OVERSEAS SHIPHOLDING GROUP INC - FORM 8-K - EX-10.1 - EXHIBIT 10.1

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8-K - FORM 8-K - OVERSEAS SHIPHOLDING GROUP INC	v444753_8k.htm

Exhibit 10.1

EXECUTION VERSION

SECOND AMENDMENT TO CREDIT AGREEMENT

SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of July 18, 2016 (this “Second Amendment”), among Overseas Shipholding Group, Inc., a Delaware corporation (“Holdings”), OSG International, Inc., a Marshall Islands corporation (the “Administrative Borrower”), OIN Delaware LLC, a Delaware limited liability company (the “Co-Borrower” and, together with the Administrative Borrower, the “Borrowers”), the other Loan Parties party hereto, the Lenders party hereto and Jefferies Finance LLC, as administrative agent (in such capacity, the “Administrative Agent”). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, Holdings, the Borrowers, the other Loan Parties, the lenders party thereto from time to time (each, a “Lender” and, collectively, the “Lenders”), the Administrative Agent and the other parties thereto are parties to that certain Credit Agreement, dated as of August 5, 2014 (as amended by that certain First Amendment to Credit Agreement and Security Agreement, dated as of June 3, 2015, as further amended by this Second Amendment and as may hereafter be amended, amended and restated, modified, supplemented, extended, renewed, restated or otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, Holdings, the Borrowers, the other Loan Parties and the Lenders party hereto desire to amend the Credit Agreement as provided herein;

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:

SECTION I. Amendments to the Credit Agreement. On the Second Amendment Effective Date (as defined below), the parties hereto agree that the Credit Agreement is hereby amended as set forth in this Section I:

1. The definition of “Holdings” appearing in Section 1.01 of the Credit Agreement is hereby restated in its entirety as follows:

“Holdings” shall have the meaning assigned to such term in the preamble hereto; provided, however, that, if clause (ii)(A) of OIN Spinoff Conditions is applicable, from and after the OIN Spinoff, the term “Holdings” instead shall refer to New Holdings.

2. The definition of “OIN Spinoff” appearing in Section 1.01 of the Credit Agreement is hereby restated in its entirety as follows:

“OIN Spinoff” shall mean a dividend or other distribution by Holdings to its shareholders of at least 25% of the Equity Interests of either (x) New Holdings (to the extent that clause (ii)(A) of the definition of OIN Spinoff Conditions is applicable) or (y) the Administrative Borrower (to the extent that clause (ii)(B) of the definition of OIN Spinoff Conditions is applicable).

3. The definition of “OIN Spinoff Conditions” appearing in Section 1.01 of the Credit Agreement is hereby restated in its entirety as follows:

“OIN Spinoff Conditions” shall mean (i) immediately before and after giving effect to the OIN Spinoff, no Default shall have occurred and be continuing, (ii) immediately prior to the consummation of the OIN Spinoff, either (A) (I) Holdings shall have (x) formed a new holding company that is organized under the laws of one of the states of the United States or another jurisdiction reasonably acceptable to the Administrative Agent (“New Holdings”) and (y) contributed all of the Equity Interests of the Administrative Borrower to New Holdings, (II) New Holdings (x) shall own 100% of the Equity Interests of the Administrative Borrower and (y) shall have become a Guarantor hereunder and shall have pledged all of the Equity Interests of the Administrative Borrower and all intercompany loans held by it of the Administrative Borrower or any of its Subsidiaries pursuant to the Holdings Pledge Agreement and (III) the Administrative Agent, the Collateral Agent and the respective Loan Parties (including New Holdings) shall have entered into such amendments to this Agreement (including an amendment and restatement hereof) and the other Loan Documents (without the further consent of any Lender) to reflect the foregoing and to make such other technical changes to this Agreement and the other Loan Documents in connection therewith, or (B) (I) the Administrative Borrower shall have (x) formed a new Wholly Owned Restricted Subsidiary that is organized under the laws of the Republic of the Marshall Islands or another jurisdiction outside the United States that is reasonably acceptable to the Administrative Agent (“New Subsidiary HoldCo”) and (y) contributed substantially all of the assets of the Administrative Borrower (including all of the Equity Interests held by the Administrative Borrower in any of its Subsidiaries) and substantially all of the liabilities (excluding the Obligations) of the Administrative Borrower (in each case, other than immaterial or non-operational assets and/or liabilities reasonably acceptable to the Administrative Agent) to New Subsidiary HoldCo (provided that (i) the Administrative Borrower shall only be obligated to use commercially reasonable efforts to transfer the Equity Interests issued to the Administrative Borrower by OSG Nakilat Corporation and Tankers International LLC to New Subsidiary Holdco, in each case, to the extent that the consent of one or more third parties is required to effect any such transfer and (ii) the Administrative Borrower shall be afforded a reasonable period of time after the OIN Spinoff before third party cash payments shall be required to be directed to Controlled Accounts of New Subsidiary Holdco as opposed to Controlled Accounts of the Administrative Borrower), (II) (x) the Administrative Borrower shall own 100% of the Equity Interests of New Subsidiary HoldCo and shall have pledged all of the Equity Interests of New Subsidiary HoldCo and all intercompany loans held by it of New Subsidiary HoldCo pursuant to the Security Documents and (y) New Subsidiary HoldCo shall have become a Guarantor hereunder and shall have pledged all of its assets (other than Excluded Collateral) as Collateral pursuant to the Security Documents and (III) the Administrative Agent, the Collateral Agent and the respective Loan Parties (including New Subsidiary HoldCo) shall have entered into such amendments to this Agreement (including an amendment and restatement hereof) and the other Loan Documents (without the further consent of any Lender) to reflect the foregoing and to make such other technical changes to this Agreement and the other Loan Documents in connection therewith (including, without limitation, amendments (A) to reflect the holding company status of the Administrative Borrower and restrict certain transfers of assets to, and certain fundamental changes affecting, the Administrative Borrower, (B) to require that the Administrative Borrower at all times shall own 100% of the Equity Interests of New Subsidiary HoldCo, (C) to include additional restrictions on fundamental changes affecting New Subsidiary Holdco, (D) to reflect that the Administrative Borrower is a public company without a parent holding company and (E) to release Holdings from (i) the Guarantee and Holdings’ obligations under the Credit Agreement and (ii) to the extent that Holdings no longer owns an Equity Interest in the Administrative Borrower, the Holdings Pledge Agreement) and (iii) simultaneously with the consummation of the OIN Spinoff, Holdings shall have (x) set aside in an escrow account established by Holdings on terms, and pursuant to arrangements, reasonably satisfactory to the Administrative Agent cash in an aggregate amount of not less than the sum of (1) all accrued and unpaid interest on the Existing OSG Notes through the date of the consummation of the OIN Spinoff and (2) all interest expense that will accrue under the respective Existing OSG Notes from the date of the consummation of the OIN Spinoff through the maturity of the respective Existing OSG Notes (it being understood and agreed that, to the extent that Holdings distributes less than 100% of the Equity Interests in either New Holdings (to the extent that clause (ii)(A) above is applicable) or the Administrative Borrower (to the extent that clause (ii)(B) above is applicable) to its shareholders, such escrow arrangements may not be amended, modified or otherwise waived without the consent of the Administrative Agent) and (y) distributed at least 25% of the Equity Interests in either New Holdings (to the extent that clause (ii)(A) above is applicable) or the Administrative Borrower (to the extent that clause (ii)(B) above is applicable) to its shareholders; provided that, for the avoidance of doubt, if all other OIN Spinoff Conditions are met, the Administrative Agent and the Collateral Agent shall enter into such amendments to this Agreement (including an amendment and restatement hereof) and the other Loan Documents as contemplated above without unreasonable delay.

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SECTION II. Effectiveness. This Second Amendment shall become effective as of the date (the “Second Amendment Effective Date”) on which the following conditions have been satisfied:

1. the Administrative Agent shall have received copies of signature pages to this Second Amendment, duly executed and delivered (including by way of facsimile or other electronic transmission) by the Administrative Agent, the Loan Parties and the Required Lenders;

2. (a) no Default shall have occurred and be continuing on the Second Amendment Effective Date or would occur after giving effect to this Second Amendment and (b) both immediately before and after giving effect to this Second Amendment, each of the representations and warranties made by any Loan Party set forth in Article III of the Credit Agreement or in any other Loan Document shall be true and correct in all material respects (or true and correct in all respects in the case of representations and warranties qualified by materiality or Material Adverse Effect) on and as of the Second Amendment Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects (or true and correct in all respects in the case of representations and warranties qualified by materiality or Material Adverse Effect) on and as of such earlier date);

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3. the Borrower shall have paid to the Administrative Agent, for the account of each Lender that has delivered to the Administrative Agent an executed counterpart of this Second Amendment on or prior to 12:00 noon, New York City time, on July 15, 2016, a fee in an aggregate amount equal to 0.10% of the sum of (i) the aggregate principal amount of all Term Loans of such Lender outstanding on the Second Amendment Effective Date and (ii) the Revolving Commitment of such Lender as in effect on the Second Amendment Effective Date; and

4. the Borrower shall have paid to the Administrative Agent and its Affiliates, all costs, fees and expenses (including legal fees and expenses of White & Case LLP) owing in connection with this Second Amendment and the other Loan Documents to the extent invoiced (in the case of costs and expenses) at least one Business Day prior to the Second Amendment Effective Date.

SECTION III. Miscellaneous Provisions.

1. Except as expressly provided herein, (a) the Credit Agreement and the other Loan Documents shall be unmodified and shall continue to be in full force and effect in accordance with their terms, and (b) this Second Amendment shall not be deemed a waiver or modification of any other term or condition of any Loan Document and shall not be deemed to prejudice any right or rights which Administrative Agent or any Lender may now have or may have in the future under or in connection with any Loan Document or any of the instruments or agreements referred to therein, as the same may be amended from time to time.

2. This Second Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to this Second Amendment shall be effective as delivery of an original executed counterpart of this Second Amendment.

3. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, AND THE PROVISIONS OF THE CREDIT AGREEMENT UNDER THE HEADING “GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS”, AS SET FORTH IN SECTION 11.09 OF THE CREDIT AGREEMENT, ARE INCORPORATED HEREIN BY THIS REFERENCE.

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4. From and after the date hereof, (a) all references in the Credit Agreement and each of the other Loan Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement, as modified hereby, and (b) this Second Amendment shall be deemed to constitute a “Loan Document” for all purposes of the Credit Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Second Amendment as of the date first above written.

	OVERSEAS SHIPHOLDING GROUP, INC., as Holdings and a Guarantor

	By:	/s/ Ian T. Blackley
	Name:
	Title:

	OSG International, Inc., as the Administrative Borrower and a Guarantor

	By:	/s/ Ian T. Blackley
	Name:
	Title:

	OIN DELAWARE LLC, as the Co-Borrower and a Guarantor

	By:	/s/ Ian T. Blackley
	Name:
	Title: