Supplemental Covenants. Commencing with the First Calendar Year of Vessel Operations and continuing thereafter unless, after giving effect to such transaction or transactions during any fiscal year: (i) the Company's debt-to-equity ratio does not exceed 2:1; (ii) upon completion of construction of the Vessel and the First Calendar Year of Vessel Operation, the Company's Minimum Cash Flow Ratio is not less than 1.0 to 1.0; and (iii) the Company has a positive cash balance at all times, the Company shall not, without the Secretary's prior written consent during any fiscal year of the Company after completion of construction of the Vessel: (1) Withdraw any capital; (2) Redeem any share capital or convert any of the same into debt; (3) Pay any dividend (except dividends payable in capital stock of the Company); (4) Make any loan or advance (except advances to cover current expenses of the Company), either directly or indirectly, to any stockholder, director, officer, or employee of the Company, or to any Related Party; (5) Make any investments in the securities of any Related Party; (6) Prepay in whole or in part any indebtedness to any stockholder, director, officer or employee of the Company, or to any Related Party; (7) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $100,000 per annum; nor increase any direct employee compensation which is already in excess of $100,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $100,000 per annum; provided, however, that beginning with January 1, 2000, the $100,000 limit may be increased annually based on the previous year's closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "direct employee compensation" is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year; (8) Acquire any fixed assets other than those required for the maintenance of the Company's existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the Company; (9) Either enter into or become liable (directly or indirectly) under charters and leases (having a term of six months or more) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $3,000,000; (10) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations; (11) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists; (12) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; or (13) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary and (ii) liens incurred in the ordinary course of business as such business presently exists. Notwithstanding the requirements set forth in Section 8(b)(i) above, so long as the Company is not in Default under the Security Agreement and Guarantor's guarantee is in full force and effect, the Company will not be required to make any Title XI Reserve Fund Deposits during the First Calendar Year of Vessel Operation and the Second Calendar Year of Vessel Operation regardless of its debt-to-equity ratio and, in the Third Calendar Year of Vessel Operation and the Fourth Year of Vessel Operation unless its debt-to-equity ratio is in excess of 4.0 to 1.0. Notwithstanding the requirements in Section 8(b) above, so long as the Shipowner is not in Default under the Security Agreement and the Guarantor's guarantee is in full force and effect, the Shipowner may: (1) Make advances, loans or other distributions to the Sister Shipowner if the Sister Shipowner issues a guarantee of the Company's debt that is in form and substance acceptable to the Secretary and said guarantee is in full force and effect and the Sister Shipowner has not defaulted on its Security Agreement; (2) Make reimbursement or payments to the Guarantor and/ or Ocean Development Co. with respect to administrative, operational and/or management expenses incurred with respect to the Vessel; (3) Make a distribution in form and substance satisfactory to the Secretary to the Guarantor to be used for equity on an option vessel as provided for in the shipbuilding contract relating to the Vessel, and the vessel being constructed by the Sister Shipowner provided the Company has met its cash flow test for the most recent reporting period, has a debt-to-equity ratio not in excess of 4.0 to 1.0 until the sixth calendar year of vessel operation, and is not in default on its Security Agreement; and (4) Make advances to the Guarantor in accordance with the Guarantor's cash management program provided such program has been approved by the Secretary and any such advances are evidenced by a receivable from the Guarantor, which receivable is due and payable to the Company at any time the Company does not have adequate funds to meet its current obligations including but limited to current obligations with respect to the Title XI debt.
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Samples: Financial Agreement (American Classic Voyages Co), Title Xi Reserve Fund and Financial Agreement (American Classic Voyages Co)
Supplemental Covenants. Commencing with the First Calendar Year of Vessel Operations and continuing thereafter unlessUnless, after giving effect to such transaction or transactions during any fiscal year: transactions, (i) the Company's debtLong-toTerm Debt of the Assuming Shipowner is equal to or less than its Long-equity ratio does not exceed 2:1; Term Debt as of the date of this Financial Agreement, which is set forth in Attachment A hereto, and (ii) upon completion of construction the Net Worth of the Vessel and Assuming Shipowner meets the First Calendar Year of Vessel Operationrequirements set forth in Attachment A hereto, the Company's Minimum Cash Flow Ratio is not less than 1.0 to 1.0; and (iii) the Company has a positive cash balance at all times, the Company Assuming Shipowner shall not, without the Secretary's ’s prior written consent during any fiscal year of the Company after completion of construction of the Vesselconsent:
(1) Withdraw any capital;
(2) Redeem any share capital membership interest or convert any of the same into debt;
(3) Pay any dividend (except dividends payable for taxes under Section 8(a)(1)(A) or in capital stock of membership interests in the CompanyAssuming Shipowner);
(4) Make any loan or advance (except advances to cover current expenses of the Company)advance, either directly or indirectly, to any stockholdermember, manager, director, officer, or employee of the CompanyAssuming Shipowner, or to any Related Party;
(5) Make any investments in the securities of any Related Party;
(6) Prepay in whole or in part any indebtedness to any stockholdermember, manager, director, officer or employee of the CompanyAssuming Shipowner, or to any Related Party;
(7) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $100,000 175,000 per annum; nor increase any direct employee compensation which is already in excess of $100,000 175,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $100,000 175,000 per annum; provided, however, that beginning with January 1, 20002003, the $100,000 175,000 limit may be increased annually based on the previous year's ’s closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "“direct employee compensation" ” is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year;
(8) Acquire any fixed assets other than those required for the maintenance of the Company's Assuming Shipowner’s existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the CompanyAssuming Shipowner;
(9) Either enter into or become liable (directly or indirectly) under charters and leases (having a term of six months or more) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $3,000,000;
(10) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations;
(11) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists;
(1210) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; or;
(1311) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary Secretary, (ii) mortgages, liens or other encumbrances in existence on the date that the supplemental covenants of Section 8(b) hereof become applicable, and (iiiii) liens incurred in the ordinary course of business as such business presently exists. Notwithstanding the requirements set forth in Section 8(b)(i) above, so long as the Company is not in Default under the Security Agreement and Guarantor's guarantee is in full force and effect, the Company will not be required to make any Title XI Reserve Fund Deposits during the First Calendar Year of Vessel Operation and the Second Calendar Year of Vessel Operation regardless of its debt-to-equity ratio and, in the Third Calendar Year of Vessel Operation and the Fourth Year of Vessel Operation unless its debt-to-equity ratio is in excess of 4.0 to 1.0. Notwithstanding the requirements in Section 8(b) above, so long as the Shipowner is not in Default under the Security Agreement and the Guarantor's guarantee is in full force and effect, the Shipowner may:
(1) Make advances, loans or other distributions to the Sister Shipowner if the Sister Shipowner issues a guarantee of the Company's debt that is in form and substance acceptable to the Secretary and said guarantee is in full force and effect and the Sister Shipowner has not defaulted on its Security Agreement;
(2) Make reimbursement or payments to the Guarantor and/ or Ocean Development Co. with respect to administrative, operational and/or management expenses incurred with respect to the Vessel;
(3) Make a distribution in form and substance satisfactory to the Secretary to the Guarantor to be used for equity on an option vessel as provided for in the shipbuilding contract relating to the Vessel, and the vessel being constructed by the Sister Shipowner provided the Company has met its cash flow test for the most recent reporting period, has a debt-to-equity ratio not in excess of 4.0 to 1.0 until the sixth calendar year of vessel operation, and is not in default on its Security Agreement; and
(4) Make advances to the Guarantor in accordance with the Guarantor's cash management program provided such program has been approved by the Secretary and any such advances are evidenced by a receivable from the Guarantor, which receivable is due and payable to the Company at any time the Company does not have adequate funds to meet its current obligations including but limited to current obligations with respect to the Title XI debt.
Appears in 1 contract
Samples: Title Xi Reserve Fund and Financial Agreement (Ambassadors International Inc)
Supplemental Covenants. Commencing with the First Calendar Year of Vessel Operations and continuing thereafter unlessUnless, after giving effect to such transaction or transactions during any fiscal year: (i) the Company's debt-to-equity ratio does not exceed 2:1; (ii) upon completion of construction of the Vessel and the First Calendar Year of Vessel Operation, the Company's Minimum Cash Flow Ratio is not less than 1.0 to 1.0; and (iii) the Company has a positive cash balance of at least $2,000,000 at the time of the delivery closing for the Vessel and has at least a positive cash balance at all other times, the Company shall not, without the Secretary's prior written consent during any fiscal year of the Company after completion of construction of the Vessel:
(1) Withdraw any capital;
(2) Redeem any share capital or convert any of the same into debt;
(3) Pay any dividend (except dividends payable in capital stock of the Company);
(4) Make any loan or advance (except advances to cover current expenses of the Company), either directly or indirectly, to any stockholder, director, officer, or employee of the Company, or to any Related Party;
(5) Make any investments in the securities of any Related Party;
(6) Prepay in whole or in part any indebtedness to any stockholder, director, officer or employee of the Company, or to any Related Party;
(7) Increase any direct employee compensation (as hereinafter defined) paid to any employee in excess of $100,000 per annum; nor increase any direct employee compensation which is already in excess of $100,000 per annum; nor initially employ or re-employ any person at a direct employee compensation rate in excess of $100,000 per annum; provided, however, that beginning with January 1, 2000, the $100,000 limit may be increased annually based on the previous year's closing CPI-U (Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics). For the purpose of this section the term "direct employee compensation" is the total amount of any wage, salary, bonus, commission, or other form of direct payment to any employee from all companies with guarantees under Title XI of the Act as reported to the Internal Revenue Service for any fiscal year;
(8) Acquire any fixed assets other than those required for the maintenance of the Company's existing assets, including the normal maintenance and operation of any vessel or vessels owned or chartered by the Company;
(9) Either enter into or become liable (directly or indirectly) under charters and leases (having a term of six months or more) for the payment of charter hire and rent on all such charters and leases which have annual payments aggregating in excess of $3,000,000;
(10) Pay any indebtedness subordinated to the Obligations or to any other Title XI obligations;
(11) Create, assume, incur, or in any manner become liable for any indebtedness, except current liabilities, or short term loans, incurred or assumed in the ordinary course of business as such business presently exists;
(12) Make any investment, whether by acquisition of stock or indebtedness, or by loan, advance, transfer of property, capital contribution, guarantee of indebtedness or otherwise, in any Person, other than obligations of the United States, bank deposits or investments in securities of the character permitted for moneys in the Title XI Reserve Fund; or
(13) Create, assume, permit or suffer to exist or continue any mortgage, lien, charge or encumbrance upon, or pledge of, or subject to the prior payment of any indebtedness, any of its property or assets, real or personal, tangible or intangible, whether now owned or hereafter acquired, or own or acquire, or agree to acquire, title to any property of any kind subject to or upon a chattel mortgage or conditional sales agreement or other title retention agreement, except (i) loans, mortgages and indebtedness guaranteed by the Secretary under Title XI of the Act or related to the construction of a vessel approved for Title XI by the Secretary and (ii) liens incurred in the ordinary course of business as such business presently exists. Notwithstanding the requirements set forth in Section 8(b)(i) above, so long as the Company is not in Default under the Security Agreement and Guarantor's guarantee is in full force and effect, the Company will not be required to make any Title XI Reserve Fund Deposits during the First Calendar Year of Vessel Operation and the Second Calendar Year of Vessel Operation regardless of its debt-to-equity ratio and, in the Third Calendar Year of Vessel Operation and the Fourth Year of Vessel Operation unless its debt-to-equity ratio is in excess of 4.0 to 1.0. Notwithstanding the requirements in Section 8(b) above, so long as the Shipowner is not in Default under the Security Agreement and the Guarantor's guarantee is in full force and effect, the Shipowner may:
(1) Make advances, loans or other distributions to the Sister Shipowner if the Sister Shipowner issues a guarantee of the Company's debt that is in form and substance acceptable to the Secretary and said guarantee is in full force and effect and the Sister Shipowner has not defaulted on its Security Agreement;
(2) Make reimbursement or payments to the Guarantor and/ or Ocean Development Co. with respect to administrative, operational and/or management expenses incurred with respect to the Vessel;
(3) Make a distribution in form and substance satisfactory to the Secretary to the Guarantor to be used for equity on an option vessel as provided for in the shipbuilding contract relating to the Vessel, and the vessel being constructed by the Sister Shipowner provided the Company has met its cash flow test for the most recent reporting period, has a debt-to-equity ratio not in excess of 4.0 to 1.0 until the sixth calendar year of vessel operation, and is not in default on its Security Agreement; and
(4) Make advances to the Guarantor in accordance with the Guarantor's cash management program provided such program has been approved by the Secretary and any such advances are evidenced by a receivable from the Guarantor, which receivable is due and payable to the Company at any time the Company does not have adequate funds to meet its current obligations including but limited to current obligations with respect to the Title XI debt.or
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