Parent Guarantor shall have provided notice to the Facility Agent that it is exercising the Cure Right, (ii) such amounts are contributed or designated, as the case may be, on or prior to the fifteenth (15th) Banking Day after each such testing date (it being understood and agreed that until such date, neither the Facility Agent nor any Lender shall be permitted to exercise any rights on account of any actual or prospective breach of this Section 4(a)(xvi) and that such breach shall be deemed cured immediately upon the contribution or designation of the Cure Amount), (iii) the Cure Amount for any fiscal quarter does not exceed the aggregate amount necessary to cure the shortfall under this Section 4(a)(xvi) for such fiscal quarter, (iv) Cash and Cash Equivalents contributed or designated as a Cure Amount in any fiscal quarter shall not be used as a Cure Amount in any of the three consecutive fiscal quarters immediately following such fiscal quarter and (v) in each period of four consecutive fiscal quarters, there shall be at least two (2) fiscal quarters in which no Cure Right is exercised and the Cure Right shall not be exercised in more than five (5) fiscal quarters over the term of this Guaranty.

 

B-8

 

 

(b)     The Parent Guarantor hereby covenants and undertakes with the Security Trustee on behalf of the Creditors that, from the date hereof and so long as any principal, interest or other monies are owing by any of the Credit Parties under or in connection with the Credit Agreement, the Note, the other Transaction Documents or any of them, it will not, without the prior written consent of the Security Trustee on behalf of the Creditors other than as expressly permitted by the terms of the Credit Agreement and the other Security Documents:

 

(i)     create, assume or permit to exist, or permit any of its Subsidiaries to create, assume or permit to exist, any Lien (other than Permitted Liens) upon any property or assets of such Subsidiary that are subject to a Lien pursuant to the Security Documents;

 

(ii)     make any new Investment in any Person which is not a Subsidiary of the Parent Guarantor and which is not consolidated on the balance sheet of the Parent Guarantor if, before or after giving effect to such Investment:

 

(1)     there shall have occurred an Event of Default described in sub-sections (a) and (j) of Section 8.1 of the Credit Agreement that is continuing,

 

(2)     the Parent Guarantor shall not be in compliance with the Financial Covenants, or

 

(3)     the aggregate amount of Unconsolidated JV Investments shall exceed 30% of the Consolidated Book Equity of the Parent Guarantor;

 

(iii)     ensure that the aggregate amount of all Lease Obligations incurred by the Parent Guarantor and its Subsidiaries shall not exceed $75,000,000;

 

(iv)     enter into any transaction with an Affiliate, other than on an arms-length basis other than transactions for its benefit; provided, that the foregoing restriction shall not apply to (i) any transaction between or among the Parent Guarantor and any other Credit Party; (ii) reasonable and customary fees paid to members of the board of directors (or similar governing body) of the Parent Guarantor and its Subsidiaries; (iii) compensation arrangements for officers and other employees of the Parent Guarantor and its Subsidiaries entered into in the ordinary course of business; (iv) transactions expressly permitted by the Credit Agreement, including but not limited to the extension of Intercompany Debt pursuant to Section 9.2(n)(ii) thereof and (v) other affiliate transactions existing on the Closing Date and set forth on Schedule 6 of the Credit Agreement;

 

(v)     materially change the nature of its business or commence any business materially different from its current business;

 

(vi)     change its name or principal place of business unless the Facility Agent shall have received five (5) Banking Days’ prior written notice of such change;

 

B-9

 

 

(vii)     make any Restricted Payment unless both before and after giving effect thereto, (1) there shall not have occurred an Event of Default that is continuing and (2) the Parent Guarantor and its Subsidiaries are in compliance with the Financial Covenants; provided, that no dividends or distributions may be made by the Parent Guarantor within two (2) years from the date hereof; and provided further, that in the event a Cure Amount is contributed or designated in connection with the Parent Guarantor’s exercise of the Cure Right, no dividends or distributions may be made by the Parent Guarantor unless and until the Financial Covenants are satisfied without giving effect to such Cure Amount;

 

(viii)     consolidate with, or merge into, any corporation or other entity, or merge any corporation or other entity into it or enter into any demerger, amalgamation, consolidation or corporate reconstruction or restructuring;

 

(ix)     change its fiscal year (other than as may be required to conform to GAAP);

 

(x)     sell, assign, transfer, pledge or otherwise convey or dispose of any of its shares of or interest in any of the other Credit Parties or allow any Security Party to do the same;

 

(xi)     create, incur, issue, or otherwise become directly or indirectly liable for, or permit any of its Subsidiaries to incur issue, or otherwise become directly or indirectly liable for, any Indebtedness, other than the following:

 

(1)     Permitted Indebtedness;

 

(2)     in the case of any Subsidiary of the Parent Guarantor that is not a Credit Party, any Indebtedness existing on the date hereof that is non-recourse to the Parent Guarantor, including, without limitation, the Chase Facility;

 

(3)     Indebtedness of any Subsidiary of the Parent Guarantor that is not a Credit Party (other than Indebtedness extended to such Subsidiary by the Parent Guarantor or any Subsidiary of the Parent Guarantor), so long as the aggregate amount of all such Indebtedness shall not exceed 30% of Consolidated Book Equity of the Parent Guarantor (excluding for this purpose (x) all Lease Obligations of such Subsidiary, (y)any Indebtedness described in Section 4(b)(xi)(2) and (z) normal trade credits in the ordinary course of business); and

 

(4)     in the case of the Parent Guarantor, additional Indebtedness, so long as (1) both before and after giving effect thereto (x) no Event of Default described in sub-sections (a) and (j) of Section 8.1 of the Credit Agreement shall have occurred and be continuing and (y) the Parent Guarantor shall be in compliance with the Financial Covenants and (2) the final maturity date for such Indebtedness is more than 91 days after the Final Payment Date; provided, that the foregoing restriction shall not apply to Indebtedness incurred in the ordinary course of business, including Indebtedness in respect of or arising from (i) non-speculative interest rate hedges and foreign exchange transactions, (ii) letters of credit or similar instruments, or (iii) contracts entered into with respect to the chartering of vessels or the acquisition of equipment (other than any vessel),

 

(xii)     (1) engage in a trade or financial transaction or other dealing with any individual, entity or Sanctioned Country that would violate Sanctions Laws; or (2) use any proceeds from the Loan, directly or, to its knowledge, indirectly, (A) to fund any trade or business involving any Blocked Person (except to the extent licensed or approved by OFAC or other applicable Governmental Authority), or (B) for the purpose of engaging in any activities that would result in a violation of Sanctions Laws or Anti-Money Laundering Laws by any Credit Party;

 

B-10

 

 

(xiii)     allow any Change of Control to occur under paragraphs (b), (c) or (d) of the defined term “Change of Control”; or

 

(xiv)     create, assume or permit to exist, any Lien on any of the Equity Interests of the Borrower without the consent of the Lenders.

 

 

5.

PAYMENTS

 

5.1     Payment. All payments by the Parent Guarantor under this Guaranty shall be made in the same manner as the Borrower is required to make payments under the Credit Agreement as specifically set forth therein.

 

(b)     On all sum or sums for which the Parent Guarantor is liable hereunder interest shall be due at the Default Rate specified in Section 6 in the Credit Agreement from the due date thereof under the Credit Agreement until the date of payment of such amount by the Parent Guarantor.

 

5.2     Taxes; Withholdings. Should the Parent Guarantor be compelled by law, regulation, decree, order or stipulation to make any deduction or withholding on account of any present or future taxes (including, without limitation, property, sales, use, consumption, franchise, capital, occupational, license, value added, excise, stamp, levies and imposts taxes and customs and other duties), assessments, fees (including, without limitation, documentation, license, filing and registration fees), deductions, withholdings and charges, of any kind or nature whatsoever, together with any penalties, fines, additions to tax or interest thereon, however imposed, withheld, levied, or assessed by any country or governmental subdivision thereof or therein, any international authority or any other taxing authority (“Taxes”) from any payment due under this Guaranty for the account of the Creditors, the sum due from the Parent Guarantor in respect of such payment shall be increased by such additional amounts necessary to ensure that, after the making of such deduction or withholding with respect to Taxes, each of the Creditors receives a net sum equal to the sum which it would have received had no such deduction or withholding with respect to Taxes been made and the Parent Guarantor shall indemnify each of the Creditors against any losses or costs incurred by it by reason of any failure of the Parent Guarantor to make any such deduction or withholding or by reason of any such additional payment not being made to the relevant Creditor on the due date for such payment. The Parent Guarantor will deliver to the relevant Creditor evidence satisfactory to such Creditor including all relevant tax receipts that such Tax has been duly remitted to the appropriate authority. Notwithstanding the preceding sentence, the Parent Guarantor shall not be required to pay additional amounts or otherwise indemnify any Creditor for or on account of:

 

(i)     Taxes based on or measured by the overall net income of any Creditor or Taxes in the nature of franchise taxes or taxes for the privilege of doing business imposed by any jurisdiction or any political subdivision or taxing authority therein unless such are imposed as a result of the activities of the Credit Parties within the relevant taxing jurisdiction; or

 

(ii)     Taxes imposed by any jurisdiction or any political subdivision or taxing authority therein on such Creditor that would not have been imposed but for such Creditor's being organized in or conducting business in or maintaining a place of business in the relevant taxing jurisdiction, or engaging in activities or transactions in the relevant taxing jurisdiction that are unrelated to the transactions contemplated by the Credit Agreement, but only to the extent such Taxes are not imposed as a result of the activities of the Credit Parties within the relevant taxing jurisdiction or the legal status of the Credit Parties under the laws of the taxing jurisdiction.

 

B-11

 

 

5.3     Delivery of Tax Forms. Section 7.4 of the Credit Agreement (Delivery of Tax Forms) is incorporated herein by reference with necessary changes to substitute the Parent Guarantor for the Borrower.

 

5.4     FATCA Information; FATCA Withholding. Sections 7.5 and 7.6 of the Credit Agreement (FATCA Information) and (FATCA Withholding), respectively, are incorporated herein by reference with necessary changes to substitute the Parent Guarantor for the Borrower.

 

 

6.

PRESERVATION OF RIGHTS

 

(a)     The Parent Guarantor hereby consents that from time to time, without notice to or further consent of the Parent Guarantor, the time for the performance and/or observance by the Credit Parties, or any of them, of any of the agreements, covenants or conditions in the Credit Agreement, the Note or the other Transaction Document, or any of them, on the part of the Credit Parties, or any of them, to be performed and/or observed may be waived or the time of performance thereof extended by any of the Creditors and payment of any sums owing or payable under any such document may be extended or any such document may be renewed in whole or in part or modified in any respect or any collateral or arrangement provided for by any such document as security for any obligation contemplated by any such document may be exchanged, surrendered, released or otherwise dealt with as the Creditors may determine, that the time for the making of any payment of any obligation hereby guaranteed may be accelerated in accordance with any agreement between any of the Creditors and the Credit Parties, or any of them, and that any of the acts mentioned in any of said documents may be done and that any document or security therefor may be released in whole or in part without affecting the obligations of the Parent Guarantor hereunder.

 

(b)     The Parent Guarantor hereby waives, to the extent permitted by applicable law: (i) any notice required by law or otherwise to preserve any rights hereunder or under the Credit Agreement, the Notes or any other Transaction Document against the Parent Guarantor or against the Credit Parties, or any of them, including without limitation: (A) acceptance, presentment, demand, protest, or proof of nonperformance of any Obligation, (B) notice of the sale of any Collateral or the transfer the Credit Parties, or any of them, of any interest in any Collateral or the Credit Agreement, the Notes or any other Transaction Document, (C) notice of the acceptance of this Guaranty and of any change in any of the Credit Parties’ financial condition, (D) notices of the creation, renewal, extension, or accrual of any Obligation or any of the matters referred to in Section 2 hereof, or any notice of or proof of reliance by any of the Creditors upon this Guaranty or acceptance of this Guaranty (the Obligations, and any of them, shall conclusively be deemed to have been created, contracted, incurred or renewed, extended, amended or waived in reliance upon this Guaranty and all dealings between the Credit Parties or the Parent Guarantor and the Creditors shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty), and (E) notices which may be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact any rights of any of the Creditors against the Parent Guarantor; (ii) the prior exercise of any remedy contained in the Credit Agreement, the Notes or any other Transaction Document or otherwise available to the Creditors; (iii) any requirement of diligence on the part of any Person including without limitation diligence in making any claim or commencing suit hereon or on the Credit Agreement, the Notes or any other Transaction Document, and any requirement to mitigate damages or exhaust remedies under the Credit Agreement, the Notes or any other Transaction Document; (iv) the right to interpose all substantive and procedural defense of the law of guaranty, indemnification, suretyship, or other applicable law except the defense of prior payment or prior performance by any of the Credit Parties or the Parent Guarantor of the Obligations; (v) all rights and remedies accorded by applicable laws to guarantors or sureties, including any extension of time conferred by any law now or hereafter in effect; (vi) any right or claim of right to cause a marshaling of any of the Credit Parties’ assets or to cause any of the Creditors to proceed against any of the Credit Parties or any collateral held by any of the Creditors at any time or in any particular order; (vii) rights to the enforcement, assertion, or exercise by any of the Creditors of any right, power, privilege, or remedy conferred herein or in the Credit Agreement, the Notes or any other Transaction Document or otherwise; (viii) notices of the sale, transfer or other disposition of any right, title to, or interest in the Credit Agreement, the Notes or any other Transaction Document; and (ix) any other right whatsoever which might otherwise constitute a discharge, release, or defense of the Parent Guarantor hereunder or of any of the Credit Parties under the Credit Agreement, the Notes or any other Transaction Document or which might otherwise limit recourse against the other Credit Parties. No failure to exercise and no delay in exercising, on the part of any of the Creditors, any right, power, or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise thereof, or the exercise of any other power or right. The obligations of the Parent Guarantor hereunder shall not be affected by receipt by any of the Creditors of any proceeds of any security at any time held by any of the Creditors. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

 

B-12

 

 

(c)     The Parent Guarantor agrees that so long as any of the Credit Parties remains under any actual or contingent liability under the Credit Agreement, the Notes and the other Transaction Documents any rights which the Parent Guarantor may at any time have by reason of the performance by the Parent Guarantor of its obligations hereunder (a) to be indemnified by any of the Credit Parties and/or (b) to claim any contribution from the Borrower or any other guarantor of the Borrower’s obligations under the Credit Agreement, the Notes or the other Transaction Documents and/or (c) to take the benefit (in whole or in part) of any security taken pursuant to this Guaranty or the Credit Agreement, the Notes or any other Transaction Documents by, all or any of the persons to whom the benefit of the Parent Guarantor's obligations are given, shall be exercised by the Parent Guarantor in such manner and upon such terms as the Creditors may require and further agrees to hold any monies at any time received by it as a result of the exercise of any such rights or otherwise for and on behalf of and to the order of the Creditors for application in or towards payment of any sums at any time owed by the Credit Parties under the Credit Agreement, the Notes or the other Transaction Documents.

 

(d)     The Parent Guarantor further agrees that its liabilities hereunder shall be unconditional irrespective of any other circumstance which might otherwise constitute a discharge at law or in equity of a guarantor or surety. The Parent Guarantor further guarantees that all payments made by the Borrower, the Parent Guarantor, the other Credit Parties or any of them, to any of the Creditors on any obligation hereby guaranteed will, when made, be final and agrees that, if any such payment is recovered from, or repaid by, any of the Creditors in whole or in part in any bankruptcy, insolvency or similar proceeding instituted by or against the Borrower, the Parent Guarantor, the other Credit Parties, or any of them, this Guaranty shall continue to be fully applicable to such obligation to the same extent as though the payment so recovered or repaid had never been originally made on such obligation.

 

(e)     The Creditors may enforce the obligations of the Parent Guarantor hereunder without in any way first pursuing or exhausting any other rights or remedies which the Creditors may have against any of the other Credit Parties, or against any other person, firm or corporation, or against any security any of the Creditors may hold.

 

B-13

 

 

(f)     The Parent Guarantor hereby irrevocably waives all rights of subrogation (whether contractual, under Section 509 of Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor thereto (herein called the “Bankruptcy Code”), under common law, or otherwise) to the claims of any of the Creditors against the Credit Parties, or any of them, and all contractual, statutory or common law rights of contribution, reimbursement, indemnification and similar rights and “claims” (as such term is defined in the Bankruptcy Code) against the Credit Parties, or any of them, which arise in connection with, or as a result of, this Guaranty, until such time as the obligations of the Credit Parties under or in connection with the Credit Agreement, the Notes and the other Transaction Documents have been indefeasibly paid in full.

 

(g)     The Parent Guarantor shall not assign, transfer, hypothecate or dispose of any claim that it has or may have against the Credit Parties, or any of them, while any indebtedness of the Credit Parties to any of the Creditors remains unpaid, without the written consent of the Creditors.

 

(h)     Any delay in or failure to exercise any right or remedy of any of the Creditors shall not be deemed a waiver of any obligation of the Parent Guarantor or right of any of the Creditors. This Guaranty may be modified, and the Creditors’ rights hereunder waived, only by an agreement in writing signed by the Creditors.

 

(i)     Notice of acceptance by the Creditors of this Guaranty and of the incurring of any or all of the obligations hereby guaranteed is hereby waived by the Parent Guarantor, and this Guaranty and all of the terms and provisions hereof shall immediately be binding upon the Parent Guarantor from the date of execution hereof.

 

 

7.

BENEFIT OF GUARANTY; ASSIGNMENT

 

This Guaranty shall inure to the benefit of the Creditors, their successors and assigns, and shall bind the successors and assigns of the Parent Guarantor.

 

 

8.

WAIVER OF JURY TRIAL; GOVERNING LAW; JURISDICTION

 

EACH OF THE PARENT GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, THE SECURITY TRUSTEE AND EACH OF THE OTHER CREDITORS, HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS GUARANTY.

 

B-14

 

 

TO THE EXTENT THAT THE PARENT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PARENT GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

 

THIS GUARANTY AND ALL RIGHTS, OBLIGATIONS AND LIABILITIES ARISING HEREUNDER SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK.

 

Unless the context otherwise requires, all terms used herein which are defined in the New York Uniform Commercial Code shall have the meanings therein stated.

 

Any legal action or proceeding against the Parent Guarantor with respect to this Guaranty or the obligations guaranteed hereby may be brought in the courts of the State of New York, United States of America, the United States Federal Courts in such State, or in the courts of any other appropriate jurisdiction, as the Creditors may elect, and the Parent Guarantor hereby irrevocably submits to the jurisdiction of such courts for the purpose of any such action or proceeding. The Parent Guarantor hereby agrees that service of process in any such action or proceeding brought in New York may be made upon it by serving a copy of the summons and other legal process in any such action or proceeding on the Parent Guarantor by mailing or delivering the same by hand to the Parent Guarantor at the address indicated for notices in Section 9 hereof. The service, as herein provided, of such summons or other legal process in any such action or proceeding shall be deemed personal service and accepted by the Parent Guarantor as such, and shall be legal and binding by the Parent Guarantor for all the purposes of any such action or proceeding. In the event that the Parent Guarantor shall not be conveniently available for such service, the Parent Guarantor hereby irrevocably appoints Farkouh, Furman & Faccio, LLP, 460 Park Avenue, New York, NY 10022, Attention: Fred Farkouh as its agent for service of process in respect of the proceeding before such courts (and agrees that service on such agent shall be deemed personal service).

 

 

9.

NOTICES

 

Notices and other communications hereunder shall be in writing and may be given or made by facsimile as follows:

 

If to the Parent Guarantor:

 

c/o SEACOR Marine Holdings Inc.
7910 Main St. 2nd Floor
Houma, Louisiana 70360
Attention: Jesus Llorca, Chief Financial Officer

Facsimile No.: (985) 876-5444

 

If to the Facility Agent or Security Trustee:

 

DNB BANK ASA
New York Branch
200 Park Avenue, 31st Floor
New York, New York 10166
Attn: Credit Middle Office / Loan Services Department
Facsimile No.: (212) 681-4123

 

or to such other address as any party shall from time to time specify in writing. Any notice sent by facsimile shall be confirmed by letter dispatched as soon as practicable thereafter.

 

B-15

 

 

Every notice or demand shall, except so far as otherwise expressly provided by this Guaranty, be deemed to have been received (provided that it is received prior to 2 p.m. New York time), in the case of a facsimile, on the date of dispatch thereof (provided that if the date of dispatch is not a Banking Day in the locality of the party to whom such notice or communication is sent it shall be deemed to have been received on the next following Banking Day in such locality), in the case of a letter, at the time of receipt thereof.

 

 

10.

CEA Eligible Contract Participant

 

Notwithstanding anything to the contrary in any Transaction Document, the Parent Guarantor shall not be deemed to guarantee, become jointly and severally obligated for or pledge assets in support of a “swap,” as defined in Section 1(a)(47) of the Commodity Exchange Act (“CEA”), of any Credit Party if at the time that swap is entered into, the Parent Guarantor is not an “eligible contract participant” as defined in Section 1(a)(18) of the CEA.

 

 

11.

HEADINGS

 

In this Guaranty, Section headings are inserted for convenience of reference only and shall be ignored in the interpretation hereof.

 

[Signature Page Follows]

 

B-16

 

 

IN WITNESS WHEREOF, this Guaranty has been duly executed by the Parent Guarantor as of the 28th day of September, 2018.

 

 

SEACOR MARINE HOLDINGS INC.
 

 

By:_____________________________________
Name:
Title:

 

B-17

 

AGREED FORM

 

 

EXHIBIT C-1

 

 



 

 

FIRST PREFERRED MORTGAGE

 

- on the -

 

Marshall Islands Flag Vessel

 

[VESSEL],

 

[OWNER],

 

as Owner

 

to

 

DNB BANK ASA, new york branch,

as Mortgagee

 

 

 

[________________], 2018

 

 



 

 

 

 

THIS FIRST PREFERRED MORTGAGE is made and given this [__] day of [___] 2018 by [OWNER], a limited liability company organized and existing under the laws of the Republic of the Marshall Islands (the “Owner”), in favor of DNB BANK ASA, New York Branch (“DNB”), a corporation organized under the laws of the Kingdom of Norway, as security trustee for the Creditors (as defined in the Credit Agreement (as hereinafter defined)) (the “Mortgagee”).

 

 

W H E R E A S:

 

A.     The Owner is the sole owner of the whole of the vessel [VESSEL], Official No. [OFFICIAL NUMBER], of [GROSS TONS] gross tons and [NET TONS] net tons, and registered and documented in the name of the Owner under the laws and flag of the Republic of the Marshall Islands.

 

B. By a senior secured Credit Agreement dated as of [__], 2018 (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) made by and among, inter alios, (1) SEACOR Marine Foreign Holdings Inc., as borrower (the “Borrower”), (2) SEACOR Marine Holdings Inc., as parent guarantor (the “Parent Guarantor”), (3) the entities listed on Schedule 1-A thereto, including the Owner, as subsidiary guarantors, (4) DNB, as facility agent (in such capacity, the “Facility Agent”) and security trustee and (5) the financial institutions identified on Schedule 1-B thereto (together with any bank or financial institution which becomes a lender pursuant to Section 10 of the Credit Agreement), as lenders (the “Lenders”), a copy of the form of the Credit Agreement, without schedules or exhibits, is attached hereto as Exhibit A, the Lenders have agreed to provide to the Borrower a senior secured credit facility in the aggregate amount of up to One Hundred Thirty Million United States Dollars (U.S. $130,000,000) (the “Facility”), the obligations of the Borrower to repay the Loan (as defined in the Credit Agreement) being evidenced by that certain promissory note dated the date hereof, executed by the Borrower to the order of the Facility Agent for the benefit of the Lenders (the “Note”), a copy of the form of which is attached hereto as Exhibit B. The Facility, and interest, fees and commissions thereon are to be repaid and paid, as the case may be, as provided in the Credit Agreement.

 

C.     The Borrower may from time to time enter into one or more Interest Rate Agreements with respect to the Facility with one or more Swap Banks providing for, among other things, the payment of certain amounts by the Borrower to the Swap Banks. The obligations of the Borrower to the Swap Banks, including obligations to pay any sums of money, interest thereon, fees and all expenses, costs and charges otherwise from time to time payable by the Borrower under the Interest Rate Agreements, are to be repaid and paid, as the case may be, as shall be provided in the Interest Rate Agreements. The Borrower and the Swap Banks estimate that the maximum amount that may be payable by the Borrower to the other Creditors at any time under the Interest Rate Agreements will not exceed a maximum aggregate amount of Thirteen Million United States Dollars (U.S. $13,000,000) (the “Hedging Liability”).

 

D.     All obligations (including but not limited to the Facility and the Hedging Liability) under or in connection with the Credit Agreement and the other Transaction Documents are guaranteed by the Owner pursuant to Section 18 of the Credit Agreement.

 

E.     Pursuant to Section 15 of the Credit Agreement, each of the Creditors has appointed the Mortgagee as security trustee on its behalf with regard to, inter alia, the security conferred on such Creditors pursuant to the Credit Agreement, the Note and the other Transaction Documents.

 

F.     The Owner, in order to secure the payment of the Obligations, as that term is defined in sub-section 1(A)(v) hereof, and to secure the performance and observance of and compliance with all the covenants, terms and conditions in the Note, the Credit Agreement and in this Mortgage contained, expressed or implied, to be performed, observed and complied with by and on the part of the Owner, has duly authorized the execution and delivery of this First Preferred Mortgage under and pursuant to Chapter 3 of the Maritime Act 1990 of the Republic of Marshall Islands, as amended (the “Maritime Law”).

 

 

 

 

N O W, T H E R E F O R E, T H I S M O R T G A G E

 

W I T N E S S E T H:

 

 

1.1

Definitions: In this Mortgage, unless the context otherwise requires:

 

(A) 

(i)

“Earnings” means (i) all moneys and claims for moneys due and to become due thereto, whether as charter hire, freights, loans, indemnities, payments or otherwise, under, and all claims for damages arising out of any breach of, any bareboat, time or voyage charter, contract of affreightment or other contract for the use or employment of the Vessel, (ii) all remuneration for salvage and towage services, demurrage and detention moneys and any other earnings whatsoever due or to become due to the Owner arising from the use or employment of the Vessel, (iii) all moneys or other compensation payable by reason of requisition for title or for hire or other compulsory acquisition of the Vessel, and (iv) all proceeds of all of the foregoing;

 

 

(ii)

“Event of Default” means any of the events of default set out in Section 7 of this Mortgage;

 

 

(iii)

“Insurances” includes all policies and contracts of insurance and reinsurance, including all entries of the Vessel in a protection and indemnity or war risks association or club which are from time to time taken out or entered into in respect of the Vessel, the Vessel's hull and machinery, and all benefits thereof, including, without limitation, all claims of whatsoever nature, as well as return premiums, or otherwise howsoever in connection with the Vessel;

 

 

(iv)

“Obligations” means all obligations owed by the Owner under or in connection with the Credit Agreement, the Note, this Mortgage, any other relevant Transaction Document (including the Interest Rate Agreements);

 

 

(v)

“Requisition Compensation” means all moneys or other compensation payable and belonging to the Owner during the Security Period by reason of requisition for title or other compulsory acquisition of the Vessel otherwise than by requisition for hire;

 

 

(vi)

“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by this Mortgage by payment in full of the Obligations;

 

 

(vii)

“Total Loss” means any of the:

 

 

(a)

actual, constructive or compromised or arranged total loss of the Vessel;

 

 

 

 

  (b)  requisition for title or other compulsory acquisition of the Vessel (otherwise than by requisition for hire) which shall continue for thirty (30) days; and

 

 

(c)

capture, seizure, arrest, detention or confiscation of the Vessel by any government or by Persons acting or purporting to act on behalf of any government unless the Vessel be released and restored to the Owner from such capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof; and

 

 

(viii)

“Vessel” means the whole of the vessel described in Recital A hereof and includes her engines, machinery, boats, boilers, masts, rigging, anchors, chains, cables, apparel, tackle, outfit, spare gear, fuel, consumable or other stores, freights, belongings and appurtenances, whether on board or ashore, whether now owned or hereafter acquired, and all additions, improvements and replacements hereafter made in or to said Vessel, or any part thereof, or in or to the stores, belongings and appurtenances aforesaid except such equipment or stores which, when placed aboard said Vessel, do not become the property of the Owner.

 

 

(B)

In Section 5(B) hereof:

 

 

(i)

“excess risks” means the proportion of claims for general average and salvage charges and under the ordinary running-down clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value;

 

 

(ii)

“protection and indemnity risks” means the usual risks covered by a United States or an English or another protection and indemnity association or club acceptable to the Mortgagee including the proportion not recoverable in case of collision under the ordinary running-down section; and

 

 

(iii)

“war risks” means the risk of mines and all risks excluded from the standard form of United States marine policy by the War, Strikes and Related Exclusion clause.

 

1.2     Other Defined Terms. Except as otherwise defined herein, terms defined in the Credit Agreement shall have the same meaning when used herein. For the purposes of this Mortgage, when any term is modified by the word "relevant" such term shall be construed to mean with respect to, among others, as the case may be, the Owner.

 

1.3 Credit Agreement Prevails. This Mortgage shall be read together with the Credit Agreement but in case of any inconsistency or conflict between the two, the provisions of the Credit Agreement shall prevail to the extent not contrary to any relevant legal requirement relating to the creation, validity and enforceability of the security interests purported to be created pursuant to this Mortgage and provided further that this Section 1.3 shall not be construed to limit in any way any covenant or obligation of the Owner under this Mortgage or to affect the governing law provision found in Section 24 of this Mortgage.

 

 

 

 

2.     Grant of Mortgage; Representations and Warranties.

 

2.1 In consideration of the premises and of other good and valuable consideration, the receipt and adequacy whereof are hereby acknowledged, and in order to secure the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in the Credit Agreement, the Note, this Mortgage and the other relevant Transaction Documents contained, the Owner has granted, conveyed and mortgaged and does by these presents grant, convey and mortgage to and in favor of the Mortgagee, its successors and assigns, the whole of the Vessel TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns, forever, upon the terms set forth in this Mortgage for the enforcement of the payment of the Obligations and to secure the performance and observance of and compliance with the covenants, terms and conditions in this Mortgage, the Credit Agreement, the Note and the other relevant Transaction Documents contained;

 

PROVIDED, ONLY, and the conditions of these presents are such that, if the Owner and/or its successors or assigns shall pay or cause to be paid to the Mortgagee or the Creditors, as the case may be, their respective successors and assigns, the Obligations as and when the same shall become due and payable in accordance with the terms of this Mortgage, the Credit Agreement, the Note and the other relevant Transaction Documents and shall perform, observe and comply with all and singular of the covenants, terms and conditions in this Mortgage, the Credit Agreement, the Note and the other relevant Transaction Documents contained, expressed or implied, to be performed, observed or complied with by and on the part of the Owner or its successors or assigns, all without delay or fraud and according to the true intent and meaning hereof and thereof, then, these presents and the rights of the Mortgagee under this Mortgage shall cease and desist and, in such event, the Mortgagee agrees by accepting this Mortgage, at the expense of the Owner, to execute all such documents as the Owner may reasonably require to discharge this Mortgage under the laws of the Republic of the Marshall Islands; otherwise to be and remain in full force and effect.

 

2.2 The Owner hereby represents and warrants to the Mortgagee that:

 

(A) the Owner is a limited liability company duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

 

(B) the Owner lawfully owns the whole of the Vessel free from any security interest, debt, lien, mortgage, charge, encumbrance or other adverse interest, other than the encumbrance of this Mortgage and except as permitted by Section 5(O) hereof; and

 

(C) the Vessel is tight, staunch and strong and well and sufficiently tackled, appareled, furnished and equipped and in all respects seaworthy and in the highest possible classification and rating for vessels of the same age and type with the respective Classification Society without any material outstanding recommendations or adverse notations affecting class.

 

3. Payment of Obligations. The Owner hereby further covenants and agrees to pay when due the Obligations to the Creditors or their successors or assigns in the manner provided for and in the terms of the Credit Agreement, this Mortgage and the other Transaction Documents.

 

4. Covenants Regarding Security Granted Hereunder. It is declared and agreed that:

 

(A) The security created by this Mortgage shall be held by the Mortgagee as a continuing security for the payment of the Obligations and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby secured.

 

 

 

 

(B) Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee or the other Creditors, related to or which reduces the obligations secured hereby, by the Owner or any other Person being avoided or set-aside or ordered to be refunded or reduced by virtue of any provision or enactment relating to bankruptcy, insolvency or liquidation for the time being in force, and if such condition is not satisfied, the Mortgagee shall be entitled to recover from the Owner on demand the value of such security or the amount of any such payment as if such settlement or discharge had not occurred.

 

(C) The rights of the Mortgagee under this Mortgage and the security hereby constituted shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to impair, affect or discharge such rights and security, including without limitation, and whether or not known to or discoverable by the Owner, the Mortgagee or any other Person:

 

(i) any time or waiver granted to, or compromise with, the Owner or any other Person; or

 

(ii) the taking, variation, compromise, renewal or release of or refusal or neglect to perfect or enforce any rights, remedies or securities against the Owner or any other Person; or

 

(iii) any legal limitation, disability, dissolution, incapacity or other circumstances relating to the Owner or any other Person; or

 

(iv) any amendment or supplement to the Credit Agreement, the Note or any other relevant Transaction Document; or

 

(v) the unenforceability, invalidity or frustration of any obligations of the Owner or any other Person under the Credit Agreement, the Note or any other relevant Transaction Document.

 

(D) The Owner acknowledges and agrees that it has not received any security from any Person for the granting of this Mortgage and it will not take any such security without the prior written consent of the Mortgagee, and the Owner will hold any security taken in breach of this provision in trust for the Mortgagee.

 

(E) Until the Obligations have been unconditionally and irrevocably paid and discharged in full to the satisfaction of the Mortgagee, the Owner shall not by virtue of any payment made under the Credit Agreement, the Note, this Mortgage or any other relevant Transaction Document on account of such moneys and liabilities or by virtue of any enforcement by the Mortgagee of its right under or the security constituted by this Mortgage:

 

(i) be entitled to exercise any right of contribution or indemnity from any co-surety liable in respect of such moneys and liabilities under any other guarantee, security or agreement; or

 

(ii) exercise any right of set-off or counterclaim against any such co-surety; or

 

(iii) receive, claim or have the benefit of any payment, distribution, security or indemnity from any such co-surety; or

 

(iv) unless so directed by the Mortgagee (which the Owner shall prove in accordance with such directions), claim as a creditor of any such co-surety in competition with the Mortgagee (or any turstee or agent on its behalf).

 

 

 

 

The Owner shall hold in trust for the Mortgagee and forthwith pay or transfer (as appropriate) to the Mortgagee any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.

 

(F)     The Owner hereby irrevocably subordinates all of its rights of subrogation (whether contractual, statutory, under common law or otherwise) to the claims of the Mortgagee against any Person and all contractual, statutory or common law rights of contribution, reimbursement indemnification and similar rights and claims against any Person which arise in connection with, or as a result of, the Credit Agreement, this Mortgage or any other relevant Transaction Document until full and final payment of all of the Obligations.

 

5. Affirmative Covenants and Insurances. The Owner further covenants with the Mortgagee and undertakes at all times throughout the Security Period:

 

(A) to maintain:

 

(i) its existence as a limited liability company of the Republic of the Marshall Islands;

 

(ii) its good standing under the laws of the Republic of the Marshall Islands; and

 

(iii) a registered office as required by the laws of the Republic of the Marshall Islands;

 

(B) (i)    To insure and keep the Vessel insured or cause or procure the Vessel to be insured and to be kept insured at no expense to the Mortgagee (or, with regard to the insurance cover described in (d) below, to reimburse the Mortgagee therefor), in regard to:

 

 

(a)

all fire and usual marine risks (including increased value, which shall not exceed twenty percent (20%) of the total hull and machinery coverage) on an agreed value basis, which hull and machinery insured value shall be at least 80% of the Fair Market Value of the Vessel in accordance with Section 9.1(v)(iii) of the Facility Agreement;

 

 

(b)

war risks on an agreed value basis (including war protection and indemnity liability with a separate limit not less than hull value) covering, inter alia, the perils of confiscation, terrorism, piracy, expropriation, nationalization, seizure and blocking;

 

 

(c)

protection and indemnity risks (including pollution risks and including protection and indemnity war risks in excess of the amount for war risks (hull)) to the highest amount available in the market for the full value and tonnage of the ship, as approved in writing by the Mortgagee, and, in case of oil pollution liability risks, at the highest level of cover from time to time available under basic protection and indemnity clubs entry, currently One Billion United States Dollars ($1,000,000,000); and

 

 

 

 

 

(d)

Mortgagee's interest including mortgagee’s interest additional perils (pollution) risks and, on demand, reimburse the Security Trustee for all premiums, costs and expenses paid or incurred by the Mortgagee from time to time;

 

(ii)  with respect to the Vessel, to effect the Insurances aforesaid or to cause or procure the same to be effected:

 

 

(a)

in the cases of the Insurances referred to in sub-sections (i) (a), (b) and (d) above and total loss, (A) in such amounts on an agreed value basis as shall be at least equivalent to the higher of (I) the Fair Market Value of the Vessel and (II) One Hundred Twenty percent (120%) of the aggregate outstanding principal amount of the Facility (when aggregated with the insured value of the other Vessels then financed under the Credit Agreement), (B) all such insurance shall be payable in lawful money of the United States of America, and (C) upon such terms (including provisions as to named insureds and loss payees and prior notice of cancellation) and with such deductibles as shall from time to time be approved by the Mortgagee in the reasonable exercise of its judgment;

 

 

(b)

in the case of the protection and indemnity Insurances referred to in sub-section (i)(c) above, in respect of the Vessel’s full tonnage, and in an amount equal to the highest level of cover commercially available as at the date of this Mortgage and to include provisions as to loss payees and prior notice of cancellation in form and substance satisfactory to the Mortgagee; and

 

 

(c)

with insurance companies, underwriters, funds, mutual insurance associations, war risks and protection and indemnity risks associations or clubs of recognized standing, in each case, acceptable to the Mortgagee (hereinafter called “the Insurers”);

 

(iii) to renew or replace all such Insurances or cause or procure the same to be renewed or replaced before the relevant policies or contracts expire and to procure that the Insurers or the firm of insurance brokers referred to herein below shall promptly confirm in writing to the Mortgagee as and when each such renewal or replacement is effected;

 

(iv) to procure, if instructed by any Lender, concurrently with the execution hereof and thereafter at intervals of not more than twelve (12) calendar months, a detailed report from a firm of independent marine insurance brokers, appointed by the Facility Agent, with respect to the Insurances together with their opinion to the Mortgagee that the Insurances comply with the provisions of this Section 5(B), such report and opinion to be addressed and delivered promptly to the Mortgagee and the costs of such report and opinion procured concurrently with the execution hereof to be for the account of the Owner;

 

(v) to cause the said independent marine insurance brokers or the Insurers to agree to use reasonable efforts to advise the Mortgagee promptly of any failure to renew any of the Insurances and of any default in payment of any premium and of any other act or omission on the part of the Owner of which they have knowledge and which might, in their opinion, invalidate or render unenforceable, or cause the lapse of or prevent the renewal or extension of, in whole or in part, any Insurances on the Vessel;

 

(vi) to cause the said independent marine insurance brokers to agree to mark their records and to use their best efforts to advise the Mortgagee, at least fourteen (14) days prior to the expiration date of any of the Insurances, that such Insurances have been renewed or replaced with new insurance which complies with the provisions of this Section 5(B);

 

 

 

 

(vii) duly and punctually to pay or to cause duly and punctually to be paid all premiums, calls, contributions or other sums payable in respect of all such Insurances, to produce or to cause to be produced all relevant receipts when so required by the Mortgagee and duly and punctually to perform and observe or to cause duly and punctually to be performed and observed any other obligations and conditions under all such Insurances;

 

(viii) to execute or use reasonable efforts to cause to be executed such guarantees as may from time to time be required by any relevant protection and indemnity association or club;

 

(ix) to procure that all policies, binders, cover notes or other instruments of the Insurances referred to in subsections (i)(a) and (b) above shall be taken out in the name of the Owner, with the Mortgagee as an additional assured (without liability for premiums), as its or their respective interests may appear, and shall incorporate a loss payable clause naming the Mortgagee as loss payee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and substance acceptable to the Mortgagee and all policies, binders, cover notes or other instruments referred to in subsection (i) shall (a) provide for prior notice of at least fourteen (14) days (except war risks which shall be seven (7) days unless terminated automatically in accordance with the provisions of the automatic termination and cancellation clauses contained in such policies) to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums as to the Mortgagee; provided, however, that unless otherwise required by the Mortgagee by notice to the underwriters, although all losses under such Insurances are payable to the Mortgagee, in case of any such losses involving any damage to the Vessel the underwriters may pay direct for the repair, salvage and other charges involved or, if the Owner shall have first fully repaired the damage or paid all of the salvage and other charges may pay the Owner as reimbursement therefor, provided, further, however, that if such damage involves a loss in excess of U.S.$500,000, or its equivalent, the underwriters shall not make such payment without first obtaining the written consent thereto of the Mortgagee, and (b) in the event that the Vessel shall be insured under any form of fleet cover, undertakings that the brokers, underwriters, association or club (as the case may be) will not set off claims relating to the Vessel against premiums, calls or contributions in respect of any other vessel or other insurance and that the insurance cover of the Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance;

 

(x) to procure that all entries, policies, binders, cover notes or other instruments of the Insurances referred to in sub-section (i)(c) above incorporate a loss payable clause naming the Mortgagee as loss payee prepared in compliance with the terms of this Mortgage and such loss payable clause to be in any event in form and substance acceptable to the Mortgagee and shall provide for prior notice of at least fourteen (14) days to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums, backcalls and assessments as to the Mortgagee, it being agreed that although such insurance is payable to the Mortgagee so long as no Event of Default has occurred and is continuing under this Mortgage, any loss payments under any such insurance on the Vessel may be paid directly to the Owner to reimburse it for any loss, damage or expenses incurred by it and covered by such insurance or to the Person to whom any liability covered by such insurance has been incurred;

 

(xi) not to reduce the coverage of any Insurances without the Mortgagee’s prior written approval;

 

 

 

 

(xii) to procure that all policies, bindings, cover notes or other instruments of the Insurances referred to in sub-section (i)(d) to the extent obtained by the Owner shall be taken out in the name of the Mortgagee and shall incorporate a loss payable clause naming the Mortgagee as loss payee and shall provide for prior notice of at least fourteen (14) days to be given to the Mortgagee before cancellation of insurance for any reason whatsoever and for a waiver of liability for payment of premiums as to the Mortgagee and the Lenders;

 

(xiii) to procure that Certificates of Insurance or summaries or copies of all such instruments of Insurances as are referred to in sub-sections (ix) and (x) above shall be from time to time deposited with the Mortgagee within thirty (30) days after placement of the relevant Insurances, provided, however, that originals or copies of all such instruments of Insurances as are referred to in sub-sections (ix) and (x) above shall be made available to the Mortgagee upon request by the Mortgagee;

 

(xiv) not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of all policies, binders, cover notes or other instruments of the Insurances (including any warranties express or implied therein) without first obtaining the written consent of the Insurers to such employment (if required by such Insurers) and complying with such requirements as to extra premiums or otherwise as the Mortgagee and/or the Insurers may prescribe;

 

(xv) to do all things necessary and proper, and execute and deliver all documents and instruments to enable the Mortgagee to collect or recover any moneys to become due the Mortgagee in respect of the Insurances; and

 

(xvi) to provide, within a reasonable period of time after a written request therefor, such additional insurances as the Mortgagee may from time to time reasonably require on account of such insurances being required by any applicable law, regulation, public body, classification society or similar relevant authority or such insurances in the reasonable opinion of the Mortgagee being customary or recommended for vessels of a similar type or vessels employed in a similar trade, in which case the provisions of this clause B shall be applicable, if appropriate.

 

(C) To keep and to cause to be kept the Vessel in a good and efficient state of repair so as to enable her to maintain her present class with its Classification Society and so as to enable her to comply with the provisions of all laws, regulations and other requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws of the Republic of the Marshall Islands, to procure that the Vessel’s Classification Society make available to the Mortgagee, upon its request, such information and documents in respect of the Vessel as are maintained in the records of such Classification Society, and to procure that all repairs to or replacements of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel;

 

(D) To submit or to cause the Vessel to be submitted on a timely basis to such periodic or other surveys as may be required for classification purposes and, if reasonably requested by the Mortgagee, to supply or to cause to be supplied to the Mortgagee copies of all survey and inspection reports and confirmations of class issued in respect thereof and to procure that the Classification Society provides the Mortgagee with the same rights and privileges to its records relating to the Vessel as given to the Owner;

 

(E) To permit the Mortgagee, by surveyors or other Persons appointed by it in its behalf, to board the Vessel at all reasonable times for the purpose of inspecting her condition or for the purpose of satisfying themselves in regard to proposed or executed repairs and to afford or to cause to be afforded all proper facilities for such inspections, provided that such inspections will not unreasonably interfere with the normal operations of the Vessel and cause no undue delay to the Vessel;

 

 

 

 

(F) (i) To pay and discharge or to cause to be paid and discharged all debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory liens on or claims enforceable against the Vessel except to the extent permitted by Section 5(O) hereof and (ii) in event of arrest of the Vessel pursuant to legal process or in event of her detention in exercise or purported exercise of any such lien as aforesaid to procure the release of the Vessel from such arrest or detention within fifteen (15) Business Days of receiving notice thereof by providing bail or otherwise as the circumstances may require;

 

(G) Not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the laws of the Republic of the Marshall Islands or the United States of America or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation or to destruction, seizure or confiscation and in event of hostilities in any part of the world (whether war be declared or not), not to employ the Vessel or suffer her employment in carrying any contraband goods or to enter or trade to any zone which is declared a war zone by any government or by the Vessel's war risks Insurers unless the required extra war risk insurance cover has been obtained for the Vessel;

 

(H) Promptly to furnish or to use its best efforts to cause promptly to be furnished to the Mortgagee all such information as the Mortgagee may from time to time reasonably request regarding the Vessel, her employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever pertaining to the Vessel;

 

(I) Promptly after learning of the same to notify or cause to be notified the Mortgagee forthwith in writing of:

 

(i) any accident to the Vessel involving repairs the cost whereof will or is likely to exceed five percent (5%) of the insured value of the Vessel;

 

(ii) any occurrence in consequence whereof the Vessel has become or is likely to become a Total Loss;

 

(iii) any material requirement or recommendation made by any Insurer or Classification Society or by any competent authority which is not complied with in accordance with reasonable commercial practices;

 

(iv) any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel or her Earnings; and

 

(v) any occurrence of circumstances forming the basis of an Environmental Claim.

 

(J) To keep or to cause to be kept proper books of account of the Owner in respect of the Vessel and her Earnings and, if reasonably requested by the Mortgagee, to make or to cause to be made such books available for inspection on behalf of the Mortgagee and furnish or cause to be furnished satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being regularly paid and that all deductions from crew's wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress;

 

 

 

 

(K) To assign and provide that Requisition Compensation is applied in accordance with Section 8 hereof as if received in respect of the sale of the Vessel;

 

(L) Not, without the previous consent in writing of the Mortgagee, materially alter the structure of the Vessel or its equipment or remove any material parts of the Vessel to the extent such action could reasonably be expected to reduce the value of the Vessel;

 

(M) [Not, without the previous consent in writing of the Mortgagee, to put the Vessel or suffer her to be put into the possession of any Person for the purpose of work being done upon her other than routine drydockings and ordinary maintenance in an amount exceeding or likely to exceed five percent (5%) of the insured value of the Vessel unless such work is fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or unless such Person shall first have given to the Mortgagee and on terms satisfactory to it a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of such work or otherwise]1[intentionally omitted];

 

(N) To keep the Vessel registered under the laws of the Republic of the Marshall Islands;

 

(O) To keep and to cause the Vessel to be kept free and clear of all liens, charges, mortgages and encumbrances except in favor of the Mortgagee, and except for crew's wages remaining unpaid in accordance with reasonable commercial practices or for collision or salvage, liens in favor of suppliers of necessaries or other similar liens arising in the ordinary course of its business, accrued for not more than thirty (30) days (unless any such lien is being contested in good faith and by appropriate proceedings or other acts and the Owner shall have set aside on its books adequate reserves with respect to such lien and so long as such deferment in payment shall not subject the Vessel to forfeiture or loss) or liens for loss, damage or expense which are fully covered by insurance, subject to applicable deductibles satisfactory to the Mortgagee, or in respect of which a bond or other security has been posted by or on behalf of the Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of the Vessel from arrest, and not, except in favor of the Mortgagee, to pledge, charge, assign or otherwise encumber (in favor of any Person other than the Mortgagee) her Insurances, Earnings or Requisition Compensation or to suffer the creation of any such pledge, charge, assignment or encumbrance as aforesaid to or in favor of any Person other than the Mortgagee;

 

(P) Not, without the previous consent in writing of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose), to sell, abandon or otherwise dispose of the Vessel or any interest therein;

 

(Q) To pay promptly to the Mortgagee all moneys (including fees of counsel) whatsoever which the Mortgagee shall or may expend, be put to or become liable for, in or about the protection, maintenance or enforcement of the security created by this Mortgage or in or about the exercise by the Mortgagee of any of the powers vested in it hereunder and to pay interest thereon at the Default Rate from the date whereon such expense or liability was incurred by the Mortgagee;

 

(R) To comply with all declaration and reporting requirements imposed by the protection and indemnity club or insurers including, without limitation, the quarterly declarations required by the U.S. Oil Pollution Section 20/2/91, and to pay all premiums required to maintain in force the necessary U.S. Oil Pollution Cover;

 

(S) To comply with and satisfy all the requisites and formalities established by the laws of the Republic of the Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first and preferred lien upon the Vessel and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the compliance by the Owner with the provisions of this Section 5(S);

 


1 To be included in mortgages for FALCON PEARL and FALCON DIAMOND

 

 

 

 

(T) Not without the previous consent of the Mortgagee in writing, which consent shall not be unreasonably withheld, to let the Vessel or permit the Vessel to be let on demise charter (other than any demise charter to a company related to the Owner or any of its members) for any period;

 

(U) To place or to cause to be placed and at all times and places to retain or to cause to be retained a properly certified copy of this Mortgage on board the Vessel with her papers and cause this Mortgage to be exhibited to any and all Persons having business with the Vessel which might give rise to any lien thereon other than liens for crew's wages and salvage, and to any representative of the Mortgagee on demand; and to place and keep or to cause to be placed and kept prominently displayed in the chart room and in the Master's cabin of the Vessel a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than six inches wide by nine inches high, reading as follows:

 

NOTICE OF MORTGAGE

 

This Vessel is owned by [OWNER] (the “Owner”) and is subject to a first preferred mortgage (the “First Mortgage”) in favor of DNB Bank ASA, New York Branch, as security trustee and mortgagee, under the authority of Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall Islands, as amended. Under the terms of the First Mortgage, neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any power, right or authority whatever to create, incur or permit to be imposed upon this Vessel any lien or encumbrance except for crew's wages and salvage.”

 

(V) to retain a manager of the Vessel, if any, as required under the Credit Agreement.

 

6. Mortgagee's Right to Cure. Without prejudice to any other rights of the Mortgagee hereunder:

 

(i) in the event that the provisions of Section 5(B) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to effect and thereafter to replace, maintain and renew all such Insurances upon the Vessel as it in its sole discretion may deem advisable;

 

(ii)   in the event that the provisions of Section 5(C) and/or 5(D) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to arrange for the carrying out of such repairs and/or surveys as it deems expedient or necessary; and

 

(iii)   in the event that the provisions of Section 5(F) hereof or any of them shall not be complied with, the Mortgagee shall be at liberty, but not obligated, to pay and discharge all such debts, damages and liabilities as are therein mentioned and/or to take any such measures as it deems expedient or necessary for the purpose of securing the release of the Vessel;

 

Any and all expenses incurred by the Mortgagee (including fees of counsel) in respect of its performances under the foregoing sub-sections (i), (ii) and (iii) shall be paid by the Owner on demand, with interest thereon at the rate provided for in Section 5(Q) hereof from the date when such expenses were incurred by the Mortgagee.

 

 

 

 

7.     Events of Default and Remedies.

 

(A) Each of the following events shall constitute an “Event of Default”:

 

(i)   a default in the payment when due (together with any applicable grace period) of all or any part of the Obligations; or

 

(ii)   an event of default stipulated in Section 8.1 of the Credit Agreement shall occur and be continuing; or

 

(iii)   a default by the Owner occurs in the due and punctual observance of any of the covenants contained in subsections (A)(i), (B) (other than subclauses (iv), (vi) and (xiii) thereof), (F), (G), (I), (K), (L), (M), (N), (O), (P), (R), (S), (T), (U) or (V) of Section 5 of this Mortgage; or

 

(iv)   a default by the Owner