Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2015
 
OR
 
o          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from           to           
 
Commission file number 001-33393

 
GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands	 	98-043-9758	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
 
299 Park Avenue, 12 th  Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
 
(646) 443-8550
(Registrant’s telephone number, including area code)

 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	 	Accelerated filer  o	
 	 	 	
Non-accelerated filer  x	 	Smaller reporting company  o	
(Do not check if a smaller reporting company)	 	 	
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No  x
 
The number of shares outstanding of each of the issuer’s classes of common stock, as of November 13, 2015: Common stock, $0.01 per share — 72,898,234 shares.

 

Table of Contents
 
Genco Shipping & Trading Limited

 	 	Page	
 	 	 	
PART I — FINANCIAL INFORMATION	
 	 	 	
Item 1.	Financial Statements (unaudited)	 	
 	 	 	
 	a)              Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	1	
 	 	 	
 	b)              Condensed Consolidated Statements of Operations	2	
 	 	 	
 	c)               Condensed Consolidated Statements of Comprehensive Loss	4	
 	 	 	
 	d)              Condensed Consolidated Statements of Equity	5	
 	 	 	
 	e)               Condensed Consolidated Statements of Cash Flows	6	
 	 	 	
 	f)                Notes to Condensed Consolidated Financial Statements	7	
 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44	
 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	72	
 	 	 	
Item 4.	Controls and Procedures	74	
 	 	 	
PART II —OTHER INFORMATION	
 	 	 	
Item 1.	Legal Proceedings	75	
 	 	 	
Item 6.	Exhibits	75	
 
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Website Information
 
We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.
 
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PART I. FINANCIAL INFORMATION 
 
ITEM 1. FINANCIAL STATEMENTS 
 
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)

 	 	Successor	 	Successor	 	
 	 	September 30,
2015	 	December 31,
2014 
 (restated)	 	
Assets	 	 	 	 	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	44,478	 	$	83,414	 	
Restricted cash	 	9,750	 	9,750	 	
Due from charterers, net of a reserve of $1,217 and $1,588, respectively	 	14,139	 	14,739	 	
Prepaid expenses and other current assets	 	22,505	 	22,423	 	
Total current assets	 	90,872	 	130,326	 	
 	 	 	 	 	 	
Noncurrent assets:	 	 	 	 	 	
Vessels, net of accumulated depreciation of $90,104 and $36,258, respectively	 	1,501,714	 	1,532,843	 	
Deposits on vessels	 	10,183	 	25,593	 	
Deferred drydock, net of accumulated amortization of $2,196 and $330, respectively	 	14,656	 	6,234	 	
Deferred financing costs, net of accumulated amortization of $2,417 and $729, respectively	 	10,948	 	10,271	 	
Fixed assets, net of accumulated depreciation and amortization of $319 and $119, respectively	 	1,115	 	701	 	
Other noncurrent assets	 	514	 	514	 	
Restricted cash	 	315	 	19,945	 	
Investments	 	17,900	 	26,486	 	
Total noncurrent assets	 	1,557,345	 	1,622,587	 	
Total assets	 	$	1,648,217	 	$	1,752,913	 	
 	 	 	 	 	 	
Liabilities and Equity	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	
Accounts payable and accrued expenses	 	$	33,899	 	$	28,217	 	
Current portion of long-term debt	 	44,242	 	34,324	 	
Deferred revenue	 	1,016	 	1,397	 	
Total current liabilities	 	79,157	 	63,938	 	
 	 	 	 	 	 	
Noncurrent liabilities:	 	 	 	 	 	
Long-term lease obligations	 	969	 	390	 	
Long-term debt	 	418,036	 	395,811	 	
Total noncurrent liabilities	 	419,005	 	396,201	 	
Total liabilities	 	498,162	 	460,139	 	
 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	
Equity:	 	 	 	 	 	
Genco Shipping & Trading Limited shareholders’ equity:	 	 	 	 	 	
Successor Company common stock, par value $0.01; 250,000,000 shares authorized; issued and outstanding 72,898,234 and 61,541,389 shares at September 30, 2015 and December 31, 2014, respectively	 	728	 	615	 	
Successor Company additional paid-in capital	 	1,477,035	 	1,251,197	 	
Accumulated other comprehensive loss	 	(17	)	(25,317	)	
Retained deficit	 	(327,691	)	(182,294	)	
Total Genco Shipping & Trading Limited shareholders’ equity	 	1,150,055	 	1,044,201	 	
Noncontrolling interest	 	—	 	248,573	 	
Total equity	 	1,150,055	 	1,292,774	 	
Total liabilities and equity	 	$	1,648,217	 	$	1,752,913	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations 
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)

 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
July 1 to
July 9,
2014
(restated)	 	
Revenues:	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	49,167	 	$	43,943	 	 	$	4,034	 	
Service revenues	 	828	 	756	 	 	72	 	
 	 	 	 	 	 	 	 	 	
Total revenues	 	49,995	 	44,699	 	 	4,106	 	
 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	
Voyage expenses	 	6,638	 	2,335	 	 	200	 	
Vessel operating expenses	 	31,544	 	27,248	 	 	2,902	 	
General, administrative and management fees	 	26,983	 	15,492	 	 	6,147	 	
Depreciation and amortization	 	20,124	 	17,356	 	 	3,213	 	
Other operating income	 	—	 	(296	)	 	—	 	
 	 	 	 	 	 	 	 	 	
Total operating expenses	 	85,289	 	62,135	 	 	12,462	 	
 	 	 	 	 	 	 	 	 	
Operating loss	 	(35,294	)	(17,436	)	 	(8,356	)	
 	 	 	 	 	 	 	 	 	
Other (expense) income:	 	 	 	 	 	 	 	 	
Impairment of investment	 	(32,536	)	—	 	 	—	 	
Other (expense) income	 	(653	)	7	 	 	1	 	
Interest income	 	22	 	19	 	 	—	 	
Interest expense	 	(4,876	)	(3,592	)	 	(1,529	)	
 	 	 	 	 	 	 	 	 	
Other expense	 	(38,043	)	(3,566	)	 	(1,528	)	
 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	(73,337	)	(21,002	)	 	(9,884	)	
Reorganization items, net	 	(174	)	(1,167	)	 	(895,534	)	
 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	(73,511	)	(22,169	)	 	(905,418	)	
Income tax expense	 	(292	)	(393	)	 	(38	)	
 	 	 	 	 	 	 	 	 	
Net loss	 	(73,803	)	(22,562	)	 	(905,456	)	
Less: Net loss attributable to noncontrolling interest	 	(7,178	)	(4,272	)	 	(53,935	)	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(66,625	)	$	(18,290	)	 	$	(851,521	)	
 	 	 	 	 	 	 	 	 	
Net loss per share-basic	 	$	(0.95	)	$	(0.30	)	 	$	(19.54	)	
Net loss per share-diluted	 	$	(0.95	)	$	(0.30	)	 	$	(19.54	)	
Weighted average common shares outstanding-basic	 	69,824,338	 	60,299,766	 	 	43,568,942	 	
Weighted average common shares outstanding-diluted	 	69,824,338	 	60,299,766	 	 	43,568,942	 	
Dividends declared per share	 	$	—	 	$	—	 	 	$	—	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)

 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
January 1 to
July 9,
2014
(restated)	 	
Revenues:	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	116,548	 	$	43,943	 	 	$	118,759	 	
Service revenues	 	2,457	 	756	 	 	1,701	 	
 	 	 	 	 	 	 	 	 	
Total revenues	 	119,005	 	44,699	 	 	120,460	 	
 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	
Voyage expenses	 	14,775	 	2,335	 	 	4,140	 	
Vessel operating expenses	 	90,143	 	27,248	 	 	64,670	 	
General, administrative and management fees	 	73,798	 	15,492	 	 	31,371	 	
Depreciation and amortization	 	58,933	 	17,356	 	 	75,952	 	
Other operating income	 	—	 	(296	)	 	—	 	
Impairment of vessel assets	 	35,396	 	—	 	 	—	 	
Loss on sale of vessels	 	1,210	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Total operating expenses	 	274,255	 	62,135	 	 	176,133	 	
 	 	 	 	 	 	 	 	 	
Operating loss	 	(155,250	)	(17,436	)	 	(55,673	)	
 	 	 	 	 	 	 	 	 	
Other (expense) income:	 	 	 	 	 	 	 	 	
Impairment of investment	 	(32,536	)	—	 	 	—	 	
Other (expense) income	 	(707	)	7	 	 	(106	)	
Interest income	 	71	 	19	 	 	45	 	
Interest expense	 	(13,887	)	(3,592	)	 	(41,061	)	
 	 	 	 	 	 	 	 	 	
Other expense	 	(47,059	)	(3,566	)	 	(41,122	)	
 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	(202,309	)	(21,002	)	 	(96,795	)	
Reorganization items, net	 	(1,006	)	(1,167	)	 	(915,640	)	
 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	(203,315	)	(22,169	)	 	(1,012,435	)	
Income tax expense	 	(1,553	)	(393	)	 	(815	)	
 	 	 	 	 	 	 	 	 	
Net loss	 	(204,868	)	(22,562	)	 	(1,013,250	)	
Less: Net loss attributable to noncontrolling interest	 	(59,471	)	(4,272	)	 	(62,101	)	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(145,397	)	$	(18,290	)	 	$	(951,149	)	
 	 	 	 	 	 	 	 	 	
Net loss per share-basic	 	$	(2.29	)	$	(0.30	)	 	$	(21.83	)	
Net loss per share-diluted	 	$	(2.29	)	$	(0.30	)	 	$	(21.83	)	
Weighted average common shares outstanding-basic	 	63,615,181	 	60,299,766	 	 	43,568,942	 	
Weighted average common shares outstanding-diluted	 	63,615,181	 	60,299,766	 	 	43,568,942	 	
Dividends declared per share	 	$	—	 	$	—	 	 	$	—	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive Loss 
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended 
 September 30, 
 2015	 	Period from 
 July 9 to
September 30,
2014	 	 	Period from 
 July 1 to 
 July 9, 
 2014 
 (restated)	 	
 	 	 	 	 	 	 	 	 	
Net loss	 	$	(73,803	)	$	(22,562	)	 	$	(905,456	)	
 	 	 	 	 	 	 	 	 	
Change in unrealized gain (loss) on investments	 	26,343	 	(13,341	)	 	2,186	 	
Unrealized gain on cash flow hedges, net	 	—	 	—	 	 	95	 	
Other comprehensive income (loss)	 	26,343	 	(13,341	)	 	2,281	 	
 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	(47,460	)	(35,903	)	 	(903,175	)	
Less: Comprehensive loss attributable to noncontrolling interest	 	(7,178	)	(4,272	)	 	(53,935	)	
Comprehensive loss attributable to Genco Shipping & Trading Limited	 	$	(40,282	)	$	(31,631	)	 	$	(849,240	)	

 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended 
 September 30, 
 2015	 	Period from 
 July 9 to
September 30,
2014	 	 	Period from 
 January 1 to 
 July 9, 
 2014 
 (restated)	 	
 	 	 	 	 	 	 	 	 	
Net loss	 	$	(204,868	)	$	(22,562	)	 	$	(1,013,250	)	
 	 	 	 	 	 	 	 	 	
Change in unrealized gain (loss) on investments	 	25,300	 	(13,341	)	 	(25,766	)	
Unrealized gain on cash flow hedges, net	 	—	 	—	 	 	2,401	 	
Other comprehensive income (loss)	 	25,300	 	(13,341	)	 	(23,365	)	
 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	(179,568	)	(35,903	)	 	(1,036,615	)	
Less: Comprehensive loss attributable to noncontrolling interest	 	(59,471	)	(4,272	)	 	(62,101	)	
Comprehensive loss attributable to Genco Shipping & Trading Limited	 	$	(120,097	)	$	(31,631	)	 	$	(974,514	)	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Equity 
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
(Deficit)
Earnings	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity	 	Noncontrolling
Interest	 	Total Equity	 	
Balance — January 1, 2015 (Successor)	 	$	615	 	$	1,251,197	 	$	(25,317	)	$	(182,294	)	$	1,044,201	 	$	248,573	 	$	1,292,774	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	(145,397	)	(145,397	)	(59,471	)	(204,868	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income	 	 	 	 	 	25,300	 	 	 	25,300	 	—	 	25,300	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Settlement of non-accredited Note holders	 	 	 	(414	)	 	 	 	 	(414	)	—	 	(414	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity effect of purchase of entities under common control	 	 	 	590	 	 	 	 	 	590	 	—	 	590	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 11,287,132 shares to Baltic Trading shareholders	 	113	 	(113	)	 	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Elimination of non-controlling interest due to Merger	 	 	 	194,375	 	 	 	 	 	194,375	 	(194,375	)	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	31,400	 	 	 	 	 	31,400	 	5,273	 	36,673	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — September 30, 2015 (Successor)	 	$	728	 	$	1,477,035	 	$	(17	)	$	(327,691	)	$	1,150,055	 	$	—	 	$	1,150,055	 	

 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Accumulated
Other
Comprehensive
(Loss)
Income	 	Retained
(Deficit)
Earnings 
 (restated)	 	Genco
Shipping &
Trading
Limited
Shareholders’
Equity 
 (restated)	 	Noncontrolling
Interest 
 (restated)	 	Total Equity 
 (restated)	 	
Balance — January 1, 2014 (Predecessor)	 	$	445	 	$	846,658	 	$	53,722	 	$	66,644	 	$	967,469	 	$	341,336	 	$	1,308,805	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	(951,149	)	(951,149	)	(62,101	)	(1,013,250	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized loss on investments	 	 	 	 	 	(25,766	)	 	 	(25,766	)	—	 	(25,766	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized gain on cash flow hedges, net	 	 	 	 	 	2,401	 	 	 	2,401	 	—	 	2,401	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	2,403	 	 	 	 	 	2,403	 	1,949	 	4,352	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash dividends paid by Baltic Trading Limited	 	 	 	(5	)	 	 	 	 	(5	)	(2,041	)	(2,046	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vesting of restricted shares issued by Baltic Trading Limited	 	 	 	74	 	 	 	 	 	74	 	(74	)	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Subtotal — July 9, 2014 (Predecessor)	 	$	445	 	$	849,130	 	$	30,357	 	$	(884,505	)	$	(4,573	)	$	279,069	 	$	274,496	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fresh-start adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cancellation of Predecessor common stock and accumulated deficit	 	(445	)	(849,130	)	 	 	884,505	 	34,930	 	—	 	34,930	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Elimination of Predecessor accumulated other comprehensive income	 	 	 	 	 	(30,357	)	 	 	(30,357	)	—	 	(30,357	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of new equity interest in connection with emergence from Chapter 11, including the $100 Million Rights Offering — 60,299,757 shares	 	603	 	1,232,397	 	 	 	 	 	1,233,000	 	—	 	1,233,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — July 9, 2014 (Successor)	 	$	603	 	$	1,232,397	 	$	—	 	$	—	 	$	1,233,000	 	$	279,069	 	$	1,512,069	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	 	 	 	 	 	(18,290	)	(18,290	)	(4,272	)	(22,562	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized loss on investments	 	 	 	 	 	(13,341	)	 	 	(13,341	)	—	 	(13,341	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Issuance of 1,110,600 shares of nonvested stock	 	11	 	(11	)	 	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nonvested stock amortization	 	 	 	7,054	 	 	 	 	 	7,054	 	818	 	7,872	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash dividends paid by Baltic Trading Limited	 	 	 	(1	)	 	 	 	 	(1	)	(511	)	(512	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance — September 30, 2014 (Successor)	 	$	614	 	$	1,239,439	 	$	(13,341	)	$	(18,290	)	$	1,208,422	 	$	275,104	 	$	1,483,526	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
Condensed Consolidated Statements of Cash Flows 
(U.S. Dollars in Thousands)
(Unaudited)

 	 	Successor	 	 	Predecessor	 	
 	 	For the Nine
Months Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
January 1 to
July 9,
2014 
 (restated)	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net loss	 	$	(204,868	)	$	(22,562	)	 	$	(1,013,250	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 	
Non-cash reorganization items and fresh-start reporting adjustments, net	 	—	 	—	 	 	880,408	 	
Depreciation and amortization	 	58,933	 	17,356	 	 	75,952	 	
Amortization of deferred financing costs	 	1,688	 	384	 	 	4,461	 	
Amortization of time charters acquired	 	—	 	434	 	 	(68	)	
Amortization of discount on Convertible Senior Notes	 	—	 	—	 	 	1,592	 	
Interest expense related to the de-designation of the interest rate swap	 	—	 	—	 	 	1,048	 	
Amortization of nonvested stock compensation expense	 	36,673	 	7,872	 	 	4,352	 	
Impairment of vessel assets	 	35,396	 	—	 	 	—	 	
Loss on disposal of vessels	 	900	 	—	 	 	—	 	
Impairment of investment	 	32,536	 	—	 	 	—	 	
Realized loss on sale of investment	 	662	 	—	 	 	—	 	
Change in assets and liabilities:	 	 	 	 	 	 	 	 	
Decrease (increase) in due from charterers	 	600	 	(2,400	)	 	1,047	 	
(Increase) decrease in prepaid expenses and other current assets	 	(89	)	5,519	 	 	(11,735	)	
Increase (decrease) in accounts payable and accrued expenses	 	8,266	 	(27,998	)	 	32,534	 	
Decrease in deferred revenue	 	(381	)	(104	)	 	(600	)	
Increase in lease obligations	 	579	 	186	 	 	195	 	
Deferred drydock costs incurred	 	(10,288	)	(2,977	)	 	(9,253	)	
 	 	 	 	 	 	 	 	 	
Net cash used in operating activities	 	(39,393	)	(24,290	)	 	(33,317	)	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchase of vessels, including deposits	 	(46,129	)	(918	)	 	(29,995	)	
Purchase of other fixed assets	 	(586	)	(30	)	 	(415	)	
Sale of AFS securities	 	688	 	—	 	 	—	 	
Changes in deposits of restricted cash	 	19,630	 	125	 	 	(125	)	
 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	 	(26,397	)	(823	)	 	(30,535	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Repayments on the $100 Million Term Loan Facility	 	(5,769	)	(1,923	)	 	(3,846	)	
Repayments on the $253 Million Term Loan Facility	 	(16,875	)	—	 	 	(10,150	)	
Proceeds from the 2015 Revolving Credit Facility	 	35,000	 	—	 	 	—	 	
Repayments on the $44 Million Term Loan Facility	 	(2,063	)	(688	)	 	(1,375	)	
Proceeds from the $148 Million Credit Facility	 	131,500	 	—	 	 	—	 	
Repayments on the $148 Million Credit Facility	 	(4,894	)	—	 	 	—	 	
Repayments on the 2010 Credit Facility	 	(102,250	)	—	 	 	—	 	
Repayments on the $22 Million Term Loan Facility	 	(1,125	)	(375	)	 	(750	)	
Repayments on the 2014 Term Loan Facilities	 	(1,381	)	—	 	 	—	 	
Payment of dividend by subsidiary	 	—	 	(512	)	 	(2,046	)	
Cash settlement of non-accredited Note holders	 	(748	)	(375	)	 	—	 	
Proceeds from Rights Offering	 	—	 	—	 	 	100,000	 	
Payment of common stock issuance costs by subsidiary	 	—	 	—	 	 	(111	)	
Payment of deferred financing costs	 	(4,541	)	(471	)	 	(4,515	)	
 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	 	26,854	 	(4,344	)	 	77,207	 	
 	 	 	 	 	 	 	 	 	
Net (decrease) increase in cash and cash equivalents	 	(38,936	)	(29,457	)	 	13,355	 	
 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at beginning of period	 	83,414	 	136,077	 	 	122,722	 	
Cash and cash equivalents at end of period	 	$	44,478	 	$	106,620	 	 	$	136,077	 	
 
See accompanying notes to condensed consolidated financial statements.
 
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Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except Per Share and Share Data)
Notes to Condensed Consolidated Financial Statements (unaudited) 
 
1 - GENERAL INFORMATION
 
The accompanying condensed consolidated financial statements include the accounts of Genco Shipping & Trading Limited (“GS&T”), its wholly-owned subsidiaries, and its wholly-owned indirect subsidiary, Baltic Trading Limited (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. GS&T is incorporated under the laws of the Marshall Islands and as of September 30, 2015, is the sole owner of all of the outstanding shares of the following subsidiaries: Genco Ship Management LLC; Genco Investments LLC; Genco RE Investments LLC; and the ship-owning subsidiaries as set forth below.  As of September 30, 2015, Genco Ship Management LLC is the sole owner of all of the outstanding shares of Genco Management (USA) Limited.
 
Bankruptcy Filing
 
On April 21, 2014 (the “Petition Date”), GS&T and its subsidiaries other than Baltic Trading Limited (“Baltic Trading”) and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors continued to operate their businesses in the ordinary course as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Through the Chapter 11 Cases, the Debtors implemented a Prepackaged Plan of Reorganization of the Debtors Pursuant to Chapter 11 of the Bankruptcy Code (the “Prepack Plan”) for which the Company solicited votes from certain classes of its creditors prior to commencement of the Chapter 11 Cases in accordance with the Restructuring Support Agreement that the Debtors entered into with certain of its creditors on April 3, 2014.  The Company subsequently emerged from bankruptcy on July 9, 2014 (the “Effective Date”).  Refer to the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014, as amended, for further detail regarding the bankruptcy filing.
 
Merger Agreement with Baltic Trading
 
On April 7, 201 5, the Company entered into a definitive merger agreement with Baltic Trading under which the Company acquired Baltic Trading in a stock-for-stock transaction (the “Merger”).  Under the terms of the agreement, Baltic Trading became an indirect wholly-owned subsidiary of the Company, and Baltic Trading shareholders (other than the Company and its subsidiaries) received 0.216 shares of the Company’s common stock for each share of Baltic Trading’s common stock they owned at closing, with fractional shares settled in cash.  Upon consummation of the transaction on July 17, 2015, the Company’s shareholders owned approximately 84.5% of the combined company, and former Baltic Trading’s shareholders (other than the Company and its subsidiaries) owned approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which were owned by the Company) were canceled in the Merger.  The Company’s common stock began trading on the New York Stock Exchange after consummation of the transaction on July 20, 2015.The Boards of Directors of both the Company and Baltic Trading established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the Merger by unanimous vote of directors present and voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  The Merger was approved on July 17, 2015 at the 2015 Annual Meeting of Shareholders (the “Annual Meeting”).
 
Prior to the completion of the Merger, the Company prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and consolidated the operations of Baltic Trading. The Baltic Trading common shares that the Company acquired in the Merger were previously recognized as a noncontrolling interest in the condensed consolidated financial statements of the Company. Under U.S. GAAP, changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are considered equity transactions (i.e. transactions with owners in their capacity as owners) with any difference between the amount by which the noncontrolling interest is adjusted and the fair value of the consideration paid attributed to the equity of the parent. Accordingly, any difference between the fair value of the Company’s common shares issued in exchange for Baltic Trading common shares pursuant to the Merger is reflected as an adjustment to the equity in the Company. No gain or loss has been recognized in the Company’s Condensed Consolidated Statement of Comprehensive Income (Loss) upon completion of the transaction.
 
Acquisition of Baltic Lion and Baltic Tiger
 
Additionally, on April 7, 2015, the Company entered into an agreement under which the Company acquired all of the shares of two single-purpose vessel owning entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, specifically the Baltic Lion and Baltic Tiger, for an aggregate purchase price of $68,500, subject to reduction for $40,563 of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by the Company.  For further details, refer to
 
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the “Impairment of vessel assets” Section in Note 2 — Summary of Significant Accounting Policies.  These transactions, which closed on April 8, 2015, were accounted for pursuant to accounting guidance under ASC 805, “Business Combinations”, for transactions amongst entities under common control.  Accordingly, the difference between the cash paid to Baltic Trading and the Company’s carrying value of the Baltic Lion and Baltic Tiger as of the closing date of $590 is reflected as an adjustment to Additional paid-in capital in the Condensed Consolidated Statements of Equity during the nine months ended September 30, 2015.  The independent special committees of both companies’ Boards of Directors reviewed and approved these transactions.
 
Financial Statement Presentation
 
Upon the Company’s emergence from the Chapter 11 Cases on July 9, 2014, the Company adopted fresh-start reporting in accordance with provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, “Reorganizations” (“ASC 852”).  Upon adoption of fresh-start reporting, the Company’s assets and liabilities were recorded at their value as of the fresh-start reporting date.  The fair values of the Company’s assets and liabilities in conformance with ASC 805, “Business Combinations,” as of that date differed materially from the recorded values of its assets and liabilities as reflected in its historical consolidated financial statements.  In addition, the Company’s adoption of fresh-start reporting may materially affect its results of operations following the fresh-start reporting dates, as the Company will have a new basis in its assets and liabilities.  Consequently, the Company’s historical financial statements may not be reliable indicators of its financial condition and results of operations for any period after it adopted fresh-start reporting.  As a result of the adoption of fresh-start reporting, the Company’s consolidated balance sheets and consolidated statements of operations subsequent to July 9, 2014 will not be comparable in many respects to our consolidated balance sheets and consolidated statements of operations prior to July 9, 2014.  References to “Successor Company” refer to the Company after July 9, 2014, after giving effect to the application of fresh-start reporting.  References to “Predecessor Company” refer to the Company prior to July 9, 2014.
 
Under ASC 852, fresh-start reporting is required upon emergence from Chapter 11 if (i) the value of the assets of the emerging entity immediately before the date of confirmation is less than the total of all post-petition liabilities and allowed claims; and (ii) holders of existing voting shares immediately before confirmation receive less than 50% of the voting shares of the emerging entity.  Accordingly, the Company qualified for and adopted fresh-start reporting as of the Effective Date. Adopting fresh-start reporting results in a new reporting entity with no beginning retained earnings or deficit. The cancellation of all existing shares outstanding on the Effective Date and issuance of new shares of the reorganized entity caused a related change of control of the Company under ASC 852.
 
The following fresh-start balance sheet illustrates the financial effects on the Company of the implementation of the Plan and the adoption of fresh-start reporting.  This fresh-start balance sheet reflects the effect of the completion of the transactions included in the Plan, including the issuance of equity and the settlement of old indebtedness.
 
The effects of the Plan and fresh-start reporting on the Company’s consolidated balance sheet (as restated) are as follows:
 
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 	 	Fresh-Start Adjustments	 	
 	 	Predecessor
July 9,
2014	 	Debt Discharge
and Equity
Issuance (a)
(restated)	 	Reinstatement
of
Liabilities (b)	 	Revaluation of
Assets and
Liabilities (c)
(restated)	 	Successor
July 9,
2014	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	48,551	 	$	87,526	 	$	—	 	$	—	 	$	136,077	 	
Restricted cash	 	9,975	 	—	 	—	 	—	 	9,975	 	
Due from charterers, net	 	13,194	 	—	 	—	 	—	 	13,194	 	
Prepaid expenses and other current assets	 	30,800	 	—	 	—	 	(41	)	30,759	 	
Time charters acquired	 	—	 	—	 	—	 	450	 	450	 	
Total current assets	 	102,520	 	87,526	 	—	 	409	 	190,455	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Noncurrent assets:	 	 	 	 	 	 	 	 	 	 	 	
Vessels, net	 	2,604,731	 	—	 	—	 	(1,065,882	)	1,538,849	 	
Deposits on vessels	 	28,658	 	—	 	—	 	2,317	 	30,975	 	
Deferred drydock, net	 	16,584	 	—	 	—	 	(16,396	)	188	 	
Deferred financing costs, net	 	18,953	 	(11,893	)	—	 	—	 	7,060	 	
Fixed assets, net	 	4,053	 	—	 	—	 	(3,443	)	610	 	
Other noncurrent assets	 	514	 	—	 	—	 	—	 	514	 	
Restricted cash	 	300	 	—	 	—	 	—	 	300	 	
Investments	 	51,804	 	—	 	—	 	—	 	51,804	 	
Goodwill	 	—	 	—	 	—	 	166,067	 	166,067	 	
Total noncurrent assets	 	2,725,597	 	(11,893	)	—	 	(917,337	)	1,796,367	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	2,828,117	 	$	75,633	 	$	—	 	$	(916,928	)	$	1,986,822	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and Equity	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities not subject to compromise:	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accrued expenses	 	$	60,333	 	$	(1,086	)	$	6,478	 	$	—	 	$	65,725	 	
Current portion of long-term debt	 	4,250	 	—	 	27,992	 	—	 	32,242	 	
Deferred revenue	 	997	 	—	 	—	 	—	 	997	 	
Time charters acquired	 	16	 	—	 	—	 	(16	)	—	 	
Total current liabilities not subject to compromise	 	65,596	 	(1,086	)	34,470	 	(16	)	98,964	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Noncurrent liabilities not subject to compromise:	 	 	 	 	 	 	 	 	 	 	 	
Long-term lease obligations	 	2,670	 	—	 	—	 	(2,670	)	—	 	
Long-term debt	 	161,500	 	—	 	214,289	 	—	 	375,789	 	
Total noncurrent liabilities not subject to compromises	 	164,170	 	—	 	214,289	 	(2,670	)	375,789	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities subject to compromise	 	1,443,446	 	(1,194,687	)	(248,759	)	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	1,673,212	 	(1,195,773	)	—	 	(2,686	)	474,753	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Equity:	 	 	 	 	 	 	 	 	 	 	 	
Genco Shipping & Trading Limited shareholders’ equity:	 	 	 	 	 	 	 	 	 	 	 	
Predecessor Common stock	 	445	 	(445	)	—	 	—	 	—	 	
Predecessor Additional paid-in capital	 	849,130	 	(849,130	)	—	 	—	 	—	 	
Successor Common stock	 	—	 	603	 	—	 	—	 	603	 	
Successor Additional paid-in capital	 	—	 	1,232,397	 	—	 	—	 	1,232,397	 	
Accumulated other comprehensive income	 	30,357	 	(30,357	)	—	 	—	 	—	 	
Retained (deficit) earnings	 	(57,463	)	918,338	 	—	 	(860,875	)	—	 	
Total Genco Shipping & Trading Limited shareholders’ equity	 	822,469	 	1,271,406	 	—	 	(860,875	)	1,233,000	 	
Noncontrolling interest	 	332,436	 	—	 	—	 	(53,367	)	279,069	 	
Total equity	 	1,154,905	 	1,271,406	 	—	 	(914,242	)	1,512,069	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and equity	 	$	2,828,117	 	$	75,633	 	$	—	 	$	(916,928	)	$	1,986,822	 	

(a)          Debt Discharge and Equity Issuance — This column reflects the following adjustments pursuant to the Plan:
 
1.               Items comprising the net gain on settlement of liabilities subject to compromise in exchange for equity issuance — see Note 18.
 
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 	 	Predecessor	 	
 	 	Period from
January 1 to
July 9,
2014	 	
Discharge of the outstanding debt under the 2007 Credit Facility	 	$	1,055,912	 	
Discharge of the long-term interest payable due pursuant to the 2007 Credit Facility	 	13,199	 	
Discharge of the 2010 Notes liability	 	117,473	 	
Discharge of coupon interest on the 2010 Notes liability	 	1,105	 	
The elimination of deferred financing fees associated with the discharged obligations	 	(15,383	)	
The elimination of accumulated other comprehensive income related to interest rate swaps associated with the discharged obligations	 	(4,574	)	
Issuance of Successor common stock	 	(1,133,900	)	
Net gain on the discharge of Predecessor liabilities related to liabilities subject to compromise and associated issuance of Successor equity	 	$	33,832	 	
 
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2.                     Other items associated with the settlement of liabilities subject to compromise:
 
·                   The payment of interest expense accrued up to the Effective Date of $1,772, $59 and $156 for the 2007 Credit Facility, the $100 Million Term Loan Facility and the $253 Million Term Loan Facility, respectively.
 
·                   The pay down on the Effective Date of $1,923 and $5,075 for the $100 Million Term Loan Facility and $253 Million Term Loan Facility, respectively, which were due on the Effective Date as they were not paid during the pendency of the Chapter 11 Cases.
 
·                   The payment of deferred financing fees of $3,490 for the Amended and Restated $100 Million and $253 Million Term Loan Facilities.
 
3.                     The reclassification to retained (deficit) earnings of $34,931 related to the gain associated with the Company’s investments.
 
4.               The reclassification of $900 of initial equity to accounts payable that represents the estimated amount of the notes discharged that will be paid in cash to non-accredited investors.
 
5.               The reclassification to retained (deficit) earnings of the Predecessor common stock of $445 and Predecessor additional paid in capital of $849,130.
 
6.                     Receipt of the proceeds of the $100,000 rights offering pursuant to the Plan.
 
(b)          Reinstatement of Liabilities — This column reflects the reinstatement of the remaining Liabilities subject to compromise for the Predecessor Company which were not already adjusted in the Debt Discharge and Equity Issuance column.  It includes the following adjustments:
 
·                   The reclassification of the debt outstanding under the Amended and Restated $100 Million Term Loan Facility.  This includes $7,692 of current long-term debt and $63,946 of long-term debt.
 
·                   The reclassification of the debt outstanding under the Amended and Restated $253 Million Term Loan Facility.  This includes $20,300 of current long-term debt and $150,343 of long-term debt.
 
·                   The reinstatement of $5,622 related to the termination of the interest rate swap agreement with DNB Bank ASA.
 
·                   The reinstatement of the $815 lease obligation.
 
·                   The reinstatement of $41 of pre-petition accounts payable due to vendors in the United States.
 
(c)           Revaluation of Assets and Liabilities — Fresh-start reporting adjustments are made to reflect asset values at their estimated fair value, including:
 
·                   Adjustment of $179 to prepaid amounts for the Predecessor Company.
 
·                   Adjustment to reflect the fair value of time charters acquired of $434.
 
·                   Adjustment of $1,083,404 to reflect the fair value of vessel assets, vessel deposits, drydocking assets and other fixed assets as of the Effective Date.  The portion of the asset revaluation associated with Baltic Trading’s noncontrolling interest in the amount of $74,355 was reflected as a reduction of noncontrolling interest.
 
·                   Adjustment of $2,670 to reflect the fair value of the Company’s current lease agreement, which was previously recorded as long-term lease obligations.  As of the Effective Date, the lease agreement has been valued at below market; therefore, we have recorded in “Prepaid expenses and other current assets” an asset of $138, which will be amortized over the remaining life of the lease agreement.
 
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·                   Goodwill in the amount of $166,067 was recognized, which represents the portion of the total reorganization value that was not attributed to specific tangible or identifiable intangible assets.  The portion of the goodwill recognized in relation to Baltic Trading noncontrolling interest in the amount of $24,022 was reflected as an increase in noncontrolling interest.  A summary of the allocation of the reorganization value to the fair value of the Successor Company net assets, including goodwill, is as follows:

 	 	 	 	Total	 	
Reorganization Value	 	 	 	 	 	
Value of shares issued to pre-petition claimants	 	$	1,133,000	 	 	 	
Proceeds of rights offering	 	100,000	 	$	1,233,000	 	
Estimated fair value of debt	 	 	 	 	 	
Current portion of long-term debt	 	32,242	 	 	 	
Long term debt	 	375,789	 	408,031	 	
Estimated fair value of non-debt liabilities	 	 	 	 	 	
Deferred revenue	 	997	 	 	 	
Accounts payable and accrued expenses	 	65,725	 	66,722	 	
 	 	 	 	 	 	
Noncontrolling interest	 	 	 	279,069	 	
 	 	 	 	 	 	
Reorganization value of assets	 	 	 	1,986,822	 	
 	 	 	 	 	 	
Estimated fair value of assets (excluding goodwill) (a)	 	 	 	(1,820,755	)	
 	 	 	 	 	 	
Reorganization value of assets in excess of fair value — goodwill (b)	 	 	 	$	166,067	 	

(a)                     Estimated fair value of assets (excluding goodwill) consists of:

Total current assets	 	$	190,455	 	
Vessels, net	 	1,538,849	 	
Deposits on vessels	 	30,975	 	
Deferred drydock, net	 	188	 	
Deferred financing costs, net	 	7,060	 	
Fixed assets, net	 	610	 	
Other noncurrent assets	 	514	 	
Restricted cash	 	300	 	
Investments	 	51,804	 	
Total assets excluding goodwill	 	$	1,820,755	 	
 
(b)                      The goodwill recognized by the Predecessor Company during the period from January 1 to July 9, 2014 was subsequently deemed impaired during the three months ended December 31, 2014.
 
·                   The total reduction of $53,367 in noncontrolling interest is due to the adjustment of the fair value of the noncontrolling interest derived from the Baltic Trading asset revaluation and goodwill described above and an additional revaluation adjustment of $3,034. The revalued noncontrolling interest was determined based on a relative fair value allocation of Baltic Trading’s estimated equity value as July 8, 2014, which multiplied the percentage of Baltic Trading’s equity ownership attributable to non-controlling interests by the estimated equity value of Baltic Trading as of such date. The estimated equity value of Baltic Trading as of such date was determined by multiplying the closing price of Baltic Trading’s publicly traded common stock by the total number of shares of Baltic Trading’s common stock and Class B stock outstanding on July 8, 2014.
 
Other General Information
 
Baltic Trading was a wholly-owned indirect subsidiary of GS&T until Baltic Trading completed its initial public offering, or IPO, on March 15, 2010.  As of December 31, 2014, Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented a 10.85% ownership interest in Baltic Trading and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  As a result of the Merger, Baltic Trading once again became a wholly-owned indirect subsidiary of GS&T.
 
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Below is the list of the Company’s wholly owned ship-owning subsidiaries as of September 30, 2015:

Wholly Owned Subsidiaries	 	Vessel Acquired	 	Dwt	 	Delivery Date	 	Year Built	 	
 	 	 	 	 	 	 	 	 	 	
Genco Reliance Limited	 	Genco Reliance	 	29,952	 	12/6/04	 	1999	 	
Genco Vigour Limited	 	Genco Vigour	 	73,941	 	12/15/04	 	1999	 	
Genco Explorer Limited	 	Genco Explorer	 	29,952	 	12/17/04	 	1999	 	
Genco Carrier Limited	 	Genco Carrier	 	47,180	 	12/28/04	 	1998	 	
Genco Sugar Limited	 	Genco Sugar	 	29,952	 	12/30/04	 	1998	 	
Genco Pioneer Limited	 	Genco Pioneer	 	29,952	 	1/4/05	 	1999	 	
Genco Progress Limited	 	Genco Progress	 	29,952	 	1/12/05	 	1999	 	
Genco Wisdom Limited	 	Genco Wisdom	 	47,180	 	1/13/05	 	1997	 	
Genco Success Limited	 	Genco Success	 	47,186	 	1/31/05	 	1997	 	
Genco Beauty Limited	 	Genco Beauty	 	73,941	 	2/7/05	 	1999	 	
Genco Knight Limited	 	Genco Knight	 	73,941	 	2/16/05	 	1999	 	
Genco Leader Limited	 	Genco Leader	 	73,941	 	2/16/05	 	1999	 	
Genco Marine Limited	 	Genco Marine	 	45,222	 	3/29/05	 	1996	 	
Genco Prosperity Limited	 	Genco Prosperity	 	47,180	 	4/4/05	 	1997	 	
Genco Muse Limited	 	Genco Muse	 	48,913	 	10/14/05	 	2001	 	
Genco Acheron Limited	 	Genco Acheron	 	72,495	 	11/7/06	 	1999	 	
Genco Surprise Limited	 	Genco Surprise	 	72,495	 	11/17/06	 	1998	 	
Genco Augustus Limited	 	Genco Augustus	 	180,151	 	8/17/07	 	2007	 	
Genco Tiberius Limited	 	Genco Tiberius	 	175,874	 	8/28/07	 	2007	 	
Genco London Limited	 	Genco London	 	177,833	 	9/28/07	 	2007	 	
Genco Titus Limited	 	Genco Titus	 	177,729	 	11/15/07	 	2007	 	
Genco Challenger Limited	 	Genco Challenger	 	28,428	 	12/14/07	 	2003	 	
Genco Charger Limited	 	Genco Charger	 	28,398	 	12/14/07	 	2005	 	
Genco Warrior Limited	 	Genco Warrior	 	55,435	 	12/17/07	 	2005	 	
Genco Predator Limited	 	Genco Predator	 	55,407	 	12/20/07	 	2005	 	
Genco Hunter Limited	 	Genco Hunter	 	58,729	 	12/20/07	 	2007	 	
Genco Champion Limited	 	Genco Champion	 	28,445	 	1/2/08	 	2006	 	
Genco Constantine Limited	 	Genco Constantine	 	180,183	 	2/21/08	 	2008	 	
Genco Raptor LLC	 	Genco Raptor	 	76,499	 	6/23/08	 	2007	 	
Genco Cavalier LLC	 	Genco Cavalier	 	53,617	 	7/17/08	 	2007	 	
Genco Thunder LLC	 	Genco Thunder	 	76,588	 	9/25/08	 	2007	 	
Genco Hadrian Limited	 	Genco Hadrian	 	169,694	 	12/29/08	 	2008	 	
Genco Commodus Limited	 	Genco Commodus	 	169,025	 	7/22/09	 	2009	 	
Genco Maximus Limited	 	Genco Maximus	 	169,025	 	9/18/09	 	2009	 	
Genco Claudius Limited	 	Genco Claudius	 	169,025	 	12/30/09	 	2010	 	
Genco Bay Limited	 	Genco Bay	 	34,296	 	8/24/10	 	2010	 	
Genco Ocean Limited	 	Genco Ocean	 	34,409	 	7/26/10	 	2010	 	
Genco Avra Limited	 	Genco Avra	 	34,391	 	5/12/11	 	2011	 	
Genco Mare Limited	 	Genco Mare	 	34,428	 	7/20/11	 	2011	 	
Genco Spirit Limited	 	Genco Spirit	 	34,432	 	11/10/11	 	2011	 	
Genco Aquitaine Limited	 	Genco Aquitaine	 	57,981	 	8/18/10	 	2009	 	
Genco Ardennes Limited	 	Genco Ardennes	 	57,981	 	8/31/10	 	2009	 	
Genco Auvergne Limited	 	Genco Auvergne	 	57,981	 	8/16/10	 	2009	 	
Genco Bourgogne Limited	 	Genco Bourgogne	 	57,981	 	8/24/10	 	2010	 	
Genco Brittany Limited	 	Genco Brittany	 	57,981	 	9/23/10	 	2010	 	
Genco Languedoc Limited	 	Genco Languedoc	 	57,981	 	9/29/10	 	2010	 	
Genco Loire Limited	 	Genco Loire	 	53,416	 	8/4/10	 	2009	 	
Genco Lorraine Limited	 	Genco Lorraine	 	53,416	 	7/29/10	 	2009	 	
Genco Normandy Limited	 	Genco Normandy	 	53,596	 	8/10/10	 	2007	 	
Genco Picardy Limited	 	Genco Picardy	 	55,257	 	8/16/10	 	2005	 	
Genco Provence Limited	 	Genco Provence	 	55,317	 	8/23/10	 	2004	 	
Genco Pyrenees Limited	 	Genco Pyrenees	 	57,981	 	8/10/10	 	2010	 	
Genco Rhone Limited	 	Genco Rhone	 	58,018	 	3/29/11	 	2011	 	
Baltic Lion Limited	 	Baltic Lion	 	179,185	 	4/8/15 (1)	 	2012	 	
Baltic Tiger Limited	 	Genco Tiger	 	179,185	 	4/8/15 (1)	 	2011	 	
Baltic Leopard Limited	 	Baltic Leopard	 	53,447	 	4/8/10 (2)	 	2009	 	
Baltic Panther Limited	 	Baltic Panther	 	53,351	 	4/29/10 (2)	 	2009	 	
Baltic Cougar Limited	 	Baltic Cougar	 	53,432	 	5/28/10 (2)	 	2009	 	
 
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Wholly Owned Subsidiaries	 	Vessel Acquired	 	Dwt	 	Delivery Date	 	Year Built	 	
 	 	 	 	 	 	 	 	 	 	
Baltic Jaguar Limited	 	Baltic Jaguar	 	53,474	 	5/14/10 (2)	 	2009	 	
Baltic Bear Limited	 	Baltic Bear	 	177,717	 	5/14/10 (2)	 	2010	 	
Baltic Wolf Limited	 	Baltic Wolf	 	177,752	 	10/14/10 (2)	 	2010	 	
Baltic Wind Limited	 	Baltic Wind	 	34,409	 	8/4/10 (2)	 	2009	 	
Baltic Cove Limited	 	Baltic Cove	 	34,403	 	8/23/10 (2)	 	2010	 	
Baltic Breeze Limited	 	Baltic Breeze	 	34,386	 	10/12/10 (2)	 	2010	 	
Baltic Fox Limited	 	Baltic Fox	 	31,883	 	9/6/13 (2)	 	2010	 	
Baltic Hare Limited	 	Baltic Hare	 	31,887	 	9/5/13 (2)	 	2009	 	
Baltic Hornet Limited	 	Baltic Hornet	 	63,574	 	10/29/14 (2)	 	2014	 	
Baltic Wasp Limited	 	Baltic Wasp	 	63,389	 	1/2/15 (2)	 	2015	 	
Baltic Scorpion Limited	 	Baltic Scorpion	 	63,462	 	8/6/15 (2)	 	2015	 	
Baltic Mantis Limited	 	Baltic Mantis	 	63,470	 	10/9/15 (2)	 	2015	 	

(1)          The delivery date for these vessels represents the date that the vessel was purchased from Baltic Trading.
(2)          The delivery date for these vessels represents the date that Baltic Trading purchased the vessel.
 
The Company provides technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”).  Peter C. Georgiopoulos, Chairman of the Board of Directors of GS&T, controls and has a minority interest in MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and were provided for an initial term of one year.  MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change in control of the Company.  The Company may terminate provision of the services at any time on 60 days’ notice.  On September 30, 2015, under the oversight of an independent committee of our Board of Directors, Genco Management (USA) Limited and MEP entered into certain agreements under which MEP paid $1,000 of the amount of service fees in arrears, a schedule was agreed for payment of the remaining amount in arrears, and the daily service fee was reduced from $750 to $650 per day effective on October 1, 2015. Refer to Note 7 — Related Party Transactions for amounts due from MEP as of September 30, 2015.
 
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Principles of consolidation
 
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which include the accounts of GS&T, Baltic Trading and its wholly-owned subsidiaries.  All intercompany accounts and transactions have been eliminated in consolidation.
 
Basis of presentation
 
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”).  In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014, as amended (the “2014 10-K”).  The results of operations for the three and nine month periods ended September 30, 2015 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2015.
 
Segment reporting
 
The Company reports financial information and evaluates its operations by charter revenues and not by the length of ship employment for its customers, i.e., spot or time charters.  Each of the Company’s vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment, after the effective date of the Merger on July 17, 2015, which is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels.  Prior to the Merger, the Company had two reportable operating segments, GS&T and Baltic Trading.
 
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Vessels, net
 
Vessels, net is stated at cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost which is directly attributable to the acquisition of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date of initial delivery from the shipyard. Depreciation expense for vessels for the Successor Company for the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 was $19,172, $56,869 and $17,221, respectively.  Depreciation expense for vessels for the Predecessor Company for the period from July 1 to July 9, 2014 and from January 1 to July 9, 2014 was $3,039 and $71,756, respectively.
 
Depreciation expense is calculated based on cost less the estimated residual scrap value. The costs of significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the vessel’s remaining estimated useful life or the estimated life of the renewal or betterment. Undepreciated cost of any asset component being replaced that was acquired after the initial vessel purchase is written off as a component of vessel operating expense. Expenditures for routine maintenance and repairs are expensed as incurred. Scrap value is estimated by the Company by taking the cost of steel times the weight of the ship noted in lightweight tons (lwt).  Effective July 9, 2014, the Company increased the estimated scrap value of the vessels from $245 per lwt to $310 per lwt prospectively based on the 15-year average scrap value of steel.  During the three and nine months ended September 30, 2015, the increase in the estimated scrap value resulted in a decrease in depreciation expense of $805 and $2,388, respectively. The decrease in depreciation expense does not take into effect the revaluation of the vessel assets due to fresh-start reporting.  During the period from July 9 to September 30, 2014, the increase in the estimated scrap value resulted in a decrease in depreciation expense of $735 for the Successor Company.
 
Deferred revenue
 
Deferred revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as income when earned. Additionally, deferred revenue includes estimated customer claims mainly due to time charter performance issues. As of September 30, 2015 and December 31, 2014, the Successor Company had an accrual of $505 and $662, respectively, related to these estimated customer claims.
 
Voyage expense recognition
 
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. These differences in bunkers resulted in a net loss (gain) of $2,394, $5,054 and ($36) during the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, respectively, for the Successor Company.  During the period from July 1 to July 9, 2014 and from January 1 to July 9, 2014, the Predecessor Company recorded a net gain of ($3) and ($252), respectively.  Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement, as well as any adjustments to record fuel inventory at the lower of cost or market at the balance sheet date.
 
Impairment of vessel assets
 
During the three and nine months ended September 30, 2015, the Successor Company recorded $0 and $35,396, respectively, related to the impairment of vessel assets in accordance with ASC 360 — “Property, Plant and Equipment” (“ASC 360”).  At March 31, 2015, the Company determined that the sale of the Baltic Lion and Baltic Tiger was more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its estimated fair value, which was determined primarily based on appraisals and third-party broker quotes.  On April 8, 2015, the Baltic Lion and Baltic Tiger entities were sold to GS&T.  Refer to Note 1 — General Information for details pertaining to the sale of these entities.
 
Loss on disposal of vessels
 
During the three and nine months ended September 30, 2015, the Successor Company recorded $0 and $1,210, respectively, related to the loss on sale of vessels related to the sale of the Baltic Lion and Baltic Tiger entities to GS&T from Baltic Trading on April 8, 2015.
 
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Noncontrolling interest
 
Net loss attributable to noncontrolling interest during the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 for the Successor Company was $7,178, $59,471 and $4,272.  Net loss attributable to noncontrolling interest during the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $53,935 and $62,101, respectively.  The aforementioned amounts reflect the noncontrolling interest’s share of the net loss of the Company’s subsidiary, Baltic Trading, prior to the Merger on July 17, 2015, which owned and employed drybulk vessels in the spot market, in vessel pools or on spot market-related time charters.  The spot market represents immediate chartering of a vessel, usually for single voyages.  At December 31, 2014, the noncontrolling interest held an 89.15% economic interest in Baltic Trading while only holding 35.40% of the voting power.
 
Investments
 
The Company holds an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and in Korea Line Corporation (“KLC”).  Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.  KLC is a marine transportation service company which operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.  The investments in Jinhui and KLC have been designated as Available For Sale (“AFS”) and are reported at fair value, with unrealized gains and losses recorded in equity as a component of accumulated other comprehensive income (loss) (“AOCI”).  The Company classifies the investments as current or noncurrent assets based on the Company’s intent to hold the investments at each reporting date.
 
Investments are reviewed quarterly to identify possible other-than-temporary impairment in accordance with ASC Subtopic 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  When evaluating its investments, the Company reviews factors such as the length of time and extent to which fair value has been below the cost basis, the financial condition of the issuer, the underlying net asset value of the issuer’s assets and liabilities, and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in market value.  Should the decline in the value of any investment be deemed to be other-than-temporary, the investment basis would be written down to fair market value, and the write-down would be recorded to earnings as a loss.  Refer to Note 5 — Investments.
 
Income taxes
 
Pursuant to certain agreements, GS&T technically and commercially managed vessels for Baltic Trading until the Merger, as well as provides technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are performed by Genco Management (USA) Limited (“Genco (USA)”), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Genco (USA) has entered into a cost-sharing agreement with the Company and Genco Ship Management LLC, collectively Manco, pursuant to which Genco (USA) agrees to reimburse Manco for the costs incurred by Genco (USA) for the use of Manco’s personnel and services in connection with the provision of the services for both Baltic Trading and MEP’s vessels.
 
Total revenue earned by the Successor Company for these services during the three and nine months ended September 30, 2015 was $1,012 and $5,692, respectively, of which $184 and $3,235, respectively, eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $593 associated with these activities for the three months ended September 30, 2015.  This resulted in estimated tax expense of $269 for the three months ended September 30, 2015. After allocation of certain expense, there was taxable income of $3,323 associated with these activities for the nine months ended September 30, 2015.  This resulted in estimated income tax expense of $1,499 for the nine months ended September 30, 2015.
 
Total revenue earned by the Successor Company for these services during the period from July 9 to September 30, 2014 was $1,692, of which $936 eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $847 associated with these activities for the period from July 9 to September 30, 2014.  This resulted in estimated tax expense of $381 for the period from July 9 to September 30, 2014.
 
Total revenue earned by the Predecessor Company for these services during the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $160 and $3,857, respectively, of which $89 and $2,156, respectively, were eliminated upon consolidation.  After allocation of certain expenses, there was taxable income of $73 associated with these activities for the period from July 1 to July 9, 2014.  This resulted in estimated tax expense of $36 for the period from July 1 to July 9, 2014.  After allocation of certain expenses, there was taxable income of $1,723 associated with these activities for the period from January 1 to July 9, 2014.  This resulted in income tax expense of $776 for the period from January 1 to July 9, 2014.
 
Baltic Trading is subject to income tax on its United States source income.  During the three and nine months ended September 30, 2015, Baltic Trading had United States operations that resulted in United States source income of $583 and $1,348, respectively, as recorded by the Successor Company.  Baltic Trading’s estimated United States income tax expense for the three and nine months ended September 30, 2015 was $23 and $54, respectively, as recorded by the Successor Company.
 
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During the period from July 9 to September 30, 2014, Baltic Trading had United States operations that resulted in United States source income of $294 as recorded by the Successor Company.  Baltic Trading’s estimated United States income tax expense for the period from July 9 to September 30, 2014 was $12 as recorded by the Successor Company.
 
Baltic Trading is subject to income tax on its United States source income.  During the period from July 1 to July 9, 2014 and January 1 to July 9, 2014, Baltic Trading had United States operations that resulted in United States source income of $51 and $965, respectively, as recorded by the Predecessor Company.  Baltic Trading’s estimated United States income tax expense for the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $2 and $39, respectively, as recorded by the Predecessor Company.
 
Recent accounting pronouncements
 
In August 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-15 (“ASU 2015-15”), which amends presentation and disclosure requirements outlined in ASU 2015-03, “Interest-Imputation of Interest (ASC Subtopic 835-30):  Simplifying the Presentation of Debt Issuance Costs,” (“ASU 2015-03”) by clarifying guidance for debt issuance costs related to line of credit arrangements by acknowledging the statement by SEC staff that it would not object to presentation of debt issuance costs related to a line of credit arrangement as an asset, and amortizing them ratably over the term of the line of credit arrangement, regardless of whether there were any borrowings outstanding under the agreement. Issued in April 2015, ASU 2015-03 required debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts.  Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as deferred charge assets, separate from the related debt liability. ASU 2015-03 does not change the recognition and measurement requirements for debt issuance costs. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating the impact of this adoption on its condensed consolidated financial statements.
 
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption.  On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date.  The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016.  The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements.
 
3 - CASH FLOW INFORMATION
 
For the nine months ended September 30, 2015, the Successor Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $363 for the Purchase of vessels, including deposits and $49 for the Purchase of other fixed assets.  Additionally, for the nine months ended September 30, 2015, the Successor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $14 associated with the Payment of deferred financing fees. Lastly, for the nine months ended September 30, 2015, the Successor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $82 associated with the Cash settlement of non-accredited Note holders.  During the nine months ended September 30, 2015, the Successor Company increased the estimated amount of non-accredited holders of the Convertible Senior Notes, which was discharged on the Effective Date, that are expected to be settled in cash versus settled with common shares.
 
Professional fees and trustee fees in the amount of $1,006 were recognized by the Successor Company in Reorganization items, net for the nine months ended September 30, 2015 (refer to Note 18).  During this period, $1,162 of professional fees and trustee fees were paid through September 30, 2015 and $157 is included in Accounts payable and accrued expenses as of September 30, 2015.
 
For the period from January 1 to July 9, 2014, the Predecessor Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $53 for the Purchase of vessels, including deposits and $20 for the Purchase of other fixed assets.  Additionally, for the period from January 1 to July 9, 2014, the Predecessor Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $456 associated with the Payment of deferred financing fees.
 
Of the $35,232 of professional fees and trustee fees recognized in Reorganization items, net for the period from January 1 to July 9, 2014 by the Predecessor Company (refer to Note 18), $2,703 was paid through July 9, 2014 and $32,529 is included in Accounts payable and accrued expenses as of July 9, 2014.
 
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For the period from July 9 to September 30, 2014, the Successor Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $34 for the Purchase of vessels, including deposits and $92 for the Purchase of other fixed assets.
 
Professional fees and trustee fees in the amount of $1,167 were recognized in Reorganization items, net for the period from July 9 to September 30, 2014 by the Successor Company (refer to Note 18).  During this period, $24,740 of professional fees and trustee fees were paid through September 30, 2014 and $8,955 is included in Accounts payable and accrued expenses as of September 30, 2014.
 
During the nine months ended September 30, 2015, the Successor Company made a reclassification of $19,043 from Deposits on vessels to Vessels, net of accumulated depreciation, due to the completion of the purchase of Baltic Wasp and Baltic Scorpion. No such reclassifications were made by the Successor and Predecessor Company during the period from July 9 to September 30, 2014 and the period from January 1 to July 9, 2014, respectively.
 
During the period from January 1 to July 9, 2014, the Predecessor Company made a reclassification of $984 from Fixed assets, net of accumulated depreciation, to Vessels, net of accumulated depreciation, for items that should be capitalized and depreciated over the remaining life of the respective vessels.
 
During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, cash paid for interest by the Successor Company, net of amounts capitalized, was $11,543 and $1,219, respectively.  During the period from January 1 to July 9, 2014, cash paid by the Predecessor Company for interest, net of amounts capitalized, and including bond coupon interest paid, June 30, 2014, was $40,209.
 
During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, cash paid by the Successor Company for estimated income taxes was $1,369 and $320, respectively.  During the period from January 1 to July 9, 2014, cash paid by the Predecessor Company for estimated income taxes was $1,495.
 
On July 13, 2015 and July 29, 2015, the Company issued 16,188 and 58,215 restricted stock units, respectively, to certain members of the Board of Directors.  The aggregate fair value of these restricted stock units was $113 and $416, respectively, and 16,188 shares vested on July 17, 2015.  Refer to Note 20 — Stock-Based Compensation for further details.
 
On August 7, 2014, the Company made grants of nonvested common stock pursuant to the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”) as approved by the Plan in the amount of 1,110,600 shares to the participating officers, directors and other management of the Successor Company.  The aggregate fair value of such nonvested stock was $22,212.  Additionally, on August 7, 2014, the Company issued 8,557,461 MIP Warrants to the participating officers, directors and other management of the Successor Company.  The aggregate fair value of these awards upon emergence from bankruptcy was $54,436.
 
On April 9, 2014, Baltic Trading made grants of nonvested common stock in the amount 36,345 shares to directors of Baltic Trading.  The aggregate fair value of such nonvested stock was $225.  On July 17, 2015, the date of Baltic Trading’s 2015 Annual Meeting of Shareholders, these shares vested automatically and received the same consideration in the Merger as holders of Baltic Trading’s common stock, refer to Note 1 — General Information for further information.
 
4 - VESSEL ACQUISITIONS
 
On November 13, 2013, Baltic Trading entered into agreements to purchase up to four 64,000 dwt Ultramax newbuilding drybulk vessels from Yangfan Group Co., Ltd. for a purchase price of $28,000 per vessel, or up to $112,000 in the aggregate.  Baltic Trading agreed to purchase two such vessels, which have been renamed the Baltic Hornet and Baltic Wasp, and obtained an option to purchase up to two additional such vessels for the same purchase price, which Baltic Trading exercised on January 8, 2014. These vessels were renamed the Baltic Mantis and the Baltic Scorpion. The first of these vessels, the Baltic Hornet, was delivered to Baltic Trading on October 29, 2014.  The Baltic Wasp was delivered to Baltic Trading on January 2, 2015.  The Baltic Scorpion and the Baltic Mantis were delivered to the Company on August 6, 2015 and October 9, 2015, respectively.  As of September 30, 2015 and December 31, 2014, deposits on vessels were $10,183 and $25,593, respectively.  The Company has used a combination of cash on hand, cash flow from operations as well as debt, including the $148 Million Credit Facility and 2014 Term Loan Facility as described in Note 8 — Debt, to fully finance the acquisition of these Ultramax newbuilding drybulk vessels.  On December 30, 2014, Baltic Trading paid $19,645 for the final payment due for the Baltic Wasp which was classified as noncurrent Restricted Cash in the Condensed Consolidated Balance Sheets as of December 31, 2014 as the payment was held in an escrow account and was released to the seller when the vessel was delivered to Baltic Trading on January 2, 2015.
 
Refer to Note 1 — General Information for a listing of the delivery dates for the vessels in the Company’s fleet.
 
Below market time charters, including those acquired during previous periods, were amortized as an increase to voyage revenue by the Predecessor Company in the amount of $2 and $68 during the period from July 1 to July 9, 2014 and January 1 to July
 
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9, 2014, respectively.  The remaining unamortized fair market value of Time charters acquired at December 31, 2014 was $0.  As part of fresh-start reporting, the remaining liability for below market time charters was written-off during the re-valuation of our liabilities.
 
Additionally, as part of fresh-start accounting, an asset for above market time charters was recorded in Time charters acquired in the amount of $450 for the Genco Bourgogne, Genco Muse and Genco Spirit.  These above market time charters were amortized as a decrease to voyage revenue by the Successor Company in the amount of $434 during the period from July 9 to September 30, 2014.  There was no amortization recorded by the Successor Company during the three and nine months ended September 30, 2015.
 
Capitalized interest expense associated with the newbuilding contracts entered into by Baltic Trading recorded by the Successor Company for the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 was $100, $363 and $208, respectively.  Capitalized interest expense associated with the newbuilding contracts entered into by Baltic Trading recorded by the Predecessor Company for the periods from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $20 and $295, respectively.
 
5 - INVESTMENTS
 
The Company holds an investment in the capital stock of Jinhui and the stock of KLC.  Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping.  KLC is a marine transportation service company that operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.  These investments are designated as AFS and are reported at fair value, with unrealized gains and losses recorded in equity as a component of AOCI.  At September 30, 2015 and December 31, 2014, the Company held 15,908,574 and 16,335,100 shares of Jinhui capital stock, respectively, which is recorded at its fair value of $17,841 and $26,414, respectively, based on the last closing price during each respective quarter on September 30, 2015 and December 30, 2014, respectively.  At September 30, 2015 and December 31, 2014, the Company held 3,355 shares of KLC stock which is recorded at its fair value of $59 and $72, respectively, based on the last closing price during each respective quarter on September 30, 2015 and December 30, 2014.
 
The Company reviewed the investment in Jinhui for indicators of other-than-temporary impairment in accordance with ASC 320-10.  Based on the Company’s review, it has deemed the investment in Jinhui to be other-than-temporarily impaired as of September 30, 2015 due to the duration and severity of the decline in its market value versus its cost basis and the absence of the intent and ability to recover the initial carrying value of the investment.  As a result, during the three and nine months ended September 30, 2015, the Successor Company recorded a $32,536 impairment charge which has been recorded in Impairment of investments in our Condensed Consolidated Statement of Operations.  The Company will continue to review its investments in Jinhui and KLC for impairment on a quarterly basis.  There were no impairment charges recorded by the Successor Company during the period July 9 to September 30, 2014 or by the Predecessor Company during the period from July 1 to July 9, 2014 or January 1 to July 9, 2014.
 
The unrealized gain (losses) on the Jinhui capital stock and KLC stock are a component of AOCI since these investments are designated as AFS securities.  As part of fresh-start reporting, the Company revised its cost basis for its investments in Jinhui and KLC based on their fair values on the Effective Date.  As a result of the other-than-temporary impairment of the investment in Jinhui, the cost basis for the investment in Jinhui will be based on its fair value as of September 30, 2015.
 
Refer to Note 11 — Accumulated Other Comprehensive Income (Loss) for a breakdown of the components of AOCI, including the effects of the sale of Jinhui shares and the other-than-temporary impairment of the investment in Jinhui.
 
6 — NET LOSS PER COMMON SHARE
 
The computation of basic net loss per share is based on the weighted-average number of common shares outstanding during the year. The computation of diluted net loss per share assumes the vesting of nonvested stock awards (refer to Note 20 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive.  Of the 798,615 nonvested shares outstanding at September 30, 2015 (refer to Note 20 — Stock-Based Compensation), all are anti-dilutive.  The Successor Company’s diluted net loss per share will also reflect the assumed conversion of the equity warrants issued on the Effective Date and MIP Warrants issued by the Successor Company (refer to Note 20 — Stock-Based Compensation) if the impact is dilutive under the treasury stock method.  The Predecessor Company’s diluted net loss per share will also reflect the assumed conversion under the Predecessor Company’s convertible debt if the impact is dilutive under the “if converted” method. The impact of the shares convertible under the Predecessor Company’s convertible notes is excluded from the computation of diluted earnings per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share.
 
The components of the denominator for the calculation of basic net loss per share and diluted net loss per share are as follows:
 
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 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
July 1 to
July 9,
2014	 	
 	 	 	 	 	 	 	 	 	
Common shares outstanding, basic:	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	69,824,338	 	60,299,766	 	 	43,568,942	 	
 	 	 	 	 	 	 	 	 	
Common shares outstanding, diluted:	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	69,824,338	 	60,299,766	 	 	43,568,942	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of warrants	 	—	 	—	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of convertible notes	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of restricted stock awards	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, diluted	 	69,824,338	 	60,299,766	 	 	43,568,942	 	

 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
January 1 to
July 9,
2014	 	
 	 	 	 	 	 	 	 	 	
Common shares outstanding, basic:	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	63,615,181	 	60,299,766	 	 	43,568,942	 	
 	 	 	 	 	 	 	 	 	
Common shares outstanding, diluted:	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, basic	 	63,615,181	 	60,299,766	 	 	43,568,942	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of warrants	 	—	 	—	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of convertible notes	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Dilutive effect of restricted stock awards	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Weighted-average common shares outstanding, diluted	 	63,615,181	 	60,299,766	 	 	43,568,942	 	
 
The following table sets forth a reconciliatio n of the net loss attributable to GS&T and the net loss attributable to GS&T for diluted net loss per share under the “if-converted” method:

 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
July 1 to
July 9,
2014
(restated)	 	
 	 	 	 	 	 	 	 	 	
Net loss attributable to GS&T	 	$	(66,625	)	$	(18,290	)	 	$	(851,521	)	
 	 	 	 	 	 	 	 	 	
Interest expense related to convertible notes, if dilutive	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Net loss attributable to GS&T for the computation of diluted net loss per share	 	$	(66,625	)	$	(18,290	)	 	$	(851,521	)	

 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
January 1 to
July 9,
2014
(restated)	 	
 	 	 	 	 	 	 	 	 	
Net loss attributable to GS&T	 	$	(145,397	)	$	(18,290	)	 	$	(951,149	)	
 	 	 	 	 	 	 	 	 	
Interest expense related to convertible notes, if dilutive	 	—	 	—	 	 	—	 	
 	 	 	 	 	 	 	 	 	
Net loss attributable to GS&T for the computation of diluted net loss per share	 	$	(145,397	)	$	(18,290	)	 	$	(951,149	)	
 
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7 - RELATED PARTY TRANSACTIONS
 
The following represent related party transactions reflected in these condensed consolidated financial statements:
 
Until December 31, 2014, the Company made available employees performing internal audit services to Gener8 Maritime, Inc., formerly General Maritime Corporation (“Gener8”), where the Company’s Chairman, Peter C. Georgiopoulos, also serves as Chairman of the Board.  During the period from July 9 to September 30, 2014, the Successor Company invoiced $9 to Gener8 and for the period from January 1 to July 9, 2014, the Predecessor Company invoiced $72 to Gener8. The amounts billed to Gener8 include time associated with such internal audit services and other expenditures.  Additionally, during the nine months ended September 30, 2015 and during the period from July 9 to September 30, 2014, the Successor Company incurred travel and other office related expenditures totaling $76 and $22, respectively, reimbursable to Gener8 or its service provider.  For the period from January 1 to July 9, 2014, the Predecessor Company incurred travel and other office related expenditures totaling $49.  At September 30, 2015 and December 31, 2014, the amount due to Gener8 from the Company was $8 and $41, respectively.
 
During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the Successor Company incurred legal services (primarily in connection with vessel acquisitions) aggregating $18 and $2, respectively, from Constantine Georgiopoulos, the father of Peter C. Georgiopoulos, Chairman of the Board.  Additionally, during the period from January 1 to July 9, 2014, the Predecessor Company incurred legal services aggregating $3 from Constantine Georgiopoulos.  At September 30, 2015 and December 31, 2014, the amount due to Constantine Georgiopoulos was $11 and $9, respectively.
 
The Company has entered into agreements with Aegean Marine Petroleum Network, Inc. (“Aegean”) to purchase lubricating oils for certain vessels in their fleets.  Peter C. Georgiopoulos, Chairman of the Board of the Company, is Chairman of the Board of Aegean.  During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, Aegean supplied lubricating oils to the Successor Company’s vessels aggregating $1,330 and $419, respectively.  Additionally, during the nine months ended September 30, 2015, Aegean supplied fuel to the Successor Company’s vessels aggregating $73.  Additionally, during the period from January 1 to July 9, 2014, Aegean supplied lubricating oils to the Predecessor Company’s vessels aggregating $1,087.  At September 30, 2015 and December 31, 2014, $604 and $267 remained outstanding, respectively.
 
During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the Successor Company invoiced MEP for technical services provided and expenses paid on MEP’s behalf aggregating $2,508 and $766, respectively.  During the period from January 1 to July 9, 2014, the Predecessor Company invoiced MEP for technical services provided and expense paid on MEP’s behalf aggregating $1,743.  Peter C. Georgiopoulos, Chairman of the Board, controls and has a minority interest in MEP.  At September 30, 2015 and December 31, 2014, $1,222 and $10, respectively, was due to the Company from MEP.  Total service revenue earned by the Successor Company for technical service provided to MEP for the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 was $2,457 and $756, respectively.  Total service revenue earned by the Predecessor Company for technical service provided to MEP for the period from January 1 to July 9, 2014 was $1,701.
 
8 - DEBT
 
Long-term debt consists of the following:

 	 	Successor	 	Successor	 	
 	 	September 30, 
 2015	 	December 31, 
 2014	 	
 	 	 	 	 	 	
$100 Million Term Loan Facility	 	$	62,023	 	$	67,792	 	
$253 Million Term Loan Facility	 	148,693	 	165,568	 	
$44 Million Term Loan Facility	 	39,187	 	41,250	 	
2015 Revolving Credit Facility	 	35,000	 	—	 	
2010 Credit Facility	 	—	 	102,250	 	
$148 Million Credit Facility	 	126,606	 	—	 	
$22 Million Term Loan Facility	 	19,000	 	20,125	 	
2014 Term Loan Facilities	 	31,769	 	33,150	 	
Less: Current portion	 	(44,242	)	(34,324	)	
Long-term debt	 	$	418,036	 	$	395,811	 	
 
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$98 Million Credit Facility
 
On November 4, 2015, thirteen of the Company’s wholly-owned subsidiaries entered into a Facility Agreement, by and among such subsidiaries as borrowers (collectively, the “Borrowers”); Genco Holdings Limited, a newly formed direct subsidiary of Genco of which the Borrowers are direct subsidiaries (“Holdco”); certain funds managed or advised by Hayfin Capital Management, Breakwater Capital Ltd, or their nominee, as lenders; and Hayfin Services LLP, as agent and security agent (the “$98 Million Credit Facility”).
 
The Borrowers borrowed the maximum available amount of $98,271 under the facility on November 10, 2015.
 
Borrowings under the facility are available for working capital purposes.  The facility has a final maturity date of September 30, 2020, and the principal borrowed under the facility will bear interest at LIBOR for an interest period of three months plus a margin of 6.125% per annum.  The facility has no fixed amortization payments for the first two years and fixed amortization payments of $2,500 per quarter thereafter.  To the extent the value of the collateral under the facility is 182% or less of the loan amount outstanding, the Borrowers are to prepay the loan from earnings received from operation of the thirteen collateral vessels after deduction of the following amounts:  costs, fees, expenses, interest, and fixed principal repayments under the facility; operating expenses relating to the thirteen vessels; and the Borrowers’ pro rata share of general and administrative expenses based on the number of vessels they own.
 
The Facility Agreement requires the Borrowers and, in certain cases, the Company and Holdco to comply with a number of covenants substantially similar to those in the other credit facilities of Genco and its subsidiaries, including financial covenants related to maximum leverage, minimum consolidated net worth, minimum liquidity, and dividends; collateral maintenance requirements; and other customary covenants.  The Facility Agreement includes usual and customary events of default and remedies for facilities of this nature.
 
Borrowings under the facility are secured by first priority mortgage on the vessels owned by the Borrowers, namely the Genco Constantine, the Genco Augustus, the Genco London, the Genco Titus, the Genco Tiberius, the Genco Hadrian,  the Genco Knight, the Genco Beauty,  the Genco Vigour, the Genco Predator, the Genco Cavalier, the Genco Champion, and the Genco Charger, and related collateral.  Pursuant to the Facility Agreement and a separate Guarantee executed by the Company, the Company and Holdco are acting as guarantors of the obligations of the Borrowers and each other under the Facility Agreement and its related documentation.
 
Amendment and Consent Agreements Related to the Merger
 
On July 14, 2015, Baltic Trading and certain of its wholly owned subsidiaries entered into agreements (the “Amendment and Consent Agreements”) to amend, provide consents under, or waive certain provisions of the $22 Million Term Loan Facility (as defined below), 2014 Term Loan Facilities (as defined below) and the $148 Million Credit Facility (as defined below) (each a “Facility” and collectively the “Facilities”).  The Amendment and Consent Agreements implemented, among other things, the following:
 
·                   The existing covenants measuring collateral maintenance under the 2014 Term Loan Facilities were amended as follows: the minimum fair market value of vessels pledged as security (together with the value of any additional collateral) is required to be (i) for the period from June 30, 2015 up to and including December 30, 2015, 125% of the amount outstanding under such Facilities; (ii) for the period from December 31, 2015 up to and including March 30, 2016, 130% of such amount; and (iii) for the period from March 31, 2016 and thereafter, 135% of such amount.
 
·                   The existing covenant measuring collateral maintenance under the $22 Million Term Loan Facility was amended so that through and including the period ending June 30, 2016, the minimum fair market value of vessels mortgaged under such Facility is required to be 110% of the amount outstanding under such Facility.
 
·                   Under the $148 Million Credit Facility, the existing covenant measuring collateral maintenance was amended so that through and including the period ending December 31, 2015, the minimum fair market value of vessels mortgaged under such Facility is required to be 130% of the amount outstanding under such Facility and thereafter, 140% of such amount, except that for the period through and including the period ending December 31, 2015, such percentage was increased to 140% at the time of funding of the term loan for the Baltic Scorpion on August 3, 2015.
 
·                   The calculation of the minimum consolidated net worth was reduced by $30,730 to $270,150 under each Facility to account for the reduction of equity due to the impairment associated with the sale of the Baltic Tiger and Baltic Lion vessels.
 
·                   The measurement of the maximum leverage ratio under each Facility was amended to exclude from the numerator thereof (which is the amount of indebtedness included in the calculation of such financial covenant) any committed but undrawn working capital lines.
 
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·                   Under the $148 Million Credit Facility, following consummation of the Merger on July 17, 2015, the amount of cash to be held by the administrative agent under such Facility (or otherwise remaining undrawn under certain working capital lines) for each collateral vessel mortgaged under such Facility, as required under the under the minimum liquidity covenant under such Facility, was amended to an amount of $750 per vessel.
 
·                   Following completion of the Merger on July 17, 2015, all corporate wide financial covenants of Baltic Trading are to be measured on a consolidated basis with the Company (the “Consolidated Covenant Amendments”).
 
·                   Waivers or consents under the Facilities to permit the delisting of Baltic Trading’s stock on the New York Stock Exchange (which constitutes a change of control under each such Facility) and the termination of the Management Agreement, dated as of March 15, 2010, by and between GS&T and Baltic Trading.
 
·                   Waivers or consents under each of the Facilities to permit the Merger.
 
·                   Waivers or consents to certain covenants under each of the Facilities to the extent such covenants would otherwise be breached as a result of the Merger.
 
On July 17, 2015, when the Merger was completed, the Company executed a guaranty of the obligations of the borrowers under each of the Facilities.  The execution of the guarantees, together with certain other items that were previously delivered, satisfied all conditions to the effectiveness of all provisions of the Amendment and Consent Agreements.
 
$100 Million Term Loan Facility
 
On August 12, 2010, the Company entered into the $100 Million Term Loan Facility. As of September 30, 2015, the Company has utilized its maximum borrowing capacity of $100,000. The Company has used the $100 Million Term Loan Facility to fund or refund the Company a portion of the purchase price of the acquisition of five vessels from companies within the Metrostar group of companies.  As of September 30, 2015, there was no availability under the $100 Million Term Loan Facility.   At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $62,023 and $67,792, respectively.
 
Pursuant to the amendments to the $100 Million Term Loan Facility that were entered into on December 21, 2011 and certain agreements we entered into in August 2012 to further amend our credit facilities (the “August 2012 Agreements”), the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.
 
On the Effective Date, the Company entered into the Amended and Restated $100 Million Term Loan Facility and the Amended and Restated $253 Million Term Loan Facility.  The Amended and Restated Credit Facilities included, among other things:
 
·                   A pay down as of the Effective Date with respect to payments which became due under the prepetition credit facilities between the Petition Date and the Effective Date and were not paid during the pendency of the Chapter 11 Cases ($1,923 for the $100 Million Term Loan Facility and $5,075 for the $253 Million Term Loan Facility).
 
·                   Extension of the maturity dates to August 31, 2019 from August 17, 2017 for the $100 Million Term Loan Facility and August 15, 2015 for the $253 Million Term Loan Facility.
 
·                   Relief from compliance with financial covenants governing the Company’s maximum leverage ratio, minimum consolidated interest coverage ratio and consolidated net worth through and including the quarter ending March 31, 2015 (with quarterly testing commencing June 30, 2015).
 
·                   A fleetwide minimum liquidity covenant requiring maintenance of cash of $750 per vessel for all vessels owned by the Company (excluding those owned by Baltic Trading).
 
·                   An increase in the interest rate to LIBOR plus 3.50% per year from 3.00% previously for the $100 Million Term Loan Facility and the $253 Million Term Loan Facility.
 
The obligations under the Amended and Restated $100 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $100 Million Term Loan Facility.  The Amended and Restated $100 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $100 Million Term Loan Facility.
 
On April 30, 2015, the Company entered into agreements to amend or waive certain provisions under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility (the “April 2015 Amendments”) which implemented the following, among other things:
 
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·                   The existing covenant measuring the Company’s ratio of net debt to EBITDA was replaced with a covenant requiring its ratio of total debt outstanding to value adjusted total assets (total assets adjusted for the difference between book value and market value of fleet vessels) to be less than 70%.
 
·                   Measurement of the interest coverage ratio under each facility is waived through and including December 31, 2016.
 
·                   The fleetwide minimum liquidity covenant was amended to allow up to 50% of the required amount of $750 per vessel in cash to be satisfied with undrawn working capital lines with a remaining availability period of more than six months.
 
·                   The Company agreed to grant additional security for its obligation under the $253 Million Term Loan Facility.  Refer to the $253 Million Term Loan Facility section below for a description of the additional security granted for this facility.
 
Consenting lenders under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility received an upfront fee of $165 and $350, respectively, related to the April 2015 Amendments.
 
As of September 30, 2015, the Company believes it is in compliance with all of the financial covenants under the Amended and Restated $100 Million Term Loan Facility, except for the 130% collateral maintenance test.  Following the procurement of updated valuations in August 2015, the actual collateral maintenance measurement by the Company was 126.2% at September 30, 2015, including the additional collateral as described below. Under the terms of the credit facility, the Company would need to remedy such shortfall within 30 days from the time it is requested by the agent.  The Company was not notified by the agent to take any remedial actions.  However, in October 2015, the Company added one of its unencumbered Handymax vessels, the Genco Prosperity, as additional collateral to cover the shortfall and satisfy the collateral maintenance test.  The next date that valuations under this credit facility will be required is on or around February 17, 2016.
 
Additionally, following the procurement of updated valuations in February 2015, the Company was not in compliance with the collateral maintenance test of a ratio of 130%. The collateral measurement was 122.4%, representing an approximate shortfall of $5,150.  Under the terms of the credit facility the Company would need to cover such shortfall within 30 days from the time it is notified by the agent.  The Company was not notified by the agent to take any remedial actions.  However, on April 24, 2015, the Company added one of its unencumbered Handysize vessels, the Genco Sugar, as additional collateral to cover the shortfall and satisfy the collateral maintenance test.
 
$253 Million Term Loan Facility
 
On August 20, 2010, the Company entered into the $253 Million Term Loan Facility.  As of September 30, 2015, the Company has utilized its maximum borrowing capacity of $253,000 to fund or refund to the Company a portion of the purchase price of the 13 vessels purchased from Bourbon SA during the third quarter of 2010 and first quarter of 2011.  As of September 30, 2015, there was no availability under the $253 Million Term Loan Facility.   At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $148,693 and $165,568, respectively.
 
Pursuant to the amendment to the $253 Million Term Loan Facility that was entered into on December 21, 2011 and the August 2012 Agreements, the maximum leverage ratio covenant and the minimum permitted consolidated interest ratio covenant were waived for the periods ending on and including December 31, 2013.
 
As of September 30, 2015 and December 31, 2014, the Company has deposited $9,750 that has been reflected as Restricted cash.  Restricted cash will be released only if the underlying collateral is sold or disposed of.
 
Refer to the “$100 Million Term Loan Facility” section above for a description of the Amended and Restated $253 Million Term Loan Facility that was entered into by the Company on the Effective Date as well as a description of the April 2015 Amendments that were entered into by the Company on April 30, 2015. The obligations under the Amended and Restated $253 Million Term Loan Facility are secured by a first priority security interest in the vessels and other collateral securing the $253 Million Term Loan Facility. The Amended and Restated $253 Million Term Loan Facility requires quarterly repayment installments in accordance with the original terms of the $253 Million Term Loan Facility.
 
As of September 30, 2015, the Company believes it is in compliance with all of the financial covenants under the Amended and Restated $253 Million Term Loan Facility.
 
As of June 30, 2015, the Company was not in compliance with the 135% collateral maintenance test.  The actual percentage measured by the Company was 129.2% at June 30, 2015, including the additional collateral as described below, and 133.5% on July 9, 2015 following the Company’s scheduled amortization payment of $5,075.  Under the terms of the credit facility, the Company would need to remedy such shortfall within 30 days from the time it is requested by the agent.  During July 2015, the Company added five of its unencumbered vessels, the Genco Thunder, the Genco Raptor, the Genco Challenger, the Genco Reliance and the Genco Explorer, as additional collateral under this facility. In order to maintain compliance with the collateral maintenance test, the Company was also
 
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in communication with the facility’s agent and prepaid $1,650 of the outstanding indebtedness on July 29, 2015, which the lenders have agreed will reduce the scheduled amortization payment of $5,075 that was due in October 2015.
 
$44 Million Term Loan Facility
 
On December 3, 2013, Baltic Tiger Limited and Baltic Lion Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $44,000 (the “$44 Million Term Loan Facility”). Amounts borrowed and repaid under the $44 Million Term Loan Facility may not be reborrowed.  The $44 Million Term Loan Facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or December 23, 2019.  Borrowings under the $44 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 0.75% per annum is payable on the unused daily portion of the credit facility, which began accruing on December 3, 2013 and ended on December 23, 2013, the date which the entire $44,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $688 each commencing three months after the last drawdown date, or March 24, 2014, and a final payment of $28,188 due on the maturity date.
 
Borrowings under the $44 Million Term Loan Facility are to be secured by liens on the Company’s vessels to be financed or refinanced with borrowings under the facility, namely the Baltic Tiger and the Baltic Lion, and other related assets. Upon the prepayment of $18,000 plus any additional amounts necessary to maintain compliance with the collateral maintenance covenant, Baltic Trading may have the lien on the Baltic Tiger released. Under a Guarantee and Indemnity entered into concurrently with the $44 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the $44 Million Term Loan Facility.
 
On December 23, 2013, Baltic Tiger Limited and Baltic Lion Limited made drawdowns of $21,400 and $22,600 for the Baltic Tiger and Baltic Lion, respectively.  As of September 30, 2015, the Company has utilized its maximum borrowing capacity of $44,000, and there was no further availability.  At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $39,187 and $41,250, respectively.
 
As of September 30, 2015 , the Company believes it is in compliance with all of the financial covenants under the $44 Million Term Loan Facility.
 
On April 8, 2015, the Company acquired the entities owning the Baltic Lion and Baltic Tiger and succeeded Baltic Trading as the guarantor of the outstanding debt under the $44 Million Term Loan Facility.  Refer to Note 1 — General Information for further information regarding the sale of these entities to the Company.
 
2015 Revolving Credit Facility
 
On April 7, 2015, the Company’s wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59,500 revolving credit facility, with an uncommitted accordion feature that has since expired (the “2015 Revolving Credit Facility”).  On April 7, 2015, the Company entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.
 
Borrowings under the 2015 Revolving Credit Facility will be used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of April 7, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1,641.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  A commitment fee of 1.5% per annum is payable on the undrawn amount of the maximum loan amount.
 
Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.
 
The 2015 Revolving Credit Facility requires the Subsidiaries to comply with a number of customary covenants including financial covenants related to collateral maintenance, liquidity, leverage, debt service reserve and dividend restrictions.
 
On April 8, 2015, the Company drew down $25,000 on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.   Additionally, on July 10, 2015, the Company drew down $10,000 on the 2015 Revolving Credit Facility for working capital purposes.  At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $35,000 and $0, respectively. On October 14, 2015, the Company drew down $21,218 on the 2015 Revolving Credit Facility for working capital purposes.
 
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As of September 30, 2015, the Company believes it is in compliance with all of the financial covenants under the 2015 Revolving Credit Facility.
 
2010 Credit Facility
 
On April 16, 2010, Baltic Trading entered into a $100,000 senior secured revolving credit facility with Nordea Bank Finland plc, acting through its New York branch (as amended, the “2010 Credit Facility”).  An amendment to the 2010 Credit Facility was entered into by Baltic Trading effective November 30, 2010.  Among other things, this amendment increased the commitment amount of the 2010 Credit Facility from $100,000 to $150,000.  An additional amendment to the 2010 Credit Facility was entered into by Baltic Trading effective August 29, 2013 (the “August 2013 Amendment”).  Among other things, the August 2013 Amendment implements the following modifications to the 2010 Credit Facility:
 
·                   The requirement that certain additional vessels acquired by Baltic Trading be mortgaged as collateral under the 2010 Credit Facility was eliminated.
 
·                   Restrictions on the incurrence of indebtedness by Baltic Trading and its subsidiaries were amended to apply only to those subsidiaries acting as guarantors under the 2010 Credit Facility.
 
·                   The total commitment under this facility was reduced to $110,000 and will be further reduced in three consecutive semi-annual reductions of $5,000 commencing on May 30, 2015.
 
·                   Borrowings bear interest at an applicable margin over LIBOR of 3.00% per annum if the ratio of the maximum facility amount of the aggregate appraised value of vessels mortgaged under the facility is 55% or less, measured quarterly; otherwise, the applicable margin is 3.35% per annum.
 
·                   Financial covenants corresponding to the liquidity and leverage under the $22 Million Term Loan Facility (as defined below) have been incorporated into the 2010 Credit Facility.
 
On December 31, 2014, Baltic Trading entered into the $148 Million Credit Facility, refer to “$148 Million Credit Facility” section below.  Borrowings under the $148 Million Credit Facility were used to refinance Baltic Trading’s indebtedness under the 2010 Credit Facility.  On January 7, 2015, Baltic Trading repaid the $102,250 outstanding under the 2010 Credit Facility with borrowings from the $148 Million Credit Facility.
 
$22 Million Term Loan Facility
 
On August 30, 2013, Baltic Hare Limited and Baltic Fox Limited, wholly-owned subsidiaries of Baltic Trading, entered into a secured loan agreement with DVB Bank SE for a term loan facility of up to $22,000 (the “$22 Million Term Loan Facility”).  Amounts borrowed and repaid under the $22 Million Term Loan Facility may not be reborrowed.  This facility has a maturity date of the sixth anniversary of the drawdown date for borrowings for the second vessel to be purchased, or September 4, 2019.  Borrowings under the $22 Million Term Loan Facility bear interest at the three-month LIBOR rate plus an applicable margin of 3.35% per annum. A commitment fee of 1.00% per annum is payable on the unused daily portion of the credit facility, which began accruing on August 30, 2013 and ended on September 4, 2013, the date which the entire $22,000 was borrowed.  Borrowings are to be repaid in 23 quarterly installments of $375 each commencing three months after the last vessel delivery date, or December 4, 2013, and a final payment of $13,375 due on the maturity date.
 
Borrowings under the $22 Million Term Loan Facility are secured by liens on Baltic Trading’s vessels purchased with borrowings under the facility, namely the Baltic Fox and the Baltic Hare, and other related assets.  Under a Guarantee and Indemnity entered into concurrently with the $22 Million Term Loan Facility, Baltic Trading agreed to guarantee the obligations of its subsidiaries under the $22 Million Term Loan Facility.
 
On September  4, 2013, Baltic Hare Limited and Baltic Fox Limited made drawdowns of $10,730 and $11,270 for the Baltic Hare and the Baltic Fox, respectively.  As of September 30, 2015, the Company has utilized its maximum borrowing capacity of $22,000, and there was no further availability.  At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $19,000 and $20,125, respectively.
 
As of September 30, 2015 the Company believes it is in compliance with all of the financial covenants under the $22 Million Term Loan Facility.
 
Refer to “Amendment and Consent Agreements Related to the Merger” section above for discussion of the amendments, consents and waiver agreements entered into on July 14, 2015 by Baltic Trading related to the $22 Million Term Loan Facility.  Upon
 
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the completion of the Merger on July 17, 2015, the Company executed a guaranty of the obligations of the borrowers under the $22 Million Term Loan Facility.
 
2014 Term Loan Facilities
 
On October 8, 2014, Baltic Trading and its wholly-owned subsidiaries, Baltic Hornet Limited and Baltic Wasp Limited, each entered into a loan agreement and related documentation for a credit facility in a principal amount of up to $16,800 with ABN AMRO Capital USA LLC and its affiliates (the “2014 Term Loan Facilities”) to partially finance the newbuilding Ultramax vessel that each subsidiary is to acquire, namely the Baltic Hornet and Baltic Wasp, respectively.  Amounts borrowed under the 2014 Term Loan Facilities may not be reborrowed.  The 2014 Term Loan Facilities have a ten-year term, and the facility amount is to be the lowest of 60% of the delivered cost per vessel, $16,800 per vessel, and 60% of the fair market value of each vessel at delivery.  The 2014 Term Loan Facilities are insured by the China Export & Credit Insurance Corporation (Sinosure) in order to cover political and commercial risks for 95% of the outstanding principal plus interest, which will be recorded in deferred financing fees.  Borrowings under the 2014 Term Loan Facilities bear interest at the three or six-month LIBOR rate plus an applicable margin of 2.50% per annum.  Borrowings are to be repaid in 20 equal consecutive semi-annual installments of 1/24 of the facility amount plus a balloon payment of 1/6 of the facility amount at final maturity.  Principal repayments will commence six months after the actual delivery date for a vessel.
 
Borrowings under the 2014 Term Loan Facilities are to be secured by liens on the Baltic Trading’s vessels acquired with borrowings under these facilities, namely the Baltic Hornet and Baltic Wasp, and other related assets. Baltic Trading guarantees the obligations of the Baltic Hornet and Baltic Wasp under the 2014 Term Loan Facilities.
 
On October 24, 2014, Baltic Trading drew down $16,800 for the purchase of the Baltic Hornet, which was delivered on October 29, 2014.  Additionally, on December 30, 2014, Baltic Trading drew down $16,350 for the purchase of the Baltic Wasp, which was delivered on January 2, 2015.  As of September 30, 2015, the Company has utilized its maximum borrowing capacity, and there was no further availability.  At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $31,769 and $33,150, respectively.
 
As of September 30, 2015, the Company believes it is in compliance with all of the financial covenants under the 2014 Term Loan Facilities.
 
Refer to “Amendment and Consent Agreements Related to the Merger” section above for discussion of the amendments, consents and waiver agreements entered into on July 14, 2015 by Baltic Trading related to the 2014 Term Loan Facilities.  Upon the completion of the Merger on July 17, 2015, the Company executed a guaranty of the obligations of the borrowers under the 2014 Term Loan Facilities.
 
$148 Million Credit Facility
 
On December 31, 2014, Baltic Trading entered into a $148,000 senior secured credit facility with Nordea Bank Finland plc, New York Branch (“Nordea”), as Administrative and Security Agent, Nordea and Skandinaviska Enskilda Banken AB (Publ) (“SEB”), as Mandated Lead Arrangers, Nordea, as Bookrunner, and the lenders (including Nordea and SEB) party thereto (the “$148 Million Credit Facility”).  The $148 Million Credit Facility is comprised of an $115,000 revolving credit facility and $33,000 term loan facility.  Borrowings under the revolving credit facility were used to refinance Baltic Trading’s outstanding indebtedness under the 2010 Credit Facility.  Amounts borrowed under the revolving credit facility of the $148 Million Credit Facility may be re-borrowed.  Borrowings under the term loan facility of the $148 Million Credit Facility may be incurred pursuant to two single term loans in an amount of $16,500 each that will be used to finance, in part, the purchase of two newbuilding Ultramax vessels that the Company has agreed to acquire, namely the Baltic Scorpion and Baltic Mantis.  Amounts borrowed under the term loan facility of the $148 Million Credit Facility may not be re-borrowed.
 
The $148 Million Credit Facility has a maturity date of December 31, 2019.  Borrowings under this facility bear interest at LIBOR plus an applicable margin of 3.00% per annum.  A commitment fee of 1.2% per annum is payable on the unused daily portion of the $148 Million Credit Facility, which began accruing on December 31, 2014.  The commitment under the revolving credit facility of the $148 Million Credit Facility is subject to equal consecutive quarterly reductions of $2,447 each beginning June 30, 2015 through September 30, 2019.  Borrowings under the term loan facility of the $148 Million Credit Facility are subject to equal consecutive quarterly installment repayments commencing three months after delivery of the relevant newbuilding Ultramax vessel, each in the amount of 1/60 of the aggregate outstanding term loan.  All remaining amounts outstanding under the $148 Million Credit Facility must be repaid in full on the maturity date, December 31, 2019.
 
Borrowings under the $148 Million Credit Facility are secured by liens on nine of Baltic Trading’s existing vessels that have served as collateral under the 2010 Credit Facility, the two newbuilding Ultramax vessels noted above, and other related assets, including existing or future time charter contracts in excess of 36 months related to the foregoing vessels.
 
The $148 Million Credit Facility requires the Company to comply with a number of customary covenants substantially similar to those in the 2010 Baltic Trading Credit Facility, including financial covenants related to liquidity, leverage, consolidated net worth and collateral maintenance.
 
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As of September 30, 2015, $16,500 remained available under the $148 Million Credit Facility which represents the remainder of the $33,000 term loan facility.  On August 3, 2015, the Company drew down $16,500 on the term loan facility for the purchase of the Baltic Scorpion.  Additionally, on October 7, 2015, the Company drew down the remaining $16,500 on the term loan facility for the purchase of the Baltic Mantis.  Refer to Note 24 — Subsequent Events.
 
On January 7, 2015, Baltic Trading drew down $104,500 from the revolving credit facility of the $148 Million Credit Facility.  Using these borrowings, Baltic Trading repaid the $102,250 outstanding under the 2010 Credit Facility.  Additionally, on February 27, 2015, Baltic Trading drew down $10,500 from the revolving credit facility of the $148 Million Credit Facility.  Therefore, as of September 30, 2015, there was no remaining availability under the revolving credit facility of the $148 Million Credit Facility.  At September 30, 2015 and December 31, 2014, the total outstanding debt balance was $126,606 and $0, respectively.
 
As of September 30, 2015, the Company believes Baltic Trading is in compliance with all of the financial covenants under the $148 Million Credit Facility.
 
Refer to “Amendment and Consent Agreements Related to the Merger” section above for discussion of the amendments, consents and waiver agreements entered into on July 14, 2015 by Baltic Trading related to the $148 Million Credit Facility.  Upon the completion of the Merger on July 17, 2015, the Company executed a guaranty of the obligations of the borrowers under the $148 Million Credit Facility.
 
As per the Amendment and Consent Agreements, the collateral maintenance increased to 140% from 130% upon the funding of the initial term loan draw down on the facility.  During August 2015, the Company added two of its unencumbered Handysize vessels, the Genco Pioneer and Genco Progress, as additional collateral to cover any potential shortfall of the collateral maintenance test.
 
Interest rates
 
The following tables sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the cost associated with unused commitment fees.  For the Predecessor Company for the period from July 1 to July 9, 2014 and January 1 to July 9, 2014, the effective interest rate also included the rate differential between the pay fixed, receive variable rate on the interest rate swap agreements that were in effect (refer to Note 10 — Interest Rate Swap Agreements), combined, as well as the 1.0% facility fee for the credit agreement entered into on July 20, 2017 with DnB Nor Bank ASA (the “2007 Credit Facility”) which was terminated on the Effective Date.  The following table also includes the range of interest rates on the debt, excluding the impact of swaps and unused commitment fees, if applicable:

 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended
September 30,
2015	 	Period from
July 9 to 
 September 30,
2014	 	 	Period from
July 1 to 
 July 9,
2014	 	
Effective Interest Rate	 	3.55	%	3.62	%	 	3.94	%	
Range of Interest Rates (excluding impact of swaps and unused commitment fees)	 	2.78% to 3.93	%	3.15% to 3.73	%	 	3.15% to 5.15	%	
 	 	 	 	 	 	 	 	 	
 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to 
 September 30,
2014	 	 	Period from
January 1 to 
 July 9,
2014	 	
Effective Interest Rate	 	3.54	%	3.62	%	 	4.19	%	
Range of Interest Rates (excluding impact of swaps and unused commitment fees)	 	2.73% to 3.93	%	3.15% to 3.73	%	 	3.15% to 5.15	%	
 
9 — CONVERTIBLE SENIOR NOTES
 
The Company issued $125,000 of the 5.0% Convertible Senior Notes on July 27, 2010 (the “2010 Notes”). The Indenture for the 2010 Notes included customary agreements and covenants by the Company, including with respect to events of default. As noted in Note 1 — General Information, the filing of the Chapter 11 Cases by the Company on April 21, 2014 constituted an event of default with respect to the 2010 Notes. On this date, the Company ceased recording interest expense related to the 2010 Notes.  During the period from July 1 to July 9, 2014 and January 1 to July 9, 2014, interest expense of $255 and $2,522, including the amortization of the discount of the liability component and the bond coupon interest expense, was not recorded by the Predecessor Company, which would have been incurred had the indebtedness not been reclassified as a Liability subject to compromise.  On the Effective Date, when the Company emerged from Chapter 11, the 2010 Notes and the Indenture were fully satisfied and discharged.
 
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The following table provides additional information about the Predecessor Company’s 2010 Notes:

 	 	Predecessor	 	
 	 	Period from 
 July 1 to 
 July 9, 
 2014	 	Period from 
 January 1 to 
 July 9, 
 2014 (a)	 	
Effective interest rate on liability component	 	—	%	10.0	%	
Cash interest expense recognized	 	$	—	 	$	1,886	 	
Non-cash interest expense recognized	 	—	 	1,592	 	
Non-cash deferred financing amortization costs included in interest expense	 	—	 	216	 	

(a)          The amounts and percentage reflect amounts through April 21, 2014 since the Company ceased recording interest expense due to the Chapter 11 Cases.
 
10 - INTEREST RATE SWAP AGREEMENTS
 
As of March 31, 2014, the Company had one interest rate swap agreement outstanding with DNB Bank ASA to manage interest costs and risk associated with variable interest rates related to the Company’s 2007 Credit Facility.  The notional amount of the swap was $106,233.  As of March 31, 2014, the Company was in default under covenants of its 2007 Credit Facility due to the default on the schedule debt amortization payment due on March 31, 2014.  The default under the 2007 Credit Facility required the Company to elect interest periods of only one-month.  Therefore, the Company no longer qualified for hedge accounting under the original designation, and hedge accounting was terminated effective March 31, 2014.  Additionally, the filing of the Chapter 11 Cases by the Company on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA.  As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and filed a secured claim with the Bankruptcy Court of $5,622.  The claim was paid to DNB Bank ASA by the Successor Company during the period from July 9 to September 30, 2014.
 
As of September 30, 2015 and December 31, 2014 the Company did not have any interest rate swap agreements.
 
The differentials to be paid or received for these swap agreements were recognized as an adjustment to interest expense as incurred.  The Company utilized cash flow hedge accounting for these swaps through March 31, 2014, whereby the effective portion of the change in the value of the swaps is reflected as a component of AOCI.  The ineffective portion is recognized as Other expense, which is a component of Other income (expense).  On March 31, 2014, the cash flow hedge accounting on the remaining swap agreement was discontinued.  Once cash flow hedge accounting was discontinued, the changes in the fair value of the interest rate swaps were recorded in the Condensed Consolidated Statement of Operations in Interest expense and the remaining amounts included in AOCI were amortized to Interest expense over the original term of the hedging relationship for the Predecessor Company.
 
The following tables present the impact of derivative instruments and their location within the Condensed Consolidated Statement of Operations for the Predecessor Company:
 
The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Period from July 1 to July 9, 2014
Predecessor Company

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2014	 	Portion)	 	2014	 	Portion)	 	2014	 	
Interest rate contracts	 	$	—	 	Interest Expense	 	$	(95	)	Other Income (Expense)	 	$	—	 	

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The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Period from January 1 to July 9, 2014
Predecessor Company

Derivatives in Cash
Flow Hedging	 	Amount of
Gain (Loss)
Recognized
in AOCI on
Derivative
(Effective
Portion)	 	Location of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective	 	Amount of
Gain (Loss)
Reclassified
from AOCI
into income
(Effective
Portion)	 	Location of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective	 	Amount of
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)	 	
Relationships	 	2014	 	Portion)	 	2014	 	Portion)	 	2014	 	
Interest rate contracts	 	$	(179	)	Interest Expense	 	$	(2,580	)	Other Income (Expense)	 	$	—	 	

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations
For the Period from July 1 to July 9, 2014 and January 1 to July 9, 2014
Predecessor Company

 	 	 	 	Amount of
Gain (Loss) Recognized in Income on
Derivative	 	
Derivatives not designated
as Hedging Instruments	 	Location of
Gain (Loss)
Recognized in Income
on Derivative	 	For the Period
from July 1 to
July 9,
2014	 	For the Period
from January 1 
 to July 9,
2014	 	
Interest rate contracts	 	Interest Expense	 	$	—	 	$	(225	)	

The Company was required to provide collateral in the form of vessel assets to support the interest rate swap agreements, excluding vessel assets of Baltic Trading.  Prior to the termination of the 2007 Credit Facility on the Effective Date, the Company’s 35 vessels mortgaged under the 2007 Credit Facility served as collateral in the aggregate amount of $100,000.
 
11 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The components of AOCI included in the accompanying condensed consolidated balance sheets consist of net unrealized gain (loss) on cash flow hedges and net unrealized gains (losses) from investments in Jinhui stock and KLC stock for the Predecessor Company.  For the Successor Company, the components of AOCI included in the accompanying condensed consolidated balance sheets consist only of net unrealized gains (losses) from investments in Jinhui stock and KLC stock based on the revised cost basis recorded as part of fresh-start reporting until September 30, 2015, when the cost basis for Jinhui was changed due to other-than-temporary impairment. Refer to Note 5 — Investments for further detail.
 
Changes in AOCI by Component
For the Three-Month Period Ended September 30, 2015
Successor Company

 	 	Net Unrealized
Gain (Loss)
on
Investments	 	
AOCI — July 1, 2015	 	$	(26,360	)	
 	 	 	 	
OCI before reclassifications	 	(6,880	)	
Amounts reclassified from AOCI	 	33,223	 	
Net current-period OCI	 	26,343	 	
 	 	 	 	
AOCI — September 30, 2015	 	$	(17	)	
 
Changes in AOCI by Component
For the Period from July 9 to September 30, 2014
Successor Company

 	 	Net Unrealized
Gain (Loss)
on
Investments	 	
AOCI — July 9, 2014	 	$	—	 	
 	 	 	 	
OCI before reclassifications	 	(13,341	)	
Amounts reclassified from AOCI	 	—	 	
Net current-period OCI	 	(13,341	)	
 	 	 	 	
AOCI — September 30, 2014	 	$	(13,341	)	
 
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Changes in AOCI by Component
For the Period from July 1 to July 9, 2014
Predecessor Company

 	 	Net Unrealized
Gain (Loss) on
Cash Flow
Hedges	 	Net Unrealized
Gain (Loss)
on
Investments	 	Total	 	
AOCI —July 1, 2014	 	$	(4,670	)	$	32,746	 	$	28,076	 	
 	 	 	 	 	 	 	 	
OCI before reclassifications	 	—	 	2,186	 	2,186	 	
Amounts reclassified from AOCI	 	95	 	—	 	95	 	
Net current-period OCI	 	95	 	2,186	 	2,281	 	
 	 	 	 	 	 	 	 	
AOCI — July 9, 2014	 	$	(4,575	)	$	34,932	 	$	30,357	 	
 
Changes in AOCI by Component
For the Nine-Month Period Ended September 30, 2015
Successor Company

 	 	Net Unrealized
Gain (Loss)
on
Investments	 	
AOCI — January 1, 2015	 	$	(25,317	)	
 	 	 	 	
OCI before reclassifications	 	(7,923	)	
Amounts reclassified from AOCI	 	33,223	 	
Net current-period OCI	 	25,300	 	
 	 	 	 	
AOCI — September 30, 2015	 	$	(17	)	
 
Changes in AOCI by Component
For the Period from July 9 to September 30, 2014
Successor Company

 	 	Net Unrealized
Gain (Loss)
on
Investments	 	
AOCI — July 9, 2014	 	$	—	 	
 	 	 	 	
OCI before reclassifications	 	(13,341	)	
Amounts reclassified from AOCI	 	—	 	
Net current-period OCI	 	(13,341	)	
 	 	 	 	
AOCI — September 30, 2014	 	$	(13,341	)	
 
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Changes in AOCI by Component
For the Period from January 1 to July 9, 2014
Predecessor Company

 	 	Net Unrealized
Gain (Loss) on
Cash Flow
Hedges	 	Net Unrealized
Gain
on
Investments	 	Total	 	
AOCI — January 1, 2014	 	$	(6,976	)	$	60,698	 	$	53,722	 	
 	 	 	 	 	 	 	 	
OCI before reclassifications	 	(179	)	(25,766	)	(25,945	)	
Amounts reclassified from AOCI	 	2,580	 	—	 	2,580	 	
Net current-period OCI	 	2,401	 	(25,766	)	(23,365	)	
 	 	 	 	 	 	 	 	
AOCI — July 9, 2014	 	$	(4,575	)	$	34,932	 	$	30,357	 	
 
Reclassifications Out of AOCI
Successor Company

 	 	Amount Reclassified from AOCI	 	 	 	
 	 	Successor	 	 	 	
Details about AOCI Components	 	Three 
 Months Ended 
 September 30, 
 2015	 	Nine 
 Months Ended 
 September 30, 
 2015	 	Affected Line Item in the Statement
Where Net Loss is Presented	 	
Net unrealized (gain) loss on investments	 	 	 	 	 	 	 	
Realized loss on sale of AFS investment	 	$	(687	)	$	(687	)	Other (expense) income	 	
Impairment of AFS investment	 	(32,536	)	(32,536	)	Impairment of investment	 	
 	 	 	 	 	 	 	 	
Total reclassifications for the period	 	$	(33,223	)	$	(33,223	)	 	 	
 
Reclassifications Out of AOCI
Predecessor Company

 	 	Amount Reclassified from AOCI	 	 	 	
 	 	Predecessor	 	 	 	
Details about AOCI Components	 	Period from 
 July 1 to 
 July 9, 
 2014	 	Period from
January 1 
 to July 9, 
 2014	 	Affected Line Item in
the Statement Where
Net Loss is Presented	 	
Gains and losses on cash flow hedges	 	 	 	 	 	 	 	
Interest rate contracts	 	$	(95	)	$	(2,580	)	Interest expense	 	
 	 	 	 	 	 	 	 	
Total reclassifications for the period	 	$	(95	)	$	(2,580	)	 	 	
 
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12 - FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The fair values and carrying values of the Company’s financial instruments at September 30, 2015 and December 31, 2014, which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

 	 	Successor	 	
 	 	September 30, 
 2015	 	December 31, 
 2014	 	
 	 	Carrying
Value	 	Fair Value	 	Carrying
Value	 	Fair Value	 	
Cash and cash equivalents	 	$	44,478	 	$	44,478	 	$	83,414	 	$	83,414	 	
Restricted cash	 	10,065	 	10,065	 	29,695	 	29,695	 	
Floating rate debt	 	462,278	 	462,278	 	430,135	 	430,135	 	

The fair value of the floating rate debt under the Amended and Restated $100 Million Term Loan Facility and the Amended and Restated $253 Million Term Loan Facility are based on rates obtained upon our emergence from Chapter 11 on the Effective Date and there were no changes to rates pursuant to the April 2015 Amendments.  The fair value of the floating rate debt under the $44 Million Term Loan Facility is based on rates that Baltic Trading initially obtained on the effective date of the facility, and there were no changes to rates pursuant to the Guarantee and Indemnity entered into by the Company during April 2015.  The fair value of the floating rate debt under the 2015 Revolving Credit Facility is based on rates the Company recently obtained upon the effective date of the facility on April 7, 2015. The fair value of the $148 Million Credit Facility, $22 Million Term Loan Facility and the 2014 Term Loan Facilities is based on rates that Baltic Trading initially obtained upon the effective dates of these facilities which did not change pursuant to the Amendment and Consent Agreements effective on July 14, 2015. Refer to Note 8 — Debt for further information.  Additionally, the Company considers its creditworthiness in determining the fair value of floating rate debt under the credit facilities.  The carrying value approximates the fair market value for these floating rate loans.  The carrying amounts of the Company’s other financial instruments at September 30, 2015 and December 31, 2014 (principally Due from charterers and Accounts payable and accrued expenses), approximate fair values because of the relatively short maturity of these instruments.
 
ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis.  This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumption (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
 
·                   Level 1—Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.
 
·                   Level 2—Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
 
·                   Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 
As of September 30, 2015 and December 31, 2014, the fair values of the Company’s financial assets and liabilities are categorized as follows:

 	 	Successor	 	
 	 	September 30, 2015	 	
 	 	Total	 	Quoted
Market
Prices in
Active
Markets
(Level 1)	 	
Investments	 	$	17,900	 	$	17,900	 	

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 	 	Successor	 	
 	 	December 31, 2014	 	
 	 	Total	 	Quoted
Market
Prices in
Active
Markets
(Level 1)	 	
Investments	 	$	26,486	 	$	26,486	 	

The Company holds an investment in the capital stock of Jinhui , which is classified as a long-term investment.  The stock of Jinhui is publicly traded on the Oslo Stock Exchange and is considered a Level 1 item.  The Company also holds an investment in the stock of KLC, which is classified as a long-term investment.  The stock of KLC is publicly traded on the Korea Stock Exchange and is considered a Level 1 item.  Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item as the Company considers the estimate of rates it could obtain for similar debt or based upon transaction amongst third parties. The Company did not have any Level 3 financial assets or liabilities as of September 30, 2015 and December 31, 2014.
 
13 - PREPAID EXPENSES AND OTHER CURRENT AND NONCURRENT ASSETS
 
Prepaid expenses and other current assets consist of the following:

 	 	Successor	 	Successor	 	
 	 	September 30,
2015	 	December 31,
2014	 	
Lubricant inventory, fuel oil and diesel oil inventory and other stores	 	$	11,910	 	$	11,018	 	
Prepaid items	 	2,488	 	4,638	 	
Insurance receivable	 	3,660	 	1,951	 	
Other	 	4,447	 	4,816	 	
Total prepaid expenses and other current assets	 	$	22,505	 	$	22,423	 	
 
Other noncurrent assets in the amount of $514 at September 30, 2015 and December 31, 2014 represent the security deposit related to the operating lease entered into effective April 4, 2011. Refer to Note 19 — Commitments and Contingencies for further information related to the lease agreement.
 
14 — DEFERRED FINANCING COSTS
 
Deferred financing costs include fees, commissions and legal expenses associated with securing loan facilities and other debt offerings and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in interest expense.  Refer to Note 8 — Debt for further information regarding the existing loan facilities.
 
Total net deferred financing costs consist of the following as of September 30, 2015 and December 31, 2014:

 	 	Successor	 	Successor	 	
 	 	September 30,
2015	 	December31, 
 2014	 	
 	 	 	 	 	 	
$100 Million Term Loan Facility	 	$	1,656	 	$	1,492	 	
$253 Million Term Loan Facility	 	3,485	 	3,135	 	
$44 Million Term Loan Facility	 	861	 	758	 	
2015 Revolving Credit Facility	 	1,254	 	—	 	
$148 Million Credit Facility	 	3,570	 	3,233	 	
$22 Million Term Loan Facility	 	593	 	529	 	
2014 Term Loan Facilities	 	1,946	 	1,853	 	
Total deferred financing costs	 	13,365	 	11,000	 	
Less: accumulated amortization	 	2,417	 	729	 	
Total	 	$	10,948	 	$	10,271	 	
 
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Amortization expense for deferred financing costs for the Successor Company for the three and nine months ended September 30, 2015 and for the period from July 9 to September 30, 2014 was $637, $1,688 and $384, respectively.  Amortization expense for deferred financing costs for the Predecessor Company for the period from July 1 to July 9, 2014 and for the period from January 1 to July 9, 2014 was $170 and $4,461, respectively.  This amortization expense is recorded as a component of Interest expense in the Condensed Consolidated Statements of Operations.
 
Baltic Trading entered into the $148 Million Credit Facility on December 31, 2014, which was used to refinance the outstanding indebtedness under the 2010 Credit Facility.  As such, on December 31, 2014, the net unamortized deferred financing costs associated with the 2010 Credit Facility are being amortized over the life of the $148 Million Credit Facility.  (Refer to Note 8 — Debt)
 
15 - FIXED ASSETS
 
Fixed assets consist of the following:

 	 	Successor	 	Successor	 	
 	 	September 30,
2015	 	December 31,
2014	 	
Fixed assets, at cost:	 	 	 	 	 	
Vessel equipment	 	$	830	 	$	229	 	
Furniture and fixtures	 	462	 	462	 	
Computer equipment	 	142	 	129	 	
Total costs	 	1,434	 	820	 	
Less: accumulated depreciation and amortization	 	319	 	119	 	
Total	 	$	1,115	 	$	701	 	
 
Depreciation and amortization expense for fixed assets for the Successor Company for the three and nine months ended September 30, 2015 and for the period from July 9 to September 30, 2014 was $83, $200 and $66, respectively.  Depreciation and amortization expense for fixed assets for the Predecessor Company for the period from July 1 to July 9, 2014 and for the period from January 1 to July 9, 2014 was $19 and $458, respectively.  Refer to Note 3 — Cash Flow Information for information regarding the reclassification from fixed assets to vessels assets by the Predecessor Company during the period from January 1 to July 9, 2014.
 
16 — ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
Accounts payable and accrued expenses consist of the following:

 	 	Successor	 	Successor	 	
 	 	September 30,
2015	 	December 31,
2014	 	
Accounts payable	 	$	10,879	 	$	9,921	 	
Accrued general and administrative expenses	 	10,212	 	5,894	 	
Accrued vessel operating expenses	 	12,808	 	12,402	 	
Total	 	$	33,899	 	$	28,217	 	
 
17 — REVENUE FROM TIME CHARTERS
 
Total voyage revenue includes revenue earned on time charters, including revenue earned in vessel pools and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters.  For the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the Successor Company earned $49,167, $116,548 and $43,943 of voyage revenue, respectively.  For the period from July 1 to July 9, 2014 and from January 1 to July 9, 2014, the Predecessor Company earned $4,043 and $118,759 of voyage revenue, respectively.  There was no profit sharing revenue earned during the nine months ended September 30, 2015 and 2014.  Future minimum time charter revenue, based on vessels committed to noncancelable time charter contracts as of November 4, 2015, is expected to be $2,536 for the remainder of 2015 and $1,529 for 2016, assuming off-hire due to any scheduled drydocking and that no additional off-hire time is incurred.  For drydockings, the Company assumes twenty days of offhire.  Future minimum revenue excludes revenue earned for the vessels currently in pool arrangements and vessels that are currently on or will be on spot market-related time charters, as spot rates cannot be estimated, as well as profit sharing revenue.
 
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18 — REORGANIZATION ITEMS, NET
 
Reorganization items, net represent amounts incurred and recovered subsequent to the bankruptcy filing as a direct result of the filing of the Chapter 11 Cases and are comprised of the following:

 	 	Successor	 	 	Predecessor	 	
 	 	Three Months
Ended 
 September 30, 
 2015	 	Period from 
 July 9 to 
 September 30, 
 2014	 	 	Period from 
 July 1 to 
 July 9, 
 2014 
 (restated)	 	
Professional fees incurred	 	$	169	 	$	857	 	 	$	15,126	 	
Trustee fees incurred	 	5	 	310	 	 	—	 	
Total reorganization fees	 	$	174	 	$	1,167	 	 	$	15,126	 	
 	 	 	 	 	 	 	 	 	
Gain on settlement of liabilities subject to compromise in exchange for equity issuance, net	 	$	—	 	$	—	 	 	$	(33,832	)	
Fresh-start reporting adjustments	 	—	 	—	 	 	914,240	 	
Total fresh-start adjustment	 	$	—	 	$	—	 	 	$	880,408	 	
 	 	 	 	 	 	 	 	 	
Total reorganization items, net	 	$	174	 	$	1,167	 	 	$	895,534	 	

 	 	Successor	 	 	Predecessor	 	
 	 	Nine Months
Ended 
 September 30, 
 2015	 	Period from 
 July 9 to 
 September 30, 
 2014	 	 	Period from 
 January 1 to 
 July 9, 
 2014 
 (restated)	 	
Professional fees incurred	 	$	644	 	$	857	 	 	$	34,981	 	
Trustee fees incurred	 	362	 	310	 	 	251	 	
Total reorganization fees	 	$	1,006	 	$	1,167	 	 	$	35,232	 	
 	 	 	 	 	 	 	 	 	
Gain on settlement of liabilities subject to compromise in exchange for equity issuance, net	 	$	—	 	$	—	 	 	$	(33,832	)	
Fresh-start reporting adjustments	 	—	 	—	 	 	914,240	 	
Total fresh-start adjustment	 	$	—	 	$	—	 	 	$	880,408	 	
 	 	 	 	 	 	 	 	 	
Total reorganization items, net	 	$	1,006	 	$	1,167	 	 	$	915,640	 	
 
19 — COMMITMENTS AND CONTINGENCIES
 
In September 2005, the Company entered into a 15-year lease for office space in New York, New York for which there was a free rental period from September 1, 2005 to July 31, 2006.  On January 6, 2012, the Company ceased the use of this space.  During the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 the Predecessor Company recorded net rent expense of ($13) and ($41).  Pursuant to the Plan that was approved by the Bankruptcy Court, the Debtors rejected the lease agreement on the Effective Date and the Company believes that it will owe the lessor the remaining liability.
 
Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for additional office space in New York, New York.  The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments are $82 per month until May 31, 2015 and thereafter will be $90 per month until the end of the seven-year term.  Pursuant to the sub-sublease agreement, the sublessor was obligated to contribute $472 toward the cost of the Company’s alterations to the sub-subleased office space.  The Company has also entered into a direct lease with the over-landlord of such office space that will commence immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provides for a free base rental period from May 1, 2018 to September 30, 2018.  Following the expiration of the free base rental period, the monthly base rental payments will be $186 per month from October 1, 2018 to April 30, 2023 and $204 per month from May 1, 2023 to September 30, 2025.  For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitutes one lease agreement.  As a result of the straight-line rent calculation generated by the free rent period and the tenant work credit, the monthly straight-line rental expense for the term of the entire lease from June 1, 2011 to September 30, 2025 was $130 for the Predecessor Company.  On the Effective Date, a revised straight-line rent calculation was completed as part of fresh-start reporting.  The revised monthly straight-line rental expense for the remaining term of the lease from the Effective Date to September 30, 2025 is $150.  The Successor Company had a long-term lease obligation at September 30, 2015 and December 31, 2014 of $969 and $390,
 
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respectively.  Rent expense pertaining to this lease recorded by the Successor Company for the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 was $452, $1,356 and $410, respectively.  Rent expense pertaining to this lease recorded by the Predecessor Company for the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $34 and $813, respectively.
 
Future minimum rental payments on the above lease for the next five years and thereafter are as follows: $269 for the remainder of 2015, $1,076 annually for 2016 and 2017, $916 for 2018, $2,230 for 2019 and a total of $13,360 for the remaining term of the lease.
 
During the beginning of 2009, the Genco Cavalier, a 2007-built Supramax vessel, was on charter to Samsun when Samsun filed for the equivalent of bankruptcy protection in South Korea, otherwise referred to as a rehabilitation application. On February 5, 2010, the rehabilitation plan submitted by Samsun was approved by the South Korean courts. As part of the rehabilitation process, the Company’s claim of $17,212 will be settled in the following manner: 34.0%, or $5,852, will be paid in cash in annual installments on December 30th of each year from 2010 through 2019 ranging from 8.0% to 17.0%; the remaining 66.0%, or $11,360, was converted to Samsun shares at a specified value per share. On December 30, 2012, a total payment was due from Samsun in the amount of $527 which represents 9.0% of the total $5,852 approved cash settlement. On December 30, 2013, a total payment was due from Samsun in the amount of $468 which represents 8.0% if the total $5,852 approved cash settlement. During the year ended December 30, 2012, Samsun remitted only 50% of the payment due, or $263 and during the year ended December 31, 2013 there was no payment remitted. During the period from July 9 to September 30, 2014, the Successor Company recorded Other operating income of $296 which represents the remaining 50% of the payment that was due on December 30, 2012 including interest earned on those amounts.  On July 3, 2015, Samsun filed for rehabilitation proceedings for the second time with the South Korean courts due to financial distress.  The rehabilitation plan is still under review by the South Korean courts, and a proposed rehabilitation plan has not yet been implemented.
 
20 — STOCK-BASED COMPENSATION
 
Genco Shipping & Trading — Predecessor Company
 
Under the Plan that was approved by the Bankruptcy Court, on the Effective Date, the 880,465 unvested shares that were issued under the Genco Shipping & Trading Limited 2005 and 2012 Equity Incentive Plans (the “GS&T Plans”) were deemed vested automatically and equity warrants were issued.
 
The total fair value of shares that vested under the GS&T Plans during the period from January 1 to July 9, 2014 for the Predecessor Company was $691.  The total fair value is calculates as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
For the period from July 1 to July 9, 2014 and from January 1 to July 9, 2014, the Predecessor Company recognized nonvested stock amortization expense for the GS&T Plans, which is included in General, administrative and management fees, as follows:

 	 	Predecessor	 	
 	 	Period from 
 July 1 to 
 July 9, 
 2014	 	Period from 
 January 1 to 
 July 9, 
 2014	 	
General, administrative and management fees	 	$	1,583	 	$	2,403	 	

Genco Shipping & Trading — Successor Company
 
2014 Management Incentive Plan
 
On the Effective Date, pursuant to the Chapter 11 Plan, the Company adopted the MIP. An aggregate of 9,668,061 shares of Common Stock were available for award under the MIP, which were awarded in the form of restricted stock grants and awards of three tiers of MIP Warrants with staggered strike prices based on increasing equity values.  The number of shares of common stock available under the Plan represented approximately 1.8% of the shares of post-emergence Common Stock outstanding as of the Effective Date on a fully-diluted basis. Awards under the MIP were available to eligible employees, non-employee directors and/or officers of the Company and its subsidiaries (collectively, “Eligible Individuals”). Under the MIP, a committee appointed by the Board from time to time (or, in the absence of such a committee, the Board) (in either case, the “Plan Committee”) may grant a variety of stock-based incentive awards, as the Plan Committee deems appropriate, to Eligible Individuals. The MIP Warrants are exercisable on a cashless basis and contain customary anti-dilution protection in the event of any stock split, reverse stock split, stock dividend, reclassification, dividend or other distributions (including, but not limited to, cash dividends), or business combination transaction.
 
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On August 7, 2014, pursuant to the MIP, certain individuals were granted MIP Warrants whereby each warrant can be converted on a cashless basis for the amount in excess of the respective strike price. The MIP Warrants were issued in three tranches, which are exercisable for 2,380,664, 2,467,009, and 3,709,788 shares and have exercise prices of $25.91 (the “$25.91 Warrants”), $28.73 (the “$28.73 Warrants”) and $34.19 (the “$34.19 Warrants”), respectively. The fair value of each warrant upon emergence from bankruptcy was $7.22 for the $25.91 Warrants, $6.63 for the $28.73 Warrants and $5.63 for the $34.19 Warrants. The warrant values were based upon a calculation using the Black-Scholes-Merton option pricing formula. This model uses inputs such as the underlying price of the shares issued when the warrant is exercised, volatility, cost of capital interest rate and expected life of the instrument. The Company has determined that the warrants should be classified within Level 3 of the fair value hierarchy by evaluating each input for the Black-Scholes-Merton option pricing formula against the fair value hierarchy criteria and using the lowest level of input as the basis for the fair value classification. The Black-Scholes-Merton option pricing formula used a volatility of 43.91% (representing the six-year volatility of a peer group), a risk-free interest rate of 1.85% and a dividend rate of 0%.  The aggregate fair value of these awards upon emergence from bankruptcy was $54,436. The warrants vest 33.33% on each of the first three anniversaries of the grant date, with accelerated vesting upon a change in control of the Company.
 
For the three and nine months ended September 30, 2015 and the period from July 9  to September 30, 2014, the Successor Company recognized amortization expense of the fair value of these warrants, which is included in General, administrative and management fees, as follows:

 	 	Successor	 	
 	 	Three Months
Ended
September 30,
2015	 	Nine Months
Ended
September 30,
2015	 	Period from 
 July 9 to 
 September 30, 
 2014	 	
General, administrative and management fees	 	$	5,646	 	$	22,134	 	$	5,010	 	

Amortization of the unamortized stock-based compensation balance of $18,912 as of September 30, 2015 is expected to be expensed $3,807, $11,496, and $3,609 during the remainder of 2015 and during the years ending December 31, 2016 and 2017, respectively.  The following table summarizes all the warrant activity for the nine months ended September 30, 2015:

 	 	Number of
Warrants	 	Weighted
Average Exercise
Price	 	Weighted
Average Fair
Value	 	
Outstanding at January 1, 2015 - Successor	 	8,557,461	 	$	30.31	 	$	6.36	 	
Granted	 	—	 	—	 	—	 	
Exercisable	 	(2,852,487	)	30.31	 	6.36	 	
Exercised	 	—	 	—	 	—	 	
Forfeited	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	
Outstanding at September 30, 2015 - Successor	 	5,704,974	 	$	30.31	 	$	6.36	 	
 
The following table summarizes certain information about the warrants outstanding as of September 30, 2015:

 	 	Warrants Outstanding,
September 30, 2015	 	Warrants Exercisable,
September 30, 2015	 	
 	 	 	 	 	 	Weighted	 	 	 	 	 	Weighted	 	
 	 	 	 	Weighted	 	Average	 	 	 	Weighted	 	Average	 	
Weighted
Average
Exercise Price	 	Number of
Warrants	 	Average
Exercise
Price	 	Remaining
Contractual
Life	 	Number of
Warrants	 	Average
Exercise
Price	 	Remaining
Contractual
Life	 	
$	30.31	 	5,704,974	 	$	30.31	 	4.86	 	2,852,487	 	$	30.31	 	4.86	 	

The nonvested stock awards granted under the MIP will vest ratably on each of the three anniversaries of the determined vesting date of August 7, 2014.  The table below summarizes the Successor Company’s nonvested stock awards for the nine months ended September 30, 2015 which were issued under the MIP:

 	 	Number of
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2015 - Successor	 	1,110,600	 	$	20.00	 	
Granted	 	—	 	—	 	
Vested	 	(370,200	)	20.00	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at September 30, 2015 - Successor	 	740,400	 	$	20.00	 	
 
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The total fair value of MIP restricted shares that vested during the nine months ended September 30, 2015 for the Successor Company was $2,662. There were no MIP restricted shares that vested during the period from July 9 to September 30, 2014 for the Successor Company.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
For the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the Successor Company recognized nonvested stock amortization expense for the MIP restricted shares, which is included in General, administrative and management fees, as follows:

 	 	Successor	 	
 	 	Three Months
Ended
September 30,
2015	 	Nine Months
Ended
September 30,
2015	 	Period from 
 July 9 to 
 September 30, 
 2014	 	
General, administrative and management fees	 	$	2,304	 	$	9,031	 	$	2,044	 	

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of September 30, 2015, unrecognized compensation cost of $7,717 related to nonvested stock will be recognized over a weighted-average period of 1.85 years.
 
Restricted Stock Units
 
The Successor Company has issued restricted stock units (“RSUs”) to certain members of the Board of Directors, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests.  The RSUs generally vest on the date of the Company’s annual shareholders meeting following the date of the grant.  On July 13, 2015 and July 29, 2015, the Company issued 16,188 and 58,215 RSUs, respectively, to members of the Company’s Board of Directors.  The 16,188 RSUs vested on July 17, 2015.  No shares of the Company’s common stock are currently outstanding in respect of the RSUs.  Such shares will only be issued in respect of vested RSUs when the director’s service with the Company as a director terminates.
 
The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant.   The table below summarizes the Successor Company’s RSUs for the nine months ended September 30, 2015:

 	 	Number of
RSUs	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2015 - Successor	 	—	 	$	—	 	
Granted	 	74,403	 	7.11	 	
Vested	 	(16,188	)	7.00	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at September 30, 2015 - Successor	 	58,215	 	$	7.15	 	
 
The total fair value of the RSUs that vested during the nine months ended September 30, 2015 for the Successor Company was $116. There were no RSUs that vested during the period from July 9 to September 30, 2014 for the Successor Company.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
The following table summarizes certain information about the RSUs vested, not outstanding as of September 30, 2015:

Unvested RSUs
September 30, 2015	 	Vested RSUs 
 September 30, 2015	 	
 	 	 	 	Weighted	 	 	 	 	 	
 	 	Weighted	 	Average	 	 	 	Weighted	 	
Number of
RSUs	 	Average
Grant Date
Price	 	Remaining
Contractual
Life	 	Number of
RSUs	 	Average
Grant Date
Price	 	
58,215	 	$	7.15	 	0.62	 	16,188	 	$	7.00	 	

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures.  As of September 30, 2015, unrecognized compensation cost of $325 related to RSUs will be recognized over a weighted-average period of 0.62 years.
 
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For the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the Successor Company recognized nonvested stock amortization expense for the RSUs, which is included in General, administrative and management fees as follows:

 	 	Successor	 	
 	 	Three Months
Ended
September 30,
2015	 	Nine Months
Ended
September 30,
2015	 	Period from 
 July 9 to 
 September 30, 
 2014	 	
General, administrative and management fees	 	$	235	 	$	235	 	$	—	 	

Baltic Trading Limited
 
On March 13, 2014, Baltic Trading’s Board of Directors approved an amendment to the Baltic Trading Limited 2010 Equity Incentive Plan (the “Baltic Trading Plan”) that increased the aggregate number of shares of common stock available for awards from 2,000,000 to 6,000,000 shares.  Additionally, on April 9, 2014, at Baltic Trading’s 2014 Annual Meeting of Shareholders, Baltic Trading’s shareholders approved the amendment to the Baltic Trading Plan.  When the Merger was completed on July 17, 2015, the 1,941,844 nonvested shares issued under the Baltic Trading Plan vested automatically and received the same consideration in the Merger as holders of Baltic Trading’s common stock.  Refer to Note 1 — General Information for further information regarding the Merger.  The vesting of these shares is included in the $3,665 of expense recorded during the three months ended September 30, 2015.

 	 	Number of Baltic
Trading
Common
Shares	 	Weighted
Average Grant
Date Price	 	
Outstanding at January 1, 2015	 	1,941,844	 	$	3.80	 	
Granted	 	—	 	—	 	
Vested	 	(1,941,844	)	3.80	 	
Forfeited	 	—	 	—	 	
 	 	 	 	 	 	
Outstanding at September 30, 2015	 	—	 	$	—	 	
 
The total fair value of shares that vested under the Baltic Trading Plan during the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014 for the Successor Company was $2,913 and $0, respectively.  The total fair value of shares that vested under the Baltic Trading Plan during the period from January 1 to July 9, 2014 for the Predecessor Company was $1,143.  The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.
 
The Successor Company and the Predecessor Company recognized nonvested stock amortization expense for the Baltic Trading Plan, which is included in General, administrative and management fees, as follows:

 	 	Successor	 	Predecessor	 	
 	 	Three Months
Ended
September 30,
2015	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30, 
 2014	 	Period from
July 1 to 
 July 9, 
 2014	 	Period from
January 1 to
July 9, 
 2014	 	
General, administrative and management fees	 	$	3,665	 	$	5,273	 	$	818	 	$	78	 	$	1,949	 	

21 - LEGAL PROCEEDINGS
 
Refer to Note 1 — General Information for information concerning the Chapter 11 Cases.
 
On March 28, 2014, the Genco Auvergne was arrested due to a disputed claim with the charterer of one of the Company’s other vessels, namely the Genco Ardennes. In order for the Company to release the Genco Auvergne from its arrest, the Company entered into a cash collateralized $900 bank guarantee with Skandinaviska Enskilda Banken AB (the “SEB Bank Guarantee”) on April 3, 2014. The vessel has since been released from its arrest, and the bank guarantee was released from escrow to the Company on June 22, 2015 after the arbitration related to this case was completed. The SEB Bank Guarantee resulted in additional indebtedness by the Company. As the Company was in default under the covenants of its 2007 Credit Facility due to the default on a scheduled debt amortization payment due on March 31, 2014, on April 3, 2014 the Company received a consent from the lenders under the 2007 Credit Facility to incur this additional indebtedness. Also, under the $253 Million Term Loan Facility for which the Genco Auvergne is collateralized, the Company may not incur additional indebtedness related to its collateralized vessels under this facility. The Company also received a consent from the lenders under the $253 Million Term Loan Facility on April 3, 2014 in order to enter the SEB Bank Guarantee.
 
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In April 2015, six class action complaints were filed in the Supreme Court of the State of New York, County of New York, styled Erol Sarikaya v. Peter C. Georgiopoulos et al. , Index No. 651244/2015, filed on April 15, 2015, voluntarily dismissed, and refiled as Joshua Bourne v. Peter C. Georgiopoulos et al. , Index No. 651429/2015, filed on April 28, 2015, Justin Wilson v. Baltic Trading Ltd., et al. , Index No. 651241/2015, filed on April 15, 2015, Sangeetha Ganesan v. Baltic Trading Limited et al. , Index No. 651279/2015, filed on April 17, 2015, Edward Braunstein v. Peter C. Georgiopoulos et al. , Index No. 651368/2015, filed on April 23, 2015, Larry Williams v. Baltic Trading Ltd., et al. , Index No. 651371/2015, filed on April 23, 2015, and Larry Goldstein and Bernhard Stomporowski v. John C. Wobensmith et al.,  Index No. 651407/2015, filed on April 27, 2015. All six complaints purport to be brought by and on behalf of the Baltic Trading’s shareholders. The plaintiff in each action alleges the proposed merger does not fairly compensate Baltic Trading’s shareholders and undervalues Baltic Trading. Each lawsuit names as defendants some or all of the Company, Baltic Trading, the individual members of Baltic Trading’s board, the Company’s and Baltic Trading’s President, and the Company’s merger subsidiary. The claims generally allege (i) breaches of fiduciary duties of good faith, due care, disclosure to shareholders, and loyalty, including for failing to maximize shareholder value, and (ii) aiding and abetting those breaches. Among other relief, the complaints seek an injunction against the merger, declaratory judgments that the individual defendants breached fiduciary duties, rescission of the merger agreement, and unspecified damages.  On May 26, 2015, the six above described actions were consolidated under the caption In Re Baltic Trading Ltd. Stockholder Litigation , Index No. 651241/2015, and a consolidated class action complaint was filed on June 10, 2015 (the “Consolidated Complaint”).
 
On June 30, 2015, Defendants moved to dismiss the Consolidated Complaint in its entirety; that motion is pending.  On July 9, 2015, plaintiffs in that action moved to enjoin the merger vote, scheduled to take place on July 17, 2015.  The motion was thereafter fully briefed and argued on July 15, 2015.  The motion to enjoin the vote was denied.  Plaintiffs sought an emergency injunction and temporary restraining order from the New York State Appellate Division, First Department the following day, on July 16, 2015.  The Appellate Division denied the request, and the vote, and subsequent merger, proceeded as scheduled on July 17, 2015.  Plaintiffs thereafter withdrew the appeal.
 
Separately, on or around May 12, 2015, a complaint was filed in the United States District Court for the Southern District of New York, styled Todd J. Biederman v. Baltic Trading Limited et al. , 15-cv-3711 (RJS), seeking relief pursuant to Sections 14(a) and 20(a) of the Exchange Act and also alleging breaches of fiduciary duties and aiding and abetting those breaches. That complaint alleges facts and seeks relief similar to that in the actions in the New York State Supreme Court, in addition to claims regarding the adequacy of the preliminary joint proxy statement/prospectus and Form S-4 disclosures.
 
Based on currently available information, the Company cannot reasonably estimate the loss, if any, in the event of an unfavorable outcome in any of these matters.  However, the Company does not believe that it is probable that the resolution of these matters will have a material financial reporting consequence.
 
From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.  The Company is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows besides those noted above.
 
22 — RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS OF THE PREDECESSOR COMPANY
 
Subsequent to the issuance of the Company’s 2014 consolidated financial statements on March 2, 2015, the Company became aware of errors in its determination of certain previously reported amounts in its Predecessor period financial reporting for the period from January 1, 2014 to July 9, 2014 related to its application of fresh-start accounting under ASC 852. These errors were also applicable to the period from July 1, 2014 to July 9, 2014.  These errors were related to the items included in the determination of the “Reorganization items, net” account balance on the Company’s Consolidated Statement of Operations of the Predecessor for the period from January 1, 2014 to July 9, 2014 and July 1, 2014 to July 9, 2014, which affected the Company’s previously reported Net income and Net income per share, Net income attributable to Genco Shipping & Trading Limited and Net loss attributable to noncontrolling interest for this period.
 
The Company determined its previously issued consolidated financial statements for the Predecessor Company for the period ended July 9, 2014 should be restated to correct for these errors. The effect of correcting for these errors resulted in (1) changing the Company’s previously reported gain on Reorganization items, net to a loss, (2) changing the Company’s previously reported Net income and Net income per share to a Net loss and Net loss per share, respectively, (3) changing the Company’s previously reported Net income attributable to Genco Shipping & Trading Limited to a Net loss attributable to Genco Shipping & Trading Limited, and increasing the Company’s previously reported Net loss attributable to noncontrolling interest for the period from January 1, 2014 to July 9, 2014 and July 1, 2014 to July 9, 2014. The effect of correcting these errors for the period from January 1, 2014 to July 9, 2014 has been disclosed in the 2014 10-K. The effect of correcting these errors for the period from July 1 to July 9, 2014 is summarized in the following tables:
 
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Condensed Consolidated Statement of Operations
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)

 	 	Predecessor	 	 	 	Predecessor	 	
 	 	Period from
July 1 to
July 9,
2014
As Reported	 	Adjustment	 	Period from
July 1 to
July 9,
2014
As Restated	 	
Loss before reorganization items, net	 	$	(9,884	)	—	 	$	(9,884	)	
Reorganization items, net	 	902,273	 	(1,797,807	)(a)	(895,534	)	
 	 	 	 	 	 	 	 	
(Loss) income before income taxes	 	892,389	 	(1,797,807	)	(905,418	)	
Income tax expense	 	(38	)	—	 	(38	)	
Net (loss) income	 	892,351	 	(1,797,807	)	(905,456	)	
Less: Net loss attributable to noncontrolling interest	 	(568	)	(53,367	)(b)	(53,935	)	
Net (loss) income attributable to Genco Shipping & Trading Limited	 	$	892,919	 	$	(1,744,440	)	$	(851,521	)	
 	 	 	 	 	 	 	 	
Net (loss) income per share-basic	 	$	20.49	 	N/A	 	$	(19.54	)	
Net (loss) income per share-diluted	 	$	20.49	 	N/A	 	$	(19.54	)	
Weighted average common shares outstanding-basic	 	43,568,942	 	N/A	 	43,568,942	 	
Weighted average common shares outstanding-diluted	 	43,568,942	 	N/A	 	43,568,942	 	
Dividends declared per share	 	$	—	 	N/A	 	$	—	 	

(a)          The adjustment is the result of errors in the Company’s prior accounting for the following transactions associated with the application of fresh—start accounting:

 	 	Adjustment	 	
Discharge of Predecessor equity <1>	 	$	(829,974	)	
Issuance of Successor equity <2>	 	(1,133,900	)	
Recording of goodwill in fresh-start accounting <3>	 	166,067	 	
Total	 	$	(1,797,807	)	

<1> The accounting consequences related to the discharge of Predecessor equity were previously reported as a component in the computation of “Reorganization items, net”. The adjustment is to exclude the accounting consequences related to the discharge of Predecessor equity from the computation of “Reorganization items, net”.
 
<2> The accounting consequences related to the issuance of Successor equity were previously excluded as a component in the computation of “Reorganization items, net”. The adjustment is to include from the accounting consequences related to the issuance of Successor equity in the computation of “Reorganization items, net”.
 
<3> The accounting consequences related to the recognition of goodwill were previously excluded as a component in the computation of “Reorganization items, net”. The adjustment is to include the accounting consequences related to the establishment of goodwill in the computation of “Reorganization items, net”.
 
(b)          The adjustment is the result of errors in the Company’s prior accounting for the consequences to non-controlling interests of certain transactions associated with the application of fresh-start accounting.
 
Condensed Consolidated Statement of Comprehensive Loss
(U.S. Dollars in Thousands)

 	 	Predecessor	 	 	 	Predecessor	 	
 	 	Period from
July 1 to
July 9,
2014
As Reported	 	Adjustment	 	Period from
July 1 to
July 9,
2014
As Restated	 	
Net (loss) income	 	$	892,351	 	$	(1,797,807	)	(905,456	)	
 	 	 	 	 	 	 	 	
Change in unrealized (loss) gain on investments	 	2,186	 	—	 	2,186	 	
Unrealized gain on cash flow hedges, net	 	95	 	—	 	95	 	
Other comprehensive (loss) income	 	2,281	 	—	 	2,281	 	
 	 	 	 	 	 	 	 	
Comprehensive (loss) income	 	894,632	 	(1,797,807	)	(903,175	)	
Less: Comprehensive loss attributable to noncontrolling interest	 	(568	)	(53,367	)	(53,935	)	
Comprehensive (loss) income attributable to Genco Shipping & Trading Limited	 	$	895,200	 	$	(1,744,440	)	$	(849,240	)	

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23 - RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS OF THE SUCCESSOR COMPANY
 
Subsequent to the issuance of the Company’s 2014 consolidated financial statements on March 2, 2015, the Company became aware of an error in its allocation of goodwill impairment to the noncontrolling interest recognized in December 2014 by the Company associated with its consolidated subsidiary Baltic Trading. As a result of this error, amounts allocated to the Company’s noncontrolling interest in the Company’s previously reported Consolidated Statement of Operations of the Successor Company for the period from July 9, 2014 to December 31, 2014 and the Company’s previously reported Consolidated Balance Sheet of the Successor Company as of December 31, 2014 were incorrect.
 
The error affected the Company’s previously reported Net loss allocable to GS&T and the noncontrolling interest and Net loss per share allocable to GS&T on the Company’s Consolidated Statement of Operations of the Successor Company for the period from July 9, 2014 to December 31, 2014, as well as the Company’s previously reported allocation of shareholders’ equity to the shareholders of the Company and the noncontrolling interest on the Company’s Consolidated Balance Sheet of the Successor Company as of December 31, 2014. The error did not impact the Company’s previously reported consolidated revenues, operating expenses, net loss or cash flows for the Successor Company for the period from July 9, 2014 to December 31, 2014, or the Company’s previously reported consolidated  assets, liabilities or total equity of the Successor Company as of December 31, 2014.
 
The Company determined its previously issued consolidated financial statements for the year ended December 31, 2014 should be restated to correct for this error. The effect of correcting for this error resulted in: 1) a decrease in previously reported net loss attributable to GS&T and an increase in previously reported Net loss attributable to noncontrolling interest for the period from July 9, 2014 to December 31, 2014 by the same amount; and 2) an increase in GS&T’s equity attributable to its shareholders and a decrease in the  Noncontrolling interest in the Consolidated Balance Sheet as of December 31, 2014 by the same amount. The effect of correcting these errors is summarized as follows:
 
·                   For the period from July 9, 2014 to December 31, 2014, the previously reported Net loss attributable to GS&T decreased by $21,823 to $182,294 from $204,117 as a result of the restatement.  This also resulted in a change in Net loss per share from $3.38 to $3.02 as a result of the restatement. After the restatement, the Net loss attributable to noncontrolling interest for the period from July 9, 2014 to December 31, 2014 increased by $21,823 to $31,064 from $9,241. The Company’s consolidated Net loss for the period from July 9, 2014 to December 31, 2014 was unchanged at $213,358.
 
·                   As of December 31, 2014, the previously reported equity recorded by GS&T attributable to its shareholders increased by $21,823 to $1,044,201 from $1,022,378 as a result of the restatement. After restatement, as of December 31, 2014, the noncontrolling interest’s equity decreased by $21,823 to $248,573 from $270,396.  The Company’s consolidated total equity in its Consolidated Balance Sheet as of December 31, 2014 was unchanged at $1,292,774.
 
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24 - SUBSEQUENT EVENTS
 
On October 9, 2015, the Company took delivery of the Baltic Mantis, a 63,470 dwt Ultramax newbuilding vessel from Yangfan Group Co., Ltd.  The Company utilized cash on hand and $16,500 of proceeds from the $33,000 term loan facility under the $148 Million Credit Facility to pay the remaining balance of $19,600 for the Baltic Mantis.
 
On November 4, 2015, thirteen of the Company’s wholly-owned subsidiaries entered into the $98 Million Credit Facility to be used for working capital purposes.  On November 10, 2015, the Company drew down $98,271 on the $98 Million Credit Facility.  Refer to Note 8 — Debt for additional information.
 
ITEM 2 .                         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 
This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines in demand or rates in the drybulk shipping industry; (ii) prolonged weakness in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, repairs, maintenance and general, administrative and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the our vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) our acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to time charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) obtaining, completion of definitive documentation for, and funding of financing for the vessel acquisitions on acceptable terms; (xvi) the ability to realize the expected benefits of the merger to the degree, in the amounts or in the timeframe anticipated; (xvii) the ability to integrate Baltic Trading’s businesses with those of Genco in a timely and cost-efficient manner; (xviii) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xix) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xx) the timing and realization of the recoveries of assets and the payments of claims and the amount of expenses required to recognize such recoveries and reconcile such claims; (xxi) our ability to obtain sufficient and acceptable post-restructuring financing; and other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our registration statement on Form S-4 filed with Securities and Exchange Commission on May 4, 2015 (as amended), our Annual Report on Form 10-K for the year ended December 31, 2014 (as amended), and our subsequent reports on Form 10-Q and Forms 8-K.  Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance.  The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.  We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
The following management’s discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included in this Form 10-Q.
 
General
 
We are a Marshall Islands company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk carrier vessels.  After the merger with Baltic Trading Limited (“Baltic Trading”), our fleet currently consists of 13 Capesize, eight Panamax, four Ultramax, 21 Supramax, six Handymax
 
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and 18 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 5,158,000 dwt, and the average age of our fleet is currently approximately 9.0 years.  We seek to deploy our vessels on time charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers, including Cargill International S.A., Swissmarine Services S.A. and the Clipper Logger Pool, in which Clipper Group acts as the pool manager.  The majority of the vessels in our current fleet are presently engaged under time charter, spot market-related time charter and vessel pool contracts that expire (assuming the option periods in the time charters are not exercised) between November 2015 and June 2017.
 
See pages 53-56 for a table of all vessels in our fleet.
 
On April 7, 2015, we entered into a definitive merger agreement with Baltic Trading under which we agreed to acquire Baltic Trading in a stock-for-stock transaction (the “Merger”).  Under the terms of the agreement, Baltic Trading became our indirect wholly-owned subsidiary, and Baltic Trading shareholders (other than GS&T and its subsidiaries) received 0.216 shares of our common stock for each share of Baltic Trading’s common stock they owned at closing, with fractional shares that were settled in cash.  Upon consummation of the transaction on July 17, 2015, our shareholders owned approximately 84.5% of the combined company, and Baltic Trading’s shareholders (other than the GS&T and its subsidiaries) owned approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which we owned) were canceled in the Merger.  Our stock commenced trading on the New York Stock Exchange after consummation of the transaction on July 20, 2015 under the symbol “GNK.”
 
Our Board of Directors and Baltic Trading’s Board of Directors established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the merger by unanimous vote of directors present and voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  The Merger was approved on July 17, 2015 at the 2015 Annual Meeting of Shareholders (the “Annual Meeting”).
 
Prior to the Merger, as of June 30, 2015, our wholly-owned subsidiary Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented a 10.85% ownership interest in Baltic Trading and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock at June 30, 2015.  Baltic Trading is consolidated as we also controlled a majority of the voting interest in Baltic Trading prior to the Merger. Management’s discussion and analysis of our results of operations and financial condition includes the results of Baltic Trading.
 
We report financial information and evaluate our operations by charter revenues and not by the length of ship employment for our customers, i.e., spot or time charters.  Each of our vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, we have determined that we operate in one reportable segment, after the effective date of the Merger on July 17, 2015, in which we are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels.  Therefore, the totals previously reported for the two segments (GS&T and Baltic Trading) is the total for the single reportable segment effective upon the Merger.
 
On April 21, 2014, we filed the Chapter 11 Filing. On July 2, 2014, the Bankruptcy Court entered the Confirmation Order which approved and confirmed the Plan. On the Effective Date of July 9, 2014, we emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms. Refer to the Annual Report on Form 10-K for the year ended December 31, 2014, as amended, for a detailed description of the Plan.
 
Additionally, on April 7, 2015, we entered into an agreement under which we acquired all of the shares of two single-purpose entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, for an aggregate purchase price of $68.5 million, subject to reduction for $40.6 million of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by the Company and an adjustment for the difference between such single-purpose entities’ current assets and total liabilities as of the closing date.  At March 31, 2015, the Company determined that the sale of the Baltic Lion and Baltic Tiger were more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen its balance sheet.  Through the transactions, which closed on April 8, 2015, we acquired the vessels known as the Baltic Lion and the Baltic Tiger. The independent special committees of both companies’ Boards of Directors reviewed and approved this transaction.
 
We entered into a long-term management agreement (the “Management Agreement”) with Baltic Trading pursuant to which we apply our expertise and experience in the drybulk industry to provide Baltic Trading with commercial, technical, administrative and strategic services. The Management Agreement was for an initial term of approximately 15 years. Baltic Trading paid us for the services we provided it as well as reimbursed us for our costs and expenses incurred in providing certain of these services. Management fee income we earned from the Management Agreement net of any allocated shared expenses, such as salary, office expenses and other general and administrative fees, were taxable to us. Upon consolidation with Baltic Trading, any management fee income earned is eliminated for financial reporting purposes.  The Management Agreement was terminated as of July 18, 2015.
 
On November 4, 2015, thirteen of our wholly-owned subsidiaries entered into a Facility Agreement, by and among such subsidiaries as borrowers (collectively, the “Borrowers”); Genco Holdings Limited, our newly formed direct subsidiary of which the Borrowers are direct subsidiaries (“Holdco”); certain funds managed or advised by Hayfin Capital Management, Breakwater Capital Ltd, or their nominee, as lenders; and Hayfin Services LLP, as agent and security agent (the “$98 Million Credit Facility”).
 
The Borrowers borrowed the maximum available amount of $98.3 million under the facility on November 10, 2015.
 
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Borrowings under the facility are available for working capital purposes.  The facility has a final maturity date of September 30, 2020, and the principal borrowed under the facility will bear interest at LIBOR for an interest period of three months plus a margin of 6.125% per annum.  The facility has no fixed amortization payments for the first two years and fixed amortization payments of $2.5 million per quarter thereafter.  To the extent the value of the collateral under the facility is 182% or less of the loan amount outstanding, the Borrowers are to prepay the loan from earnings received from operation of the thirteen collateral vessels after deduction of the following amounts:  costs, fees, expenses, interest, and fixed principal repayments under the facility; operating expenses relating to the thirteen vessels; and the Borrowers’ pro rata share of general and administrative expenses based on the number of vessels they own.
 
The Facility Agreement requires the Borrowers and, in certain cases, the Company and Holdco to comply with a number of covenants substantially similar to those in the other credit facilities of Genco and its subsidiaries, including financial covenants related to maximum leverage, minimum consolidated net worth, minimum liquidity, and dividends; collateral maintenance requirements; and other customary covenants.  The Facility Agreement includes usual and customary events of default and remedies for facilities of this nature.
 
Borrowings under the facility are secured by first priority mortgage on the vessels owned by the Borrowers, namely the Genco Constantine, the Genco Augustus, the Genco London, the Genco Titus, the Genco Tiberius, the Genco Hadrian,  the Genco Knight, the Genco Beauty,  the Genco Vigour, the Genco Predator, the Genco Cavalier, the Genco Champion, and the Genco Charger, and related collateral.  Pursuant to the Facility Agreement and a separate Guarantee executed by the Company, the Company and Holdco are acting as guarantors of the obligations of the Borrowers and each other under the Facility Agreement and its related documentation.
 
On April 7, 2015, five of our wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59.5 million revolving credit facility (the “2015 Revolving Credit Facility”).  On April 7, 2015, we entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.  Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.
 
Borrowings under the 2015 Revolving Credit Facility have been used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of April 7, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1.6 million to $4.1 million depending on the total amount committed.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  On April 8, 2015, we drew down $25.0 million on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.  Additionally, on July 10, 2015, we drew down $10.0 million for working capital purposes.  Lastly, on October 14, 2015, the Company drew down $21.2 million for working capital purposes.
 
On November 13, 2013, Baltic Trading entered into agreements to purchase up to four 64,000 dwt Ultramax newbuilding drybulk carriers from Yangfan Group Co., Ltd. for a purchase of $28.0 million per vessel, or up to $112.0 million in the aggregate. Baltic Trading has agreed to purchase two such vessels, to be renamed the Baltic Hornet and Baltic Wasp, and obtained an option to purchase up to two additional such vessels for the same purchase price, which Baltic Trading exercised on January 8, 2014. These vessels are to be renamed the Baltic Mantis and the Baltic Scorpion. The purchases are subject to completion of customary additional documentation and closing conditions. The first of these vessels, the Baltic Hornet, was delivered to Baltic Trading on October 29, 2014.  The Baltic Wasp, Baltic Scorpion and Baltic Mantis were delivered on January 2, 2015, August 6, 2015 and October 9, 2015, respectively. We have used a combination of cash on hand,  cash flow from operations as well as debt financing, including the $148 Million Credit Facility and the 2014 Term Loan Facilities as described in Note 8 — Debt in our Condensed Consolidated Financial Statements, to fully finance the acquisition of these Ultramax newbuilding drybulk vessels.
 
Our management team and our other employees are responsible for the commercial and strategic management of our fleet. Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters. Strategic management includes locating, purchasing, financing and selling vessels. We currently contract with three independent technical managers to provide technical management of our fleet at a lower cost than we believe would be possible in-house. Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies. Members of our New York City-based management team oversee the activities of our independent technical managers.
 
We hold an investment in the capital stock of Jinhui Shipping and Transportation Limited (“Jinhui”) and Korea Line Corporation (“KLC”). Jinhui is a drybulk shipping owner and operator focused on the Supramax segment of drybulk shipping. KLC is a marine transportation service company which operates a fleet of carriers which includes carriers for iron ore, liquefied natural gas and tankers for oil and petroleum products.
 
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We provide technical services for drybulk vessels purchased by Maritime Equity Partners LLC (“MEP”) under an agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services are provided for a fee of $750 per ship per day plus reimbursement of out-of-pocket costs and will be provided for an initial term of one year.  MEP has the right to cancel provision of services on 60 days’ notice with payment of a one-year termination fee upon a change of our control.  We may terminate provision of the services at any time on 60 days’ notice.  Peter C. Georgiopoulos, our Chairman of the Board of Directors, controls and has a minority interest in MEP.  This arrangement was approved by an independent committee of our Board of Directors. On September 30, 2015, under the oversight of an independent committee of our Board of Directors Genco Management (USA) Limited and MEP entered into certain agreements under which MEP paid $1.0 million of the amount of service fees in arrears (which is $1.5 million as of November 1, 2015), a schedule was agreed for payment of the remaining amount in arrears, and the daily service fee was reduced from $750 to $650 per day effective on October 1, 2015.
 
During the beginning of 2009, the Genco Cavalier, a 2007-built Supramax vessel, was on charter to Samsun Logix Corporation (“Samsun”), when Samsun filed for the equivalent of bankruptcy protection in South Korea, otherwise referred to as a rehabilitation application.  On February 5, 2010, the rehabilitation plan submitted by Samsun was approved by the South Korean courts.  As part of the rehabilitation process, our claim of approximately $17.2 million will be settled in the following manner: 34%, or approximately $5.9 million, is to be be paid in cash in annual installments on December 30 of each year from 2010 through 2019 ranging in percentages from eight to 17; the remaining 66%, or approximately $11.3 million, converted to Samsun shares at a specified value per share. During the period from July 9 to September 30, 2014, the Successor Company recorded Other operating income of $0.3 million which represents the remaining 50% of the payment that was due on December 30, 2012 including interest earned on those amounts.  On July 3, 2015, Samsun filed for rehabilitation proceedings for the second time with the South Korean courts due to financial distress.  The rehabilitation plan is still under review by the South Korean courts, and a proposed rehabilitation plan has not yet been implemented.
 
Factors Affecting Our Results of Operations
 
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three and nine months ended September 30, 2015 and 2014 for the Successor Company and the Predecessor Company, respectively, on a consolidated basis, which includes the operations of Baltic Trading.  The period from July 9 to September 30, 2014 (Successor Company) and the period from January 1 to July 9, 2014 (Predecessor Company) are distinct reporting periods as a result of our emergence from bankruptcy on July 9, 2014.  References in these results of operation and the percentage change combine the Successor Company and the Predecessor Company results for the nine months ended September 30, 2014 in order to provide comparability of such information to the nine months ended September 30, 2015.

 	 	For the Three Months Ended 
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	
Ownership days (1) 	 	 	 	 	 	 	 	 	 	
Capesize	 	1,196.0	 	1,196.0	 	—	 	—	 	
Panamax	 	736.0	 	736.0	 	—	 	—	 	
Ultramax	 	239.9	 	—	 	239.9	 	100.0	%	
Supramax	 	1,932.0	 	1,932.0	 	—	 	—	 	
Handymax	 	552.0	 	552.0	 	—	 	—	 	
Handysize	 	1,656.0	 	1,656.0	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total	 	6,311.9	 	6,072.0	 	239.9	 	4.0	%	
 	 	 	 	 	 	 	 	 	 	
Available days (2) 	 	 	 	 	 	 	 	 	 	
Capesize	 	1,187.6	 	1,179.6	 	8.0	 	0.7	%	
Panamax	 	684.1	 	719.5	 	(35.4	)	(4.9	)%	
Ultramax	 	237.6	 	—	 	237.6	 	100.0	%	
Supramax	 	1,869.3	 	1,836.0	 	33.3	 	1.8	%	
Handymax	 	515.6	 	516.9	 	(1.3	)	(0.3	)%	
Handysize	 	1,573.6	 	1,652.4	 	(78.8	)	(4.8	)%	
 	 	 	 	 	 	 	 	 	 	
Total	 	6,067.8	 	5,904.4	 	163.4	 	2.8	%	
 	 	 	 	 	 	 	 	 	 	
Operating days (3) 	 	 	 	 	 	 	 	 	 	
Capesize	 	1,171.2	 	1,175.1	 	(3.9	)	(0.3	)%	
Panamax	 	683.2	 	715.6	 	(32.4	)	(4.5	)%	
 
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 	 	For the Three Months Ended
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
Ultramax	 	236.7	 	—	 	236.7	 	100.0	%	
Supramax	 	1,827.8	 	1,815.0	 	12.8	 	0.7	%	
Handymax	 	507.6	 	501.3	 	6.3	 	1.3	%	
Handysize	 	1,573.2	 	1,632.8	 	(59.6	)	(3.7	)%	
 	 	 	 	 	 	 	 	 	 	
Total	 	5,999.7	 	5,839.8	 	159.9	 	2.7	%	
 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4) 	 	 	 	 	 	 	 	 	 	
Capesize	 	98.6	%	99.6	%	(1.0	)%	(1.0	)%	
Panamax	 	99.9	%	99.5	%	0.4	%	0.4	%	
Ultramax	 	99.6	%	—	 	99.6	%	100.0	%	
Supramax	 	97.8	%	98.9	%	(1.1	)%	(1.1	)%	
Handymax	 	98.5	%	97.0	%	1.5	%	1.5	%	
Handysize	 	100.0	%	98.8	%	1.2	%	1.2	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	98.9	%	98.9	%	—	 	—	 	

 	 	For the Three Months Ended
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
 	 	(U.S. dollars)	 	 	 	 	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5) 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	11,120	 	$	12,131	 	$	(1,011	)	(8.3	)%	
Panamax	 	5,191	 	5,474	 	(283	)	(5.2	)%	
Ultramax	 	9,628	 	—	 	9,628	 	100.0	%	
Supramax	 	5,887	 	6,978	 	(1,091	)	(15.6	)%	
Handymax	 	6,217	 	6,502	 	(285	)	(4.4	)%	
Handysize	 	5,895	 	6,670	 	(775	)	(11.6	)%	
Fleet average	 	7,009	 	7,696	 	(687	)	(8.9	)%	
 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6) 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	5,320	 	$	5,532	 	$	(212	)	(3.8	)%	
Panamax	 	5,284	 	4,767	 	517	 	10.8	%	
Ultramax	 	4,699	 	—	 	4,699	 	100.0	%	
Supramax	 	4,914	 	4,929	 	(15	)	(0.3	)%	
Handymax	 	5,474	 	5,781	 	(307	)	(5.3	)%	
Handysize	 	4,619	 	4,414	 	205	 	4.6	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,997	 	4,965	 	32	 	0.6	%	

 	 	For the Nine Months Ended 
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
Fleet Data:	 	 	 	 	 	 	 	 	 	
Ownership days (1) 	 	 	 	 	 	 	 	 	 	
Capesize	 	3,549.0	 	3,549.0	 	—	 	—	 	
Panamax	 	2,184.0	 	2,184.0	 	—	 	—	 	
Ultramax	 	600.9	 	—	 	600.9	 	100.0	%	
Supramax	 	5,733.0	 	5,733.0	 	—	 	—	 	
Handymax	 	1,638.0	 	1,638.0	 	—	 	—	 	
Handysize	 	4,914.0	 	4,914.0	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total	 	18,618.9	 	18,018.0	 	600.9	 	3.3	%	
 	 	 	 	 	 	 	 	 	 	
Available days (2) 	 	 	 	 	 	 	 	 	 	
Capesize	 	3,492.9	 	3,532.6	 	(39.7	)	(1.1	)%	
Panamax	 	2,108.6	 	2,097.9	 	10.7	 	0.5	%	
 
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 	 	For the Nine Months Ended
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
Ultramax	 	594.1	 	—	 	594.1	 	100.0	%	
Supramax	 	5,442.4	 	5,448.3	 	(5.9	)	(0.1	)%	
Handymax	 	1,463.1	 	1,556.1	 	(93.0	)	(6.0	)%	
Handysize	 	4,765.0	 	4,826.3	 	(61.3	)	(1.3	)%	
 	 	 	 	 	 	 	 	 	 	
Total	 	17,866.1	 	17,461.2	 	404.9	 	2.3	%	
 	 	 	 	 	 	 	 	 	 	
Operating days (3) 	 	 	 	 	 	 	 	 	 	
Capesize	 	3,446.8	 	3,525.4	 	(78.6	)	(2.2	)%	
Panamax	 	2,106.9	 	2,090.0	 	16.9	 	0.8	%	
Ultramax	 	593.2	 	—	 	593.2	 	100.0	%	
Supramax	 	5,310.4	 	5,373.7	 	(63.3	)	(1.2	)%	
Handymax	 	1,417.2	 	1,516.8	 	(99.6	)	(6.6	)%	
Handysize	 	4,755.0	 	4,699.6	 	55.4	 	1.2	%	
 	 	 	 	 	 	 	 	 	 	
Total	 	17,629.5	 	17,205.5	 	424.0	 	2.5	%	
 	 	 	 	 	 	 	 	 	 	
Fleet utilization (4)	 	 	 	 	 	 	 	 	 	
Capesize	 	98.7	%	99.8	%	(1.1	)%	(1.1	)%	
Panamax	 	99.9	%	99.6	%	0.3	%	0.3	%	
Ultramax	 	99.9	%	—	 	99.9	%	100.0	%	
Supramax	 	97.6	%	98.6	%	(1.0	)%	(1.0	)%	
Handymax	 	96.9	%	97.5	%	(0.6	)%	(0.6	)%	
Handysize	 	99.8	%	97.4	%	2.4	%	2.5	%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	98.7	%	98.5	%	0.2	%	0.2	%	

 	 	For the Nine Months Ended
September 30,	 	Increase	 	 	 	
 	 	2015	 	2014	 	(Decrease)	 	% Change	 	
 	 	(U.S. dollars)	 	 	 	 	 	
Average Daily Results:	 	 	 	 	 	 	 	 	 	
Time Charter Equivalent (5) 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	6,204	 	$	13,095	 	$	(6,891	)	(52.6	)%	
Panamax	 	4,517	 	7,016	 	(2,499	)	(35.6	)%	
Ultramax	 	8,013	 	—	 	8,013	 	100.0	%	
Supramax	 	5,478	 	8,246	 	(2,768	)	(33.6	)%	
Handymax	 	5,646	 	7,979	 	(2,333	)	(29.2	)%	
Handysize	 	5,822	 	7,854	 	(2,032	)	(25.9	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	5,696	 	8,947	 	(3,251	)	(36.3	)%	
 	 	 	 	 	 	 	 	 	 	
Daily vessel operating expenses (6) 	 	 	 	 	 	 	 	 	 	
Capesize	 	$	5,212	 	$	5,430	 	$	(218	)	(4.0	)%	
Panamax	 	4,748	 	5,232	 	(484	)	(9.3	)%	
Ultramax	 	4,649	 	—	 	4,649	 	100.0	%	
Supramax	 	4,876	 	5,166	 	(290	)	(5.6	)%	
Handymax	 	5,163	 	5,280	 	(117	)	(2.2	)%	
Handysize	 	4,492	 	4,672	 	(180	)	(3.9	)%	
 	 	 	 	 	 	 	 	 	 	
Fleet average	 	4,841	 	5,101	 	(260	)	(5.1	)%	
 
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Definitions
 
In order to understand our discussion of our results of operations, it is important to understand the meaning of the following terms used in our analysis and the factors that influence our results of operations.
 
(1) Ownership days .  We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
 
(2) Available days .  We define available days as the number of our ownership days in a period less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
 
(3) Operating days .  We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
 
(4) Fleet utilization .  We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
 
(5) TCE rates .  We define TCE rates as net voyage revenue (voyage revenues less voyage expenses) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.

 	 	For the Three Months Ended
September 30,	 	For the Nine Months Ended
September 30,	 	
 	 	2015	 	2014	 	2015	 	2014	 	
 	 	 	 	 	 	 	 	 	 	
Voyage revenues (in thousands)	 	$	49,167	 	$	47,977	 	$	116,548	 	$	162,702	 	
Voyage expenses (in thousands)	 	6,638	 	2,535	 	14,775	 	6,475	 	
 	 	$	42,529	 	$	45,442	 	$	101,773	 	$	156,227	 	
Total available days	 	6,067.8	 	5,904.4	 	17,866.1	 	17,461.2	 	
Total TCE rate	 	$	7,009	 	$	7,696	 	$	5,696	 	$	8,947	 	
 
(6) Daily vessel operating expenses .  We define daily vessel operating expenses as vessel operating expenses divided by ownership days for the period.  Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.
 
Operating Data
 
The following tables represent the operating data for the three and nine months ended September 30, 2015 and 2014 on a consolidated basis, which includes the operations of Baltic Trading prior to and after the Merger on July 17, 2015.  The period from July 9 to September 30, 2014 (Successor Company) and the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 (Predecessor Company) are distinct reporting period as a result of our emergence from bankruptcy on July 9, 2014.  References in these results of operating and the percentage change combine the Successor Company and Predecessor Company results for the three and nine months ended September 30, 2014 in order to provide comparability of such information to the three-month and nine-month period ended September 30, 2015. We did not compare the share and per share amounts since the change in our capital structure as a result of the bankruptcy renders these not comparable between the Successor Company and the Predecessor Company.
 
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 	 	Successor	 	Successor	 	 	Predecessor	 	 	 	 	 	
 	 	Three Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
July 1
to July 9, 
 2014
(restated)	 	Change	 	% Change	 	
(U.S. Dollars in thousands, except for per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	49,167	 	$	43,943	 	 	$	4,034	 	$	1,190	 	2.5	%	
Service revenues	 	828	 	756	 	 	72	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	49,995	 	44,699	 	 	4,106	 	1,190	 	2.4	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	6,638	 	2,335	 	 	200	 	4,103	 	161.9	%	
Vessel operating expenses	 	31,544	 	27,248	 	 	2,902	 	1,394	 	4.6	%	
General, administrative and management fees	 	26,983	 	15,492	 	 	6,147	 	5,344	 	24.7	%	
Depreciation and amortization	 	20,124	 	17,356	 	 	3,213	 	(445	)	(2.2	)%	
Other operating income	 	—	 	(296	)	 	—	 	296	 	(100.0	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	85,289	 	62,135	 	 	12,462	 	10,692	 	14.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	(35,294	)	(17,436	)	 	(8,356	)	(9,502	)	36.8	%	
Other expense	 	(38,043	)	(3,566	)	 	(1,528	)	(32,949	)	646.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	(73,337	)	(21,002	)	 	(9,884	)	(42,451	)	137.4	%	
Reorganization items, net	 	(174	)	(1,167	)	 	(895,534	)	896,527	 	(100.0	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	(73,511	)	(22,169	)	 	(905,418	)	854,076	 	(92.1	)%	
Income tax expense	 	(292	)	(393	)	 	(38	)	139	 	(32.3	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	(73,803	)	(22,562	)	 	(905,456	)	854,215	 	(92.0	)%	
Less: Net loss attributable to noncontrolling interest	 	(7,178	)	(4,272	)	 	(53,935	)	51,029	 	(87.7	)%	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(66,625	)	$	(18,290	)	 	$	(851,521	)	$	803,186	 	(92.3	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic	 	$	(0.95	)	$	(0.30	)	 	$	(19.54	)	N/A	 	N/A	 	
Net loss per share - diluted	 	$	(0.95	)	$	(0.30	)	 	$	(19.54	)	N/A	 	N/A	 	
Dividends declared and paid per share	 	$	—	 	$	—	 	 	$	—	 	N/A	 	N/A	 	
Weighted average common shares outstanding - basic	 	69,824,338	 	60,299,766	 	 	43,568,942	 	N/A	 	N/A	 	
Weighted average common shares outstanding - diluted	 	69,824,338	 	60,299,766	 	 	43,568,942	 	N/A	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	(41,355	)	$	3,032	 	 	$	(846,741	)	802,354	 	(95.1	)%	
 
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 	 	Successor	 	Successor	 	 	Predecessor	 	 	 	 	 	
 	 	Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
January 1
to July 9, 
 2014
(restated)	 	Change	 	% Change	 	
(U.S. Dollars in thousands, except for per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage revenues	 	$	116,548	 	$	43,943	 	 	$	118,759	 	$	(46,154	)	(28.4	)%	
Service revenues	 	2,457	 	756	 	 	1,701	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	119,005	 	44,699	 	 	120,460	 	(46,154	)	(27.9	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Voyage expenses	 	14,775	 	2,335	 	 	4,140	 	8,300	 	128.2	%	
Vessel operating expenses	 	90,143	 	27,248	 	 	64,670	 	(1,775	)	(1.9	)%	
General, administrative and management fees	 	73,798	 	15,492	 	 	31,371	 	26,935	 	57.5	%	
Depreciation and amortization	 	58,933	 	17,356	 	 	75,952	 	(34,375	)	(36.8	)%	
Other operating income	 	—	 	(296	)	 	—	 	296	 	(100.0	)%	
Impairment of vessel assets	 	35,396	 	—	 	 	—	 	35,396	 	100.0	%	
Loss on sale of vessels	 	1,210	 	—	 	 	—	 	1,210	 	100.0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	274,255	 	62,135	 	 	176,133	 	35,987	 	15.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	(155,250	)	(17,436	)	 	(55,673	)	(82,141	)	112.4	%	
Other expense	 	(47,059	)	(3,566	)	 	(41,122	)	(2,371	)	5.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before reorganization items, net	 	(202,309	)	(21,002	)	 	(96,795	)	(84,512	)	71.7	%	
Reorganization items, net	 	(1,006	)	(1,167	)	 	(915,640	)	915,801	 	(99.9	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	(203,315	)	(22,169	)	 	(1,012,435	)	831,289	 	(80.3	)%	
Income tax expense	 	(1,553	)	(393	)	 	(815	)	(345	)	28.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	(204,868	)	(22,562	)	 	(1,013,250	)	830,944	 	(80.2	)%	
Less: Net loss attributable to noncontrolling interest	 	(59,471	)	(4,272	)	 	(62,101	)	6,902	 	(10.4	)%	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(145,397	)	$	(18,290	)	 	$	(951,149	)	$	824,042	 	(85.0	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share - basic	 	$	(2.29	)	$	(0.30	)	 	$	(21.83	)	N/A	 	N/A	 	
Net loss per share - diluted	 	$	(2.29	)	$	(0.30	)	 	$	(21.83	)	N/A	 	N/A	 	
Dividends declared and paid per share	 	$	—	 	$	—	 	 	$	—	 	N/A	 	N/A	 	
Weighted average common shares outstanding - basic	 	63,615,181	 	60,299,766	 	 	43,568,942	 	N/A	 	N/A	 	
Weighted average common shares outstanding - diluted	 	63,615,181	 	60,299,766	 	 	43,568,942	 	N/A	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	(71,095	)	$	3,032	 	 	$	(833,366	)	759,239	 	(91.4	)%	

(1)          EBITDA represents net (loss) income attributable to Genco Shipping & Trading Limited plus net interest expense, taxes and depreciation and amortization.  EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers.  Our management uses EBITDA as a performance measure in our consolidated internal financial statements, and it is presented for review at our board meetings.  We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing.  EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs.  EBITDA is not an item recognized by U.S. GAAP and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP.  EBITDA is not
 
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a measure of liquidity or cash flows as shown in our consolidated statements of cash flows.  The definition of EBITDA used here may not be comparable to that used by other companies.  Pursuant to the amendments entered into on April 30, 2015 for our $100 Million Term Loan Facility and our $253 Million Term Loan Facility, the definition of Consolidated EBITDA used in the financial covenants has been eliminated.  The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net (loss) income attributable to Genco Shipping & Trading Limited for each of the periods presented above:

 	 	Successor	 	 	Predecessor	 	
 	 	For the 
 Three Months
Ended
September 30,
2015	 	For the 
 Nine Months
Ended
September 30,
2015	 	Period from
July 9 to
September 30,
2014	 	 	Period from
July 1 to 
 July 9, 
 2014 
 (restated)	 	Period from
January 1 to
July 9, 
 2014 
 (restated)	 	
Net loss attributable to Genco Shipping & Trading Limited	 	$	(66,625	)	$	(145,397	)	$	(18,290	)	 	$	(851,521	)	$	(951,149	)	
Net interest expense	 	4,854	 	13,816	 	3,573	 	 	1,529	 	41,016	 	
Income tax expense	 	292	 	1,553	 	393	 	 	38	 	815	 	
Depreciation and amortization	 	20,124	 	58,933	 	17,356	 	 	3,213	 	75,952	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1)	 	$	(41,355	)	$	(71,095	)	$	3,032	 	 	$	(846,741	)	$	(833,366	)	
 
Results of Operations
 
The following tables set forth information about the vessels in our fleet, including Baltic Trading’s vessels, as of November 11, 2015:

Vessel	 	Year 
 Built	 	Charterer	 	Charter
Expiration(1)	 	Cash Daily
Rate(2)	
 	 	 	 	 	 	 	 	 	
Capesize Vessels	 	 	 	 	 	 	 	 	
Genco Augustus	 	2007	 	Swissmarine Asia Pte. Ltd.	 	March 2016	 	102% of BCI	
Genco Tiberius	 	2007	 	Cargill International S.A.	 	December 2015	 	102% of BCI	
Genco London	 	2007	 	Cargill International S.A.	 	December 2015	 	102.5% of BCI	
Genco Titus	 	2007	 	Swissmarine Services S.A.	 	June 2016	 	104.5% of BCI	
Genco Constantine	 	2008	 	Cargill International S.A.	 	December 2015	 	102% of BCI	
Genco Hadrian	 	2008	 	Swissmarine Services S.A.	 	November 2016	 	98.5% of BCI(3)	
Genco Commodus	 	2009	 	Swissmarine Asia Pte. Ltd.	 	March 2016	 	98.5% of BCI	
Genco Maximus	 	2009	 	Swissmarine Services S.A.	 	February 2016	 	98.5% of BCI	
Genco Claudius	 	2010	 	Swissmarine Services S.A.	 	December 2015	 	99% of BCI	
Genco Tiger	 	2011	 	Swissmarine Services S.A.	 	December 2015	 	103% of BCI	
Baltic Lion	 	2012	 	Swissmarine Services S.A.	 	December 2015	 	103% of BCI	
Baltic Bear	 	2010	 	Swissmarine Services S.A.	 	April 2016	 	102.5% of BCI	
Baltic Wolf	 	2010	 	Swissmarine Services S.A.	 	December 2015	 	101.5% of BCI	
 	 	 	 	 	 	 	 	 	
Panamax Vessels	 	 	 	 	 	 	 	 	
Genco Beauty	 	1999	 	Navig8 Inc.	 	September 2016	 	94.75% of BPI	
Genco Knight	 	1999	 	Swissmarine Services S.A.	 	March 2016	 	95% of BPI	
Genco Leader	 	1999	 	Navig8 Pan8 Pool Inc.	 	February 2016	 	Spot Pool(4)	
Genco Vigour	 	1999	 	Swissmarine Services S.A.	 	February 2016	 	95% of BPI	
Genco Acheron	 	1999	 	D/S Norden A/S	 	December 2015	 	$12,250(5)	
Genco Surprise	 	1998	 	Swissmarine Services S.A.	 	January 2016	 	96% of BPI	
Genco Raptor	 	2007	 	GMI Panamax Pool Ltd.	 	June 2016	 	100% of BPI	
Genco Thunder	 	2007	 	Swissmarine Services S.A.	 	August 2016	 	100% of BPI	
 	 	 	 	 	 	 	 	 	
Ultramax Vessels	 	 	 	 	 	 	 	 	
Baltic Hornet	 	2014	 	Swissmarine Asia Pte. Ltd.	 	February 2017	 	115.5% of BSI(6)	
Baltic Wasp	 	2015	 	Pioneer Navigation Ltd.	 	December 2015	 	115% of BSI	
Baltic Scorpion	 	2015	 	Swissmarine Asia Pte. Ltd.	 	October 2016	 	115.5% of BSI	
Baltic Mantis	 	2015	 	Pioneer Navigation Ltd.	 	December 2016	 	115% of BSI(7)	
 
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Supramax Vessels	 	 	 	 	 	 	 	 	
Genco Predator	 	2005	 	Cargill Ocean Transportation (Singapore) Pte. Ltd.	 	November 2015	 	$5,000(8)	
Genco Warrior	 	2005	 	Centurion Bulk Pte. Ltd., Singapore	 	June 2016	 	98.5% of BSI(9)	
Genco Hunter	 	2007	 	Pioneer Navigation Ltd.	 	December 2015	 	106.5% of BSI	
Genco Cavalier	 	2007	 	DHL Project and Chartering (China) Ltd.	 	November 2015	 	$6,150(10)	
Genco Lorraine	 	2009	 	Chun An Chartering Co., Ltd.	 	November 2015	 	$4,850(11)	
Genco Loire	 	2009	 	Bulkhandling Handymax A/S	 	February 2016	 	Spot Pool(12)	
Genco Aquitaine	 	2009	 	Bulkhandling Handymax A/S	 	February 2016	 	Spot Pool(12)	
Genco Ardennes	 	2009	 	Fednav International Ltd.	 	December 2015	 	$10,000(13)	
Genco Auvergne	 	2009	 	Pioneer Navigation Ltd.	 	December 2015	 	100% of BSI	
Genco Bourgogne	 	2010	 	Clipper Sapphire Pool	 	May 2016	 	Spot Pool(14)	
Genco Brittany	 	2010	 	Clipper Sapphire Pool	 	May 2016	 	Spot Pool(14)	
Genco Languedoc	 	2010	 	Clipper Sapphire Pool	 	May 2016	 	Spot Pool(14)	
Genco Normandy	 	2007	 	Medi Supra Pool Management Ltd.	 	November 2015	 	$4,600(15)	
Genco Picardy	 	2005	 	Ultrabulk A/S	 	November 2015	 	$5,000(16)	
Genco Provence	 	2004	 	Pioneer Navigation Ltd.	 	August 2016	 	100% of BSI(17)	
Genco Pyrenees	 	2010	 	Clipper Sapphire Pool	 	May 2016	 	Spot Pool(14)	
Genco Rhone	 	2011	 	Pioneer Navigation Ltd.	 	December 2016	 	100% of BSI(18)	
Baltic Leopard	 	2009	 	Dragon Carriers Ltd.	 	December 2015	 	$4,000(19)	
Baltic Panther	 	2009	 	Bulkhandling Handymax A/S	 	February 2016	 	Spot Pool(12)	
Baltic Jaguar	 	2009	 	Centurion Bulk Pte. Ltd., Singapore	 	November 2015	 	$3,650(20)	
Baltic Cougar	 	2009	 	Bulkhandling Handymax A/S	 	February 2016	 	Spot Pool(12)	
 	 	 	 	 	 	 	 	 	
Handymax Vessels	 	 	 	 	 	 	 	 	
Genco Success	 	1997	 	Norvic Shipping North America Inc., Toronto	 	December 2015	 	$4,650(21)	
Genco Carrier	 	1998	 	Thoresen Shipping Singapore Pte. Ltd.	 	December 2015	 	$4,500(22)	
Genco Prosperity	 	1997	 	Centurion Bulk Pte. Ltd., Singapore	 	December 2015	 	89% of BSI	
Genco Wisdom	 	1997	 	ED & F MAN Shipping Ltd.	 	February 2016	 	89% of BSI	
Genco Marine	 	1996	 	TST NV, Nevis	 	February 2016	 	87% of BSI	
Genco Muse	 	2001	 	Centurion Bulk Pte. Ltd., Singapore	 	November 2015	 	$4,250(23)	
 	 	 	 	 	 	 	 	 	
Handysize Vessels	 	 	 	 	 	 	 	 	
Genco Sugar	 	1998	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Pioneer	 	1999	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Progress	 	1999	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Explorer	 	1999	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Reliance	 	1999	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Baltic Hare	 	2009	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Baltic Fox	 	2010	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Charger	 	2005	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Challenger	 	2003	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Genco Champion	 	2006	 	Clipper Logger Pool	 	May 2016	 	Spot Pool(24)	
Baltic Wind	 	2009	 	Trammo Bulk Carriers	 	January 2016	 	107% of BHSI	
Baltic Cove	 	2010	 	Clipper Bulk Shipping Ltd.	 	May 2016	 	100.5% of BHSI	
Baltic Breeze	 	2010	 	Trammo Bulk Carriers	 	January 2017	 	103% of BHSI(25)	
Genco Ocean	 	2010	 	Falcon Navigation A/S	 	July 2016	 	103% of BHSI	
Genco Bay	 	2010	 	Clipper Bulk Shipping Ltd.	 	June 2016	 	102% of BHSI	
Genco Avra	 	2011	 	Pioneer Navigation Ltd./Ultrabulk S.A.	 	Dec. 2015/Mar. 2017	 	107%/104% of BHSI(26)	
Genco Mare	 	2011	 	Pioneer Navigation Ltd.	 	June 2017	 	103.5% of BHSI(27)	
Genco Spirit	 	2011	 	Clipper Bulk Shipping Ltd.	 	August 2016	 	$7,000(28)	
 
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(1)          The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course.  Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel’s final voyage plus any time the vessel has been off-hire.
 
(2)          Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues.
 
(3)          We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 10.5 to 13.5 months based on 98.5% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about December 15, 2015.
 
(4)          We have reached an agreement to enter this vessel into the Navig8 Pan8 Pool, a vessel pool trading in the spot market of which Navig8 Inc. acts as the pool manager.  Genco can withdraw the vessel with three months’ notice.
 
(5)          We have reached an agreement with D/S Norden A/S on a time charter for approximately 55 days at a rate of $12,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 14, 2015 after repositioning. A ballast bonus was awarded after the repositioning period. The vessel redelivered to Genco on September 4, 2015.
 
(6)          We have agreed to an extension with Swissmarine Asia Pte. Ltd. on a spot market-related time charter for 14 to 18.5 months based on 115.5% of the Baltic Supramax Index (BSI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about December 15, 2015.
 
(7)          We have reached an agreement with Pioneer Navigation Ltd. on a spot market-related time charter for 14 to 18.5 months based on 115% of the BSI, as reflected in daily reports except for the initial 40 days in which hire is based on the average of the Baltic Supramax S2 and S3 routes. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 13, 2015.
 
(8)          We have reached an agreement with Cargill Ocean Transportation (Singapore) Pte. Ltd. on a time charter for approximately 20 days at a rate of $5,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 18, 2015 after repositioning. The vessel redelivered to Genco on October 16, 2015.
 
(9)          We have reached an agreement with Centurion Bulk Pte. Ltd., Singapore on a spot market-related time charter for 7.5 to 11.5 months based on 98.5% of the BSI, as reflected in daily reports. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. Genco maintains the option to convert to a fixed rate based on Supramax FFA values at 98.5%. The vessel delivered to charterers on October 25, 2015 after repositioning. The vessel redelivered to Genco on October 7, 2015.
 
(10)   We have reached an agreement with DHL Project and Chartering (China) Ltd. on a time charter for approximately 35 days at a rate of $6,150 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 8, 2015 after repositioning. The vessel redelivered to Genco on October 1, 2015.
 
(11)   We have reached an agreement with Chun An Chartering Co., Ltd. on a time charter for approximately 30 days at a rate of $4,850 per day.  Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 25, 2015 after repositioning. The vessel redelivered to Genco on October 20, 2015.
 
(12)   We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice.
 
(13)   We have reached an agreement with Fednav International Ltd. on a time charter for approximately 45 days at a rate of $10,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 30, 2015 after repositioning. The vessel redelivered to Genco on September 24, 2015.
 
(14)   We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager.  Genco can withdraw a vessel with a minimum notice of six months.
 
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(15)   We have reached an agreement with Medi Supra Pool Management Ltd. on a time charter for approximately 20 days at a rate of $4,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 30, 2015 after repositioning. The vessel redelivered to Genco on October 21, 2015.
 
(16)   We have reached an agreement with Ultrabulk A/S on a time charter for approximately 20 days at a rate of $5,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 22, 2015 after repositioning. The vessel redelivered to Genco on October 20, 2015.
 
(17)   We have agreed to an extension with Pioneer Navigation Ltd. on a spot market-related time charter for 10.5 to 13.5 months based on 100% of the BSI, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. Genco maintains the option to convert to a fixed rate based on Supramax FFA values at 100%. The extension began on October 12, 2015.
 
(18)   We have agreed to an extension with Pioneer Navigation Ltd. on a spot market-related time charter for 12 to 15.5 months based on 100% of the BSI, as reflected in daily reports except for the initial 42 days in which hire is based on the average of the Baltic Supramax S2 and S3 routes. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin after completion of drydocking for scheduled maintenance.
 
(19)   We have reached an agreement with Dragon Carriers Ltd. on a time charter for approximately 30 days at a rate of $4,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on November 6, 2015 after repositioning. The vessel redelivered to Genco on October 27, 2015.
 
(20)   We have reached an agreement with Centurion Bulk Pte. Ltd., Singapore on a time charter for approximately 20 days at a rate of $3,650 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 24, 2015.
 
(21)   We have reached an agreement with Norvic Shipping North America Inc., Toronto on a time charter for approximately 25 days at a rate of $4,650 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver charterers on or about November 17, 2015 after repositioning. The vessel redelivered to Genco on November 3, 2015.
 
(22)   We have reached an agreement with Thoresen Shipping Singapore Pte. Ltd. on a time charter for approximately 35 days at a rate of $4,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on October 28, 2015 after repositioning. The vessel redelivered to Genco on October 22, 2015.
 
(23)   The vessel redelivered to Genco on November 6, 2015 and is currently in drydocking for scheduled maintenance.
 
(24)   We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager.  Genco can withdraw the vessels with a minimum notice of six months.
 
(25)   We have reached an agreement with Trammo Bulk Carriers on a spot market-related time charter for 15.5 to 20.5 months based on 103% of the Baltic Handysize Index (BHSI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The vessel delivered to charterers on September 28, 2015 after completion of drydocking for scheduled maintenance.
 
(26)   We have reached an agreement with Ultrabulk S.A. on a spot market-related time charter for 15.5 to 19.5 months based on 104% of the BHSI, as reflected in daily reports. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers after the completion of drydocking for scheduled maintenance.
 
(27)   We have agreed to an extension with Pioneer Navigation Ltd. on a spot-market related time charter for 12 to 15.5 months based on 103.5% of the BHSI, as reflected in daily reports except for the initial 42 days in which hire is based on the average of the Baltic Handysize HS2 and HS3 routes. The extension is expected to begin after completion of drydocking for scheduled maintenance.
 
(28)   We have agreed to an extension with Clipper Bulk Shipping Ltd. on a time charter at a rate of $7,000 per day except for the initial 40 days in which the hire rate is $4,250 per day. The minimum and maximum expiration dates of the time charter are August 15, 2016 and October 15, 2016, respectively. The extension began on October 14, 2015.
 
Three months ended September 30, 2015 compared to the three months ended September 30, 2014
 
VOYAGE REVENUES-
 
For the three months ended September 30, 2015, voyage revenues increased by $1.2 million to $49.2 million, or 2.5%, as compared to the three months ended September 30, 2014.  The increase in voyage revenues was primarily due to the increase in the
 
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size of our fleet following the delivery of three Ultramax newbuilding vessels, offset by lower rates achieved by the majority of the vessels in our fleet during the third quarter of 2015 versus the same period last year.
 
The average Time Charter Equivalent (“TCE”) rate of our fleet decreased by $687 per day to $7,009 a day for the three months ended September 30, 2015 as compared to the three months ended September 30, 2014. The decrease in TCE rates was primarily due to lower spot rates achieved by the vessels in our fleet as well as an increase in voyage expenses during the third quarter of 2015 versus the third quarter of 2014.  During the third quarter of 2015, the Baltic Dry Index continued to demonstrate considerable volatility which was most evident within the Capesize sector. Capesize earnings displayed significant strength during the first two months of the quarter approaching a level of $20,000 per day as a result of strong iron ore volumes out of Brazil, but retreated to lower levels towards the end of the quarter.  Demand for smaller class vessels was more stable during the quarter aided by both an extended South American grain season as well as higher steel exports out of China.  Although the slowdown of fleet growth during the first half of the year resulted in marginally improved market dynamics, excess vessel supply has continued to weigh on the drybulk industry.  Higher freight rates registered during the first two months of the quarter contributed to lower vessel demolition activity as compared to the record pace achieved in the first half of 2015.
 
For the three months ended September 30, 2015 and 2014, we had 6,311.9 and 6,072.0 ownership days, respectively.  The increase in ownership days is a result of the delivery of three Ultramax newbuilding vessels.  Total available days increased to 6,067.8 during the three months ended September 30, 2015 from 5,904.4 during the three months ended September 30, 2014.  The increase in available days was due to the delivery of the three aforementioned three vessels partially offset by an increase in drydocking days during the third quarter of 2015 as compared to the same period last year.  Fleet utilization remained stable at 98.9% during both three month periods ending September 30, 2015 and 2014.
 
SERVICE REVENUES-
 
Service revenues consist of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services were provided for a fee of $750 per ship per day during the three months ended September 30, 2015.  During the three months ended September 30, 2015, total service revenue was $0.8 million and did not change from the same period during the prior year.
 
VOYAGE EXPENSES-
 
In time charters, spot market-related time charters and pool agreements, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses and the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement, as well as any adjustments to record fuel inventory at the lower of cost or market at the balance sheet date.
 
Voyage expenses increased by $4.1 million to $6.6 million during the three months ended September 30, 2015 as compared to the same period during 2014.  The increase was primarily due to an increase in net bunker losses recorded during the third quarter of 2015 based on the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a result of the decrease in bunker prices.  Additionally, there was an increase in voyage expenses as our bunker inventory was written down to its market value as of September 30, 2015 as well as an increase the cost of bunkers consumed during short-term time charters during the third quarter of 2015 as compared to the same period last year.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses increased by $1.4 million to $31.5 million during the third quarter of 2015 as compared to the third quarter of 2014.  This increase was primarily due to the operation of larger fleet as a result of the delivery of three Ultramax newbuilding vessels, as well as higher spares and maintenance related expenses.
 
Daily vessel operating expenses increased marginally by $32 per vessel per day, or 0.6%, to $4,997 per vessel per day during the three months ended September 30, 2015 as compared to the same period during 2014. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.  Our actual daily vessel operating expenses per vessel for the three months ended September 30, 2015 were $323 below the weighted-average budgeted rate of $5,320 per vessel per day.
 
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Our vessel operating expenses, which generally represent fixed costs for each vessel, will increase if our fleet expands. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase.
 
GENERAL, ADMINISTRATIVE AND MANAGEMENT FEES-
 
For the three months ended September 30, 2015, general, administrative and management fees increased by $5.3 million to $27.0 million as compared to the three months ended September 30, 2014. The increase was primarily a result of higher non-cash compensation expenses in the amount of $2.3 million, mainly arising from awards under the 2014 MIP and expenses related to the merger with Baltic Trading in the amount of $6.9 million. The increase was partially offset by a decrease in expenses related to our restructuring, which were incurred during 2014. We incur management fees to third-party technical management companies for the day-to-day management of our vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.  Management fees increased marginally due to the delivery of three Ultramax newbuilding vessels.
 
DEPRECIATION AND AMORTIZATION-
 
We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years. On the Effective Date, as part of fresh-start reporting, we revalued our vessels assets which resulted in a decrease in vessels assets, vessel equipment recorded as a component of other fixed assets and drydocking assets. On the Effective Date, we also increased the scrap value of our vessels from $245/lwt to $310/lwt which will result in an overall decrease in vessels depreciation expense over the remaining life of the vessels.
 
Depreciation and amortization expense decreased by $0.4 million to $20.1 million during the three months ended September 30, 2015 as compared to the three months ended September 30, 2014.  This decrease was due to a revaluation of the vessel assets as well as the change in the scrap value as mentioned above.  These decreases were partially offset by the operation of a larger fleet during the third quarter of 2015 as compared to the third quarter of 2014 due to the delivery of three Ultramax newbuilding vessels.
 
OTHER OPERATING INCOME -
 
During the three months ended September 30, 2015, other operating income decreased by $0.3 million to $0 as compared to the three months ended September 30, 2014.  During the three months ended September 30, 2014, we received the remaining 50%, including interest, of the cash settlement that was originally due from Samsun on December 30, 2012 as included in the rehabilitation plan approved by the South Korean courts during 2010.  Refer to Note 19 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the settlement payments.
 
OTHER (EXPENSE) INCOME-
 
IMPAIRMENT OF INVESTMENT-
 
During the three months ended September 30, 2015, the impairment of investment increased by $32.5 million as compared to the three months ended September 30, 2014.  We reviewed our investment in Jinhui for indicators of other-than-temporary impairment during the three months ended September 30, 2015 in accordance with Accounting Standards Codification (“ASC”) 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  Based on our review, we have deemed the investment in Jinhui to be other-than-temporarily impaired as of September 30, 2015, refer to Note 5 — Investments in our Condensed Consolidated Financial Statements for further information.  As a result, during the three months ended September 30, 2015, we recorded a $32.5 million impairment loss.
 
NET INTEREST EXPENSE-
 
During the three months ended September 30, 2015, net interest expense decreased by $0.2 million to $4.9 million as compared to the three months ended September 30, 2014.  Net interest expenses during the three months ended September 30, 2015 consisted of interest expense under our $100 Million Term Loan Facility, $253 Million Term Loan Facility, the $44 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $22 Million Term Loan Facility, the 2014 Term Loan Facilities and the $148 Million Credit Facility.  Net interest expense during the three months ended September 30, 2014 consisted of interest expense under the 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility, the 2010 Credit Facility, the $22 Million Term Loan Facility and the $44 Million Term Loan Facility.  The 2007 Credit Facility and 2010 Notes were terminated upon our emergence from bankruptcy on the Effective Date.  The outstanding indebtedness under the 2010 Baltic Trading Credit Facility was refinanced with the $148 Million Credit Facility on January 7, 2015.  Additionally, interest income, unused commitment fees associated with the aforementioned credit facilities as well as the amortization of deferred financing costs related to the aforementioned credit facilities are included in net interest expense during the three months ended September 30, 2015 and 2014.
 
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The decrease in net interest expense for the third quarter of 2015 as compared to the third quarter of 2014 was primarily due to a decrease in interest expense and amortization of deferred financing fees associated with the 2007 Credit Facility, which was terminated pursuant to the Plan on the Effective Date, and the interest rate swap agreements as three interest rate swap agreements expired during the first quarter of 2014. Refer to Note 10 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements.  These decreases were partially offset by an increase in interest expense related to the 2014 Term Loan Facilities, which were entered into by Baltic Trading on October 8, 2014, an increase in interest expense related to the 2015 Revolving Credit Facility which we entered into on April 7, 2015 and an increase in interest expense related to the $148 Million Credit Facility which replaced the 2010 Credit Facility on January 7, 2015 and which had higher debt outstanding during the third quarter of 2015 as compared to the prior year.
 
REORGANIZATION ITEMS, NET
 
During the three months ended September 30, 2015, reorganization items, net decreased by $896.5 million to $0.2 million as compared to the three months ended September 30, 2014.  The reorganization items recorded during both periods include trustee fees and professional fees incurred after the Petition Date in relation to the Chapter 11 Cases.  However, the reorganization items recorded during the three months ended September 30, 2014 also include the revaluation of assets and liabilities recorded as part of fresh-start reporting as well as the discharge of liabilities subject to compromise in exchange for issuance of common stock pursuant to the Plan. Refer to Note 18 — Reorganization items, net in our Condensed Consolidated Financial Statements for further detail.  The decrease was due to the winding down of settlement payments as a result of the Chapter 11 Cases as well as the fact that the fresh-start reporting adjustments were one-time adjustments that were recorded immediately upon our emergence from bankruptcy.
 
INCOME TAX EXPENSE-
 
During the three months ended September 30, 2015, income tax expense decreased by $0.1 million to $0.3 million as compared to the three months ended September 30, 2014.  This income tax expense consists primarily of federal, state and local income taxes on net income earned by Genco Management (USA) Limited (“Genco (USA)”), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we technically and commercially managed vessels for Baltic Trading until the Merger on July 17, 2015, as well as provide technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Refer to the “Income taxes” section of Note 2 — Summary of Significant Accounting Policies included in our Condensed Consolidated Financial Statements for further information.  The decrease in income tax expense during the three months ended September 30, 2015 as compared to the same period during the prior year is primarily due to a decrease in income earned by Genco (USA) during the three months ended September 30, 2015 as a result of the cancellation of the Management Agreement with Baltic Trading effective July 18, 2015 pursuant to the Merger.  As a result of the cancellation, Genco (USA) was no longer earning commercial service revenue, management fees and sales and purchase fees from Baltic Trading effective July 18, 2015.
 
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST-
 
During the three months ended September 30, 2015, net loss attributable to noncontrolling interest decreased by $51.0 million to $7.2 million as compared to the three months ended September 30, 2014.  Net loss was allocated to the noncontrolling interest up until July 17, 2015 when the Merger was effective.  Once the Merger was effective, the noncontrolling interest allocation was no longer applicable.
 
Nine months ended September 30, 2015 compared to the nine months ended September 30, 2014
 
VOYAGE REVENUES-
 
For the nine months ended September 30, 2015, voyage revenues decreased by $46.2 million to $116.5 million, or 28.4%, as compared to the nine months ended September 30, 2014.  The decrease in voyage revenues was primarily due to lower rates achieved by the majority of our vessels partially offset by the increase in the size of our fleet due to the delivery of three Ultramax newbuilding vessels.
 
The average TCE rate of our fleet decreased by $3,251 per day to $5,696 per day for the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  The decrease in TCE rates resulted from lower rates achieved by the vessels in our fleet as well as higher voyage expenses during the nine months ended September 30, 2015 as compared to the same period during 2014.
 
For the nine months ended September 30, 2015 and 2014, we had 18,618.9 and 18,018.0 ownership days, respectively.  The increase in ownership days is a result of the delivery of three Ultramax newbuilding vessels.  Total available days increased to 17,866.1 during the nine months ended September 30, 2015 from 17,461.2 during the nine months ended September 30, 2014.  This
 
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increase in available days was due to the delivery of the three aforementioned vessels partially offset by an increase in repositioning days during the nine months ended September 30, 2015 as compared to the same period last year.  Fleet utilization increased marginally to 98.7% during the nine months ended September 30, 2015 from 98.5% during the nine months ended September 30, 2014.
 
SERVICE REVENUES-
 
Service revenues consist of revenues earned from providing technical services to MEP pursuant to the agency agreement between us and MEP.  These services include oversight of crew management, insurance, drydocking, ship operations and financial statement preparation, but do not include chartering services.  The services were provided for a fee of $750 per ship per day during the nine months ended September 30, 2015.  During such period, total service revenue was $2.5 million and did not change from the same period during the prior year.
 
VOYAGE EXPENSES-
 
Voyage expenses increased by $8.3 million to $14.8 million during the nine months ended September 30, 2015 as compared to the same period during 2014.  The increase was primarily due to an increase in net bunker losses recorded during the nine months ended September 30, 2015 based on the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a result of the decrease in bunker prices.  Additionally, there was an increase in voyage expenses as our bunker inventory was written down to its market value as of March 31, 2015, June 30, 2015 and September 30, 2015, as well as an increase the cost of bunkers consumed during short-term time charters during the nine months ended September 30, 2015 as compared to the same period last year.  These increases were partially offset by a decrease in third-party broker commissions as a result of the decrease in voyage revenue earned during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.
 
VESSEL OPERATING EXPENSES-
 
Vessel operating expenses decreased by $1.8 million to $90.1 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  This decrease was primarily due to lower insurance, stores and maintenance related expenses.  These decreases were partially offset by the operation of a larger fleet as a result of the delivery of three Ultramax newbuilding vessels.
 
Daily vessel operating expenses decreased by $260 per vessel per day to $4,841 per vessel per day during the nine months ended September 30, 2015 as compared to the same period during 2014.  The decrease in daily vessel operating expenses was primarily due to lower insurance, stores and maintenance related expenses. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.  Our actual daily vessel operating expenses per vessel for the nine months ended September 30, 2015 were $479 below the weighted-average budgeted rate of $5,320 per vessel per day.
 
GENERAL, ADMINISTRATIVE AND MANAGEMENT FEES-
 
During the nine months ended September 30, 2015, general, administrative and management fees increased by $26.9 million to $73.8 million as compared to the nine months ended September 30, 2014.  The increase was primarily a result of higher non-cash compensation expense in the amount of $24.4 million, mainly arising from awards under the MIP, and expenses related to the merger with Baltic Trading in the amount of $13.4 million.  The increase was partially offset by a decrease in expenses related to our restructuring which were incurred in 2014.  We incur management fees to third-party technical management companies for the day-to-day management of our vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies.  Management fees increased marginally due to the delivery of three Ultramax newbuilding vessels.
 
DEPRECIATION AND AMORTIZATION-
 
We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years. On the Effective Date, as part of fresh-start reporting, we revalued our vessels assets which resulted in a decrease in vessels assets, vessel equipment recorded as a component of other fixed assets and drydocking assets. On the Effective Date, we also increased the scrap value of our vessels from $245/lwt to $310/lwt which will result in an overall decrease in vessels depreciation expense over the remaining life of the vessels.
 
Depreciation and amortization expense decreased by $34.4 million to $58.9 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  This decrease was due to a revaluation of the vessel assets as well as the change in the scrap value as mentioned above.  These decreases were partially offset by the operation of a larger
 
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fleet during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 due to the delivery of three Ultramax newbuilding vessels.
 
OTHER OPERATING INCOME -
 
During the nine months ended September 30, 2015, other operating income decreased by $0.3 million to $0 as compared to the nine months ended September 30, 2014.  During the nine months ended September 30, 2014, we received the remaining 50%, including interest, of the cash settlement that was originally due from Samsun on December 30, 2012 as included in the rehabilitation plan approved by the South Korean courts during 2010.  Refer to Note 19 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the settlement payments.
 
IMPAIRMENT OF VESSEL ASSETS -
 
During the nine months ended September 30, 2015, we recorded $35.4 million of Impairment of vessel assets which represented an increase of $35.4 million as compared to the same period during 2014.  As of March 31, 2015, t he Company determined that the sale of two of Baltic Trading’s vessels, the Baltic Lion and Baltic Tiger, was more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its fair market value.  For this reason, the Company recorded an impairment charge for these vessels during the first quarter of 2015.  Refer to Note 1 — General information in our Condensed Consolidated Financial Statements for further information.
 
LOSS ON SALE OF VESSELS -
 
During the nine months ended September 30, 2015, we recorded a $1.2 million loss on sale of vessels.  On April 8, 2015, Baltic Trading sold two of its vessels, the Baltic Lion and Baltic Tiger, to us at a loss of $1.2 million. This represented an increase of $1.2 million as compared to the same period during 2014.
 
OTHER (EXPENSE) INCOME-
 
IMPAIRMENT OF INVESTMENT-
 
During the nine months ended September 30, 2015, impairment of investment increased by $32.5 million as compared to the nine months ended September 30, 2014.  We reviewed our investment in Jinhui for indicators of other-than-temporary impairment during the three months ended September 30, 2015 in accordance with Accounting Standards Codification (“ASC”) 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  Based on our review, we have deemed the investment in Jinhui to be other-than-temporarily impaired as of September 30, 2015, refer to Note 5 — Investments in our Condensed Consolidated Financial Statements for further information.  As a result, during the nine months ended September 30, 2015, we recorded a $32.5 million impairment loss.
 
NET INTEREST EXPENSE-
 
During the nine months ended September 30, 2015, net interest expense decreased by $30.8 million to $13.8 million as compared to the nine months ended September 30, 2014.  Net interest expense during the nine months ended September 30, 2015 consisted of interest expense under our $100 Million Term Loan Facility, $253 Million Term Loan Facility, the $44 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $22 Million Term Loan Facility and the 2014 Term Loan Facilities.  Additionally, during the nine months ended September 30, 2015, we recorded interest expense for the 2010 Baltic Trading Credit Facility until January 7, 2015 when Baltic Trading refinanced the outstanding indebtedness under this facility with the $148 Million Credit Facility for which we recorded interest expense for the remainder of the nine months ended September 30, 2015.  Net interest expense during the nine months ended September 30, 2014 consisted of interest expense under the 2007 Credit Facility, $100 Million Term Loan Facility, $253 Million Term Loan Facility, the 2010 Credit Facility, the $22 Million Term Loan Facility, the $44 Million Term Loan Facility, as well as interest expense related to our 5.0% Convertible Senior Notes (the “2010 Notes”).  The 2007 Credit Facility and 2010 Notes were terminated upon our emergence from bankruptcy on the Effective Date.  Additionally, interest income, unused commitment fees associated with the aforementioned credit facilities as well as the amortization of deferred financing costs related to the aforementioned credit facilities are included in net interest expense during the nine months ended September 30, 2015 and 2014.
 
The decrease in net interest expense for the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 was primarily due to a decrease in interest expense and amortization of deferred financing fees associated with the 2007 Credit Facility, which was terminated pursuant to the Plan on the Effective Date, and the interest rate swap agreements as three interest rate swap agreements expired during the first quarter of 2014. Additionally, there was a decrease in interest expense
 
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related to the 2010 Notes as we ceased accreting the liability related to the 2010 Notes and accruing for the related coupon payment on the Petition Date of April 21, 2014.  Refer to Note 8 — Debt, Note 9 — Convertible Senior Notes and Note 10 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements.  These decreases were partially offset by an increase in interest expense related to the 2014 Term Loan Facilities, which were entered into by Baltic Trading on October 8, 2014, and an increase in interest expense related to the 2015 Revolving Credit Facility which we entered into on April 7, 2015.  Additionally, there was an increase in interest expense related to the $148 Million Credit Facility which had higher debt outstanding during the nine months ended September 30, 2015 as compared to the same period during 2014.
 
REORGANIZATION ITEMS, NET
 
During the nine months ended September 30, 2015, reorganization items, net decreased by $915.8 million to $1.0 million as compared to the nine months ended September 30, 2014.  The reorganization items recorded during both periods include trustee fees and professional fees incurred after the Petition Date in relation to the Chapter 11 Cases.  However, the reorganization items recorded during the nine months ended September 30, 2014 also include the revaluation of assets and liabilities recorded as part of fresh-start reporting as well as the discharge of liabilities subject to compromise in exchange for issuance of common stock pursuant to the Plan. Refer to Note 18 — Reorganization items, net in our Condensed Consolidated Financial Statements for further detail.  The decrease was due to the winding down of settlement payments as a result of the Chapter 11 Cases as well as the fact that the fresh-start reporting adjustments were one-time adjustments that were recorded immediately upon our emergence from bankruptcy.
 
INCOME TAX EXPENSE-
 
During the nine months ended September 30, 2015, income tax expense increased by $0.3 million to $1.6 million as compared to the nine months ended September 30, 2014.  This income tax expense consists primarily of federal, state and local income taxes on net income earned by Genco Management (USA) Limited (“Genco (USA)”), one of our wholly-owned subsidiaries.  Pursuant to certain agreements, we technically and commercially manage vessels for Baltic Trading until the Merger on July 17, 2015, as well as provide technical management of vessels for MEP in exchange for specified fees for these services provided.  These services are provided by Genco (USA), which has elected to be taxed as a corporation for United States federal income tax purposes.  As such, Genco (USA) is subject to United States federal income tax on its worldwide net income, including the net income derived from providing these services.  Refer to the “Income taxes” section of Note 2 — Summary of Significant Accounting Policies included in our Condensed Consolidated Financial Statements for further information.  The increase in income tax expense during the nine months ended September 30, 2015 as compared to the same period during the prior year is primarily due to the 1% purchase fee earned by Genco (USA) from Baltic Trading pursuant to the Management Agreement related to the delivery of the Baltic Wasp during the first quarter of 2015.  This increase was partially offset by a decrease in income earned by Genco (USA) during the nine months ended September 30, 2015 as a result of the cancellation of the Management Agreement with Baltic Trading effective July 18, 2015 pursuant to the Merger.  As a result of the cancellation, Genco (USA) was no longer earning commercial service revenue, management fees and sales and purchase fees from Baltic Trading effective July 18, 2015.
 
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST-
 
During the nine months ended September 30, 2015, net loss attributable to noncontrolling interest decreased by $6.9 million to $59.5 million as compared to the nine months ended September 30, 2014.  Net loss was allocated to the noncontrolling interest up until July 17, 2015 when the Merger was effective.  Once the Merger was effective, the noncontrolling interest allocation was no longer applicable.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Our principal sources of funds are currently operating cash flows and long-term borrowings.  We have also historically used issuances of equity and long-term debt securities as sources of financing and may do so in the future.  Our principal use of funds is capital expenditures to establish and grow our fleet, maintain the quality of our vessels, comply with international shipping standards and environmental laws and regulations, and fund working capital requirements and repayments on outstanding loan facilities.
 
Our liquidity needs arise primarily from drydocking for our vessels and working capital requirements as may be needed to support our business and payments required under our indebtedness. Our primary sources of liquidity are cash flow from operations, cash on hand, and credit facility borrowings. Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, weakness in shipping industry conditions, the financial condition of our customers, vendors and service providers, our ability to comply with the financial and other covenants of our post-restructuring indebtedness, and other factors. While the current drybulk rate environment is weak, we believe that internally generated cash flow and cash on hand (including proceeds from credit facility borrowings) will be sufficient to fund the operations of our fleet, including our working capital requirements, for the next twelve months. Given the weak drybulk rate environment, we may seek to raise additional capital through debt or equity offerings or selling assets (including vessels), in order to enhance our liquidity position or to meet our liquidity requirements if the weak environment continues in the intermediate term.
 
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Historically, we have used funds to pay dividends and to repurchase our common stock from time to time. We have not declared or paid any dividends since the third quarter of 2008 and currently do not plan to resume the payment of dividends.  Moreover, pursuant to restrictions under our credit facilities, we are currently prohibited from paying dividends.  Future dividends, if any, will depend on, among other things, our cash flows, cash requirements, financial condition, results of operations, required capital expenditures or reserves, contractual restrictions, provisions of applicable law and other factors that our board of directors may deem relevant.
 
Our credit facilities subsequent to the Merger require us to maintain a current minimum cash balance of $52.5 million certain portions of which can be satisfied by undrawn working capital lines. Pursuant to the terms of the 2015 Revolving Credit Facility as defined below, we are also currently subject to a $3.2 million debt service reserve for that facility only, which is inclusive of the total $52.5 million current minimum cash balance on a fleetwide basis.
 
In addition, under the collateral maintenance covenants, as amended, of our 2015 Revolving Credit Facility, $253 Million Term Loan Facility, our $100 Million Term Loan Facility, the $148 Million Credit Facility, the $22 Million Term Loan Facility, the $44 Million Term Loan Facility and the 2014 Term Loan Facilities, the aggregate valuations of our vessels pledged under each facility must at least be a certain percentage of loans outstanding , which percentages are currently 140%, 135%, 130%, 140%, 110%, 125% and 125%, respectively.  If this test is not met, we may be required to take certain actions to remedy the shortfall, including pledging of other unencumbered vessels.  See “Critical Accounting Policies — Vessels and Depreciation” below for further details of our vessel valuations.
 
Following the procurement of updated valuations in August 2015, we did not meet the 130% collateral maintenance test under the $100 Million Term Loan Facility.  The actual percentage measured by us was 126.2% at September 30, 2015, including the additional collateral as described below.  Under the terms of the credit facility, we would need to remedy such shortfall within 30 days from the time we are requested by the agent.  We were not notified by the agent to take any remedial actions.  However, in October 2015, we added one of our unencumbered Handymax vessels, the Genco Prosperity, as additional collateral to cover the shortfall and satisfy the collateral maintenance test.  The next date valuation under this credit facility will be required is on or around February 17, 2016.  Additionally, on April 24, 2015, we added one of our unencumbered Handysize vessels, the Genco Sugar, as additional collateral under the $100 Million Term Loan Facility to cover our collateral maintenance shortfall as of March 31, 2015.
 
At June 30, 2015, we did not meet the 135% collateral maintenance test under the $253 Million Term Loan Facility.  The actual percentage measured by us was 129.2% at June 30, 2015, including the additional collateral as described below, and 133.5% on July 9, 2015 following our schedule amortization payment of $5.1 million.  Under the terms of the credit facility, we must remedy such shortfall within 30 days from the time we are requested by the agent.  During July 2015, we added five of our unencumbered vessels, the Genco Thunder, Genco Raptor, Genco Challenger, Genco Reliance and Genco Explorer, as additional collateral under this facility.  We have been in communication with the facility’s agent and prepaid $1.7 million of the outstanding indebtedness on July 29, 2015, which the lenders have agreed will reduce the scheduled amortization payment of $5.1 million that will be due in October 2015.
 
At June 30, 2015, we did not meet the 140% collateral maintenance test under the $148 Million Credit Facility.  The actual percentage measured by us was 132.0% at June 30, 2015.  Under the credit facility terms then in effect, we were required to remedy such a shortfall within 60 days; however, the collateral maintenance requirement was amended prior to the expiration of such period such that were in compliance.  See “Amendment and Consent Agreements Related to the Merger” section in Note 8 — Debt in our Condensed Consolidated Financial Statements.  Additionally, during August 2015, we added two of our unencumbered Handysize vessels, the Genco Pioneer and Genco Progress, as additional collateral under this facility.
 
Given the recent downward trend in vessel values, we believe we may not meet the minimum threshold under the collateral maintenance covenant in one or more of our credit facilities when new vessel valuations are required.  To remedy this, we may pledge additional collateral (including vessels), prepay a portion of our indebtedness, seek waivers or modifications to our credit agreements (which may be unavailable or subject to conditions), or take other actions available to us.  If we fail to remedy any shortfall under our collateral maintenance covenants and are found to be in default, it could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.
 
Prior to the merger with Baltic Trading, Genco Investments LLC owned 6,356,471 shares of Baltic Trading’s Class B Stock, which represented an 10.85% ownership interest in Baltic Trading and 64.60% of the aggregate voting power of Baltic Trading’s outstanding shares of voting stock.  On April 7, 2015, we entered into a definitive merger agreement with Baltic Trading (the “Merger”) under which we acquired Baltic Trading in a stock-for-stock transaction.  The Merger was approved on July 17, 2015. Under the terms of the agreement, Baltic Trading became our indirect wholly-owned subsidiary, and Baltic Trading shareholders (other than GS&T and its subsidiaries) received 0.216 shares of our common stock for each share of Baltic Trading’s common stock they own at closing, with fractional shares to be settled in cash.  Upon consummation of the transaction on July 17, 2015, our
 
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shareholders owned approximately 84.5% of the combined company, and Baltic Trading’s shareholders (other than the GS&T and its subsidiaries) own approximately 15.5% of the combined company.  Shares of Baltic Trading’s Class B stock (all of which are owned by us) were canceled in the Merger.  Our stock began trading on the New York Stock Exchange after consummation of the transaction on July 20, 2015 under the symbol “GNK.”
 
Our Board of Directors and Baltic Trading’s Board of Directors established independent special committees to review the transaction and negotiate the terms on behalf of their respective companies.  Both independent special committees unanimously approved the transaction.  The Boards of Directors of both companies approved the merger by unanimous vote of directors present and voting, with Peter C. Georgiopoulos, Chairman of the Board of each company, recused for the vote.  The Merger was approved on July 17, 2015 at the Annual Meeting.
 
Additionally, on April 7, 2015, we entered into an agreement under which we acquired all of the shares of two single-purpose entities that were wholly owned by Baltic Trading, each of which owns one Capesize drybulk vessel, for an aggregate purchase price of $68.5 million, subject to reduction for $40.6 million of outstanding first-mortgage debt of such single-purpose entities that is to be guaranteed by us and an adjustment for the difference between such single-purpose entities’ current assets and total liabilities as of the closing date. At March 31, 2015, we determined that the sale of the Baltic Lion and Baltic Tiger were more likely than not based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen its balance sheet.  Through the transactions, which closed on April 8, 2015, we acquired the vessels known as the Baltic Lion and the Baltic Tiger. The independent special committees of both companies’ Boards of Directors reviewed and approved this transaction.
 
On November 4, 2015, thirteen of our wholly-owned subsidiaries entered into a Facility Agreement, by and among such subsidiaries as borrowers (collectively, the “Borrowers”); Genco Holdings Limited, our newly formed direct subsidiary of which the Borrowers are direct subsidiaries (“Holdco”); certain funds managed or advised by Hayfin Capital Management, Breakwater Capital Ltd, or their nominee, as lenders; and Hayfin Services LLP, as agent and security agent (the “$98 Million Credit Facility”).
 
The Borrowers borrowed the maximum available amount of $98.3 million under the facility on November 10, 2015.
 
Borrowings under the facility are available for working capital purposes.  The facility has a final maturity date of September 30, 2020, and the principal borrowed under the facility will bear interest at LIBOR for an interest period of three months plus a margin of 6.125% per annum.  The facility has no fixed amortization payments for the first two years and fixed amortization payments of $2.5 million per quarter thereafter.  To the extent the value of the collateral under the facility is 182% or less of the loan amount outstanding, the Borrowers are to prepay the loan from earnings received from operation of the thirteen collateral vessels after deduction of the following amounts:  costs, fees, expenses, interest, and fixed principal repayments under the facility; operating expenses relating to the thirteen vessels; and the Borrowers’ pro rata share of general and administrative expenses based on the number of vessels they own.
 
The Facility Agreement requires the Borrowers and, in certain cases, the Company and Holdco to comply with a number of covenants substantially similar to those in the other credit facilities of Genco and its subsidiaries, including financial covenants related to maximum leverage, minimum consolidated net worth, minimum liquidity, and dividends; collateral maintenance requirements; and other customary covenants.  The Facility Agreement includes usual and customary events of default and remedies for facilities of this nature.
 
Borrowings under the facility are secured by first priority mortgage on the vessels owned by the Borrowers, namely the Genco Constantine, the Genco Augustus, the Genco London, the Genco Titus, the Genco Tiberius, the Genco Hadrian,  the Genco Knight, the Genco Beauty,  the Genco Vigour, the Genco Predator, the Genco Cavalier, the Genco Champion, and the Genco Charger, and related collateral.  Pursuant to the Facility Agreement and a separate Guarantee executed by the Company, the Company and Holdco are acting as guarantors of the obligations of the Borrowers and each other under the Facility Agreement and its related documentation.
 
On April 7, 2015, five of our wholly-owned subsidiaries, Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited (collectively, the “Subsidiaries”) entered into a loan agreement by and among the Subsidiaries, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent, security agent, and as lender, providing for a $59.5 million revolving credit facility, with an uncommitted accordion feature that has since expired (the “2015 Revolving Credit Facility”).  On April 7, 2015, we entered into a guarantee of the obligations of the Subsidiaries under the 2015 Revolving Credit Facility, in favor of ABN AMRO Capital USA LLC.  Borrowings under the 2015 Revolving Credit Facility are to be secured by liens on each of the Subsidiaries’ respective vessels; specifically, the Genco Commodus, Genco Maximus, Genco Claudius, Genco Hunter and Genco Warrior and other related assets.
 
Borrowings under the 2015 Revolving Credit Facility have been used for general corporate purposes including “working capital” (as defined in the 2015 Revolving Credit Facility) and to finance the purchase of drybulk vessels.  The 2015 Revolving Credit Facility has a maturity date of March 31, 2020.  Borrowings under the 2015 Revolving Credit Facility bear interest at LIBOR plus a margin based on a combination of utilization levels under the 2015 Revolving Credit Facility and a security maintenance cover ranging from 3.40% per annum to 4.25% per annum.  The commitment under the 2015 Revolving Credit Facility is subject to quarterly reductions of $1.6 million.  Borrowings under the 2015 Revolving Credit Facility are subject to 20 equal consecutive quarterly installment repayments commencing three months after the date of the loan agreement, or July 7, 2015.  On April 8, 2015,
 
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we drew down $25.0 million on the 2015 Revolving Credit Facility for working capital purposes and to partially fund the purchase of the Baltic Lion and Baltic Tiger from Baltic Trading.  Additionally, on July 10, 2015, we drew down $10.0 million for working capital purposes.  Lastly, on October 14, 2015, the Company drew down $21.2 million for working capital purposes.  A commitment fee of 1.5% per annum is payable on the undrawn amount of the maximum loan amount.
 
On April 30, 2015, we entered into agreements to amend or waive certain provisions of the $100 Million Term Loan Agreement and the $253 Million Term Loan Facility.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further information.
 
On July 14, 2015, Baltic Trading and certain of its wholly owned subsidiaries entered into agreements to amend, provide consents under, or waive certain provisions of the $22 Million Term Loan Facility, the 2014 Term Loan Facilities and the $148 Million Credit Facility.
 
On December 31, 2014, Baltic Trading entered into a $148.0 million senior secured credit facility with Nordea Bank Finland plc, New York Branch (“Nordea”), as Administrative and Security Agent, Nordea and Skandinaviska Enskilda Banken AB (Publ) (“SEB”), as Mandated Lead Arrangers, Nordea, as Bookrunner, and the lenders (including Nordea and SEB) party thereto (the “$148 Million Credit Facility”).  The $148 Million Credit Facility is comprised of a $115.0 million revolving credit facility and $33.0 million term loan facility.  Borrowings under the revolving credit facility will be used to refinance Baltic Trading’s outstanding indebtedness under the 2010 Credit Facility.  Amounts borrowed under the revolving credit facility of the $148 Million Credit Facility may be re-borrowed.  Borrowings under the term loan facility of the $148 Million Credit Facility may be incurred pursuant to two single term loans in an amount of $16.5 million each that have been used to finance, in part, the purchase of two of our newbuilding Ultramax vessels, the Baltic Scorpion and Baltic Mantis.  Amounts borrowed under the term loan facility of the $148 Million Term Loan Facility may not be re-borrowed.
 
The $148 Million Credit Facility has a maturity date of December 31, 2019.  Borrowings under this facility bear interest at LIBOR plus an applicable margin of 3.00% per annum.  A commitment fee of 1.2% per annum is payable on the unused daily portion of the $148 Million Credit Facility, which began accruing on December 31, 2014.  The commitment under the revolving credit facility of the $148 Million Term Loan Facility is subject to equal consecutive quarterly reductions of approximately $2.5 million each beginning June 30, 2015 through September 30, 2019.  Borrowings under the term loan facility of the $148 Million Term Loan Facility are subject to equal consecutive quarterly installment repayments commencing three months after delivery of the relevant newbuilding Ultramax vessel, each in the amount of 1/60th of the aggregate outstanding term loan.  All remaining amounts outstanding under the $148 Million Term Loan Facility must be repaid in full on the maturity date, December 31, 2019.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for additional information regarding the $148 Million Credit Facility.
 
On October 8, 2014, Baltic Trading and its wholly-owned subsidiaries, Baltic Hornet Limited and Baltic Wasp Limited, each entered into a loan agreement and related documentation for a credit facility in a principal amount of up to $16.8 million with ABN AMRO Capital USA LLC and its affiliates (the “2014 Term Loan Facilities”) to partially finance the newbuilding Ultramax vessel that each subsidiary is to acquire, namely the Baltic Hornet and Baltic Wasp, respectively. Amounts borrowed may not be reborrowed. The 2014 Term Loan Facilities have a ten-year term and is to be repaid in 20 equal consecutive semi-annual installments of 1/24 of the facility amount a balloon payment of 1/6 of the facility amount to be paid at final maturity. Principal repayments will commence six months after the actual delivery date for the vessel and borrowing bear interest at three or six-month LIBOR rate plus an applicable margin of 2.50%. Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for additional information regarding the 2014 Term Loan Facilities. On October 24, 2014, Baltic Trading drew down $16.8 million for the purchase of the Baltic Hornet, which was delivered on October 29, 2014.  On December 30, 2014, Baltic Trading drew down $16.4 million for the purchase of the Baltic Wasp, which was delivered on January 2, 2015.
 
Dividends
 
We are currently prohibited from paying dividends under certain of our facilities, the longest restriction of which is in effect until May 1, 2017. Following May 1, 2017, the amount of dividends we may pay is limited based on the amount of the loans outstanding under the 2015 Revolving Credit Facility and the $98 Million Credit Facility, as well as the ratio of the value of vessels and certain other collateral pledged under the $98 Million Credit Facility to the amount of the loan outstanding under such facility.  In addition, dividends may not exceed 50% of our net income (as defined in the 2015 Revolving Credit Facility) and may only be paid out of excess cash flow of Genco and its subsidiaries (as defined in the $98 Million Credit Facility). Moreover, we would make dividend payments to our shareholders only if our Board of Directors, acting in its sole discretion, determines that such payments would be in our best interest and in compliance with relevant legal and contractual requirements. The principal business factors that our Board of Directors would consider when determining the timing and amount of dividend payments would be our earnings, financial condition and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends other than from surplus. Marshall Islands law also prohibits the declaration and payment of dividends while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
 
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Cash Flow
 
Net cash used in operating activities decreased by $18.2 million to $39.4 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  Excluding the non-cash impairment of vessel assets of $35.4 million, the non-cash impairment of our investment in Jinhui of $32.5 million and the non-cash loss on the disposal of vessels of $0.9 million, we recorded a net loss in the amount of $136.0 million during the nine months ended September 30, 2015.  Excluding the $880.4 million in non-cash reorganization items and fresh-start reporting adjustments reflected in the net loss recorded by the Predecessor Company during the period from January 1 to July 9, 2014 and the aforementioned non-cash expenses during the nine months ended September 30, 2015, net loss decreased by $19.4 million during the nine months ended September 30, 2015 as compared to the same period during 2014.  The decrease in cash used by operating activities was primarily due to a $24.4 million increase in the amortization of nonvested stock compensation due to the amortization of the MIP Warrants and restricted shares issued after July 9, 2014 by the Successor Company.  The fluctuation in accounts payable and accrued expenses increased by $3.7 million due to merger related expenses incurred during the nine months ended September 30, 2015 and the fluctuation in prepaid expenses and other current assets increased by $6.1 million due to the timing of payments.  These decreases in net cash used in operations was offset by a decrease in depreciation and amortization expense of $34.4 million as a result of the adoption of fresh-start reporting on July 9, 2014 which required us to revalue our vessel assets at market partially offset by the increase in the size of our fleet due to the delivery of three Baltic Trading vessels after September 30, 2014.
 
Net cash used in investing activities decreased by $5.0 million to $26.4 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  Net cash used in investing activities during the nine months ended September 30, 2015 by the Successor Company consisted primarily of $46.1 million of vessel asset purchases, including deposits.  This consisted primarily of deposits made for the three Ultramax vessels that Baltic Trading agreed to acquire, one of which was delivered during the first quarter of 2015 and one of which was delivered during the third quarter of 2015.  The last vessel was delivered on October 9, 2015.  Additionally, there was a $19.6 million fluctuation of the change in deposits of restricted cash related to the $19.6 million of restricted cash that was held in an escrow account as of December 31, 2014 for the purchase of the Baltic Wasp which was released to the shipyard upon the vessel delivery on January 2, 2015.  Net cash used in investing activities by the Successor Company and Predecessor Company during the periods from July 9 to September 30, 2014 and January 1 to July 9, 2014, respectively, consisted primarily of $0.9 million and $30.0 million of vessel asset purchases, including deposits, respectively.  These amounts consisted primarily of deposits made for the four Ultramax vessels that Baltic Trading agreed to acquire, one of which was delivered during the fourth quarter of 2014.
 
Net cash provided by financing activities decreased by $46.0 million to $26.9 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.  Net cash provided by financing activities for the nine months ended September 30, 2015 for the Successor Company consisted primarily of $131.5 million of proceeds from the $148 Million Credit Facility and $35.0 million of proceeds from the 2015 Revolving Credit Facility partially offset by the following: $102.3 million repayment of debt under the 2010 Credit Facility, $16.9 million repayment of debt under the $253 Million Term Loan Facility, $5.8 million repayment of debt under the $100 Million Term Loan Facility, $2.1 million repayment of debt under the $44 Million Term Loan Facility, $4.9 million repayment of debt under the $148 Million Credit Facility, $1.1 million repayment of debt under the $22 Million Term Loan Facility, $1.4 million repayment of debt under the 2014 Term Loan Facilities, $4.5 million payment of deferred financing costs and $0.7 million cash settlement paid to non-accredited 2010 Note holders. Net cash used in financing activities for the period from July 9 to September 30, 2014 for the Successor Company consisted primarily of the following:  $1.9 million repayment of debt under the $100 Million Term Loan Facility, $0.7 million repayment of debt under the $44 Million Term Loan Facility, $0.4 million repayment of debt under the $22 Million Term Loan Facility, $0.5 million payment of deferred financing costs, $0.4 million cash settlement paid to non-accredited 2010 Note Holders and $0.5 million dividend payment by Baltic Trading to its shareholders.  Net cash provided by financing activities for the period from January 1 to July 9, 2014 for the Predecessor Company consisted primarily of $100.0 million received for the Rights Offering pursuant to the Plan partially offset by the following:  $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.8 million repayment of debt under the $100 Million Term Loan Facility, $1.4 million repayment of debt under the $44 Million Term Loan Facility, $0.8 million repayment of debt under the $22 Million Term Loan Facility, $4.5 million payment of deferred financing costs, a $2.0 million dividend payment by Baltic Trading to its shareholders and $0.1 million for payment of common stock issuance costs by Baltic Trading.
 
Credit Facilities
 
Refer to the 2014 10-K, as amended, for a summary and description of our outstanding credit facilities, including the underlying financial and non-financial covenants.  On October 8, 2014, wholly-owned subsidiaries of Baltic Trading entered into the 2014 Term Loan Facilities to fund a portion of the purchase of the Baltic Hornet and Baltic Wasp. Additionally, on December 31, 2014, Baltic Trading entered into the $148 Million Credit Facility which is comprised of a $115.0 million revolving credit facility and $33.0 million term loan facility to fund or refund a portion of the purchase of the Baltic Scorpion and Baltic Mantis. Borrowings under the $148 Million Credit Facility were used to refinance Baltic Trading’s indebtedness under the 2010 Credit Facility.  On April 7, 2015, five of our wholly-owned subsidiaries entered into 2015 Revolving Credit Facility which provides for a $59.5 million revolving credit facility with an uncommitted accordion feature that has since expired. On April 30, 2015, we entered into agreements to amend or waive certain provisions of the $100 Million Term Loan Agreement and the $253 Million Term Loan Facility. On July 14, 2015, Baltic Trading and certain of its wholly owned subsidiaries entered into agreements to amend, provide consents under, or waive certain provisions of the $22 Million Term Loan Facility, the 2014 Term Loan Facilities and the $148 Million Credit Facility. Lastly, on November 4, 2015, thirteen of our wholly-owned subsidiaries entered into the $98 Million Credit Facility to be used for working
 
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capital purposes.  Refer to Note 8 —Debt in our Condensed Consolidated Financial Statements for further information regarding the terms and fees associated with these agreements.
 
On July 2, 2014, the Bankruptcy Court entered the Confirmation Order, confirming the Plan. On July 9, 2014 (the “Effective Date”), we completed our financial restructuring and emerged from Chapter 11 through a series of transactions contemplated by the Plan, and the Plan became effective pursuant to its terms.
 
Key components of the Plan regarding the credit facilities and the 2010 Notes included:
 
·                   The conversion of 100% of the Claims under the 2007 Credit Facility into 81.1% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2007 Credit Facility was terminated, and the liens and mortgages thereunder were released. Refer to Note 8 — Debt in our Condensed Consolidated Balance Sheet for further information.
 
·                   The conversion of 100% of the Claims under the 2010 Notes into 8.4% of the New Genco Common Stock (subject to dilution by the warrants issued under the Plan). On the Effective Date, the 2010 Notes and the Indenture were fully satisfied and discharged. Refer to Note 9 — Convertible Senior Notes in our Condensed Consolidated Financial Statements for further information.
 
·                   The amendment and restatement of the $253 Million Term Loan Facility and the $100 Million Term Loan Facility as of the Effective Date, with extended maturities, a financial covenant holiday and certain other amendments, as discussed further in Note 8 — Debt in our Condensed Consolidated Financial Statements.
 
As of September 30, 2015, we believe we were in compliance with all of the financial covenants under the $253 Million Term Loan Facility; the $100 Million Term Loan Facility; the $44 Million Term Loan Facility; the 2015 Revolving Credit Facility; the $148 Million Credit Facility; the $22 Million Term Loan Facility and the 2014 Term Loan Facilities.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for discussion of any remedies that were taken to resolve any collateral maintenance requirements that were originally not met as of September 30, 2015.
 
Convertible Notes Payable
 
Refer to Note 9 — Convertible Senior Notes of our Condensed Consolidated Financial Statements for a summary of the convertible notes payable.  On the Effective Date when the Company emerged from Chapter 11, the 2010 Notes and the Indenture were fully satisfied and discharged.
 
Interest Rate Swap Agreements, Forward Freight Agreements and Currency Swap Agreements
 
At September 30, 2015 and December 31, 2014, we did not have any interest rate swap agreements.  As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.  In determining the fair value of interest rate derivatives, we would consider the creditworthiness of both the counterparty and ourselves immaterial. Valuations prior to any adjustments for credit risk would be validated by comparison with counterparty valuations.  Amounts would not and should not be identical due to the different modeling assumptions.  Any material differences would be investigated.
 
Refer to Note 10 — Interest Rate Swap Agreements of our Condensed Consolidated Financial Statements, which discusses the interest rate swap agreement that were in place prior to the Effective Date.
 
As part of our business strategy, we may enter into arrangements commonly known as forward freight agreements, or FFAs, to hedge and manage market risks relating to the deployment of our existing fleet of vessels.  These arrangements may include future contracts, or commitments to perform in the future a shipping service between ship owners, charterers and traders.  Generally, these arrangements would bind us and each counterparty in the arrangement to buy or sell a specified tonnage freighting commitment “forward” at an agreed time and price and for a particular route.  Although FFAs can be entered into for a variety of purposes, including for hedging, as an option, for trading or for arbitrage, if we decided to enter into FFAs, our objective would be to hedge and manage market risks as part of our commercial management. It is not currently our intention to enter into FFAs to generate a stream of income independent of the revenues we derive from the operation of our fleet of vessels.  If we determine to enter into FFAs, we may reduce our exposure to any declines in our results from operations due to weak market conditions or downturns, but may also limit our ability to benefit economically during periods of strong demand in the market.  We have not entered into any FFAs as of September 30, 2015 and December 31, 2014.
 
Contractual Obligations
 
The following table sets forth our contractual obligations and their maturity dates as of September 30, 2015.  The table incorporates the employment agreement entered into in September 2007 with our President, John Wobensmith.  The interest and
 
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borrowing fees and credit agreement payments below reflect the $100 Million Term Loan Facility, the $253 Million Term Loan Facility, the $44 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $22 Million Term Loan Facility, the 2014 Term Loan Facilities and the $148 Million Credit Facility, as well as other fees associated with the facilities.  Additionally, the interest and borrowing fees and credit agreement payments below reflect the unused fees, interest expense, upfront fees, estimated commitment fees and credit facility repayments related to the $98 Million Credit Facility which was entered into on November 4, 2015.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further information regarding the terms of the aforementioned credit facilities.  The following table also incorporates the future lease payments associated with the lease for our current space and excludes the lease from our former space as we have filed a motion to reject the lease for our former space in the bankruptcy proceedings, which was accepted on the Effective Date upon our emergence from Chapter 11.  Refer to Note 19 — Commitments and Contingencies in our Condensed Consolidated Financial Statements for further information regarding the terms of our current lease agreement.

 	 	Total	 	Less than One
Year (1)	 	One to Three
Years	 	Three to Five
Years	 	More than
Five Years	 	
 	 	(U.S. dollars in thousands)	 	
Credit Agreements (2)	 	$	598,266	 	$	9,832	 	$	108,527	 	$	353,071	 	$	126,836	 	
Interest and borrowing fees	 	94,115	 	7,824	 	45,683	 	34,757	 	5,851	 	
Remainder of purchase price of vessels (3)	 	3,100	 	3,100	 	—	 	—	 	—	 	
Executive employment agreement	 	602	 	156	 	446	 	—	 	—	 	
Office leases	 	18,927	 	269	 	2,152	 	3,146	 	13,360	 	
Totals	 	$	715,010	 	$	21,181	 	$	156,808	 	$	390,974	 	$	146,047	 	

(1)          Represents the three-month period ending December 31, 2015.
(2)          On October 7, 2015, $16.5 million was drawn down on the $148 Million Credit Facility in order to fund the purchase of the Baltic Mantis, which was delivered on October 9, 2015.  As such, it is included in the total contractual obligation for credit agreement payments.
(3)          Upon the delivery of the Baltic Mantis on October 9, 2015, the remaining purchase price of $19.6 million was paid to Yangfan Group Co., Ltd., of which $3.1 million has been included in the table above as the $16.5 million draw down is included in the total contractual obligation for credit agreement payments.
 
Interest expense has been estimated using 0.34% plus the applicable margin of 3.50% for the $100 Million Term Loan Facility and the $253 Million Term Loan Facility, 3.90% for the 2015 Revolving Credit Facility and 6.125% for the $98 Million Credit Facility.  For the $22 Million Term Loan Facility and the $44 Million Term Loan Facility, interest expense has been estimated using 0.34% plus the applicable margin of 3.35%.  Interest expense has been estimated using 0.34% plus the applicable margin for the $148 Million Credit Facility and for the 2014 Term Loan Facilities of 3.00% and 2.50%, respectively.
 
Capital Expenditures
 
We make capital expenditures from time to time in connection with our vessel acquisitions.  Including Baltic Trading’s vessels and the delivery of the Baltic Mantis on October 9, 2015, our fleet currently consists of 13 Capesize drybulk carriers, eight Panamax drybulk carriers, four Ultramax drybulk carriers, 21 Supramax drybulk carriers, six Handymax drybulk carriers and 18 Handysize drybulk carriers.
 
As previously announced, we have initiated a fuel efficiency upgrade program for certain of our vessels. We believe this program will generate considerable fuel savings going forward and increase the future earnings potential for these vessels. The cost of the upgrades, which will be performed under the planned drydocking schedule, is expected to be approximately $0.3 million for a Supramax vessel and $0.5 million for a Capesize vessel and is included in our estimated drydocking costs below.  The upgrades have been successfully installed on 14 of our vessels, which completed their respective planned drydockings during 2014 and 2015.  During the remainder of 2015, we expect these upgrades to be installed on one of our Supramax vessels and one of our Capesize vessels.
 
Under U.S. Federal law and 33 CFR, Part 151, Subpart D, U.S. approved ballast water treatment systems will be required to be installed in all vessels at the first out of water drydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the United States. Currently, we do not believe there are any ballast water treatment systems that are approved by U.S. authorities; however, an alternative management system (“AMS”) may be installed in lieu.  For example, in February 2015, the USCG added Bawat to the list of ballast water treatment systems that received AMS acceptance.  An AMS is valid for five years from the date of required compliance with ballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval. The cost of these systems will vary based on the size of the vessel, and the Company estimates the cost of the systems to be $1.0 million for Capesize, $0.8 million for Panamax, $0.8 million for Supramax, $0.7 million for Handymax and $0.7 million for Handysize vessels. Any newbuilding vessels that we acquire will have an AMS installed when the vessel is being built. The costs of ballast water treatment systems will be capitalized and depreciated over the remainder of the life of the vessel, assuming the system the Company installs becomes approved. These amounts would be in addition to the amounts budgeted for drydocking below.
 
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In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet. We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, and scheduled off-hire days for our fleet through 2016 to be:

Year	 	Estimated Drydocking Cost	 	Estimated Off-hire Days	 	
 	 	(U.S. dollars in millions)	 	 	 	
 	 	 	 	 	 	
2015 (October 1- December 31, 2015)	 	$	4.5	 	100	 	
2016	 	$	10.1	 	310	 	
 
The costs reflected are estimates based on drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed.  We expect to fund these costs with cash from operations.  These costs do not include drydock expense items that are reflected in vessel operating expenses, including the write-off of any steel that is replaced during drydocking.  Additionally, these costs do not include the cost of ballast water treatment systems as noted above.
 
Actual length of drydocking will vary based on the condition of the vessel, yard schedules and other factors.  Higher repairs and maintenance expense during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the
 
During the nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, we incurred a total of $10.3 million and $3.0 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.  During the period from January 1 to July 9, 2014, we incurred a total of $9.3 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.
 
Seventeen of our vessels completed their drydockings during the nine months ended September 30, 2015, including the Genco Bourgogne, which entered the drydocking yard during the fourth quarter of 2014.  Additionally, the Baltic Wolf entered the drydocking yard during the third quarter of 2015, but did not complete its drydocking until the fourth quarter of 2015. We estimate that five of our vessels will be drydocked during the remainder of 2015 (including the Baltic Wolf) and an additional 11 of our vessels will be drydocked during 2016.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 
Inflation
 
Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, general and administrative, and financing costs.
 
CRITICAL ACCOUNTING POLICIES
 
There have been no changes or updates to the critical accounting policies as disclosed in the 2014 10-K, as amended.
 
Vessels and Depreciation
 
We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation.  We depreciate our drybulk vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard.  Depreciation is based on cost less the estimated residual scrap value.  Effective July 9, 2014, the Effective Date, we increased the estimated scrap value of the vessels from $245/lwt to $310/lwt prospectively based on the 15-year average scrap value of steel.  This increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessels.  During the three and nine months ended September 30, 2015 and the period from July 9 to September 30, 2014, the increase in the estimated scrap value resulted in a decrease in depreciation expense of approximately $0.8 million, $2.4 million and $0.7 million, respectively, for the Successor Company.  Similarly, an increase in the useful life of a drybulk vessel would also decrease the annual depreciation charge.  Comparatively, a decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge.  However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use.
 
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The carrying value of each of our vessels does not represent the fair market value of such vessel or the amount we could obtain if we were to sell any of our vessels, which could be more or less.  Under U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed in the 2014 10-K, as amended.  Excluding the three Bourbon vessels we resold immediately upon delivery to MEP at our cost, we have sold three of our vessels since our inception and realized a profit in each instance.  However, we did determine to cancel an acquisition of six drybulk newbuildings in November 2008, incurring a $53.8 million loss from the forfeiture of our deposit and related interest.  At March 31, 2015, we determined that the sale of the Baltic Lion and Baltic Tiger was probable based on Baltic Trading’s expressed consideration to divest of those vessels to increase its liquidity position and strengthen our balance sheet.  Therefore, the time utilized to determine the recoverability of the carrying value of the vessel assets was significantly reduced, and after determining that the sum of the estimated undiscounted future cash flows attributable to the Baltic Lion and Baltic Tiger would not exceed the carrying value of the respective vessels, the Company reduced the carrying value of each vessel to its fair market value.  On April 7, 2015, we entered into an agreement with Baltic Trading to purchase the Baltic Lion and Baltic Tiger for an aggregate purchase price of $68.5 million, not including commission, which closed on April 8, 2015.  During the three and nine months ended September 30, 2015, we have recorded an impairment loss related to these vessel assets of $0 and $35.4 million, respectively, as it was determined that the estimated undiscounted future cash flows attributable to these vessels would not exceed the carrying value and during the three and nine months ended September 30, 2015, we have recorded a loss on disposal of vessels of $0 and $1.2 million, respectively.  Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information.
 
Pursuant to our bank credit facilities, we regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our bank credit facilities.  Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such.  We were in compliance with the collateral maintenance covenants under our $100 Million Term Loan Facility, as amended; the $253 Million Term Loan Facility, as amended; the 2015 Revolving Credit Facility; the $44 Million Term Loan Facility; the $148 Million Credit Facility; the $22 Million Term Loan Facility; and the 2014 Term Loan Facilities at September 30, 2015.  Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for discussion of any remedies that were taken to resolve any collateral maintenance requirements that were originally not met as of September 30, 2015.  We obtained valuations for all of the vessels in our fleet, including Baltic Trading, on or around June 30, 2015 pursuant to the terms of the credit facilities, with the exception of the $100 Million Term Loan Facility which we utilized August 19, 2015 valuations pursuant to the terms of the credit facility.  In the chart below, we list each of our vessels, the year it was built, the year we acquired it, and its carrying value at September 30, 2015 and December 31, 2014.
 
At September 30, 2015, the vessel valuations of all of our vessels for covenant compliance purposes under our bank credit facilities as of the most recent compliance te sting date, with the exception of the Baltic Lion and Genco Tiger, were lower than their carrying values at September 30, 2015.  At December 31, 2014, the vessel valuations of all of our vessels for covenant compliance purposes under our bank credit facilities as of the most recent compliance testing date, with the exception of the Genco Avra, Genco Mare and Genco Spirit, were lower than their carrying values at December 31, 2014.  For the Genco Ocean, Genco Bay, Genco Avra, Genco Mare, Genco Spirit and Genco Sugar (which was added as additional collateral under this facility effective April 24, 2015), the last compliance testing date prior to September 30, 2015 and December 31, 2014 was August 19, 2015 and August 18, 2014, respectively, in accordance with the terms of the $100 Million Term Loan Facility; for all other vessels, the compliance testing date was June 30, 2015 and December 31, 2014, respectively, in accordance with the terms of the applicable credit facility.
 
The amount by which the carrying value at September 30, 2015 of all of the vessels in our fleet other than the Baltic Lion and Genco Tiger exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $3.4 million to $17.1 million per vessel, and $531.6 million on an aggregate fleet basis.  The amount by which the carrying value at December 31, 2014 of all of the vessels in our fleet, with the exception of the Genco Avra, Genco Mare and Genco Spirit, exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.1 million to $8.2 million per vessel, and $246.6 million on an aggregate fleet basis.  The average amount by which the carrying value of our vessels exceeded the valuation of such vessels for covenant compliance purposes was $7.9 million at September 30, 2015 and $3.9 million as of December 31, 2014.  However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters related to some of our vessels.

 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	September 30,
2015	 	December
31, 2014	 	
Unencumbered	 	 	 	 	 	 	 	 	 	
Genco Vigour	 	1999	 	2004	 	$	11,389	 	$	12,064	 	
Genco Carrier	 	1998	 	2004	 	10,412	 	11,209	 	
Genco Wisdom	 	1997	 	2005	 	9,608	 	10,354	 	
Genco Success	 	1997	 	2005	 	9,575	 	10,338	 	
Genco Beauty	 	1999	 	2005	 	11,379	 	12,061	 	

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 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	September 30,
2015	 	December
31, 2014	 	
Genco Knight	 	1999	 	2005	 	11,334	 	12,043	 	
Genco Leader	 	1999	 	2005	 	11,325	 	12,039	 	
Genco Marine	 	1996	 	2005	 	8,524	 	9,346	 	
Genco Prosperity	 	1997	 	2005	 	9,535	 	10,356	 	
Genco Muse	 	2001	 	2005	 	13,829	 	14,617	 	
Genco Acheron	 	1999	 	2006	 	11,296	 	12,028	 	
Genco Surprise	 	1998	 	2006	 	10,435	 	11,058	 	
Genco Augustus	 	2007	 	2007	 	40,226	 	41,761	 	
Genco Tiberius	 	2007	 	2007	 	40,232	 	41,763	 	
Genco London	 	2007	 	2007	 	38,871	 	40,242	 	
Genco Titus	 	2007	 	2007	 	39,226	 	40,603	 	
Genco Charger	 	2005	 	2007	 	14,160	 	14,726	 	
Genco Predator	 	2005	 	2007	 	19,480	 	20,349	 	
Genco Champion	 	2006	 	2008	 	15,066	 	15,710	 	
Genco Constantine	 	2008	 	2008	 	42,595	 	44,133	 	
Genco Cavalier	 	2007	 	2008	 	18,026	 	18,694	 	
Genco Hadrian	 	2008	 	2008	 	42,171	 	43,587	 	
TOTAL	 	 	 	 	 	$	438,694	 	$	459,081	 	
 	 	 	 	 	 	 	 	 	 	
2015 Revolving Credit Facility	 	 	 	 	 	 	 	 	 	
Genco Commodus	 	2009	 	2009	 	44,600	 	46,057	 	
Genco Maximus	 	2009	 	2009	 	44,615	 	46,065	 	
Genco Claudius	 	2010	 	2009	 	46,771	 	48,275	 	
Genco Hunter	 	2007	 	2007	 	21,871	 	22,710	 	
Genco Warrior	 	2005	 	2007	 	19,476	 	20,348	 	
TOTAL	 	 	 	 	 	$	177,333	 	$	183,455	 	
 	 	 	 	 	 	 	 	 	 	
$100 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Genco Bay	 	2010	 	2010	 	20,176	 	20,822	 	
Genco Ocean	 	2010	 	2010	 	20,197	 	20,829	 	
Genco Avra	 	2011	 	2011	 	21,277	 	21,945	 	
Genco Mare	 	2011	 	2011	 	21,286	 	21,948	 	
Genco Spirit	 	2011	 	2011	 	21,301	 	21,954	 	
Genco Sugar	 	1998	 	2004	 	7,924	 	8,502	 	
TOTAL	 	 	 	 	 	$	112,161	 	$	116,000	 	
 	 	 	 	 	 	 	 	 	 	
$253 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Genco Aquitaine	 	2009	 	2010	 	20,292	 	20,963	 	
Genco Ardennes	 	2009	 	2010	 	20,298	 	20,967	 	
Genco Auvergne	 	2009	 	2010	 	20,488	 	21,157	 	
Genco Bourgogne	 	2010	 	2010	 	21,451	 	22,110	 	
Genco Brittany	 	2010	 	2010	 	21,466	 	21,966	 	
Genco Languedoc	 	2010	 	2010	 	21,465	 	21,967	 	
Genco Loire	 	2009	 	2010	 	19,654	 	20,321	 	
Genco Lorraine	 	2009	 	2010	 	19,647	 	20,320	 	
Genco Normandy	 	2007	 	2010	 	18,046	 	18,702	 	
Genco Picardy	 	2005	 	2010	 	19,479	 	20,321	 	
Genco Provence	 	2004	 	2010	 	18,375	 	19,211	 	
Genco Pyrenees	 	2010	 	2010	 	21,465	 	21,971	 	
Genco Rhone	 	2011	 	2011	 	22,523	 	23,054	 	
Genco Thunder	 	2007	 	2008	 	19,137	 	19,810	 	
Genco Raptor	 	2007	 	2008	 	19,114	 	19,802	 	
Genco Challenger	 	2003	 	2007	 	12,232	 	12,851	 	
Genco Reliance	 	1999	 	2004	 	8,803	 	9,379	 	
Genco Explorer	 	1999	 	2004	 	8,774	 	9,367	 	
TOTAL	 	 	 	 	 	$	332,709	 	$	344,239	 	
 	 	 	 	 	 	 	 	 	 	
$44 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Baltic Lion	 	2009	 	2013	 	34,898	 	53,659	 	
Genco Tiger	 	2010	 	2013	 	32,447	 	51,541	 	
 
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 	 	 	 	 	 	Carrying Value (U.S.
dollars in
thousands) as of	 	
Vessels	 	Year Built	 	Year
Acquired	 	September 30,
2015	 	December
31, 2014	 	
TOTAL	 	 	 	 	 	$	67,345	 	$	105,200	 	
 	 	 	 	 	 	 	 	 	 	
$148 Million Credit Facility	 	 	 	 	 	 	 	 	 	
Baltic Leopard	 	2009	 	2009	 	19,666	 	20,325	 	
Baltic Panther	 	2009	 	2010	 	19,670	 	20,327	 	
Baltic Cougar	 	2009	 	2010	 	19,675	 	20,329	 	
Baltic Jaguar	 	2009	 	2010	 	19,679	 	20,330	 	
Baltic Bear	 	2010	 	2010	 	46,043	 	47,251	 	
Baltic Wolf	 	2010	 	2010	 	46,071	 	47,210	 	
Baltic Wind	 	2009	 	2010	 	19,182	 	19,831	 	
Baltic Cove	 	2010	 	2010	 	20,169	 	20,824	 	
Baltic Breeze	 	2010	 	2010	 	20,197	 	20,833	 	
Baltic Scorpion	 	2015	 	2015	 	29,986	 	—	 	
Genco Pioneer	 	1999	 	2005	 	8,735	 	9,352	 	
Genco Progress	 	1999	 	2005	 	8,765	 	9,364	 	
TOTAL	 	 	 	 	 	$	277,838	 	$	255,976	 	
 	 	 	 	 	 	 	 	 	 	
$22 Million Term Loan Facility	 	 	 	 	 	 	 	 	 	
Baltic Fox	 	2010	 	2013	 	19,784	 	20,444	 	
Baltic Hare	 	2009	 	2013	 	18,681	 	19,331	 	
TOTAL	 	 	 	 	 	$	38,465	 	$	39,775	 	
 	 	 	 	 	 	 	 	 	 	
2014 Term Loan Facilities	 	 	 	 	 	 	 	 	 	
Baltic Hornet	 	2014	 	2014	 	28,458	 	29,117	 	
Baltic Wasp	 	2015	 	2015	 	28,711	 	—	 	
TOTAL	 	 	 	 	 	$	57,169	 	$	29,117	 	
 	 	 	 	 	 	 	 	 	 	
Consolidated Total	 	 	 	 	 	$	1,501,714	 	$	1,532,843	 	
 
If we were to sell a vessel or hold a vessel for sale, and the carrying value of the vessel were to exceed its fair market value, we would record a loss in the amount of the difference.  See above for information regarding the sale of the Baltic Lion and Baltic Tiger.
 
ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 
Interest rate risk
 
We are exposed to the impact of interest rate changes.  Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings.  Prior to the filing of our Chapter 11 cases on the Petition Date, on March 31, 2014, we held one interest rate swap agreement with DnB Bank ASA to manage future interest costs and the risk associated with changing interest rates.  The swap agreement synthetically converted variable rate debt to fixed rate debt at the fixed interest rate of the swap plus the applicable margin of 3.00%.  The total notional principal amount of the remaining swap was $106.2 million and the swap had a specified rate and duration.  As of September 30, 2015 and December 31, 2014, we had no interest rate swap agreements in place.  Refer to the table in Note 10 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements.
 
As of March 31, 2014, we were in default under covenants of our 2007 Credit Facility due to the default on the scheduled debt amortization payment due on March 31, 2014. The default under the 2007 Credit Facility required us to elect interest periods of only one-month.  Therefore, we no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014. Additionally, the filing of the Chapter 11 Cases on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA. As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and issued a secured claim with the Bankruptcy Court of $5.6 million. The interest rate swap was settled on the Effective Date upon our emergence from bankruptcy. This liability was paid by the Successor Company during the period from July 9 to December 31, 2014.
 
The interest rate swap that was terminated April 30, 2014 as mentioned above was not hedged as cash flow hedge accounting was discontinued beginning on March 31, 2014 as a result of the default under the 2007 Credit Facility (see above). Once cash flow hedge accounting was discontinued, the changes in the fair value of the interest rate swaps were recorded in the Condensed Consolidated Statement of Operations in Interest expense and the remaining amounts included in AOCI were amortized to interest expense over the original term of the hedging relationship. There was no hedge ineffectiveness associated with the interest rate swaps during the three months ended March 31, 2014.
 
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We are subject to market risks relating to changes in LIBOR rates because we have significant amounts of floating rate debt outstanding.  For the 2007 Credit Facility, which was terminated on the Effective Date pursuant to the Plan, we were subject to a facility fee of 1.00% per annum on the average daily outstanding principal amount of the outstanding loan under the 2007 Credit Facility and we paid LIBOR plus 3.00% on the outstanding debt under this facility prior to its termination.  Additionally, during the period from January 1 to July 9, 2014, the Effective Date, we paid LIBOR plus 3.00% on the outstanding debt under the $100 Million Term Loan Facility and $253 Million Term Loan Facility. Pursuant to the amendments to these facilities which were effective on the Effective Date of the Plan, the margin was increased from 3.00% to 3.50% effective July 9, 2014.  We paid LIBOR plus 3.40% on the outstanding debt under the 2015 Revolving Credit Facility until July 10, 2015 when the margin increased to 3.65%.  We also paid LIBOR plus 3.00% on the outstanding debt under the 2010 Credit Facility until January 7, 2015 when the facility was refinanced with the $148 Million Credit Facility.  Beginning on July 7, 2015, we paid LIBOR plus 3.00% on the outstanding debt under the $148 Million Credit Facility as well.  Additionally, we paid the three-month LIBOR plus 3.35% on the outstanding debt under the $22 Million Term Loan Facility and the $44 Million Term Loan Facility. Lastly, we paid three-month LIBOR plus 2.50% on the outstanding debt under the 2014 Term Loan Facilities. A 1% increase in LIBOR would result in an increase of $3.3 million in interest expense for the nine months ended September 30, 2015. For any unpaid loan payments due under the $100 Million Term Loan Facility and the $253 Million Term Loan Facility during the bankruptcy period in 2014, we incurred an additional 2.00% default interest only on the unpaid loan amounts due during the bankruptcy period.
 
From time to time the Company may consider derivative financial instruments such as swaps and caps or other means to protect itself against interest rate fluctuations.
 
Derivative financial instruments
 
As of March 31, 2014, we were in default under covenants of our 2007 Credit Facility due to the default on the scheduled debt amortization payment due on March 31, 2014. The default under the 2007 Credit Facility required us to elect interest periods of only one month. Therefore, we no longer qualified for hedge accounting under the original designation and hedge accounting was terminated effective March 31, 2014. Additionally, the filing of the Chapter 11 Cases on the Petition Date constituted an event of default with respect to the outstanding interest rate swap with DNB Bank ASA. As a result, DNB Bank ASA terminated all transactions under the remaining swap agreement effective April 30, 2014 and made a secured claim with the Bankruptcy Court of $5.6 million. The interest rate swap was settled on the Effective Date upon our emergence from bankruptcy. This liability was paid by the Successor Company during the period from July 9 to December 31, 2014. Refer to Note 10 — Interest Rate Swap Agreements in our Condensed Consolidated Financial Statements for additional information.
 
As of September 30, 2015 and December 31, 2014, we did not have any interest rate swap agreements to manage interest costs and the risk associated with changing interest rates.
 
The differential to be paid or received for the swap agreements that we previously had were recognized as an adjustment to interest expense as incurred.  The interest rate differential pertaining to the interest rate swaps for the Predecessor Company during the period from July 1 to July 9, 2014 and January 1 to July 9, 2014 was $0.1 million and $2.6 million, respectively.  The Company was utilizing cash flow hedge accounting for the swaps whereby the effective portion of the change in value of the swaps is reflected as a component of AOCI.  The ineffective portion was recognized as other (expense) income, which is a component of other (expense) income.  If for any period of time we did not designate the swaps for hedge accounting, the change in the value of the swap agreements prior to designation would be recognized as other (expense) income.
 
Amounts receivable or payable arising at the settlement of hedged interest rate swaps are deferred and amortized as an adjustment to interest expense over the period of interest rate exposure provided the designated liability continues to exist.  Amounts receivable or payable arising at the settlement of unhedged interest rate swaps are reflected as other (expense) income and is listed as a component of other (expense) income.
 
Refer to “Interest rate risk” section above for further information regarding the interest rate swap agreements.
 
Currency and exchange rates risk
 
The international shipping industry’s functional currency is the U.S. Dollar.  Virtually all of our revenues and most of our operating costs are in U.S. Dollars.  We incur certain operating expenses in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses is immaterial.
 
As part of our business strategy, we may enter into short-term forward currency contracts to protect ourselves from the risk arising from the fluctuation in the exchange rate associated with the cost basis of the Jinhui shares.
 
Investments
 
We hold investments in equity securities of Jinhui, which are classified as available for sale (“AFS”) under Accounting Standards Codification 320-10, “Investments — Debt and Equity Securities” (“ASC 320-10”).  Pursuant to guidance in ASC 320-10,
 
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changes between our cost basis in these securities and their market value are recognized as an adjustment to their carrying values with an offsetting adjustment to AOCI at each reporting date.  We review the carrying value of such investments on a quarterly basis to determine if there are in indicators of other-than-temporary impairment in accordance with ASC 320-10.  Based on our review as of September 30, 2015, we have deemed our investment in Jinhui to be other-than-temporarily impaired as of September 30, 2015 due to the duration and severity of the decline in its market value versus its costs basis and the absence of the intent and ability to recover the initial carrying value of the investment.  Therefore, a loss in the amount of $32.5 million has been recorded as impairment of investment in our Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2015.  We will continue to evaluate the carrying value of such investments on a quarterly basis.  Refer to Note 5 — Investments in our Condensed Consolidated Financial Statements for further information.
 
ITEM 4 .       CONTROLS AND PROCEDURES 
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
Under the supervision and with the participation of our management, including our President and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Financial Officer have concluded that, in light of the material weaknesses in internal controls and our ongoing remediation efforts as described below, our disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2015.
 
REMEDIATION PLAN TO ADDRESS THE MATERIAL WEAKNESSES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
In response to the material weaknesses in internal controls described in our Annual Report on Form 10-K/A filed with the SEC on October 19, 2015 for the year ended December 31, 2014 as described in Item 9A thereof, which is incorporated herein by reference, management has implemented remediation efforts to address the design of internal controls and the ineffectiveness of our disclosure controls and procedures. Our new and refined internal controls are intended to prevent or detect similar occurrences.
 
In response to the control deficiency related to the accurate tracking of basis differences attributable to noncontrolling interests, such changes to our internal controls include (1) improved reconciliation and review controls over tracking legal entity financial information and focus on classification and presentation effects of less-than-wholly-owned subsidiaries in our consolidation process; and (2) enhanced training and education on principles related to accounting for noncontrolling interests.
 
In response to the control deficiency related to the accounting for non-routine transactions, such changes to our internal controls include enhanced training and education on principles related to accounting for material non-routine transactions for those individuals recording the accounting consequences of such transactions and an independent level of review of the details of such transactions by a more senior member of management.
 
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 
Except for the remediation efforts described above, t here have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II:        OTHER INFORMATION 
 
ITEM 1 .         LEGAL PROCEEDINGS 
 
The information set forth in Note 21 — Legal Proceedings in our Condensed Consolidated Financial Statements above is incorporated herein by reference.
 
We have not been involved in any other legal proceedings which we believe are likely to have, or have had a significant effect on our business, financial position, results of operations or cash flows, nor are we aware of any proceedings that are pending or threatened which we believe are likely to have a significant effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.
 
ITEM 6 .  EXHIBITS 

Exhibit	 	Document	
 	 	 	
2.1	 	Agreement and Plan of Merger, dated as of April 7, 2015, by and among Genco Shipping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(1)	
 	 	 	
2.2	 	Stock Purchase Agreement, dated as of April 7, 2015, by and between Genco Shipping & Trading Limited and Baltic Trading Limited.(1)	
 	 	 	
2.3	 	Amendment No. 1 to Agreement and Plan of Merger, dated as of June 10, 2015, by and among Genco Shipping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(2)	
 	 	 	
3.1	 	Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(3)	
 	 	 	
3.2	 	Articles of Amendment to Genco Shipping & Trading Limited Second Amended and Restated Articles of Incorporation, dated July 17, 2015.(4)	
 	 	 	
3.4	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(3)	
 	 	 	
4.1	 	Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
4.2	 	Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
10.1	 	Voting and Support Agreement, dated as of April 7, 2015, by and among Baltic Trading Limited, Genco Shipping & Trading Limited, and the entities listed on Schedule A thereto.(1)	
 	 	 	
10.2	 	Loan Agreement, dated as of April 7, 2015, by and among Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent and security agent and the banks and financial institutions party thereto, as lenders.(5)	
 	 	 	
10.3	 	Guarantee, dated as of April 7, 2015, made by Genco Shipping & Trading Limited to ABN AMRO Capital USA LLC.(5)	
 	 	 	
10.4	 	Amendment and Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Bay Limited and other subsidiaries of Genco named therein as guarantors, and Credit Agricole Corporate and Investment Bank.(5)	
 	 	 	
10.5	 	Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Lorraine Limited and other subsidiaries of Genco named therein as guarantors and, Deutsche Bank Luxembourg S.A.(7)	
 	 	 	
10.6	 	Loan Agreement by and among Baltic Tiger Limited and Baltic Lion limited as borrowers, the banks listed therein as lenders, and DVB Bank SE, as agent, arranger, and security agent, dated as of December 3, 2013.(6)	
 	 	 	
10.7	 	First Supplemental Agreement to Secured Loan Facility Agreement, dated as of April 7, 2015, by and among Baltic Tiger Limited, Baltic Lion Limited, Baltic Trading Limited, DVB Bank SE, and the lenders listed on Schedule 1 thereto.(7)	
 	 	 	
10.8	 	Guarantee and Indemnity dated April 8, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(1)	
 
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Exhibit	 	Document	
 	 	 	
10.9	 	Letter Agreement dated April 30, 2015 between Genco Shipping & Trading Limited and John C. Wobensmith.(8)	
 	 	 	
10.10	 	Letter Agreement dated April 30, 2015 between Baltic Trading Limited and John C. Wobensmith.(8)	
 	 	 	
10.11	 	Genco Shipping & Trading Limited 2015 Equity Incentive Plan.(9)	
 	 	 	
10.12	 	First Supplemental Agreement dated as of July 13, 2015, to Loan Facility Agreement dated August 30, 2013, by and among Baltic Hare Limited and Baltic Fox Limited as borrowers, Baltic Trading Limited as guarantor and pledgor, DVB Bank SE and others as Lenders, and DVB Bank SE as Agent and Security Agent.(10)	
 	 	 	
10.13	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(10)	
 	 	 	
10.14	 	Amendment No. 1 dated as of July 14, 2015, to Up to $148,000,000 Senior Secured Credit Agreement dated December 31, 2014, by and among Baltic Trading Limited as Borrower, various lenders listed on Schedule I as Lenders, Nordea Bank Finland PLC, New York Branch as Administrative Agent and Security Agent, Nordea Bank Finland PLC, New York Branch and Skandinaviska Enskilda Banken AB (PUBL) as Mandated Lead Arrangers, and Nordea Bank Finland plc, New York Branch as Bookrunner.(10)	
 	 	 	
10.15	 	Guaranty dated as of July 17, 2015 by Genco Shipping & Trading Limited in favor of Nordea Bank Finland plc, New York Branch.(10)	
 	 	 	
10.16	 	Supplemental Agreement dated as of July 14, 2015 to $16,800,000 Secured Loan Facility Agreement dated October 8, 2014, by and among Baltic Hornet Limited as Borrower, ABN AMRO Capital USA LLC and others as Lenders, ABN AMRO Capital USA LLC as Mandated Lead Arranger, Agent and Security Agent, ABN AMRO Bank N.V. Singapore Branch as Sinosure Agent, ABN AMRO Bank N.V. as Swap Provider, Baltic Trading Limited as Guarantor, Genco Shipping & Trading Limited as New Guarantor, Baltic Trading Limited as Pledgor and Baltic Wasp Limited as Other Borrower.(10)	
 	 	 	
10.17	 	Supplemental Agreement dated as of July 14, 2015 to $16,800,000 Secured Loan Facility Agreement, dated October 8, 2014, by and among Baltic Wasp Limited as Borrower, ABN AMRO Capital USA LLC and others as Lenders, ABN AMRO Capital USA LLC as Mandated Lead Arranger, Agent and Security Agent, ABN AMRO Bank N.V. Singapore Branch as Sinosure Agent, ABN AMRO Bank N.V. as Swap Provider, Baltic Trading Limited as Guarantor, Genco Shipping & Trading Limited as New Guarantor, Baltic Trading Limited as Pledgor and Baltic Hornet Limited as Other Borrower.(10)	
 	 	 	
10.18	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of ABN AMRO Capital USA LLC pertaining to Baltic Hornet Limited.(10)	
 	 	 	
10.19	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of ABN AMRO Capital USA LLC pertaining to Baltic Wasp Limited.(10)	
 	 	 	
10.20	 	Termination Agreement by and among Genco Shipping & Trading Limited, Genco Investments LLC, and Baltic Trading Limited.(10)	
 	 	 	
10.21	 	Amendment No. 2 dated as of July 14, 2015, to Up to 148,000,000 Senior Secured Credit Agreement dated December 31, 2014, by and among Baltic Trading Limited as Borrower, various lenders listed on Schedule I as Lenders, Nordea Bank Finland PLC, New York Branch as Administrative Agent and Security Agent, Nordea Bank Finland PLC, New York Branch and Skandinaviska Enskilda Banken AB (PUBL) as Mandated Lead Arrangers, and Nordea Bank Finland plc, New York Branch as Bookrunner.(11)	
 	 	 	
10.22	 	Form of Director Restricted Stock Unit Agreement dated as of July 13, 2015.*	
 	 	 	
10.23	 	Form of Director Restricted Stock Unit Agreement dated as of July 29, 2015.*	
 	 	 	
10.24	 	Facility Agreement, dated November 4, 2015, by and among the indirect subsidiaries of Genco Shipping & Trading Limited listed therein as borrowers, Genco Holdings Limited, the financial institutions listed therein as lenders, and Hayfin Services LLP, as agent and security agent.*	
 	 	 	
10.25	 	Guarantee dated as of November 4, 2015 by Genco Shipping & Trading Limited as guarantor to Hayfin Services LLP as Security Agent.*	
 	 	 	
31.1	 	Certification of President pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as	
 	 	amended.*	
 	 	 	
31.2	 	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*	
 	 	 	
32.1	 	Certification of President pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
32.2	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*	
 
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Exhibit	 	Document	
 	 	 	
101	 	The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (Unaudited), (ii) Condensed Consolidated Statements of Operations (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Loss (Unaudited), (iv) Condensed Consolidated Statements of Equity (Unaudited), (v) Condensed Consolidated Statements of Cash Flows (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).	

(*)	 	Filed with this report.	
 	 	 	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 10, 2015.	
 	 	 	
(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(4)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 17, 2015.	
 	 	 	
(5)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed with the Securities and Exchange Commission on May 8, 2015.	
 	 	 	
(6)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on December 6, 2013.	
 	 	 	
(7)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(8)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 4, 2015.	
 	 	 	
(9)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 2, 2015.	
 	 	 	
(10)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, filed with the Securities and Exchange Commission on August 10, 2015.	
 	 	 	
(11)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on August 4, 2015.	
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 	 	 	GENCO SHIPPING & TRADING LIMITED	

 	DATE: November 13, 2015	 	By:	/s/ John C. Wobensmith	
 	 	 	John C. Wobensmith	
 	 	 	President	
 	 	 	(Principal Executive Officer)	

 	DATE: November 13, 2015	 	By:	/s/ Apostolos Zafolias	
 	 	 	Apostolos Zafolias	
 	 	 	Chief Financial Officer	
 	 	 	(Principal Financial Officer)	
 
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Exhibit Index

Exhibit	 	Document	
 	 	 	
2.1	 	Agreement and Plan of Merger, dated as of April 7, 2015, by and among Genco Shipping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(1)	
 	 	 	
2.2	 	Stock Purchase Agreement, dated as of April 7, 2015, by and between Genco Shipping & Trading Limited and Baltic Trading Limited.(1)	
 	 	 	
2.3	 	Amendment No. 1 to Agreement and Plan of Merger, dated as of June 10, 2015, by and among Genco Shipping & Trading Limited, Poseidon Merger Sub Limited and Baltic Trading Limited.(2)	
 	 	 	
3.1	 	Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(3)	
 	 	 	
3.2	 	Articles of Amendment to Genco Shipping & Trading Limited Second Amended and Restated Articles of Incorporation, dated July 17, 2015.(4)	
 	 	 	
3.4	 	Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated as of July 9, 2014.(3)	
 	 	 	
4.1	 	Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
4.2	 	Form of Specimen Warrant Certificate of Genco Shipping & Trading Limited.(3)	
 	 	 	
10.1	 	Voting and Support Agreement, dated as of April 7, 2015, by and among Baltic Trading Limited, Genco Shipping & Trading Limited, and the entities listed on Schedule A thereto.(1)	
 	 	 	
10.2	 	Loan Agreement, dated as of April 7, 2015, by and among Genco Commodus Limited, Genco Maximus Limited, Genco Claudius Limited, Genco Hunter Limited and Genco Warrior Limited, as borrowers, ABN AMRO Capital USA LLC, as arranger, facility agent and security agent and the banks and financial institutions party thereto, as lenders.(5)	
 	 	 	
10.3	 	Guarantee, dated as of April 7, 2015, made by Genco Shipping & Trading Limited to ABN AMRO Capital USA LLC.(5)	
 	 	 	
10.4	 	Amendment and Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Bay Limited and other subsidiaries of Genco named therein as guarantors, and Credit Agricole Corporate and Investment Bank.(5)	
 	 	 	
10.5	 	Waiver Agreement dated as of April 30, 2015 by and among Genco as borrower, Genco Lorraine Limited and other subsidiaries of Genco named therein as guarantors and, Deutsche Bank Luxembourg S.A.(7)	
 	 	 	
10.6	 	Loan Agreement by and among Baltic Tiger Limited and Baltic Lion limited as borrowers, the banks listed therein as lenders, and DVB Bank SE, as agent, arranger, and security agent, dated as of December 3, 2013.(6)	
 	 	 	
10.7	 	First Supplemental Agreement to Secured Loan Facility Agreement, dated as of April 7, 2015, by and among Baltic Tiger Limited, Baltic Lion Limited, Baltic Trading Limited, DVB Bank SE, and the lenders listed on Schedule 1 thereto.(7)	
 	 	 	
10.8	 	Guarantee and Indemnity dated April 8, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(1)	
 	 	 	
10.9	 	Letter Agreement dated April 30, 2015 between Genco Shipping & Trading Limited and John C. Wobensmith.(8)	
 	 	 	
10.10	 	Letter Agreement dated April 30, 2015 between Baltic Trading Limited and John C. Wobensmith.(8)	
 	 	 	
10.11	 	Genco Shipping & Trading Limited 2015 Equity Incentive Plan.(9)	
 	 	 	
10.12	 	First Supplemental Agreement dated as of July 13, 2015, to Loan Facility Agreement dated August 30, 2013, by and among Baltic Hare Limited and Baltic Fox Limited as borrowers, Baltic Trading Limited as guarantor and pledgor, DVB Bank SE and others as Lenders, and DVB Bank SE as Agent and Security Agent.(10)	
 	 	 	
10.13	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of DVB Bank SE.(10)	
 	 	 	
10.14	 	Amendment No. 1 dated as of July 14, 2015, to Up to $148,000,000 Senior Secured Credit Agreement dated December 31, 2014, by and among Baltic Trading Limited as Borrower, various lenders listed on Schedule I as Lenders, Nordea Bank Finland PLC, New York Branch as Administrative Agent and Security Agent, Nordea Bank Finland PLC, New York Branch and Skandinaviska Enskilda Banken AB (PUBL) as Mandated Lead Arrangers, and Nordea Bank	
 
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Exhibit	 	Document	
 	 	 	
 	 	Finland plc, New York Branch as Bookrunner.(10)	
 	 	 	
10.15	 	Guaranty dated as of July 17, 2015 by Genco Shipping & Trading Limited in favor of Nordea Bank Finland plc, New York Branch.(10)	
 	 	 	
10.16	 	Supplemental Agreement dated as of July 14, 2015 to $16,800,000 Secured Loan Facility Agreement dated October 8, 2014, by and among Baltic Hornet Limited as Borrower, ABN AMRO Capital USA LLC and others as Lenders, ABN AMRO Capital USA LLC as Mandated Lead Arranger, Agent and Security Agent, ABN AMRO Bank N.V. Singapore Branch as Sinosure Agent, ABN AMRO Bank N.V. as Swap Provider, Baltic Trading Limited as Guarantor, Genco Shipping & Trading Limited as New Guarantor, Baltic Trading Limited as Pledgor and Baltic Wasp Limited as Other Borrower.(10)	
 	 	 	
10.17	 	Supplemental Agreement dated as of July 14, 2015 to $16,800,000 Secured Loan Facility Agreement, dated October 8, 2014, by and among Baltic Wasp Limited as Borrower, ABN AMRO Capital USA LLC and others as Lenders, ABN AMRO Capital USA LLC as Mandated Lead Arranger, Agent and Security Agent, ABN AMRO Bank N.V. Singapore Branch as Sinosure Agent, ABN AMRO Bank N.V. as Swap Provider, Baltic Trading Limited as Guarantor, Genco Shipping & Trading Limited as New Guarantor, Baltic Trading Limited as Pledgor and Baltic Hornet Limited as Other Borrower.(10)	
 	 	 	
10.18	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of ABN AMRO Capital USA LLC pertaining to Baltic Hornet Limited.(10)	
 	 	 	
10.19	 	Guarantee and Indemnity dated July 17, 2015 by Genco Shipping & Trading Limited in favor of ABN AMRO Capital USA LLC pertaining to Baltic Wasp Limited.(10)	
 	 	 	
10.20	 	Termination Agreement by and among Genco Shipping & Trading Limited, Genco Investments LLC, and Baltic Trading Limited.(10)	
 	 	 	
10.21	 	Amendment No. 2 dated as of July 14, 2015, to Up to 148,000,000 Senior Secured Credit Agreement dated December 31, 2014, by and among Baltic Trading Limited as Borrower, various lenders listed on Schedule I as Lenders, Nordea Bank Finland PLC, New York Branch as Administrative Agent and Security Agent, Nordea Bank Finland PLC, New York Branch and Skandinaviska Enskilda Banken AB (PUBL) as Mandated Lead Arrangers, and Nordea Bank Finland plc, New York Branch as Bookrunner.(11)	
 	 	 	
10.22	 	Form of Director Restricted Stock Unit Agreement dated as of July 13, 2015.*	
 	 	 	
10.23	 	Form of Director Restricted Stock Unit Agreement dated as of July 29, 2015.*	
 	 	 	
10.24	 	Facility Agreement, dated November 4, 2015, by and among the indirect subsidiaries of Genco Shipping & Trading Limited listed therein as borrowers, Genco Holdings Limited, the financial institutions listed therein as lenders, and Hayfin Services LLP, as agent and security agent.*	
 	 	 	
10.25	 	Guarantee dated as of November 4, 2015 by Genco Shipping & Trading Limited as guarantor to Hayfin Services LLP as Security Agent.*	
 	 	 	
31.1	 	Certification of President pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*	
 	 	 	
31.2	 	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*	
 	 	 	
32.1	 	Certification of President pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
32.2	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*	
 	 	 	
101	 	The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (Unaudited), (ii) Condensed Consolidated Statements of Operations (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Loss (Unaudited), (iv) Condensed Consolidated Statements of Equity (Unaudited), (v) Condensed Consolidated Statements of Cash Flows (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).	

(*)	 	Filed with this report.	
 	 	 	
(1)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(2)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 10, 2015.	
 
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(3)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014.	
 	 	 	
(4)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 17, 2015.	
 	 	 	
(5)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed with the Securities and Exchange Commission on May 8, 2015.	
 	 	 	
(6)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on December 6, 2013.	
 	 	 	
(7)	 	Incorporated by reference to Baltic Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 8, 2015.	
 	 	 	
(8)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 4, 2015.	
 	 	 	
(9)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 2, 2015.	
 	 	 	
(10)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, filed with the Securities and Exchange Commission on August 10, 2015.	
 	 	 	
(11)	 	Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on August 4, 2015.	
 
(Remainder of page left intentionally blank)
 
81 

Exhibit 10.22
 
RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
GENCO SHIPPING & TRADING LIMITED 2015 EQUITY INCENTIVE PLAN
 
*  *  *  *  *
 
Participant:
 
Grant Date:     July 13, 2015
 
Number of Restricted Stock Units granted:  4,047
 
*  *  *  *  *
 
WHEREAS, this Restricted Stock Unit Award Agreement (this “ Award Agreement ”), dated as of the Grant Date specified above, is entered into by and between Genco Shipping & Trading Limited, a Marshall Islands corporation (the “ Company ”), and the Participant specified above, pursuant to the Genco Shipping & Trading Limited 2015 Equity Incentive Plan (the “ Plan ”); and
 
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“ RSUs ”) provided herein to the Participant.
 
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
 
1.                                       Incorporation By Reference; Plan Document Receipt .  This Award Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the grant of the RSUs hereunder), all of which terms and provisions are made a part of and incorporated in this Award Agreement as if they were each expressly set forth herein, provided that any subsequent amendment of the Plan shall not adversely affect Participant’s rights under this Award Agreement without the Participant’s written consent to such amendment.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Award Agreement and the terms of the Plan, the terms of the Plan shall control.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board of Directors in respect of the Plan, this Award Agreement and the RSUs shall be final and conclusive.  Any capitalized term not defined in this Award Agreement shall have the same meaning as is ascribed thereto in the Plan.
 
2.                                       Grant of Restricted Stock Unit Award .  The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above.  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Award Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall not have the rights of a stockholder in respect of the shares of Common Stock

 
underlying this Award until such shares of Common Stock are delivered to the Participant in accordance with Section 4 .
 
3.                                       Vesting .
 
(a)                                  General .  Except as otherwise provided in this Section 3 or in the Plan, RSUs subject to this Award shall vest on the date of the annual shareholders meeting of the Company next following the date hereof (the “Annual Meeting Date”), provided that the Participant is a Director as of such date.
 
(b)                                  Termination of Service .  Upon a termination of service as a Director, other than due to death or Disability, all unvested RSUs shall immediately terminate and be forfeited.
 
(c)                                   Termination Due to Death or Disability .  Upon a termination of Participant’s service as a Director due to the Participant’s death or Disability, then the Participant’s then outstanding and unvested RSUs shall immediately vest in full as of the date of such termination.
 
4.                                       Delivery of Shares .
 
(a)                                  Within 30 days of the Participant’s termination of service as a Director, the Participant shall be issued one share of Common Stock for each vested RSU, provided that the Participant may not determine when during such 30-day period the shares of Common Stock shall be issued.
 
(b)                                  Blackout Periods .  Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 4(a)  hereof, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last day of the calendar year in which the Participant terminated service as a Director and (2) the end of the 30-day period set forth in Section 4(a).
 
5.                                       Dividends and Other Distributions .  The Participant shall be entitled to receive payments equal to all dividends and other distributions paid with respect to the shares of Common Stock underlying the RSUs, and any such amounts will be paid in the same amount and form (cash or non-cash) as that paid directly to holders of shares of Common Stock, provided that such dividends or other distributions will be subject to the same vesting requirements as the underlying RSUs, and shall be paid at the same time the related shares of Common Stock are delivered pursuant to Section 4 , and any such amounts with respect to unvested RSUs shall be placed into escrow until such time as the shares for the related RSUs are issued and delivered or the underlying RSUs are forfeited; provided, further, that if any such amounts are paid in shares of Common Stock with respect to unvested RSUs, the shares of Common Stock shall be deposited with the Company and shall be subject to the same restrictions on transferability and forfeitability as the RSUs with respect to which they were paid.
 
2 

 
6.                                       Non-transferability .
 
(a)                                  Restriction on Transfers .  The RSUs, and any rights or interests therein, (i) shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way at any time by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or by the laws of descent and distribution, (ii) shall not be pledged or encumbered in any way at any time by the Participant (or any beneficiary of the Participant) and (iii) shall not be subject to execution, attachment or similar legal process.  Any attempt to sell, exchange, pledge, transfer, assign, encumber or otherwise dispose of the RSUs, or the levy of any execution, attachment or similar legal process upon the RSUs, contrary to the terms of this Award Agreement and/or the Plan, shall be null and void and without legal force or effect.
 
7.                                       Entire Agreement; Amendment .  This Award Agreement and the Plan the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Award Agreement from time to time in accordance with and as provided in the Plan, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.  This Award Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such mutually-agreed-on modification or amendment of this Award Agreement as soon as practicable after the adoption thereof by the Company.
 
8.                                       Acknowledgment of Participant .  This award of RSUs does not entitle Participant to any benefit other than that granted under this Award Agreement.  Any benefits granted under this Award Agreement are not part of the Participant’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation.  Participant understands and accepts that the benefits granted under this Award Agreement are entirely at the discretion of the Company and that the Company retains the right to amend or terminate this Award Agreement and the Plan at any time, at its sole discretion and without notice, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.
 
9.                                       Securities Matters .  The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933, as amended (the “ 1933 Act ”) of any interests in the Plan or any shares of Common Stock to be issued thereunder or to effect similar compliance under any state laws.  The Company shall not be obligated to cause to be issued any shares, whether by means of stock certificates or appropriate book entries, unless and until the Company is advised by its counsel that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded.  The Board of Directors may require, as a condition of the issuance of shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that any certificates bear such legends and any book entries be subject to such electronic coding, as the Board of Directors, in its sole discretion, deems necessary or desirable.  The Participant specifically understands and agrees that the shares of Common Stock, if and when issued, may
 
3 

 
be “restricted securities,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended and, accordingly, the Participant may be required to hold the shares indefinitely unless they are registered under such Act or an exemption from such registration is available.
 
10.                                Delays or Omissions .  No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any party under this Award Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Award Agreement, or any waiver on the part of any party or any provisions or conditions of this Award Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.
 
11.                                Governing Law .  This Award Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws thereof.
 
12.                                No Right to Continued Service .   Nothing in this Award Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s employment or service at any time, for any reason and with or without cause.
 
13.                                Notices .   Any notice which may be required or permitted under this Award Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows:
 
(a)                                  If such notice is to the Company, to the attention of the President of the Company or at such other address as the Company, by notice to the Participant, shall designate in writing from time to time.
 
(b)                                  If such notice is to the Participant, at his/her address as shown on the Company’s records, or at such other address as the Participant, by notice to the Company, shall designate in writing from time to time.
 
14.                                Compliance with Laws .  This issuance of RSUs (and the shares of Common Stock underlying the RSUs) pursuant to this Award Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the 1933 Act, the Securities Exchange Act of 1934 and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue these RSUs or any of the shares of Common Stock pursuant to this Award Agreement if any such issuance would violate any such requirements.
 
15.                                Binding Agreement; Assignment .  This Award Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except as provided by Section 5 hereof) any part of this Award
 
4 

 
Agreement without the prior express written consent of the Company.  The Company may not assign any portion of this Award Agreement without the prior written consent of the Participant except as otherwise provided in the Plan.
 
16.                                Counterparts .  This Award Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
 
17.                                Headings .  The titles and headings of the various sections of this Award Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Award Agreement.
 
18.                                Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Award Agreement and the Plan and the consummation of the transactions contemplated thereunder.
 
19.                                Severability .  The invalidity or unenforceability of any provisions of this Award Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Award Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Award Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
 
[Remainder of Page Intentionally Left Blank]
 
5 

 
IN WITNESS WHEREOF , the parties hereto have executed this Award Agreement as of the date first written above.

 	GENCO SHIPPING & TRADING LIMITED	

 	By:	 	
 	Name:	 	
 	Title:	

 	PARTICIPANT	

 	 	
 	Name:	

Signature Page to Restricted Stock Unit Agreement

Exhibit 10.23
 
RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE
GENCO SHIPPING & TRADING LIMITED 2015 EQUITY INCENTIVE PLAN
 
*  *  *  *  *
 
Participant:
 
Grant Date:      July 29, 2015
 
Number of Restricted Stock Units granted:  11,643
 
*  *  *  *  *
 
WHEREAS, this Restricted Stock Unit Award Agreement (this “ Award Agreement ”), dated as of the Grant Date specified above, is entered into by and between Genco Shipping & Trading Limited, a Marshall Islands corporation (the “ Company ”), and the Participant specified above, pursuant to the Genco Shipping & Trading Limited 2015 Equity Incentive Plan (the “ Plan ”); and
 
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“ RSUs ”) provided herein to the Participant.
 
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
 
1.                                       Incorporation By Reference; Plan Document Receipt .  This Award Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the grant of the RSUs hereunder), all of which terms and provisions are made a part of and incorporated in this Award Agreement as if they were each expressly set forth herein, provided that any subsequent amendment of the Plan shall not adversely affect Participant’s rights under this Award Agreement without the Participant’s written consent to such amendment.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Award Agreement and the terms of the Plan, the terms of the Plan shall control.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board of Directors in respect of the Plan, this Award Agreement and the RSUs shall be final and conclusive.  Any capitalized term not defined in this Award Agreement shall have the same meaning as is ascribed thereto in the Plan.
 
2.                                       Grant of Restricted Stock Unit Award .  The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above.  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Award Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall not have the rights of a stockholder in respect of the shares of Common Stock

 
underlying this Award until such shares of Common Stock are delivered to the Participant in accordance with Section 4.
 
3.                                       Vesting .
 
(a)                                  General.  Except as otherwise provided in this Section 3 or in the Plan, RSUs subject to this Award shall vest at 12:01 a.m. on the earlier of the date of the first Annual Meeting of Shareholders of the Company following the date of grant and the date that is fourteen months after the date of grant, provided that the Participant is a Director as of such date.
 
(b)                                  Termination of Service.  Upon a termination of service as a Director, other than due to death or Disability, all unvested RSUs shall immediately terminate and be forfeited.
 
(c)                                   Termination Due to Death or Disability.  Upon a termination of Participant’s service as a Director due to the Participant’s death or Disability, then the Participant’s then outstanding and unvested RSUs shall immediately vest in full as of the date of such termination.
 
4.               Delivery of Shares .
 
(a)                                  Within 30 days of the Participant’s termination of service as a Director, the Participant shall be issued one share of Common Stock for each vested RSU, provided that the Participant may not determine when during such 30-day period the shares of Common Stock shall be issued.
 
(b)                                  Blackout Periods.  Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section (a) hereof, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last day of the calendar year in which the Participant terminated service as a Director and (2) the end of the 30-day period set forth in Section 4(a).
 
5.                                       Dividends and Other Distributions .  The Participant shall be entitled to receive payments equal to all dividends and other distributions paid with respect to the shares of Common Stock underlying the RSUs, and any such amounts will be paid in the same amount and form (cash or non-cash) as that paid directly to holders of shares of Common Stock, provided that such dividends or other distributions will be subject to the same vesting requirements as the underlying RSUs, and shall be paid at the same time the related shares of Common Stock are delivered pursuant to Section 4, and any such amounts with respect to unvested RSUs shall be placed into escrow until such time as the shares for the related RSUs are issued and delivered or the underlying RSUs are forfeited; provided, further, that if any such amounts are paid in shares of Common Stock with respect to unvested RSUs, the shares of Common Stock shall be deposited with the Company and shall be subject to the same restrictions on transferability and forfeitability as the RSUs with respect to which they were paid.
 
6.                                       Non-transferability . The RSUs, and any rights or interests therein, (i) shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way at any time by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or by the laws of descent and distribution, (ii) shall not be pledged or encumbered in
 
2 

 
any way at any time by the Participant (or any beneficiary of the Participant) and (iii) shall not be subject to execution, attachment or similar legal process.  Any attempt to sell, exchange, pledge, transfer, assign, encumber or otherwise dispose of the RSUs, or the levy of any execution, attachment or similar legal process upon the RSUs, contrary to the terms of this Award Agreement and/or the Plan, shall be null and void and without legal force or effect.
 
7.                                       Entire Agreement; Amendment .  This Award Agreement and the Plan the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Award Agreement from time to time in accordance with and as provided in the Plan, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.  This Award Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such mutually-agreed-on modification or amendment of this Award Agreement as soon as practicable after the adoption thereof by the Company.
 
8.                                       Acknowledgment of Participant .  This award of RSUs does not entitle Participant to any benefit other than that granted under this Award Agreement.  Any benefits granted under this Award Agreement are not part of the Participant’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation.  Participant understands and accepts that the benefits granted under this Award Agreement are entirely at the discretion of the Company and that the Company retains the right to amend or terminate this Award Agreement and the Plan at any time, at its sole discretion and without notice, but not in any manner or to any extent that would be adverse to the Participant without the Participant’s written consent at the time.
 
9.                                       Securities Matters .  The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933, as amended (the “1933 Act”) of any interests in the Plan or any shares of Common Stock to be issued thereunder or to effect similar compliance under any state laws.  The Company shall not be obligated to cause to be issued any shares, whether by means of stock certificates or appropriate book entries, unless and until the Company is advised by its counsel that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded.  The Board of Directors may require, as a condition of the issuance of shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that any certificates bear such legends and any book entries be subject to such electronic coding, as the Board of Directors, in its sole discretion, deems necessary or desirable.  The Participant specifically understands and agrees that the shares of Common Stock, if and when issued, may be “restricted securities,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended and, accordingly, the Participant may be required to hold the shares indefinitely unless they are registered under such Act or an exemption from such registration is available.
 
10.                                Delays or Omissions .  No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any party under this Award
 
3 

 
Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Award Agreement, or any waiver on the part of any party or any provisions or conditions of this Award Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.
 
11.                                Governing Law.  This Award Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws thereof.
 
12.                                No Right to Continued Service.   Nothing in this Award Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s employment or service at any time, for any reason and with or without cause.
 
13.                                Notices.   Any notice which may be required or permitted under this Award Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows:
 
(a)                                  If such notice is to the Company, to the attention of the President of the Company or at such other address as the Company, by notice to the Participant, shall designate in writing from time to time.
 
(b)                                  If such notice is to the Participant, at his/her address as shown on the Company’s records, or at such other address as the Participant, by notice to the Company, shall designate in writing from time to time.
 
14.                                Compliance with Laws .  This issuance of RSUs (and the shares of Common Stock underlying the RSUs) pursuant to this Award Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the 1933 Act, the Securities Exchange Act of 1934 and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue these RSUs or any of the shares of Common Stock pursuant to this Award Agreement if any such issuance would violate any such requirements.
 
15.                                Binding Agreement; Assignment .  This Award Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except as provided by Section 5 hereof) any part of this Award Agreement without the prior express written consent of the Company.  The Company may not assign any portion of this Award Agreement without the prior written consent of the Participant except as otherwise provided in the Plan.
 
4 

 
16.                                Counterparts .  This Award Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
 
17.                                Headings .  The titles and headings of the various sections of this Award Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Award Agreement.
 
18.                                Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Award Agreement and the Plan and the consummation of the transactions contemplated thereunder.
 
19.                                Severability .  The invalidity or unenforceability of any provisions of this Award Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Award Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Award Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
 
[Remainder of Page Intentionally Left Blank]
 
5 

 
IN WITNESS WHEREOF , the parties hereto have executed this Award Agreement as of the date first written above.

 	GENCO SHIPPING & TRADING LIMITED	

 	By:	 	
 	Name:	 	
 	Title:	

 	PARTICIPANT	

 	 	
 	Name:	

Exhibit 10.24
 
Private and Confidential
 
DATED 4 NOVEMBER 2015
 
(1)                                  EACH OF THE ENTITIES LISTED IN SCHEDULE 1 PART I
 
(as joint and several Borrowers)
 
(2)                                  GENCO HOLDINGS LIMITED
 
(as HoldCo)
 
(3)                                  THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 PART II
 
(as Lenders)
 
(4)                                  HAYFIN SERVICES LLP
 
(as Agent)
 
(5)                                  HAYFIN SERVICES LLP
 
(as Security Agent)
 
FACILITY AGREEMENT
US$100,000,000 SECURED TERM LOAN FACILITY
 
EXECUTION VERSION
 
REFERENCE RAW/ 382792.00001

	r e e d s m i t h . c o m	

 
CONTENTS
 
CLAUSE

1.	DEFINITIONS AND INTERPRETATION	1	
2.	THE FACILITY	31	
3.	PURPOSE	31	
4.	CONDITIONS OF UTILISATION	32	
5.	UTILISATION	33	
6.	REPAYMENT	33	
7.	PREPAYMENT AND CANCELLATION	35	
8.	INTEREST	38	
9.	INTEREST PERIODS	39	
10.	CHANGES TO THE CALCULATION OF INTEREST	39	
11.	FEES	41	
12.	TAX GROSS UP AND INDEMNITIES	41	
13.	INCREASED COSTS	45	
14.	OTHER INDEMNITIES	47	
15.	MITIGATION BY THE LENDERS	49	
16.	COSTS AND EXPENSES	50	
17.	JOINT AND SEVERAL LIABILITY	51	
18.	GUARANTEE AND INDEMNITY	53	
19.	REPRESENTATIONS AND WARRANTIES	56	
20.	INFORMATION UNDERTAKINGS	62	
21.	FINANCIAL COVENANTS	66	
22.	GENERAL UNDERTAKINGS	67	
23.	VESSEL UNDERTAKINGS	73	
24.	INSURANCE UNDERTAKINGS	78	
25.	ACCOUNTS	83	
26.	SECURITY SHORTFALL	84	
27.	EVENTS OF DEFAULT	86	
28.	CHANGES TO THE LENDERS	91	
29.	CHANGES TO THE OBLIGORS	96	
30.	ROLE OF THE AGENT AND THE SECURITY AGENT	96	
31.	APPLICATION OF PROCEEDS	110	
32.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES	112	
33.	SHARING AMONG THE FINANCE PARTIES	112	
34.	PAYMENT MECHANICS	113	
35.	SET-OFF	116	
36.	NOTICES	116	
37.	CALCULATIONS AND CERTIFICATES	118	
38.	PARTIAL INVALIDITY	119	
39.	REMEDIES AND WAIVERS	119	
40.	AMENDMENTS AND WAIVERS	119	
41.	CONFIDENTIALITY	121	
42.	COUNTERPARTS	124	
43.	GOVERNING LAW	124	
 
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44.	ENFORCEMENT	125	
SCHEDULE 1 THE ORIGINAL PARTIES	126	
 	PART I THE OBLIGORS	126	
 	PART II THE ORIGINAL LENDERS	131	
 	PART III AGENT AND SECURITY AGENT	132	
SCHEDULE 2 CONDITIONS PRECEDENT	133	
 	PART I CONDITIONS PRECEDENT TO UTILISATION REQUEST	133	
 	PART II CONDITIONS PRECEDENT TO UTILISATION	135	
 	PART III CONDITIONS SUBSEQUENT	138	
SCHEDULE 3 UTILISATION REQUEST	139	
SCHEDULE 4 FORM OF TRANSFER CERTIFICATE	141	
SCHEDULE 5 FORM OF ASSIGNMENT AGREEMENT	143	
SCHEDULE 6 FORM OF COMPLIANCE CERTIFICATE	145	
SCHEDULE 7 TIMETABLES	146	
SCHEDULE 8 DETAILS OF VESSELS	147	
SCHEDULE 9 DISTRESSED INVESTORS	153	
SCHEDULE 10 FORM OF EXCESS CASH FLOW NOTICE	154	
SCHEDULE 11 EXISTING PERMITTED INTERCOMPANY LOANS	155	
SCHEDULE 12	156	
 	PART I UNENCUMBERED FLEET VESSELS	156	
 	PART II ADDITIONAL SECURITY TERMS	157	
SCHEDULE 13 EXAMPLE BUDGET	158	
 
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THIS AGREEMENT is dated 4 November 2015
 
BETWEEN:
 
(1)                                  EACH OF THE ENTITIES listed in Part I of Schedule 1 ( The Original Parties ) as joint and several borrowers (the “ Borrowers ” and each a “ Borrower ”);
 
(2)                                  GENCO HOLDINGS LIMITED , a corporation incorporated under the laws of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands MH 96960 (as “ HoldCo ”);
 
(3)                                  THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 ( The Original Parties ) as Lenders (the “ Original Lenders ”);
 
(4)                                  HAYFIN SERVICES LLP as agent of the Finance Parties (“ Agent ”); and
 
(5)                                  HAYFIN SERVICES LLP as security agent for the Finance Parties (“ Security Agent ”).
 
BACKGROUND
 
The Lenders have agreed to make available to the Borrowers a loan facility of up to the Maximum Loan Amount for general working capital purposes.
 
IT IS AGREED as follows:
 
1.                                       DEFINITIONS AND INTERPRETATION
 
1.1                                Definitions
 
In this Agreement:
 
“ A-Type Vessel ” means each Vessel, other than a B-Type Vessel.
 
“ Account ” means each of the Earnings Accounts, the Retention Account, the Minimum Liquidity Account, and any other account, opened made or established in accordance with Clause 25 ( Accounts ).
 
“ Account Bank ” means, in relation to any Account, Nordea Bank Finland, acting through its New York branch, or any other bank or financial institution approved by Agent (with the prior written consent of the Majority Lenders).
 
“ Account Control Agreement ” means, in relation to an Account, any account control agreement between the Account Holder, the Account Bank, and the Security Agent, in the agreed form providing for the “control” (as such term is used in Article 9 of the UCC of the State of New York) of the Accounts by the Security Agent.
 
“ Account Holder ” means, in relation to any Account, each Obligor in whose name that Account is held.
 
“ Account Security ” means, in relation to an Account, a deed or other instrument granted by the Account Holder in favour of the Security Agent conferring Security over that Account in the agreed form.
 
“ Additional Vessel ” has the meaning set out in paragraph (b)(ii)(B) of Clause 26.1 ( Additional Security ).
 
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“ Affiliate ” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
 
“ Approved Brokers ” means any of Clarksons Platou, Maersk Broker K/S, Fearnleys AS, and Simpson Spence Young Ltd. (or any Affiliate of such persons through which valuations are commonly issued), or any independent international sale and purchase broker proposed by the Borrowers and approved by the Agent (acting on the instructions of the Majority Lenders).
 
“ Approved Commercial Manager ” means any Approved Commercial Manager (External) and any Approved Commercial Manager (Internal).
 
“ Approved Commercial Manager (External) ” means, in relation to a Vessel any third party commercial ship management company as the Agent may, with the authorisation of the Majority Lenders, approve in writing from time to time in respect of that Vessel and, as at the date of this Agreement, in respect of the Genco Champion and Genco Charger only, Clipper.
 
“ Approved Commercial Manager (Internal) ” means, in respect of a Vessel, together the Parent Guarantor, Genco Ship Management LLC and Genco Management (USA) LLC, or any member of the Group providing commercial management services as the Agent may, with the authorisation of the Majority Lenders, approve in writing from time to time in respect of that Vessel.
 
“ Approved Flag ” means Marshall Islands flag, Liberian flag or Hong Kong flag or any other flag as the Agent may, with the authorisation of all Lenders, approve in writing as the flag under which a Vessel may be registered, provided that, for the avoidance of doubt, no flag under which a Vessel may be registered may be changed from one Approved Flag to another Approved Flag without the consent of the Agent with the authorisation of all Lenders).
 
“ Approved Managers ” means each Approved Commercial Manager and each Approved Technical Manager.
 
“ Approved Technical Manager ” means, in relation to a Vessel, any of Wallem Shipmanagement Ltd., V-Ships, Anglo-Eastern Shipmanagement Ltd, or any other management company as the Agent may, with the authorisation of all Lenders, approve in writing from time to time in respect of that Vessel.
 
“ Approved Upgrades ” means, in relation to a Vessel, any upgrade works relating to the installation of Mewis Ducts and ballast water treatment plants, or otherwise compulsorily required to comply with changes in Classification Society rules or regulatory requirements after the date of this Agreement, and any other structural improvements to that Vessel as may be approved by the Agent (acting with the authorisation of the Majority Lenders) from time to time at the request of the Borrowers.
 
“ Assignment Agreement ” means an agreement substantially in the form set out in Schedule 4 ( Form of Assignment Agreement ) or any other form agreed between the relevant assignor and assignee.
 
“ Availability Period ” means the period from and including the date of this Agreement to and including 15 November 2015 or such later date as may be agreed between the Agent (acting upon the instructions of all the Lenders) and the Borrowers.
 
“ Available Commitment ” means a Lender’s Commitment minus:
 
(a)                                  the amount of its participation in the outstanding Loan; and
 
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(b)                                  in relation to any proposed Utilisation, the amount of its participation in any Utilisation 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.
 
“ B-Type Vessel ” means each of m.v.’s “GENCO KNIGHT”, “GENCO BEAUTY” and “GENCO VIGOUR” (as further identified in Schedule 8).
 
“ Balloon Instalment ” has the meaning given to such term in Clause 6.1(b).
 
“ Borrower/HoldCo Dividend Criteria ” means, at the time of a proposed dividend by a Borrower or HoldCo:
 
(a)                                  the VTL Coverage (excluding, for the purposes of such calculation, any additional security provided pursuant to Clause 26.1 ( Additional Security ) is greater than 182% (as evidenced by Valuations);
 
(b)                                  in the case of a Borrower, the dividend is funded solely from any balance available to a Borrower under paragraph (b)(iii) of Clause 6.2 ( Payment of Excess Cash Flow ) following the application of Excess Cash Flow in accordance with paragraph (b) of Clause 6.2 ( Payment of Excess Cash Flow );
 
(c)                                   the dividend is made within five (5) Business Days of the Excess Cash Flow Payment Date and, together with any other Permitted Dividends (Borrowers/Holdco) and Permitted Up-Stream Loans made during such financial quarter does not exceed the aggregate amount available for such purposes under paragraph (b)(iii) of Clause 6.2 ( Payment of Excess Cash Flow) ; and
 
(d)                                  no Default has occurred and is continuing or would result from the making of such dividend payment.
 
“ Borrowers’ Share of Group Expenses ” means, in respect of any Financial Quarter, the fair and equitable proportion of Group Expenses incurred in that period that the Borrowers can demonstrate are reasonably allocable to the Vessels provided that such allocation shall be based on the proportion that the Vessels represent of the total number of Fleet Vessels (in each case as at the Quarter Date in respect of that Financial Quarter).
 
“ Break Costs ” means 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 participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of that 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.
 
“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York.
 
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“ Cash ” means, at any time with respect to any person, cash in hand or at bank and (in the latter case) credited to an account in the name of that person and to which that person alone is beneficially entitled and for so long as:
 
(a)                                  that cash is repayable within thirty (30) days after the relevant date of calculation;
 
(b)                                  repayment of that cash is not contingent on the prior discharge of any other indebtedness of that person or of any other person whatsoever or on the satisfaction of any other condition other than any such conditions under Transaction Security referred to in clause (c) below;
 
(c)                                   there is no Security over that cash except for Transaction Security or, in case of cash provided pursuant to a minimum liquidity cash retention of a nature substantially similar to that set out in Clause 21.1(a) held in relation of any other Fleet Vessel pursuant to a vessel financing by any other member or members of the Group, security in favour of a lender or security agent; and
 
(d)                                  the cash is freely and (except as mentioned in paragraph (a) and (c) above) immediately available to be applied in repayment or prepayment of the Loan.
 
“ Cash Equivalents ” means:
 
(a)                                  securities issued or directly and fully guaranteed or insured by the USA or any agency or instrumentality thereof (provided that the full faith and credit of the USA is pledged in support thereof) having maturities of not more than one year from the date of acquisition,
 
(b)                                  time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having capital, surplus and undivided profits aggregating in excess of US$200,000,000, with maturities of not more than one year from the date of acquisition by such person; and
 
(c)                                   repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in (i) above entered into with any bank meeting the qualifications specified in clause (ii) above,
 
(d)                                  commercial paper issued by any person incorporated in the USA 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; and
 
(e)                                   investments in money market funds substantially all of whose assets are comprised of securities of the types described in (i) to (iv) above.
 
“ Capesize Vessel ” means each of m.v.’s “GENCO CONSTANTINE”, “GENCO AUGUSTUS”, “GENCO LONDON”, “GENCO TITUS”, “GENCO TIBERIUS”, and “GENCO HADRIAN”.
 
“ Change of Control ” means:
 
(a)                                  in respect of the Parent Guarantor, any of the following events:
 
(i)                                      a sale, lease or transfer of all or substantially all of the Parent Guarantor’s assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act); or
 
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(ii)                                   a liquidation or dissolution of the Parent Guarantor; or
 
(iii)                                a replacement of a majority of the directors on the board of directors of the Parent Guarantor over a two-year period from the directors who constituted the board of directors of the Parent Guarantor at the beginning of such period and such replacement has not been approved by a vote of at least a majority of the board of directors of the Parent Guarantor then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or
 
(iv)                               a “change of control” or similar event (however described) in any documentation related to any Financial Indebtedness of the Parent Guarantor or the Group or any member of the Group; or
 
(v)                                  any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) other than one or more of the Permitted Holders, at any time becomes the owner, directly or indirectly, beneficially or of record, of shares representing more than thirty per cent (30%) of the outstanding voting or economic equity interests of the Parent Guarantor; or
 
(b)                                  in respect of a Borrower, any time during which and for any reason, HoldCo fails to own, directly, one hundred per cent of the capital stock or other equity interests of that Borrower; or
 
(c)                                   in respect of HoldCo, any time during which and for any reason, Parent Guarantor fails to legally and beneficially own, directly, one hundred per cent. (100%) of the capital stock or other equity interests of HoldCo.
 
“ Charged Property ” means the shares in each of the relevant Obligors and all of the assets of the Obligors which from time to time are, or are expressly or intended to be, the subject of the Security Documents.
 
“ Charters ” means any charter or contract of employment of a duration exceeding twelve (12) months (whether by virtue of optional extensions or otherwise) entered into between a Borrower and a charterer (each a “ Charter ”).
 
“ Classification ” means the classification with the Classification Society specified in Schedule 8 ( Details of Vessels ) or such other classification being a member of the International Association of Classification Societies as the Agent may, with the authorisation of the Majority Lenders, approve in writing.
 
“ Classification Society ” means, in relation to a Vessel, the classification society specified in Schedule 8 ( Details of Vessels ), or such other classification society being a member of the International Association of Classification Societies as the Agent may, with the authorisation of the Majority Lenders approve in writing (it being acknowledged that American Bureau of Shipping, DNV GL, and Lloyd’s Register of Ships shall each be deemed an approved classification society).
 
“ Clipper ” means the Clipper Group (Management) Ltd. of Pineapple Grove, Unit 3, Old Fort Bay, P.O. Box CB-13048, Nassau, Bahamas.
 
“ Code ” means the US Internal Revenue Code of 1986 as amended.
 
“ Commercial Management Agreement ” means, in relation to a Vessel, any commercial management agreement entered into or to be entered into (as applicable) between the relevant
 
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Borrower and an Approved Commercial Manager (External) in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).
 
“ Commitment ” means:
 
(a)                                  in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Part I of Schedule 1 ( The Original Parties ) and the amount of any other Commitment transferred to it under this Agreement; and
 
(b)                                  in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
 
to the extent not cancelled, reduced or transferred by it under this Agreement.
 
“ Compliance Certificate ” means a certificate in the form set out in Schedule 6 ( Form of Compliance Certificate ) or otherwise in form and substance satisfactory to the Agent.
 
“ Confidential Information ” means all information relating to any Obligor, the Finance Documents or the Loan of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party 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 Loan from either:
 
(a)                                  any Obligor or any of its advisers; or
 
(b)                                  another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Obligor or any of its advisers, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes 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 41 ( Confidentiality ); or
 
(ii)                                   is identified in writing at the time of delivery as non-confidential by any Obligor 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 (a) or (b) 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 any Obligor 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 substantially in a recommended form of the LMA from time to time.
 
“ Consolidated Net Worth ” means the Net Worth of the Group determined on a consolidated basis in accordance with GAAP after deduction for any minority interest in the Parent Guarantor’s Subsidiaries (except to the extent already deducted in calculating Net Worth).
 
“ Corresponding Debt ” means any amount, other than a Parallel Debt, which an Obligor owes to a Finance Party under or in connection with the Finance Documents.
 
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“ Deed of Covenants ” means, in relation to each Vessel registered under Hong Kong flag (or under any other Approved Flag whose laws prescribe a statutory form of vessel mortgage), a first priority deed of covenants collateral to the relevant Mortgage, in the agreed form.
 
“ Default ” means an Event of Default or 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.
 
“ Delegate ” means any delegate, agent, attorney or co-trustee or other person appointed by the Security Agent.
 
“ 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 of the Parties; 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 preventing that, or any other Party:
 
(c)                                   from performing its payment obligations under the Finance Documents; or
 
(d)                                  from communicating with other Parties 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, the Party whose operations are disrupted.
 
“ Distressed Investor ” means an entity whose principal investment strategy includes engaging in the purchase of loans or other debt securities with a view to gaining control of the business that has borrowed or issued those loans or other debt securities including without any limitation any of the investors listed in Schedule 9 ( Distressed Investors) .
 
“ DOC ” means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration (as defined in the ISM Code) under paragraph 13.2 of the ISM Code.
 
“ Dollars ” and “ US$ ” mean the lawful currency, for the time being, of the United States of America.
 
“ Earnings ” means, in relation to a Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Security Agent and which arise out of the use or operation of the Vessel owned by it including (but not limited to):
 
(a)                                  all freight, hire and passage moneys, money or compensation payable for the provision of services by or from such Vessel or under any charter commitment, compensation payable to that Borrower or the Security Agent in the event of requisition of such Vessel for hire, general average consolidation, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of such Vessel;
 
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(b)                                  all moneys which are at any time payable under Insurances in respect of loss of earnings; and
 
(c)                                   if and whenever such Vessel is employed on terms whereby any moneys falling within paragraphs (i) or (ii) is pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Vessel.
 
“ Earnings Accounts ” means, in relation to a Borrower, an account in the name of that Borrower with the Account Bank designated respectively “ [Name of Borrower] - Earnings Account ” or any other account opened or established with that office of the Account Bank or another office of the Account Bank which is designated by the Agent as the “ Earnings Account ” of that Borrower for the purposes of this Agreement.
 
“ Environment ” means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
 
(a)                                  air (including, without limitation, air within natural or man-made structures, whether above or below ground);
 
(b)                                  water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
 
(c)                                   land (including, without limitation, land under water).
 
“ Environmental Approval ” means any present or future permit, ruling, variance or other Authorisation required under Environmental Law.
 
“ Environmental Claim ” means any claim, proceeding, formal notice or investigation by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
 
“ Environmental Incident ” means:
 
(a)                                  any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from a Vessel; or
 
(b)                                  any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
 
(c)                                   any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is
 
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actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.
 
“ Environmental Law ” means any present or future law or regulation relating to pollution or protection of human health or the Environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
 
“ Environmentally Sensitive Material ” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
 
“ Event of Default ” means any event or circumstance specified as such in Clause 27 ( Events of Default ).
 
“ Excess Cash Flow ” means, in respect of each Financial Quarter (or, for the Financial Quarter in which the Utilisation occurs, the period from Utilisation to the end of that Financial Quarter), the aggregate amount of all Earnings received in respect of each Vessel during that period, after deduction of the following amounts:
 
(a)                                  all costs, fees and expenses paid under the Finance Documents during that period;
 
(b)                                  (subject to no Event of Default having occurred which is continuing) any amount paid or applied during that period in respect of any Operating Expenses in relation to the Vessels by the Borrowers or paid by the Parent Guarantor on behalf of the Borrowers and reimbursed to the Parent Guarantor in that period by way of Permitted Parent Loan:
 
(c)                                   all interest paid in cash on the Loan during that period; and
 
(d)                                  (if applicable) any Fixed Repayment Instalment paid during that period.
 
“ Excess Cash Flow Payment Date ” means each of 14 February, 15 May, 14 August and 14 November (being the 45 th  day after each Quarter Date, or, where such date is not a Business Day, the next following Business Day after that date.
 
“ Exchange Act ” means the US Securities Exchange Act 1934, as amended.
 
“ Existing Permitted Intercompany Loan ” means each of those loans and advances among the Borrowers and other members of the Group as set forth on Schedule 11 (the balances of which shall be as of September 30, 2015 but, for purposes of being an Existing Permitted Intercompany Loan, shall be in such amounts as of the Utilisation Date (with an update to Schedule 11 reflecting the balances thereof as of the Utilisation Date to be provided to the Agent within ten (10) Business Days of the Utilisation Date provided in each case that such loans and advances are (a) non-interest bearing and (b) subordinated and subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).
 
“ Facility ” means the term loan facility made available under this Agreement as described in Clause 2.1 ( The Facility ).
 
“ Facility Office ” means:
 
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(a)                                  in respect of a Lender, the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; and
 
(b)                                  in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
 
“ Facility Period ” means the period from and including the date of this Agreement to and including the date on which the Total Commitments have been reduced to zero and all Secured Liabilities have been fully paid and discharged.
 
“ FATCA ” means:
 
(a)                                  sections 1471 to 1474 of the Code or any associated regulations or other official guidance;
 
(b)                                  any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or any regulation referred to in paragraph (a) above; or
 
(c)                                   any agreement pursuant to the implementation of any treaty, law, regulation or other official guidance referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
 
“ FATCA Application Date ” means:
 
(a)                                  in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;
 
(b)                                  in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or
 
(c)                                   in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019;
 
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.
 
“ FATCA Deduction ” means a deduction or withholding from a payment under a Finance Document required by FATCA.
 
“ FATCA Exempt Party ” means a Party that is entitled to receive payments free from any FATCA Deduction.
 
“ Fee Letter ” means any letter or letters dated on or about the date of this Agreement between (i) the Agent or the Security Agent and (ii) the Borrowers setting out any of the fees referred to in Clause 11 ( Fees ).
 
“ Finance Document ” means:
 
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(a)                                  this Agreement;
 
(b)                                  any Security Document;
 
(c)                                   any Subordination Agreement;
 
(d)                                  any Fee Letter;
 
(e)                                   any Transfer Certificate;
 
(f)                                    any Assignment Agreement; or
 
(g)                                   any other document designated as a Finance Document by the Agent and the Borrowers.
 
“ Finance Party ” means the Agent the Security Agent or a Lender (together the “ Finance Parties ”)
 
“ Financial Indebtedness ” means any indebtedness for or in respect of:
 
(a)                                  moneys borrowed;
 
(b)                                  any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
 
(c)                                   any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
 
(d)                                  the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
 
(e)                                   receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
 
(f)                                    any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
 
(g)                                   any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
 
(h)                                  any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
 
(i)                                      the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above;
 
provided that Financial Indebtedness shall in any event not include any amount of any liability under trade payables if (a) incurred in the ordinary course of trading and operating the Vessels and (b) the agreement is in respect of the supply of assets or services and payment is due no more than one hundred and eighty (180) days after the date of invoice.
 
“ Financial Quarter ” means each period of three (3) months ending on a Quarter Date.
 
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“ Fixed Repayment Instalments ” means each repayment instalment payable by the Borrowers under Clause 6.1(a).
 
“ Fleet Market Value ” means the aggregate Market Value of the Fleet Vessels.
 
“ Fleet Vessels ” means any vessel (including each Vessel) from time to time directly owned by the Parent Guarantor or any of its wholly-owned Subsidiaries, as they appear in the then most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements ) and each a “ Fleet Vessel ”.
 
“ GAAP ” means generally accepted accounting principles in the United States of America.
 
“ General Assignment ” means, in relation to a Borrower, any assignment of the Earnings, Insurances, Requisition Compensation and Charters in respect of a Vessel owned by that Borrower, entered into by that Borrower in favour of the Security Agent in the agreed form.
 
“ Group ” means the Parent Guarantor and its Subsidiaries for the time being.
 
“ Group Cash Flow ” means, in respect of any financial year of the Parent Guarantor, the consolidated operation profit of the Group (“ Group EBITDA ”) for that period as shown in the Parent Guarantor’s audited financial statements:
 
(a)                                  adding the amount of any decrease (and deducting the amount of any increase) in working capital for that period;
 
(b)                                  adding the amount of any cash receipts (and deducting the amount of any cash payments) during that period in respect of any exceptional items not already taken account of in calculating Group EBITDA for that period;
 
(c)                                   adding the amount of any cash receipts during that period in respect of any tax rebates or credits and deducting the amount actually paid or due and payable in respect of taxes during that period by any member of the Group;
 
(d)                                  adding the amount of any increase in provisions, other non-cash debits and other non-cash charges (which are not current assets or current liabilities) and deducting the amount of any non-cash credits (which are not current assets or current liabilities) in each case to the extent taken into account in establishing Group EBITDA;
 
(i)                                      deducting the amount of any capital expenditure, investments or acquisitions actually made during that period by any member of the Group except (in each case) to the extent funded from insurance claims; and
 
(ii)                                   deducting the amount of any cash costs of pension items during that period to the extent not taken into account in establishing Group EBITDA.
 
“ Group Debt Service ” means, in respect of any financial year of the Parent Guarantor, the aggregate of:
 
(a)                                  finance charges of the Group for that period;
 
(b)                                  all scheduled and mandatory repayments of Financial Indebtedness of the Group falling due and any voluntary prepayments made during that period but excluding:
 
(i)                                      any amounts falling due under any overdraft or revolving facility and which were available for simultaneous redrawing according to the terms of that facility; and
 
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(ii)                                   any such obligations owed to any member of the Group;
 
(c)                                   the amount of the capital element of any payments in respect of that period payable under any finance lease entered into by any member of the Group,
 
and so that no amount shall be included more than once.
 
“ Group Excess Cash Flow ” means, for any financial year of the Parent Guarantor, Group Cash Flow for that period less Group Debt Service for that period.
 
“ Group Expenses ” means the actual and direct costs of the Parent Guarantor incurred in providing the on-shore general corporate management and administration services to the Group (including employment costs of any employee of the Parent Guarantor in providing such services and day-to-day overheads), but in each case (i) only to the extent such costs are properly incurred, and (ii) determined in a manner consistent with the line item titled “ General administrative and management fees ” in the Original Financial Statements of the Parent Guarantor but always excluding any amount payable in respect of costs and expenses equivalent to Operating Expenses in respect of any Fleet Vessel..
 
“ Guarantees ” means (i) the guarantee and indemnity in Clause 18 ( Guarantee and indemnity ) and (ii) the Parent Guarantee (and “ Guarantee ” means either of them).
 
“ Guarantors ” means together, HoldCo and the Parent Guarantor.
 
“ HMT ” means Her Majesty’s Treasury.
 
“ Holding Company ” means, in relation to a person, any other person in respect of which it is a Subsidiary.
 
“ IFRS ” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
 
“ Index-linked Charter ” means a charterparty entered into by a Borrower and a charterer where the charter hire is payable on a floating basis linked to the Baltic Exchange Dry Index or any sub-index thereof.
 
“ Initial Valuation ” means, in relation to a Vessel, the Valuation of that Vessel supplied to the Agent as a condition precedent under this Agreement on or before the Utilisation Date.
 
“ Insolvency Event ” in relation to an entity means that the entity:
 
(a)                                  is dissolved (other than pursuant to a consolidation, amalgamation or merger);
 
(b)                                  becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
 
(c)                                   makes a general assignment, arrangement or composition with or for the benefit of its creditors;
 
(d)                                  institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;
 
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(e)                                   has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and:
 
(i)                                      results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
 
(ii)                                   is not dismissed, discharged, stayed or restrained in each case within thirty (30) days of the institution or presentation thereof;
 
(f)                                    has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;
 
(g)                                   has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
 
(h)                                  seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));
 
(i)                                      has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within thirty (30) days thereafter;
 
(j)                                     causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (i); or
 
(k)                                  takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
 
“ Insurances ” means, in relation to a Vessel:
 
(a)                                  any policy and contract of insurance including entries of that Vessel in any protection and indemnity or war risk association, effected in relation to that Vessel and that Vessel’s Earnings whether before or after the date of this Agreement; and
 
(b)                                  all rights and other assets relating to, or derived from, any such policies and contracts of insurance (including any rights to a return for a premium.
 
“ Interest Period ” means, in relation to 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 ).
 
“ Interpolated Screen Rate ” means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
 
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(a)                                  the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and
 
(b)                                  the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,
 
each as of the Specified Time for the currency of that Loan.
 
“ 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 Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).
 
“ ISM Company ” means, at any given time, the company responsible for a Vessel’s compliance with the ISM Code.
 
“ ISSC ” means a valid and current International Ship Security Certificate issued under the ISPS Code.
 
“ ITA ” means the Income Tax Act 2007.
 
“ Joint Venture ” means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.
 
“ Legal Reservations ” means:
 
(a)                                  the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
 
(b)                                  the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;
 
(c)                                   the limitation of the enforcement of the terms of leases of real property by laws of general application to those leases;
 
(d)                                  similar principles, rights and remedies under the laws of any Relevant Jurisdiction; and
 
(e)                                   any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions supplied to the Agent as a condition precedent under this Agreement on or before the Utilisation Date.
 
“ Lender ” means:
 
(a)                                  any Original Lender; and
 
(b)                                  any other person 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 the terms of this Agreement.
 
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“ Leverage ” means the aggregate Financial Indebtedness (excluding undrawn working capital lines) of the Group divided by the Value Adjusted Total Assets.
 
“ LIBOR ” means, in relation to the Loan or any part of it:
 
(a)                                  the applicable Screen Rate; or
 
(b)                                  (if no Screen Rate is available for the Interest Period of that Loan or any part of it) the Interpolated Screen Rate for that Loan;
 
(c)                                   if:
 
(i)                                      no Screen Rate is available for Dollars; or
 
(ii)                                   no Screen Rate is available for the Interest Period of the Loan or any part of it and it is not possible to calculate the Interpolated Screen Rate for the Loan or part of it,
 
the Reference Bank Rate,
 
as of in the case of paragraphs (a) and (c) above the Specified Time on the Quotation Day for Dollars and for a period equal in length to the Interest Period of the Loan, or part of it and, if any such rate is below zero, LIBOR shall be deemed to be zero.
 
“ Limitation Acts ” means the Limitation Act 1980, and the Foreign Limitation Periods Act 1984.
 
“ Loan ” means the loan made or to be made under the Facility or, as the context requires, the principal amount outstanding for the time being of that loan.
 
“ Major Casualty ” means, in relation to a Vessel, any casualty to that Vessel in respect of which the claim or the aggregate of the claims against all insurers, inclusive of any franchise or deductible, exceeds or may exceed the Major Casualty Amount.
 
“ Major Casualty Amount ” means, in relation to a Vessel, US$1,000,000 or the equivalent in any other currency.
 
“ Majority Lenders ” means a Lender or Lenders whose Commitments aggregate more than 66 2 / 3 % of the Total Commitments or, if the Total Commitments have been reduced to zero, aggregated more than 66 2 / 3 % of the Total Commitments immediately prior to the reduction.
 
“ Make Whole Amount ” means an amount equal to the greater of:
 
(a)                                  3.0 per cent. of the principal amount to be prepaid; and
 
(b)                                  the excess of:
 
(i)                                      the present value on the date of prepayment of the aggregate of: (x) 103.00 per cent. of the principal amount to be prepaid as if that amount would otherwise be prepaid on the date which is immediately after the second anniversary of the Utilisation Date; and (y) the amount equal to the amount of all interest which would otherwise have accrued for the period from the date of such prepayment (assuming for these purposes that LIBOR is the greater of (I) the LIBOR rate for a period of six months on the date which is two (2) Business Days prior to the date of prepayment and (II) zero) to immediately after the date which is immediately after the second anniversary of the Utilisation Date,
 
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computed using a discount rate equal to the US Treasury Rate plus 50 basis points; over
 
(ii)                                   the principal amount to be prepaid.
 
“ Management Agreements ” means any Technical Management Agreements and any Commercial Management Agreements.
 
“ Manager’s Undertaking ” means, in relation to a Vessel, the letter(s) of undertaking from each Approved Manager subordinating its rights and claims against that Vessel and the relevant Borrowers to the rights of the Finance Parties, in the agreed form.
 
“ Margin ” means six point one two five per cent (6.125%) per annum.
 
“ Market Value ” means, in relation to a Vessel, a Fleet Vessel or an Additional Vessel, the value of that vessel (as the case may be) determined in accordance with Clause 26.2 ( Valuation of Vessels/Fleet Vessels ).
 
“ Material Adverse Effect ” means, in the opinion of the Majority Lenders, a material adverse effect on:
 
(a)                                  the business, operations, property, condition (financial or otherwise) or prospects of an Obligor; or
 
(b)                                  the ability of an Obligor to perform its obligations under any Finance Document; or
 
(c)                                   the validity or enforceability of, or the effectiveness or ranking of any Security granted or purported to be granted pursuant to any of, the Finance Documents; or
 
(d)                                  the rights or remedies of any Finance Party under any of the Finance Documents.
 
“ Maximum A-Type Loan Amount ” means an amount of up to the lower of:
 
(a)                                  US$92,500,000; and
 
(b)                                  the aggregate of 50% of the Market Value of each A-Type Vessel (on an individual basis).
 
“ Maximum B-Type Loan Amount ” means an amount of up to the lower of:
 
(a)                                  US$7,500,000; and
 
(b)                                  the aggregate of the lower of (i) 50% of the Market Value of each B-Type Vessel (on an individual basis) and (US$2,500,000 multiplied by the number of B-Type Vessels).
 
“ Maximum Loan Amount ” means an amount of up to the lower of:
 
(a)                                  US$100,000,000; and
 
(b)                                  the aggregate of:
 
(i)                                      Maximum A-Type Loan Amount; and
 
(ii)                                   Maximum B-Type Loan Amount.
 
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“ Minimum Consolidated Net Worth ” means an amount not less than (a) US$786,360,204 plus (b) fifty per cent (50%) of the value of any subsequent primary equity offerings of the Parent Guarantor completed after 31 March 2015.
 
“ Minimum Liquidity Account ” means an account in the name of HoldCo with the Account Bank designated as “ Genco Holdings Limited — Minimum Liquidity Account ” or any other account opened or established with that office of the Account Bank or another office of the Account Bank which is designated by the Agent as the “Minimum Liquidity Account” for the purposes of this Agreement.
 
“ Minimum Liquidity Amount ” means an amount equal to A multiplied by B, where:
 
A = the number of Vessels (and for the purposes of this definition excluding any Vessel in respect of which the Notional Vessel Tranche has been prepaid in full following a sale or Total Loss); and
 
B = US$750,000.
 
“ Mortgage ” means, in relation to a Vessel, the first priority or first preferred ship mortgage (as the case may be) granted or to be granted (as the context so requires) over that Vessel in the agreed form.
 
“ Net Worth ” means, as to any person, the consolidated total assets of the person minus the consolidated total liabilities of the person and its Subsidiaries determined in each case in accordance with GAAP after deduction for any minority interest in the Parent Guarantor’s Subsidiaries.
 
“ New Lender ” has the meaning given to that term in Clause 28 ( Changes to the Lenders ).
 
“ Notional Vessel Tranche ” means, in respect of any Vessel, the proportion of the Utilisation allocated to that Vessel based on its contribution to the Maximum Loan Amount relative to the aggregate Maximum Loan Amount in relation to all Vessels (which shall initially be as set out in the relevant column of the Utilisation Request), as reduced by any repayments (whether Fixed Repayment Instalments or otherwise) or prepayments from time to time in accordance with the terms of this Agreement (whether by application of excess cash flow or otherwise).
 
“ Obligors ” means the parties to the Finance Documents (other than the Finance Parties and any parties who are not a member of the Group) and “Obligor” means any one of them.
 
“ OFAC ” means the Office of Foreign Assets Control of the US Department of the Treasury.
 
“ Operating Expenses ” means expenses properly and reasonably incurred by a Borrower in connection with the ownership, operation, technical management, employment, maintenance (including expenses relating to dry-docking costs and Approved Upgrades), repair and insurance of a Vessel.
 
“ Original Financial Statements ” means:
 
(a)                                  in relation to the Parent Guarantor, the audited consolidated financial statements of the Group for the financial year ended 31 December 2014; and
 
(b)                                  in relation to a Borrower, its management accounts for the month ended 30 September 2015.
 
“ Original Jurisdiction ” means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement.
 
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“ Overseas Regulations ” means the Overseas Companies Regulations 2009 (SI 2009/1801).
 
“ Parallel Debt ” means any amount which an Obligor owes the Security Agent under Clause 30.28 ( Parallel Debt ).
 
“ Parent Guarantee ” means a guarantee and indemnity to be granted by the Parent Guarantor in favour of the Security Agent in the agreed form.
 
“ Parent Guarantor ” means Genco Shipping & Trading Limited, a corporation formed under the laws and jurisdiction of the Republic of the Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
 
“ Parent Guarantor Dividend Criteria ” means, at the time of a proposed dividend:
 
(a)                                  the making of such dividend payment does not and would not constitute a breach of any restriction or constitute a default under any other loan facility or financing arrangement of any member of the Group;
 
(b)                                  the VTL Coverage (excluding, for the purposes of such calculation, any additional security provided pursuant to Clause 26.1 ( Additional Security ) is greater than 200% (as evidenced by Valuations);
 
(c)                                   (unless the Agent has agreed otherwise acting on the instruction of all the Lenders) the Loan has been repaid or prepaid by an amount of not less than US$25,000,000;
 
(d)                                  the dividend is to be funded from Group Excess Cash Flow in respect of each financial quarter of the Parent Group end after the Utilisation Date to the extent not otherwise applied by the Group; and
 
(e)                                   no Default has occurred and is continuing or would result from the making of such dividend payment.
 
“ Participating Member State ” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
 
“ Party ” means a party to this Agreement (together the “ Parties ”).
 
“ Permitted Dividend ” means a Permitted Dividend (Parent Guarantor) or a Permitted Dividend (Borrower/HoldCo).
 
“ Permitted Dividend (Borrowers/HoldCo) ” means a dividend made by a Borrower to HoldCo, or by HoldCo to the Parent Guarantor, in conformity with the with Borrowers/HoldCo Dividend Criteria at the date of the declaration of such dividend, as certified to the Agent in writing by the Chief Financial Officer of the Parent Guarantor.
 
“ Permitted Dividend (Parent Guarantor) ” means a dividend made by the Parent Guarantor after 1 May 2017 in conformity with the Parent Guarantor Dividend Criteria at the date of the declaration of such dividend, as certified to the Agent in writing by the Chief Financial Officer of the Parent Guarantor
 
“ Permitted Downstream Loans ” means any loans from (i) Parent Guarantor to HoldCo or (ii) from HoldCo to any Borrower or Borrowers provided that, in each case, such loan is (a) non-interest bearing and (b) subordinated and subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).
 
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“ Permitted Holders ” means (a) Mr. Peter Georgiopoulos (including his immediate family members and trusts to which he or such family members hold a beneficial interest), (b) any corporation or any other entity directly or indirectly controlled by Mr. Peter Georgiopoulos (for so long as it is directly or indirectly controlled by him) and (c) any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) who may at the time of the signing of this Agreement own, directly or indirectly, beneficially or of record, shares representing more than thirty per cent of the voting or economic equity interests of the Parent Guarantor, any affiliate of any such person, and any member of such group or affiliate of such member.
 
“ Permitted Inter-Borrower Loan ” means any loan made by any Borrower to any other Borrower or Borrowers or HoldCo, or from HoldCo to any Borrower or Borrowers provided in each case that such loan is subordinated and subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders.
 
“ Permitted Intercompany Loans ” means:
 
(a)                                  the Existing Permitted Intercompany Loans;
 
(b)                                  any Permitted Inter-Borrower Loan;
 
(c)                                   any Permitted Up-Stream Loan;
 
(d)                                  any Permitted Downstream Loan; and
 
(e)                                   any Permitted Parent Loan,
 
provided in each case it is (i) advanced on a non-interest bearing basis and (b) subordinated and subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders.
 
“ Permitted Maritime Lien ” means, in relation to a Vessel:
 
(a)                                  unless a Default is continuing, any ship repairer’s or outfitter’s possessory lien in respect of the Vessel for an amount not exceeding the Major Casualty Amount or the equivalent in any other currency;
 
(b)                                  any lien on the Vessel for masters, officer’s or crew’s wages outstanding in the ordinary course of its trading and in accordance with usual maritime practise; or
 
(c)                                   liens for salvage.
 
“ Permitted Parent Loans ” means any loans or advances made by a Borrower to the Parent Guarantor from the balance standing to the credit of an Earnings Account solely and exclusively for the purposes of directly funding the actual payment of (or reimbursement of the Parent Guarantor for amounts directly and actually paid by the Parent Guarantor on behalf of a Borrower solely and exclusively in respect of) (a) any Operating Expenses of a Borrower and (b) the relevant proportion of Group Expenses incurred by the Parent Guarantor in accordance with the terms of this Agreement, provided always that (i) such loans or advances are funded with amounts which could otherwise be applied in direct payment of such Operating Expenses or Group Expenses expressly permitted to be made pursuant to the terms of the Finance Documents; and (ii) such loans or advances are subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).
 
“ Permitted Security ” means, in relation to a Vessel, any Security over that Vessel which is:
 
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(a)                                  granted by the Finance Documents;
 
(b)                                  a Permitted Maritime Lien; or
 
(c)                                   approved in writing by the Agent (on behalf of all Lenders).
 
“ Permitted Transaction ” means:
 
(a)                                  any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Finance Documents; or
 
(b)                                  transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm’s length terms;
 
(c)                                   any amalgamation, demerger, merger, consolidation or corporate reconstruction between the Parent Guarantor and a Group entity or a company which is, at the date of the Agreement, consolidated into the accounts of the Parent Guarantor but excluding for the avoidance of doubt any Guarantor (other than the Parent Guarantor) or any Borrower; or
 
any amalgamation, demerger, merger, consolidation or corporate reconstruction between the Parent Guarantor and any other Person (other than HoldCo or a Borrower) in which the surviving entity in such transaction will be the Parent Guarantor and provided that the Agent is satisfied (acting reasonably) that such amalgamation, demerger, merger, consolidation or corporate reconstruction would not result in a Material Adverse Effect.
 
“ Permitted Up-Stream Loans ” means any loans or advances made by a Borrower to HoldCo, or by HoldCo to the Parent Guarantor, with any proceeds referred to in paragraph (b)(iii) of Clause 6.2 ( Payment of Excess Cash Flow) (in the case of the Borrowers) or from dividends or other Permitted Up-Stream Loans from Borrowers (in the case of HoldCo), which, in each case, would otherwise be permitted to be made as a Permitted Dividend (Borrowers/HoldCo) provided always that such loan is (a) non-interest bearing and (b) subject to Transaction Security in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders) provided such loan or advance is made within five (5) Business Days of an Excess Cash Flow Payment Date and, together with any other Permitted Dividends (Borrowers/Holdco) and Permitted Up-Stream Loans made during such Financial Quarter does not exceed the aggregate amount available for such purposes under paragraph (b)(iii) of Clause 6.2 ( Payment of Excess Cash Flow ).
 
“ Permitted Vessel Disposal ” means a sale of a Vessel by a Borrower provided always that:
 
(a)                                  no Default has occurred and is continuing or would occur as a result of the sale,
 
(b)                                  it is on arm’s length terms for cash proceeds and for market value as at the date of contracting for sale;
 
(c)                                   the sale must be to an third party who is not a n Affiliate of any member of the Group (or any shareholder, officer, employee or director of a member of the Group or any of their respective Affiliates) (each a “ Related Party ”) provided that the Vessel may be sold to Related Party if the Agent has received, in form and substance satisfactory to the Agent, each of the following prior to entering into a legally binding commitment in relation to such sale:
 
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(i)                                      a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Parent Guarantor confirming that the transaction is on arm’s length terms;
 
(ii)                                   evidence that the sale was approved by a majority of the disinterested members of the board of directors of the Parent Guarantor; and
 
(iii)                                evidence from a third party that the price paid by the Affiliate is fair from a financial point of view and is on terms not less favourable than might have been obtained in a comparable sale at such time on an arm’s length basis from a third party who is not an Affiliate of any member of the Group;
 
(d)                                  (prior to entering into a legally binding commitment in relation to such sale) the Agent has received evidence in form and substance satisfactory to it demonstrating that the net sale proceeds from the sale of the Vessel are sufficient to ensure that the prepayment requirements set out in Clause 7.3 ( Mandatory prepayment ) will be satisfied (including but not limited to the requirement to pay all accrued interest, fees, any prepayment fees and other amounts payable under the Finance Documents); and
 
(e)                                   upon completion of the sale of the Vessel the net sale proceeds are immediately applied in prepayment in accordance with Clause 7.3 ( Mandatory prepayment ) and in payment of such other amounts due and payable under the Finance Documents.
 
“ Prepayment Fee ” means, in respect of any amount of principal prepaid under Clause 7.5 ( Prepayment and cancellation ):
 
(a)                                  the Make Whole Amount if the prepayment occurs on or before the two year anniversary of the Utilisation Date;
 
(b)                                  3.00% of the amount prepaid if the prepayment occurs after the second anniversary of the Utilisation Date but on or before the third anniversary of the Utilisation Date;
 
(c)                                   2.00% of the amount prepaid if the prepayment occurs after the third anniversary of the Utilisation Date but on or before the fourth anniversary of the Utilisation Date; and
 
(d)                                  nil if the prepayment occurs after fourth anniversary of the Utilisation Date.
 
“ Quarter Date ” means 31 st  March, 30 th  June, 30 th  September and 31 st  December of each calendar year.
 
“ Quasi-Security ” has the meaning given to that term in Clause 22.9 ( Negative pledge ).
 
“ Quotation Day ” means, in relation to any period for which an interest rate is to be determined, two (2) 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 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).
 
“ Receiver ” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Property.
 
“ Reference Bank Rate ” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the Relevant Interbank Market in
 
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Dollars for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.
 
“ Reference Banks ” means the principal London offices of Barclays Bank plc, Lloyds Bank plc, and HSBC Bank plc , or such other banks as may be appointed by the Agent in consultation with the Borrower.
 
“ 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 Document ” means:
 
(a)                                  any Finance Document;
 
(b)                                  any Technical Management Agreement and, to the extent relevant, any Commercial Management Agreement;
 
(c)                                   each Charter; and
 
(d)                                  any other document designated as such by the Agent and any Obligor.
 
“ Relevant Interbank Market ” means the London interbank market.
 
“ Relevant Jurisdiction ” means, in relation to an Obligor:
 
(a)                                  its jurisdiction of incorporation;
 
(b)                                  a country in which it has the centre of its main interests or in which its central management and control is or has recently been exercised or where it conducts its business;
 
(c)                                   a country in which its overall net income is subject to corporation tax, income tax or any similar tax;
 
(d)                                  a country in which its assets (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which it maintains a branch or a permanent place of business;
 
(e)                                   a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to it, whether as main or territorial or ancillary proceedings, or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b), (c) or (d);
 
(f)                                    any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated; and
 
(g)                                   the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
 
“ Repayment Instalment ” means each scheduled instalment for the repayment of the Loan under Clause 6 ( Repayment ).
 
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“ Repeating Representations ” means each of the representations set out in Clause 19 ( Representations and warranties ), other than Clauses 19.8, 19.9 and 19.25, 19.27 and 19.28(a) and (b) any representation in any other Finance Document which is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.
 
“ Representative ” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
 
“ Requisition Compensation ” means, in relation to a Vessel:
 
(a)                                  any and all compensation or other monies payable by reason of any act or event such as is referred to in paragraph (b) or (c) of the definition of “Total Loss” relating to that Vessel; and
 
(b)                                  all claims, rights and remedies of the relevant Borrower against the government or official authority or person or persons claiming to be or to represent a government or official authority or other entity in relation to (a) above.
 
“ Restricted Person ” means a person that is:
 
(a)                                  listed on, or owned or controlled by a person listed on any Sanctions List;
 
(b)                                  located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions); or
 
(c)                                   otherwise a target of Sanctions.
 
“ Retention Account ” means an account in the name of HoldCo with the Account Bank designated “ Genco Holdings Limited — Retention Account ” or any other account opened or established with that office of the Account Bank or another office of the Account Bank which is designated by the Agent as the “Retention Account” of HoldCo for the purposes of this Agreement.
 
“ Sanctions ” means any economic or trade sanctions laws, embargoes, regulations. freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):
 
(a)                                  imposed by law or regulation of the United Kingdom, the Council of the European Union or any of its Members States, the United Nations or its Security Council or the government of the United States of America, whether or not any Obligor or any Affiliate is legally bound to comply with the foregoing;
 
(b)                                  the respective governmental institutions and agencies of any of the foregoing, including without limitation, OFAC, the United States Department of State, and HMT (together “ Sanctions Authorities ”); or
 
(c)                                   otherwise imposed by any law or regulation by which any Obligor or any Affiliate of any of them is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Obligor or any Affiliate of any of them.
 
“ Sanctions List ” means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the “Consolidated List of Financial Sanctions Targets and Investment Ban List”
 
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issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities that has the effect of prohibiting transactions with such persons;
 
“ 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 the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers.
 
“ 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 Finance Party under or in connection with any Finance Document.
 
“ Secured Party ” means each Finance Party, from time to time party to this Agreement, any Receiver or any Delegate (together the “ Secured Parties ”).
 
“ Security ” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
 
“ Security Documents ” means:
 
(a)                                  any Mortgage;
 
(b)                                  any Deed of Covenants;
 
(c)                                   any General Assignment;
 
(d)                                  any Share Charges;
 
(e)                                   any Account Security;
 
(f)                                    any Account Control Agreement;
 
(g)                                   any Guarantee;
 
(h)                                  any Manager’s Undertaking; and
 
(i)                                      any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under any Finance Document.
 
“ Security Property ” means:
 
(a)                                  the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;
 
(b)                                  all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Secured Liabilities to the Security Agent as trustee for the Finance Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor or any other person in favour of the Security Agent as trustee for the Finance Parties;
 
(c)                                   the Security Agent’s interest in any turnover trust created under the Finance Documents; and
 
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(d)                                  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.
 
“ Share Charges ” means together:
 
(a)                                  the share charge granted or to be granted (as the context so requires) by the Parent Guarantor in favour of the Security Agent over the entire issued share capital of HoldCo; and
 
(b)                                  each share charge granted or to be granted (as the context so requires) by HoldCo in favour of the Security Agent over the entire issued share capital of each Borrower (other than Genco Cavalier LLC; and
 
(c)                                   the membership interest security deed granted or to be granted (as the context so requires) by HoldCo in favour of the Security Agent over the entire limited liability company interests in Genco Cavalier LLC, in each case in the agreed form (and each a “ Share Charge ”).
 
“ Specified Time ” means a time determined in accordance with Schedule 7 ( Timetables ).
 
“ Subordination Agreement ” means a subordination agreement entered into or to be entered into by the Obligors and the Security Agent in the agreed form.
 
“ Subsidiary ” means, as to any person, (i) 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 (ii) 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.
 
“ Tax ” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
 
“ Technical Management Agreement ” means, in relation to a Vessel, any technical management agreement entered into or to be entered into (as applicable) between the relevant Borrower and an Approved Technical Manager in form and substance acceptable to the Agent (acting on the instructions of the Majority Lenders).
 
“ Termination Date ” means 30 September 2020.
 
“ Total Commitments ” means the aggregate of the Commitments.
 
“ Total Assets ” means the amount which is equal to the total assets of the Group as shown in the Parent Guarantor’s applicable financial statements after deduction for any minority interest in the Parent Guarantor’s Subsidiaries provided that for all purposes of this definition no consideration shall be given to any interest in any entity in respect of which the Parent Guarantor does not directly or indirectly own or control more that 50% of the economic and voting interests in that entity.
 
“ Total Loss ” means, in relation to a Vessel:
 
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(a)                                  any actual, constructive, compromised, agreed or arranged total loss of that Vessel;
 
(b)                                  any expropriation, confiscation, requisition or acquisition of that Vessel, whether or not for consideration (full, partial or nominal), 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; and
 
(c)                                   any arrest, capture, seizure or detention of that Vessel (including any hijacking or theft) unless it is within thirty (30) days redelivered to the relevant Borrower’s full control.
 
“ Total Loss Date ” means, in relation to a Vessel:
 
(a)                                  in the case of an actual loss of that Vessel, the date on which it occurred or, if that is unknown, the date when that Vessel was last heard of;
 
(b)                                  in the case of a constructive, compromised, agreed or arranged total loss of that Vessel, the earliest of:
 
(i)                                      the date on which a notice of abandonment is given to the insurers; and
 
(ii)                                   the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with the Vessel’s insurers in which the insurers agree to treat that Vessel as a total loss; and
 
(c)                                   in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.
 
“ Transaction Security ” means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
 
“ Transfer Certificate ” means a certificate substantially in the form set out in Schedule 4 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrowers.
 
“ 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 Agent executes the relevant Assignment Agreement or Transfer Certificate.
 
“ 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 any Finance Document.
 
“ US Tax Obligor ” means:
 
(a)                                  an Obligor which is resident for tax purposes in the United States of America; or
 
(b)                                  an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
 
“ Utilisation ” means the utilisation of the Facility.
 
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“ Utilisation Date ” means the date of the Utilisation, being the date on which the Utilisation is to be made.
 
“ Utilisation Request ” means a notice substantially in the form set out in Schedule 3 ( Utilisation Request ).
 
“ Valuation ” means the average of two (2) Vessel or Fleet Vessel valuations, each prepared:
 
(a)                                  as at a date not more than fifteen (15) days previously;
 
(b)                                  by an Approved Broker;
 
(c)                                   with or without physical inspection of the vessel (as the Agent may require);
 
(d)                                  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 existing charter or other contract of employment; and
 
(e)                                   after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
 
“ Value Adjusted Total Assets ” means the Total Assets of the Parent Guarantor adjusted in each case by substituting the book value of each Fleet Vessel (as evidenced in the most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements )) with the Market Value of that Fleet Vessel.
 
“ 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.
 
“ Vessels ” means each vessel described in Schedule 8 ( Details of Vessels ) (and each a “ Vessel ”) except to the extent it has been sold or has become a Total Loss.
 
“ VTL Coverage ” has the meaning given to such term in Clause 26.1( Additional Security ).
 
1.2                                Construction
 
(a)                                  Unless a contrary indication appears, a reference in this Agreement to:
 
(i)                                      the “ Account Bank ”, the “ Agent ”, any “ Finance Party ”, any “ Lender ”, any “ Obligor ”, any “ Party ”, any “ Secured Party ”, the “ Security Agent ” 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 and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;
 
(ii)                                   an “agency” of a state includes any local or other authority, self-regulating or other recognised body or agency, central or federal bank, department, government, legislature, minster, ministry, self-regulating organisation,
 
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official or public or statutory person (whether autonomous or not) or, or of the government of, that state or political sub-division in or of that state;
 
(iii)                                a document in “ agreed form ” is a document which is previously agreed in writing by or on behalf of the any Obligor party to it and the Agent or, if not so agreed, is in the form and substance specified by the Agent (acting with the instructions of all Lenders);
 
(iv)                               “ approved ” means approved in writing by the Agent, acting on the instructions of the Majority Lenders;
 
(v)                                  “ assets ” includes present and future properties, revenues and rights of every description;
 
(vi)                               “ authorisation ” means an authorisation, consent, approval, resolution, licence, exemption or by a person by whom the same is required by law;
 
(vii)                            “ disposal ” includes a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and “dispose” will be construed accordingly;
 
(viii)                         the “ equivalent ” of an amount specified in a particular currency (“specific currency amount”) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specific currency amount in the London foreign exchange market at 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of such purchase being the “Agent’s spot rate of exchange”);
 
(ix)                               “ excess risks ” means, in relation to a Vessel, the proportion (if any) of claims for general average, salvage and salvage charges not recoverable under the hull and machinery insurances in respect of that Vessel in consequence of the value at which such Vessel is assessed for the purpose of such claims exceeding its insured value;
 
(x)                                  a “ Finance Document ” or “ Relevant Document ” or any other agreement or instrument is a reference to that Finance Document or Relevant Document or other agreement or instrument as amended, novated, supplemented, extended or restated from time to time;
 
(xi)                               “ guarantee ” means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
 
(xii)                            “ 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;
 
(xiii)                         “ 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)                                if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in
 
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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)                                the above rules will only apply to the last month of any period.
 
(xiv)                        “ obligatory insurances ” means all insurances effected, or which any Borrower is required to effect, under Clause 24 ( Insurance Undertakings ) or any other provision of any Finance Document;
 
(xv)                           a “ person ” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
 
(xvi)                        a “ policy ” in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
 
(xvii)                     “ protection and indemnity risks ” means the usual risks covered by a protection and indemnity association that is a member of the International Group of P&I Clubs, 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 Time Clauses (Hulls)(1/11/02 or 1/11/03) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
 
(xviii)                  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 of any regulatory, self-regulatory or other authority or organisation;
 
(xix)                        “ war risks ” includes the risk of mines and all risks excluded by clause 29 of the Institute Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time clauses (Hulls) (1/11/1995) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83);
 
(xx)                           words importing the plural shall include the singular and vice versa and words importing a gender shall include every gender;
 
(xxi)                        a provision of law is a reference to that provision as amended or re-enacted; and
 
(xxii)                     a time of day is a reference to London time.
 
(b)                                  Section, Clause and Schedule headings are for ease of reference only.
 
(c)                                   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.
 
(d)                                  A Default (other than an 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.
 
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1.3                                Third Party Rights
 
(a)                                  Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “ Third Parties Act ”) to enforce or to enjoy the benefit of any term of this Agreement.
 
(b)                                  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 person described in Clause 1.1 ( Definitions ) may, subject to this Clause 1.3(c) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
 
1.4                                Conflict
 
In the event of conflict between the provisions of this Agreement and any other Finance Documents, unless a contrary intention appears the provision of this Agreement shall prevail.
 
2.                                       THE FACILITY
 
2.1                                The Facility
 
Subject to the terms of this Agreement, the Lenders shall make available to the Borrowers a term loan facility in a single advance in an amount not exceeding the Maximum Loan Amount (as adjusted in accordance with the terms of this Agreement).
 
2.2                                Finance Parties’ rights and obligations
 
(a)                                  The obligations of each Finance Party under the Finance Documents are several. 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)                                   A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
 
3.                                       PURPOSE
 
3.1                                Purpose
 
Each Borrower shall apply all amounts borrowed by it under the Facility only for general working capital purposes.
 
3.2                                Monitoring
 
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
 
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4.                                       CONDITIONS OF UTILISATION
 
4.1                                Initial conditions precedent
 
The Borrowers may not deliver the Utilisation Request unless the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Schedule 2, Part I ( Conditions Precedent to Utilisation Request ) in form and substance satisfactory to the Agent. The Agent shall notify the Obligors and the Lenders promptly upon being so satisfied.
 
4.2                                Utilisation conditions precedent
 
The Lenders will only be obliged to comply with Clause 5.4 ( Lenders’ participation ) in relation to the Utilisation if:
 
(a)                                  on or before the Utilisation Date (and prior to the Utilisation), the Agent has received all of the documentation and other evidence listed in Schedule 2, Part II ( Conditions Precedent to Utilisation ) in form and substance satisfactory to the Agent;
 
(b)                                  on the date of the Utilisation Request and on the proposed Utilisation Date:
 
(i)                                      no Default is continuing or would result from the proposed Utilisation;
 
(ii)                                   all representations and warranties under any of the Finance Documents made or to be made by an Obligor are true and accurate as at that date with reference to the facts and circumstances then existing;
 
(iii)                                the provisions of paragraph (c) of Clause 10.3 ( Alternative basis of interest or funding, suspension ) do not apply; and
 
(iv)                               no Vessel has not been the subject of sale or Total Loss;
 
(c)                                   the Utilisation requested is not for more than the Maximum Loan Amount (as evidenced by the Initial Valuations for each Vessel); and
 
(d)                                  the Agent is satisfied that the Utilisation requested shall not exceed the Total Commitments.
 
4.3                                Waiver of Conditions Precedent
 
If the Agent, acting upon the instructions of all Lenders (which authorisation the relevant Lenders shall have full power to withhold), permits the Utilisation of the Facility before certain of the conditions referred to in Clause 4.2(a) and/or Clause 4.2(b) are satisfied, the Borrowers shall ensure that such conditions are satisfied with five (5) Business Days after the Utilisation Date (or such longer period as the Agent may, with the authorisation of all Lenders, specify) and any failure of the Borrowers to do so within that period shall constitute an Event of Default.
 
4.4                                Conditions subsequent
 
The Borrowers undertake to deliver or to cause to be delivered to the Agent within thirty (30) days after the Utilisation Date the additional documents and other evidence listed in Part III of Schedule 2 ( Conditions Subsequent ).
 
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5.                                       UTILISATION
 
5.1                                Delivery of a Utilisation Request
 
The Borrowers may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.
 
5.2                                Completion of a Utilisation Request
 
A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
 
(a)                                  the proposed Utilisation Date is a Business Day within the Availability Period;
 
(b)                                  the currency and amount of the Utilisation comply with 5.3 ( Currency and amount );
 
(c)                                   it specifies the account and bank to which the proceeds of the Loan is to be credited;
 
(d)                                  the proposed Interest Period complies with Clause 9 ( Interest Periods ).
 
5.3                                Currency and amount
 
(a)                                  The currency specified in the Utilisation Request must be Dollars.
 
(b)                                  There shall be no more than one Utilisation.
 
5.4                                Lenders’ participation
 
(a)                                  If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.
 
(b)                                  The amount of each Lender’s participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan. No Lender is obliged to participate in the Loan if, as a result, its share in the Loan then outstanding or in respect of which the Utilisation Request has been issued would exceed its Commitment.
 
(c)                                   The Agent shall notify each Lender of the amount of the Loan and the amount of its participation in that Loan by the Specified Time.
 
5.5                                Disbursement
 
The Agent shall, on the Utilisation Date, pay to, and for the account of, the Borrowers the amount which the Agent receives from the Lenders in respect of the Utilisation, such payment to be made in like funds as the Agent so receives from the Lenders to the account (which may be an account of the Parent Guarantor) of as specified in the Utilisation Request.
 
6.                                       REPAYMENT
 
6.1                                Fixed Repayment Instalments
 
Subject to the provisions of this Agreement the Borrowers shall repay the Loan by:
 
(a)                                  twelve (12) consecutive quarterly instalments commencing on the first Quarter Date following the second anniversary of the Utilisation date, and thereafter on each subsequent Quarter Date, in each case in an amount of two million five hundred
 
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thousand Dollars (US$2,500,000), provided always that the first such instalment shall be reduced to an amount equal to A x (B / C), where:
 
A = US$2,500,000;
 
B = the number of days from and including the second anniversary of the Utilisation Date to and including 31 December 2017; and
 
C = the number of days from (and including) 1 October 2017 to (and including) 31 December 2017.
 
(b)                                  the balance of the Loan shall be repaid in full as a balloon repayment on the Termination Date, together with all other amounts then due and outstanding under the Finance Documents (“ Balloon Instalment ”).
 
6.2                                Cash Sweep Repayments
 
(a)                                  Calculation of Excess Cash Flow
 
The amount of Excess Cash Flow shall be calculated on an aggregate basis for the Borrowers in respect of each Financial Quarter ending on each Quarter Date (commencing with the first Quarter Date after the date of this Agreement and including, for the avoidance of doubt, any Quarter Date on which a Fixed Repayment Instalment is payable) provided that in respect of the Financial Quarter in which the Utilisation occurs, the calculation shall be in respect of the period from Utilisation to the end of that Financial Quarter.
 
The Borrowers shall provide the Agent on each date falling five (5) Business Days after the relevant Quarter Date in respect of the Financial Quarter for which the Excess Cash Flow is to be calculated, a provisional certificate substantially in the form set out in Schedule 10 (Form of Excess Cash Flow Notice) (a “ Provisional Excess Cash Flow Notice ”) evidencing for that period the estimated level of Earnings in respect of each Vessel, the estimated overall Group Expenses for such Financial Quarter (and the Borrowers’ Share of Group Expenses for such Financial Quarter), and the estimated Operating Expenses for each Vessel for such Financial Quarter, together with such supporting documents, calculations and evidence as the Agent may reasonably require.
 
On or before the date being forty-five (45) days after the Quarter Date the Borrower will deliver to the Agent an updated and final excess cash flow notice substantially in the form set out in Schedule 10 ( Form of Excess Cash Flow Notice ) (together with the Provisional Excess Cash Flow Notice, the “ Excess Cash Flow Notice ”) confirming or adjusting (as relevant) the amounts and calculations set out in the Provisional Excess Cash Flow Notice, together with such supporting documents, calculations and evidence as the Agent may reasonably require.
 
(b)                                  Payment of Excess Cash Flow
 
All Excess Cash Flow for a Financial Quarter shall be applied on the next Excess Cash Flow Payment Date following that Financial Quarter by way of payment of the following liabilities, in the following order:
 
(i)                                      (subject to no Event of Default having occurred which is continuing) in payment to the Parent Guarantor of the Borrowers’ Share of Group Expenses whether by way of Permitted Parent Loan or otherwise;
 
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(ii)            (with the balance) in or towards prepayment of the principal and accrued and capitalised interest in respect of the Loan in an amount as shall be required to (and up to such amount to) ensure that the VTL Coverage (excluding, for the purposes of such calculation, any additional security provided pursuant to Clause 26.1 ( Additional Security ) is greater than 182% (provided that if a Default has occurred or is continuing or would result if such prepayment was not made, the entire balance shall be applied in prepayment), to be applied pro rata against each of the Fixed Repayment Instalments and the Balloon Instalment (and pro rata against each Notional Vessel Tranche); and
 
(iii)           thereafter any remaining balance be available to the Borrowers for any purpose expressly permitted by the Finance Documents.
 
6.3                                No Reborrowing
 
Amounts of the Loan which are repaid (whether as a result of fixed repayments or by operation of the cash sweep mechanism under Clause 6.2 ( Payment of Excess Cash Flow)) or prepaid shall not be available for reborrowing.
 
6.4                                No Adjustment of Repayment Instalments
 
If the Commitment is not utilised in full, there shall be no adjustment of the Fixed Repayment Instalments.
 
6.5                                Audit of Group Expenses
 
Following any Default which is continuing, if the Agent (acting reasonably) suspects that a Default is continuing or otherwise not more than once per financial year of the Parent Guarantor, the Agent shall, at the cost and expense of the Borrowers, have the right (upon instructions from the Majority Lenders) to appoint an independent chartered or public accountant experienced in the audit of companies providing vessel ownership and management services (“ Expert ”) to undertake a detailed review of the calculation and apportionment of Group Expenses. Each Borrower and HoldCo shall, and shall procure that the Parent Guarantor shall, provide all required documentation and evidence to, and shall fully cooperative with, the Expert for the purpose of such audit.
 
7.                                       PREPAYMENT AND CANCELLATION
 
7.1                                Illegality
 
If, in any applicable jurisdiction, it becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or any part of the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
 
(a)                                  that Lender shall promptly notify the Agent upon becoming aware of that event;
 
(b)                                  upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled; and
 
(c)                                   the Borrowers shall repay that Lender’s participation in the Loan on the last day of the Interest Period for the Loan occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).
 
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7.2                                Change of Control
 
If a Change of Control occurs, then:
 
(a)                                  the Borrowers shall promptly notify the Agent upon becoming aware of that event;
 
(b)                                  a Lender shall not be obliged to fund a Utilisation; and
 
(c)                                   if the Majority Lenders so require, the Agent shall declare the Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Total Commitments will be cancelled and all such outstanding amounts will become immediately due and payable.
 
7.3                                Mandatory prepayment
 
(a)                                  If a Vessel is sold or becomes a Total Loss, the Borrowers shall be obliged to:
 
(i)             (and without prejudice to the restrictions on sale of a Vessel and/or insurance covenants and requirements as otherwise provided in the Finance Documents) prepay, as a minimum amount, the higher of:
 
(A)                                the outstanding balance of the Notional Vessel Tranche relating to the subject Vessel; and
 
(B)                                such amount that would be required to be prepaid in order to ensure that the VTL Coverage immediately after the sale or Total Loss (excluding, for the purposes of such calculation, the Vessel which is sold or which becomes a Total Loss and any additional security provided pursuant to Clause 26.1 ( Additional Security )) is no less than what it was immediately prior to such sale or Total Loss (including the Vessel which is sold or which becomes a Total Loss);
 
(ii)            apply the balance of the sale or insurance proceeds, to the extent such sale proceeds are higher than the required minimum prepayment in (i) above, as follows:
 
(A)                                in the case of a A-Type Vessel, in prepayment of the Loan an amount equal to the lesser of:
 
(1)                                  the entire balance of the sale or insurance proceeds (as the case may be); and
 
(2)                                  such amount as shall be required to be prepaid to ensure that the that the VTL Coverage (excluding, for the purposes of such calculation, the Vessel which is sold or which becomes a Total Loss and any additional security provided pursuant to Clause 26.1 ( Additional Security )), is greater than:
 
(I)                                    where more than 85% of the Vessels (excluding the subject Vessel) are Capesize Vessels, 222%; or otherwise
 
(II)                               200%.
 
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(B)                                in the case of a B-Type Vessel, in prepayment of the Loan in an amount equal to the lesser of (a) the entire balance of the sale or insurance proceeds and (b) US$4,000,000.
 
(b)                                  If a Vessel is sold or becomes a Total Loss, the required amount in sub-clause (a) shall be prepaid on the date on which the sale is completed by delivery of the Vessel to the buyer or if the Vessel becomes a Total Loss, on the earlier of the date falling one hundred and eighty (180) days after the Total Loss Date and the date of receipt by the Agent of the proceeds of insurance relating to such Total Loss.
 
(c)                                   Any prepayments of principal under this Clause 7.3 shall be applied firstly in repayment of the then principal outstandings under the Notional Vessel Tranche relating to that Vessel and any balance to be applied pro rata in reduction of the remaining Fixed Repayment Instalments and the Balloon Instalment and pro rata against the other Notional Vessel Tranches.
 
(d)                                  Any proceeds of the sale or Total Loss of a Vessel after the mandatory prepayments in (a) above have been made, and that there are no other amounts due and payable that remain outstanding under the Finance Documents, shall be released to the relevant Borrower for use in a manner which is not prohibited by the Finance Documents, provided that if a Default has occurred and is continuing such remaining proceeds shall be applied in full in prepayment of the Loan in accordance with paragraph (c) above.
 
(e)                                   If there is any loss in respect of a Vessel or a claim under the Insurances in respect of a Vessel exceeding US$1,000,000 which in each case is not a Total Loss, the Borrowers irrevocably authorise, and shall procure that all such things are done to enable the Agent to apply any proceeds received from such loss or claim as a prepayment against the relevant Notional Vessel Tranche relating to that Vessel unless such proceeds are applied within ninety (90) days, or within such other period as the Classification Society may advise in writing, of being received towards repairing the relevant Vessel in accordance with the relevant Security Documents (or otherwise are used to reimburse the Borrowers for amounts made for such repair) and during which time the Borrowers shall procure that such funds are immediately credited to and remain in the Retention Account on and from their receipt.
 
7.4                                Automatic cancellation
 
The unutilised Commitment (if any) of each Lender shall be automatically cancelled at the earlier of (i) close of business on the date on which the Loan is made available and (ii) at the end of the Availability Period.
 
7.5                                Voluntary prepayment
 
(a)                                  The Borrowers may, upon giving to the Agent not less than five (5) Business Days’ 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 US$2,500,000).
 
(b)                                  The Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).
 
(c)                                   Any partial prepayments under this Clause 7.5 shall be applied against pro rata against the Fixed Repayment Instalments and the Balloon Instalment and pro rata against the Notional Vessel Tranches.
 
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7.6                                Restrictions
 
(a)                                  Any notice of cancellation or prepayment given by any Party under this Clause 7.6 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. The Agent must notify the Lenders promptly upon receipt of any such notice.
 
(b)                                  Any repayment or prepayment under this Agreement shall be made together with accrued interest on the amount repaid or prepaid and the Prepayment Fee (if any) and shall be subject to any Break Costs provided that no Prepayment Fee shall be payable in respect of:
 
(i)             any repayment pursuant to Clause 6.1 ( Fixed Repayment Instalments );
 
(ii)            any prepayment pursuant to paragraph (b)(ii) of Clause 6.2 ( Payment of Excess Cash Flow );
 
(iii)           any prepayment pursuant to paragraph (b)(iii) of Clause 26.1 ( Additional Security );
 
(iv)           any one-off voluntary prepayment (“ One-off Payment ”) in an aggregate amount of US$25,000,000 (less any prepayments or scheduled repayments made in relation to the Loan that have been made prior to the date of said prepayment).
 
(c)                                   The Borrowers 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.
 
(d)                                  No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
 
(e)                                   If the Agent receives a notice under this Clause 7.6 it shall promptly forward a copy of that notice to either the Borrowers or the Lenders, as appropriate.
 
(f)                                    If all or part of a Loan is repaid or prepaid, an amount of the Commitments (equal to the amount of the Loan which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this paragraph shall reduce the Commitments of the Lenders rateably.
 
(g)                                   Any prepayment of a Loan shall be applied pro rata to each Lender’s participation in the Loan and each Notional Vessel Tranche.
 
8.                                       INTEREST
 
8.1                                Calculation of interest
 
The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
 
(a)                                  Margin; and
 
(b)                                  LIBOR.
 
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8.2                                Payment of interest
 
(a)                                  The Borrowers shall pay accrued interest on the Loan on the last day of each Interest Period.
 
(b)                                  If any Interest Period is longer than 3 months, the Borrowers shall also pay interest then accrued on the dates falling at 3 monthly intervals after the first day of the Interest Period.
 
8.3                                Default interest
 
If the Borrowers fail to pay any amount payable by them under a Finance Document on its due date (after the expiration of any applicable grace period under Clause 27.1 ( Non-payment )), interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Utilisation in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrowers on demand by the Agent. Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
 
8.4                                Notification of rates of interest
 
The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.
 
9.                                       INTEREST PERIODS
 
9.1                                Length of Interest Periods
 
(a)                                  Each Interest Period for the Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period and end on the next Quarter Date.
 
(b)                                  If an Interest Period would otherwise overrun the Termination Date, it will be shortened so that it ends on the Termination Date.
 
9.2                                Non-Business Days
 
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
 
10.                                CHANGES TO THE CALCULATION OF INTEREST
 
10.1                         Absence of quotations
 
Subject to Clause 10.2 ( Market disruption ), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
 
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10.2                         Market disruption
 
(a)                                  If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each Lender’s share of the Loan for the Interest Period shall be the percentage rate per annum which is the sum of:
 
(i)                                      the Margin; and
 
(ii)            the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.
 
(b)                                  In this Agreement “ Market Disruption Event ” means:
 
(i)             at or about noon on the Quotation Day for the relevant Interest Period, the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for Dollars for the relevant Interest Period; or
 
(ii)            before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed fifty (50%) per cent. of the Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR.
 
10.3                         Alternative basis of interest or funding
 
(a)                                  If a Market Disruption Event occurs and the Agent or the Borrowers so requires, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest.
 
(b)                                  Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
 
10.4                         Break Costs
 
(a)                                  The Borrowers shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by any Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
 
(b)                                  Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
 
(c)                                   Notwithstanding any other term of this Agreement, no Break Costs are payable to an Original Lender.
 
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11.                                FEES
 
11.1                         Agency fee
 
The Borrowers shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in the Fee Letter.
 
11.2                         Upfront fee
 
The Borrowers shall pay to the Agent (for its own account) an upfront fee in the amount and at the times agreed in the Fee Letter.
 
12.                                TAX GROSS UP AND INDEMNITIES
 
12.1                         Definitions
 
In this Agreement:
 
(a)                                  “ Protected Party ” means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
 
(b)                                  “ Tax Credit ” means a credit against, relief or remission for, or repayment of any Tax.
 
(c)                                   “ Tax Deduction ” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
 
(d)                                  “ Tax Payment ” means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).
 
(e)                                   Unless a contrary indication appears, in this Clause 12 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
 
12.2                         Tax gross-up
 
Each Borrower and HoldCo shall (and shall procure that each other Obligor shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:
 
(a)                                  a Borrower and HoldCo shall promptly upon becoming aware that it or any other Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and any such other Obligor;
 
(b)                                  if a Tax Deduction is required by law to be made by a Borrower or any other Obligor, the amount of the payment due from that Borrower or that other Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;
 
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(c)                                   if a Borrower, HoldCo, or any other Obligor is required to make a Tax Deduction, that Borrower or HoldCo (as the case may be) shall (and shall procure that such other Obligor shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law;
 
(d)                                  within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall (and shall procure that such other Obligor shall) deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
 
12.3                         Tax indemnity
 
(a)                                  Each Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
 
(b)                                  Clause 12.3(a) shall not apply:
 
(i)             with respect to any Tax assessed on a Finance Party:
 
(A)                                under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
 
(B)                                under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,
 
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
 
(ii)            to the extent a loss, liability or cost:
 
(A)                                is compensated for by an increased payment under Clause 12.2 ( Tax gross-up ); or
 
(B)                                relates to a FATCA Deduction required to be made by a Party.
 
(c)                                   A Protected Party making, or intending to make a claim under Clause 12.3(a) shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers.
 
(d)                                  A Protected Party shall, on receiving a payment from a Borrower under this Clause 12.3, notify the Agent.
 
12.4                         Tax Credit
 
If a Borrower or any other Obligor makes a Tax Payment and the relevant Finance Party determines that:
 
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(a)                                  a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and
 
(b)                                  that Finance Party has obtained and utilised that Tax Credit, that Finance Party shall pay an amount to that Borrower or to that other Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by that Borrower or that other Obligor.
 
12.5                         Stamp taxes
 
The Borrowers shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
 
12.6                         VAT
 
(a)                                  All amounts expressed to be payable under a Finance Document by any Party or any Obligor to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.6(b), if VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Obligor under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Obligor must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrowers).
 
(b)                                  If VAT is or becomes chargeable on any supply made by any Finance Party (the “ Supplier ”) to any other Finance Party (the “ Recipient ”) under a Finance Document, and any Party other than the Recipient (the “ Relevant Party ”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
 
(i)             (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.6(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
 
(ii)            (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
 
(c)                                   Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably
 
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determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
 
(d)                                  Any reference in this Clause 12.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).
 
(e)                                   In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.
 
12.7                         FATCA information
 
(a)                                  Subject to Clause 12.7(c), each Party shall, within ten (10) Business Days of a reasonable request by another Party:
 
(i)             confirm to that other Party whether it is:
 
(A)                                a FATCA Exempt Party; or
 
(B)                                not a FATCA Exempt Party;
 
(ii)            supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and
 
(iii)           supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.
 
(b)                                  If a Party confirms to another Party pursuant to Clause 12.7(a)(i)(A) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
 
(c)                                   Clause 12.7(a) shall not oblige any Finance Party to do anything, and Clause 12.7(a)(iii) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:
 
(i)             any law or regulation;
 
(ii)            any fiduciary duty; or
 
(iii)           any duty of confidentiality.
 
(d)                                  If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.7(a)(i) or 12.7(a)(ii) (including, for the avoidance of doubt, where Clause 12.7(c) applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as
 
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the Party in question provides the requested confirmation, forms, documentation or other information.
 
(e)                                   If a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten (10) Business Days of:
 
(i)             where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
 
(ii)            where a Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender or an Increase Lender, the relevant Transfer Date; or
 
(iii)           where a Borrower is not a US Tax Obligor, the date of a request from the Agent,
 
supply to the Agent:
 
(A)                                a withholding certificate on Form W-8 or Form W-9 or any other relevant form; or
 
(B)                                any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
 
(f)                                    The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.7(e) to the Borrowers.
 
(g)                                   If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 12.7(e) is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrowers.
 
The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.7(e) or 12.7(g) without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clause 12.7(e), 12.7(f) or 12.7(g).
 
13.                                INCREASED COSTS
 
13.1                         Increased costs
 
(a)                                  Subject to Clause 13.3 ( Exceptions ) the Borrowers shall, within three (3) Business Days of a demand by the Agent, pay to the Agent for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III and Dodd Frank and any other which relates to capital adequacy or liquidity controls or which affects the manner in which that Finance Party allocates capital resources to
 
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obligations under this Agreement) or (iii) any change in the risk weight allocated by that Finance Party to the Borrowers after the date of this Agreement.
 
(b)            In this Agreement “ Increased Costs ” means:
 
(i)             a reduction in the rate of return from the Loan or on a Finance Party’s (or its Affiliate’s) overall capital;
 
(ii)            an additional or increased cost; or
 
(iii)           a reduction of any amount due and payable under any Finance Document, which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into any Finance Document or funding or performing its obligations under any Finance Document.
 
(c)            In this Agreement “ Basel III ” means:
 
(i)             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;
 
(ii)            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
 
(iii)           any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
 
(d)            In this Agreement “ Dodd Frank ” means the Dodd-Frank Wall Street Reform and Consumer Protection Act of the U.S.A and all requests, rules, guidelines or directives thereunder or issued in connection therewith.
 
13.2         Increased cost claims
 
(a)            A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.
 
(b)            Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
 
13.3         Exceptions
 
(a)            Clause 13.1 ( Increased costs ) does not apply to the extent any Increased Cost is:
 
(i)             attributable to a Tax Deduction required by law to be made by a Borrower;
 
(ii)            attributable to a FATCA Deduction required to be made by a Party;
 
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(iii)           compensated for by Clause 12.3 ( Tax indemnity ) (or would have been compensated for under Clause 12.3 ( Tax indemnity ) but was not so compensated solely because any of the exclusions in Clause 12.3 ( Tax indemnity ) applied);
 
(iv)           attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or
 
(v)            attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).
 
(b)            In this Clause 13.3, a reference to a “ Tax Deduction ” has the same meaning given to the term in Clause 12.1 ( Definitions ).
 
14.           OTHER INDEMNITIES
 
14.1         Currency indemnity
 
(a)            If any sum due from an Obligor under the Finance Documents (a “ Sum ”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:
 
(i)             making or filing a claim or proof against that Obligor; or
 
(ii)            obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Borrowers and HoldCo shall procure that that Obligor shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
 
(b)            The Borrower and HoldCo waive (and shall procure that each other Obligor waives) any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
 
14.2         Other indemnities
 
(a)            The Borrower and HoldCo shall (and shall procure that each other Obligor shall), within three (3) Business Days of demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party as a result of:
 
(i)             the occurrence of any Event of Default;
 
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(ii)            a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 33 ( Sharing among the Finance Parties );
 
(iii)           funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in the Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
 
(iv)           the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower.
 
(b)            The Borrower and HoldCo shall (and shall procure that each other Obligor shall), on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (an “ Indemnified Person ”), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Vessel unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
 
(c)            Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
 
(i)             arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
 
(ii)            in connection with any Environmental Claim.
 
(d)            Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause subject to Clause 1.3 ( Third party rights ) and the provisions of the Third Parties Act.
 
14.3         Indemnity to the Agent
 
Each Obligor jointly and severally shall promptly indemnify the Agent against:
 
(a)            any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
 
(i)             investigating any event which it reasonably believes is a Default; or
 
(ii)            acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
 
(iii)           instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and
 
(b)            any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent in acting as Agent under the Finance Documents.
 
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14.4         Indemnity to the Security Agent
 
(a)            Each Obligor jointly and severally shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:
 
(i)             any failure by any Obligor to comply with its obligations under Clause 16 ( Costs and expenses );
 
(ii)            acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 
(iii)           the taking, holding, protection or enforcement of the Transaction Security;
 
(iv)           the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;
 
(v)            any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
 
(vi)           instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; or
 
(vii)          acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).
 
(b)            The Security Agent and every Receiver and Delegate may, in priority to any payment to the Finance Parties, indemnify itself out of the Security Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 (b) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.
 
14.5         Indemnity Survival
 
The indemnities in this Agreement shall survive repayment of the Loan.
 
14.6         Priority of Indemnity
 
The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in Clause 14.4 ( Indemnity to the Security Agent ) and shall have a lien on the Transaction Security and the proceeds of enforcement of the Transaction Security for all moneys payable to it.
 
15.           MITIGATION BY THE LENDERS
 
15.1         Mitigation
 
(a)            Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 12 ( Tax gross up and indemnities ) or Clause 13 ( Increased costs )
 
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including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
 
(b)            Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
 
15.2         Limitation of liability
 
(a)            The Obligors shall, within three (3) Business Days of demand, promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ).
 
(b)            A Finance Party is not obliged to take any steps under Clause 15.1 ( Mitigation ) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
 
16.           COSTS AND EXPENSES
 
16.1         Transaction expenses
 
The Borrowers shall, within five (5) Business Days of demand, pay each of the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
 
(a)            this Agreement and any other documents referred to in this Agreement or in a Security Document;
 
(b)            the Transaction Security;
 
(c)            any other Finance Documents executed after the date of this Agreement;
 
(d)            any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, for the avoidance of doubt) any Valuation); and
 
(e)            any discharge, release or reassignment of any of the Finance Documents.
 
16.2         Amendment costs
 
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 34.9 ( Change of currency ), the Borrowers shall, within five (5) Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent or the Security Agent (and, in the case of the Security Agent, any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
 
16.3         Agent and Security Agent’s management time and additional remuneration
 
Any amount payable to the Agent under Clause 14.3 ( Indemnity to the Agent ) or to the Security Agent under Clause 14.4 ( Indemnity to the Security Agent ) or to either of them under this Clause 16 or Clause 25.11 ( Lenders’ indemnity to the Agent ) shall include the cost of utilising the management time or other resources of the Agent or the Security Agent (as the case may be) and will be calculated on the basis of such reasonable daily or hourly rates as the
 
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Agent or the Security Agent may notify to the Borrowers and the Lenders, and is in addition to any other fee paid or payable to the Agent or the Security Agent.
 
16.4         Enforcement and preservation costs
 
The Borrowers shall, within five (5) Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against that Finance Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
 
16.5         Other costs
 
The Borrowers shall, within five (5) Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of a Borrower in connection with a Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the Insurances, any expenses incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of a Vessel or in discharging any lien, bond or other claim relating in any way to a Vessel, and any sums which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of a Vessel from arrest or detention.
 
17.           JOINT AND SEVERAL LIABILITY
 
17.1         Joint and Several Liability
 
(a)            All liabilities and obligations of the Obligors under or in connection with any Finance Document shall, whether expressed or not expressed to be so, be joint and several. The failure by one Obligor to perform its obligations under the Finance Documents shall constitute a failure by the other Obligors in the performance of such obligations under the Finance Documents. Each Obligor shall be responsible for the performance of the obligations of the other Obligors under the Finance Documents.
 
(b)            Each Obligor agrees to be bound by the Finance Documents to which it is, or becomes, a party, notwithstanding that:
 
(i)             any other Obligor intended to be a party or be bound by such Finance Document does not become a party or bound; and
 
(ii)            any Finance Document may be invalid or unenforceable against the other Obligors, whether or not such validity or unenforceability is known to any Finance Party.
 
(c)            The Finance Parties may, but only through the Agent or the Security Agent, take action against any Obligor, grant any time or other indulgence to any Obligor, or release or compromise in whole or in part the liability of any Obligor under the Finance Documents, in each case without affecting the liability of any other Obligor.
 
17.2         Waiver of Defences
 
(a)            The joint and several liabilities and obligations of each Obligor will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Agreement and/or any other Finance
 
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Document (without limitation and whether or not known to it or any Finance Party) including:
 
(i)             any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(ii)            the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
 
(iii)           the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any other Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(iv)           any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Obligor or any other person;
 
(v)            any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(vi)           any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(vii)          any insolvency or similar proceedings.
 
17.3         Appropriations
 
(a)            Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
 
(i)             refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Obligors (or any of them) shall be entitled to the benefit of the same; and
 
(ii)            hold in an interest-bearing suspense account any moneys received from the Obligor or on account of the relevant Obligor’s liability under this Clause 17.
 
17.4         Deferral of each Obligor’s rights
 
(a)            Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Obligor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17:
 
(i)             to be indemnified by an Obligor;
 
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(ii)            to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
 
(iii)           to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
 
(iv)           to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Obligor has given a guarantee, undertaking or indemnity under Clause 18.1 ( Guarantee and indemnity );
 
(v)            to exercise any right of set-off against any Obligor; and/or
 
(vi)           to claim or prove as a creditor of any Obligor in competition with any Finance Party.
 
(b)            If any Obligor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 34 ( Payment mechanics ).
 
18.           GUARANTEE AND INDEMNITY
 
18.1         Guarantee and indemnity
 
HoldCo irrevocably and unconditionally:
 
(a)            guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor’s obligations under the Finance Documents;
 
(b)            undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, HoldCo shall immediately on demand pay that amount as if it was the principal obligor; and
 
(c)            agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation,
 
indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor (other than HoldCo) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by HoldCo under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.
 
18.2         Continuing guarantee
 
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
 
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18.3         Reinstatement
 
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of HoldCo under this Clause 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
18.4         Waiver of defences
 
The obligations of HoldCo under this Clause 18 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:
 
(a)            any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)            the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
 
(c)            the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(d)            any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
 
(e)            any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(f)             any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(g)            any insolvency or similar proceedings.
 
18.5         HoldCo Intent
 
Without prejudice to the generality of Clause 18.4 ( Waiver of defences ), HoldCo expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital, enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities, refinancing any other indebtedness; making facilities available to new borrowers, any other variation or extension of the purposes for which any such facility or amount might be made available from time to time, and any fees, costs and/or expenses associated with any of the foregoing.
 
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18.6         Immediate recourse
 
HoldCo waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from it or commencing proceedings under this Clause 18. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
18.7         Appropriations
 
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
 
(a)            refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and HoldCo shall be entitled to the benefit of the same; and
 
(b)            hold in an interest-bearing suspense account any moneys received from HoldCo or on account of HoldCo’s liability under this Clause 18.
 
18.8         Deferral of HoldCo’s rights
 
All rights which HoldCo has at any time (whether in respect of this guarantee, a mortgage or any other transaction) against any Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, HoldCo will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18:
 
(a)            to be indemnified by an Obligor;
 
(b)            to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
 
(c)            to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
 
(d)            to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Obligor has given a guarantee, undertaking or indemnity under Clause 18.1 ( Guarantee and indemnity );
 
(e)            to exercise any right of set-off against any Obligor; and/or
 
(f)             to claim or prove as a creditor of any Obligor in competition with any Finance Party.
 
If HoldCo receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay
 
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or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 34 ( Payment mechanics ).
 
18.9         Additional security
 
This guarantee and any other Security given by HoldCo is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Finance Party, or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
 
19.           REPRESENTATIONS AND WARRANTIES
 
19.1         Representations
 
Each Borrower and HoldCo make the representations and warranties set out in this Clause 19 to each Finance Party.
 
19.2         Status
 
Each of the Obligors:
 
(a)            is a corporation or a limited liability company, duly incorporated or formed and validly existing under the law of its jurisdiction of incorporation or formation; and
 
(b)            has the power to own its assets and carry on its business as it is being conducted.
 
19.3         Binding obligations
 
Subject to the Legal Reservations:
 
(a)            the obligations expressed to be assumed by each of the Obligors in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable obligations; and
 
(b)            (without limiting the generality of paragraph (a)), each Security Document to which it is a party creates the security interests that that Security Document purports to create and those security interests are valid and effective.
 
19.4         Non-conflict with other obligations
 
The entry into and performance by each of the Obligors of, and the transactions contemplated by, the Relevant Documents do not conflict with:
 
(a)            any law or regulation applicable to such Obligor;
 
(b)            the constitutional documents of such Obligor; or
 
(c)            any agreement or instrument binding upon such Obligor or any of such Obligor’s assets or constitute a default or termination event (however described) under any such agreement or instrument.
 
19.5         Power and authority
 
(a)            Each of the Obligors has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the
 
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Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.
 
(b)            No limit on the powers of any Obligor will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Relevant Documents to which it is a party.
 
19.6         Validity and admissibility in evidence
 
All authorisations required or desirable:
 
(a)            to enable each of the Obligors lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to enable each Finance Party to enforce and exercise all its rights under the Relevant Documents; and
 
(b)            to make the Relevant Documents to which any Obligor is a party admissible in evidence in its Relevant Jurisdictions,
 
have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part III of Schedule 2 ( Conditions Subsequent ).
 
19.7         Governing law and enforcement
 
(a)            The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.
 
(b)            Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Obligor.
 
19.8         Insolvency
 
No corporate action, legal proceeding or other procedure or step described in Clause 27.7 ( Insolvency proceedings ) or creditors’ process described in Clause 27.8 ( Creditors’ process ) has been taken or, to the knowledge of any Borrower, threatened in relation to an Obligor; and none of the circumstances described in Clause 27.6 ( Insolvency ) applies to an Obligor.
 
19.9         No filing or stamp taxes
 
Under the laws of the Relevant Jurisdictions of each relevant Obligor it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or similar tax or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except registration of each Mortgage at the registry of the Approved Flag where title to the relevant Vessel is registered in the ownership of the relevant Borrower and payment of associated fees, which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.
 
19.10       No default
 
(a)            No Event of Default and, on the date of this Agreement and the Utilisation Date, no Default is continuing or is reasonably likely to result from the advance of a Utilisation or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.
 
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(b)            No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any of the Obligors or to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.
 
19.11       No misleading information
 
(a)            All information supplied by it or on its behalf to any Finance Party in connection with the Relevant Documents was true and accurate in all material respects as at the date it was provided or as at any date at which it was stated to be given.
 
(b)            Any financial projections contained in the information referred to in paragraph (a) above have been prepared as at their date on the basis of recent historical information and on the basis of reasonable assumptions.
 
(c)            It has not omitted to supply any information which, if disclosed, would make the information referred to in paragraph (a) above untrue or misleading in any material respect.
 
(d)            Nothing has occurred since the date of the information referred to in paragraph (a) above which, if disclosed, would make that information untrue or misleading in any material respect.
 
19.12       Financial statements
 
(a)            The Original Financial Statements were prepared in accordance with GAAP consistently applied.
 
(b)            The unaudited Original Financial Statements fairly represent each Obligor’s and the Group’s financial condition and results of operations for the relevant financial quarter.
 
(c)            The audited Original Financial Statements give a true and fair view of the Parent Guarantor’s financial condition and results of operations during the relevant financial year.
 
(d)            There has been no material adverse change in any Obligor’s assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent Guarantor) since the date of the Original Financial Statements.
 
(e)            Each Obligor’s most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements ) or Clause 20.2 ( Interim Financial Statements ):
 
(i)             have been prepared in accordance with GAAP as applied to the Original Financial Statements; and
 
(ii)            give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
 
(f)             Since the date of the most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements ) or Clause 20.2 ( Interim Financial Statements ) there has been no material adverse change in the business, assets or financial condition of any of the Obligors or any other member of the Group.
 
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19.13                  No proceedings pending or threatened
 
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any of the Obligors.
 
19.14                  No breach of laws
 
None of the Obligors has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
 
19.15                  Environmental laws
 
(a)                                  Each of the Obligors is in compliance with Clause 22.3 ( Environmental compliance ) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.
 
(b)                                  No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of the Obligors where that claim has or is reasonably likely, if determined against that Obligor, to have a Material Adverse Effect.
 
19.16                  Taxation
 
(a)                                  None of the Obligors is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.
 
(b)                                  No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Obligors with respect to Taxes.
 
(c)                                   Each of the Obligors is resident for Tax purposes only in its Original Jurisdiction.
 
19.17                  Anti-corruption law
 
Each of the Obligors and each Affiliate of any of them has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
 
19.18                  No Security or Financial Indebtedness
 
(a)                                  No Security exists over all or any of the present or future assets of any Borrower.
 
(b)                                  No Borrower has any Financial Indebtedness outstanding other than as permitted by this Agreement.
 
19.19                  Pari passu ranking
 
The payment obligations of each of the Obligors under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
 
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19.20                  No adverse consequences
 
(a)                                  It is not necessary under the laws of the Relevant Jurisdictions of any of the Obligors:
 
(i)                                      in order to enable any Finance Party to enforce its rights under any Finance Document; or
 
(ii)                                   by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,
 
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Obligors.
 
(b)                                  No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Obligors by reason only of the execution, performance and/or enforcement of any Finance Document.
 
19.21                  Disclosure of material facts
 
No Borrower is aware of any material facts or circumstances that have not been disclosed to the Agent and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.
 
19.22                  Completeness of Relevant Documents
 
The copies of any Relevant Documents provided or to be provided by the Borrowers to the Agent in accordance with Clause 4 ( Conditions of Utilisation ) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Agent.
 
19.23                  No Immunity
 
No Obligor or any of its assets is immune to any legal action or proceeding.
 
19.24                  Money laundering
 
Any borrowing by a Borrower under this Agreement, and the performance of its obligations under this Agreement and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities.
 
19.25                  Sanctions
 
As regards Sanctions:
 
(a)                                  None of the Obligors or any Affiliate of any of them is a Restricted Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person and none of such persons owns or controls a Restricted Person.
 
(b)                                  No proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Restricted Person in violation applicable Sanctions laws, or otherwise
 
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shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
 
(c)                                   Each of the Obligors and each Affiliate of any of them is in material compliance with all applicable Sanctions.
 
19.26                  Valuation
 
(a)                                  All information supplied by it or on its behalf to the Agent for the purposes of each Valuation was true and accurate as at its date or (if appropriate) as at the date (if any) at which it is stated to be given.
 
(b)                                  It has not omitted to supply any information to the Agent which, if disclosed, would adversely affect the Valuation.
 
(c)                                   Nothing has occurred since the date the information referred to in paragraph (a) above was supplied which, if it had occurred prior to the relevant Valuation, would have adversely affected that Valuation.
 
19.27                  ISM Code and ISPS Code
 
All requirements of the ISM Code and the ISPS Code as they apply to each Borrower and any Approved Manager and each Vessel have been complied with.
 
19.28                  Vessel
 
(a)                                  Each Vessel is:
 
(i)                                      permanently registered in the name of the relevant Borrower under the relevant Approved Flag;
 
(ii)                                   free from Security (other than Permitted Security);
 
(iii)                                operationally seaworthy and in every way fit for service;
 
(iv)                               classed in accordance with the relevant Classification free of all requirements and recommendations of the relevant Classification Society (except as disclosed to and approved by the Agent prior to the Utilisation Date); and
 
(v)                                  insured in the manner required by the Security Documents.
 
(b)                                  To the best of its knowledge (following due and careful enquiry):
 
(i)                                      no material breach of any law or regulation is outstanding which might have a Material Adverse Effect (including in relation to the value of a Vessel); and
 
(ii)                                   no adverse claim has been made by any person in respect of the ownership of the Vessel or any interest in it.
 
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19.29                  Borrowers
 
Each Borrower is a special purpose vehicle which has not traded or incurred any liabilities other than in connection with the relevant Vessel pursuant to the Relevant Documents.
 
19.30                  Commercial management
 
Except as otherwise permitted under Clause 23.13(f):
 
(a)                                  no Vessel, other than the “GENCO CHAMPION” and the “GENCO CHARGER”,, is managed by an Approved Commercial Manager (External); and
 
(b)                                  in respect of any Vessel (other than the “GENCO CHAMPION” and the “GENCO CHARGER”), no Borrower has entered into any agreement or arrangement in relation to the provision of commercial management services to its Vessel, save that the Approved Commercial Manager (Internal) provides certain assistance to each of the relevant Borrowers (and each owner of a Fleet Vessel) in relation to the fixing of employment on a undocumented and informal basis, without any right to fees, commission or any other compensation, contribution, remuneration or payment of any kind whatsoever, except for the Borrowers’ Share of Group Expenses to the Parent Guarantor as permitted to be paid pursuant to Clause 6(b)(ii).
 
19.31                  Repetition
 
Each Repeating Representation is deemed to be repeated by each Borrower by reference to the facts and circumstances then existing on the date of each Utilisation Request, on the Utilisation Date, on the first day of each Interest Period and, in the case or those contained in Clause 19.12(d) and (f) ( Financial statements ) and for so long as any amount is outstanding under the Finance Documents or any Commitment is in force, on each day.
 
20.                                INFORMATION UNDERTAKINGS
 
The undertakings in this Clause 20 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
 
20.1                         Financial statements
 
Holdco and the Borrowers shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within ninety (90) days after the end of each of its financial years:
 
(a)                                  the Parent Guarantor’s audited consolidated (so as to include inter alia the Borrowers) financial statements for that financial year;
 
(b)                                  the Parent Guarantor’s unaudited financial statements for that financial year (including the Borrowers) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 20.2(a) above;
 
(c)                                   Holdco’s management accounts for that financial year (including the Borrowers); and
 
(d)                                  each Borrower’s annual management accounts (balance sheet and profit and loss accounts).
 
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20.2                         Interim financial statements
 
Holdco and the Borrowers shall procure that the Parent Guarantor shall, and shall procure that each Borrower shall, supply to the Agent as soon as the same become available, but in any event within forty-five (45) days after the end of each quarter during each of its financial years:
 
(a)                                  the Parent Guarantor’s consolidated (so as to include inter alia the Borrowers) quarterly financial statements for that quarter;
 
(b)                                  the Parent Guarantor’s unaudited financial statements for that quarter (including the Borrowers and the other Subsidiaries of the Guarantor) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 20.2(a) and (b) above; and
 
(c)                                   Holdco’s and each Borrower’s quarterly management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 20.3 ( Compliance Certificate ).
 
20.3                         Compliance Certificate
 
(a)                                  The Borrowers and HoldCo shall procure that the Parent Guarantor shall supply to the Agent, with each set of financial statements delivered pursuant to Clause 20.1 ( Financial statements ) and Clause 20.2 ( Interim financial statements ), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 ( Financial covenants ) as at the date as at which those financial statements were drawn up.
 
(b)                                  The Borrowers and HoldCo shall procure that each Compliance Certificate shall be signed by any authorised officer of the Parent Guarantor.
 
(c)                                   The Borrowers and HoldCo shall procure that, if, prior to the delivery of any Compliance Certificate by the Parent Guarantor, the Parent Guarantor or any other Obligor becomes aware that the financial covenants detailed in Clause 21 ( Financial Covenants ) (or any of them) will not be complied with, the Borrowers and HoldCo shall promptly notify the Agent accordingly.
 
20.4                         Requirements as to financial statements
 
(a)                                  Each set of financial statements delivered by an Obligor pursuant to Clause 20.1 ( Financial statements ):
 
(i)                                      shall be certified by an authorised officer of that Obligor as giving a true and fair view (in case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up; and
 
(ii)                                   shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:
 
(A)                                a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor’s Original Financial Statements were prepared; and
 
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(B)                                sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 21.1 ( Financial Covenants ) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and that Obligor’s Original Financial Statements.
 
(b)                                  Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
20.5                         Budgets and Report on Operating Expenses and Group Expenses
 
(a)                                  The Borrowers and HoldCo shall:
 
(i)                                      supply to the Agent, no later than fifteen (15) days after the end of each financial year of the Parent Guarantor, copies of an annual operating budget of each of the Borrowers (and the Vessel owned by it) for the following financial year;
 
(ii)                                   procure that the Parent Guarantor shall supply to the Agent, no later than fifteen (15) days after the end of each financial year of the Parent Guarantor, a copy of an annual budget in respect of Group Expenses for the following financial year,
 
each such budget to be in the form appended to Schedule 13 ( Example Budget ) or in such other form and with such details as may be agreed by the Agent (acting on the instructions of the Majority Lenders).
 
(b)                                  The Borrowers and HoldCo shall procure that the Parent Guarantor shall supply to the Agent, with each set of financial statements delivered pursuant Clause 20.2 ( Interim financial statements ), the details of the Operating Expenses and Group Expenses payable by each Borrower in respect of its Vessel together with all computations of how such Operating Expenses and Group Expenses were calculated.
 
20.6                         Information: miscellaneous
 
Each Borrower and HoldCo shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
 
(a)                                  at the same time as they are dispatched, copies of all documents dispatched by that Borrower or HoldCo to its shareholders generally (or any class of them) or dispatched by that Borrower or HoldCo to its creditors generally (or any class of them);
 
(b)                                  promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings (including proceedings related to any alleged or actual breach of the ISM Code or the ISPS Code) which are current, threatened or pending against any Obligor, and which might, if adversely determined, are likely to have a Material Adverse Effect;
 
(c)                                   promptly, such further information regarding the financial condition, business and operations of any Obligor (or any other member of the Group) as any Finance Party (through the Agent) may reasonably request, including without limitation cash flow analyses and details of the Operating Expenses of any Vessel, the Group Expenses, any dividends and/or loans made by a Borrower, HoldCo and/or the Parent
 
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Guarantor, and annual inspection certificates (including any annual inspection report (if required by the Agent)); and
 
(d)                                  promptly on request, such further information regarding the financial condition, assets and operations of any Obligor (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement and an up to date copy of its shareholders’ register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Agent may reasonably request.
 
20.7                         Notification of default
 
(a)                                  Each Borrower and HoldCo shall notify the Agent of any Event of Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Borrower or HoldCo (as the case may be) is aware that a notification has already been provided by another Obligor).
 
(b)                                  Promptly upon a request by the Agent, each Borrower and HoldCo shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Event of Default is continuing (or if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it).
 
20.8                         “Know your customer” checks
 
(a)                                  If:
 
(i)                                      the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
 
(ii)                                   any change in the status of an Obligor after the date of this Agreement; or
 
(iii)                                a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
 
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower and HoldCo shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
(b)                                  Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
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20.9                         USA Patriot Act Notice
 
Each Lender hereby notifies each Borrower and HoldCo that, pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub.: 107-56 (signed into law October 26, 2001) (the “ Patriot Act ”) it is required to obtain, verify, and record information that identifies each Borrower, which information includes the name of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act, and each Borrower agrees to provide such information from time to time to any Lender.
 
21.                                FINANCIAL COVENANTS
 
21.1                         Financial covenants
 
(a)                                  At each and all times during the Facility Period, the Borrowers shall maintain Cash in the Minimum Liquidity Account in an amount of not less than $750,000 per Vessel.
 
(b)                                  At each and all times during the Facility Period, the Borrowers and HoldCo shall procure that the Parent Guarantor shall, in respect of the Parent Guarantor only:
 
(i)                                      ensure that the aggregate of its Cash and Cash Equivalents and any undrawn availability under any of its working capital lines (but only to the extent such lines are not draw stopped and are available for drawing) in an amount of not less than $750,000 per Fleet Vessel of which a minimum amount of $25,000,000 shall be in Cash or Cash Equivalents; and
 
(ii)                                   not permit its Leverage to exceed seventy per cent (70%); and
 
(iii)                                not permit its Consolidated Net Worth to be less than the Minimum Consolidated Net Worth;
 
which covenants to be tested on each Quarter Date and reported to the Agent in each Compliance Certificate to be delivered to the Agent pursuant to Clause 20.3 ( Compliance certificate ).
 
21.2                         Most favoured Lenders
 
(a)                                  If at any time any Other Facility Agreement shall include any financial covenant in respect of the Parent Guarantor, the Group or the majority of the Group (whether set forth as a covenant, undertaking, event of default, restriction or other such provision) (a “ Financial Covenant ”) not set forth herein or that would be more beneficial to the Lenders than any analogous provision contained in this Agreement (any such Financial Covenant, an “ Additional Financial Covenant ”), then the Borrowers and HoldCo shall provide a Most Favoured Lender Notice to the Lenders. Thereupon, unless waived in writing by the Majority Lenders within fourteen (14) days of receipt of such Most Favoured Lender Notice by the Lenders, such Additional Financial Covenant (and any related definitions and any information and other undertakings reasonably required to ensure compliance with the Additional Finance Covenant) shall be deemed automatically incorporated by reference into this Agreement, mutatis mutandis , as if set out fully in this document, without any further action required on the part of any person, effective as of the date when such Additional Financial Covenant became effective under the Facility Agreement. For the avoidance of doubt, in no event shall any (i) collateral maintenance requirements relating to a Fleet Vessel or Fleet Vessels, or (ii) minimum liquidity requirements on a per vessel basis equivalent to the requirement in Clause 21.1(a), in any Other Facility Agreement be subject to the requirements set forth in this Clause 21.2.
 
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(b)                                  If requested by the Majority Lenders following the receipt of a Most Favoured Lender Notice, the Obligors shall enter into any additional agreement or amendment to this Agreement reasonably requested by the Majority Lenders evidencing the provisions of paragraph (a) above.
 
(c)                                   In this Clause 21.2:
 
(i)                                      “ Most Favoured Lender Notice ” means, in respect of any Additional Financial Covenant, a written notice to each of the Lenders delivered promptly, and in any event within thirty (30) days after the inclusion of such Additional Financial Covenant in the Other Facility Agreement, as applicable (including by way of amendment or other modification of any existing provision thereof), by the an authorised officer of the obligor referring to the provisions of this Clause 21.2 and setting out a description of such Additional Financial Covenant (including any defined terms used therein) and related explanatory calculations, as applicable;
 
(ii)                                   “ Other Facility Agreement ” means, with respect to any Financial Indebtedness, any agreement and other documentation (including in relation to any amendments thereto) entered into in respect of such Financial Indebtedness.
 
22.                                GENERAL UNDERTAKINGS
 
The undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
 
22.1                         Authorisations
 
The Borrower and HoldCo shall (and shall procure that each other Obligor shall) promptly:
 
(a)                                  obtain, comply with, renew and do all that is necessary to maintain in full force and effect; and
 
(b)                                  supply certified copies to the Agent of any authorisation required under any law or regulation of its jurisdiction of incorporation to:
 
(i)                                      enable it to perform its obligations under the Relevant Documents to which it is a party;
 
(ii)                                   ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Relevant Document; or
 
(iii)                                enable any Obligor to carry on its business where failure to do so has or is reasonably likely to have Material Adverse Effect.
 
22.2                         Compliance with laws
 
(a)                                  Each Borrower and HoldCo shall comply (and shall procure that each Affiliate of any of them shall comply) in all respects with all laws to which it may be subject if (except as regards Sanctions, to which Clause 22.2(b) applies, and anti-corruption laws, to which Clause 22.5 ( Anti-corruption laws ) applies) failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
(b)                                  Each Borrower and HoldCo shall (and shall procure that each Affiliate of any of them shall comply) in all respect with all Sanctions.
 
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22.3                         Environmental compliance
 
Each Borrower and HoldCo shall, and shall procure that the Parent Guarantor shall:
 
(a)                                  comply with all Environmental Laws;
 
(b)                                  obtain, maintain and ensure compliance with all requisite Environmental Approvals; and
 
(c)                                   implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
 
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
22.4                         Environmental Claims
 
Each Borrower and HoldCo shall, and shall procure that the Parent Guarantor shall, promptly upon becoming aware of the same, inform the Agent in writing of:
 
(a)                                  any Environmental Claim against any of the Obligors which is current, pending or threatened; and
 
(b)                                  any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Obligors, where the claim, if determined against that Obligor, has or is reasonably likely to have a Material Adverse Effect.
 
22.5                         Anti-corruption law
 
(a)                                  Each Borrower shall, and shall procure that the Guarantor shall not (and shall procure that no other Obligor will) directly or indirectly use the proceeds of the Loan for any purpose that would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.
 
(b)                                  Each Borrower and HoldCo shall, and shall procure that the Parent Guarantor shall (and shall procure that each other Obligor shall):
 
(i)                                      conduct its businesses in material compliance with applicable anti-corruption laws; and
 
(ii)                                   maintain policies and procedures designed to promote and achieve compliance with such laws.
 
22.6                         Taxation
 
(a)                                  Each Borrower and HoldCo shall, and shall procure that the Parent Guarantor shall (and shall procure that each other Obligor shall) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
 
(i)                                      such payment is being contested in good faith;
 
(ii)                                   adequate reserves are being maintained for those Taxes and the costs required to contest them, which have been disclosed in its latest financial statements delivered to the Agent under Clause 20.1 ( Financial statements ); and
 
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(iii)                                such payment can be lawfully withheld and, in the case of the Parent Guarantor only, failure to pay, those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
 
(b)                                  No Borrower and no other Obligor may change its residence for Tax purposes.
 
22.7                         Evidence of good standing
 
Each Borrower and HoldCo will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Obligors and all corporate shareholders of any of the Obligors remain in good standing.
 
22.8                         Pari passu ranking
 
The Borrower and HoldCo shall (and shall procure that each other Obligor shall) ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
 
22.9                         Negative pledge
 
(a)                                  In this Clause 22.9, “ Quasi-Security ” means an arrangement or transaction described in Clause 22.9(b)
 
(b)                                  Except as permitted under Clause 22.9(c):
 
(i)                                      No Borrower nor HoldCo shall create nor permit to subsist any Security over any of its assets.
 
(ii)                                   No Borrower nor HoldCo shall:
 
(A)                                sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
 
(B)                                sell, transfer or otherwise dispose of any of its receivables on recourse terms;
 
(C)                                enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
 
(D)                                enter into any other preferential arrangement having a similar effect, in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
 
(c)                                   Clauses 22.9(a) and 22.9(b) do not apply to any Security or (as the case may be) Quasi-Security, which is a Permitted Security or a Permitted Transaction.
 
22.10                  Disposals
 
(a)                                  Except as permitted under Clause 22.10(b), no Borrower or HoldCo shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
 
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(b)                                  Clause 22.10(a) does not apply to any sale, lease, transfer or other disposal which is a Permitted Transaction or a Permitted Vessel Disposal.
 
22.11                  Arm’s length basis
 
(a)                                  Except as permitted under Clause 22.11(b), the Borrower and HoldCo shall not (and shall procure that each other Obligor shall not) enter into any transaction with any person except on arm’s length terms and for full market value.
 
(b)                                  The following transactions shall not be a breach of this Clause 22.11:
 
(i)                                      fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 ( Initial conditions precedent )or agreed by the Agent;
 
(ii)                                   any Permitted Transaction and any Permitted Intercompany Loan;
 
(iii)                                customary director’s fees consistent with past practice.
 
(iv)                               employment agreements in the ordinary course of business; and
 
(v)                                  management fees received by Parent Guarantor, in the ordinary course of business and in line with market practice.
 
22.12                  Merger
 
No Borrower nor HoldCo shall, and shall procure the Parent Guarantor shall not, without the prior written consent of the Lenders (such consent not to be unreasonably withheld), enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction.
 
22.13                  Change of business
 
The Borrowers and HoldCo shall not (and shall procure that each other Obligor shall not) make any substantial change to the general nature of its business from that carried on at the date of this Agreement.
 
22.14                  No other business
 
None of the Borrowers shall engage in any business other than the ownership, operation, chartering and management of the relevant Vessel owned by it and HoldCo shall not engage in any business other than the ownership of the shares in each Borrower.
 
22.15                  No acquisitions
 
No Borrower or HoldCo shall acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company.
 
22.16                  No Joint Ventures
 
No Borrower or HoldCo shall:
 
(a)                                  enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
 
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(b)                                  transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).
 
22.17                  No borrowings
 
No Borrower or HoldCo shall incur or allow to remain outstanding any Financial Indebtedness (except for the Loan) unless it is a Permitted Transaction or a Permitted Intercompany Loan provided that, in respect of any Permitted Intercompany Loan, no Default has occurred and is continuing and each of the Obligors that are to be a party to such Permitted Intercompany Loan have first provided to the Agent a duly executed original of a Subordination Agreement in relation thereto.
 
22.18                  No substantial liabilities
 
Except in the ordinary course of business, no Borrower or HoldCo shall incur any liability to any third party which is in the Agent’s opinion of a substantial nature.
 
22.19                  No loans or credit
 
No Borrower or HoldCo shall be a creditor in respect of any Financial Indebtedness (other than pursuant to the Finance Documents) unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of the relevant Vessel or a Permitted Transaction or a Permitted Intercompany Loan (and provided always that in the case of a Permitted Intercompany Loan, no Default has occurred and its continuing and the Obligors have provided to the Agent a duly executed Subordination Agreement in relation thereto).
 
22.20                  No guarantees or indemnities
 
No Borrower or HoldCo shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person unless it is a Permitted Transaction.
 
22.21                  No dividends
 
Except for any Permitted Dividend, neither the Borrowers (or any of them) nor HoldCo shall, and shall procure that the Parent Guarantor shall not:
 
(a)                                  declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
 
(b)                                  repay or distribute any dividend or share premium reserve; or
 
(c)                                   redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.
 
This Clause 22.21 does not apply to (i) any making, distribution, dividend, or payment in respect of the Parent Guarantor’s share capital (or any class of its share capital), if and only to the extent the same is exclusively made by way of an issue of non-redeemable shares, or (ii) declaration of any of foregoing in paragraph (i).
 
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22.22                  Inspection of records
 
Each Borrower and HoldCo shall, and shall procure the Parent Guarantor will, permit the inspection of its financial records and accounts as may be reasonably required from time to time by the Agent or its nominee.
 
22.23                  No change in Relevant Documents
 
(a)                                  No Borrower nor HoldCo shall (and the Borrowers shall procure that no other Obligor will):
 
(i)                                      exercise any discretion in a under any of the Relevant Documents which are not Finance Documents in a manner which is material and adverse to the interests of the Lenders; or
 
(ii)                                   amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Finance Documents, or any other document delivered to the Agent pursuant to Clause 4.1 ( Initial conditions precedent ) or Clause 4.2 ( Further conditions precedent ) or Clause 4.4 ( Conditions Subsequent ) other than in relation to (i) a time charter or other contract of employment which is not capable of exceeding twelve (12) months duration in an manner which is not material and adverse to the interests of the Lenders and (ii) non-material alterations to the terms of the Management Agreements (in respect of which (i) and (ii) no consent shall be required), provided there is no Default continuing or would result.
 
(b)                                  Each Borrower and HoldCo shall take all reasonable and practical steps to preserve and enforce its rights and pursue any claims and remedies arising under any Relevant Documents which are not Finance Documents.
 
(c)                                   Each Borrower and HoldCo shall (and shall procure that each other Security Party shall) comply with its obligations under the Relevant Documents which are not Finance Documents.
 
22.24                  Further assurance
 
(a)                                  Each Borrower and HoldCo shall (and shall procure that each other Obligor shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
 
(i)                                      to perfect any Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
 
(ii)                                   to confer on the Security Agent or confer on the Finance Parties an Security over any property and assets of that Borrower (or that other Obligor as the case may be) located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Security Documents; and/or
 
(iii)                                to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.
 
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(b)                                  Each Borrower and HoldCo shall (and shall procure that each other Obligor shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
 
22.25                  Sanctions
 
(a)                                  The Borrowers and HoldCo each undertake that it and each director, officer, agent, employee or person acting on behalf of any Obligor, is not a Restricted Person and is not owned, controlled, or an agent of a Restricted Person.
 
(b)                                  The Borrowers and HoldCo shall not (and shall procure that each other Obligor shall not), use any revenue or benefit derived from any activity or dealing with a Restricted Person in breach of Sanctions in discharging any obligation due or owing to the Finance Parties.
 
(c)                                   Each Borrower and HoldCo shall (and shall procure that each other Obligor shall not), to the extent permitted by law, promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or formal investigation against it brought by any Sanctions Authority, with respect to the activities of an Obligor.
 
22.26                  Use of proceeds
 
The Borrowers and HoldCo shall not, and will procure that each other Obligor shall not, and shall not permit or authorise any other person to, directly or indirectly, make available any proceeds of the Loan to fund or facilitate trade, business or other activities (i) involving or for the benefit of any Restricted Person in breach of Sanctions or (ii) in any other manner that could result in any Borrower or the Parent Guarantor or a Finance Party being in breach of any Sanctions or becoming a Restricted Person.
 
23.                                VESSEL UNDERTAKINGS
 
23.1                         General
 
The undertakings in this Clause 23 remain in force from the date of this Agreement for so long as any amount is outstanding under any Finance Document.
 
23.2                         Vessel Name and Registration
 
Each Borrower shall, in respect of the Vessel owned by it:
 
(a)                                  keep that Vessel registered in its name with the Approved Flag;
 
(b)                                  not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and
 
(c)                                   not change the name or port of registry of that Vessel without the prior written consent of the Agent (acting with the instruction of all Lenders).
 
23.3                         Repair and Classification
 
Each Borrower shall keep the Vessel owned by it:
 
(a)                                  in a good and safe condition and state of repair;
 
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(b)                                  consistent with first class ship ownership and management practice;
 
(c)                                   in a manner such that they maintain the Classification of that Vessel free of recommendations and conditions; and
 
(d)                                  so as to comply with all laws and regulations applicable to vessels registered under the Approved Flag or to vessels trading to any jurisdiction to which that Vessel may trade from time to time including but not limited to ISM Code and the ISPS Code.
 
23.4                         Modification
 
Each Borrower shall, in respect of the Vessel owned by it, not make or permit to be made, any modification or repairs to, or replacement of, the Vessel owned by it or equipment installed on that Vessel that would or might materially alter the structure, type or performance characteristics of that Vessel or materially reduce its value.
 
23.5                         Removal of Parts
 
Each Borrower shall, in respect of the Vessel owned by it, not remove, nor permit the removal, of any material part of the Vessel owned by it, or any item of equipment installed on that Vessel, unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security or any right in favour of any person other than the Security Agent and becomes on installation on that Vessel, the property of the relevant Borrower, and subject to the security constituted by the Mortgage relating to that Vessel PROVIDED THAT the relevant Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to that Vessel.
 
23.6                         Surveys
 
Each Borrower shall, in respect of the Vessel owned by it, submit that Vessel regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Agent, provide the Agent with copies of all survey reports.
 
23.7                         Inspection
 
Each Borrower shall permit the Agent and/or the Security Agent (by surveyors or other persons appointed by it for that purpose) to board the Vessel owned by it at all times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. Any costs, fees or expenses relating to such inspections shall be for the account of the Borrowers, provided that, so long as no Event of Default has occurred and is continuing, the Borrowers shall not be required to pay for more than one inspection per Vessel in any calendar year.
 
23.8                         Prevention and Release from Arrest
 
Each Borrower shall, in respect of the Vessel owned by it, promptly discharge:
 
(a)                                  all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Vessel, its Earnings or its Insurances;
 
(b)                                  all Taxes, dues and other amounts charged in respect of that Vessel, its Earnings or its Insurances; and
 
(c)                                   all other outgoings whatsoever in respect of that Vessel, its Earnings or its Insurances,
 
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and, forthwith upon receiving notice of the arrest of that Vessel, or of its detention in exercise or purported exercised of any lien or claim, the Borrowers shall procure its release by providing bail or otherwise as the circumstances may require.
 
23.9                         Compliance with Laws
 
Each Borrower shall:
 
(a)                                  comply, or procure compliance with all Environmental Laws, the ISM Code, the ISPS Code, Sanctions and all other laws and regulations relating to the Vessel owned by it, its ownership, operation and management or to its business;
 
(b)                                  not employ the Vessel owned by it nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code, any Environmental Laws and any Sanctions;
 
(c)                                   maintain an ISSC for the Vessel owned by it;
 
(d)                                  in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Vessel owned by it to enter or trade to any zone which is declared a war zone by any government or by the war risks insurers of the Vessel owned by it unless the prior written consent of the Agent has been given and the Borrowers have (at their expense) effected any special, additional or modified insurance cover which the Agent may require; and
 
(e)                                   in respect of any Vessel whose age exceeds 10 years, obtain a green passport for the Vessel owned by it, promptly after completion of the first dry-dock to occur after the tenth anniversary of the date on which the relevant Vessel was delivered by the relevant builder to its first owner, and shall maintain such green passport throughout the Facility Period.
 
23.10                  Classification Society
 
Following a written request by the Agent, the relevant Borrower shall instruct the relevant Classification Society to (and shall procure that such Classification Society shall undertake to the Security Agent to):
 
(a)                                  notify the Security Agent promptly in writing if the Classification Society:
 
(i)                                      receives notification that a Vessel’s classification society is to be changed; or
 
(ii)                                   becomes aware of any facts or matters which may result in or have resulted in a change, discontinuance, withdrawal suspension, or expiry of a Vessel’s class under the rules or terms and conditions of such Borrower’s or such Vessel’s membership of the Classification Society;
 
(b)                                  following receipt of a request in writing by the Security Agent:
 
(i)                                      send to the Security Agent certified true copies of all original class records held by the Classification Society in relation to such Vessel and/or allow the Security Agent (or its agents) at any time to inspect the original class and related records of such Borrower and such Vessel at the offices of the Classification Society, and to take copies of them; and
 
(ii)                                   confirm whether the relevant Borrower is or is not in default of any of its obligations or liabilities to the Classification Society, including confirmation
 
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on whether it has paid in full all fees or other charges due and payable to the Classification Society and, if that Borrower is in default, to specify in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Classification Society.
 
23.11                  Provision of Information
 
Each Borrower shall, in respect of the Vessel owned by it, promptly provide the Lenders with any information which they request regarding:
 
(a)                                  that Vessel, its employment, position and engagements;
 
(b)                                  its Earnings;
 
(c)                                   payments and amounts due to the master and crew of that Vessel;
 
(d)                                  any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Vessel and any payments made in respect of that Vessel;
 
(e)                                   any towages and salvages; and
 
(f)                                    the Borrowers’, the Approved Manager’s or that Vessel’s compliance with the ISM Code and the ISPS Code.
 
23.12                  Notification of Certain Events
 
Each Borrower shall, in relation to the Vessel owned by it, immediately notify the Agent by fax, confirmed forthwith by letter, of:
 
(a)                                  any casualty relating to that Vessel which is or is likely to be or to become a Major Casualty;
 
(b)                                  any occurrence as a result of which that Vessel has become or is, by the passing of time or otherwise, likely to become a Total Loss;
 
(c)                                   any requirement or recommendation made by any insurer or the Classification Society or by any competent authority which is not immediately complied with;
 
(d)                                  any arrest or detention of that Vessel, any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire;
 
(e)                                   any intended dry docking of that Vessel;
 
(f)                                    any Environmental Claim made against any Borrower or in connection with any Vessel, or any Environmental Incident;
 
(g)                                   any claim for breach of the ISM Code or the ISPS Code being made against any Borrower, the Approved Manager or otherwise in connection with that Vessel;
 
(h)                                  any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC; and
 
(i)                                      any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
 
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and the Borrowers shall keep the Agent advised in writing on a regular basis and in such detail as the Agent shall require of the Borrowers’, the Approved Manager’s or any other person’s response to any of those events or matters.
 
23.13                  Restrictions on Chartering; Appointment of Managers etc.
 
No Borrower shall, in relation to the Vessel owned by it:
 
(a)                                  let that Vessel on demise charter for any period;
 
(b)                                  enter into any time or consecutive voyage charter in respect of that Vessel for a term which exceeds, or which by virtue of any option of extensions may exceed (i) in the case of an Index-linked Charter, twenty-four (24) months; and otherwise (ii) eighteen (18) months;
 
(c)                                   enter into any charter in relation to that Vessel under which more than two (2) months’ hire (or the equivalent) is payable in advance;
 
(d)                                  charter that Vessel otherwise than on bona fide arm’s length terms at the time when that Vessel is fixed;
 
(e)                                   appoint a manager of that Vessel or, in relation to each member of the Group, an administrative manager, other than an Approved Manager or agree to any alteration to the terms of an Approved Manager’s appointment;
 
(f)                                    enter into any formal arrangement or documentation with any Approved Commercial Manager (Internal);
 
(g)                                   pay or agree to pay any fees, commission, or any other compensation, contribution, remuneration, or payment of any kind whatsoever to an Approved Commercial Manager (Internal) (other than in relation to the reimbursement of the Borrowers’ Share of Group Expenses in accordance with the terms of the Finance Documents);
 
(h)                                  deactivate or lay-up that Vessel; or
 
(i)                                      other than in respect of a scheduled dry-docking of a Vessel as approved by the relevant Approved Manager, put that Vessel into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed US$1,000,000 (or the equivalent in any other currency) unless that person has first given to the Agent in terms satisfactory to it a written undertaking not to exercise any lien on that Vessel or its Earnings for the cost of such work or for any other reason.
 
23.14                  Notice of Mortgage
 
Each Borrower shall keep the Mortgage registered against the Vessel owned by it as a valid first priority or first preferred mortgage (as the case may be), carry on board that Vessel a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of that Vessel a framed printed notice stating that that Vessel is mortgaged by the Borrower to the Security Agent.
 
23.15                  Sharing of Earnings
 
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings relating to any Vessel, other than (i) pool arrangements in place as at the Utilisation Date and approved by the Lenders and otherwise (ii) with the prior written consent of the Agent (acting on the instructions of all Lenders), such consent not to be unreasonably withheld.
 
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24.                                INSURANCE UNDERTAKINGS
 
24.1                         General
 
Each Borrower undertakes to comply with the following provisions of this Clause 24 for so long as any amount is outstanding under the Finance Documents or except as the Security Agent may otherwise permit (acting on the instructions of all Lenders.
 
24.2                         Maintenance of Obligatory Insurances
 
Each Borrower will keep the Vessel owned by it at all times insured at its own cost and expense against:
 
(a)                                  fire and usual marine risks (including excess risks and increased value) and war risks (including the London blocking and trapping addendum or equivalent coverage, including terrorism and privacy risks where excluded under the fire and usual marine risks insurance and including without limitation protection and indemnity war risks with a separate limit not less than hull value) for an amount on an agreed value basis at least the greater of:
 
(i)                                      an amount equal to 140% of the Notional Vessel Tranche in respect of that Vessel (and, when aggregated with such insurances in respect of each Vessel other than that Vessel, 140% of the Loan); and
 
(ii)                                   the Market Value of that Vessel;
 
(b)                                  protection and indemnity risks (including without limitation protection and indemnity war risks in excess of the amount for war risks (hull) and oil pollution liability risks and in respect of the full value and tonnage of the Vessel), on “full entry terms” for the highest available amount in the insurance market for vessels of a similar age and type as that Vessel (but, in relation to liability for oil pollution, for an amount not less than US$1,000,000,000); and
 
(c)                                   any other risks against which the Agent considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Agent be reasonable for that Borrower to insure and which are specified by the Agent by notice to the relevant Borrower.
 
24.3                         Terms of Obligatory Insurances
 
The obligatory insurances shall:
 
(a)                                  be in Dollars;
 
(b)                                  be on terms approved by the Agent in writing;
 
(c)                                   be through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations, which are members of the International Group of Protection and Indemnity Associations, and have Standard & Poor’s rating of at least A or a comparable rating by any other rating agency acceptable to the Agent (acting on the instructions of all Lenders);
 
(d)                                  whenever required by the Agent, name (or be amended to name) the Security Agent as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Agent (as the case
 
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may be), but without the Security Agent thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
 
(e)                                   name the Security Agent as loss payee with such directions for payment as the Security Agent may specify (such loss payable clause to be in the for determined pursuant to the provisions of the General Assignment);
 
(f)                                    provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Agent shall be made without set off, counterclaim or deductions or condition whatsoever;
 
(g)                                   provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Agent and/or the Agent; and
 
(h)                                  provide that the Security Agent may make proof of loss if the relevant Borrower fails to do so.
 
24.4                         Renewal
 
Each Borrower shall:
 
(a)                                  at least fourteen (14) days before the expiry of any obligatory insurance relating to a Vessel;
 
(i)                                      notify the Agent of the approved brokers (or other insurers) and any protection and indemnity or war risks association through or with whom a Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and
 
(ii)                                   obtain the Agent’s approval to the matters referred to in paragraph (a)(i);
 
(b)                                  at least seven (7) days before the expiry of any obligatory insurance relating to a Vessel, renew that obligatory insurance in accordance with the Agent’s approval pursuant to paragraph (a); and
 
(c)                                   not add any (other) assured to any obligatory insurance without the prior written consent of the Agent.
 
24.5                         Copies of Policies
 
Each Borrower shall provide to the Agent pro forma copies of all insurance policies and other documentation issued by brokers, insurance and protection and indemnity associations as soon as they are available after they have been placed or renewed.
 
24.6                         Copies of Certificates of Entry
 
Each Borrower shall ensure that any protection and indemnity and/or war risks association in which a Vessel is entered provides the Agent with:
 
(a)                                  a certified copy of the certificate of entry for the Vessel owned by it;
 
(b)                                  a letter or letters of undertaking in such form as may be required by the Security Agent; and
 
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(c)                                   where required to be issued under the terms of insurance or indemnity provided by the relevant Borrower’s protection and indemnity association, a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Vessel owned by it.
 
24.7                         Letters of Undertaking
 
Each Borrower shall ensure that all approved brokers provide the Security Agent a letter or letters or undertaking in a form required by the Security Agent and including undertakings by the approved brokers that:
 
(a)                                  they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment in the agreed form or in such other forms as the Security Agent may require;
 
(b)                                  they will hold such policies, and the benefit of such insurances, to the order of the Security Agent in accordance with the said loss payable clause;
 
(c)                                   they will advise the Security Agent immediately of any material change to the terms of the obligatory insurances;
 
(d)                                  they will notify the Security Agent, not less than seven (7) days before the expiry of the relevant obligatory insurances, in the event of their not having received notice of renewal instructions from the relevant Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Agent of the terms of the instructions; and
 
(e)                                   they will not set off against any sum recoverable in respect of a claim relating to the Vessel owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Vessel or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Vessel forthwith upon being so requested by the Security Agent.
 
24.8                         Deposit Original Policies
 
Each Borrower shall ensure that the originals of all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
 
24.9                         Payment of Premiums
 
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Agent.
 
24.10                  P&I Guarantees
 
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
 
24.11                  Additional Assureds
 
No Borrower shall add any (other) assured to any obligatory insurance without the prior written consent of the Security Agent.
 
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24.12                  Compliance with Terms of Obligatory Insurances
 
No Borrower shall do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
 
(a)                                  each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 24.6 ( Copies of Certificates of Entry ) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Agent has not given its prior written approval;
 
(b)                                  no Borrower shall make any changes relating to the Classification or Classification Society or manager or operator of the Vessel owned by it approved by the underwriters of the obligatory insurances; and
 
(c)                                   no Borrower shall employ the Vessel owned by it, or allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the Agent and the insurers and complying with any requirements (as to extra premium or otherwise) which the Agent and the insurers specify.
 
24.13                  Alteration to Terms of Obligatory Insurances
 
No Borrower shall make nor agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Agent (acting on the instructions of all the Lenders).
 
24.14                  Settlement of Claims
 
No Borrower shall settle, compromise or abandon any claim under any obligatory insurance for a Total Loss or for a Major Casualty without the prior written consent of the Security Agent, and shall do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
 
24.15                  Application of recoveries
 
Any sums paid under the obligatory insurances other than to the Security Agent shall be applied in repairing the damage and/or discharging the liability in respect of which they have been paid, save to the extent that the repairs have already been completed and paid for and/or the liability has already been fully discharged.
 
24.16                  Provision of Copies of Communications
 
Each Borrower shall provide the Agent, at the time of each such communication, copies of all written communications between the Borrower and each of the following:
 
(a)                                  the approved brokers; and
 
(b)                                  the approved protection and indemnity and/or war risks associations; and
 
(c)                                   the approved insurance companies and/or underwriters,
 
which relate directly or indirectly to:
 
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(i)                                      that Borrower’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 
(ii)                                   any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.
 
24.17                  Provision of Information
 
In addition, each Borrower shall promptly provide the Agent (or any persons which the Agent may designate) with any information which the Agent (or any such designated person) requests for the purpose of:
 
(a)                                  obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
 
(b)                                  effecting, maintaining or renewing any such insurances as are referred to in Clause 24.18 ( Mortgagee’s Interest and Additional Perils ) or dealing with or considering any matters relating to any such insurances,
 
and each Borrower shall, forthwith upon demand, indemnify the Agent in respect of all fees and other expenses incurred by or for the account of the Agent in connection with any such report as is referred to in paragraph (a).
 
24.18                  Mortgagee’s Interest and Additional Perils
 
The Security Agent shall be entitled, at the cost and expense of the Borrowers, from time to time to effect, maintain and renew:
 
(a)                                  a Mortgagee’s Interest Additional Perils Insurance and a Mortgagee’s Interest Marine Insurance in each case in an amount equal to 120% of the Loan and otherwise on such terms, through such insurers and generally in such manner as the Security Agent may from time to time consider appropriate; and
 
(b)                                  any other insurance cover which the Security Agent reasonable requires in respect of an Finance Party’s interests and potential liabilities (whether as mortgagee of a Vessel or beneficiary of the Security Documents) and the Borrowers shall upon demand fully indemnify the Security Agent in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in this Clause 24.18 or dealing with, or considering, any matter arising out of such insurance,
 
and the Borrowers shall supply, or procure that there is supplied, to the Security Agent such information as the Security Agent may require in connection with the matters referred to in this Clause 24.18.
 
24.19                  Change in insurance requirements
 
The Agent shall have the right, by giving notice to the Borrowers, to change the terms and requirements of this Clause 24 in such manner as it considers appropriate as a result of a change of circumstances or practice after the date of this Agreement, in which case, from the date being fourteen (14) days after such notice is provided, this Clause 24 shall be automatically be deemed modified in accordance with the terms of that notice.
 
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25.                                ACCOUNTS
 
25.1                         Maintenance
 
(a)                                  Other than with the consent of the Agent, no Borrower shall open or maintain any bank accounts other than its Earnings Account and HoldCo shall not open or maintain any bank accounts other than the Retention Account and the Minimum Liquidity Account.
 
(b)                                  Each Borrower shall maintain the relevant Accounts with the Account Bank, free of Security and rights of set-off (other than as created under the Account Security), until no amount remains outstanding from them under this Agreement or any other Finance Documents.
 
25.2                         Location of Accounts
 
Each Borrower shall promptly:
 
(a)                                  comply with any requirement of the Agent as to the location or relocation of the Accounts; and
 
(b)                                  execute any documents which the Agent specifies to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) each Account.
 
25.3                         Application of Account
 
Each Borrower shall procure that transfers are made from each Account (and irrevocably authorises the Agent to instruct an Account Bank to transfer from each Account) in order to facilitate the payment of amounts required and/or contemplated by this Agreement.
 
25.4                         Earnings and Requisition Compensation
 
(a)                                  Each Borrower shall procure that all Earnings in relation to its Vessel is credited to that Borrower’s Earnings Account, unless and until the Agent shall otherwise direct.
 
(b)                                  Each Borrower shall be entitled to withdraw from its Earnings Account any amount, if any, standing to the credit of the Earnings Account:
 
(i)                                      in payment of amounts due and payable under the Finance Documents;
 
(ii)                                   (provided no Event of Default has occurred and is continuing) in payment of amounts due and payable in respect of Operating Expenses;
 
(iii)                                (provided no Event of Default has occurred and is continuing and such payment is made on, or within five (5) Business Days after, a Excess Cash Flow Payment Date) in payment of amounts due and payable in respect of Borrowers’ Share of Group Expenses; and
 
(iv)                               (provided no Default has occurred and is continuing) for such other purposes expressly permitted by the terms of the Finance Documents.
 
(c)                                   Each Borrower shall procure that the proceeds of any Permitted Vessel Disposal and Requisition Compensation in relation to its Vessel is credited to the Retention Account, unless and until the Agent shall otherwise direct and the Borrower shall not
 
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be permitted to withdraw any sums from the Retention Account without the prior written consent of the Agent (acting on the instructions of the Majority Lenders).
 
(d)                                  The Minimum Liquidity Account shall be a blocked account and HoldCo shall not be permitted to withdraw any sums from the Minimum Liquidity Account without the prior written consent of the Agent (acting on the instructions of the Majority Lenders).
 
(e)                                   Each Borrower shall only be permitted to withdraw sums from the Accounts in accordance with the provisions of the Finance Documents or as otherwise permitted by the Agent.
 
(f)                                    The Agent shall be entitled to debit the Earnings Accounts from time to time (without notice to the Borrowers) in order to discharge any amount due and owing from the Obligors under a Finance Document for more than three (3) Business Days.
 
26.                                SECURITY SHORTFALL
 
26.1                         Additional security
 
(a)                                  The Borrowers shall ensure that the ratio (expressed as a percentage) of: (x) the aggregate of the Market Value of the Vessels plus the aggregate value of any additional security provided pursuant to this Clause 26; to (y) the aggregate amount of the Loan then outstanding (the “ VTL Coverage ”), is at all times more than 140%.
 
(b)                                  If at any time the VTL Coverage is less than or equal to 140%, the Borrowers shall, within thirty (30) days of the Agent’s request, at the Borrower’s option:
 
(i)                                      pay to the Security Agent or to its nominee a deposit of Cash in the amount of the shortfall to be secured in form and substance satisfactory the Security Agent in favour of the Finance Parties as additional security for the payment of the Secured Liabilities; or
 
(ii)                                   give to the Security Agent other additional security in form and substance reasonably satisfactory to the Security Agent in favour of the Finance Parties for the payment of the Secured Liabilities which (in the opinion of the Security Agent acting in its sole discretion):
 
(A)                                has a net realisable value (on an aggregate basis) equal to or greater than the applicable shortfall; and
 
(B)                                is of a type which is in form and substance satisfactory to it (it being acknowledged that any unencumbered Fleet Vessel listed in Part I of Schedule 12 ( Unencumbered Fleet Vessels) (“ Additional Vessel ”) may be provided as additional security provided that the terms set out in Part II of Schedule 12 ( Additional Security Terms ) have been complied with in a manner satisfactory to the Agent (acting on the instructions of the Majority Lenders); or
 
(iii)                                prepay the Loan to the extent required to eliminate the shortfall.
 
(c)                                   Clause 7 ( Prepayment and cancellation ) shall apply to prepayments under paragraph (b), but provided that no Prepayment Fee is payable in respect of such prepayment.
 
(d)                                  Any prepayment made under this Clause 26.1 shall be applied pro rata against the Repayment Instalments and the Balloon Instalment and pro rata against the Notional Vessel Tranches.
 
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(e)                                   The value of any additional security provided shall in the case of cash deposit be the face amount of the deposit, in the case of a Vessel be determined in the same manner as the Market Value of the Vessels and in the case of other security shall be determined by the Agent in its absolute discretion.
 
26.2                         Valuation of Vessels / Fleet Vessels
 
The Market Value of a Vessel, a Fleet Vessel and/or an Additional Vessel at any time is that shown by the most recent Valuation in respect of that Vessel.
 
26.3                         Valuation of Additional Vessel Security
 
The net realisable value of any additional security which is provided under Clause 26.1 ( Additional Security ) in respect of an Additional Vessel shall be the Market Value of that Additional Vessel shown by the most recent Valuation.
 
26.4                         Delivery of Valuations
 
(a)                                  The Borrowers will procure and promptly deliver to the Agent for distribution to each Lender one Valuation relating to each Vessel and each other Fleet Vessel at least once during each rolling six-month period following the date of this Agreement at the Borrowers’ cost provided that at least one Valuation with respect to each Vessel and each other Fleet Vessel must be provided pursuant to this paragraph (a) which is prepared, delivered and dated no earlier than 15 June and no later than 15 July, and another one dated no earlier than 15 December and no later than 15 January of each year.
 
(b)                                  The Agent is at liberty (at the cost of the Lenders), and the Guarantors are at the liberty (at the cost of the Guarantors), to assess the Market Value of the Vessels and each other Fleet Vessel at any time and at such frequency as the Agent considers necessary or desirable in its absolute discretion.
 
(c)                                   If an Event of Default is continuing or the Agent suspects that an Event of Default has occurred and is continuing, the Agent is at liberty to assess the Market Value of the Vessels and each other Fleet Vessel at any time, and any such Valuation will be at the Borrowers’ cost if and to the extent that an Event of Default was continuing at the time the Agent elected to obtain such Valuation.
 
26.5                         Valuations Binding
 
Any valuation under Clause 26.2 ( Valuation of Vessels/Fleet Vessels ) shall be binding and conclusive as regards the Borrowers, as shall any valuation which the Agent makes of any additional security which does not consist of or include Security.
 
26.6                         Provision of Information
 
Each Borrower shall promptly provide (or procure the provision to, as the case may be) the Agent and any shipbroker or expert acting under Clause 26.2 ( Valuation of Vessels/Fleet Vessels ) with any information which the Agent or the shipbroker or expert may reasonably require for the purposes of the valuation; and, if that Borrower fails to provide the information by the dates specified in the request, the valuation will be made on any basis and assumptions which the Agent (or the shipbroker or expert appointed by it) considers prudent.
 
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26.7                         Payment of Valuation Expenses
 
Except as otherwise provided in Section 26.4, the Borrowers and HoldCo shall, on demand, as a joint and several obligation, pay the Agent the amount of the fees and expenses of any shipbroker or expert instructed by the Agent under this Clause 26 ( Security Shortfall ) and all legal and other expenses incurred by the Agent in connection with any matter arising out of this Clause 26 ( Security Shortfall ).
 
26.8                         Release of additional security
 
Any additional security provided by or on behalf of the Borrowers pursuant to this Clause 26 ( Security Shortfall ) shall, at the Borrowers’ own cost and expense, be released upon the Borrowers’ written request to the Agent provided that, without taking into account such additional security, the Borrowers:
 
(a)                                  have satisfied the Agent (acting reasonably) that the VTL Coverage (excluding, for the purposes of such calculation, any additional security provided pursuant to Clause 26.1 ( Additional Security ) and which is requested to be released pursuant to this Clause 26.8) is not less than 150% at that time, based on recent Valuations in respect of each Vessel dated no earlier than fifteen (15) days prior to the date of the request; and
 
(b)                                  no Default has occurred and is continuing.
 
27.                                EVENTS OF DEFAULT
 
Each of the events or circumstances set out in this Clause 27 is an Event of Default (save for Clause 27.25 ( Acceleration ) and Clause 27.26 ( Approved Manager) .
 
27.1                         Non-payment
 
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless its failure to pay is caused by either (i) an administrative or technical error or (ii) a Disruption Event, and, in either event, is paid within three (3) Business Days of its due date.
 
27.2                         Other Specific Obligations
 
(a)                                  Any requirement of Clause 21 ( Financial covenants ) is not satisfied.
 
(b)                                  An Obligor does not comply with Clause 26.1 ( Additional Security ).
 
(c)                                   The obligatory insurances of a Vessel are not placed and kept in full force and effect in accordance with Clause 23.15 ( Insurance undertakings ).
 
27.3                         Other Obligations
 
(a)                                  An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.1 ( Non-payment ), Clause 27.2, ( Other Specific Obligations ), and Clause 27.24 ( Sanctions ).
 
(b)                                  No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within fourteen (14) days of the earlier of (i) the Agent giving notice to the Borrowers and (ii) any Obligor becoming aware of the failure to comply.
 
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27.4                         Misrepresentation
 
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
 
27.5                         Cross default
 
(a)                                  Any Financial Indebtedness of any member of the Group:
 
(i)                                      is not paid when due nor within any originally applicable grace period; or
 
(ii)                                   is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described);
 
(iii)                                is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event.
 
(b)                                  No Event of Default shall occur under this paragraph (b) unless, in respect of any member of the Group other than a Borrower or HoldCo, the aggregate amount of Financial Indebtedness or commitment (as the case may be) falling within (a) above is more than US$5,000,000 or its equivalent in any other currency.
 
(c)                                   A Borrower is in breach of any of its material obligations under any Relevant Document or any other material contract entered into by a Borrower, the effect of which would reasonably be expected to result in a Material Adverse Effect.
 
27.6                         Insolvency
 
(a)                                  An Obligor is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
 
(b)                                  The value of the assets of any Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
 
(c)                                   A moratorium is declared in respect of any indebtedness of any Obligor. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default covered by that moratorium.
 
27.7                         Insolvency proceedings
 
(a)                                  Any corporate action, legal proceedings or other procedure or step is taken in relation to:
 
(i)                                      the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Obligor;
 
(ii)                                   a composition, compromise, assignment or arrangement with any creditor of any Obligor;
 
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(iii)                                the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Obligor or any of its assets; or
 
(iv)                               enforcement of any Security over any assets of any Obligor,
 
or any analogous procedure or step is taken in any jurisdiction.
 
(b)                                  Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within thirty (30) days of commencement.
 
27.8                         Creditors’ process
 
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of any Obligor and is not discharged within fourteen (14) days.
 
27.9                         Unlawfulness and invalidity
 
(a)                                  It is or becomes unlawful for any Obligor to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Security Documents ceases to be effective or any subordination created under a Finance Document is or becomes unlawful.
 
(b)                                  Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding, or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Finance Parties under the Finance Documents.
 
(c)                                   Any Finance Document ceases to be in full force and effect or any Transaction Security created or expressed to be created by the Security Documents ceases to be legal, valid, binding, enforceable, or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.
 
(d)                                  Any Transaction Security proves to have ranked after or lost its priority to any other Security.
 
27.10                  Cessation of business
 
Any Obligor ceases, or threatens to cease, to carry on business except as a result of any disposal allowed under this Agreement.
 
27.11                  Expropriation
 
The authority or ability of any Obligor to conduct its business is limited or is wholly or substantially curtailed by seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any government or agency in relation to an Obligor or any of its assets.
 
27.12                  Repudiation and rescission of agreements
 
(a)                                  Any Obligor (any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document, a Relevant Document, or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document, a Relevant Document, or any Transaction Security.
 
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27.13                  Conditions Subsequent
 
Any of the conditions referred to in Clause 4.4 ( Conditions subsequent ) is not satisfied within the time reasonably required by the Agent.
 
27.14                  Revocation or modification of Authorisation
 
Any Authorisation of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Obligors to comply with any of their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn, or withheld, or is modified in a manner which the Agent considers is, or may be, prejudicial to the interests of any Finance Party, or ceases to remain in full force and effect.
 
27.15                  Reduction of capital
 
A Borrower or HoldCo reduces its authorised or issued or subscribed capital.
 
27.16                  Loss of Vessel
 
A Vessel suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Security Agent as security for the payment of all or any part of the Indebtedness, except that a Total Loss (which term shall for the purposes of the remainder of this Clause 27.16 shall include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:
 
(a)                                  that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances; and
 
(b)                                  no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Agent in its discretion that any such refusal or dispute is likely to occur; and
 
(c)                                   payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within on hundred and eighty (180) days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree.
 
27.17                  Challenge to registration
 
The registration of a Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.
 
27.18                  Classification and regulatory approvals
 
The classification certificate of a Vessel is withdrawn or a Vessel ceases to be classified with a Classification Society for any reason.
 
27.19                  War
 
The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.
 
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27.20                  Notice of determination
 
A Guarantor gives notice to the Security Agent to determine any obligations under a Guarantee.
 
27.21                  Vessel Defaults
 
(a)                                  A Vessel is arrested, detained, seized, impounded in exercise or purported exercise of any possessory lien or other claim or interest and the Vessel is not released within fourteen (14) days of the occurrence of the same.
 
(b)                                  There is a default under any charter of a Vessel or any charter of a Vessel is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to be in full force and effect prior to its expiration date and such default, termination, cancellation, suspension, rescission, or revocation is likely to be material and adverse to the interests of the Lenders.
 
(c)                                   A Vessel is not managed by an Approved Manager unless, within thirty (30) days from the date on which that Vessel ceases to be managed by an Approved Manager, another Approved Manager is appointed on terms reasonably acceptable to the Lenders.
 
27.22                  Litigation
 
Any litigation, arbitration or administrative or regulatory proceeding is commenced by or against any Obligor which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect. .
 
27.23                  Material adverse change
 
Any event or circumstance occurs which, in the reasonable opinion of the Majority Lenders, has or is reasonably likely to have a Material Adverse Effect.
 
27.24                  Sanctions
 
(a)                                  Any of the Obligors, any member of the Group, or any of its or their Subsidiaries becomes a Restricted Party or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Restricted Party in breach of Sanctions or any of such persons becomes the owner or controller of a Restricted Party;
 
(b)                                  Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Restricted Person in breach of Sanctions or otherwise is, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
 
(c)                                   Any of the Obligors or any of its or their Subsidiaries is not in compliance with any Sanctions.
 
27.25                  Acceleration
 
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders:
 
(a)                                  by notice to the Borrowers, cancel the Total Commitments, at which time they shall immediately be cancelled, provided that in the case of an Event of Default under either of Clauses 27.6 ( Insolvency ) and 27.7 ( Insolvency Proceedings ) the Total
 
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Commitments shall be deemed immediately cancelled without notice or demand therefor;
 
(b)                                  by notice to the Borrowers, declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, provided that in the case of an Event of Default under either of Clauses 27.6 ( Insolvency ) and 27.7 ( Insolvency Proceedings ) the Total Commitments shall be deemed immediately cancelled without notice or demand therefor;
 
(c)                                   by notice to the Borrowers, declare that all or part of the Loan is payable on demand, at which time all or part of the Loan (as the case may be) shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
 
(d)                                  declare that no withdrawal may be made from any Account; and/or
 
(e)                                   exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers, or discretions under the Finance Documents.
 
27.26                  Approved Technical Manager
 
Without prejudice to Clause 27.25 ( Acceleration ), the Borrowers will, at the request of the Agent, at any time when an Insolvency Event has occurred in respect of the Approved Technical Manager, promptly (and in any event within ten (10) Business Days) replace the Approved Technical Manager appointed by the Borrowers in relation to any Vessel with an alternative entity identified and on terms approved by the Agent (acting on the instructions of the Majority Lenders) as appropriate.
 
28.                                CHANGES TO THE LENDERS
 
28.1                         Assignments and transfers by the Lenders
 
Subject to this Clause 28, a Lender (the “ Existing Lender ”) may:
 
(a)                                  assign any of its rights; or
 
(b)                                  transfer by novation any of its rights and obligations,
 
to any other person other than an individual (the “ New Lender ”).
 
28.2                         Conditions of assignment or transfer
 
(a)                                  Any transfer or assignment by a Lender of part of its Commitment must be for pro rata portion of that Lenders’ Total Commitments immediately preceding such transfer of assignment, and must be pro rata across all outstanding Notional Vessel Tranches.
 
(b)                                  No consent from the Borrowers shall be required for any assignment or transfer by an Existing Lender except in relation to any transfer or assignment to a Distressed Investor (unless an Event of Default has occurred and is continuing in which case no consent is required to any assignment or transfer, including an assignment or transfer to a Distressed Investor).
 
(c)                                   Except in the case of an assignment or transfer by an Existing Lender to an Affiliate of it or a fund managed or advised by such Existing Lender, or of a re-transfer by such entity to such Existing Lender, an Existing Lender will first deliver written notice
 
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(“ Notice of Intention to Transfer/Assign ”) to the other Lenders of its intention to assign or transfer such part of its Commitment. A Notice of Intention to Transfer/Assign shall name the proposed transferees (if any), specify the price (if any) offered by a third party or the price (if any) sought by the Existing Lender. The other Lenders shall have the right of first refusal to purchase all, but not less than all, of the offered Commitment. The right of first refusal shall be exercised within ten (10) Business Days after the receipt of the Notice of Intention to Transfer/Assign. If more than one Lender exercises such right of first refusal, then those exercising Lenders shall purchase the offered Commitment in proportion to their existing Commitments as between themselves at that time.
 
(d)                                  An assignment will only be effective on:
 
(i)                                      receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and
 
(ii)                                   performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.
 
(e)                                   A transfer will only be effective if the procedure set out in Clause 28.5 ( Procedure for transfer ) is complied with.
 
(f)                                    If:
 
(i)                                      a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
 
(ii)                                   as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 ( Tax gross up and indemnities ) or Clause 13 ( Increased costs ),
 
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph f shall not apply:
 
(A)                                in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility; or
 
(B)                                to the extent that the payment under Clause 12 ( Tax gross-up and indemnities ) relates to a FATCA Deduction.
 
(g)                                   Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
 
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28.3                         Assignment or transfer fee
 
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $5,000.
 
28.4                         Limitation of responsibility of Existing Lenders
 
(a)                                  Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
 
(i)                                      the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
 
(ii)                                   the financial condition of any Obligor;
 
(iii)                                the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
 
(iv)                               the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
 
and any representations or warranties implied by law are excluded.
 
(b)                                  Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
 
(i)                                      has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
 
(ii)                                   will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
 
(c)                                   Nothing in any Finance Document obliges an Existing Lender to:
 
(i)                                      accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28; or
 
(ii)                                   support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.
 
28.5                         Procedure for transfer
 
(a)                                  Subject to the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
 
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(b)                                  The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
 
(c)                                   Subject to Clause 28.9 ( Pro rata interest settlement ), on the Transfer Date:
 
(i)                                      to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents, each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “ Discharged Rights and Obligations ”);
 
(ii)                                   each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
 
(iii)                                the Agent, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
 
(iv)                               the New Lender shall become a Party as a “Lender”.
 
28.6                         Procedure for assignment
 
(a)                                  Subject to the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ) an assignment may be effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
 
(b)                                  The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
 
(c)                                   Subject to Clause 28.9 ( Pro rata interest settlement ), on the Transfer Date:
 
(i)                                      the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement;
 
(ii)                                   the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the “ Relevant Obligations ”) and expressed to be the subject of the release in the Assignment Agreement; and
 
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(iii)                                the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.
 
(d)                                  The Lenders may utilise procedures other than those set out in this Clause (d) to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause 28.5 ( Procedure for transfer ), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ).
 
28.7                         Copy of Transfer Certificate or Assignment Agreement to Borrowers
 
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.
 
28.8                         Security over Lenders’ rights
 
In addition to the other rights provided to Lenders under this Clause 28, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
 
(a)                                  any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
 
(b)                                  in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, except that no such charge, assignment or Security shall:
 
(i)                                      release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
 
(ii)                                   require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
 
28.9                         Pro rata interest settlement
 
If the Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.5 ( Procedure for transfer ) or any assignment pursuant to Clause 28.6 ( Procedure for assignment ) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):
 
(a)                                  any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“ Accrued Amounts ”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than 6 months, on the next of the dates which falls at 6 monthly intervals after the first day of that Interest Period); and
 
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(b)                                  the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
 
(i)                                      when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
 
(ii)                                   the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.9, have been payable to it on that date, but after deduction of the Accrued Amounts.
 
29.                                CHANGES TO THE OBLIGORS
 
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
 
30.                                ROLE OF THE AGENT AND THE SECURITY AGENT
 
30.1                         The Agent and the Security Agent
 
(a)                                  Each of the Finance Parties appoints the Agent to act as its agent under and in connection with the Finance Documents.
 
(b)                                  The Security Agent declares that it holds the Security Property on trust for the Secured Parties on the terms contained in this Agreement.
 
(c)                                   Each of the Finance Parties authorises the Agent and the Security Agent:
 
(i)                                      to exercise the rights, powers, authorities and discretions specifically given to the Agent and the Security Agent (as applicable) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and
 
(ii)                                   to execute each of the Security Documents and all other documents approved by the Majority Lenders or all Lenders (as the case may be) for execution by it.
 
(d)                                  Each of the Lenders irrevocably appoints the Security Agent as trustee on its behalf with regard to (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Finance Parties or any of them or for the benefit thereof under or pursuant to this Agreement, or any of the Finance Documents (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to any Finance Party in this Agreement, or any Finance Document), (ii) all moneys, property and other assets paid or transferred to or vested in any Finance Party or any agent of any Finance Party or received or recovered by any Finance Party or any agent of any Finance Party pursuant to, or in connection with, this Agreement or the Finance Documents whether from any Obligor or any other person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Finance Party or any agent of any Finance Party in respect of the same (or any part thereof).
 
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30.2                         Enforcement through Security Agent only
 
The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.
 
30.3                         Instructions
 
(a)                                  Each of the Agent and the Security Agent shall:
 
(i)                                      unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent or Security Agent (as applicable) in accordance with any instructions given to it by:
 
(A)                                all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
 
(B)                                in all other cases, the Majority Lenders; and
 
(ii)                                   not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (A) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).
 
(b)                                  Each of the Agent and the Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent or Security Agent (as applicable) may refrain from acting unless and until it receives those instructions or that clarification.
 
(c)                                   Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent or Security Agent (as applicable) by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
 
(d)                                  Paragraph (c) above shall not apply:
 
(i)                                      where a contrary indication appears in a Finance Document;
 
(ii)                                   where a Finance Document requires the Agent or the Security Agent to act in a specified manner or to take a specified action;
 
(iii)                                in respect of any provision which protects the Agent’s or Security Agent’s own position in its personal capacity as opposed to its role of Agent or Security Agent for the relevant Finance Parties or Secured Parties (as applicable) including, without limitation, Clause 30.5 ( No fiduciary duties ) to Clause 30.10 ( Exclusion of liability ), Clause 30.13 ( Confidentiality ) to Clause 30.20 ( Custodians and nominees ) and Clause 30.23 ( Acceptance of title ) to Clause 30.27 ( Disapplication of Trustee Acts );
 
(iv)                               in respect of the exercise of the Security Agent’s discretion to exercise a right, power or authority under any of:
 
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(A)                                Clause 31.1 ( Application of Receipts — Security Agent );
 
(B)                                Clause 31.3 ( Prospective liabilities ); and
 
(C)                                Clause 31.2 ( Deductions from receipts ).
 
(e)                                   If giving effect to instructions given by the Majority Lenders would (in the Agent’s or (as applicable) the Security Agent’s opinion) have an effect equivalent to an amendment or waiver referred to in Clause 39 ( Remedies and waivers ), the Agent or (as applicable) Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Agent or Security Agent) whose consent would have been required in respect of that amendment or waiver.
 
(f)                                    In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:
 
(i)                                      it has not received any instructions as to the exercise of that discretion; or
 
(ii)                                   the exercise of that discretion is subject to paragraph (d)(iv) above,
 
the Agent or Security Agent shall do so having regard to the interests of (in the case of the Agent) all the Finance Parties and (in the case of the Security Agent) all the Secured Parties.
 
(g)                                   The Agent or the Security Agent (as applicable) may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.
 
(h)                                  Without prejudice to the remainder of this Clause 30.3 ( Instructions ), in the absence of instructions, each of the Agent and the Security Agent may act (or refrain from acting) as it considers to be in the best interest of (in the case of the Agent) the Finance Parties and (in the case of the Security Agent) the Secured Parties.
 
(i)                                      Neither the Agent nor the Security Agent is authorised to act on behalf of a Finance Party (without first obtaining that Finance Party’s consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security or Security Documents.
 
30.4                         Duties of the Agent and Security Agent
 
(a)                                  The duties of the Agent and the Security Agent under the Finance Documents are solely mechanical and administrative in nature.
 
(b)                                  Subject to paragraph (c) below, each of the Agent and the Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent or Security Agent (as applicable) for that Party by any other Party.
 
(c)                                   Without prejudice to Clause 28.7 ( Copy of Transfer Certificate or Assignment Agreement to ), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.
 
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(d)                                  Except where a Finance Document specifically provides otherwise, neither the Agent nor the Security Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
 
(e)                                   If the Agent or the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
 
(f)                                    If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.
 
(g)                                   Each of the Agent and the Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
 
30.5                         No fiduciary duties
 
(a)                                  Nothing in any Finance Document constitutes:
 
(i)                                      the Agent as a trustee or fiduciary of any other person; or
 
(ii)                                   the Security Agent as an agent, trustee or fiduciary of any Obligor.
 
(iii)                                Neither the Agent nor the Security Agent shall be bound to account to any other Finance Party or (in the case of the Security Agent) any Secured Party or the profit element of any sum received by it for its own account.
 
(iv)                               The provisions of this Clause 30.5 shall apply even if, notwithstanding and contrary to this Clause 30.5, any provision of any Finance Document by operation of law has the effect of constituting the Agent as a true or fiduciary of any person, or the Security Agent as an agent, trustee or fiduciary of any Obligor or otherwise requiring the Agent, the Security Agent or the Arrange to account to any other Finance Party or Secured Party (as the case may be).
 
30.6                         Business with the Group
 
The Agent and the Security Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Obligor or Affiliate of an Obligor.
 
30.7                         Rights and discretions
 
(a)                                  Each of the Agent and the Security Agent may:
 
(i)                                      rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
 
(ii)                                   assume that:
 
(A)                                any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and
 
(B)                                unless it has received notice of revocation, that those instructions have not been revoked; and
 
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(C)                                rely on a certificate from any person:
 
(1)                                  as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
 
(2)                                  to the effect that such person approves of any particular dealing, transaction, step, action or thing,
 
as sufficient evidence that that is the case and, in the case of paragraph (1) above, may assume the truth and accuracy of that certificate.
 
(b)                                  Each of the Agent and the Security Agent may assume (unless it has received notice to the contrary in its capacity as agent or Security Agent for the Finance Parties or Secured Parties) that:
 
(i)                                      no Default has occurred (unless, in the case of the Agent, it has actual knowledge of a Default arising under Clause 27.1 ( Non-payment ));
 
(ii)                                   any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
 
(iii)                                any notice or request made by an Obligor (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
 
(c)                                   Each of the Agent and the Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
 
(d)                                  Without prejudice to the generality of paragraph (c) above or paragraph (e) below, each of the Agent and the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent or Security Agent (as applicable), (and so separate from any lawyers instructed by the Lenders) if the Agent or Security Agent (as applicable), in its reasonable opinion deems this to be desirable.
 
(e)                                   Each of the Agent and the Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
 
(f)                                    Each of the Agent and the Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
 
(i)                                      be liable for any error of judgment made by any such person; or
 
(ii)                                   be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,
 
unless such error or such loss was directly caused by the Agent’s or the Security Agent’s (as applicable) gross negligence or wilful misconduct.
 
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(g)                                   Unless a Finance Document expressly provides otherwise each of the Agent and the Security Agent may disclose to any other Party any information it reasonably believes it has received as agent or Security Agent under the Finance Documents.
 
(h)                                  Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
 
(i)                                      The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of paragraph (a)(ii) of Clause 10.2 ( Market disruption ).
 
(j)                                     Notwithstanding any provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
 
30.8                         Responsibility for documentation
 
Neither the Agent nor the Security Agent, is responsible or liable for:
 
(a)                                  the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Security Agent, an Obligor or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
 
(b)                                  the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property; or
 
(c)                                   any determination as to whether any information provided or to be provided to any Finance Party or Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
 
30.9                         No duty to monitor
 
Neither, the Agent nor the Security Agent shall be bound to enquire:
 
(a)                                  whether or not any Default has occurred;
 
(b)                                  as to the performance, default or any breach by any Party of its obligations under any Finance Document; or
 
(c)                                   whether any other event specified in any Finance Document has occurred.
 
30.10                  Exclusion of liability
 
(a)                                  Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent, the Security
 
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Agent or any Receiver or Delegate), none of the Agent, the Security Agent nor any Receiver or Delegate will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
 
(i)                                      any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;
 
(ii)                                   exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Security Property;
 
(iii)                                any shortfall which arises on the enforcement or realisation of the Security Property; or
 
(iv)                               without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
 
(A)                                any act, event or circumstance not reasonably within its control; or
 
(B)                                the general risks of investment in, or the holding of assets in, any jurisdiction,
 
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of god; war, terrorism, insurrection or revolution; or strikes or industrial action.
 
(b)                                  No Party (other than the Agent, the Security Agent, that Receiver or that Delegate (as applicable)) may take any proceedings against any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate, in respect of any claim it might have against the Agent, the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Security Property and any officer, employee or agent of the Agent, the Security Agent, a Receiver or a Delegate may rely on this Clause.
 
(c)                                   Neither the Agent nor the Security Agent will be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent or the Security Agent (as applicable) if the Agent or Security Agent (as applicable) has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent or the Security Agent (as applicable) for that purpose.
 
(d)                                  Nothing in this Agreement shall oblige the Agent or the Security Agent to carry out:
 
(i)                                      any “know your customer” or other checks in relation to any person; or
 
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(ii)            any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,
 
on behalf of any Finance Party and each Finance Party confirms to the Agent and the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Security Agent.
 
(e)                                   Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Agent, the Security Agent, any Receiver or Delegate, any liability of the Agent, the Security Agent, any Receiver or Delegate arising under or in connection with any Finance Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent, the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent, the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss. In no event shall the Agent, the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent, the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.
 
30.11                  Lenders’ indemnity to the Agent and Security Agent
 
(a)                                  Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, the Security Agent and every Receiver and every Delegate, within three (3) Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the Agent’s, Security Agent’s Receiver’s or Delegate’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 34.10 ( Disruption to Payment Systems etc. ), notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Security Agent, Receiver or Delegate under the Finance Documents (unless the relevant Agent, Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document).
 
(b)                                  Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent or the Security Agent pursuant to paragraph (a) above.
 
(c)                                   Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent or the Security Agent to an Obligor.
 
30.12                  Resignation of the Agent and the Security Agent
 
(a)                                  Each of the Agent and/or the Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.
 
(b)                                  Alternatively the Agent or the Security Agent may resign by giving thirty (30) days’ notice to the other Finance Parties and the Borrowers, in which case the Majority
 
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Lenders (after consultation with the other Finance Parties and the Borrowers) may appoint a successor Agent or Security Agent (as applicable).
 
(c)                                   If the Majority Lenders have not appointed a successor Agent or Security Agent in accordance with paragraph (b) above within twenty (20) days after notice of resignation was given, the retiring Agent or Security Agent (as applicable) (after consultation with the other Finance Parties and the Borrowers) may appoint a successor Agent or Security Agent (as applicable).
 
(d)                                  The retiring Agent or Security Agent (as applicable) shall make available to the successor Agent or Security Agent (as applicable) such documents and records and provide such assistance as the successor Agent or Security Agent may reasonably request for the purposes of performing its functions as Agent or Security Agent (as applicable) under the Finance Documents. The Borrowers shall, within three (3) Business Days of demand, reimburse the retiring Agent or Security Agent (as applicable) for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
 
(e)                                   The resignation notice of the Agent or Security Agent (as applicable) shall only take effect upon:
 
(i)             the appointment of a successor; and
 
(ii)            (in the case of the Security Agent) the transfer of the Security Property to that successor.
 
(f)                                    Upon the appointment of a successor, the retiring Agent or Security Agent (as applicable) shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (ii) of Clause 30.24 ( Winding up of trust ) and (e) above) but shall remain entitled to the benefit of Clause (e) ( Indemnity to the Agent ), Clause 14.4 ( Indemnity to the Security Agent ) and this Clause 30 (and any fees for the account of the retiring Agent or Security Agent (as applicable) shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
 
(g)                                   After consultation with the Borrowers, the Majority Lenders may, by giving thirty (30) days’ notice to the Agent or Security Agent (as applicable), require it to resign in accordance with paragraph (b) above. In this event, the Agent or Security Agent (as applicable) shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrowers.
 
(h)                                  The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three (3) months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:
 
(i)             the Agent fails to respond to a request under Clause 12.7 ( FATCA Informatio n) and the Borrowers or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
 
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(ii)            the information supplied by the Agent pursuant to Clause 12.7 ( FATCA Information ) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
 
(iii)           the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
 
and (in each case) the Borrowers or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and the Borrowers or that Lender, by notice to the Agent, requires it to resign.
 
30.13                  Confidentiality
 
(a)                                  In acting as agent or trustee for the Finance Parties, the Agent or Security Agent (as applicable) shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
 
(b)                                  If information is received by another division or department of the Agent or Security Agent, it may be treated as confidential to that division or department and the Agent or Security Agent (as applicable) shall not be deemed to have notice of it.
 
(c)                                   Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Security Agent is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
 
30.14                  Relationship with the other Finance Parties
 
(a)                                  Subject to Clause 28.9 ( Pro rata interest settlement ), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
 
(i)             entitled to or liable for any payment due under any Finance Document on that day; and
 
(ii)            entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
 
unless it has received not less than five (5) Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
 
(b)                                  Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 36.5 ( Electronic communication )) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 36.2 ( Addresses ) and paragraph (a)(ii) of Clause 36.5 ( Electronic
 
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communication ) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
 
(c)                                   Each Finance Party shall supply the Security Agent with any information that the Security Agent may reasonably specify as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.
 
30.15                  Credit appraisal by the Lenders
 
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
 
(a)                                  the financial condition, status and nature of each member of the Group;
 
(b)                                  the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;
 
(c)                                   whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Security Property, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;
 
(d)                                  the adequacy, accuracy or completeness of any information provided by the Agent, the Security Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
 
(e)                                   the right or title of any person in or to, or the value or sufficiency of any part of, the Security Property, the priority of any of the Transaction Security or the existence of any Security affecting the Security Property.
 
30.16                  Reference Banks
 
The Agent shall (if so instructed by the Majority Lenders and in consultation with the Borrowers) replace a Reference Bank with another bank or financial institution.
 
30.17                  Deduction from amounts payable by the Agent
 
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
 
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30.18                  No responsibility to perfect Transaction Security
 
The Security Agent shall not be liable for any failure to:
 
(a)                                  require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Security Property;
 
(b)                                  obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
 
(c)                                   register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
 
(d)                                  take, or to require any Obligor to take, any step to perfect its title to any of the Security Property or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or
 
(e)                                   require any further assurance in relation to any Security Document.
 
30.19                  Insurance by Security Agent
 
(a)                                  The Security Agent shall not be obliged:
 
(i)             to insure any of the Security Property;
 
(ii)            to require any other person to maintain any insurance; or
 
(iii)           to verify any obligation to arrange or maintain insurance contained in any Finance Document,
 
and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
 
(b)                                  Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Majority Lenders request it to do so in writing and the Security Agent fails to do so within fourteen (14) days after receipt of that request.
 
30.20                  Custodians and nominees
 
The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.
 
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30.21                  Delegation by the Security Agent
 
(a)                                  Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.
 
(b)                                  That delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties.
 
(c)                                   No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of, any such delegate or sub-delegate.
 
30.22                  Additional Security Agents
 
(a)                                  The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:
 
(i)             if it considers that appointment to be in the interests of the Secured Parties;
 
(ii)            for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or
 
(iii)           for obtaining or enforcing any judgment in any jurisdiction,
 
and the Security Agent shall give prior notice to the Borrowers and the Finance Parties of that appointment.
 
(b)                                  Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
 
(c)                                   The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
 
30.23                  Acceptance of title
 
The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Security Property and shall not be liable for, or bound to require any Obligor to remedy, any defect in its right or title.
 
30.24                  Winding up of trust
 
If the Security Agent, with the approval of the Agent, determines that:
 
(a)                                  all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and
 
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(b)                                  no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,
 
then:
 
(i)             the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and
 
(ii)            any Security Agent which has resigned pursuant to Clause 30.12 ( Resignation of the Agent and the Security Agent ) shall release, without recourse or warranty, all of its rights under each Security Document.
 
30.25                  Perpetuity period
 
The trusts constituted by this Agreement are governed by English law and the perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall be the period of 125 years from the date of this Agreement.
 
30.26                  Powers supplemental to Trustee Acts
 
The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.
 
30.27                  Disapplication of Trustee Acts
 
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
 
30.28                  Parallel Debt
 
(a)                                  Each Borrower and HoldCo irrevocably and unconditionally undertake to pay (and shall procure that each other Obligor shall pay) to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
 
(b)                                  The Parallel Debt of an Obligor:
 
(i)                                      shall become due and payable at the same time as its Corresponding Debt;
 
(ii)                                   is independent and separate from, and without prejudice to, its Corresponding Debt.
 
(c)                                   For purposes of this Clause 30.28 , the Security Agent:
 
(i)                                      is the independent and separate creditor of each Parallel Debt;
 
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(ii)            acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
 
(iii)           shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).
 
(d)                                  The Parallel Debt of an Obligor shall be:
 
(i)             decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
 
(ii)            increased to the extent that its Corresponding Debt has increased,
 
and the Corresponding Debt of an Obligor shall be:
 
(iii)           decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and
 
(iv)           increased to the extent that its Parallel Debt has increased,
 
in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.
 
(e)                                   All amounts received or recovered by the Security Agent in connection with this Clause 30.28 to the extent permitted by applicable law, shall be applied in accordance with Clause 31.1 ( Application of receipt s — Security Agent ).
 
(f)                                    This Clause 30.28 shall apply, with any necessary modifications, to each Finance Document.
 
31.                                APPLICATION OF PROCEEDS
 
31.1                         Application of receipts — Security Agent
 
(a)                                  Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Agent receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 31 ( Application of Proceeds ), the “ Recoveries ”) shall be transferred to the Agent for application in accordance with Clause 34.5 ( Application of receipts - Partial Payments ).
 
(b)                                  Paragraph (a) above is without prejudice to the rights of the Security Agent, each Receiver and each Delegate:
 
(i)             to be indemnified out of the Charged Property in accordance with any provision of any Finance Document; and
 
(ii)            under any Finance Document to credit any moneys received or recovered by it to any suspense account.
 
(c)                                   Any transfer by the Security Agent to the Facility Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Agent.
 
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(d)                                  The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) of this Clause 31.1 ( Application of receipts — Security Agent ) in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.
 
31.2                         Deductions from receipts
 
(a)                                  Before transferring any moneys to the Facility Agent under Clause 31.1 ( Application of Receipts — Security Agent ), the Security Agent may, in its discretion:
 
(i)             deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Agent or any Receiver or Delegate and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;
 
(ii)            set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and
 
(iii)           pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
 
(b)                                  For the purposes of paragraph (a)(i) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.
 
31.3                         Prospective liabilities
 
Following acceleration of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit acting reasonably (the interest being credited to the relevant account) for later payment to the Agent for application in accordance with Clause 34.5 ( Application of receipts - Partial Payments ) in respect of:
 
(a)                                  any sum to the Security Agent, any Receiver or any Delegate; and
 
(b)                                  any part of the Secured Liabilities, that the Security Agent or, in the case of paragraph (b) only, the Agent, reasonably considers, in each case, might become due or owing at any time in the future.
 
31.4                         Investment of proceeds
 
Prior to the application of the proceeds of the Recoveries in accordance with Clause 31.1 ( Application of Receipts — Security Agent ) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those moneys in the Security Agent’s discretion in accordance with the provisions of this Clause 31.
 
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31.5                         Currency Conversion
 
(a)                                  For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.
 
(b)                                  The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
 
31.6                         Good Discharge
 
(a)                                  Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Agent on behalf of the Finance Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.
 
(b)                                  The Security Agent is under no obligation to make the payments to the Agent under paragraph (a) of this Clause 31.6 in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.
 
32.                                CONDUCT OF BUSINESS BY THE FINANCE PARTIES
 
No provision of this Agreement will:
 
(a)                                  interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
 
(b)                                  oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
 
(c)                                   oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
 
33.                                SHARING AMONG THE FINANCE PARTIES
 
33.1                         Payments to Finance Parties
 
If a Finance Party (a “ Recovering Finance Party ”) receives or recovers any amount from an Obligor other than in accordance with Clause 34 ( Payment mechanics ) (a “ Recovered Amount ”) and applies that amount to a payment due under the Finance Documents then:
 
(a)                                  the Recovering Finance Party shall, within three (3) Business Days, notify details of the receipt or recovery to the Agent;
 
(b)                                  the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 34 ( Payment mechanics ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
 
(c)                                   the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the “ Sharing Payment ”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 34.5 ( Application of Receipts — Partial Payments ).
 
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33.2                         Redistribution of payments
 
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 34.5 ( Application of Receipts — Partial Payments ) towards the obligations of that Obligor to the Sharing Finance Parties.
 
33.3                         Recovering Finance Party’s rights
 
On a distribution by the Agent under Clause 33.2 ( Redistribution of payments ) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
 
33.4                         Reversal of redistribution
 
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
 
(a)                                  each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “ Redistributed Amount ”); and
 
(b)                                  as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
 
33.5                         Exceptions
 
(a)                                  This Clause 33 ( Sharing among the Finance Parties ) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.
 
(b)                                  A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
 
(i)                                      it notified that other Finance Party of the legal or arbitration proceedings; and
 
(ii)                                   that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
 
34.                                PAYMENT MECHANICS
 
34.1                         Payments to the Agent
 
(a)                                  On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
 
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(b)                                  Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Agent) and with such bank as the Agent, in each case, specifies.
 
34.2                         Distributions by the Agent
 
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 34.3 ( Distributions to an Obligor ) and Clause 34.4 ( Clawback and pre-funding ) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five (5) Business Days’ notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London, as specified by that Party).
 
34.3                         Distributions to an Obligor
 
The Agent may (with the consent of the Obligor or in accordance with Clause 35 ( Set-off )) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
 
34.4                         Clawback and pre-funding
 
(a)                                  Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
 
(b)                                  Unless paragraph (c) below applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.
 
(c)                                   If the Agent is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:
 
(i)             the Agent shall notify the Borrowers of that Lender’s identity and the Borrower to whom that sum was made available shall on demand refund it to the Agent; and
 
(ii)            the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
 
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34.5                         Application of Receipts — Partial Payments
 
If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:
 
(a)                                  FIRST, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents;
 
(b)                                  SECOND, in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;
 
(c)                                   THIRD, in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement; and
 
(d)                                  FOURTH, in or towards payment pro rata of any other sum due to any Finance Party but unpaid under the Finance Documents;
 
34.6                         No set-off by Obligors
 
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
34.7                         Business Days
 
(a)                                  Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
 
(b)                                  During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
 
34.8                         Currency of account
 
(a)                                  Subject to paragraphs (b) and (c) below, US$ is the currency of account and payment for any sum due from an Obligor under any Finance Document.
 
(b)                                  Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
(c)                                   Any amount expressed to be payable in a currency other than US$ shall be paid in that other currency.
 
34.9                         Change of currency
 
(a)                                  Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
 
(i)                                      any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and
 
(ii)                                   any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of
 
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that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).
 
(b)                                  If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.
 
34.10                  Disruption to Payment Systems etc.
 
If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Borrowers that a Disruption Event has occurred:
 
(a)                                  the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances;
 
(b)                                  the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
 
(c)                                   the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
 
(d)                                  any such changes agreed upon by the Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 40 ( Amendments and waivers );
 
(e)                                   the Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 34.10; and
 
(f)                                    the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
 
35.                                SET-OFF
 
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 
36.                                NOTICES
 
36.1                         Communications in writing
 
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
 
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36.2                         Addresses
 
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
 
(a)                                  in the case of the Borrowers, that specified in Schedule 1 ( The Original Parties );
 
(b)                                  in the case of each Lender, that specified in Schedule 1 ( The Original Parties ) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Agent on or before the date it becomes a Party;
 
or, in each case, any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days’ notice.
 
36.3                         Delivery
 
(a)                                  Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
 
(i)                                      if by way of fax, when received in legible form; or
 
(ii)                                   if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;
 
and, if a particular department or officer is specified as part of its address details provided under Clause 36.2 ( Addresses ), if addressed to that department or officer.
 
(b)                                  Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s or the Security Agent’s signature below (or any substitute department or officer as the Agent or Security Agent shall specify for this purpose).
 
(c)                                   All notices from or to an Obligor shall be sent through the Agent.
 
(d)                                  Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.
 
(e)                                   Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
36.4                         Notification of address and fax number
 
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 36.2 ( Addresses ) or changing its own address or fax number, the Agent shall notify the other Parties.
 
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36.5                         Electronic communication
 
(a)                                  Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:
 
(i)                                      notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
 
(ii)                                   notify each other of any change to their address or any other such information supplied by them by not less than five (5) Business Days’ notice.
 
(b)                                  Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.
 
(c)                                   Any electronic communication which becomes effective, in accordance with paragraph (b) above, after 5 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
36.6                         English language
 
(a)                                  Any notice given under or in connection with any Finance Document must be in English.
 
(b)                                  All other documents provided under or in connection with any Finance Document must be:
 
(i)                                      in English; or
 
(ii)                                   if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
 
37.                                CALCULATIONS AND CERTIFICATES
 
37.1                         Accounts
 
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
 
37.2                         Certificates and Determinations
 
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
 
37.3                         Day count convention
 
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of three
 
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hundred and sixty (360) days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
 
38.                                PARTIAL INVALIDITY
 
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
39.                                REMEDIES AND WAIVERS
 
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any of the Finance Documents on the part of any Finance Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
 
40.                                AMENDMENTS AND WAIVERS
 
40.1                         Required consents
 
(a)                                  (Subject to Clause 40.3 ( All Lender matters ) and Clause 40.4 ( Other exceptions ), any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.
 
(b)                                  The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 40.
 
(c)                                   Without prejudice to the generality of paragraphs (c), (d) and (e) of Clause 30.7 ( Rights and discretions ), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.
 
(d)                                  Each Obligor agrees to any such amendment or waiver permitted by this Clause 40.1 which is agreed to by the Borrowers. This includes any amendment or waiver which would, but for this paragraph (d), require the consent of all of the Obligors.
 
40.2                         Excluded Commitments
 
If any Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any of the terms of the Finance Document or other vote of Lenders under the terms of this Agreement within fifteen (15) Business Days or (in the case of a matter that requires the consent or approval of all Lenders) twenty (20) Business Days of that request being made:
 
(a)                                  its Commitment and/or participation in the Loan then outstanding shall not be included for the purpose of calculating the Total Commitments or participations under the Facility when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments has been obtained to approve that request; and
 
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(b)                                  its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
 
40.3                         All Lender matters
 
An amendment, waiver or (in the case of a Transaction Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to:
 
(a)                                  the definition of “Majority Lenders” in Clause 1.1 ( Definitions );
 
(b)                                  a postponement or extension to the date of payment of any amount under the Finance Documents;
 
(c)                                   a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
 
(d)                                  a change in currency of payment of any amount under the Finance Documents;
 
(e)                                   an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Facility;
 
(f)                                    a change to any Obligor;
 
(g)                                   any provision which expressly requires the consent of all the Lenders;
 
(h)                                  any change to the preamble ( Background ), Clause 2.1 ( The Facility ), Clause 3 ( Purpose ), Clause 5 ( Utilisation ), Clause 8 ( Interest ), Clause 28 ( Changes to Lenders , this Clause 40, Clause 43 ( Governing law ) or Clause 44.1 ( Jurisdiction ).
 
(i)                                      (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:
 
(i)                                      the guarantee and indemnity granted under Clause 18 ( Guarantee and Indemnity );
 
(ii)                                   the Security Property; or
 
(iii)                                the manner in which the proceeds of enforcement of the Transaction Security are distributed
 
(except in the case of paragraphs (ii) and (iii) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document); or
 
(j)                                     the release of, or material variation to, any guarantee and indemnity granted under Clause 18 ( Guarantee and Indemnity ) or of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document,
 
shall not be made, or given, without the prior consent of all the Lenders.
 
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40.4                         Other exceptions
 
(a)                                  An amendment or waiver which relates to the rights or obligations of the Agent or the Security Agent (each in their capacity as such) may not be effected without the consent of the Agent or, as the case may be,, the Security Agent.
 
41.                                CONFIDENTIALITY
 
41.1                         Confidential Information
 
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 41.2 ( Disclosure of Confidential Information ) and Clause 41.3 ( Disclosure to numbering service providers ), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
 
41.2                         Disclosure of Confidential Information
 
Any Finance Party may disclose:
 
(a)                                  to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
 
(b)                                  to any person:
 
(i)                                      to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 
(ii)                                   with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 
(iii)                                appointed by any Finance Party or by a person to whom paragraph (b)(i) or (b)(ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of Clause 1.1 ( Definitions ));
 
(iv)                               who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above;
 
121 

 
(v)                                  to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
 
(vi)                               to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
 
(vii)                            to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.8 ( Security over Lenders’ rights );
 
(viii)                         who is a Party, a member of the Group or any related entity of an Obligor; or
 
(ix)                               with the consent of the Borrowers;
 
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
 
(A)                                in relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
 
(B)                                in relation to paragraph (b)(iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
 
(C)                                in relation to paragraphs (b)(v), and (b)(vi) and (b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
 
(c)                                   to any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or (b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the relevant Finance Party;
 
(d)                                  to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the
 
122 

 
Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
 
41.3                         Disclosure to numbering service providers
 
(a)                                  Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:
 
(i)                                      names of Obligors;
 
(ii)                                   country of domicile of Obligors;
 
(iii)                                place of incorporation of Obligors;
 
(iv)                               date of this Agreement;
 
(v)                                  the name of the Agent;
 
(vi)                               date of each amendment of this Agreement;
 
(vii)                            amount of Total Commitments;
 
(viii)                         currency of the Facility;
 
(ix)                               type of Facility;
 
(x)                                  ranking of Facility;
 
(xi)                               Termination Date for Facility;
 
(xii)                            changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and
 
(xiii)                         such other information agreed between such Finance Party and the Borrowers and HoldCo,
 
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
 
(b)                                  The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
 
(c)                                   Each Obligor represents that none of the information set out in paragraphs (a)(i) to (a)(xiii) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
 
(d)                                  The Agent shall notify the Borrowers and the other Finance Parties of:
 
(i)                                      the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and
 
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(ii)                                   the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.
 
41.4                         Entire agreement
 
This Clause 41 ( Confidentiality ) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
 
41.5                         Inside information
 
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
 
41.6                         Notification of disclosure
 
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:
 
(a)                                  of the circumstances of any disclosure of Confidential Information made pursuant to paragraph 41.2(b)(iv) of Clause 41.2 ( Disclosure of Confidential Information ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
 
(b)                                  upon becoming aware that Confidential Information has been disclosed in breach of this Clause 41 ( Confidentiality ).
 
41.7                         Continuing obligations
 
The obligations in this Clause 41 ( Confidentiality ) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
 
(a)                                  the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
 
(b)                                  the date on which such Finance Party otherwise ceases to be a Finance Party.
 
42.                                COUNTERPARTS
 
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
 
43.                                GOVERNING LAW
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
124 

 
44.                                ENFORCEMENT
 
44.1                         Jurisdiction
 
(a)                                  The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to 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)                                  The Parties agree 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 44.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
 
44.2                         Service of process
 
(a)                                  Without prejudice to any other mode of service allowed under any relevant law, each Obligor:
 
(i)                                      irrevocably appoints WFW Legal Services Limited at present of 15 Appold Street, London EC2A 2HB, England as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 
(ii)                                   agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
 
(b)                                  If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Obligors) must immediately (and in any event within five (5) days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.
 
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

125 

 
 
EXECUTION PAGE

BORROWERS	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO CONSTANTINE LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO AUGUSTUS LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO LONDON LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO TITUS LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	

 

Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO TIBERIUS LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO HADRIAN LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO KNIGHT LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO BEAUTY LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO VIGOUR LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	

 

Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO PREDATOR LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO CAVALIER LLC	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO CHAMPION LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	

 

Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO CHARGER LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
HOLDCO	 	 	
 	 	 	
Signed by Apostolos Zafolias	)	/s/ Apostolos Zafolias	
Chief Financial Officer for and on behalf of	)	 	
GENCO HOLDINGS LIMITED	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Peter Allen	 	 	
Peter Allen,	 	 	
Financial Associate	 	 	
299 Park Ave.	 	 	
New York, NY 10171	 	 	
 	 	 	
ORIGINAL LENDERS	 	 	
 	 	 	
Signed by Carmen Ionescu	)	/s/ Carmen Ionescu	
Director for and on behalf of	)	 	
HAYFIN DLF LUXCO 3 SARL	)	/s/ Sakorafas Sylvie	
 	 	 	
In the presence of:- Sakorafas Sylvie	 	 	
 	 	 	
Signed by Carmen Ionescu	 	 	
Director for and on behalf of	 	 	
HAYIN DLF (EUROPE) LUXCO 3 SARL	)	/s/ Carmen Ionescu	
 	)	 	
In the presence of:- Sakorafas Sylvie	)	/s/ Sakorafas Sylvie	
 	 	 	
Signed by Carmen Ionescu	 	 	
Director for and on behalf of	 	 	
HAYFIN ONYX LUXCO 3 SCA	)	 	
 	)	/s/ Carmen Ionescu	
In the presence of:- Sakorafas Sylvie	)	 	
 	 	/s/ Sakorafas Sylvie	

 

Signed by Carmen Ionescu	 	 	
Director for and on behalf of	)	 	
HAYFIN OPAL LUXCO 3 SARL	)	/s/ Carmen Ionescu	
 	)	 	
In the presence of:- Sakorafas Sylvie	 	/s/ Sakorafas Sylvie	
 	 	 	
Signed by Bethany Walker	 	 	
in her capacity as Director for and on behalf of	 	 	
HAYFIN OPAL III LP	)	/s/ Bethany Walker	
 	)	 	
In the presence of:-	)	 	
/s/ Afsheen Khan	 	 	
Afsheen Khan	 	 	
Legal Exec.	 	 	
One Eagle Place	 	 	
London	 	 	
 	 	 	
Signed by Carmen Ionescu	 	 	
Director for and on behalf of	 	 	
HAYFIN REST LUXCO SARL	)	/s/ Carmen Ionescu	
 	)	 	
In the presence of:- Emmanuel Mougeolle	)	/s/ Emmanuel Mougeolle	
 	 	 	
AGENT	 	 	
 	 	 	
Signed by Stephen Bourne	)	/s/ Stephen Bourne	
Member for and on behalf of	)	 	
HAYFIN SERVICES LLP	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Afsheen Khan	 	 	
Afsheen Khan	 	 	
Legal Exec.	 	 	
One Eagle Place	 	 	
London	 	 	

 

SECURITY AGENT	 	 	
 	 	 	
Signed Stephen Bourne	)	/s/ Stephen Bourne	
Member for and on behalf of	)	 	
HAYFIN SERVICES LLP	)	 	
 	 	 	
In the presence of:-	 	 	
/s/ Afsheen Khan	 	 	
Afsheen Khan	 	 	
Legal Exec.	 	 	
One Eagle Place	 	 	
London	 	 	

Exhibit 10.25
 
DATED 4 NOVEMBER 2015
 
(1)                                  GENCO SHIPPING & TRADING LIMITED
(as Guarantor)
 
to
 
(2)                                  HAYFIN SERVICES LLP
(as Security Agent)
 
GUARANTEE
 
EXECUTION VERSION
 
REFERENCE RAW/382792.00001

	r e e d s m i t h . c o m	

 
CONTENTS
 
CLAUSE

1.	DEFINITIONS AND INTERPRETATION	1	
2.	GUARANTEE AND INDEMNITY	2	
3.	PROTECTION OF FINANCE PARTIES	2	
4.	ADDITIONAL PAYMENT OBLIGATIONS	5	
5.	APPLICATION OF MONEYS	6	
6.	REPRESENTATIONS AND WARRANTIES	7	
7.	INFORMATION UNDERTAKINGS	8	
8.	FINANCIAL COVENANTS	10	
9.	GENERAL UNDERTAKINGS	11	
10.	PAYMENTS	12	
11.	SET-OFF	13	
12.	CALCULATIONS AND CERTIFICATES	13	
13.	PARTIAL INVALIDITY	14	
14.	REMEDIES AND WAIVERS	14	
15.	MISCELLANEOUS PROVISIONS OF THE FACILITY AGREEMENT	14	
16.	TRANSFERS	14	
17.	NOTICES	14	
18.	GOVERNING LAW	15	
19.	ENFORCEMENT	15	
SCHEDULE 1 FORM OF COMPLIANCE CERTIFICATE	17	
 
i 

 
THIS GUARANTEE is dated 4 November 2015
 
BY:
 
(1)                                  GENCO SHIPPING & TRADING LIMITED , a corporation incorporated under the laws of the Republic of the Marshall Islands, whose principal place of business is at 299 Park Avenue, 17 th  Floor, New York, New York 10171 (the “ Guarantor ”)
 
IN FAVOUR OF:
 
(2)                                  HAYFIN SERVICES LLP, a limited liability partnership formed according to the laws of England and Wales, whose registered office is at One Eagle Place, London, SW1Y 6AF, England (the “ Security Agent ”, which expression includes its successors and assigns).
 
BACKGROUND
 
(A)                                Each of the banks listed in part I of schedule 1 to the Facility Agreement (as defined below) (collectively the “ Lenders ”) has agreed to lend to the borrowers listed in part II of schedule 1 to the Facility Agreement on a joint and several basis (the “ Borrowers ”) its participation in a loan of up to one hundred million Dollars ($100,000,000) (the “ Loan ”) on the terms and subject to the conditions set out in a loan agreement dated 4 November 2015 made between the Borrowers (as borrowers), Genco Holdings Limited (“ HoldCo ”) the Lenders (as lenders), Hayfin Services LLP as agent for the Lenders (the “ Agent ”) and the Security Agent (as security agent) (the “ Facility Agreement ”).
 
(B)                                Pursuant to the Facility Agreement, and as a condition precedent to the several obligations of the Lenders to make the Loan available to the Borrowers, the Borrowers have, amongst other things, agreed to procure that the Guarantor execute and deliver this Guarantee in favour of the Security Agent as security agent for the Finance Parties.
 
IT IS AGREED as follows:
 
1.                                       DEFINITIONS AND INTERPRETATION
 
1.1                                Definitions
 
In this Guarantee, unless the context otherwise requires, words and expressions defined in the Facility Agreement shall have the same meanings when used in this Guarantee and the following definitions apply:
 
“ Compliance Certificate ” means a certificate substantially in the form set out in Schedule 1 to this Guarantee.
 
“ Default Rate ” means interest at the rate calculated in accordance with clause 8.3 of the Facility Agreement ( Default interest ).
 
“ Guarantor Liabilities ” means all of the liabilities and obligations of the Guarantor to any of the Finance Parties under or pursuant to this Guarantee, from time to time, whether in respect of principal, interest, costs or otherwise and whether present, future, actual or contingent.
 
“ Guarantor Security Documents ” means this Guarantee and any and all documents which may at any time be executed by the Guarantor as security for the payment of all or any part of the Guarantor Liabilities and “ Guarantor Security Document ” means any one of them.
 
“ Original Financial Statements ” means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2014.
 
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“ 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 Finance Party under or in connection with any Finance Document.
 
1.2                                Construction
 
Clause 1.2 of the Facility Agreement ( Construction ) shall apply to this Guarantee as if it were incorporated into it with any necessary modifications.
 
1.3                                Headings
 
Section, Clause and Schedule headings are for ease of reference only.
 
1.4                                Inconsistency between Facility Agreement provisions and this Guarantee
 
This Guarantee shall be read together with the other Finance Documents, but in case of any conflict between the Facility Agreement and this Guarantee, the provisions of the Facility Agreement shall prevail.
 
1.5                                Third party rights
 
(a)                                  A person who is not a party to this Guarantee (other than a Finance 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 Guarantee.
 
(b)                                  Notwithstanding any term of any Finance Document the consent of any person who is not a party to this Guarantee is not required to rescind or vary this Guarantee at any time.
 
(c)                                   Any Receiver, Delegate or any person described in clause 1.1 ( Definitions ) of the Facility Agreement may, subject to this Clause 1.5(c) and the Third Parties Act, rely on any Clause of this Guarantee which expressly confers rights on it
 
2.                                       GUARANTEE AND INDEMNITY
 
The Guarantor irrevocably and unconditionally:
 
2.1                                guarantees to each Finance Party punctual performance by the Borrowers of all the Borrowers’ obligations under the Finance Documents;
 
2.2                                undertakes with each Finance Party that whenever the Borrowers do not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
 
2.3                                agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrowers not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by them under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Guarantee if the amount claimed had been recoverable on the basis of a guarantee.
 
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3.                                       PROTECTION OF FINANCE PARTIES
 
3.1                                Continuing Guarantee
 
This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
 
3.2                                Reinstatement
 
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Guarantee will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
3.3                                Waiver of defences
 
The obligations of the Guarantor under this Guarantee will not be affected by an act, omission, matter or thing which, but for this Clause 3.3, would reduce, release or prejudice any of its obligations under this Guarantee (without limitation and whether or not known to it or any Finance Party) including:
 
(a)                                  any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)                                  the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any Obligor or any other member of the Group;
 
(c)                                   the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(d)                                  any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
 
(e)                                   any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(f)                                    any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(g)                                   any insolvency or similar proceedings.
 
3.4                                Guarantor intent
 
Without prejudice to the generality of Clause 3.3 ( Waiver of defences ), the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making
 
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facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
 
3.5                                Immediate recourse
 
The Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Guarantee. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
3.6                                Appropriations
 
Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
 
(a)                                  refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
 
(b)                                  hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of any of the Guarantor Liabilities.
 
3.7                                Deferral of Guarantors’ rights
 
Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents have been irrevocably paid in full and unless the Security Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Guarantee:
 
(a)                                  to be indemnified by an Obligor;
 
(b)                                  to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
 
(c)                                   to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
 
(d)                                  to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 2 ( Guarantee and indemni ty);
 
(e)                                   to exercise any right of set-off against any Obligor; and/or
 
(f)                                    to claim or prove as a creditor of any Obligor in competition with any Finance Party.
 
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Security Parties under or in
 
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connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Security Agent or as the Security Agent may direct for application in accordance with clause 34 of the Facility Agreement ( Payment Mechanics ).
 
3.8                                Additional security
 
This Guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
 
4.                                       ADDITIONAL PAYMENT OBLIGATIONS
 
4.1                                Indemnity to the Security Agent
 
The Guarantor shall promptly indemnify the Security Agent and every Receiver and Delegate on demand against any cost, loss or liability incurred by any of them as a result of:
 
(a)                                  any failure by the Borrowers to comply with their obligations under clause 16 of the Facility Agreement ( Costs and Expenses );
 
(b)                                  acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 
(c)                                   the taking, holding, protection or enforcement of the Security Documents;
 
(d)                                  the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;
 
(e)                                   any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
 
(f)                                    acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct),
 
together in each case with interest at the Default Rate on the amount demanded from the date of demand until the date of payment, both before and after judgment, which interest shall be compounded with the amount demanded at the end of such periods as the Security Agent may reasonably select.
 
4.2                                Currency indemnity
 
(a)                                  If any sum due from the Guarantor under this Guarantee (a “ Sum ”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:
 
(b)                                  making or filing a claim or proof against the Guarantor, or
 
(c)                                   obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Guarantor shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability
 
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arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Finance Party at the time of its receipt of that Sum.
 
(d)                                  The Guarantor waives any right it may have in any jurisdiction to pay any amount under this Guarantee in a currency or currency unit other than that in which it is expressed to be payable.
 
4.3                                Amendment costs
 
If (a) the Guarantor requests an amendment, waiver or consent in relation to any Guarantor Security Document or (b) an amendment is required under clause 34.9 of the Facility Agreement ( Change of currency ), the Guarantor shall, within three (3) Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
 
4.4                                Enforcement and preservation costs
 
The Guarantor shall, within three (3) Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Guarantor Security Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Guarantor Security Documents or enforcing those rights.
 
4.5                                Default interest
 
(a)                                  If the Guarantor fails to pay any amount payable by it under this Guarantee on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) either (a) at the rate (if any) applicable to that amount under the Facility Agreement or (b) (if there is no such rate) at a rate calculated in accordance with clause 8.3 of the Facility Agreement ( Default interest ). Any interest accruing under this Clause 4.5 shall be immediately payable by the Guarantor on demand by the Security Agent.
 
(b)                                  Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
 
4.6                                Additional payment obligations under the Facility Agreement
 
This Clause 4 is without prejudice to the Guarantor Liabilities in respect of the Borrowers’ obligations under the clauses of the Facility Agreement numbered 8 ( Interest ), 14 ( Other Indemnities ) and 16 ( Costs and Expenses ) and under similar provisions in any other Finance Documents.
 
5.                                       APPLICATION OF MONEYS
 
5.1                                Moneys received by Finance Parties
 
All sums which any Finance Party (other than the Security Agent) receives (including by way of set-off) under or in connection with any Guarantor Security Document, otherwise than by payment from the Security Agent, shall be paid to the Security Agent immediately on receipt,
 
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and that payment to the Security Agent shall be deemed to have been made by the Guarantor rather than by the receiving Finance Party.
 
5.2                                Moneys received by Security Agent
 
All sums which the Security Agent receives under or in connection with any Guarantor Security Document shall, unless otherwise agreed by the Security Agent or otherwise provided in the Facility Agreement, be applied by the Security Agent in or towards satisfaction of, or retention on account for, the Guarantor Liabilities in such manner as the Security Agent may in its discretion determine.
 
5.3                                Suspense account
 
The Security Agent may place any money received by it under or in connection with any Guarantor Security Document to the credit of a suspense account on such terms and subject to such conditions as the Security Agent may in its discretion determine for so long as the Security Agent thinks fit without any obligation in the meantime to apply that money in or towards discharge of the Indebtedness, and, despite such payment, the Security Agent may claim against any of the other Security Parties or prove in the bankruptcy, liquidation or insolvency of any of the other Security Parties for the whole of the Indebtedness at the date of the Security Agent’s demand for payment pursuant to this Guarantee, together with all interest, commission, charges and expenses accruing subsequently.
 
6.                                       REPRESENTATIONS AND WARRANTIES
 
6.1                                Representations
 
The Guarantor makes the representations and warranties set out in this Clause 6 to each Finance Party.
 
(a)                                  Facility Agreement representations and warranties All representations and warranties given by the Borrowers in the Facility Agreement in respect of the Guarantor and/or any Guarantor Security Document are and will remain correct and none of them is or will become misleading.
 
(b)                                  Ownership of Borrowers and HoldCo HoldCo is a directly wholly-owned Subsidiary of the Guarantor and each of the Borrowers is a directly wholly-owned subsidiary of HoldCo.
 
(c)                                   Disclosure of material facts The Guarantor is not aware of any material facts or circumstances which have not been disclosed to the Security Agent and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by the Facility Agreement available to the Borrowers.
 
(d)                                  Copy Facility Agreement The Guarantor has received a copy of the Facility Agreement and approves of, and agrees to, the terms and conditions of the Facility Agreement.
 
6.2                                Repetition
 
Each Repeating Representation is deemed to be repeated by the Guarantor by reference to the facts and circumstances then existing on the date of each Utilisation Request, on the Utilisation Date, on the first day of each Interest Period and, in the case or those contained in clause 19.12(d) and 19.12(f) of the Facility Agreement and for so long as any amount is outstanding under the Finance Documents or any Commitment is in force, on each day.
 
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7.                                       INFORMATION UNDERTAKINGS
 
The undertakings in this Clause 7 remain in force for the duration of the Facility Period.
 
7.1                                Financial statements
 
The Guarantor shall supply to the Security Agent as soon as the same become available, but in any event within ninety (90) days after the end of each of its financial years:
 
(a)                                  the Guarantor’s audited consolidated (so as to include inter alia the Borrowers) financial statements for that financial year;
 
(b)                                  the Guarantor’s unaudited financial statements for that financial year (including the Borrowers) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in clause 7.1(a) above; and
 
(c)                                   HoldCo’s management accounts for that financial year (including the Borrowers); and
 
(d)                                  each Borrower’s annual management accounts (balance sheet and profit and loss accounts).
 
7.2                                Interim financial statements
 
The Guarantor shall, and shall procure that each Borrower shall, supply to the Security Agent as soon as the same become available, but in any event within forty-five (45) days after the end of each quarter during each of its financial years:
 
(a)                                  the Guarantor’s consolidated (so as to include inter alia the Borrowers) quarterly financial statements for that quarter;
 
(b)                                  the Guarantor’s unaudited financial statements for that quarter (including the Borrowers and the other Subsidiaries of the Guarantor) together with the calculations and documentation that the Agent and the Security Agent may deem necessary in order to make the necessary reconciliations and off-setting against the financial statements referred to in Clause 7.2(a) above; and
 
(c)                                   HoldCo’s and each Borrower’s quarterly management accounts (balance sheet and profit and loss accounts) at the time that the relevant Compliance Certificate is presented pursuant to Clause 7.3 ( Compliance Certificate ).
 
7.3                                Compliance Certificate
 
(a)                                  The Guarantor shall supply to the Security Agent, with each set of its annual financial statements delivered pursuant to Clause 7.1 ( Financial Statements ) and Clause 7.2 ( Interim Financial Statements ), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 8 ( Financial Covenants ) as at the date as at which those financial statements were drawn up.
 
(b)                                  Each Compliance Certificate shall be signed by an authorised officer of the Guarantor.
 
(c)                                   If prior to the delivery of any Compliance Certificate by the Guarantor, the Guarantor becomes aware that the financial covenants detailed in Clause 8 ( Financial Covenants ) (or any of them) will not be complied with, the Guarantor shall promptly notify the Agent accordingly.
 
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7.4                                Requirements as to financial statements
 
(a)                                  Each set of financial statements delivered by the Guarantor under Clause 7.1 ( Financial statements ):
 
(i)                                      shall be certified by an authorised officer of the Parent Guarantor as giving a true and fair view of (in case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up;
 
(ii)                                   shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Security Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Security Agent:
 
(A)                                a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and
 
(B)                                sufficient information, in form and substance as may be reasonably required by the Security Agent, to enable the Security Agent to determine whether Clause 8 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.
 
(b)                                  Any reference in this Guarantee to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
7.5                                Budgets and Report on Operating Expenses and Group Expenses
 
(a)                                  The Guarantor shall procure that the Borrowers and HoldCo shall:
 
(i)                                      supply to the Agent, no later than fifteen (15) days after the end of each financial year of the Parent Guarantor, copies of an annual operating budget of each of the Borrowers (and the Vessel owned by it) for the following financial year;
 
(ii)                                   procure that the Parent Guarantor shall supply to the Agent, no later than fifteen (15) days after the end of each financial year of the Parent Guarantor, a copy of an annual budget in respect of Group Expenses for the following financial year,
 
each such budget to be in the form appended to Schedule 13 of the Facility Agreement or in such other form and with such details as may be agreed by the Agent (acting on the instructions of the Majority Lenders).
 
(b)                                  The Borrowers and HoldCo shall procure that the Parent Guarantor shall supply to the Agent, with each set of financial statements delivered pursuant Clause 7.2 ( Interim financial statements ), the details of the Operating Expenses and Group Expenses payable by each Borrower in respect of its Vessel together with all computations of how such Operating Expenses and Group Expenses were calculated.
 
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7.6                                Information: miscellaneous
 
The Guarantor shall supply to the Security Agent (in sufficient copies for all the Lenders, if the Security Agent so requests:
 
(a)                                  at the same time as they are dispatched, copies of all documents dispatched by the Guarantor to its shareholders generally (or any class of them) or to its creditors generally (or any class of them);
 
(b)                                  promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Obligor, and which, if adversely determined, are likely to have a Material Adverse Effect;
 
(c)                                   promptly, such further information regarding the financial condition, business and operations of any Obligor (or any other member of the Group) as any Finance Party (through the Agent) may reasonably request, including without limitation cash flow analyses and details of the Operating Expenses of any Vessel the Group Expenses, any dividends and/or loans made by a Borrower, HoldCo and/or the Parent Guarantor, and annual inspection certificates (including any annual inspection report (if required by the Agent)); and
 
(d)                                  promptly on request, such further information regarding the financial condition, assets and operations of any Obligor (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Guarantee and an up to date copy of its shareholders’ register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Security Agent may reasonably request.
 
7.7                                Notification of Default
 
The Guarantor shall notify the Security Agent of any Event of Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
 
8.                                       FINANCIAL COVENANTS
 
8.1                                Financial covenants
 
(a)                                  At each and all times during the Facility Period, the Guarantor shall procure that the Borrowers shall maintain Cash in the Minimum Liquidity Account in an amount of not less than $750,000 for each Vessel.
 
(b)                                  At each and all times during the Facility Period the Guarantor shall in respect of the Guarantor only:
 
(i)                                      ensure that the aggregate of its Cash and Cash Equivalents and any undrawn availability under any of its working capital lines (but only to the extent such lines are not draw-stopped and are available for drawing) in an amount of not less than $750,000 per Fleet Vessel of which a minimum amount of $25,000,000 shall be in Cash or Cash Equivalents; and
 
(ii)                                   not permit its Leverage to exceed seventy per cent (70%); and
 
(iii)                                not permit its Consolidated Net Worth to be less than the Minimum Consolidated Net Worth,
 
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which covenants to be tested on each Quarter Date and reported to the Agent together with the interim financial statements to be delivered to the Agent pursuant to Clause 7.2 ( Interim financial statements ).
 
8.2                                Most favoured Lenders
 
(a)                                  If at any time any Other Facility Agreement shall include any financial covenant in respect of the Parent Guarantor, the Group or the majority of the Group (whether set forth as a covenant, undertaking, event of default, restriction or other such provision) (a “ Financial Covenant ”) not set forth herein or that would be more beneficial to the Lenders than any analogous provision contained in this Agreement (any such Financial Covenant, an “ Additional Financial Covenant ”), then the Borrowers and HoldCo shall provide a Most Favoured Lender Notice to the Lenders. Thereupon, unless waived in writing by the Majority Lenders within fourteen (14) days of receipt of such Most Favoured Lender Notice by the Lenders, such Additional Financial Covenant (and any related definitions and any information and other undertakings reasonably required to ensure compliance with the Additional Finance Covenant) shall be deemed automatically incorporated by reference into this Agreement, mutatis mutandis, as if set out fully in this document, without any further action required on the part of any person, effective as of the date when such Additional Financial Covenant became effective under the Facility Agreement. For the avoidance of doubt, in no event shall any (i) collateral maintenance requirements relating to a Fleet Vessel or Fleet Vessels, or (ii) minimum liquidity requirements on a per vessel basis equivalent to the requirement in clause 7.1(a) in any Other Facility Agreement be subject to the requirements set forth in this Clause 8.2.
 
(b)                                  If requested by the Majority Lenders following the receipt of a Most Favoured Lender Notice, the Guarantor shall enter into any additional agreement or amendment to this Guarantee reasonably requested by the Majority Lenders evidencing the provisions of paragraph (a) above.
 
(c)                                   In this Clause 8.2:
 
(i)                                      “ Most Favoured Lender Notice ” means, in respect of any Additional Financial Covenant, a written notice to each of the Lenders delivered promptly, and in any event within thirty (30) days after the inclusion of such Additional Financial Covenant in the Other Facility Agreement, as applicable (including by way of amendment or other modification of any existing provision thereof), by an authorised officer of the obligor referring to the provisions of this Clause 8 and setting out a description of such Additional Financial Covenant (including any defined terms used therein) and related explanatory calculations, as applicable;
 
(ii)                                   “ Other Facility Agreement ” means, with respect to any Financial Indebtedness, any agreement and other documentation (including in relation to any amendments thereto) entered into in respect of such Financial Indebtedness.
 
9.                                       GENERAL UNDERTAKINGS
 
The undertakings in this Clause 9 remain in force for the duration of the Facility Period.
 
9.1                                No security
 
The Guarantor has not taken, and will not take without the prior written consent of the Security Agent (and then only on such terms and subject to such conditions as the Security
 
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Agent may impose), any security from any of the other Security Parties in connection with this Guarantee, and any security taken by the Guarantor notwithstanding this Clause 9.1 shall be held by the Guarantor in trust for the Finance Parties absolutely as a continuing security for the Guarantor Liabilities.
 
9.2                                Hedging
 
The Guarantor shall not enter into any agreement relating to interest or currency exchange transactions which correspond to a notional amount which is greater than the Total Net Debt based on the consolidated financial statements of the Guarantor most recently provided to the Security Agent pursuant to Clause 7.1 ( Financial Statements ).
 
9.3                                Facility Agreement undertakings
 
The Guarantor will observe and perform any and all covenants and undertakings in the Facility Agreement whose observance and performance by the Guarantor the Borrowers have undertaken to procure.
 
9.4                                Further assurance
 
(a)                                  The Guarantor shall (and shall procure that each other Obligor shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
 
(i)                                         to perfect any Security created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Security Interest over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
 
(ii)                                      to confer on the Security Agent or confer on the Finance Parties an Security Interest over any property and assets of the Guarantor (or that other Obligor as the case may be) located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents; and/or
 
(iii)                                   to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.
 
(b)                                  The Guarantor shall (and shall procure that each other Obligor shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
 
10.                                PAYMENTS
 
10.1                         Payments to the Security Agent
 
On each date on which the Guarantor is required to make a payment under any Guarantor Security Document, the Guarantor shall make the same available to the Security Agent for value on the due date at the time and in such funds specified by the Security Agent as being customary at the time for settlement of transactions in the relevant currency in the place of
 
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payment. Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Security Agent, in each case, specifies.
 
10.2                         No set-off by Guarantor
 
All payments to be made by the Guarantor under any Guarantor Security Document shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
10.3                         Business Days
 
Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
 
10.4                         Currency of payments
 
(a)                                  Subject to Clauses 10.4(b) and 10.4(c), US$ is the currency of account and payment for any sum due from the Guarantor under this Guarantee is payable in Dollars.
 
(b)                                  Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
(c)                                   Any amount expressed to be payable in a currency other than Dollars shall be paid in that other currency.
 
10.5                         Tax gross-up
 
The clauses of the Facility Agreement numbered 12 ( Tax Gross Up and Indemnities ) and 15 ( Mitigation by the Lenders ) (in so far as that clause 15 applies to that clause 12) shall apply to this Guarantee as if they were incorporated into it with any necessary modifications.
 
11.                                SET-OFF
 
A Finance Party may set off any matured obligation due from the Guarantor under any Guarantor Security Document (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Guarantor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 
12.                                CALCULATIONS AND CERTIFICATES
 
12.1                         Accounts
 
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by any relevant Finance Party are prima facie evidence of the matters to which they relate.
 
12.2                         Certificates and determinations
 
Any certification or determination by any relevant Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
 
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12.3                         Day count convention
 
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
 
13.                                PARTIAL INVALIDITY
 
If, at any time, any provision of any Guarantor Security Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
14.                                REMEDIES AND WAIVERS
 
No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Guarantee and any other Guarantor Security Document are cumulative and not exclusive of any rights or remedies provided by law.
 
15.                                MISCELLANEOUS PROVISIONS OF THE FACILITY AGREEMENT
 
The following clauses of the Facility Agreement apply to this Guarantee as if they were incorporated in this Guarantee with any necessary modifications:
 
clause 33 ( Sharing among the Finance Parties );
 
clause 40 ( Amendments and Waivers );
 
clause 41 ( Confidentiality ); and
 
clause 42 ( Counterparts ).
 
16.                                TRANSFERS
 
16.1                         Transfer by Security Agent
 
The Security Agent may transfer its rights and obligations under and in connection with this Guarantee to the same extent as it may do so under the Facility Agreement.
 
16.2                         Benefit of this Guarantee
 
This Guarantee shall enure to the benefit of the Finance Parties and their respective successors, transferees and assigns, as if each of the other Finance Parties had also been a party to this Guarantee.
 
17.                                NOTICES
 
17.1                         Addresses The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication or document to be made or delivered under or in connection with this Guarantee and any other Guarantor Security Document is:
 
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(a)                                  in the case of the Guarantor,
Genco Shipping & Trading Limited
299 Park Avenue, 12 th  Floor, New York,
NY 10171
Fax no.: +1 646 443 8555
Email: finance@gencoshipping.com
Department/Officer: Apostolos Zafolias; and
 
(b)                                  in the case of the Security Agent,
Hayfin Services LLP
One Eagle Place
London, SW1Y 6AF,
England
Fax no.: +44 207 785 6829
Email: loanops@hayfin.com
Attention: Loan Operations
 
or any substitute address, fax number, or department or officer as the party may notify to the other by not less than five Business Days’ notice.
 
17.2                         Facility Agreement provisions The clauses of the Facility Agreement numbered 36.1 ( Communications in writing ), 36.3 ( Delivery ), 36.6 ( Electronic communication ) and 36.7 ( English language ) shall apply to any notice or demand under or in connection with this Guarantee.
 
18.                                GOVERNING LAW
 
This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.
 
19.                                ENFORCEMENT
 
19.1                         Jurisdiction of English courts
 
(a)                                  The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Guarantee (including a dispute relating to the existence, validity or termination of this Guarantee or any non-contractual obligation arising out of or in connection with this Guarantee) (a “ Dispute ”).
 
(b)                                  The Guarantor agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly it will not argue to the contrary.
 
(c)                                   This Clause 19.1 is for the benefit of the Security Agent only. As a result, the Security Agent shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Security Agent may take concurrent proceedings in any number of jurisdictions.
 
19.2                         Service of process
 
(a)                                  Without prejudice to any other mode of service allowed under any relevant law, the Guarantor:
 
(i)                                      irrevocably appoints WFW Legal Services Limited currently of 15 Appold Street, London EC2A 2HB as its agent for service of process in relation to any
 
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proceedings before the English courts in connection with any Finance Document; and
 
(ii)                                   agrees that failure by a process agent to notify the Guarantor 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 or terminates its appointment as agent for service of process, the Guarantor must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Security Agent. Failing this, the Security Agent may appoint another agent for this purpose.
 
THIS GUARANTEE has been entered into and delivered as a deed on the date stated at the beginning of this Guarantee.
 
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SCHEDULE 1
FORM OF COMPLIANCE CERTIFICATE
 
To:                              [ Security Agent ]
 
From:                [ Guarantor ]
 
Dated:            [ · ]
 
Dear Sirs
 
Guarantee dated [ · ] 2015 between the Guarantor and the Security Agent in respect of a Facility Agreement dated [ · ] between various parties
 
1                                          We refer to the Guarantee. This is a Compliance Certificate. Terms defined in the Guarantee have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
 
2                                          We confirm that: [Insert details of covenants to be certified]
 
3                                          We set out below calculations establishing the figures in paragraph 2:
 
[ · ]
 
4                                          [We confirm that no Default is continuing.]*

Signed:	 	 	 	
 	 	 	 	
 	Director of [Guarantor]	 	Director of [Guarantor]	
 	 	 	 	
[insert applicable certification language]	 	 	
 
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EXECUTION PAGE

THE GUARANTOR	 	 	
 	 	 	
Signed and delivered	)	 	
as a Deed	)	 	
by GENCO SHIPPING & TRADING LIMITED	)	/s/ Apostolos Zafolias	
acting by Apostolos Zafolias	)	 	
 	 	 	
its duly authorised Chief Financial Officer	 	/s/ Peter Allen	
 	 	 	
in the presence of:	 	Name: Peter Allen	
 	 	Address: 299 Park Avenue, 12 th  Floor	
 	 	New York, NY 10171	
 	 	 	
THE SECURITY AGENT	 	 	
 	 	/s/ Stephen Bourne	
Signed and delivered	)	 	
as a Deed	)	 	
by HAYFIN SERVICES LLP	)	 	
acting by Stephen Bourne	)	 	
 	 	 	
its duly authorised	 	 	
Member	 	 	
 	 	 	
in the presence of:	 	/s/ Afsheen Khan	
 	 	 	
 	 	Name: Afsheen Khan	
 	 	Address: One Eagle Place	
 	 	London	
 	 	SW146AF	
 
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Exhibit 31.1
 
CERTIFICATION
 
I, John C. Wobensmith, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 of Genco Shipping & Trading Limited;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	 	/s/ John C. Wobensmith	
 	 	Name:	John C. Wobensmith	
Date:  November 13, 2015	 	Title:	President	

Exhibit 31.2
 
CERTIFICATION
 
I, Apostolos Zafolias, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 of Genco Shipping & Trading Limited;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	 	/s/ Apostolos Zafolias	
 	 	Name:	Apostolos Zafolias	
Date:  November 13, 2015	 	Title:	Chief Financial Officer	

Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned President of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2015	/s/ John C. Wobensmith	
 	Name:	John C. Wobensmith	
 	Title:	President	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2015	 	/s/ Apostolos Zafolias	
 	 	Name:	Apostolos Zafolias	
 	 	Title:	Chief Financial Officer	
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.