PLEDGE OF SHARES between GENCO SHIPPING & TRADING LIMITED, as Pledgor and DNB NOR BANK ASA, Grand Cayman Branch as Security Trustee, as Pledgee May 3, 2007
Exhibit
10.2
between
GENCO
SHIPPING & TRADING LIMITED,
as
Pledgor
and
DNB
NOR
BANK ASA,
Grand
Cayman Branch
as
Security Trustee,
as
Pledgee
May
3,
2007
THIS
PLEDGE OF SHARES (hereinafter, this "Pledge Agreement") is made this 3rd day
of
May, 2007, between GENCO SHIPPING & TRADING LIMITED, a corporation organized
and existing under the laws of the Republic of the Xxxxxxxx Islands with offices
at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (herein called the
"Pledgor"), and DNB NOR BANK ASA, Grand Cayman Branch, a corporation organized
and existing under the laws of the Kingdom of Norway, in its capacity as
security trustee (herein called the "Pledgee"), for and on its own behalf and
on
behalf of the Administrative Agent, as defined below, and the Lenders, as
defined below, (together, the "Creditors").
WITNESSETH:
WHEREAS:
A. Pursuant
to a promissory note dated as of May 3, 2007 (the "Promissory Note"), issued
to
the Pledgor to the order of the Pledgee evidencing a loan to the Pledgor, as
borrower, by (1) the Pledgee as administrative agent (in such capacity, the
“Administrative Agent”), security trustee (in such capacity, the “Security
Trustee”) for the Lenders, as defined below, joint mandated lead arranger and
joint bookrunner, (2) Nordea Bank Norge ASA, Grand Cayman Branch, as
joint mandated lead arranger and joint bookrunner, and (3) the banks and
financial institutions listed on Schedule 1 of the Promissory Note, as lenders
(together with any bank or financial institution which becomes a lender by
assignment or otherwise, the "Lenders"), the Administrative Agent and
the Security Trustee have agreed to serve in such capacities under the
Promissory Note and the Lenders have agreed to provide to the Borrower a loan
in
the aggregate amount of up to US$155,000,000 (the "Loan");
B. It
is a
condition to the Lenders’ agreement to make any Advance under the Loan available
to the Pledgor under the Promissory Note that the Pledgor execute and deliver
to
the Pledgee, as security for the obligations of the Pledgor to the Security
Trustee, the Administrative Agent and the Lenders (together, the “Creditors”), a
pledge of all of the Pledgor's right, title and interest in and to the all
of
the shares that it now owns or in the future acquires (the “Pledged Shares”) in
Jinhui Shipping and Transportation Limited (the "Pledged Company");
C. As
of the
date hereof, the Pledgor is the registered and beneficial owner of 4,131,000
shares (the “Currently Owned Shares”) of Pledged Company;
D. The
Pledgor hereby covenants that it will execute and deliver a pledge agreement,
substantially in the form of this Pledge Agreement (or a supplement hereto),
over all shares of the Pledged Company that the Pledgor acquires after the
date
of this Pledge Agreement and prior to the Termination Date (as defined in the
Note); and
E. The
Pledgor will obtain benefits as a result of the consummation of the transactions
under the Promissory Note and, accordingly, desires to enter into this Agreement
in order to satisfy the conditions described in the Promissory
Note.
NOW,
THEREFORE, in consideration of the premises, the Pledgor agrees with the Pledgee
as follows:
1. Defined
Terms. Unless otherwise defined herein, terms defined in the
Promissory Note shall have the same meanings when used herein.
2. Grant
of Security. As security for (a) the full and prompt payment
to the Pledgee and the Creditors of all sums owing by the Pledgor to the
Creditors whether for principal, interest, fees, expenses or otherwise, under
and in connection with the Promissory Note, and the other Security Documents
to
which they are a party or otherwise due the punctual performance by the Pledgor
of its obligations in connection therewith, and (b) the due and punctual
performance by the Pledgor of all its obligations under this Pledge Agreement
(all of the above under (a) and (b) now or hereafter existing, hereinafter
together called the "Obligations"), the Pledgor hereby pledges and assigns
to
the Pledgee the Pledged Shares and hereby grants to the Pledgee a first lien
on,
and first security interest in, the Pledged Shares.
3. Pledge
Documents. As soon as practicable, but in any event within thirty
(30) days of the execution of this Pledge Agreement, the Pledgor shall execute
and deliver to the Pledgee a control agreement in form and substance
satisfactory to the Mandated Lead Arrangers over the Pledgor’s Norwegian Central
Securities Depository Account with the Pledgee.
4. Representations
and Warranties. The Pledgor represents and warrants
that:
|
(i)
|
it
is the legal and beneficial owner of, and has good and marketable
title
to, the Currently Owned Shares, subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the lien and security interest created by this
Pledge
Agreement;
|
|
(ii)
|
it
has full power, authority and legal right to execute, deliver and
perform
this Pledge Agreement and to create the collateral security interest
for
which this Pledge Agreement
provides;
|
|
(iii)
|
as
of the date hereof, the Pledgor has not entered into any voting
trusts or other shareholder agreements or arrangements relating to
any of
the Currently Owned Shares;
|
|
(iv)
|
this
Pledge Agreement constitutes a valid obligation of the Pledgor, legally
binding upon it and enforceable in accordance with its
terms;
|
|
(v)
|
the
pledge, hypothecation, and assignment of the Pledged Shares pursuant
to
and/or described in this Pledge Agreement creates a valid first perfected
security interest in each of the Pledged Shares and the proceeds
thereof;
|
2
|
(vi)
|
no
consent of any other party (including stockholders of the Pledgor)
is
required in connection with the execution, delivery, performance,
validity, enforceability or enforcement of this Pledge Agreement,
and no
consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, bureau or agency is
required
in connection with the execution, delivery, performance, validity,
enforceability or enforcement of this Pledge
Agreement;
|
|
(vii)
|
the
execution, delivery and performance of this Pledge Agreement will
not
violate or contravene any provision of any existing law or regulation
or
decree of any court, governmental authority, bureau or agency having
jurisdiction in the premises or of the Articles of Incorporation,
by-laws
or other charter documents of the Pledgor or of any mortgage, indenture,
security agreement, contract, undertaking or other agreement to which
the
Pledgor is a party or which purports to be binding upon it or any
of its
properties or assets and will not result in the creation or imposition
of
any lien, charge or encumbrance on, or security interest in, any
of its
properties or assets pursuant to the provisions of any such mortgage,
indenture, security agreement, contract, undertaking or other agreement;
and
|
|
(viii)
|
the
representations and warranties set forth in Section 6 of the Promissory
Note insofar as they relate to the Pledgor are true and complete
and the
Pledgor will comply with each of the covenants set forth in the Promissory
Note which are applicable thereto.
|
5. Covenants. The
Pledgor hereby covenants that during the continuance of this Pledge
Agreement:
|
(i)
|
it
shall warrant and defend the right and title of the Pledgee conferred
by
this Pledge Agreement in and to the Pledged Shares at the cost of
the
Pledgor against the claims and demands of all persons
whomsoever;
|
|
(ii)
|
except
as herein provided or as provided in the Promissory Note, without
the
prior written consent of the Pledgee, it shall not sell, assign,
transfer,
charge, pledge or encumber in any manner any part of the Pledged
Shares or
suffer to exist any encumbrance on the Pledged
Shares;
|
|
(iii)
|
without
the prior written consent of the Pledgee, it will not amend or modify
any
articles of incorporation, charter documents or bylaws relating to
the
Pledged Company;
|
3
|
(iv)
|
without
the prior written consent of the Pledgee, it shall not vote the Pledged
Shares of any Pledged Company in favor of the dissolution, liquidation,
consolidation with or merger into, any corporation, or merge any
corporation into it, except that the Pledgor shall be permitted to
merge
the Pledged Company into itself or consolidate the Pledged Company
with
any subsidiary or affiliate so long as no Event of Default would
result
therefrom; and
|
|
(v)
|
without
the prior written consent of the Pledgee, it shall not take from
the
Pledged Company any undertaking or security in respect of its liability
hereunder or in respect of any other liability of the Pledged Company
to
the Pledgor and the Pledgor shall not prove nor have the right of
proof,
in competition with the Pledgee, for any monies whatsoever owing
from the
Pledged Company to the Pledgor, in any insolvency or liquidation,
or
analogous proceedings under any applicable law, of the
Pledgor.
|
6. Additional
Shares. If the Pledgor purchases or shall otherwise become
entitled to receive or shall receive any shares of stock, options or rights,
whether as an addition to, in substitution of, or in exchange for any of the
Pledged Shares, the Pledgor agrees to accept the same as the agent of the
Pledgee and to deposit the same in the Pledgor’s Norwegian Central Securities
Depository Account for the benefit of the Pledgee, subject to the terms hereof,
as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Shares on the liquidation or dissolution
of
the Pledged Company shall be paid over to the Pledgee to be held by it as
additional collateral security for the Obligations.
7. Collateral. All
property at any time pledged to the Pledgee hereunder by the Pledgor (whether
described herein or not) and all income therefrom and proceeds thereof, are
herein collectively sometimes called the "Collateral".
8. General
Authority. The Pledgor hereby consents that, without the
necessity of any reservation of rights against the Pledgor, and without notice
to or further assent by the Pledgor, any demand for payment of any of the
Obligations made by the Pledgee or any of the Creditors may be rescinded by
the
Pledgee or any of the Creditors and any of the Obligations continued, and the
Obligations, or the liability of the Pledgor and/or the Pledged Company upon
or
for any part thereof, or any other collateral security or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, modified, accelerated, compromised, waived, surrendered, or released
by the Pledgee or any of the Creditors, and any guarantees and any other
collateral security documents executed and delivered by the Pledgor and/or
the
Pledged Company or any other obligors in respect of the Obligations may be
amended, modified, supplemented or terminated, in whole or in part, as the
Pledgee or any of the Creditors may deem advisable, from time to time, and
any
other collateral security at any time held by the Pledgee or any of the
Creditors for the payment of the Obligations (including, without limitation,
any
collateral security held pursuant to any other collateral security document
executed and delivered pursuant to the Promissory Note) may be sold, exchanged,
waived, surrendered or released, all without notice to or further assent by
the
Pledgor or any Pledged Company, which will remain bound hereunder,
notwithstanding any such renewal, extension,
4
modification,
acceleration, compromise, amendment, supplement, termination, sale, exchange,
waiver, surrender or release. The Pledgor waives any and all notices
of the creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Pledgee or any of the Creditors upon
this
Pledge Agreement, and the Obligations, and any of them, shall conclusively
be
deemed to have been created, contracted or incurred in reliance upon this Pledge
Agreement, and all dealings between the Pledged Company and the Pledgee and
any
of the Creditors shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Pledge Agreement. The Pledgor
waives diligence, presentment, protest, demand for payment and notice of default
or non-payment to or upon the Pledgor or the Pledged Company with respect to
the
Obligations.
9. Voting
Rights. The Pledgee shall receive notice (if the Pledgee has
requested to be provided with such notice) and have the right (but not the
obligation) to vote the Pledged Shares at its own discretion at, any annual
or
special meeting, as the case may be, of the shareholders of the Pledged Company,
provided, however, that the Pledgee shall not exercise such right
to vote until such time that default shall have occurred in the payment or
performance of the Obligations and not been remedied to the Pledgee's
satisfaction or waived in writing.
10. Default. The
security constituted by this Pledge Agreement shall become immediately
enforceable on the occurrence of an Event of Default under the Promissory
Note.
11. Remedies. At
any time after the security constituted by this Pledge Agreement shall have
become enforceable as aforesaid, whereupon the security constituted by this
Pledge Agreement shall become enforceable, the Pledgee shall be entitled,
without further notice to the Pledgor:
|
(i)
|
subject
to the limitations of Sections 9-610 and 9-615 of the Uniform Commercial
Code of the State of New York (if applicable), to sell, assign, transfer
and deliver at any time the whole, or from time to time any part,
of the
Collateral or any rights or interests therein, at public or private
sale
or in any other manner, at such price or prices and on such terms
as the
Pledgee may deem appropriate, and either for cash, on credit, for
other
property or for future delivery, at the option of the Pledgee, upon
not
less than 10 days' written notice (which 10 day notice is hereby
acknowledged by the Pledgor to be reasonable) addressed to the Pledgor
at
its last address on file with the Pledgee, but without demand,
advertisement or other notice of any kind (all of which are hereby
expressly waived by the Pledgor). If any of the Collateral or
any rights or interests thereon are to be disposed of at a public
sale,
the Pledgee may, without notice or publication, adjourn any such
sale or
cause the same to be adjourned from time to time by announcement
at the
time and place fixed for sale, and such sale may, without further
notice,
occur at the time and place identified in such announcement. If
any of the Collateral or any rights or interests therein shall be
disposed
of at a private sale, the Pledgee shall be relieved from all liability
or
claim for inadequacy of price.
|
5
At
any
such public sale the Pledgee may purchase the whole or any part of the
Collateral or any rights or interests purchaser, including the Pledgee should
it
acquire the Collateral, at any public or private sale shall hold the property
sold free from any claim or right of redemption, stay, appraisal or reclamation
on the part of the Pledgor which are hereby expressly waived and released to
the
extent permitted by applicable law. If any of the Collateral or any rights
or interests therein shall be sold on credit or for future delivery, the
Collateral or such rights or interests in or of the Collateral so sold may
be
retained by the Pledgee until the selling price thereof shall be paid by the
purchaser, but the Pledgee shall not incur any liability in case of failure
of
the purchaser to take up and pay for the Collateral or rights or interests
therein case of any such failure, such Collateral or rights or interests therein
may again be sold on not less than 10 days' written notice as
aforesaid;
|
(ii)
|
to
exercise all voting and other rights at any meeting of the Pledged
Company
and exercise any and all rights of conversion, exchange, subscription
or
any other rights, privileges or options pertaining to the Pledged
Shares
of the Pledged Company as if it was the absolute owner thereof, including,
without limitation, the right to exchange at its discretion, the
Pledged
Shares upon the merger, consolidation, reorganization, recapitalization
or
other readjustment of the Pledged Company or, upon the exercise by
the
Pledged Company or the Pledgee of any right, privilege or option
pertaining to the Pledged Interest, and in connection therewith,
to
deposit and deliver the Pledged Shares with any committee, depository,
transfer agent, registrar or other designated agency upon such terms
and
conditions as it may determine, all without liability except to account
for property actually received by
it.
|
In
addition to the rights and remedies granted to it in this Pledge Agreement
and
in any other instrument or agreement securing, evidencing or relating to any
of
the Obligations, the Pledgee shall have rights and remedies of a secured party
under the Uniform Commercial Code of the State of New York.
12. No
Duty on Pledgee. The Pledgee shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible
for
any failure to do so or delay in so doing.
13. Application
of Proceeds. All moneys collected or received by the Pledgee
pursuant to this Pledge Agreement shall be applied towards amounts owing under
or in connection with the Promissory Note.
14. Termination. When
all of the Obligations shall have been fully satisfied, the Pledgee agrees
that
it shall forthwith release the Pledgor from its Obligations hereunder and the
Pledgee, at the request and expense of the Pledgor, will promptly execute and
deliver to the
6
Pledgor
a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement.
15. Further
Assurances. The Pledgor shall from time to time, and at all times
after the security constituted by this Pledge Agreement shall have become
enforceable, execute all such further instruments and documents and do all
such
things as the Pledgee may deem desirable for the purpose of obtaining the full
benefit of this Pledge Agreement and of the rights, title, interest, powers,
authorities and discretions conferred on the Pledgee by this Pledge Agreement
including (without limitation) causing the Pledged Company to execute any such
instruments and documents as aforesaid. The Pledgor hereby
irrevocably appoints the Pledgee its attorney-in-fact for him and in its name
and on its behalf and as its act and deed to execute, seal and deliver and
otherwise perfect any deed, assurance, agreement, instrument or act which it
may
deem desirable for any of the purposes of this Pledge Agreement; provided that
the Pledgee shall not exercise such power unless the security constituted by
this Pledge Agreement shall have become enforceable. The Pledgee
shall have full power to delegate this power of attorney but no such delegation
shall preclude the subsequent exercise of such power by the Pledgee itself
or
preclude the Pledgee from subsequent delegation to some other person and any
delegation may be revoked by the Pledgee at any time.
16. No
Waiver; Remedies Cumulative and Exclusive. The Pledgee shall not
by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver shall be valid unless in writing,
signed by the Pledgee, and then only to the extent therein set
forth. A waiver by the Pledgee of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Pledgee would otherwise have had on any future occasion. No
failure to exercise nor any delay in exercising on the part of the Pledgee,
any
right, power or privilege hereunder shall operate as a waiver thereof; nor
shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided
are cumulative and may be exercised singly or concurrently, and are exclusive
of
any rights and remedies provided by law.
17. Changes
in Writing; Successors and Assigns. None of the terms or
provisions of this Pledge Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by the Pledgee (with the
written consent of the Majority Lenders). This Pledge Agreement and
all obligations of the Pledgor hereunder shall be binding upon the successors
and assigns of the Pledgor and shall, together with the rights and remedies
of
the Pledgee hereunder, inure to the benefit of the Pledgee, and its respective
successors and assigns.
18. Notices.
Every notice or demand under this Assignment shall be in writing (including
prepaid overnight courier, facsimile transmission or similar
writing). Every notice or demand shall be sent as
follows:
If
to the
Pledgor:
GENCO
SHIPPING & TRADING LIMITED
000
Xxxx
Xxxxxx, 00xx Xxxxx
0
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile
No.: 000-000-0000
If
to the
Pledgee:
DNB
NOR
BANK ASA
Grand
Cayman Branch
Bank
of
Xxxxxxxxxxx International (Cayman) Ltd
Xxxxxxxxxxx
Xxxxx
00
Xxxx
Xxxxxx
P.O.
Box
705GT
Xxxxxx
Town, Grand Cayman
British
West Indies
With
copy
to
DNB
NOR
BANK ASA
000
Xxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attn: Xxxxxxx
X. Xxxxxxxxx/Xxxxxxxx Xxxxxxx
xxxxxxx.xxxxxxxxx@xxxxxx.xx
xxxxxxxx.xxxxxxx@xxxxxx.xx
Telephone
No. 000-000-0000
Facsimile
No. 000-000-0000
Each
such
notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the telecopy number specified
in this Section and telephonic confirmation of receipt thereof is obtained
or
(ii) if given by mail, prepaid overnight courier or any other means, when
received at the address specified in this Section or when delivery at such
address is refused.
19. Governing
Law. This Pledge Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of law thereof.
20. Submission
to Jurisdiction. The Pledgor hereby irrevocably submits to the
jurisdiction of the courts of the State of New York and of the United States
District Court for the Southern District of New York in any action or proceeding
brought against it by any of the Creditors under this Pledge Agreement or under
any document delivered hereunder and hereby irrevocably agrees that valid
service of summons or other legal process on it may be effected by serving
a
copy of the summons and other legal process in any such action or proceeding
on
the Pledgor by mailing or delivering the same by hand to the Pledgor at
the
address indicated for notices in Section 18. The service, as
herein provided, of such summons or other legal process in any such action
or
proceeding shall be deemed personal service and accepted by the Pledgor as
such,
and shall be legal and binding upon the Pledgor for all the purposes of any
such
action or proceeding. Final judgment (a certified or exemplified copy
of which shall be conclusive evidence of the fact and of the amount of any
indebtedness of the Pledgor to the Creditors)
8
against
the Pledgor in any such legal action or proceeding shall be conclusive and
may
be enforced in other jurisdictions by suit on the judgment. The
Pledgor will advise the Pledgee promptly of any change of address for the
purpose of service of process. Notwithstanding anything herein to the
contrary, the Creditors may bring any legal action or proceeding in any other
appropriate jurisdiction.
21. WAIVER
OF JURY TRIAL. EACH OF THE PLEDGOR AND THE PLEDGEE HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR
IN
ANY WAY CONNECTED WITH THIS PLEDGE AGREEMENT.
22. Severability. If
any provision hereof is invalid and unenforceable in any jurisdiction, then,
to
the fullest extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Pledgee in order to carry out the intentions of the
parties hereto as nearly as may be possible; and (ii) the invalidity and
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other
jurisdiction.
23. Counterparts. This
Pledge Agreement may be signed in any number of counterparts, each of which
shall be an original with the same effect as if the signatures thereto and
hereto were upon the same instrument.
24. Headings. In
this Pledge Agreement, Section headings are inserted for convenience of
reference only and shall be ignored in the interpretation of this Pledge
Agreement.
9
[THIS
PAGE INTENTIONALLY LEFT BLANK]
10
IN
WITNESS whereof, the parties hereto have caused this Pledge Agreement to be
duly
executed the day and year first above written.
GENCO
SHIPPING &
TRADING LIMITED
By:
/s/
Xxxx X.
Xxxxxxxxxx
Name:
Xxxx X.
Xxxxxxxxxx
Title:
CFO
DNB
NOR BANK
ASA,
Grand
Cayman Branch,
as Security Trustee
By:
/s/
Xxxxxxx X.
Xxxxxxxxx
Name:
Xxxxxxx X.
Xxxxxxxxx
Title:
Senior Vice
President
By:
/s/
Xxxxxxxx
Xxxxxxx
Name:
Xxxxxxxx
Xxxxxxx
Title:
Vice
President
11
