Toggle SGML Header (+)


Section 1: S-3/A (S-3/A)

 

As filed with the Securities and Exchange Commission on August 28, 2018

 

 

Registration No. 333-226946

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Amendment No 1. to

 FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

 

 

INTERNATIONAL SEAWAYS, INC.

(Exact name of registrant as specified in its charter)

 

Marshall Islands

(State or other jurisdiction of

incorporation or organization)

4412

(Primary Standard Industrial

Classification Code Number)

98-0467117

(I.R.S. Employer

Identification No.)

     
 

600 Third Avenue, 39th Floor

New York, New York 10016

(212) 578-1600

 

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

 

 
James D. Small III, Esq.
Chief Administrative Officer, Senior Vice President,
Secretary and General Counsel
600 Third Avenue, 39th Floor, New York, New York 10016
(212) 578-1600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
 

 

(Copies of all communications, including communications sent to agent for service)
Jeffrey D. Karpf, Esq.
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
(212) 225-2000
 

 

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

 

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.        ¨

 

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨

  

 

 

 

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨     Accelerated filer x
Non-accelerated filer ¨     Smaller reporting company ¨
      Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. x

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of
Securities to be Registered
  Amount to be
Registered (1)
    Proposed Maximum
Offering Price
Per Security
    Proposed Maximum
Aggregate
Offering Price
    Amount of
Registration
Fee(2)
 
Secondary Offering                                
Common Stock, no par value     7,479,202   $ 19.52     $ 145,994,023.04     $ 18,176.26  
Total     7,479,202           $ 145,994,023.04     $ 18,176.26  

 

  (1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act based on the average of the reported high and low prices of the Registrant’s common stock on the New York Stock Exchange on August 16, 2018.
  (2) Previously paid.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission relating to these securities is effective. This preliminary prospectus is not an offer to sell these securities and it is not a solicitation of an offer to buy these securities in any jurisdiction where such offer, solicitation or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED AUGUST 28, 2018

 

PROSPECTUS

 

INTERNATIONAL SEAWAYS, INC.

 

7,479,202 Shares of Common Stock

 

 

 

This prospectus relates to the resale from time to time by the selling stockholders identified in this prospectus of up to 7,479,202 shares of the common stock of International Seaways, Inc. (the “Company,” “we,” “our” or “us”).

 

This prospectus provides you with a general description of our common stock and the general manner in which the selling stockholders will offer the securities. When securities are offered, we may provide a prospectus supplement, to the extent appropriate, that will contain specific information about the terms of that offering. Any such prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus, any prospectus supplement and the risk factors incorporated by reference herein or included in any prospectus supplement carefully before you invest in our securities.

 

Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “INSW.” The last reported sale price of our common stock on the NYSE on August 27, 2018 was $20.97 per share.

 

Investing in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties in the section entitled “Risk Factors” beginning on page 8 of this prospectus in any applicable prospectus supplement and in the documents we file with the Securities and Exchange Commission before investing in our securities.

 

The selling shareholders may offer securities through underwriting syndicates managed or co-managed by one or more underwriters or dealers, through agents or directly to purchasers, on a continuous or delayed basis. The shares may be offered at fixed prices, prevailing market prices, at prices relating to prevailing market prices or at negotiated prices, or otherwise. If the securities are sold through underwriters, broker-dealers or agents, the relevant seller will be responsible for underwriting discounts or commissions or agents’ commissions. Any prospectus supplement for an offering may provide additional detail about the plan of distribution for that offering. For general information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.

 

We will pay the expenses related to the registration of the securities covered by this prospectus. The selling stockholders will pay any underwriting discounts and commissions associated with their sale of securities pursuant to this prospectus. We will not receive any proceeds from the sale or other disposition of securities by the selling stockholders pursuant to this prospectus.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

 
The date of this prospectus is ________ __, 2018.
 

 

3 

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS 5
PROSPECTUS SUMMARY 6
RISK FACTORS 8
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 11
USE OF PROCEEDS 13
SELLING SECURITYHOLDERS 14
DESCRIPTION OF CAPITAL STOCK 16
U.S. FEDERAL INCOME TAX CONSEQUENCES 20
PLAN OF DISTRIBUTION 23
LEGAL MATTERS 26
EXPERTS 26
WHERE YOU CAN FIND MORE INFORMATION 26
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 26

 

4 

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, the selling stockholders may, from time to time, offer and sell the securities described in this prospectus in one or more offerings. This prospectus generally describes International Seaways, Inc. and our common stock. The selling stockholders may use the shelf registration statement to sell up to an aggregate of 7,479,202 shares of common stock from time to time through any means described in the section entitled “Plan of Distribution.” We have entered into a registration rights agreement with each of the selling stockholders to register the resale of their shares of common stock.

 

This prospectus only provides you with a general description of the securities that may be offered. Each time the selling stockholders sell securities using this shelf registration, a supplement to this prospectus containing specific information about the terms of that offering may also be provided to you. Any such prospectus supplement may also add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any applicable prospectus supplement, you should rely on the information in any applicable prospectus supplement. You should read in their entirety both this prospectus and any accompanying prospectus supplement, together with the additional information described under the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” before deciding to invest in any of the securities being offered.

 

You should not assume that the information in this prospectus, any accompanying prospectus supplement or any document incorporated by reference herein is accurate as of any date other than the date on the front of each document, regardless of the time of delivery of this prospectus, any accompanying prospectus supplement or any sale of securities. Our business, financial condition, results of operations and prospects may have changed since such date. Neither the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information in this prospectus is correct as of any date after the date of this prospectus.

 

You should rely only on the information contained in or incorporated by reference in this prospectus, in any accompanying prospectus supplement or in any free writing prospectus filed by us with the SEC. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted

 

In this prospectus, unless otherwise specified or the context otherwise requires, we use the terms “the Company,” “INSW,” “we,” “our” and “us” to refer to International Seaways, Inc., a Marshall Islands corporation, and its consolidated subsidiaries. References to “International Seaways, Inc.” refer only to International Seaways, Inc. on an unconsolidated basis, except where the context may require otherwise.

 

5 

 

 

PROSPECTUS SUMMARY

 

This summary highlights information contained elsewhere in, or incorporated by reference into, this prospectus. As a result, it may not contain all the information that may be important to you in, or that you should consider before making a decision as to whether or not to invest in our securities, and is qualified in its entirety by the more detailed information included in and incorporated by reference into this prospectus. You should read the entire prospectus carefully, including the section entitled “Risk Factors” and the documents incorporated by reference herein, which are described under “Incorporation of Certain Documents by Reference,” before making an investment decision. For a more complete description of our business as of the date of this prospectus, see the “Business” section of our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 12, 2018 (Commission File No. 001-37836) (the “Form 10-K”), and see our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed with the SEC on August 8, 2018, as well as any most recently filed Annual Report on Form 10-K and any subsequently filed Quarterly Report on Form 10-Q, each of which is incorporated by reference herein.

 

A glossary of shipping terms that should be used as a reference when reading this prospectus and the documents incorporated by reference herein can be found in the Form 10-K.

 

Our Company

 

We are a leading provider of ocean transportation services for crude oil and refined petroleum products. We own or operate a fleet of more than 50 vessels, all of which operate in International Flag markets. We serve a diverse group of customers, including major independent and state-owned oil companies, oil traders and refinery operators, and have a reputation in the industry for excellent service.

 

Our vessel operations are organized into two segments: Crude Tankers and Product Carriers. Our fleet consists of VLCC, Aframax and Panamax crude tankers, as well as LR1, LR2 and MR product carriers, and includes vessels owned by two joint ventures (the “JVs”) through which we have ownership interests in four liquefied natural gas (“LNG”) carriers and two floating storage and offloading (“FSO”) service vessels.

 

INSW generally charters its vessels to customers either for specific voyages at spot rates or for specific periods of time at fixed daily amounts through time charters or bareboat charters. Spot market rates are highly volatile, while time charter and bareboat charter rates provide more predictable streams of time charter equivalent (“TCE”) revenues because they are fixed for specific periods of time. Shipping revenues from our fleet, derived primarily through spot market voyage charters, were $290 million during 2017 and $109 million during the first six months of 2018, while TCE revenues (shipping revenues less voyage expenses) were $275 million and $99 million during each of those periods, respectively.

 

Company Information

 

Our executive offices are located at 600 Third Avenue, 39th Floor, New York, New York 10016, and our telephone number is (212) 578-1600. Our Internet website address is www.intlseas.com . Information on, or accessible through, our website is not incorporated into, nor should it be considered part of, this prospectus or any applicable prospectus supplement, except as and solely to the extent otherwise provided herein or therein. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.

 

6 

 

 

The Offering

 

Issuer   International Seaways, Inc.
     
Shares of common stock offered by the selling stockholders   7,479,202 shares of the common stock.
     
Common stock issued and outstanding prior to this offering  

As of August 15, 2018, we had 29,178,887 outstanding shares of common stock (excluding shares of common stock issuable upon exercise of outstanding options granted or shares available to be granted under our equity incentive and compensation plans).

     
Common stock that will be issued and outstanding after this offering  

 

Following completion of this offering, we would have 29,178,887 outstanding shares of common stock (excluding shares of common stock issuable upon exercise of outstanding options granted or shares available to be granted under our equity incentive and compensation plans). Sales of our common stock by the selling stockholders will not increase the number of shares of common stock outstanding.

     
Use of proceeds   We will not receive any proceeds from the sale of the shares of common stock to be offered by the selling stockholders.
     
Risk factors   You should read the section entitled “Risk Factors” beginning on page 8, the risk factors incorporated by reference in this prospectus, and any risk factors set forth in any applicable prospectus supplement or incorporated by reference therein, for a discussion of some of the risks and uncertainties you should carefully consider before deciding to invest in our securities.

 

7 

 

 

RISK FACTORS

 

An investment in our securities involves a high degree of risk. You should carefully consider the specific risks described under the heading “Risk Factors” in any applicable prospectus supplement and in the documents incorporated by reference into this prospectus, including our most recently filed Annual Report on Form 10-K and any subsequently filed Quarterly Report on Form 10-Q or Interim Report on Form 8-K, before making an investment decision. If any of the risks described in these documents actually materializes, our business, financial condition, results of operations and prospects could be materially adversely affected. As a result, the value of our securities could decline and you could lose part or all of your investment. The risks described below are not the only ones we face. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

 

Risks Related to the Common Stock

 

The market price of our securities may fluctuate significantly following the offering and you could lose all or part of your investment as a result.

 

The market price of our securities may fluctuate substantially. The price of our common stock that will prevail in the open market following this offering may be higher or lower than the price you pay for such securities. You may not be able to resell your common stock at or above the price you paid for such securities due to a number of factors, some of which are beyond our control. These risks include those described or referred to in this “Risk Factors” section, under “Cautionary Note Regarding Forward-Looking Statements” and in other documents incorporated herein by reference and include, among other things:

 

·fluctuations in our results of operations;
·activities of and results of operations of our competitors;
·changes in our relationships with our customers or our vendors;
·changes in business or regulatory conditions;
·any announcements by us or our competitors of significant acquisitions, strategic alliances or joint ventures;
·additions or departures of key personnel;
·announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint ventures or capital commitments;
·investors’ general perception of us;
·failure to meet market expectations;
·future sales of our securities by us, directors, executives and significant stockholders;
·changes in domestic and international economic and political conditions;
·changes in accounting principles;
·announcements by third parties or governmental entities of significant claims or proceedings against us;
·a default under the agreements governing our indebtedness; and
·other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.

 

Any of the foregoing factors could also cause the price of our common stock to fall and may expose us to securities class action litigation. Any securities class action litigation could result in substantial costs and the diversion of management’s attention and resources. Furthermore, the stock market has from time to time experienced volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our securities, regardless of our actual operating performance.

 

8 

 

 

Our common stock is thinly traded, and your ability to sell common stock may be limited.

 

We cannot assure you as to the liquidity of any market that may exist or be sustained for our common stock, your ability to sell your common stock, or the price at which you would be able to sell such securities. Future trading prices of the common stock will depend on many factors, including, among other things, our operating results and the market for similar securities. The effect an offering of our common stock by us or by one or more selling stockholder from time to time will have on the volume or trading price of these securities is uncertain. You may not be able to sell acquired securities at the price equal to or greater than the offering price.

 

Although our common stock is listed on the New York Stock Exchange, our common stock has experienced relatively low trading volume. Limited trading volume may subject our common stock to greater price volatility and may make it difficult for investors to sell shares at a price that is attractive to them.

 

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

 

Sales of substantial amounts of our common stock, including sales by the selling stockholders from time to time, or the perception that these sales could occur, could adversely affect the price of our common stock and impair our ability to raise capital through the sale of equity securities.

 

We have not paid cash dividends since the spin-off.

 

We have not paid any cash dividends since the Company was spun off from its former parent company in November 2016. The declaration and timing of future cash dividends, if any, will be at the discretion of the Board of Directors and will depend upon, among other things, our future operations and earnings, capital requirements, general financial condition, contractual restrictions (including the terms of our financing agreements), restrictions imposed by applicable law or the SEC and such other factors as our Board of Directors may deem relevant.

 

We are a holding company and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or pay dividends.

 

International Seaways, Inc. is a holding company and its subsidiaries conduct all of its operations and own all of its operating assets. It has no significant assets other than the equity interests in its subsidiaries and certain joint ventures. As a result, its ability to satisfy its financial obligations or pay dividends depends on its subsidiaries and their ability to distribute funds to it. In addition, the terms of our financing agreements restrict the ability of our subsidiaries to distribute funds to International Seaways, Inc.

 

Some provisions of Marshall Islands law and our governing documents could discourage a takeover that stockholders may consider favorable, or otherwise influence our ability to consummate a change of control.

 

Marshall Islands law and provisions contained in our amended and restated certificate of incorporation (“Amended and Restated Articles of Incorporation”) and amended and restated by-laws (“Amended and Restated By-Laws”) could have the effect of delaying, deferring or preventing a change of control of us. In addition, these provisions could make it more difficult to bring about a change in the composition of our board of directors. For example, our Amended and Restated Articles of Incorporation and Amended and Restated By-Laws:

 

·give the sole ability to then-current members of our board of directors to fill a vacancy on the board of directors;
·require the affirmative vote of two-thirds or more of the combined voting power of the outstanding shares of our capital stock in order to amend or repeal certain provisions of our COI and By-Laws; and
·establish advance notice requirements for nomination for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

 

9 

 

 

These and other provisions of our organizational documents and Marshall Islands law may have the effect of delaying, deferring or preventing changes of control or changes in management, even if such transactions or changes would have significant benefits for our stockholders. See “Description of Capital Stock.” As a result, these provisions could limit the price some investors might be willing to pay in the future for shares of our common stock.

 

We may issue preferred shares in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our securities.

 

Our Amended and Restated Articles of Incorporation authorize us to issue one or more series of preferred shares. Our Board of Directors will have the authority to determine the preferences, limitations and relative rights of such preferred shares and to fix the number of shares, up to the current authorized share capital amount, constituting any series and the designation of such series, without any further vote or action by our shareholders. Our preferred shares could be issued with voting, liquidation, dividend and other rights superior to the rights of shares of our common stock. The potential issuance of preferred shares may delay or prevent a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially and adversely affect the market price of our common stock and the voting and other rights of the holders of shares of our common stock.

 

If securities or industry analysts issue an adverse or misleading opinion regarding us or do not publish or cease publishing research or reports about us, our business, our market or our competitors, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.

 

The trading market for our common stock will be influenced, to some extent, by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not control these analysts, or the content and opinions included in their reports. If any of the analysts who cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who covers us were to cease coverage of us or fail to publish reports on us regularly, or if analysts elect not to provide research coverage of our common stock, we could lose visibility in the financial markets, which in turn could cause the price and/or trading volume of our common stock to decline.

 

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate or bankruptcy law, and as a result, shareholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States.

 

Our corporate affairs are governed by our Amended and Restated Articles of Incorporation and Amended and Restated By-Laws and by the Marshall Islands Business Corporations Act (the “BCA”). The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or significant shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction. Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings. As such, in the event of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover their claims after any such insolvency or bankruptcy.

 

10 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements contained in this prospectus and the documents incorporated by reference herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All such statements other than statements of historical facts should be considered forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts, and you can often identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “forecasts,” “shall,” “contemplates” or the negative version of those words or other comparable words. Such forward-looking statements represent our reasonable expectation with respect to future events or circumstances based on various factors and are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors, many of which are beyond our control, that could cause our actual results to differ materially from those indicated in these statements. You should not place undue reliance on any forward-looking statements and should consider the following factors, as well as the factors discussed elsewhere in this prospectus, including under “Risk Factors,” when reviewing such statement. We believe that these factors include, but are not limited to: 

 

·the highly cyclical nature of the Company’s industry

 

·fluctuations in the market value of vessels;

 

·declines in charter rates, including spot charter rates or other market deterioration;

 

·an increase in the supply of vessels without a commensurate increase in demand;

 

·the impact of adverse weather and natural disasters;

 

·the adequacy of INSW’s insurance to cover its losses, including in connection with maritime accidents or spill events;

 

·constraints on capital availability;

 

·changing economic, political and governmental conditions in the United States and/or abroad and general conditions in the oil and natural gas industry;

 

·changes in fuel prices;

 

·acts of piracy on ocean-going vessels;

 

·terrorist attacks and international hostilities and instability;

 

·the impact of public health threats and outbreaks of highly communicable diseases;

 

·the effect of the Company’s indebtedness on its ability to finance operations, pursue desirable business operations and successfully run its business in the future;

 

·the Company’s ability to generate sufficient cash to service its indebtedness and to comply with debt covenants;

 

·the Company’s ability to make additional capital expenditures to expand the number of vessels in its fleet, and to maintain all of its vessels and to comply with existing and new regulatory standards;

 

·the availability and cost of third party service providers for technical and commercial management of the Company’s fleet;

 

·fluctuations in the contributions of the Company’s joint ventures to its profits and losses;

 

·the Company’s ability to renew its time charters when they expire or to enter into new time charters;

 

·termination or change in the nature of the Company’s relationship with any of the commercial pools in which it participates and the ability of such commercial pools to pursue a profitable chartering strategy;

 

11 

 

 

·competition within the Company’s industry and the Company’s ability to compete effectively for charters with companies with greater resources;

 

·the loss of a large customer or significant business relationship;

 

·the Company’s ability to realize benefits from its past acquisitions or acquisitions or other strategic transactions it may make in the future;

 

·increasing operating costs and capital expenses as the Company’s vessels age, including increases due to limited shipbuilder warranties or the consolidation of suppliers;

 

·the Company’s ability to replace its operating leases on favorable terms, or at all;

 

·changes in credit risk with respect to the Company’s counterparties on contracts;

 

·the failure of contract counterparties to meet their obligations;

 

·the Company’s ability to attract, retain and motivate key employees;

 

·work stoppages or other labor disruptions by employees of the Company or other companies in related industries;

 

·unexpected drydock costs;

 

·the potential for technological innovation to reduce the value of the Company’s vessels and charter income derived therefrom;

 

·the impact of an interruption in or failure of the Company’s information technology and communication systems upon the Company’s ability to operate;

 

·seasonal variations in the Company’s revenues;

 

·government requisition of the Company’s vessels during a period of war or emergency;

 

·the Company’s compliance with complex laws, regulations and in particular, environmental laws and regulations, including those relating to the emission of greenhouse gases and ballast water treatment;

 

·any non-compliance with the U.S. Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery or corruption;

 

·the impact of litigation, government inquiries and investigations;

 

·governmental claims against the Company;

 

·the arrest of the Company’s vessels by maritime claimants;

 

·changes in laws, treaties or regulations; and

 

·the impact that Brexit might have on global trading parties.

 

The factors identified above should not be construed as exhaustive list of factors that could affect our future results, and should be read in conjunction with the other cautionary statements that are included elsewhere in this prospectus. The forward-looking statements made in this prospectus are made only as of the date of this prospectus. The forward-looking statements made in documents incorporated by reference into this prospectus are made only as of the date of such documents. The forward-looking statements made in any accompanying prospectus supplement are made only as of the date of such document. We do not undertake any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

 

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

 

You should refer to our periodic and current reports filed with the SEC for further information on other factors that could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. See “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus.

 

12 

 

 

USE OF PROCEEDS

 

We will not receive any proceeds from the sale of shares of common stock to be offered by the selling stockholders pursuant to this prospectus.

 

13 

 

 

SELLING SECURITYHOLDERS

 

Up to 7,479,202 shares of our common stock may be offered for resale by the selling stockholders under this prospectus. Those shares of common stock were issued in a spin-off transaction that took place in November 2016. We have entered into a registration rights agreement with each of the selling stockholders to register the resale of their shares of common stock.

 

The selling stockholders may from time to time offer and sell pursuant to this prospectus any or all of the shares of common stock set forth below. However, the selling stockholders are under no obligation to sell any of the shares of common stock offered pursuant to this prospectus. As used in this prospectus, the term “stockholders” includes the stockholders listed in the table below, as well as permitted transferees, pledgees, donees, assignees, successors and others who later come to hold any of the stockholders’ interests in such shares of common stock, other than through a public sale pursuant to this prospectus or Rule 144 under the Securities Act.

 

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities or has the right to acquire such powers within 60 days.

 

Except as disclosed in the footnotes to these tables and subject to applicable community property laws, we believe that each beneficial owner identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the beneficial owner. The information with respect to beneficial ownership by the selling stockholders was prepared based on information supplied by such stockholders to us. Unless otherwise indicated in the table or footnotes thereto, the address for each beneficial owner is c/o International Seaways, Inc., 600 Third Avenue, 39th Floor, New York, New York 10016.

 

Selling Stockholders

 

The following table sets forth information with respect to the beneficial ownership of our common stock held by each of the selling stockholders as of August 15, 2018. Based on the information provided to us by the selling stockholders, assuming that the selling stockholders sell all of the shares owned by them that have been registered pursuant to the registration statement of which this prospectus forms a part, and do not acquire any additional shares of our common stock, each selling stockholder would not own any shares of our common stock after completion of this offering. We cannot advise you as to whether the selling stockholders will, in fact, sell any or all of such shares. In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, their shares in transactions exempt from the registration requirements of the Securities Act after the date on which they provided the information set forth in the table below.

 

Name of Selling Stockholder   Aggregate Number of
Shares of Common
Stock Beneficially
Owned Prior to the
Offering
    Number of Shares of
Common
Stock That May Be
Offered Hereby
        Number of Shares of
Common
Stock Beneficially
Owned After
Completion of the
Offering
 
Cyrus Capital Partners, L.P. (1)     18,853       18,853              
Cyrus Select Opportunities Master Fund, Ltd. (1)     222,450       222,450              
Cyrus Opportunities Master Fund II, Ltd. (1)   2,222,316         2,222,316              
CRS Master Fund, L.P. (1)     670,442       670,442              
Crescent 1, L.P. (1)     700,579       700,579              
Canary SC Master Fund, L.P. (1)     187,789       187,789              
Paulson & Co. Inc. on behalf of managed funds and accounts (2)     3,456,773       3,456,773              
                                     

 

14 

 

 

(1)

Based on a Schedule 13D filed on December 9, 2016 and a Form 4 filed on June 12, 2017 with the SEC, Cyrus Capital Partners, L.P. (“CCP”) serves as the investment advisor to with respect to beneficial ownership of 4,022,429 shares owned by the six funds specified in the table above (collectively, the “Cyrus Funds”). Cyrus Capital Partners GP, L.L.C. (“CCPGP”) serves as the general partner of CCP. Of those shares, 18,853 were granted to CCP pursuant to agreements between CCP and Mr. Joseph I. Kronsberg relating to the Company’s non-Employee Director Incentive Compensation Plan, or distributed in the spin-off in respect of OSG shares previously granted as compensation for service on OSG’s board of directors. All discretion over the investment activities of the Cyrus Funds has been delegated to CCP. As the (i) principal of CCP and (ii) principal of Cyrus Capital Partners GP, L.L.C., the general partner of CCP, Stephen C. Freidheim (“Freidheim”) may be deemed the beneficial owner of 4,022,429 shares of Common Stock. The address of each of CCP, CCPGP and Freidheim is 65 East 55th Street, 35th Floor, New York, NY 10022.

 

Joseph I. Kronsberg, a partner of CCP, has served on the Company’s Board of Directors since November 30, 2016. On May 25, 2018, 5,370 shares of restricted common stock were granted to CCP by the Company pursuant to the Company’s Non-Employee Director Incentive Compensation Plan and vest on the earlier of (i) May 24, 2019 and (ii) the date of the annual meeting of stockholders in 2019. The grant was made directly to CCP because pursuant to agreements between CCP and Mr. Kronsberg, CCP is required to receive all compensation in connection with Mr. Kronsberg’s directorship. These unvested shares are included in the ownership information for CCP set forth in the table above.

 

(2)

Based on Schedule 13D filed on December 12, 2016, and Form 4s filed on June 30, 2017 and March 19, 2018, with the SEC by Paulson & Co. Inc. (“Paulson”) with respect to beneficial ownership of 3,456,773 shares by Paulson. Paulson is the investment advisor, or manager, of PCO Shipping LLC and certain separately managed accounts (collectively, the “Paulson Accounts”). Paulson possesses voting and investment power of the shares owned or held by the Paulson Accounts. John Paulson is the controlling person of Paulson. The address of Paulson and the Paulson Accounts is c/o Paulson & Co. Inc., 1251 Avenue of the Americas, 50th Floor, New York, NY 10020.

 

Ty E. Wallach has served on the Company’s Board of Directors since November 30, 2016, and until July 20, 2018 was a Partner at Paulson and a Co-Portfolio Manager at Paulson’s credit funds.

 

Based on information provided by the selling stockholders, except as further described below, no selling stockholder is a broker-dealer or an affiliate of a broker-dealer. The Paulson Accounts have advised us that Plus Securities LLC, an affiliate of Paulson & Co. Inc., is a limited purpose broker-dealer registered with the Financial Industry Regulatory Authority, Inc. (“FINRA”), and that Plus Securities LLC only assists with the offer of investment funds and/or accounts sponsored or advised by its affiliates. The Paulson Accounts have also advised us that they purchased the securities to be offered and sold by them from time to time hereunder for investment purposes. The Paulson Accounts have also advised us that they purchased the securities to be offered and sold by them from time to time hereunder in the ordinary course of business, and that at the time they purchased such securities, they had no agreements, understandings or arrangements, directly or indirectly, with the Company or any other person to dispose of or distribute the securities.

 

15 

 

 

DESCRIPTION OF CAPITAL STOCK

 

The following descriptions are summaries of the material terms of our capital stock, articles of incorporation and by-laws, each as amended and restated, and any references to Republic of the Marshall Islands (the “RMI”) law are not meant to be complete and are subject to, and qualified in their entirety by, reference to our amended and restated articles of incorporation (“Amended and Restated Articles of Incorporation”), a copy of which has been filed as an exhibit to our Current Report on Form 8-K dated December 2, 2016 and is incorporated by reference into the registration statement of which this prospectus forms a part, our amended and restated by-laws (“Amended and Restated By-Laws”), a copy of which has been filed as an exhibit to our Current Report on Form 8-K dated December 2, 2016 and is incorporated by reference into the registration statement of which this prospectus forms a part, and to the RMI Business Corporations Act (the “BCA”). See “Where You Can Find More Information.” These descriptions may not contain all of the information that may be important to you and should be read in conjunction with our Amended and Restated Articles of Incorporation, Amended and Restated By-Laws and applicable provisions of the BCA.

 

Authorized Capitalization

 

Our authorized capital stock consists of (a) 100,000,000 authorized shares of common stock, no par value (the “common stock”), and (b) 10,000,000 shares of preferred stock, no par value (the “preferred stock”).

 

As of August 15, 2018 there were 29,178,887 shares of common stock outstanding and no shares of preferred stock outstanding.

 

Common Stock

 

The holders of our common stock are entitled to such dividends as our board of directors may declare from time to time from legally available funds, based on the number of shares of common stock then held of record by such holder, subject to the preferential rights of the holders of any shares of preferred stock that we may issue in the future. The holders of our common stock are entitled to one vote per share.

 

Our Amended and Restated Articles of Incorporation do not provide for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of common stock can elect all of the directors standing for election, and the holders of the remaining shares are not able to elect any directors. Our Amended and Restated By-Laws provide that directors will be elected by a majority of the shares voting once a quorum is present.

 

Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of our common stock are entitled to share, on a pro rata basis, all assets remaining after payment to claimants and creditors and subject to prior distribution rights of any shares of preferred stock that we may issue in the future. All of the outstanding shares of common stock are fully paid and non-assessable. Holders of our common stock have no preemptive rights, conversion rights or other subscription rights as set out in our Amended and Restated Articles of Incorporation, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of holders of common stock are subject to, and may be impacted by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

 

As August 15, 2018, there were approximately 116 holders of record of our common stock, including Cede & Co. as nominee for DTC.

 

Preferred Stock

 

Under our Amended and Restated Articles of Incorporation, our board of directors, without further action by our stockholders, is authorized to issue shares of preferred stock with such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions as the board of directors shall specify in the resolution or resolutions providing for the issue of such preferred stock, provided that the board of directors may not issue any preferred stock for any defensive or anti-takeover purpose, for the purpose of implementing any shareholders rights plan or with features specifically intended to make any attempted acquisition of the Company more difficult or costly, without the affirmative vote of at least a majority of the total voting power of the outstanding shares of our capital stock entitled to vote on such matter, voting as a class. Notwithstanding the foregoing, the preferred stock could have voting or conversion rights that could adversely affect the voting power or other rights of holders of our common stock and the issuance of preferred stock could also have the effect, under certain circumstances, of delaying, deferring or preventing a change of control of us. We currently have no plans to issue any shares of preferred stock. 

 

16 

 

 

Anti-Takeover Effects of Provisions of our Amended and Restated Articles of Incorporation, our Amended and Restated By-Laws and RMI Law

 

Our Amended and Restated Articles of Incorporation and Amended and Restated By-Laws contain a number of provisions relating to corporate governance and to the rights of stockholders. Certain of these provisions may be deemed to have a potential “anti-takeover” effect in that such provisions may delay, defer or prevent a change of control or an unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by the stockholders. Examples of such provisions in our Amended and Restated Articles of Incorporation and Amended and Restated By-Laws relating to corporate governance and the rights of stockholders, certain of which may be deemed to have a potential “anti-takeover” effect include:

 

Authorized but Unissued or Undesignated Capital Stock. Our authorized capital stock consists of 100,000,000 authorized shares of common stock and 10,000,000 shares of preferred stock. A large quantity of authorized but unissued shares may deter potential takeover attempts because of the ability of our board of directors to authorize the issuance of some or all of these shares to a friendly party, or to the public, which would make it more difficult for a potential acquirer to obtain control of us. This possibility may encourage persons seeking to acquire control of us to negotiate first with our board of directors. The authorized but unissued stock may be issued by the board of directors in one or more transactions. In this regard, our Amended and Restated Articles of Incorporation grants the board of directors broad power to establish the rights and preferences of authorized and unissued preferred stock. Although our Amended and Restated Articles of Incorporation prohibits the board of directors, without the affirmative vote of at least a majority of the total voting power of our outstanding shares of capital stock entitled to vote on such matters, voting as a class, from issuing any preferred stock for any defensive or anti-takeover purpose, for the purpose of implementing any shareholder rights plan or with features specifically intended to make any attempted acquisition of the Corporation more difficult or costly, the issuance of shares of preferred stock pursuant to the board of directors’ authority described above could decrease the amount of earnings and assets available for distribution to holders of common stock and adversely affect the rights and powers, including voting rights, of such holders and may have the effect of delaying, deferring or preventing a change of control. The board of directors does not currently intend to seek stockholder approval prior to any issuance of preferred stock, unless otherwise required by law or our Amended and Restated Articles of Incorporation.

 

Action by Written Consent. Our Amended and Restated By-Laws and Section 67 of the BCA provide that stockholder action can be taken by written consent in lieu of a meeting if all stockholders entitled to vote on the subject matter unanimously consent.

 

Special Meetings of Stockholders. Our Amended and Restated By-Laws provide that special meetings of our stockholders may be called only by the President or any Vice President, by resolution of the board of directors or by holders of not less than 25% of all outstanding shares entitled to vote on the matter for which the meeting is called. Our Amended and Restated By-Laws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting.

 

Advance Notice Procedures. Our Amended and Restated By-Laws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide us with certain information. Generally, to be timely, a stockholder’s notice must be received at our principal executive offices not less than 60 days nor more than 90 days prior to the first anniversary of the date of the immediately preceding annual meeting. In the event that the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the stockholder must be received no earlier than 90 days prior to the annual meeting and not later than the later of 60 days prior to the annual meeting or 10 days following the public announcement of the date of the annual meeting. Our Amended and Restated By-Laws also specify requirements as to the form and content of a stockholder’s notice. These provisions may defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.

 

17 

 

 

Super Majority Approval Requirements. Our Amended and Restated By-Laws provide that our board of directors, at any regular meeting or special meeting called for the purpose, and our stockholders, at any annual meeting or special meeting called for the purpose, may make, alter, amend or repeal our Amended and Restated By-Laws. However, our board of directors may not, without the affirmative vote of a majority of the outstanding stock entitled to vote on such matters, alter, amend or repeal certain provisions of our Amended and Restated By-Laws, including those relating to stockholder meeting quorum requirements, majority election of directors, notification of the nominations for the election of directors, special meetings of our board of directors, committees of the board of directors and amendments to the Amended and Restated By-Laws. Further, our board of directors may not, without the affirmative vote of the holders of two-thirds or more of the outstanding stock entitled to vote on such matters, alter, amend or repeal certain other provisions of our Amended and Restated By-Laws, including those relating to the calling of special meetings by stockholders and stockholder action by written consent.

 

The BCA provides generally that the affirmative vote of a majority of the outstanding shares then entitled to vote is required to amend a corporation’s articles of incorporation, unless the articles of incorporation requires a greater percentage. Our Amended and Restated Articles of Incorporation provides that specified provisions, including those relating to amendment of our Amended and Restated Articles of Incorporation and the procedures by which any action required or permitted to be taken by holders of common stock may be performed, may only be amended or repealed by the affirmative vote of two-thirds (2/3) of the combined voting power of the outstanding shares of our capital stock.

 

The combination of these provisions may make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to retain or discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management.

 

Exclusive Forum

 

Our Amended and Restated By-Laws provide that unless we consent in writing to the selection of an alternate forum, the State and Federal Court located in the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees, (iii) any action asserting a claim against us arising pursuant to the BCA or (iv) any action asserting a claim against us that is governed by the bylaws, in all cases subject to the court having personal jurisdiction over the parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in our shares of common stock shall be deemed to have notice of and consented to the forum provisions in our Amended and Restated By-Laws.

 

Dissenters’ Rights of Appraisal and Payment

 

Under the BCA, with certain exceptions, our stockholders will have appraisal rights in connection with a merger or consolidation of us. Pursuant to the BCA, stockholders who properly request and perfect appraisal rights in connection with such merger or consolidation will have the right to receive payment of the fair value of their shares as determined by the appropriate court. See “Description of Capital Stock—Exclusive Forum” above.

 

Stockholders’ Derivative Actions

 

Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of our shares at the time of the transaction to which the action relates or such stockholder’s stock thereafter devolved by operation of law.

 

18 

 

 

Limitations on Liability and Indemnification of Officers and Directors

 

Under the BCA, a Marshall Islands corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to or a witness in or is otherwise involved in any threatened, pending or completed action, suit, claim, inquiry or proceeding whether civil, criminal, administrative or investigative (including an action by or in the right of the corporation) and whether formal or informal, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation, or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust, nonprofit or other entity, including service with respect to employee benefit plans, against all liability and loss suffered, and expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with such action, suit or proceeding. The corporation shall be required to indemnify or advance expenses to such a person in connection with a proceeding commenced by the person against the corporation only if the commencement of such proceeding was authorized in the specific case by the Board of Directors or was brought to establish or enforce a right to indemnification under the bylaws, the corporation’s articles of incorporation, any agreement, the laws of the RMI or otherwise.

 

 

To the extent that a director or officer of a Marshall Islands corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the preceding paragraphs, or in the defense of a claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in the BCA.

 

In addition, a Marshall Islands corporation has the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer against any liability asserted against him or her and incurred by him or her in such capacity whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the BCA. The indemnification provisions of the BCA are not exclusive of any other rights under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

 

Our Amended and Restated Articles of Incorporation limits the liability of our directors to the fullest extent permitted by the BCA and requires that we will provide them with customary indemnification.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

 

19 

 

 

U.S. FEDERAL INCOME TAX CONSEQUENCES

 

United States Federal Tax Considerations for Holders of Common Stock

 

The following is a summary of material U.S. federal income tax considerations that are likely to be relevant to the purchase, ownership and disposition of our common stock by a U.S. Holder (as defined below).

 

This summary is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial interpretations thereof, in force as of the date hereof. Those authorities may be changed at any time, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below.

 

This summary is not a comprehensive discussion of all of the tax considerations that may be relevant to a particular investor’s decision to purchase, hold, or dispose of our common stock. In particular, this summary is directed only to U.S. Holders that hold our common stock as capital assets and does not address tax consequences to U.S. Holders who may be subject to special tax rules, such as banks, brokers or dealers in securities or currencies, traders in securities electing to mark to market, financial institutions, life insurance companies, tax exempt entities, entities that are treated as partnerships for U.S. federal income tax purposes (or partners therein), holders that own or are treated as owning 10% or more of our common stock by vote or value, persons holding our common stock as part of a hedging or conversion transaction or a straddle, or persons whose functional currency is not the U.S. dollar. Moreover, this summary does not address state, local or foreign taxes, the U.S. federal estate and gift taxes, or the Medicare contribution tax applicable to net investment income of certain non-corporate U.S. Holders, or alternative minimum tax consequences of acquiring, holding or disposing of our common stock.

 

For purposes of this summary, a “U.S. Holder” is a beneficial owner of our common stock that is a citizen or resident of the United States or a U.S. domestic corporation or that otherwise is subject to U.S. federal income taxation on a net income basis in respect of such our common stock.

 

You should consult your own tax advisors about the consequences of the acquisition, ownership, and disposition of our common stock, including the relevance to your particular situation of the considerations discussed below and any consequences arising under foreign, state, local or other tax laws.

 

Tax Treatment of U.S. Holders

 

Tax Treatment of Dividends

 

Subject to the discussion below under “—Passive Foreign Investment Company Status,” the gross amount of any distribution of cash or property with respect to our common stock that is paid out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) will generally be includible in your taxable income as ordinary dividend income on the day on which you receive the dividend and will not be eligible for the dividends-received deduction allowed to corporations under the Code.

 

Subject to certain exceptions for short-term positions, the U.S. dollar amount of dividends received by an individual with respect to our common stock will be subject to taxation at a preferential rate if the dividends are “qualified dividends.” Dividends paid on our common stock will be treated as qualified dividends if:

 

·our common stock is readily tradable on an established securities market in the United States or we are eligible for the benefits of a comprehensive tax treaty with the United States that the U.S. Treasury determines is satisfactory for purposes of this provision and that includes an exchange of information program; and

 

·we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (a “PFIC”).

 

20 

 

 

Our common stock is listed on the New York Stock Exchange and will qualify as readily tradable on an established securities market in the United States so long as it is so listed. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our prior taxable year. In addition, based on our audited financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our current taxable year. Holders should consult their own tax advisers regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.

 

Dividend distributions with respect to our common stock generally will be treated as “passive category” income from sources outside the United States for purposes of determining a U.S. Holder’s U.S. foreign tax credit limitation.

 

U.S. Holders that receive distributions of our common stock or rights to subscribe for our common stock as part of a pro rata distribution to all our shareholders generally will not be subject to U.S. federal income tax in respect of the distributions, unless the U.S. Holder has the right to receive cash or property, in which case the U.S. Holder will be treated as if it received cash equal to the fair market value of the distribution.

 

 Taxation of Dispositions of Our Common Stock

 

Subject to the discussion below under “—Passive Foreign Investment Company Status,” if a U.S. Holder realizes gain or loss on the sale, exchange or other disposition of our common stock, that gain or loss will be capital gain or loss and generally will be long-term capital gain or loss if our common stock has been held for more than one year. Long-term capital gain realized by a U.S. Holder that is an individual generally is subject to taxation at a preferential rate. The deductibility of capital losses is subject to limitations.

 

Gain, if any, realized by a U.S. Holder on the sale or other disposition of our common stock generally will be treated as U.S. source income for U.S. foreign tax credit purposes.  

 

Passive Foreign Investment Company Rules

 

A non-U.S. corporation generally will be treated as a “passive foreign investment company,” or a “PFIC,” for U.S. federal income tax purposes if, after applying certain look through rules, either (i) at least 75% of its gross income for any taxable year consists of “passive income” or (ii) at least 50% of the average value (determined on a quarterly basis) produce or are held for the production of “passive income.” We refer to assets which produce or are held for production of “passive income” as “passive assets.” For purposes of these tests, “passive income” generally includes dividends, interest, gains from the sale or exchange of investment property and rental income and royalties other than rental income and royalties which are received from unrelated parties in connection with the active conduct of a trade or business, as defined in applicable U.S. Treasury Regulations. Passive income does not include income derived from the performance of services. Although there is no authority under the PFIC rules directly on point, and existing legal authority in other contexts is inconsistent in its treatment of time charter income, we believe that the gross income we derive or are deemed to derive from our time and spot chartering activities is services income, rather than rental income.

 

Accordingly, we believe that (i) our income from time and spot chartering activities does not constitute passive income and (ii) the assets that we own and operate in connection with the production of that income do not constitute passive assets. Therefore, we believe that we are not now and have never been a PFIC with respect to any taxable year. There is no assurance that the IRS or a court of law will accept our position and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, because there are uncertainties in the application of the PFIC rules and PFIC status is determined annually and is based on the composition of a company’s income and assets (which are subject to change), we can provide no assurance that we will not become a PFIC in any future taxable year. If we were to be treated as a PFIC for any taxable year (and regardless of whether we remain as a PFIC for subsequent taxable years), our U.S. shareholders would be subject to a disadvantageous U.S. federal income tax regime with respect to distributions received from us and gain, if any, derived from the sale or other disposition of our common stock. These adverse tax consequences to shareholders could negatively impact our ability to issue additional equity in order to raise the capital necessary for our business operations.

 

21 

 

 

Foreign Financial Asset Reporting

 

Certain U.S. Holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 are generally required to file an information statement along with their tax returns, currently on Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer that are not held in accounts maintained by financial institutions. The understatement of income attributable to “specified foreign financial assets” in excess of U.S.$5,000 extends the statute of limitations with respect to the tax return to six years after the return was filed. U.S. Holders who fail to report the required information could be subject to substantial penalties. Prospective investors are encouraged to consult with their own tax advisors regarding the possible application of these rules, including the application of the rules to their particular circumstances.

 

Information Reporting and Backup Withholding

 

Dividends paid on, and proceeds from the sale or other disposition of, our common stock to a U.S. Holder generally may be subject to the information reporting requirements of the Code and may be subject to backup withholding unless the U.S. Holder provides an accurate taxpayer identification number and makes any other required certification or otherwise establishes an exemption. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the U.S. Internal Revenue Service in a timely manner.

 

A holder that is a foreign corporation or a non-resident alien individual may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup withholding.

 

22 

 

 

PLAN OF DISTRIBUTION

 

The selling stockholders may offer and sell all or a portion of the securities covered by this prospectus from time to time, together or separately, in one or more or any combination of the following transactions:

 

·on the NYSE, in the over-the-counter market or on any other national securities exchange on which our securities are listed or traded;

 

·in privately negotiated transactions;

 

·in underwritten transactions;

 

·in a block trade in which a broker-dealer will attempt to sell the offered securities as agent but may purchase and resell a portion of the block as principal to facilitate the transaction;

 

·through purchases by a broker-dealer as principal and resale by the broker-dealer for its account pursuant to this prospectus;

 

·in ordinary brokerage transactions and transactions in which the broker solicits purchasers;

 

·through the writing of options (including put or call options), whether the options are listed on an options exchange or otherwise;

 

·through the distribution of the securities by any selling stockholder to its partners, members or stockholders;

 

·in short sales entered into after the effective date of the registration statement of which this prospectus is a part;

 

·“at the market” or through market makers or into an existing market for the securities; and

 

·through any other method permitted by applicable law.

 

The selling stockholders may sell the securities at prices then prevailing, related to the then-prevailing market price or at negotiated prices. The offering price of the securities from time to time will be determined by the selling stockholder or selling stockholders, as applicable, and, at the time of the determination, may be higher or lower than the market price of our securities on the NYSE or any other exchange or market.

 

The selling stockholders may also sell our securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The shares may be sold directly or through broker-dealers acting as principal or agent, or pursuant to a distribution by one or more underwriters on a firm commitment or best-efforts basis. The selling stockholders may also enter into hedging transactions with broker-dealers. In connection with such transactions, broker-dealers of other financial institutions may engage in short sales of our securities in the course of hedging the positions they assume with us and with the selling stockholders. The selling stockholders may also enter into options or other transactions with broker-dealers or other financial institutions, which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

23 

 

 

In connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or from purchasers of the offered securities for whom they may act as agents. In addition, underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. The selling stockholders and any underwriters, dealers or agents participating in a distribution of the securities may be deemed to be “underwriters” within the meaning of the Securities Act, and any profit on the sale of the securities by the selling stockholders and any commissions received by broker-dealers may be deemed to be underwriting commissions under the Securities Act.

 

To facilitate the offering of securities covered by this prospectus, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. This may include over-allotments or short sales of our common stock, which involve the sale by persons participating in the offering of more common stock than the selling stockholders sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of our common stock by bidding for or purchasing our common stock in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if our common stock sold by them is repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of our common stock at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

 

We and the selling stockholders may agree to indemnify an underwriter, broker-dealer or agent against certain liabilities related to the sale of the securities, including liabilities under the Securities Act. The selling stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their securities.

 

Upon our notification by a selling stockholder that any material arrangement has been entered into with an underwriter or broker-dealer for the sale of securities through a block trade, special offering, exchange distribution, secondary distribution or a purchase by an underwriter or broker-dealer, we will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing certain material information, including:

 

·the name of the selling stockholders;

 

·the number of securities being offered;

 

·the terms of the offering;

 

·the names of the participating underwriters, broker-dealers or agents;

 

·any discounts, commissions or other compensation paid to underwriters or broker-dealers and any discounts, commissions or concessions allowed or reallowed or paid by any underwriters to dealers;

 

·the public offering price; and

 

·other material terms of the offering.

 

In addition, upon being notified by a selling stockholder that a donee, pledgee, transferee or other successor-in-interest intends to sell securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such person as a selling stockholder.

 

We and the selling stockholders are subject to the applicable provisions of the Exchange Act and the rules and regulations under the Exchange Act, including Regulation M. This regulation may limit the timing of purchases and sales of any of the securities offered in this prospectus by the selling stockholders. The anti-manipulation rules under the Exchange Act may apply to sales of securities in the market and to the activities of the selling stockholders and their affiliates. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of the securities to engage in market-making activities for the particular securities being distributed for a period of up to five business days before the distribution. The restrictions may affect the marketability of the securities and the ability of any person or entity to engage in market-making activities for the securities.

 

24 

 

 

To the extent required, this prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution. Instead of selling the securities under this prospectus, the selling stockholders may sell the securities in compliance with the provisions of Rule 144 under the Securities Act, if available, or pursuant to other available exemptions from the registration requirements of the Securities Act.

 

In the ordinary course of their business activities, any underwriter, broker-dealer or agent and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and other instruments. Any underwriter, broker-dealer or agent and their respective affiliates may also engage in transactions with or perform services for us or provide other types of financing to us in the ordinary course of their business.

 

25 

 

 

LEGAL MATTERS

 

Unless otherwise indicated in any applicable prospectus supplement, the validity of any common stock offered hereby will be passed upon for us by Reeder & Simpson, P.C., a Marshall Islands law firm.

 

EXPERTS

 

The consolidated financial statements of International Seaways, Inc. appearing in our Current Report on Form 8-K dated May 14, 2018 (including the schedule appearing therein) for the year ended December 31, 2017, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

 

The financial statements as of December 31, 2016 and for each of the two years in the period ended December 31, 2016 incorporated in this Prospectus by reference to International Seaways, Inc.’s Current Report on Form 8-K dated May 14, 2018 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

 

WHERE YOU CAN FIND MORE INFORMATION

 

This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed with it. For further information about us, our common stock and other information set forth herein, reference is made to the registration statement and exhibits and schedules with it. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is subject to, and qualified in its entirety by, reference to the applicable contract or other document filed herewith. 

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any materials we have filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy and information statements and other information concerning issuers that file electronically with the SEC, including us. We also maintain a website at www.intlseas.com that contains information concerning us, including the reports we file with the SEC. The information contained or referred to on our website is not incorporated by reference in this prospectus and is not a part of this prospectus.

 

We also make available on our website our corporate governance guidelines, code of business conduct and ethics, insider trading policy, anti-bribery and corruption policy and charters of the audit committee, human resources and compensation committee and corporate governance and risk assessment committee of our board of directors. Information on, or accessible through, our website is not part of this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.

 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with the SEC, which means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be part of this prospectus.

 

We incorporate by reference the documents listed below, except to the extent that any information contained in such filings is deemed “furnished” in accordance with SEC rules:

 

·Our Annual Report on Form 10-K, filed with the Commission on March 12, 2018, as updated by our Current Report on Form 8-K filed with the Commission on May 14, 2018;

 

·Our Quarterly Reports on Form 10-Q, filed with the Commission on May 7, 2018 and August 8, 2018;

 

26 

 

 

·Our Proxy Statement, filed with the Commission on April 12, 2018; and

 

·Our Current Reports on Form 8-K, filed with the Commission on April 10, 2018; April 24, 2018; April 30, 2018; May 4, 2018; May 14, 2018; May 30, 2018; May 31, 2018; and June 15, 2018.

 

We also incorporate by reference any filings made with the SEC in accordance with Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and until the date all of the securities offered hereby are sold or the offering is otherwise terminated, with the exception of any information contained in such filings that is deemed “furnished” in accordance with SEC rules, unless such information is expressly incorporated herein by a reference in such filings. Any such filings shall be deemed to be incorporated by reference and to be a part of this prospectus from the respective dates of filing of those documents.

 

The documents incorporated by reference in this prospectus contain important information about us and our financial condition. Information contained in this prospectus supersedes information incorporated by reference that we have filed with the SEC prior to the date of this prospectus, while information included in any accompanying prospectus supplement or post-effective amendment will supersede this information.

 

Statements contained in this registration statement or any accompanying prospectus supplement as to the contents of any contract or other document that is filed or incorporated by reference as an exhibit to the registration statement are not necessarily complete and we refer you to the full text of the contract or other document filed or incorporated by reference as an exhibit to the registration statement.

 

Our filings are available on our website at www.intlseas.com. Information on, or accessible through, our website is not part of this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. We will provide without charge to each person to whom this prospectus and any accompanying prospectus supplement is delivered, upon written or oral request of such person, a copy of any or all of the documents referred to above that have been incorporated by reference into this prospectus and any accompanying prospectus supplement. Requests for such documents should be directed to International Seaways, Inc., 600 Third Avenue, 39th Floor, New York, New York 10016, Attention: Investor Relations, (212) 578-1635.

 

27 

 

 

 

 
 
INTERNATIONAL SEAWAYS, INC.
 
 
 
 
 
Common Stock
 
 
 
 
 
 
 
PROSPECTUS
 
 
 
__________ ___, 2018
 

 

 

 

 

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 14. Other Expenses of Issuance and Distribution.

 

The following table sets forth the estimated fees and expenses payable by the registrant in connection with the offering and sale of our Common Stock, other than any estimated underwriting discounts and commissions:

 

SEC registration fee  $18,177 
Printing, engraving, Edgarization and filing expenses   5,000 
Blue sky fees and expenses (including related legal fees)    
Legal fees and expenses   45,000 
Accounting fees and expenses   50,000 
Miscellaneous   1,823 
Total  $120,000 

  

In the event securities being offered under this registration statement are distributed in an underwritten offering, we anticipate that additional expenses will be incurred. An estimate of the aggregate expenses in connection with the issuance and distribution of securities being offered will be included in any relevant applicable prospectus supplement.

 

We will bear all of the expenses shown above. All amounts are estimates except for the SEC registration fee.

 

  Item 15. Indemnification of Directors and Officers.

 

Section 60 of the BCA provides that a corporation may indemnify directors and officers as well as other employees and individuals of such corporation against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement in connection with specified actions, suits and proceedings whether civil, criminal, administrative, or investigative, other than a derivative action by or in the right of the corporation, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification extends only to expenses, including attorneys’ fees, incurred in connection with the defense or settlement of such action and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s bylaws, disinterested director vote, stockholder vote, agreement or otherwise.

 

Our Amended and Restated Articles of Incorporation and Amended and Restated By-Laws provide for indemnification of directors and officers to the fullest extent permitted by law, including payment of expenses in advance of resolution of any such matter. Our Amended and Restated Articles of Incorporation eliminates the potential personal monetary liability of our directors to the Company or its stockholders for breaches of their duties as directors except as otherwise required under the BCA.

 

In addition, we have entered into separate indemnification agreements with certain of our directors and officers. Each indemnification agreement provides, among other things, for indemnification to the fullest extent permitted by law against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements also provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law.

 

Section 60(7) of the BCA provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against the person in any such capacity, or arising out of the person’s status as such, whether or not the corporation would have the power to indemnify the person against such liability under the provisions of the BCA. We maintain insurance policies that provide coverage to our directors and officers against certain liabilities.

 

II-1 

 

 

  Item 16. Exhibits.

 

The list of exhibits is set forth beginning on page II-5 of this Registration Statement and is incorporated herein by reference.

 

  Item 17. Undertakings.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

The undersigned Registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

provided , however , that paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

(i) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

II-2 

 

 

(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of the registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided , however , that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

 

(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, each undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of such undersigned Registrant or used or referred to by the undersigned Registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

 

(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of International Seaways, Inc.’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

II-3 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on August 28, 2018.

 

  INTERNATIONAL SEAWAYS, INC.
   
  By: /s/ Lois K. Zabrocky
    Lois K. Zabrocky
    President and Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

 

Name  

Title

 

Date

         
/s/ Lois K. Zabrocky   President and Chief Executive Officer; Director   August 28, 2018
Lois K. Zabrocky   (principal executive officer)    
         
/s/ Jeffrey D. Pribor   Senior Vice President and   August 28, 2018
Jeffrey D. Pribor  

Chief Financial Officer

(principal financial and accounting officer)

   
         
/s/ *   Chairman of the Board of Directors   August 28, 2018
Douglas D. Wheat        
         
/s/ *   Director   August 28, 2018
Timothy J. Bernlohr        
         
/s/ *   Director   August 28, 2018
Ian T. Blackley        
         
/s/ *   Director   August 28, 2018
Randee E. Day        
         
/s/ *   Director   August 28, 2018
David I. Greenberg        
         
/s/ *   Director   August 28, 2018
Joseph I. Kronsberg        
         
/s/ *   Director   August 28, 2018
Ty E. Wallach        
         
/s/ *   Director   August 28, 2018
Gregory A. Wright        
         
*By: /s/ James D. Small III        
James D. Small III        
Attorney-in-Fact        


 

II-4 

 

 

EXHIBIT INDEX

 

Exhibit
Number
  Description
1.1**   Form of Underwriting Agreement.
     
2.1   Separation and Distribution Agreement, dated November 30, 2016, by and between Overseas Shipholding Group, Inc. and International Seaways, Inc. (filed as Exhibit 2.1 to International Seaways, Inc.’s Current Report on Form 8-K dated December 2, 2016 and incorporated herein by reference).
     
2.2   Stock Purchase and Sale Agreement, dated April 18, 2018, by and among Euronav NV, Euronav MI Inc., and Seaways Holding Corporation (pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments have been omitted but will be furnished supplementally to the Commission upon request) (filed as exhibit 2.2 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-3 (File No. 333-224313) filed on May 14, 2018 and incorporated herein by reference).
     
2.3   Guarantee of International Seaways, Inc., dated April 18, 2018, in favor of Euronav MI Inc. (filed as exhibit 2.3 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-3 (File No. 333-224313) filed on May 14, 2018 and incorporated herein by reference).
     
3.1   Amended and Restated Articles of Incorporation of International Seaways, Inc. (filed as Exhibit 3.1 to International Seaways, Inc.’s Current Report on Form 8-K dated December 2, 2016 and incorporated herein by reference).
     
3.2   Amended and Restated By-Laws of International Seaways, Inc. (filed as Exhibit 3.2 to International Seaways, Inc.’s Current Report on Form 8-K dated December 2, 2016 and incorporated herein by reference).
     
4.1   Registration Rights Agreement, dated as of November 30, 2016, between the International Seaways, Inc. and certain stockholders party thereto (filed as Exhibit 4.1 to International Seaways, Inc.’s Current Report on Form 8-K dated December 2, 2016 and incorporated herein by reference).
     
4.2  

Indenture, dated May 31, 2018, between International Seaways, Inc. and The Bank of New York Mellon, as trustee (filed as exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated May 31, 2018 and incorporated by reference herein)

     
4.3  

First Supplemental Indenture, dated May 31, 2018, between International Seaways, Inc. and The Bank of New York Mellon, as trustee (filed as exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated May 31, 2018 and incorporated by reference herein).

     
4.4  

Form of Global Note (included as Exhibit A to the First Supplemental Indenture filed as Exhibit 4.3).

     
4.5  

Indenture, dated June 13, 2018, between the Company and GLAS Trust Company LLC, as trustee (filed as exhibit 4.4 to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2018 and incorporated by reference herein).

     
4.6+  

Form of Note for the Indenture filed as Exhibit 4.5 (Exhibit A to Annex I).

     
5.1+   Opinion of Reeder & Simpson, P.C.
     
10.1   International Seaways, Inc. Non-Employee Director Incentive Compensation Plan (filed as Exhibit 10.2 to International Seaways, Inc.’s Current Report on Form 8-K dated November 25, 2016 and incorporated herein by reference).
     
10.1.1   Form of International Seaways, Inc. Non-Executive Director Incentive Compensation Plan Restricted Stock Grant Agreement (filed as Exhibit 10.1.1 to the Registrant’s Annual Report on Form 10-K for 2016 and incorporated herein by reference).
     
10.2   International Seaways, Inc. Management Incentive Plan (filed as Exhibit 10.1 to International Seaways, Inc.’s Current Report on Form 8-K dated November 25, 2016 and incorporated herein by reference).

 

II-5 

 

 

10.2.1   Form of International Seaways, Inc. Management Incentive Compensation Plan Stock Option Grant Agreement (filed as Exhibit 10.2.1 to the Registrant’s Annual Report on Form 10-K for 2016 and incorporated herein by reference).
     
10.2.2   Form of International Seaways, Inc. Management Incentive Compensation Plan Restricted Stock Unit Grant Agreement (filed as Exhibit 10.2.2 to the Registrant’s Annual Report on Form 10-K for 2016 and incorporated herein by reference).
     
10.2.3   Form of International Seaways, Inc. Management Incentive Compensation Plan Performance-Based Restricted Stock Unit Grant Agreement (filed as Exhibit 10.2.3 to the Registrant’s Annual Report on Form 10-K for 2016 and incorporated herein by reference).
     
10.3   Credit Agreement dated as of June 22, 2017, among the Registrant, OIN Delaware LLC, International Seaways Operating Corporation and certain of its subsidiaries as other guarantors, various lenders, Jefferies Finance LLC and JP Morgan Chase Bank, N.A., as joint lead arrangers, UBS Securities LLC, as joint bookrunner, DNB Markets Inc., Fearnley Securities AS, Pareto Securities Inc. and Skandinaviska Enskilda Banken AB (Publ) as co-managers, Jefferies Finance LLC, as administrative agent, syndication agent, collateral agent and mortgage trustee (“2017 Credit Agreement”) (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference).
     
10.4   First Amendment, dated as of July 24, 2017, to the 2017 Credit Agreement (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference).
     
10.5   Employee Matters Agreement, dated November 30, 2016, between Overseas Shipholding Group, Inc. and International Seaways, Inc. (filed as Exhibit 10.2 to International Seaways, Inc.’s Current Report on Form 8-K dated December 2, 2016 and incorporated herein by reference).
     
10.6   Employment Agreement dated September 29, 2014 between Overseas Shipholding Group, Inc. and Lois K. Zabrocky (filed as Exhibit 10.13 to Overseas Shipholding Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference).
     
10.7   Amendment No. 1 to Lois K. Zabrocky’s Employment Agreement dated March 30, 2016 (filed as Exhibit 10.2 to Overseas Shipholding Group, Inc.’s Current Report on Form 8-K dated April 5, 2016 and incorporated herein by reference).
     
10.8   Amendment No. 2 to Lois K. Zabrocky’s Employment Agreement dated August 3, 2016 (filed as Exhibit 10.10 to International Seaways, Inc.’s Amendment No. 4 to the Registration Statement on Form 10 filed on November 4, 2016 and incorporated herein by reference).
     
10.9   Form of Amendment No. 3 to Lois K. Zabrocky’s Employment Agreement (filed as Exhibit 10.8 to International Seaways, Inc.’s Amendment No. 2 to the Registration Statement on Form 10 filed on October 21, 2016 and incorporated herein by reference).
     
10.10  

Amendment No. 4 to Lois K. Zabrocky's Employment Agreement dated April 4, 2018 (filed as Exhibit 10.10 to International Seaways, Inc’s Registration Statement on Form S-3 (File No. 333-224313), filed April 17, 2018, and incorporated herein by reference).

     
10.11   Employment Agreement dated February 13, 2015 between Overseas Shipholding Group, Inc. and James D. Small III (filed as Exhibit 10.29 to Overseas Shipholding Group, Inc.’s Annual Report on Form 10-K for 2014 and incorporated herein by reference).
     
10.12   Amendment No. 1 to James D. Small III’s Employment Agreement dated March 30, 2016 (filed as Exhibit 10.4 to Overseas Shipholding Group, Inc.’s Current Report on Form 8-K dated April 5, 2016 and incorporated herein by reference).
     
10.13   Amendment No. 2 to James D. Small III’s Employment Agreement dated August 3, 2016 (filed as Exhibit 10.14 to International Seaways, Inc.’s Amendment No. 4 to the Registration Statement on Form 10 filed on November 4, 2016 and incorporated herein by reference).
     
10.14   Form of Amendment No. 3 to James D. Small’s Employment Agreement (filed as Exhibit 10.9 to International Seaways, Inc.’s Amendment No. 2 to the Registration Statement on Form 10 filed on October 21, 2016 and incorporated herein by reference).

 

II-6 

 

 

10.15   Employment Agreement dated September 29, 2014 between Overseas Shipholding Group, Inc. and Adewale O. Oshodi (filed as Exhibit 10.23 to Overseas Shipholding Group, Inc.’s Annual Report on Form 10-K for 2014 and incorporated herein by reference).
     
10.16   Amendment No. 1 to Adewale O. Oshodi’s Employment Agreement dated March 2, 2015 (filed as Exhibit 10.24 to Overseas Shipholding Group, Inc.’s Annual Report on Form 10-K for 2014 and incorporated herein by reference).
     
10.17   Amendment No. 2 to Adewale O. Oshodi’s Employment Agreement dated March 2, 2015 (filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 and incorporated herein by reference).
     
10.18   Employment Agreement dated November 9, 2016 between International Seaways, Inc. and Jeffrey D. Pribor (filed as Exhibit 10.20 to International Seaways, Inc.’s Amendment No. 6 to the Registration Statement on Form 10 filed on November 9, 2016 and incorporated herein by reference).
     
10.19   International Seaways Ship Management LLC Supplemental Executive Savings Plan (filed as Exhibit 10.18 to International Seaways, Inc.’s Annual Report on Form 10-K for 2017 and incorporated herein by reference).
     
10.20   Letter of Intent dated December 20, 2017 between Euronav NV and Registrant relating to Registrant’s purchase of all the issued and outstanding shares of Gener8 Maritime Subsidiary VII Inc (filed as Exhibit 10.19 to International Seaways, Inc.’s Annual Report on Form 10-K for 2017 and incorporated herein by reference). 
     
10.21  

$220 Million Senior Secured Credit Facility of TI Africa Limited and TI Asia Limited, as joint and several Borrowers, and ABN Amro Bank N.V. and ING Belgium SA/NV, as Mandated Lead Arrangers, dated March 29, 2018 (filed as Exhibit 10.21 to International Seaways, Inc’s Amendment No. 1 to Registration Statement on Form S-3 (File No. 333-224313) filed May 14, 2018 and incorporated herein by reference).

     
10.22  

Guarantee, dated March 29, 2018, relating to $220 Million Senior Secured Credit Facility dated March 29, 2018 (filed as Exhibit 10.22 to International Seaways, Inc.’s Amendment No. 1 to Registration Statement on Form S-3 (File No. 333-224313) filed May 14, 2018 and incorporated herein by reference).

     
10.23  

Credit agreement dated as of June 7, 2018, by and among Seaways Shipping Corporation, a Marshall Islands corporation and wholly-owned subsidiary of the Registrant, the Registrant (as a guarantor), certain other guarantors which are subsidiaries of the Registrant, lenders named therein and ABN AMRO Capital USA LLC as lead arranger and facility agent (filed as Exhibit 10.3 to International Seaways, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed August 8, 2018 and incorporated herein by reference).

     
10.24*   Amending and Restating Agreement by and among Gener8 Maritime Subsidiary VII, Inc., Seaways Holding Corporation, a wholly owned subsidiary of the Company, the Company, Citibank, N.A. (London Branch), the Export-Import Bank of China and Bank of China (New York Branch) (and its successors and assigns) and certain other parties thereto (filed herewith).
     
10.25  

Second Amendment, dated as of June 14, 2018, to the Credit Agreement dated as of June 22, 2017, among the Registrant, OIN Delaware LLC, International Seaways Operating Corporation and certain of its subsidiaries as other guarantors, various lenders, Jefferies Finance LLC and JP Morgan Chase Bank, N.A., as joint lead arrangers, UBS Securities LLC, as joint bookrunner, DNB Markets Inc., Fearnley Securities AS, Pareto Securities Inc. and Skandinaviska Enskilda Banken AB (Publ) as co-managers, Jefferies Finance LLC, as administrative agent, syndication agent, collateral agent and mortgage trustee (filed as Exhibit 10.5 to International Seaways, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed August 8, 2018 and incorporated herein by reference).

     
21.1+   List of significant subsidiaries.
     
23.1*   Consent of PricewaterhouseCoopers LLP.
     
23.2+   Consent of Reeder & Simpson, P.C. (included in Exhibit 5.1).
     
23.3*   Consent of Ernst & Young LLP.
     
24.1+   Power of Attorney (included on signature page).

 

 
* Filed herewith.
** To be filed, if applicable, by amendment or by a report filed under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.
+ Previously filed.

 

II-7 

 

(Back To Top)

Section 2: EX-10.24 (EXHIBIT 10.24)

 

Exhibit 10.24

 

Execution Version

 

Dated _____________13 June_______________ 2018

 

GENER8 MARITIME SUBSIDIARY VII INC.
as Borrower

 

THE COMPANIES listed in Part A of Schedule 1

as Original Owner Guarantors and
Original Hedge Guarantors

 

EURONAV MI II INC.

(formerly KNOWN AS GENER8 MARITIME, INC.)

as Existing Parent Guarantor

 

SEAWAYS HOLDING CORPORATION

as New Parent Guarantor

 

international seaways, inc.

as Holdings Guarantor

 

CITIBANK, N.A.
NORDEA BANK AB (PUBL), New York BRANCH
as Global Co-ordinators

 

CITIBANK, N.A.
as Bookrunner

 

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

BANK OF CHINA, new york branch

as Mandated Lead Arrangers

 

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

as Original Lenders

 

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

as Hedge Counterparties

 

CITIBANK, N.A., LONDON BRANCH

as ECA Co-ordinator and ECA Agent

 

NORDEA BANK AB (PUBL), NEW YORK BRANCH
as Facility Agent and Security Agent

 

 

 

AMENDING AND RESTATING AGREEMENT

 

 

 

relating to a facility agreement originally dated 30 November 2015

as supplemented by a supplemental agreement dated 28 December 2015, as amended and restated by an amending and restating deed dated 29 June 2016, as supplemented by a supplemental agreement dated 8 November 2017 and as further supplemented by a consent, supplemental and amendment letter dated 2 April 2018

 

 

 

  

INDEX

 

Clause   Page
     
1 INTERPRETATION 3
     
2 consent, waiver, RELEASE AND ACCESSION 3
     
3 CONDITIONS precedent 4
     
4 representations and WARRANTIES 7
     
5 amendment and restatement of Facility agreement and other finance documents 8
     
6 Further Assurance 9
     
7 Fees, Costs and Expenses 9
     
8 Notices 9
     
9 Counterparts 9
     
10 CONFIRMATION BY REMAINING OBLIGORS 9
     
11 Governing Law 9
     
12 Enforcement 10
     
SCHEDULE 1 12
   
Part A ORIGINAL OWNER GUARANTORS  AND ORIGINAL HEDGE GUARANTORS 12
   
Part B Original Lenders 13
   
Part C HEDGE COUNterparties 14
   
EXECUTION PAGES 15
   
EXHIBIT A  FORM OF EFFECTIVE date NOTICE
   
APPENDIX 1  PART A  FORM OF AMENDED AND RESTATED facility AGREEMENT MARKED TO INDICATE AMENDMENTS TO THE facility AGREEMENT
   
APPENDIX 1  PART B  form of clean copy amended and restated facility agreement

 

 

 

  

THIS AGREEMENT is made on ____________________________ 2018

 

BETWEEN

 

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

 

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

 

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

 

(4)SEAWAYS HOLDING CORPORATION, a corporation incorporated and existing under the laws of the Republic of The Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the new parent guarantor (the “New Parent Guarantor”);

 

(5)INTERNATIONAL SEAWAYS, INC., a corporation incorporated and existing under the laws of the Republic of The Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960 as the holdings guarantor (the “Holdings Guarantor”);

 

(6)CITIBANK, N.A. and NORDEA BANK AB (PUBL), NEW YORK BRANCH (as successor of Nordea Bank Finland Plc, New York Branch) as global co-ordinators (the “Global Co-ordinators” and each, a “Global Co-ordinator”);

 

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

 

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

 

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

 

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

 

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

 

(12)NORDEA BANK AB (PUBL), NEW YORK BRANCH (as successor of Nordea Bank Finland Plc, New York Branch) as agent of the other Finance Parties (the “Facility Agent”); and

 

(13)NORDEA BANK AB (PUBL), NEW YORK BRANCH (as successor of Nordea Bank Finland Plc, New York Branch) as security agent for the Secured Parties (the “Security Agent”).

 

 

 

  

BACKGROUND

 

(A)By a facility agreement dated 30 November 2015 (as supplemented by a supplemental agreement dated 28 December 2015, as amended and restated by an amending and restating deed dated 29 June 2016 , as supplemented by a supplemental agreement dated 8 November 2017 and as further supplemented by a consent, supplemental and amendment letter dated 2 April 2018, the “Facility Agreement”) and made between (i) the Borrower, (ii) the Original Owner Guarantors and Original Hedge Guarantors, (iii) the Existing Parent Guarantor, (iv) the Global Co-ordinators, (v) the Bookrunner, (vi) the Mandated Lead Arrangers, (vii) the Original Lenders, (viii) the Hedge Counterparties, (ix) the ECA Co-ordinator, (x) the Facility Agent and (xi) the Security Agent, the Original Lenders made available to the Borrower a facility of up to US$385,227,495.00.

 

(B)By a share purchase agreement (the “Share Purchase Agreement”) dated April 18, 2018 made between (i) the New Parent Guarantor as purchaser, (ii) Euronav NV, a corporation incorporated and existing under laws of the Kingdom of Belgium as seller parent and (iii) Euronav MI Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands as seller, it is intended that the New Parent Guarantor purchase the entire share capital of the Borrower (the “Shares Purchase”).

 

(C)In order to facilitate the Share Purchase and the transactions contemplated thereby, the Parties have agreed inter alia that:

 

(i)no Change of Control shall occur as a result of the Shares Purchase;

 

(ii)clauses 21.22 (Disposals), 21.23 (Merger) and 29.1 (Assignment or Transfers by Obligors) shall be waived solely in respect of the Shares Purchase, subject to the occurrence of the Effective Date;

 

(iii)the Existing Parent Guarantor shall be irrevocably and unconditionally released from all of its liabilities and obligations under the Facility Agreement and the other Finance Documents with effect from the Effective Date (as defined below) (the “Release”);

 

(iv)the New Parent Guarantor shall accede to the Facility Agreement and shall provide a guarantee thereunder (as defined below) (the “Accession of New Parent Guarantor”) with effect from the Effective Date;

 

(v)the Holdings Guarantor shall accede to the Facility Agreement and shall provide a guarantee thereunder (as defined below) (the “Accession of Holdings Guarantor”) with effect from the Effective Date; and

 

(vi)certain amendments shall be made to the Facility Agreement (as set out in Appendix 1) to reflect the Accession of New Parent Guarantor and the Accession of the Holdings Guarantor and as a consequence of the Shares Purchase (the “Proposed Changes”).

 

(D)This Agreement sets out the terms and conditions on which the Finance Parties agree, with effect on and from the Effective Date, at the request of the Borrower, to the Proposed Changes, each of the other consequential amendments to be made to the Finance Documents in connection therewith and certain other changes described herein.

 

IT IS AGREED as follows:

 

 2 

 

  

1INTERPRETATION

 

1.1Defined expressions

 

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

 

1.2Definitions. In this Agreement:

 

Acceding Parties” means collectively, the New Parent Guarantor and the Holdings Guarantor (and each or any of them as the context may require, an “Acceding Party”).

 

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

 

Effective Date” means the date specified on the Effective Date Notice, such date being the date on which the conditions precedent in Clause 3 (Conditions Precedent) are satisfied.

 

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

 

Facility Agreement” means the Facility Agreement referred to in Recital (A).

 

Party” means a party to this Agreement.

 

Remaining Obligors” means the Borrower, each Owner Guarantor and each Hedge Guarantor.

 

Shares” means all of the shares in the share capital of the Borrower which are held by, to the order of or on behalf of the New Parent Guarantor.

 

SPA Closing Date” means the closing of the transactions contemplated by the Share Purchase Agreement.

 

1.3Application of construction and interpretation provisions of Facility Agreement

 

Clauses 1.2 (Construction) and 1.5 (Third party rights) of the Facility Agreement apply to this Agreement as if they were each expressly incorporated herein with any necessary modifications.

 

1.4Designation as a Finance Document

 

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

 

2consent, waiver, RELEASE AND ACCESSION

 

Subject to and upon the terms and conditions of this Agreement, in consideration of the Lenders continuing to make available the amounts presently extended under the Facility to the Borrower pursuant to the Facility Agreement and without prejudice to the continuing obligations of each Remaining Obligor under the Facility Agreement and/or each of the other Finance Documents (in each case, as amended and restated or amended pursuant to this Agreement):

 

 3 

 

  

(a)all Lenders hereby provide their consent to the Shares Purchase and confirm that they waive the provisions of clause 7.2 (Change of control) of the Facility Agreement which require a mandatory prepayment to be made by the Borrower as a result of a Change of Control;

 

(b)all Lenders hereby agree to waive the breach of clause 21.22 (Disposals), clause 21.23 (Merger), and clause 29.1 (Assignment or transfer by Obligors) of the Facility Agreement that will occur as a result of the Shares Purchase;

 

(c)the Lenders and the other Finance Parties agree to the Proposed Changes and each of the other consequential amendments to be made to the Facility Agreement and the other Finance Documents and certain other changes as set out in this Agreement;

 

(d)the Lenders and the other Finance Parties agree that, with effect from the Effective Date:

 

(i)the Existing Parent Guarantor shall be irrevocably and unconditionally released from all of its liabilities and obligations under the Facility Agreement and the other Finance Documents;

 

(ii)the Acceding Parties shall be deemed to be Guarantors under the Facility Agreement in accordance with the terms of this Agreement and the Amended and Restated Facility Agreement; and

 

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

 

(e)The Acceding Parties each agree to be bound by the terms of the Amended and Restated Facility Agreement as a Guarantor, and by signing this Agreement each of the Acceding Parties undertakes to perform all liabilities and to make all payments and to comply with all other obligations under the Amended and Restated Facility Agreement as if named as a party to it as a Guarantor.

 

3CONDITIONS precedent

 

3.1Agreement of the Lenders and the other Finance Parties

 

The agreement of the Lenders, the other Finance Parties and the other Parties contained in Clause 2 (Consent, Waiver, Release and Accession) is subject to:

 

(a)no Default or Event of Default would result from entry into this Agreement or the occurrence of the Effective Date;

 

(b)no event which would result in a Material Adverse Effect has occurred or would result from entry into this Agreement or the occurrence of the Effective Date;

 

(c)the SPA Closing Date having occurred;

 

(d)the representations and warranties set out in clause 18 (Representations) of the Facility Agreement to be made by each of the Remaining Obligors and the Acceding Parties being true on each of the date of this Agreement and the Effective Date (provided that the representations made under clause 18.7 (Financial Statements; financial condition; undisclosed liabilities) of the Facility Agreement shall be made with reference to the latest financial statements provided by the Acceding Parties to the Facility Agent and as at the last day of the financial period in relation to which such financial statements relate);

 

 4 

 

  

(e)no Change of Control having occurred on the date of this Agreement or the Effective Date (it being understood that neither the Share Purchase nor the Merger (as defined in the consent, supplemental and amendment letter dated 2 April 2018) constitute a Change of Control); and

 

(f)the Facility Agent having received the following documents and evidence, in each case in form and substance satisfactory to the Facility Agent (acting reasonably) on or before the date of this Agreement or such later date as the Facility Agent may agree with the Borrower:

 

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

 

(ii)a duly executed copy of the Share Purchase Agreement (and each document required to be delivered thereunder);

 

(iii)a copy of the shares certificate and any other documents evidencing title to the Shares;

 

(iv)a duly executed original of the Shares Security in respect of the Borrower (and each document required to be delivered thereunder);

 

(v)a duly executed original of the control agreement regarding deposit accounts to be made between the New Parent Guarantor and the Account Bank together with each Account Security in respect of the Minimum Liquidity Account and the Debt Service Reserve Account (and each document required to be delivered thereunder);

 

(vi)a duly executed original of each transfer form, irrevocable proxy and power of attorney and letter of resignation to be delivered by the Borrower under each Shares Security in respect of each Owner Guarantor;

 

(vii)a duly executed original of each notice of assignment of insurances and notice of assignment of management agreement to be delivered by each Owner under each General Assignment in respect of each Ship;

 

(viii)documents establishing that each Ship will, on and from the Effective Date, be managed technically by Wallem Shipmanagement Limited as Approved Technical Manager together with:

 

(A)a duly executed original of a Manager’s Undertaking for Wallem Shipmanagement Limited as Approved Technical Manager of each Ship; and

 

(B)a copy of the Document of Compliance for Wallem Shipmanagement Limited;

 

(ix)a copy of each Ship’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to such Ship including without limitation an ISSC;

 

(x)in respect of each Ship, a copy of the class certificate from an Approved Classification Society indicating that such Ship meets the criteria specified in clause 24.2 (flag of ships; citizenship; ship classification) of the Amended and Restated Facility Agreement;

 

 5 

 

  

(xi)documentary evidence that each Ship will be insured in accordance with the provisions of the Amended and Restated Facility Agreement and all requirements in the Amended and Restated Facility Agreement in respect of Insurances will be complied with on and from the Effective Date;

 

(xii)an opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances as the Facility Agent may reasonably require;

 

(xiii)copies of the Constitutional Documents of each of the Remaining Obligors and the Acceding Parties in each case certified by an authorized signatory of such party as being a true, correct and complete copy thereof;

 

(xiv)evidence that each of the Remaining Obligors and the Acceding Parties are in goodstanding in its respective jurisdiction of incorporation or formation;

 

(xv)copies of resolutions of the directors and (if required) resolutions of shareholders of each of the Existing Parent Guarantor, the Remaining Obligors and the Acceding Parties, authorising the execution of this Agreement and any other Finance Document that is to be delivered pursuant hereto, in each case certified by an authorized signatory of such party as being a true, correct and complete copy thereof;

 

(xvi)a copy of Sinosure’s written approval notice in respect of the transactions contemplated by this Agreement together with (i) any amendments to each Sinosure Insurance Policy and (ii) evidence in relation to the due authorisation and execution by Sinosure of each such amendment to such Sinosure Insurance Policy, in each case in form and substance satisfactory to the Lenders;

 

(xvii)a copy of (A) the audited consolidated financial statement of the Holdings Guarantor for its fiscal year ended on 31 December 2017, (B) the unaudited consolidated financial statement of the Holdings Guarantor for its fiscal quarter ended on 31 March 2018 and (C) the opening balance sheet of the New Parent Guarantor;

 

(xviii)such evidence as the Facility Agent and Sinosure may require for the Finance Parties to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the transactions contemplated by this Agreement, the other Finance Documents and the Shares Purchase;

 

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

 

(xx)evidence that any process agent referred to in Clause 12.2 (Service of process) has accepted its appointment;

 

(xxi)evidence of payment of all fees, costs and expenses incurred by the Finance Parties in connection with this Agreement which are due and payable by the Remaining Obligors, the Acceding Parties or the Existing Parent Guarantor on or before the Effective Date pursuant to the terms of the Finance Documents and for which an invoice has been received; and

 

 6 

 

  

(xxii)a certified English translation in respect of any documents referred to above as may be required by the Facility Agent.

 

3.2Effective Date Notice

 

On the day of satisfaction or waiver of the conditions precedent specified in Clause 3.1 (Agreement of the Lenders and the other Finance Parties) (it being agreed that the condition precedent set out in Clause 3.1(c) may not be waived without the consent of the Acceding Parties), the Effective Date Notice shall be completed and signed by the Facility Agent and the Facility Agent shall promptly on such day provide a copy of the Effective Date Notice to the Borrower, the Existing Parent Guarantor, the Acceding Parties and the Lenders.

 

4representations and WARRANTIES

 

4.1General

 

(a)The Remaining Obligors and the Acceding Parties each make the representations and warranties set out in clause 18 (Representations) of the Facility Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement, to each Finance Party, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.

 

(b)The Remaining Obligors and the Acceding Parties each make the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and restated and/or supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.

 

4.2Corporate Power and Authority; Legal Validity and Enforceability

 

The Remaining Obligors, the Acceding Parties and the Existing Parent Guarantor each make the following representations and warranties to each Finance Party on the date of this Agreement and (except in the case of the Existing Parent Guarantor) on the Effective Date:

 

(a)it has the corporate or other applicable power and authority to execute this Agreement and to perform the terms and provisions of this Agreement and (except in the case of the Existing Parent Guarantor) the Amended and Restated Facility Agreement, and it has taken all necessary corporate or other applicable action to authorise the execution of this Agreement, and performance by it of this Agreement and (except in the case of the Existing Parent Guarantor) the Amended and Restated Facility Agreement.

 

(b)it has duly executed this Agreement, and this Agreement and (except in the case of the Existing Parent Guarantor) the Amended and Restated Facility Agreement constitutes its legal, valid and binding obligations enforceable against it in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

 

 7 

 

  

4.3No Violation

 

Each of the Remaining Obligors, the Acceding Parties and the Existing Parent Guarantor represent and warrant that neither the execution of this Agreement, nor the performance or compliance by it with the terms and provisions hereof (or (except in the case of the Existing Parent Guarantor) with the terms and provisions of the Amended and Restated Facility Agreement), will:

 

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

 

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

 

(c)violate any provision of its Constitutional Documents.

 

5amendment and restatement of Facility agreement and other finance documents

 

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

 

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

 

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

 

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

 

(c)by construing references throughout each of the Finance Documents to “Parent Guarantor” as being references to the New Parent Guarantor;

 

(d)by construing references throughout each of the Finance Documents to “Obligors” as being references to the Borrower, the New Parent Guarantor, the Holdings Guarantor, each Owner Guarantor and each Hedge Guarantor or any one of them; and

 

(e)by construing references throughout each of the Finance Documents to “Transaction Obligors” as being references to a Remaining Obligor, any Acceding Party, any Approved Manager or any other member of the Group who executes a Transaction Document.

 

 8 

 

  

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

 

(a)in the case of the Facility Agreement, as amended and restated pursuant to Clause 5.1 (Specific amendments to Facility Agreement); and

 

(b)in the case of the other Finance Documents, as amended and supplemented:

 

(i)by the amendments contained in Clause 5.2 (Amendments to Finance Documents); and

 

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

 

6Further Assurance

 

Clause 21.34 (Further assurance) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.

 

7Fees, Costs and Expenses

 

The Borrower shall reimburse the Facility Agent on demand for (i) all fees as set out any Fee Letter (Second Amending and Restating Agreement) (as defined in the Amended and Restated Facility Agreement) and (ii) all other fees and costs and expenses (including reasonable legal fees, VAT and other disbursements) incurred by the Finance Parties in connection with or arising out of the negotiation, execution, operation or implementation of this Agreement and any other documents required in connection herewith.

 

8Notices

 

Clause 38 (Notices) of the Amended and Restated Facility Agreement applies to this Agreement as if it were expressly incorporated herein with any necessary modifications.

 

9Counterparts

 

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

 

10CONFIRMATION BY REMAINING OBLIGORS

 

Notwithstanding any of the provisions of this Agreement:

 

(a)each of the Remaining Obligors hereby acknowledge and confirm that:

 

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

 

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

 

 9 

 

  

(b)Each Owner Guarantor hereby acknowledges and confirms that the guarantee in clause 17 (Guarantee and Indemnity) of the Facility Agreement (as amended and restated or amended by this Agreement) remains in full force and effect.

 

11Governing Law

 

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

 

12Enforcement

 

12.1Jurisdiction

 

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

 

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

 

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

 

12.2Service of process

 

(a)Without prejudice to any other mode of service allowed under any relevant law:

 

(i)prior to the Effective Date:

 

(A)each of the Borrower, the Original Owner Guarantors, the Original Hedge Guarantors and the Existing Parent Guarantor irrevocably appoints Euronav (UK) Agencies Ltd. as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

 

(B)each of the Acceding Parties irrevocably appoints OSG Ship Management (UK) Ltd. as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

 

(ii)on and from the Effective Date:

 

(A)the Existing Parent Guarantor irrevocably appoints Euronav (UK) Agencies Ltd. as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

 

(B)each of the Borrower, the Original Owner Guarantors, the Original Hedge Guarantors and the Acceding Parties irrevocably appoints OSG Ship Management (UK) Ltd. as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

 

 10 

 

  

(iii)each of the Borrower, the Original Owner Guarantors, the Original Hedge Guarantors, the Existing Parent Guarantor and the Acceding Parties agree that failure by a process agent to notify the relevant appointing party of the process will not invalidate the proceedings concerned.

 

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

 

This AGREEMENT has been duly executed as on the date stated at the beginning of this Agreement.

 

 11 

 

  

SCHEDULE 1

 

Part A

ORIGINAL OWNER GUARANTORS
AND ORIGINAL HEDGE GUARANTORS

 

Name of Original Owner
Guarantor / Hedge
Place of Incorporation
 or Formation
Registration number
(or equivalent, if any)
Address for Communication
Guarantor      
GENER8 STRENGTH LLC REPUBLIC OF 963430 prior to the Effective Date:
GENER8 SUPREME LLC MARSHALL 963435  
GENER8 SUCCESS LLC ISLANDS 963434 c/o Euronav NV
GENER8 ANDRIOTIS LLC   963431 De Gerlachekaai 20
GENER8 CHIOTIS LLC   963432 2000, Antwerp, Belgium
GENER8 MILTIADES LLC   963433  
      Attention: Egied Verbeeck, General Counsel
      An Goris, Secretary General
       
      Fax: +32 (3) 247-4409
      Email: [omitted]
       
      on and from the Effective Date:
       
      c/o International Seaways Ship Management LLC, 600 Third Avenue, 39th Floor, New York, New York 10016
      Attention: President
      Telephone: 212-953-4100
      Fax: 212-578-1881
      Email: [omitted]

 

 12 

 

  

Part B

Original Lenders

 

Name of Commercial Lender   Address for Communication
CITIBANK, N.A., LONDON BRANCH   Citibank N.A., London Branch,
    Citigroup Centre, Canada Square,
    London, E14 5LB
    c/o Citibank International Limited,
    Poland Branch
    7/9 Traugutta str., 1st Floor
    00-985 Warsaw, Poland
    Attention: Loan Operations Department
    (Kara Catt / Romina Coates – EAF Middle Office)
    Telephone: +44 207986 4881
    Facsimile: +44 207 655 2380
    E-mail: [omitted]
     
    With a copy to:
     
    388 Greenwich Street,
    New York, NY, 10013
    Attention: Meghan O’Connor
    Telephone: +1 212 816 8557
    Facsimile: N/A
    E-mail:  [omitted]
     
THE EXPORT-IMPORT BANK OF CHINA   No. 30 Fu Xing Men Nei St., Xicheng District
    Beijing, China, 100031
    Attention: Transport Finance Department (Song Xiaofei / Gao Youzi)
    Telephone: +86 10 63693162/83579500
    Facsimile:+86 10 83578428/9
    Email: [omitted]
     
BANK OF CHINA, NEW YORK BRANCH   Bank of China, New York Branch
    410 Madison Avenue
    New York, NY 10017
    Attention: Operation Service Department
                      (Ms. Wenzhen Zhang)
    Telephone: +1 646 231 3143
    Facsimile: +1 212 371 4185
    E-mail: [omitted]
                [omitted]

 

 13 

 

  

Part C

HEDGE COUNterparties

 

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

 

 14 

 

  

EXECUTION PAGES

 

SIGNED FOR AND ON BEHALF OF

GENER8 MARITIME SUBSIDIARY VII INC.,

as Borrower

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF

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

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF

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

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF

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

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

 15 

 

  

SIGNED FOR AND ON BEHALF OF
GENER8 ANDRIOTIS LLC,
as Original Owner Guarantor and Original Hedge Guarantor

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF
GENER8 CHIOTIS LLC,
as Original Owner Guarantor and Original Hedge Guarantor

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF

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

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

SIGNED FOR AND ON BEHALF OF

GENER8 MARITIME, INC,
as Existing Parent Guarantor

 

/s/ Sophia Agathis  
Name: Sophia Agathis  
Title: Attorney-in-fact  

 

 16 

 

  

SIGNED FOR AND ON BEHALF OF

SEAWAYS HOLDING CORPORATION,
as New Parent Guarantor

 

/s/ Lois K. Zabrocky  
Name: Lois K. Zabrocky  
Title: President  

 

SIGNED FOR AND ON BEHALF OF

INTERNATIONAL SEAWAYS, INC.,
as Holdings Guarantor

 

/s/ Lois K. Zabrocky  
Name: Lois K. Zabrocky  
Title: President and CBO  

 

SIGNED FOR AND ON BEHALF OF

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

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

SIGNED FOR AND ON BEHALF OF

NORDEA BANK AB (PUBL), New York BRANCH,
as Global Co-ordinator

 

   
Name:  
Title:  

 

   
Name:  
Title:  

 

 17 

 

  

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Bookrunner

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

SIGNED FOR AND ON BEHALF OF

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

 

   
Name:  
Title:  

 

SIGNED FOR AND ON BEHALF OF

NORDEA BANK AB (PUBL), New York BRANCH,
as Global Co-ordinator

 

/s/ Erik Havnvik  
Name: Erik Havnvik  
Title: Director  

 

/s/ Martin Lunder  
Name: Martin Lunder  
Title: Managing Director  

 

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Bookrunner

 

   
Name:  
Title:  

 

 18 

 

  

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Mandated Lead Arranger

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

signed FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Mandated Lead Arranger

 

/s/ Erik Havnvik  
Name: Erik Havnvik  
Title:Director  

 

signed FOR AND ON BEHALF OF
BANK OF CHINA, new york branch,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

 19 

 

  

signed FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Mandated Lead Arranger

 

/s/ Gao Zeteng  
Name: Gao Zeteng  
Title: Deputy General Manager  

 

signed FOR AND ON BEHALF OF
BANK OF CHINA, new york branch,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

signed FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

 20 

 

  

signed FOR AND ON BEHALF OF
BANK OF CHINA, new york branch,
as Mandated Lead Arranger

 

/s/ Raymond Qiao  
Name: Raymond Qiao  
Title: Executive Vice President  

 

SIGNED FOR AND ON BEHALF OF
CITIBANK, N.A., LONDON BRANCH,
as Original Lender

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

SIGNED FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Original Lender

 

   
Name:  
Title:  

 

SIGNED FOR AND ON BEHALF OF
BANK OF CHINA, NEW YORK BRANCH,
as Original Lender

 

   
Name:  
Title:  

 

 21 

 

  

SIGNED FOR AND ON BEHALF OF
CITIBANK, N.A., LONDON BRANCH,
as Original Lender

 

   
Name:  
Title:  

 

SIGNED FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Original Lender

 

/s/ Gao Zetang  
Name: Gao Zetang  
Title: Deputy General Manager  

 

SIGNED FOR AND ON BEHALF OF
BANK OF CHINA, NEW YORK BRANCH,
as Original Lender

 

   
Name:  
Title:  

 

signed FOR AND ON BEHALF OF
CITIBANK, N.A.,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

signed FOR AND ON BEHALF OF
THE EXPORT-IMPORT BANK OF CHINA,
as Mandated Lead Arranger

 

   
Name:  
Title:  

 

 22 

 

  

signed FOR AND ON BEHALF OF
BANK OF CHINA, new york branch,
as Mandated Lead Arranger

 

/s/ Raymond Qiao  
Name: Raymond Qiao  
Title: Exective Vice President  

 

SIGNED FOR AND ON BEHALF OF
CITIBANK, N.A., LONDON BRANCH,
as Hedge Counterparty

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

SIGNED FOR AND ON BEHALF OF
CITIBANK, N.A., LONDON BRANCH,
as ECA Co-ordinator and ECA Agent

 

/s/ Meghan O’Connor  
Name: Meghan O’Connor  
Title: Vice President  

 

SIGNED FOR AND ON BEHALF OF
NORDEA BANK AB (PUBL), NEW YORK BRANCH,
as Facility Agent

 

/s/ Erik Havnvik  
Name: Erik Havnvik  
Title: Director  

 

/s/ Martin Lunder  
Name: Martin Lunder  
Title: Managing Director  

 

 23 

 

  

SIGNED FOR AND ON BEHALF OF

NORDEA BANK AB (PUBL), NEW YORK BRANCH,
as Security Agent

 

/s/ Erik Havnvik  
Name: Erik Havnvik  
Title: Director  

 

/s/ Martin Lunder  
Name: Martin Lunder  
Title: Managing Director  

 

 24 

 

  

APPENDIX 1

PART B

FORM OF CLEAN COPY AMENDED AND RESTATED

FACILITY AGREEMENT

 

 

 

  

AMENDED AND RESTATED FINAL VERSION

 

FACILITY AGREEMENT ORIGINALLY DATED 30 NOVEMBER 2015 as supplemented by a supplemental agreement dated 28 December 2015, as amended and restated by an amending and restating deed dated 29 June 2016, as supplemented by a supplemental agreement dated 8 November 2017, as supplemented by a consent, supplemental and amendment letter dated 2 April 2018 and as further amended and restated by an amending and restating agreement dated __________________ 2018 RELATING TO A TERM LOAN FACILITY OF UP TO $385,227,495

GENER8 MARITIME SUBSIDIARY VII INC.
as Borrower


THE COMPANIES listed in Part A of Schedule 1

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

 

SEAWAYS HOLDING CORPORATION

as Parent Guarantor

 

INTERNATIONAL SEAWAYS, INC.

as Holdings Guarantor

 

CITIBANK, N.A.
NORDEA BANK AB (PUBL), New York BRANCH
as Global Co-ordinators

 

CITIBANK, N.A.
as Bookrunner

 

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

BANK OF CHINA, new york branch

as Mandated Lead Arrangers

 

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

as Original Lenders

 

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

as Hedge Counterparties

 

CITIBANK, N.A., LONDON BRANCH

as ECA Co-ordinator and ECA Agent

 

NORDEA BANK AB (PUBL), New York BRANCH
as Facility Agent and Security Agent

 

 

 

  

Index

 

Clause   Page
     
Section 1 Interpretation 3
     
1 Definitions and Interpretation 3
     
Section 2 The Facility 41
     
2 The Facility 41
     
3 Purpose 42
     
4 Conditions of Utilisation 43
     
Section 3 Utilisation 45
     
5 Utilisation 45
     
Section 4 Repayment, Prepayment and Cancellation 48
     
6 Repayment 48
     
7 Prepayment and Cancellation 48
     
Section 5 Costs of Utilisation 53
     
8 Interest 53
     
9 Interest Periods 56
     
10 Changes to the Calculation of Interest 56
     
11 Fees and Sinosure Premium 57
     
Section 6 Additional Payment Obligations 59
     
12 Tax Gross Up and Indemnities; FATCA 59
     
13 Increased Costs 62
     
14 Other Indemnities 64
     
15 Mitigation by the Finance Parties 67
     
16 Costs and Expenses 68
     
Section 7 Guarantees 69
     
17 Guarantee and Indemnity 69
     
Section 8 Representations, Undertakings and Events of Default 74
     
18 Representations 74
     
19 Information Undertakings 84
     
20 Financial Covenants 88
     
21 General Undertakings 89
     
22 Insurance Undertakings 104
     
23 Shipbuilding Contract Undertakings 109
     
24 General Ship Undertakings 109
     
25 Security Cover 116
     
26 Application of Earnings 116
     
27 Events of Default 118

 

 

 

  

Section 9 Changes to Parties 125
     
28 Changes to the Lenders 125
     
29 Changes to the Obligors 130
     
Section 10 The Finance Parties 131
     
30 The Facility Agent and the Mandated Lead Arrangers 131
     
31 The Security Agent 140
     
32 ECA Agent 153
     
33 Sinosure Specific Provisions 154
     
34 Conduct of Business by the Finance Parties 162
     
35 Sharing among the Finance Parties 162
     
Section 11 Administration 164
     
36 Payment Mechanics 164
     
37 Set-Off 168
     
37A Bail-In 168
     
38 Notices 168
     
39 Calculations and Certificates 171
     
40 Partial Invalidity 171
     
41 Remedies and Waivers 171
     
42 Settlement or Discharge Conditional 171
     
43 Irrevocable Payment 171
     
44 Amendments and Waivers 172
     
45 Confidential Information 174
     
46 Counterparts 177
     
Section 12 Governing Law and Enforcement 178
     
47 Governing law 178
     
48 Enforcement 178
     
49 PATRIOT Act Notice 178

 

Execution  
   
Execution Pages 179
   
Schedules  
   
Schedule 1 The Parties 188
     
  Part A The Obligors 188
  Part B The Original Lenders 189
  Part C Hedge Counterparties 189
  Part D The Servicing Parties 191
     
Schedule 2 Conditions Precedent 192
     
  Part A Conditions Precedent to Initial Utilisation Request 192
  Part B Conditions Precedent to Utilisation –  Advance 194
     
Schedule 3 Utilisation Request 197

 

 

 

  

Schedule 4 Commitments 198
   
Schedule 5 Form of Transfer Certificate 200
   
Schedule 6 Form of Assignment Agreement 202
   
Schedule 7 Form of Compliance Certificate 205
   
Schedule 8 Details of Ships 206
   
Schedule 9 ERISA Plans and contributions 208
   
Schedule 10 Subsidiaries 209
   
Schedule 11 Insurances 214
   
Schedule 12 Existing Transactions 217
   
Schedule 13 Intentionally Omitted 218
   
Schedule 14 Timetables 219
   
Schedule 15 Form of MT 199 220

 

 

 

  

THIS AGREEMENT is originally dated 30 November 2015 as supplemented by a supplemental agreement dated 28 December 2015, as amended and restated by an amending and restating deed dated 29 June 2016, as supplemented by a supplemental agreement dated 8 November 2017, as supplemented by a consent, supplemental and amendment letter dated 2 April 2018 and as further amended and restated by an amending and restating agreement dated __________________ 2018 (this “Agreement”).

 

PARTIES

 

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

 

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

 

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

 

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

 

(5)CITIBANK, N.A. and NORDEA BANK AB (PUBL), New York BRANCH as global co-ordinators (the “Global Co-ordinators” and each, a “Global Co-ordinator”);

 

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

 

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

 

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

 

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

 

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

 

(11)NORDEA BANK AB (PUBL), New York BRANCH as agent of the other Finance Parties (the “Facility Agent”); and

 

(12)NORDEA BANK AB (PUBL), New York BRANCH as security agent for the Secured Parties (the “Security Agent”).

 

 1 

 

  

BACKGROUND

 

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

 

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

 

OPERATIVE PROVISIONS

 

 2 

 

  

Section 1

Interpretation

 

2Definitions and Interpretation

 

2.1Definitions

 

In this Agreement:

 

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

 

Account Bank” means Nordea Bank AB (publ), New York Branch acting through its office at 1211 Avenue of the Americas, 23rd Floor, New York, NY 10036.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 3 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 4 

 

  

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

 

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

 

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

 

Availability Period” means in relation to each Vessel Loan, the period from and including 30 November 2015 up to and including,

 

(a)the earliest of:

 

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

 

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

 

(iii)31 May 2017, or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Basel III” means:

 

 5 

 

  

(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”.

 

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

 

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

 

exceeds:

 

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

 

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

 

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

 

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

 

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

 

“Cash Equivalents” means:

 

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

 

 6 

 

  

(b)time deposits, certificates of deposit or deposits in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having (x) capital and surplus in excess of $200,000,000 and (y) a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from Moody’s with maturities of not more than one year from the date of acquisition by such Person;

 

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

 

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

 

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

 

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

 

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

 

CEXIM” means The Export-Import Bank of China.

 

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

 

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

 

“Change of Control” means:

 

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

 

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

 

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

 

 7 

 

  

(d)in respect of the Holdings Guarantor, save with the prior written consent of the Required Lenders, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or group or its respective subsidiaries, and any person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that, for purposes of this clause, such person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of either (x) voting Equity Interests of the Holdings Guarantor representing 50% or more of the voting power of the total outstanding voting Equity Interests of the Holdings Guarantor or (y) 50% or more of the total economic interests of the Equity Interests of the Holdings Guarantor (in either case, taking into account in the numerator all such securities that such person or group has the right to acquire (whether pursuant to an option right or otherwise) and taking into account in the denominator all securities that any person has the right to acquire (whether pursuant to an option right or otherwise)).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

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

 

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

 

Commitment” means:

 

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

 

(b)in relation to any other Lender, the amount of any Commitment transferred or assigned to it under this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

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

 

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

 

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

 

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

 

 8 

 

   

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

 

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

 

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

 

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

 

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

 

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

 

Consolidated Cash Interest Expense” means,

 

(a)for the First Period:

 

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

 

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

 

(iii)cash interest income.

 

(b)For the Intermediate Period and the Going Forward Period:

 

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

 

 9 

 

  

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

 

(iii)cash interest income.

 

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

 

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

 

(i)consolidated interest expense and amortization of debt discount and commissions and other fees and charges, including, without limitation, noncash interest payments, the interest component of capitalized lease obligations, net payments, if any, made (less net payments, if any, received), pursuant to any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other Hedging Agreements, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including without limitation, any Hedging Agreements) or any Other Hedging Agreements, associated with Financial Indebtedness for such period (whether amortized or immediately expensed),

 

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

 

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

 

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

 

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

 

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

 

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

 

 10 

 

  

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

 

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

 

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

 

(xi)non-recurring costs, charges, accruals, reserves and business optimization expense, including, without limitation, any severance and restructuring costs, integration costs related to acquisitions after the date of this Agreement, project start-up costs, transition costs, cost related to the opening, closure and/or consolidation of offices and facilities (including, without limitation, fees and expenses incurred in connection with the winding up of all of the Parent Guarantor and its Subsidiaries’ activities and operations in Portugal), contract termination costs, systems establishment costs, and excess pension charges,

 

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

 

(xiii)any proceeds from business interruption insurance,

 

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

 

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

 

(xvi)all costs and expenses incurred in connection with the Finance Documents, and

 

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

 

(xvii)any extraordinary gains for such period;

 

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

 

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

 

 11 

 

  

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

 

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

 

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

 

Consolidated Net Income” shall mean,

 

(a)for any period during the First Period, the consolidated net after tax income of the Parent Guarantor and its Subsidiaries for such period determined in accordance with GAAP; and

 

(b)for any period during each of the Intermediate Period and the Going Forward Period, the consolidated net after tax income of the Holdings Guarantor and its Subsidiaries for such period determined in accordance with GAAP.

 

Consolidated Net Indebtedness” shall mean, with respect to any Person, as at any relevant date, (x) Consolidated Indebtedness less (y) an amount equal to the Unrestricted Cash and Cash Equivalents of the Holdings Group as at such date provided that for the purposes of this definition (a) cash and Cash Equivalents that are subject to Security in favour of the lenders under the Term Loan B Facility may be included in the calculation of Unrestricted Cash and Cash Equivalents and (b) all obligations of the Holdings Guarantor as guarantor under the debt financing provided to TI Africa Limited and TI Asia Limited pursuant to a loan agreement dated 29 March 2018 between (among others) ING Bank N.V. as agent and security trustee, TI Africa Limited and TI Asia Limited shall be excluded from the calculation of Consolidated Net Indebtedness.

 

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

 

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

 

Constitutional Documents” with respect to any Obligor means the Memorandum of Association or Certificate of Incorporation, as the case may be, Certificate of Formation (including, without limitation, by the filing or modification of any certificate of designation made prior to 30 November 2015), By-Laws or limited liability company agreement (or equivalent organizational documents).

 

 12 

 

  

Contingent Extras” means, in relation to a Ship, an amount equivalent to the aggregate of unforeseen costs and expenses (including the cost of extras) as permitted by the terms of the Shipbuilding Contract relating to such Ship incurred during the period commencing from 30 November 2015 up to and including the Delivery Date of such Ship and which are documented in such form and substance acceptable to the Facility Agent (including by any relevant supplemental agreements to such Shipbuilding Contract), provided that the aggregate of such amount shall not exceed $500,000 in relation to such Ship.

 

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

 

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

 

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

 

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

 

Debt Service Reserve Account” means:

 

(a)an account in the name of the Parent Guarantor with the Account Bank designated “Seaways Holding Corporation – Debt Service Reserve Account (Sinosure)”; or

 

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

 

 13 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Disruption Event” means either or both of:

 

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

 

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

 

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

 

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

 

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

 

Dividend” means, with respect to any Person, a dividend, distribution or return of any equity capital to its stockholders, partners or members, any other distribution, payment or delivery of property or cash to its stockholders, partners or members in their capacity as such.

 

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

 

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

 

 14 

 

  

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

 

(a)the following, save to the extent that any of them was, as of 30 November 2015 or is, with the prior written consent of the Facility Agent, pooled or shared with any other person:

 

(i)all freight, hire and passage moneys;

 

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

 

(iii)remuneration for salvage and towage services;

 

(iv)demurrage and detention moneys;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Effective Date” has the meaning given to such term in the Second Amending and Restating Agreement.

 

 15 

 

  

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

 

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

 

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

 

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

 

Equity Interests” of any person means:

 

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

 

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

 

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

 

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

 

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

 

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

 

 16 

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)for and addressed to the Facility Agent;

 

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

 

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

 

 17 

 

  

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

 

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

 

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

 

Fee Letter (Second Amending and Restating Agreement)” means any letter or letters between the ECA Agent, the Facility Agent and the Security Agent and any Obligor entered into in connection with the Second Amending and Restating Agreement.

 

Finance Document” means:

 

(a)this Agreement;

 

(b)the First Supplemental Agreement;

 

(c)the Second Supplemental Agreement;

 

(d)the First Amending and Restating Deed;

 

(e)the Second Amending and Restating Agreement;

 

(f)any Fee Letter (Second Amending and Restating Agreement);

 

(g)each Utilisation Request;

 

(h)any Security Document;

 

(i)any Hedging Agreement;

 

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

 

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

 

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

 

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

 

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

 

 18 

 

  

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

 

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

 

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

 

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

 

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

 

(f)all Contingent Obligations of such Person, and

 

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

 

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

 

First Amending and Restating Deed” means the amending and restating deed dated 29 June 2016 and made between, amongst others, the Borrower, the Previous Parent Guarantor, the Facility Agent and the Security Agent.

 

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

 

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

 

First Period” has the meaning given to it in Clause 20.2(a)(Interest Expense Coverage Ratio).

 

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

 

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

 

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

 

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

 

 19 

 

 

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

 

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

 

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

 

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

 

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

 

(a)that Ship’s Earnings;

 

(b)its Insurances;

 

(c)any Requisition Compensation;

 

(d)the relevant Pool Agreement;

 

(e)the relevant Charter(s); and

 

(f)the relevant Ship Management Agreement.

 

Going Forward Period” has the meaning given to it in Clause 20.2(b)(Interest Expense Coverage Ratio).

 

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

 

Group” means the Parent Guarantor and its Subsidiaries from time to time.

 

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

 

Hazardous Materials” means:

 

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

 

 20 

 

 

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

 

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

 

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

 

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

 

Holdings Group” means the Holdings Guarantor and its Subsidiaries from time to time.

 

Immaterial Subsidiary” means any Subsidiary of the Holdings Guarantor (other than an Obligor and any Subsidiary who is an obligor or security provider in relation to the Term Loan B Facility) whose aggregate assets account for less than 5.0% of the consolidated total assets of the Holdings Guarantor (as determined in accordance with GAAP) and less than 5.0% of the Consolidated EBITDA of the Holdings Guarantor.

 

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

 

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

 

Insurances” means, in relation to a Ship:

 

(a)all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after 30 November 2015; and

 

(b)all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before 30 November 2015.

 

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

 

 21 

 

 

Interest Expense Coverage Ratio” shall mean, for any test period, the ratio of the Consolidated EBITDA for such period to the Consolidated Cash Interest Expense for such period.

 

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

 

Intermediate Period” has the meaning given to it in Clause 20.2(b)(Interest Expense Coverage Ratio).

 

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

 

ISOC” means International Seaways Operating Corporation, a corporation incorporated and existing in the Republic of The Marshall Islands.

 

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

 

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

 

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

 

Lender” means:

 

(a)any Original Lender; and

 

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

 

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

 

Lender Default” means, as to any Lender:

 

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

 

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

 

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

 

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

 

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

 

 22 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Margin” means 2.0% per annum.

 

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

 

Margin Stock” has the meaning provided in Regulation U.

 

Material Adverse Effect” means a material adverse effect on:

 

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

 

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

 

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

 

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

 

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

 

 23 

 

 

Minimum Liquidity Account” means the account in the name of the Parent Guarantor with the Account Bank designated “Seaways Holding Corporation – Minimum Liquidity Account (Sinosure)”.

 

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

 

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

 

(a)(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

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

 

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

 

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

 

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

 

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

 

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

 

Net Cash Proceeds” means,

 

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

 

 24 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 25 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Party” means a party to this Agreement.

 

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

 

Permitted Charter” means, in relation to a Ship,

 

(a)a Charter:

 

(i)which is a time, voyage or consecutive voyage charter;

 

(ii)the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 12 months plus a redelivery allowance of not more than 30 days;

 

(iii)which is entered into on bona fide arm’s length terms at the time at which that Ship is fixed; and

 

(iv)in relation to which not more than two months’ hire is payable in advance, or

 

(b)any other Charter which is approved in writing by the Facility Agent acting with the authorization of the Lenders.

 

 26 

 

 

Permitted Encumbrance” means:

 

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

 

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

 

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

 

Permitted Security” means:

 

(a)Security created by the Finance Documents;

 

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

 

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

 

(d)liens for salvage;

 

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

 

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

 

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

 

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

 

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

 

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

 

Pool Manager” means, in relation to a Ship, VL8 Pool Inc., V8 Pool Inc., Unique Tankers LLC, Tankers International, Heidmar, Inc. or any other reputable pool manager (provided that the Parent Guarantor shall give the Facility Agent at least 30 days’ prior written notice of the inclusion of the relevant Ship (to which such pool manager relates) in a new Pool Agreement.

 

 27 

 

 

Potential Event of Default” means any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

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

 

Previous Parent Guarantor” means Gener8 Maritime, Inc. a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

 

Projections” means each of the Holding Guarantor’s and the Parent Guarantor’s forecasted consolidated and consolidating:

 

(a)balance sheets;

 

(b)profit and loss statements;

 

(c)cash flow statements; and

 

(d)capitalization statements,

 

all prepared on a Subsidiary by Subsidiary basis for each of the Parent Guarantor’s Subsidiaries and the Holding Guarantor’s Subsidiaries and based upon good faith estimates and assumptions believed by each of the Holdings Guarantor and the Parent Guarantor, as the case may be, to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.

 

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

 

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

 

Rating Agencies” means:

 

(a)S&P and Moody’s; or

 

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

 

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

 

 28 

 

 

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

 

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

 

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

 

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

 

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

 

Relevant Interbank Market” means the London interbank market.

 

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

 

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

 

Repeating Representation” means each of the representations set out in Clauses 18.2 (Corporate/Limited Liability Company Status), 18.3 (Corporate power and authority; legal validity and enforceability), 18.4 (Pari passu ranking), 18.5 (No violation), 18.6 (Government approvals), 18.7 (Financial statements; Financial condition; Undisclosed Liabilities), 18.8 (Litigation), 18.9 (True and Complete Disclosure), 18.10 (Use of proceeds, Margin Regulations), 18.12 (Subsidiaries), 18.14 (Compliance with statutes etc.), 18.16 (Anti-money laundering; anti-corruption) and 18.17 (Sanctions) and any representation of any Obligor made in any other Finance Document that is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.

 

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

 

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

 

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

 

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

 

"Requisition" means, in relation to a Ship:

 

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

 

 29 

 

 

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

 

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

 

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

 

Restricted Party” means any Person:

 

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

 

(b)that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country or territory which is subject to country-wide or territory wide Sanctions (including without limitation, as at the date of this Agreement, Cuba, the Crimea, Iran, Syria and North Korea);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Sanctions Authorities” means:

 

(a)the United Kingdom;

 

(b)the United States of America;

 

(c)the European Union;

 

(d)the member states of the European Union;

 

 30 

 

 

(e)the United Nations; and

 

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

 

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

 

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

 

Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on page LIBOR01 of the Thomson Reuters screen (or such other service as may be nominated by the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available)) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purpose of this Agreement. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

 

Second Amending and Restating Agreement” means the amending and restating agreement dated __________________ 2018 and made between, amongst others, the Parties.

 

“Second Supplemental Agreement” means the supplemental agreement dated 8 November 2017 and made between, amongst others, the Borrower, the Previous Parent Guarantor, the Facility Agent and the Security Agent in connection with this Agreement.

 

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

 

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

 

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

 

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

 

Security Assets Disposition” means

 

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

 

 31 

 

 

(b)any Total Loss of any Ship,

 

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

 

Security Document” means:

 

(a)any Shares Security;

 

(b)any General Assignment;

 

(c)any Assignment of Builder’s Warranties;

 

(d)any Assignment of Hedging Agreement;

 

(e)any Mortgage;

 

(f)any Account Security;

 

(g)any Manager’s Undertaking;

 

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

 

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

 

Security Period” means the period starting on or about 30 November 2015 (but no later than the first Utilisation Date) and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

 

Security Property” means:

 

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

 

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

 

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

 

except:

 

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

 

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

 

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

 

Seller” means:

 

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

 

 32 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

Shipbuilding Contract” means, in relation to a Ship, the relevant shipbuilding contract set out in the corresponding column under the heading “Shipbuilding Contract” in Schedule 8 (Details of the Ships) entered into or to be entered into by the relevant Seller and the relevant Owner Guarantor or its Affiliate, for the construction of that Ship (as amended and supplemented from time to time with the prior written consent of the Lenders) and including without limitation, supplemented by and read together with the Intercompany Ship Delivery Agreement relating to such Ship (and any assignment and/or novation agreement referred to therein). 

 

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

 

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

 

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

 

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

 

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

 

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

 

 33 

 

 

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

 

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

 

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

 

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

 

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

 

Specified Time” means a day or time determined in accordance with Schedule 14 (Timetables).

 

Subsidiary” means, with respect to any person:

 

(a)any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such person and/or one or more Subsidiaries of such person; and

 

(b)any partnership, limited liability company, association, joint venture or other entity in which such person and/or one or more Subsidiaries of such person has more than a 50% equity interest at the time.

 

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

 

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

 

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

 

 34 

 

 

Term Loan B Facility” means the facilities extended to ISOC as administrative borrower and OIN Delaware LLC as co-borrower pursuant to a credit agreement dated 22 June 2017 (as amended and supplemented from time to time including pursuant to the first amendment to credit agreement dated 24 July 2017) by the lenders from time to time party thereto.

 

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

 

Test Date” means, in respect of each of the four consecutive Fiscal Quarters in a Fiscal Year, the date on which such Fiscal Quarter ends, being 31 December, 31 March, 30 June and 30 September.

 

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

 

Third Supplemental Agreement” means the consent, supplemental and amendment letter dated 2 April 2018 and made between, amongst others, the Borrower, the Previous Parent Guarantor, the Owner Guarantors, the ECA Agent, Euronav NV, Euronav MI Inc., the Facility Agent and the Security Agent in connection with this Agreement.

 

Total Commitments” means the aggregate of the Commitments, being $385,227,495 as at 30 November 2015.

 

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

 

Total Loss” means any of the following events:

 

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

 

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

 

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

 

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

 

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

 

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

 

Transaction Document” means:

 

(a)a Finance Document;

 

(b)any Shipbuilding Contract;

 

(c)any Charter; and

 

 35 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)are not subject to any Security in favour of any Person other than the Security Agent for the benefit of the Finance Parties provided that any cash or Cash Equivalents of the Holdings Guarantor, the Parent Guarantor or any such Subsidiary of the Parent Guarantor that are subject to such Security may be included in the calculation of Minimum Liquidity Amount; or

 

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

 

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

 

Utilisation” means a utilisation of the Facility.

 

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

 

 36 

 

 

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

 

VAT” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.2Construction

 

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

 

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

 

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

 

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

 

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

 

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

 

 37 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 38 

 

 

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

 

(f)Any reference to Nordea Bank Finland plc (either directly or indirectly in its capacity as Lender, Global Co-ordinator, Facility Agent and/or Security Agent or any other capacity) in the Finance Documents shall be construed as a reference to Nordea Bank AB (publ) as a result of the corporate reconstruction, merger, amalgamation, consolidation between Nordea Bank Finland plc and Nordea Bank AB (publ) where Nordea Bank AB (publ) is the surviving entity and acquired all the rights of and assumed all the obligations of Nordea Bank Finland plc.

 

2.3Construction of insurance terms

 

In this Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

2.4Agreed forms of Finance Documents

 

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

 

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

 

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

 

 39 

 

 

2.5Third party rights

 

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

 

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

 

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

 

 40 

 

 

Section 2

The Facility

 

3The Facility

 

3.1The Facility

 

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

 

3.2Finance Parties’ rights and obligations

 

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

 

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

 

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

 

3.3Borrower’s Agent

 

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

 

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

 

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

 

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

 

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

 

 41 

 

 

4Purpose

 

4.1Purpose

 

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

 

(a)to re-finance the Bridging Facility;

 

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

 

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

 

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

 

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

 

4.2Monitoring

 

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

 

4.3Obligors and the Shipbuilding Contracts

 

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

 

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

 

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

 

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

 

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

 

 42 

 

 

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

 

(i)unconditional and irrevocable; and

 

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

 

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

 

5Conditions of Utilisation

 

5.1Initial conditions precedent

 

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

 

5.2Further conditions precedent

 

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

 

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

 

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

 

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

 

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

 

(iv)a Change of Control has not occurred;

 

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

 

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

 

 43 

 

 

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

 

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

 

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

 

5.3Notification of satisfaction of conditions precedent

 

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

 

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

 

5.4Waiver of conditions precedent

 

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

 

 44 

 

 

Section 3

Utilisation

 

6Utilisation

 

6.1Delivery of a Utilisation Request

 

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

 

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

 

6.2Completion of a Utilisation Request

 

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

 

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

 

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

 

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

 

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

 

6.3Currency and amount

 

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

 

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

 

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

 

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

 

 45 

 

 

6.4Lenders’ participation

 

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

 

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

 

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

 

6.5Cancellation of Commitments

 

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

 

6.6Payment to third parties

 

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

 

6.7Disbursement of Advance to third party

 

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

 

6.8Prepositioning of funds

 

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

 

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

 

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

 

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

 

(ii)issue a SWIFT MT 199 or other similar communication in the form attached as Schedule 15 (Form of MT 199) of this Agreement or such other form and substance acceptable to the Facility Agent (acting on instructions of the Required Lenders) (each such communication, a “Disbursement Authorization”) authorizing the release of such funds by the relevant Seller’s Bank on the relevant Delivery Date upon receipt of a protocol of delivery and acceptance in respect of such Ship duly executed by the relevant Seller and the relevant Owner Guarantor or its Affiliates and countersigned by a representative of the Facility Agent;

 

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

 

 46 

 

 

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

 

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

 

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

 

 47 

 

 

Section 4

Repayment, Prepayment and Cancellation

 

7Repayment

 

7.1Repayment of Loan

 

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

 

7.2Termination Date

 

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

 

7.3[Intentionally left blank]

 

7.4Re-borrowing

 

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

 

8Prepayment and Cancellation

 

8.1Illegality

 

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

 

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

 

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

 

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

 

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

 

 48 

 

 

8.2Change of control

 

If a Change of Control occurs:

 

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

 

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

 

8.3Voluntary and automatic cancellation

 

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

 

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

 

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

 

8.4Voluntary prepayment of Loan

 

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

 

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

 

8.5Mandatory cancellation or prepayment on default under Shipbuilding Contract

 

If, in relation to a Ship:

 

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

 

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

 

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

 

 49 

 

 

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

 

then:

 

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

 

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

 

8.6Mandatory prepayment on sale or Total Loss

 

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

 

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

 

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

 

Relevant Date” means:

 

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

 

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

 

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

 

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

 

8.7Termination etc. of Sinosure Insurance Policies

 

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

 

8.8Right of replacement and repayment and cancellation in relation to a single Lender

 

(a)If:

 

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

 

 50 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 51 

 

 

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

 

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

 

8.9Restrictions

 

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

 

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

 

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

 

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

 

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

 

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

 

8.10Refund of Sinosure Premium on voluntary prepayment

 

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

 

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

 

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

 

 52 

 

 

Section 5

Costs of Utilisation

 

9Interest

 

9.1Calculation of interest

 

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

 

(a)the Margin; and

 

(b)LIBOR.

 

9.2Payment of interest

 

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

 

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

 

9.3Default interest

 

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

 

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

 

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

 

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

 

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

 

9.4Notification of rates of interest

 

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

 

 53 

 

 

9.5Hedging

 

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

 

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

 

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

 

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

 

(iii)be in agreed form;

 

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

 

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

 

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

 

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

 

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

 

(f)Paragraph (e) above shall not apply to an amendment, supplement or waiver that is administrative and mec