SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-6479-1
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OVERSEAS SHIPHOLDING GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-2637623
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1114 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-869-1222
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock - (par New York Stock Exchange
value $1.00 per share) Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Aggregate market value of the Common Stock held by non-affiliates
of the registrant, based on the closing price on the New York
Stock Exchange on March 21, 1995: $491,841,461. (For this
purpose, all outstanding shares of Common Stock have been
considered held by non-affiliates, other than the shares
beneficially owned by directors, officers and certain 5%
shareholders of the registrant; certain of such persons disclaim
that they are affiliates of the registrant.)
Number of shares of Common Stock outstanding at March 21, 1995:
36,216,833.
Documents incorporated by reference: portions of the
registrant's Annual Report to Shareholders for 1994 (incorporated
in Parts I and II); portions of the definitive proxy statement to
be filed by the registrant in connection with its 1995 Annual
Meeting of Shareholders (incorporated in Part III).
<PAGE>
ITEM 1. BUSINESS
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Overseas Shipholding Group, Inc. (the "registrant") and its
subsidiaries (collectively the "Company") constitute a major
international shipping enterprise owning and operating a
diversified fleet of oceangoing bulk cargo vessels (principally
tankers and dry bulk carriers). The Company's operating bulk
fleet consists of 61 vessels having an aggregate carrying
capacity of approximately 5,846,100 deadweight tons ("DWT"),
including ten ships aggregating approximately 1,536,300 DWT
which the Company owns jointly with others and in which the
Company has at least a 49% interest.* Sixteen vessels in the
Company's operating bulk fleet, which total approximately 993,350
DWT and represent about 30% of the Company's investment in bulk
cargo vessels at cost, are registered under the U.S. flag; the
balance are registered under foreign flags. Forty-five tankers
account for 78% of the total tonnage, and 15 dry bulk carriers
and a pure car carrier account for the remainder. A single
company and its subsidiaries, for and under the direction and
control of the Company, act as agents in respect of the bulk
fleet of the registrant's majority-owned subsidiaries and certain
of its bulk shipping joint ventures.
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* Except as otherwise noted, references herein to the
Company's "operating bulk fleet" are as of February 21,
1995. Such fleet includes eight vessels that are leased from
financial institutions under bareboat charters having
remaining terms of from 7 to 17 years, and two 94,000 DWT
double-hulled Aframax tankers built in 1994, which the
Company recently purchased and were delivered to the Company
in March 1995, but does not include a 29,300 DWT petroleum
barge, which is owned by a partnership in which the Company
has a 50% interest, or the eight newbuildings currently on
order which are more fully described under "Bulk Fleet
Modernization and Expansion" below.
<PAGE>
Celebrity Cruise Lines Inc. (together with its
subsidiaries collectively "CCLI"), the passenger cruise business
joint venture which the Company entered into in late 1992, owns
and operates cruise ships marketed primarily under the trade name
Celebrity Cruises in the premium segment of the industry. The
Celebrity Cruises fleet presently consists of three cruise ships
with a total passenger-carrying capacity of 3,834 berths. In
addition, CCLI has a budget-priced Fantasy Cruises division,
which consists of two vessels. As of February 21, 1995, CCLI had
on order three new passenger cruise ships, all for the Celebrity
fleet, scheduled for delivery in late 1995, 1996 and 1997,
respectively, which will increase the Celebrity Cruises total
passenger-carrying capacity to over 9,300 berths. See
"Investment in Cruise Business" below.
The Company's operating bulk fleet, aggregating
approximately 5,846,100 DWT, represents approximately 1% of the
total world tonnage of oceangoing bulk cargo vessels. As of
February 21, 1995, the Company had on order eight vessels,
aggregating over two million DWT, for delivery to its
international bulk fleet. See "Bulk Fleet Modernization and
Expansion" below.
The Company charters its ships to commercial shippers
and U.S. and foreign governmental agencies for the carriage of
bulk commodities, principally crude oil and petroleum products,
coal, iron ore and grain. Generally, each ship is chartered for
a specific period of time ("time charter"), or for a specific
voyage or voyages ("voyage charter"). Under the terms of time
and voyage charters covering the Company's vessels, the ships are
equipped and operated by the Company and are manned by personnel
in the Company's employ. From time to time, the Company also has
some of its vessels on bareboat charter. Under the terms of
bareboat charters, the ships are chartered for fixed periods of
time (generally medium- or long-term) during which they are
operated and manned by the charterer.
Generally, the Company's ships engage in carriage of
cargo in various parts of the world, principally in carriage of
petroleum from Alaska to the lower 48 states and U.S.
territories, from Caribbean ports to United States, South
American and European ports, from Mediterranean, West African,
Arabian Gulf and Far East ports to European, United States,
Caribbean, South American and Far East ports, and in the United
States coastwise trade, and in carriage of dry cargo between
United States ports and Far East, Caribbean, European,
Mediterranean, Black Sea and Baltic ports, between South
American, African and various European, Black Sea, Baltic and Far
East ports, and from Australia to Japan, Korea and European
ports. The Company does not employ any container or similar
vessels in its operation.
Revenues from carriage of petroleum and its derivatives
represented approximately 78% of the voyage revenues of the
registrant and its majority-owned subsidiaries for 1994, 75% for
1993 and 78% for 1992. Revenues from carriage of dry cargo
accounted for the balance of such voyage revenues for each of
those years. The carriage of petroleum and its derivatives also
accounted for the majority of the voyage revenues of the
Company's bulk shipping joint ventures. The relative
contributions to voyage revenues of the various types of cargoes
carried may vary from year to year, depending upon demand for
particular kinds of carriage and the purposes for which and the
terms on which the ships are chartered.
As of February 21, 1995, with the exception of four
U.S.-flag crude oil carriers, all of the vessels in the Company's
operating bulk fleet were employed. Forty-six of these vessels
were chartered to non-governmental commercial shippers. These 46
ships include eight U.S.-flag ships and 38 foreign-flag ships,
which together represent approximately 83% of the combined
carrying capacity of the Company's operating bulk fleet. Of the
remaining ships in the Company's operating bulk fleet, four U.S.-
flag ships and five foreign-flag ships were under charter to
foreign or U.S. governmental agencies.
U.S.-FLAG AND FOREIGN-FLAG OPERATIONS
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The Company's U.S.-flag and foreign-flag bulk fleets
operate substantially in separate markets. The Company believes
that ownership of a diversified fleet, with vessels of different
flags, types and sizes and with operating flexibility, enables
the Company to take advantage of chartering opportunities for
domestic and international shipment of bulk commodities and
thereby cushion the effects of weakness in particular markets.
Information about the Company's operations under U.S. and foreign
flags for the three years ended December 31, 1994 is set forth in
the table in Note B to the Company's financial statements
incorporated by reference in Item 8 below. For information
regarding the revenues and net income of the Company's bulk
shipping joint ventures for the three years ended December 31,
1994, see Note E to the Company's financial statements
incorporated by reference in Item 8 below.
In each of the years 1994, 1993 and 1992 the Company
had one charterer (BP Oil Company, USA) from which it had
revenues in excess of 10% of revenues from voyages, amounting in
1994 to approximately $63.7 million, in 1993 to approximately
$73.7 million, and in 1992 to approximately $84.3 million.
U.S. DOMESTIC AND PREFERENCE TRADES
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Under the Jones Act, shipping between United States
coastal ports, including the movement of Alaskan oil, is reserved
by law primarily to U.S.-flag vessels, owned by U.S. citizens,
crewed by U.S. seafarers, and built in the United States without
construction subsidies and operated without operating
differential subsidies. The Company owns the largest independent
fleet of unsubsidized U.S.-flag tankers and is a major
participant in the Alaskan oil trade.
Demand for tonnage in the Alaskan oil trade depends on
the volume of crude shipped out of Alaska and its distribution to
ports at varying distances from the source. In recent years, the
amount of crude shipped on the long-haul route to the Gulf of
Mexico, via the Panama Pipeline, has fallen sharply, and this
development has reduced tonnage requirements. Alaskan crude oil
shipments are the main source of employment for U.S.-flag crude
carriers and are carried mostly on unsubsidized U.S.-flag crude
carriers of over 60,000 DWT. By law, exports of Alaskan crude
oil are effectively prohibited. Initiatives are under way in
Washington to permit the export of Alaskan crude oil, which, if
successful, are expected to provide significant new employment
opportunities for the Company's U.S.-flag tanker fleet.
Vessels built with construction differential subsidies
and operated with operating differential subsidies ("ODS") are
not permitted in the Jones Act trade. Under an interpretation of
the law by the Maritime Administration, tankers built with
subsidies have been deemed eligible for full coastwise privileges
when they reach 20 years of age and their ODS contracts have
expired. The Company believes that this interpretation is
contrary to law and has commenced litigation seeking to overrule
it. Recently, there have been increased calls by members of
Congress and efforts to reduce or eliminate cargo preference and,
in some cases, to weaken the long-standing requirement that U.S.
coastwise trade be conducted by U.S.-flag Jones Act ships. If
such changes were implemented, they would adversely affect the
already diminished U.S.-flag merchant marine.
United States military cargo must be transported on
U.S.-flag vessels, if available. The Merchant Marine Act, 1936,
as amended, requires that preference be given to U.S.-flag
vessels, if available at reasonable rates, in the shipment of at
least half of all U.S. government-generated cargoes and 75% of
food-aid cargoes. Half of the imports into the Strategic
Petroleum Reserve, a U.S. government procurement program, must be
transported on U.S.-flag vessels.
Vessels in the Company's operating bulk fleet have been
chartered from time to time to the Military Sealift Command of
the United States Navy ("MSC"), and to recipient nations for the
carriage of grain and other cargoes under United States foreign
aid and agricultural assistance programs. Charters to MSC
reflect in large part the requirements of the United States
military for waterborne carriage of cargoes, and, accordingly,
depend in part on world conditions and United States foreign
policy.
EMPLOYMENT OF VESSELS
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The bulk shipping industry is highly fragmented and
competitive. The Company competes in its charter operations with
other owners of U.S. and foreign-flag tankers and dry cargo ships
operating on an unscheduled basis similar to the Company and, to
some extent, with owners operating cargo ships on a scheduled
basis. About one third of the world's tanker tonnage is owned by
oil companies and is primarily engaged in the carriage of
proprietary cargoes. In chartering vessels to the United States
government, the Company competes primarily with other owners of
U.S.-flag vessels. U.S.-flag product carriers, whose trade
demand are closely linked to changes in regional energy demands
and in refinery activity, also compete with pipelines, oceangoing
barges, and, with regard to imports from abroad, foreign-flag
product carriers. In the spot and short-term charter market, the
Company's vessels compete with all other vessels of a size and
type required by a charterer that can be available at the date
specified. In the spot market, competition is based primarily on
price. Nevertheless, within a narrow price band, factors related
to quality of service and safety enter into a potential
customer's decision as to which vessel to charter.
Prevailing rates for charters of particular types of
ships are subject to fluctuations depending on conditions in
United States and international bulk shipping markets and other
factors. Although medium- and long-term charter business avoids,
to some extent, the sharp rate fluctuations characteristic of the
spot or voyage markets, the availability of such business in
recent years has been relatively limited, and, when available,
rates of return have generally been unattractive.
For additional information as of February 21, 1995
regarding the 61 vessels in the Company's operating bulk fleet,
including information as to the employment of such vessels, see
the table in the "To Our Shareholders" section (page 2), and the
"International Bulk Fleet" and "U.S. Bulk Fleet" tables (pages 10
and 11), of the registrant's Annual Report to Shareholders for
1994, which tables are incorporated herein by reference.
ENVIRONMENTAL MATTERS RELATING TO BULK SHIPPING
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Over the past five years, the bulk shipping industry
has experienced a more stringent regulatory environment.
Classification societies, governmental authorities and charterers
have strengthened their inspection programs, and there has been
an increasing reluctance among charterers to accept older vessels
due to safety and pollution concerns.
OPA 90. The Oil Pollution Act of 1990 ("OPA 90")
significantly expands the liability of a vessel owner or operator
(including a bareboat charterer), for damage resulting from
spills in U.S. waters (up to 200 miles offshore). OPA 90 applies
to all U.S. and foreign-flag vessels. Some operators are
reluctant to trade their vessels to the United States because of
OPA 90.
Under OPA 90, a vessel owner or operator is liable without
fault for removal costs and damages, including economic loss
without physical damage to property, up to $1,200 per gross ton
of the vessel. When a spill is proximately caused by gross
negligence, willful misconduct or a violation of a Federal
safety, construction or operating regulation, liability is
unlimited. OPA 90 did not preempt state law, and therefore states
remain free to enact legislation imposing additional liability.
Virtually all coastal states have enacted pollution prevention,
liability and response laws, many with some form of unlimited
liability.
In addition, OPA 90 imposes a requirement that tankers
calling at U.S. ports have double hulls. This requirement applies
to newly constructed tankers contracted for after June 30, 1990,
or delivered after January 1, 1994. Beginning on January 1,
1995, the double-hull requirement is phased in for existing
tankers. The age requirement is reduced in stages so that by the
year 2000, tankers of at least 30,000 gross tons over 23 years
old (and tankers between 15,000 and 30,000 gross tons over 30
years old) must have double hulls, and by 2010, all tankers must
have double hulls, except that tankers with double bottoms or
double sides are afforded an additional five years for compliance
but must comply no later than January 1, 2015. Tankers
discharging at a deepwater port or lightering more than 60 miles
offshore will not be required to have double hulls until January
1, 2015.
The double-hull requirement will not begin to affect
the Company's existing tanker fleet until near the end of the
decade, with most of the Company's vessels not affected until the
next decade. Each of the 16 vessels in the Company's current
fleet to which the double-hull requirements are expected to apply
in the next nine years will be at least 23 years old on the
applicable double-hull requirement date and consequently near the
end of its economic life.
OPA 90 also requires owners and operators of vessels
calling at U.S. ports to adopt contingency plans for responding
to a worst case oil spill under adverse weather conditions. The
plans must include contractual commitments with clean-up response
contractors in order to ensure an immediate response to an oil
spill. Furthermore, training programs and drills for vessel,
shore and response personnel are required. The Company has
developed and timely filed its vessel response plans with the
United States Coast Guard and has received approval of such
plans.
Under new, more stringent U.S. Coast Guard financial
responsibility regulations issued pursuant to OPA 90, all tankers
entering U.S. waters on or after December 28, 1994 were required
to obtain Certificates of Financial Responsibility ("COFRs") from
the Coast Guard demonstrating substantially greater financial
capability to meet potential spill liabilities. Prior to that
date, the Company obtained such COFRs for all the vessels in its
U.S.-flag and international flag tanker fleets.
INTERNATIONAL REQUIREMENTS. In addition to the OPA 90
requirements, the International Maritime Organization ("IMO")
adopted regulations that will phase out all single-hulled tankers
in international waters at 25 years of age unless other
environmental safety steps are taken. IMO regulations also
require double-hulls or equivalent tanker designs for newbuilding
orders.
These requirements will apply to all vessels trading to
ports in countries that are parties to the International
Convention for the Prevention of Pollution by Ships, as amended
("MARPOL"), which include the world's major trading countries.
The United States has reserved its position on the IMO
regulations. Since the schedule for phasing in the double-hull
requirements under the IMO regulations is in certain instances
faster and in certain instances slower than the requirements
under OPA 90, if the United States does not accept the IMO
regulations, tankers trading between U.S. ports and ports in
countries that are parties to MARPOL will have to meet the
requirements of the earlier of the two to apply.
The Company believes that as the double-hull
requirements imposed by U.S. law and international conventions
become applicable, some older vessels will be scrapped. The
impact of the double-hull requirements of the IMO regulations on
the Company's vessels will not be significantly different from
the impact of the double-hull requirements of OPA 90. All of the
tankers the Company has on order will be double-hulled.
INSURANCE. Consistent with the currently prevailing
practice in the industry, the Company presently carries a minimum
of $700 million of pollution coverage per occurrence on every
vessel in its fleet. While the Company has historically been
able to obtain such insurance at commercially reasonable rates,
no assurances can be given that such insurance will continue to
be available in the future.
BULK SHIPPING MARKETS
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Information regarding the international bulk shipping
markets and the markets for U.S.-flag vessels, including the
Alaskan oil trade, is set forth in the text of the "Global Bulk
Shipping Markets" section (pages 14 through 16) of the
registrant's Annual Report to Shareholders for 1994, which
information is incorporated herein by reference.
BULK FLEET MODERNIZATION AND EXPANSION
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The Company is engaged in a major fleet modernization
program. This entails periodically selling older vessels,
placing newbuilding orders and purchasing existing modern
tonnage, when available at attractive prices. The Company's
newbuilding program totals eight ships aggregating more than two
million DWT.
NEWBUILDING ORDERS: In 1994, the Company took delivery
of four 93,300 DWT double-hulled Aframax tankers for its
international fleet, and placed orders for four double-hulled
very large crude carriers ("VLCCs"). Two of these VLCCs, 269,650
DWT tankers, were ordered with a joint venture partner and will
commence eight-year charters to the partner when the ships are
delivered in December 1996 and March 1997. The other two VLCCs,
302,150 DWT vessels, are scheduled for delivery in late 1996 and
early 1997. In late 1995, the Company will take delivery of two
double-hulled VLCCs, each 295,250 DWT, ordered in 1993. Upon
delivery of the six VLCCs, over half of the Company's tanker
tonnage will either be totally double-hulled or protected by
double sides or double bottoms. On the dry bulk side, the
Company in 1995 placed orders for two 158,100 DWT Capesize ships
for delivery in late 1996 and early 1997. All of these eight
ships are being built by major shipbuilders (six in South Korea
and two in Japan) for delivery to the Company's international
fleet. The commitments for these eight vessels are in U.S.
Dollars; for additional information as of February 21, 1995 about
the commitments, see Notes E and L(1) to the Company's financial
statements incorporated by reference in Item 8 below.
PURCHASES: In 1995, the Company purchased two 94,000
DWT double-hulled Aframax tankers built in 1994, which were each
delivered to the Company in March 1995 for its international
fleet.
SALES: In 1994, the Company sold four foreign-flag dry
bulk carriers and a 50%-owned foreign-flag single-hulled VLCC.
The Company's newbuilding program, together with the
selective upgrading of the Company's fleet through acquisition
and disposition of existing tonnage, reflects changes that the
Company makes from time to time in light of its continuing review
of changing market conditions. There is no assurance that the
Company's fleet will expand, or that the Company will acquire
vessels or place orders for the construction of new vessels, to
the same extent as in the past.
EMPLOYEES
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At February 21, 1995, the Company employed
approximately 2,000 seagoing personnel to operate its ships. The
Company has collective bargaining agreements with three different
maritime unions, covering seagoing personnel employed on the
Company's U.S.-flag vessels, which agreements are in effect
through June 15, 1996 with one of the unions and through June 15,
2000 with two of the unions. Under the collective bargaining
agreements, the Company is obligated to make contributions to
pension and other welfare programs. The Company believes that
its relations with its employees are satisfactory.
U.S. SUBSIDIES
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To encourage private investment in U.S.-flag ships, the
Merchant Marine Act of 1970 permits deferral of taxes on earnings
deposited into capital construction funds and amounts earned
thereon, which can be used for the construction or acquisition
of, or retirement of debt on, qualified U.S.-flag vessels
(primarily those limited to United States foreign and
noncontiguous domestic trades). The registrant is a party to an
agreement under the Act. Under the agreement, the general
objective is (by use of assets accumulated in the fund) for two
vessels to be constructed or acquired by the end of 1999. If the
agreement is terminated or amounts are withdrawn from the capital
construction fund for non-qualified purposes, such amounts will
then be subject to Federal income taxes. Provision has been made
in the Company's financial statements for deferred taxes on the
amounts deposited in the capital construction fund and on the
earnings thereon. Monies can remain tax deferred in the fund for
a maximum period of twenty-five years (commencing January 1, 1987
for deposits prior thereto). See the second paragraph of Note J
to the Company's financial statements incorporated by reference
in Item 8 below.
The Company does not receive any operating differential
subsidies or any construction differential subsidies under the
Merchant Marine Act, 1936, as amended.
INVESTMENT IN CRUISE BUSINESS
-----------------------------
The Company owns a 49% equity investment in Celebrity
Cruise Lines Inc. (together with its subsidiaries collectively
"CCLI"), a joint venture formed in late 1992 that owns and
operates five cruise vessels. CCLI functions as an equal joint
venture and the approval of both shareholders is required for all
substantive policy matters. All debt of the joint venture is
nonrecourse to the joint venture partners. It is anticipated
that CCLI's earnings will be reinvested in the cruise business,
and accordingly the Company has made no provision for U.S. income
taxation with respect to its share of CCLI's earnings.
CCLI markets its ships primarily under the brand name
Celebrity Cruises, which is a leading provider of cruises in the
premium segment of the North American cruise market. The
Celebrity Cruises fleet consists of three ships -- ZENITH,
HORIZON and MERIDIAN -- having a total of 3,834 berths and
sailing mainly in the Caribbean and to Bermuda.
Two vessels operated in 1994 as part of CCLI's budget-
priced Fantasy Cruises division. One of these ships, BRITANIS,
was chartered in late 1994 to the U.S. Military Sealift Command,
while the division's other ship, AMERIKANIS, sailed on European
itineraries.
The 1994 results for CCLI were below those of 1993.
CCLI incurred a loss in the third quarter, normally its most
profitable quarter of the year, due to the 11-day withdrawal of a
ship from service in July 1994, following isolated cases of
Legionnaires' disease among passengers. In addition, the premium
segment of the industry experienced greater pricing pressures in
the last quarter of the year as the volume of overall bookings
declined.
During 1993, CCLI's first full year of operation, CCLI
contracted to build two cruise ships (to be named CENTURY and
GALAXY) which are scheduled for delivery in late 1995 and 1996,
respectively, and in 1994 CCLI exercised its option to build a
third sistership scheduled for delivery in late 1997. These
vessels are all for the Celebrity Cruises fleet. This fleet
expansion will increase Celebrity's passenger-carrying capacity
to over 9,300 berths and is expected to provide economies of
scale in operations and marketing as well as increase brand
recognition of Celebrity Cruises. The contracts are with the
same European shipyard that built the two newest ships in the
Celebrity Cruises fleet. The contracts provide for shipyard-
arranged long-term bank financing to CCLI for a substantial
portion of the cost of each vessel. For additional information
about CCLI and its fleets and the CCLI commitments as of February
21, 1995, see the text of the "CCLI" section (pages 17 and 18),
including the Celebrity Cruises fleet table (page 17), and the
CCLI fleet table (page 11) of the registrant's Annual Report to
Shareholders for 1994, which information is incorporated herein
by reference, and Note D to the Company's financial statements
incorporated by reference in Item 8 below.
COMPETITION. CCLI operates its vessels primarily in
the North American cruise market, which accounts for
approximately 80% of the total cruise passengers carried. The
North American cruise market is characterized by large and
generally well-capitalized companies and is highly competitive.
There are four companies in the industry each of which has a
fleet with an aggregate number of berths in excess of 10,000,
substantially more berths than CCLI's current fleet. Larger
capacity affords fleet owners certain economies of scale.
According to recently published data, the largest three companies
have about 46% of total capacity, and the largest seven
companies, including CCLI, have approximately 75% of total
capacity.
Capacity additions in the North American cruise market
averaged 7% per year during the past decade versus the 9% per
year growth in demand (measured by the number of passengers
carried). In 1994, capacity increases slowed to 1% as 6,300
berths were added and nearly 5,400 berths were removed through
retirements, redeployments and shutdowns. At year-end 1994,
North American cruise capacity was estimated to be 105,000
berths.
Consolidation continues in the industry. CCLI and
three other cruise companies account for 91% of the total
capacity additions slated for 1995 through 1998. On the basis of
the newbuilding orderbook, recently published data forecasts that
capacity will increase 7% in 1995, and before taking into
consideration any retirements and deletions from the existing
fleet, capacity is expected to increase 13% in 1996 and 10% in
1997.
Cruise lines compete with other vacation alternatives
such as land-based resort hotels and sightseeing destinations for
consumers' discretionary income. The amount of discretionary
income spent on vacations is influenced by general economic
conditions. Within the cruise industry, competition is primarily
based on product quality, itinerary and price. Product quality
is a function of ship design, onboard facilities, amenities,
service and cuisine.
REGULATORY MATTERS. Each ship is subject to
regulations of its country of registry, including regulations
issued pursuant to international treaties governing the safety of
the ship and its passengers. Each country of registry conducts
periodic inspections to verify compliance with these regulations.
In addition, ships operating from U.S. ports are subject to
inspection by the U.S. Coast Guard for compliance with
international treaties and by the U.S. Public Health Service for
sanitary conditions.
With respect to passengers to and from U.S. ports, CCLI
is required to obtain certificates from the U.S. Federal Maritime
Commission and the U.S. Coast Guard relating to its ability to
satisfy liabilities arising out of nonperformance of obligations
to passengers, casualty or personal injury and water pollution.
The Company believes CCLI is in compliance with all material
regulations applicable to its ships and has all licenses
necessary for the conduct of its business.
The International Maritime Organization's SOLAS 1974
convention, which became effective in 1980 and was last amended
in 1992, established minimum safety, fire prevention and fire
protection standards (the "SOLAS '74 standards"). Under the
amended SOLAS requirements, all passenger ships must have
upgraded fire detection and fire protection systems by October 1,
1997. The schedule for compliance with certain other aspects of
the amended requirements for passenger vessels currently meeting
SOLAS '74 standards extends until 2005 or 15 years after
construction, whichever is later.
Since substantial capital expenditures may be needed to
bring older vessels into compliance with the SOLAS requirements
that become applicable in 1997, it is likely that some ships for
which such capital expenditures would not be economical will be
removed from the market. About 40,000 berths are on ships that
are expected to need the 1997 SOLAS mandated upgrades. The
actual number of deletions will depend upon shipowners'
willingness to incur the potentially significant cost needed to
bring a vessel up to the required standards. Two of CCLI's
Celebrity vessels were delivered in 1990 and 1992, respectively,
and the third was rebuilt in 1990. Based on present estimates,
any work necessary for these vessels to meet SOLAS requirements
applicable in 1997 can be done without material capital
expenditures.
ITEM 2. PROPERTIES
------ ----------
See Item 1.
ITEM 3. LEGAL PROCEEDINGS
------- -----------------
The Company and CCLI are parties, as plaintiff or
defendant, to various suits in the ordinary course of business
for monetary relief arising principally from personal injuries,
collision or other casualty and to claims arising under charter
parties. All such personal injury, collision and casualty claims
against the Company and CCLI are fully covered by insurance
(subject to deductibles not material in amount). Each of the
other claims involves an amount which in the opinion of
management is not material in relation to the consolidated
current assets of the Company as shown in the Company's
Consolidated Balance Sheet as at December 31, 1994, incorporated
herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------ ---------------------------------------------------
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
Has Served as
Name Age Position Held Such Since
---- --- ------------- -------------
Morton P. Hyman 59 President October 1971
Michael A. Recanati 37 Executive February 1993
Vice President,
Treasurer June 1994
Robert N. Cowen 46 Senior Vice February 1993
President,
Secretary, June 1982
General Counsel November 1989
Alan Carus 56 Controller December 1987
Messrs. Hyman, Recanati and Cowen are directors of the
registrant and Messrs. Hyman and Recanati are members of the
Finance and Development Committee of its Board of Directors (Mr.
Recanati is Vice Chairman of the Committee). The term of office
of each executive officer continues until the first meeting of
the Board of Directors of the registrant immediately following
the next annual meeting of its stockholders, to be held in June
1995, and until the election and qualification of his successor.
There is no family relationship between the executive officers;
Mr. Michael A. Recanati is a son of Mr. Raphael Recanati and a
nephew of Mr. Ran Hettena, directors of the registrant.
Mr. Morton P. Hyman has served as a director of the
registrant since 1969. Mr. Michael A. Recanati has served as a
director, senior vice president and treasurer of the registrant
and as an officer and director of certain of its subsidiaries
during the past five years; he has also served as a director and
senior officer of Maritime Overseas Corporation ("MOC"), the
agent for the Company's vessels referred to in the first
paragraph of Item 1, during the past five years. Mr. Robert N.
Cowen has served as a director of the registrant since June 1993,
as an officer and director of certain of the registrant's
subsidiaries during the past five years, and as a director of MOC
since January 1991. Mr. Alan Carus has served as an officer and
director of certain of the registrant's subsidiaries during the
past five years; he has also served as a senior officer of MOC
during the past five years.
PART II
--------
The information called for by Items 5 through 8 is
incorporated herein by this reference from the following
respective portions and page numbers of the registrant's Annual
Report to Shareholders for 1994:
Item Incorporated from:
---- -----------------
ITEM 5.Market for Registrant's Last three paragraphs under
------ Common Equity and Related "Shareholder Information" on
Stockholder Matters inside back cover; "Stock
------------------------- Price and Dividend Data" table
on last page (page 22) of
"Management's Discussion and
Analysis" section.
ITEM 6.Selected Financial Data The information for the years
------ ----------------------- 1990 through 1994 under
"Eleven-Year Statistical
Review" section (pages 38 and
39).
ITEM 7.Management's Discussion Information set forth in text
------ and Analysis of Financial of "Management's Discussion
Condition and Results of and Analysis" section (pages
Operations 19 through 22).
-------------------------
ITEM 8.Financial Statements and "Consolidated Statements of
------ Supplementary Data Operations and Retained
------------------------ Earnings", "Consolidated
Balance Sheets", "Consolidated
Statements of Cash Flows",
"Notes to Consolidated
Financial Statements" and
"Report of Independent
Auditors" sections (pages 23
through 37).
Additional Supplementary Data -
Ratio of Earnings to Fixed Charges
----------------------------------
There was a deficiency of earnings to fixed charges
for 1994 of $26,977,000. This has been computed by
subtracting the sum of loss before Federal income
taxes and fixed charges from fixed charges. Fixed
charges consist of interest expense, including the
proportionate share of interest of joint venture
companies, capitalized interest and an estimate of
the interest component of an operating lease.
ITEM 9.Changes in and Disagreements with Accountants on
------ Accounting and Financial Disclosure
-------------------------------------------------
None.
PART III
---------
The information called for by Items 10 through 13,
except for the information set forth in Part I above regarding
the executive officers of the registrant, is incorporated herein
by this reference from the following respective portions of the
definitive proxy statement to be filed by the registrant in
connection with its 1995 Annual Meeting of Shareholders.
Item Incorporated from:
---- -------------------
ITEM 10. Directors and Executive "Election of Directors"
------- Officers of the Registrant
--------------------------
ITEM 11. Executive Compensation "Compensation and Certain
------- -------------------------- Transactions"*
ITEM 12. Security Ownership of "Election of Directors"
------- Certain Beneficial Owners and "Information as to
and Management Stock Ownership"
--------------------------
ITEM 13. Certain Relationships and "Election of Directors" and
------- Related Transactions "Compensation and Certain
-------------------------- Transactions"*
-----------------
* Excluding material under "Stockholder Return Performance
Presentation" and "Executive Compensation Report of the
Executive Compensation Committee and the Stock Option
Committee".
PART IV
-------
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on
------- Form 8-K
-------------------------------------------------------
(a) See the accompanying index to financial statements
and schedules, and the accompanying Exhibit Index.
(b) Reports on Form 8-K: The registrant did not file
any report on Form 8-K during the quarter ended December 31,
1994.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
OVERSEAS SHIPHOLDING GROUP, INC.
By: S/Michael A. Recanati
--------------------------------
Michael A. Recanati
Executive Vice President & Treasurer
Date: March 29, 1995
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated. Each of such persons appoints Morton P.
Hyman and Michael A. Recanati, and each of them, as his agents
and attorneys-in-fact, in his name, place and stead in all
capacities, to sign and file with the SEC any amendments to this
report and any exhibits and other documents in connection
therewith, hereby ratifying and confirming all that such
attorneys-in-fact or either of them may lawfully do or cause to
be done by virtue of this power of attorney.
By S/Morton P. Hyman
------------------------------
Morton P. Hyman, Principal
Executive Officer and Director
By S/Michael A. Recanati
------------------------------
Michael A. Recanati, Principal
Financial Officer and Director
By S/Alan Carus
------------------------------
Alan Carus, Controller
By S/Ran Hettena
------------------------------
Ran Hettena, Director
By S/George C. Blake
------------------------------
George C. Blake, Director
By S/Solomon N. Merkin
------------------------------
Solomon N. Merkin, Director
By S/William L. Frost
------------------------------
William L. Frost, Director
By S/Joel I. Picket
------------------------------
Joel I. Picket, Director
By S/Thomas H. Dean
------------------------------
Thomas H. Dean, Director
By S/Robert N. Cowen
------------------------------
Robert N. Cowen, Director
Date: March 29, 1995
<PAGE>
FORM 10-K--ITEM 14(a) (1) and (2)
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Overseas
Shipholding Group, Inc. and subsidiaries, included in the annual
report of the registrant to its shareholders for the year ended
December 31, 1994 are incorporated by reference in Item 8:
Consolidated Balance Sheets--December 31, 1994 and 1993
Consolidated Statements of Operations and Retained Earnings--
Years Ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows--
Years Ended December 31, 1994, 1993 and 1992
Notes to Financial Statements --December 31, 1994
All schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable, and therefore have been omitted.
<PAGE>
Exhibit Index
3(i) Certificate of Incorporation of the registrant, as
amended to date (filed as Exhibit 3(a) to the
registrant's Form 10-K for 1988 and incorporated herein
by reference).
3(ii) By-Laws of the registrant, as amended to date (filed
via EDGAR as Exhibit 3(ii) to the registrant's Form
10-K for 1993 and incorporated herein by reference).
*4(a) Amended and Restated Credit Agreement dated as of
February 9, 1990, as amended and restated as of October
31, 1994, among the registrant, two subsidiaries of the
registrant and certain banks.
4(b) Form of Note Purchase Agreement dated as of March 1,
1992 between the registrant and each of the purchasers
of its senior notes (filed as Exhibit 4(b) to the
registrant's Form 10-K for 1991 and incorporated herein
by reference).
4(c) Form of Note Purchase Agreement dated as of June 1,
1993 between the registrant and each of the purchasers
of its senior notes (filed via EDGAR as Exhibit 4 to
the registrant's Form 10-Q for the quarter ended June
30, 1993 and incorporated herein by reference.)
4(d)(1) Form of Indenture dated as of December 1, 1993 between
the registrant and The Chase Manhattan Bank (National
Association) providing for the issuance of debt
securities by the registrant from time to time (filed
via EDGAR as Exhibit 4(d)(1) to the registrant's Form
10-K for 1993 and incorporated herein by reference).
4(d)(2) Resolutions dated December 2, 1993 fixing the terms of
two series of debt securities issued by the registrant
under the Indenture (filed via EDGAR as Exhibit 4(d)(2)
to the registrant's Form 10-K for 1993 and incorporated
herein by reference).
4(d)(3) Form of 8% Notes due December 1, 2003 of the registrant
(filed via EDGAR as Exhibit 4(d)(3) to the registrant's
Form 10-K for 1993 and incorporated herein by
reference).
4(d)(4) Form of 8-3/4% Debentures due December 1, 2013 of the
registrant (filed via EDGAR as Exhibit 4(d)(4) to the
registrant's Form 10-K for 1993 and incorporated herein
by reference).
NOTE: The Exhibits filed herewith do not include other
instruments authorizing long-term debt of the
registrant and its subsidiaries, none of which exceeds
10% of total assets of the registrant and its
subsidiaries on a consolidated basis. The registrant
agrees to furnish a copy of each such instrument to the
Commission upon request.
10(a) Form of Agency Agreements between Maritime Overseas
Corporation and each of the registrant's majority-owned
subsidiaries that owns or operates a U.S.-flag vessel
(refiled as Exhibit 10(a) to the registrant's Form 10-K
for 1989 and incorporated herein by reference).
10(b) Form of Agency Agreements between Maritime Overseas
Corporation and each of the registrant's majority-owned
subsidiaries that owns or operates a foreign-flag
vessel (refiled as Exhibit 10(b) to the registrant's
Form 10-K for 1989 and incorporated herein by
reference).
10(c)(1) Form of Management Agreement dated as of January 1,
1985 between Lion Insurance Company Ltd. and Maritime
Overseas Corporation (filed as Exhibit 10(c)(2) to the
registrant's Form 10-K for 1985 and incorporated herein
by reference).
10(c)(2) Form of Amendment No. 1 dated as of April 1, 1986 to
the Management Agreement between Lion Insurance Company
Ltd. and Maritime Overseas Corporation (filed as
Exhibit 10(c)(2) to the registrant's Form 10-K for 1986
and incorporated herein by reference).
10(d)(1) Form of General Services Agreement dated December 31,
1969 between the registrant and Maritime Overseas
Corporation (the form of which was filed as Exhibit
13(3) to Registration Statement No. 2-34124 and is
incorporated herein by reference).
*10(d)(2) Form of Amendment dated as of January 1, 1975 to
General Services Agreement between the registrant and
Maritime Overseas Corporation (previously filed more
than 10 years ago and refiled herewith).
10(d)(3) Amendment dated January 10, 1980 to General Services
Agreement between the registrant and Maritime Overseas
Corporation (refiled as Exhibit 10(d)(3) to the
registrant's Form 10-K for 1989 and incorporated herein
by reference).
10(d)(4) Form of Amendment dated as of January 1, 1981 to
General Services Agreement between the registrant and
Maritime Overseas Corporation (refiled as Exhibit
10(d)(4) to the registrant's Form 10-K for 1990 and
incorporated herein by reference).
10(d)(5) Form of Amendment dated as of October 1, 1987 to
General Services Agreement between the registrant and
Maritime Overseas Corporation (filed as Exhibit
10(d)(5) to the registrant's Form 10-K for 1987 and
incorporated herein by reference).
*10(d)(6) Form of Amendment dated as of July 1, 1994 to General
Services Agreement between the registrant and Maritime
Overseas Corporation.
*10(e)(1) Form of Letter Agreement dated as of August 9, 1973
between the registrant and Maritime Overseas
Corporation (previously filed more than 10 years ago
and refiled herewith).
*10(e)(2) Form of Letter Agreement dated as of August 9, 1973 by
Maritime Overseas Corporation (previously filed more
than 10 years ago and refiled herewith).
*10(e)(3) Form of Letter Agreement dated as of August 9, 1973 by
Maritime Overseas Corporation (previously filed more
than 10 years ago and refiled herewith).
10(e)(4) Form of Letter Agreement dated as of January 1, 1981
between the registrant and Maritime Overseas
Corporation (refiled as Exhibit 10(e)(4) to the
registrant's Form 10-K for 1991 and incorporated herein
by reference).
10(f)(1) Form of Service Agreements between Maritime Overseas
Corporation and each of the partnerships First Shipmor
Associates, Second Shipmor Associates, Third Shipmor
Associates and Fourth Shipmor Associates and related
letter agreements between the registrant and each of
said partnerships (refiled as Exhibit 10(f)(1) to the
registrant's Form 10-K for 1987 and incorporated herein
by reference).
10(f)(2) Service Agreement dated January 27, 1983 between
Cambridge Tankers, Inc. and Maritime Overseas
Corporation relating to the OVERSEAS BOSTON (refiled as
Exhibit 10(f)(2) to the registrant's Form 10-K for 1992
and incorporated herein by reference).
10(f)(3) Form of Service Agreement between respective
subsidiaries of the registrant and Maritime Overseas
Corporation relating to the OVERSEAS NEW ORLEANS and
OVERSEAS PHILADELPHIA (not filed--substantially
identical in all material respects to the agreement
listed as Exhibit 10(f)(2) hereto except as to the
parties, the vessels and the dates).
*10(g)(1) Form of Management Agreements between Maritime
Overseas Corporation and each of First United Shipping
Corporation, Interocean Tanker Corporation, Second
United Shipping Corporation and Third United Shipping
Corporation (previously filed more than 10 years ago
and refiled herewith).
10(g)(2) Form of Amendment No. 1 and Amendment No. 2 to
Management Agreements between Maritime Overseas
Corporation and each of First United Shipping
Corporation, Interocean Tanker Corporation, Second
United Shipping Corporation and Third United Shipping
Corporation (filed as Exhibit 10(g)(1)(b) to the
registrant's Form 10-K for 1985 and incorporated herein
by reference).
*10(g)(3) Form of Amendment No. 3 to Management Agreements
between Maritime Overseas Corporation and each of First
United Shipping Corporation, Interocean Tanker
Corporation, Second United Shipping Corporation and
Third United Shipping Corporation.
*10(g)(4) Form of Company Service Employees Agreement between
Maritime Overseas Corporation and each of First Union
Tanker Corporation and Second Union Tanker Corporation.
10(h)(1) Agreement dated April 1, 1992 between the registrant
and Maritime Overseas Corporation (filed as Exhibit 10
to the registrant's Form 10-Q for the quarter ended
March 31, 1992 and incorporated herein by reference).
10(h)(2) Letter Agreement dated November 9, 1993 amending the
Agreement dated April 1, 1992 referred to above (filed
via EDGAR as Exhibit 10(h)(2) to the registrant's Form
10-K for 1993 and incorporated herein by reference).
10(i) Indemnification Agreement dated December 21, 1992 among
Continental Grain Company, Third Contiship Inc., Fourth
Contiship Inc., OSG Bulk Ships, Inc., Third Shipco
Inc., Fourth Shipco Inc. and the registrant (filed as
Exhibit 10(i) to registrant's Form 10-K for 1992 and
incorporated herein by reference).
10(j)(1) Exchange Agreement dated December 9, 1969 (including
exhibits thereto) between the registrant and various
parties relating to the formation of the registrant
(the form of which was filed as Exhibit 2(3) to
Registration Statement No. 2-34124 and is incorporated
herein by reference).
10(j)(2) Form of Additional Exchange Agreement referred to in
Section 2.02 of Exhibit 10(j)(1) hereto (filed as
Exhibit 2(4) to Registration Statement No. 2-34124 and
incorporated herein by reference).
*10(k) Supplemental Executive Retirement Plan of the
registrant, as amended and restated as of January 1,
1995.
10(l)(1) 1989 Stock Option Plan adopted for officers and key
employees of the registrant or its subsidiaries (filed
as Exhibit 10(l) to the registrant's Form 10-K for 1989
and incorporated herein by reference).
10(l)(2) Amendment adopted October 9, 1990 to the registrant's
1989 Stock Option Plan referred to above (filed as
Exhibit 10(l)(2) to the registrant's Form 10-K for 1990
and incorporated herein by reference).
10(m) 1990 Stock Option Plan adopted for officers and
employees of the registrant or its subsidiaries,
excluding the recipients of options under Exhibits
10(l)(1) and (2) listed above (filed as Exhibit 10(m)
to the registrant's Form 10-K for 1990 and incorporated
herein by reference).
10(n)(1) Joint Venture Agreement dated September 23, 1992 among
Archinav Holdings Ltd. ("Archinav"), Overseas
Cruiseship Inc. ("Overseas"), and Celebrity Cruise
Lines Inc. ("CCLI") (excluding exhibits and schedules)
and the following related agreements: Guarantee of the
registrant dated September 23, 1992 and Shareholders
Agreement dated October 21, 1992 among Archinav,
Overseas and CCLI (excluding exhibits)(filed as
Exhibits 2(a), (b) and (c), respectively, to the
registrant's Report on Form 8-K dated October 21, 1992
and incorporated herein by reference).
10(n)(2) Supplemental Agreement dated January 29, 1993 to the
Shareholders Agreement referred to in Exhibit 10(n)(1)
above (filed as Exhibit 10(n)(2) to the registrant's
Form 10-K for 1992 and incorporated herein by
reference).
*12 Computation of Ratio of Earnings to Fixed Charges.
*13 Such portions of the Annual Report to security holders
for 1994 as are expressly incorporated herein by
reference.
*21 List of subsidiaries of the registrant.
*23 Consent of Independent Auditors of the registrant.
*27 Financial Data Schedule.
NOTE: The Exhibits which have not previously been
filed or listed or are being refiled are marked with an
asterisk (*).
List of Executive Compensation Plans and Arrangements -
See Exhibits 10(k), 10(l)(1) and (2), and 10(m) above.
<PAGE>
EXHIBIT 4(a)
------------
[EXECUTION COPY]
$500,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
February 9, 1990,
as amended and restated as of
October 31, 1994
among
OVERSEAS SHIPHOLDING GROUP, INC.,
OSG BULK SHIPS, INC.
and
OSG INTERNATIONAL, INC.,
THE BANKS LISTED HEREIN,
CITIBANK, N.A.,
as Administrative Agent,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent
<PAGE>
TABLE OF CONTENTS*
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations
26
SECTION 1.03. Types of Borrowings 27
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend 27
SECTION 2.02. Notice of Committed Borrowing 28
SECTION 2.03. Money Market Borrowings 28
SECTION 2.04. Notice to Banks; Funding of Loans 32
SECTION 2.05. Notes 34
SECTION 2.06. Maturity of Loans 35
SECTION 2.07. Interest Rates 35
SECTION 2.08. Fees 38
SECTION 2.09. Optional Termination or Reduction of
Commitments 39
SECTION 2.10. Scheduled Termination of Commitments 39
SECTION 2.11. Optional Prepayments 39
SECTION 2.12. General Provisions as to Payments 41
SECTION 2.13. Funding Losses 42
SECTION 2.14. Computation of Interest and Fees 42
SECTION 2.15. Regulation D Compensation 42
SECTION 2.16. Judgment Currency 43
SECTION 2.17. Withholding Tax Exemption 44
SECTION 2.18. Taxes 46
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness 47
SECTION 3.02. Consequences of Effectiveness 50
SECTION 3.03. Borrowings 50
-------------
*The Table of Contents is not a part of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power 51
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention 51
SECTION 4.03. Binding Effect 52
SECTION 4.04. Financial Information 52
SECTION 4.05. Litigation 53
SECTION 4.06. Compliance with ERISA 53
SECTION 4.07. Environmental Matters 54
SECTION 4.08. Taxes 54
SECTION 4.09. Subsidiaries 54
SECTION 4.10. Not an Investment Company 54
ARTICLE V
COVENANTS
SECTION 5.01. Information 55
SECTION 5.02. Payment of Obligations 60
SECTION 5.03. Maintenance of Property; Insurance 60
SECTION 5.04. Conduct of Business and Maintenance
of Existence 61
SECTION 5.05. Compliance with Laws 63
SECTION 5.06. Books and Records 63
SECTION 5.07. Negative Pledge; Minimum
Unencumbered Assets to Unsecured
Debt Ratio 63
SECTION 5.08. Company Debt 66
SECTION 5.09. Subsidiary Debt 66
SECTION 5.10. Consolidations, Mergers and Sales
of Assets 66
SECTION 5.11. Use of Proceeds 67
SECTION 5.12. Security Interest 67
SECTION 5.13. Letters of Credit 69
SECTION 5.14. Ownership of OBS and OIN 71
SECTION 5.15. Agent for Service of Process for
OIN 71
SECTION 5.16. Minimum Consolidated Working
Capital 72
SECTION 5.17. Minimum Consolidated Tangible Net
Worth 72
SECTION 5.18. Maximum Total Debt to Consolidated
Tangible Net Worth Ratio 72
SECTION 5.19. Minimum Liquid Cash Flow Coverage
Ratio 72
SECTION 5.20. Maximum Investments in Joint
Ventures 72
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default 73
SECTION 6.02. Notice of Default 75
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization 75
SECTION 7.02. Agents and Affiliates 76
SECTION 7.03. Action by Agents 76
SECTION 7.04. Consultation with Experts 76
SECTION 7.05. Liability of the Agents 76
SECTION 7.06. Indemnification 77
SECTION 7.07. Credit Decision 77
SECTION 7.08. Successor Administrative Agent 77
SECTION 7.09. Agents' Fees 78
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair 78
SECTION 8.02. Illegality 79
SECTION 8.03. Increased Cost and Reduced Return 80
SECTION 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans 82
SECTION 8.05. Substitution of Bank 82
ARTICLE IX
GUARANTY
SECTION 9.01. The Guaranty 83
SECTION 9.02. Guaranty Unconditional 83
SECTION 9.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain
Circumstances 84
SECTION 9.04. Waiver by the Company 85
SECTION 9.05. Waiver of Subrogation 85
SECTION 9.06. Stay of Acceleration 85
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices 85
SECTION 10.02. No Waivers 86
SECTION 10.03. Expenses; Documentary Taxes;
Indemnification 86
SECTION 10.04. Amendments and Waivers 87
SECTION 10.05. Successors and Assigns 87
SECTION 10.06. Collateral 90
SECTION 10.07. Governing Law; Submission to
Jurisdiction; Waiver of Jury
Trial; Agent for Service of
Process 90
SECTION 10.08. Counterparts; Integration 91
SECTION 10.09. Certain Provisions of the
Existing Agreement 91
<PAGE>
Schedule 1 - Permitted Liens
Schedule 2 - Non-Recourse Subsidiaries
Pricing Schedule
Exhibit A - Note
Exhibit B-1 - Money Market Quote Request
Exhibit B-2 - Invitation for Money Market Quotes
Exhibit B-3 - Money Market Quote
Exhibit C-1 - Opinion of Proskauer Rose Goetz & Mendelsohn,
special counsel for the Borrowers
Exhibit C-2 - Opinion of Samuel M. Rosenbloom, Esq., Senior Vice
President of MOC and Counsel for the Borrowers
Exhibit C-3 - Opinion of Davis Polk & Wardwell, special counsel
for the Agents
Exhibit D - Assignment and Assumption Agreement
Exhibit E - Form of Acceptance of Appointment as Agent for
Service of Process
Exhibit F - Administrative Questionnaire
Exhibit G - Form of Reimbursement Agreement
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT dated as of February 9, 1990, as amended and
restated as of October 31, 1994, among OVERSEAS SHIPHOLDING
GROUP, INC., OSG BULK SHIPS, INC. and OSG INTERNATIONAL, INC.,
the CO-ARRANGERS and the other BANKS party hereto, CITIBANK,
N.A., as Administrative Agent, and MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent.
WHEREAS, Overseas Shipholding Group, Inc., OSG Bulk
Ships, Inc. and OSG International, Inc., certain banks, Citibank,
N.A., as manager and administrative agent, and The Chase
Manhattan Bank (National Association), as co-manager, are parties
to a Credit Agreement dated as of February 9, 1990, as amended
prior to October 31, 1994 (the "Existing Agreement"); and
WHEREAS, the parties hereto desire to amend the
Existing Agreement as set forth herein;
NOW, THEREFORE, the parties hereto agree that, upon
satisfaction of the conditions set forth in Section 3.01 below,
the Existing Agreement will be amended and restated to read in
full as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as
used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money
Market Quotes setting forth Money Market Absolute Rates pursuant
to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section
2.07(b).
"Administrative Agent" means Citibank, N.A., in its
capacity as administrative agent for the Banks hereunder, and its
successors in such capacity.
"Administrative Questionnaire" means, with respect to
each Bank, an administrative questionnaire, substantially in the
form of Exhibit F hereto, submitted to the Administrative Agent
(with a copy to the Company) duly completed by such Bank.
"Affiliate" means, with respect to any Person, (i) any
Person that directly, or indirectly through one or more
intermediaries, Controls such Person (a "Controlling Person") or
(ii) any Person (other than such Person or a Subsidiary of such
Person) which is Controlled by or is under common Control with a
Controlling Person.
"Agents" means the Administrative Agent and the
Documentation Agent, and "Agent" means either of them.
"Agreement" means, when used with reference to this
Agreement, the Credit Agreement dated as of February 9, 1990
among Overseas Shipholding Group, Inc., OSG Bulk Ships, Inc. and
OSG International, Inc., the banks listed therein, Citibank,
N.A., as manager and administrative agent, and The Chase
Manhattan Bank (National Association), as co-manager, as amended
from time to time, including, with reference to any time on or
after the Amendment Effective Date, the Amended Agreement.
"Amended Agreement" means the Existing Agreement, as
amended and restated as of October 31, 1994 by this Amended
Agreement, and as further amended from time to time after the
Amendment Effective Date.
"Amendment Effective Date" means the date this Amended
Agreement becomes effective in accordance with Section 3.01.
"Applicable Lending Office" means, with respect to any
Bank, (i) in the case of its Domestic Loans, its Domestic Lending
Office, (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office and (iii) in the case of its Money
Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.07(b).
"Assignee" means a bank or other financial institution
(including, without limitation, a Bank) to which any Bank assigns
all, or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes in accordance with
Section 2.17(c), 8.05 or 10.05(c).
"Assignment and Assumption Agreement" has the meaning
set forth in Section 2.17(c).
"Attributable Debt" has the meaning set forth in Note
Agreement dated as of March 1, 1992 among the Borrower and the
Purchasers named in Schedule I thereto, without regard to any
amendments or supplements thereto or waivers of compliance with
any provision thereof, PROVIDED that the definition of the term
"Sale and Leaseback Transaction" shall have the meaning set forth
in this Section 1.01.
"Bank" means each Co-arranger and other bank listed on
the signature pages of this Amended Agreement, each Assignee
which becomes a Bank after the Amendment Effective Date pursuant
to Section 2.17(c), 8.05 or 10.05(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal
to the higher of (i) the Prime Rate for such day and (ii) the sum
of 1/4 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a
Bank as a Base Rate Loan pursuant to the applicable Notice of
Committed Borrowing or Article VIII.
"Beneficial Ownership" means beneficial ownership
within the meaning of Rule 13d-3 (or any successor rule)
promulgated by the Securities and Exchange Commission under the
Exchange Act.
"Borrower" means any of the Company, OBS or OIN, as the
context may require, and "Borrowers" means all of the foregoing.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Construction Funds" means, for any period, the
aggregate amount on deposit in capital construction funds
established and maintained pursuant to agreements with the
Secretary of Transportation in accordance with Section 1177 of
the Merchant Marine Act, 1936, as amended, 46 U.S.C. Appx.
Section 1177, for the account of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) as of the
last day of such period, as the same is reflected in a
consolidated balance sheet of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) as of such
date.
"Cash" means (i) for purposes of the definition of
"Liquid Cash Flow Coverage Ratio", with respect to the Company
for any period, the aggregate amount of cash, including
interest-bearing deposits with maturities of less than one year,
held by the Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) on the last day of such period, as the
same is reflected in a consolidated balance sheet of the Company
and its Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of such last day and (ii) for purposes of the
definition of "Quick Assets", with respect to any Guaranteed
Person as of any date, the aggregate amount of cash, including
interest-bearing deposits with maturities of less than one year,
held by such Guaranteed Person on such date, as the same is (or
would be) reflected in a balance sheet of such Guaranteed Person
as of such date.
"CD Base Rate" has the meaning set forth in Section
2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank
as a CD Loan pursuant to the applicable Notice of Committed
Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
"CD Reference Banks" means The Chase Manhattan Bank
(National Association), Citibank, N.A. and Morgan Guaranty Trust
Company of New York.
"Co-arrangers" means each Bank identified as a "Co-
arranger" on the signature pages of this Amended Agreement, so
long as such Bank remains a Bank hereunder, and their respective
successors; PROVIDED, HOWEVER, that such term shall not include
any Assignee of any of the foregoing.
"Collateral" has the meaning set forth in Section
5.12(a).
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature
pages of this Amended Agreement, as such amount may be increased
from time to time pursuant to Sections 2.17(c), 8.05 and 10.05(c)
or any combination thereof or reduced from time to time pursuant
to Sections 2.09 and 2.10.
"Committed Loan" means a loan to be made by a Bank
pursuant to Section 2.01.
"Company" means Overseas Shipholding Group, Inc., a
Delaware corporation, and its successors.
"Company's 1993 Form 10-K" means the Company's annual
report on Form 10-K for 1993 (including any information
incorporated by reference therein), all as filed with the
Securities and Exchange Commission pursuant to the Exchange Act.
"Consolidated Defined Assets" has the meaning set forth
in Section 5.04.
"Consolidated Net Income" means, for any period, the
consolidated net income of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) for such
period, as the same is reflected in a consolidated statement of
income and retained earnings of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) for such
period; PROVIDED that, for purposes of this Agreement,
Consolidated Net Income shall never be less than zero for any
period.
"Consolidated Net Tangible Assets" has the meaning set
forth in Section 5.20.
"Consolidated Subsidiary" means, with respect to any
Person at any date, any Subsidiary of such Person or other entity
the accounts of which would be consolidated with those of such
Person in its consolidated financial statements if such
statements were prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the
consolidated total common stockholders' equity of the Company and
its Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries), as the same is reflected in the consolidated
balance sheet of the Company and its Consolidated Subsidiaries
(other than Non-Recourse Subsidiaries), LESS their consolidated
Intangible Assets, all determined as of such date; PROVIDED that
Consolidated Tangible Net Worth at any date shall be reduced by
the amount, if any, by which the aggregate amount of cash and
cash equivalents subject to any Lien permitted under Section
5.07(a)(viii) on such date exceeds 5% of Consolidated Tangible
Net Worth as of such date, determined without reference to this
proviso.
"Consolidated Working Capital" means at any date the
amount by which Total Current Assets exceeds Total Current
Liabilities as of such date.
"Continuing Director" means a member of the Company's
board of directors who (i) is a member of such board as of
October 31, 1994 or (ii) was nominated or appointed to fill a
vacancy by the board of directors of the Company, PROVIDED that
at the time of such nomination or appointment a majority of (i)
the board of directors of the Company shall be Continuing
Directors and (ii) the directors voting in favor of such
nomination or appointment shall be Continuing Directors.
"Control" means, for purposes of the definitions of
"Affiliate", "Parent" and "Uncontrolled Joint Venture", with
respect to any Person, possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. For purposes of the
aforesaid definitions, the term "Control" used as a verb has a
corresponding meaning.
"Corporate Tax Rate" means, for any period, the highest
marginal rate of federal income tax which could be applicable to
the Company as of the last day of such period, expressed as a
decimal.
"current liabilities" of any Borrower as of any date
shall not, for purposes of the definitions of "Total Current
Debt" and "Total Current Liabilities", include any Loans
hereunder to such Borrower, except Loans (or portions thereof) to
such Borrower which would be classified under generally accepted
accounting principles as current liabilities as a result of
Section 2.10, 2.11 or 6.01 (i.e., with respect to Section 2.11
and as a result of any irrevocable notice of prepayment given
pursuant thereto, an aggregate principal amount of Loans to such
Borrower equal to the principal amount of Loans to such Borrower
which, measured as of such date, will become due and payable
pursuant to such Section within one year from such date shall be
treated as current liabilities of such Borrower as of such date
to the extent that the same would be treated as such under
generally accepted accounting principles).
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all obligations of
such Person to reimburse any bank or other Person in respect of
amounts paid or which may be paid under a letter of credit,
letter of guarantee or similar instrument, such obligations to
constitute Debt (x) in the case of any such obligation of the
Company or any Subsidiary of the Company in respect of a letter
of credit, letter of guarantee or similar instrument issued
solely to support an obligation of the Company or any Subsidiary
of the Company which obligation does not constitute Debt
hereunder, on the date that a drawing is made under such letter
of credit, letter of guarantee or similar instrument if the bank
or other Person issuing such letter of credit, letter of
guarantee or similar instrument shall not have been reimbursed
therefor on such date, (y) in all other cases (except as provided
in clause (z) below), at the time at which such bank or other
Person is committed (whether or not such commitment is subject to
any conditions) to issue, or has issued, such letter of credit,
letter of guarantee or similar instrument and (z) notwithstanding
any other provision herein to the contrary, for purposes of (I)
Section 5.07(a), the term "Debt" shall include all contingent
obligations to reimburse any bank or other Person in respect of
amounts paid or which may be paid under a letter of credit,
letter of guarantee or similar instrument and (II) the
definitions of "Material Debt" and "Material Financial
Obligations", the term "Debt" shall include all contingent
obligations referred to in clause (I) above, but only if the
relevant letter of credit, letter of guarantee or similar
instrument has been actually issued (as opposed to only the
issuance of a commitment to issue the same), (vi) all Debt of
others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person, and (vii) all Debt of
others Guaranteed by such Person. For purposes of this
Agreement, at any date, neither Debt of the Company owed on such
date to any Subsidiary of the Company nor Debt of any Subsidiary
of the Company owed to the Company or any other Subsidiary of the
Company on such date shall be considered to be Debt of the
Company or such Subsidiary, as the case may be.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction
(including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
"Documentation Agent" means Morgan Guaranty Trust
Company of New York, in its capacity as documentation agent for
the Banks hereunder, and its successors in such capacity.
"Dollars" and the sign "$" mean lawful money of the
United States of America.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in New
York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its
office located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank
may hereafter designate as its Domestic Lending Office by notice
to the Company and the Administrative Agent; PROVIDED that any
Bank may so designate separate Domestic Lending Offices for its
Base Rate Loans, on the one hand, and its CD Loans, on the other
hand, in which case all references herein to the Domestic Lending
Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth
in Section 2.07(b).
"Domestic Tax" means, with respect to any Bank, a Tax
that is not a Foreign Tax with respect to it.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, judicial decisions binding on
any Borrower or to which any asset of any Borrower is subject,
regulations, ordinances, rules, judgments, orders, decrees, plans
or injunctions binding on any Borrower or to which any asset of
any Borrower is subject, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor
statute and the regulations promulgated and the rulings issued
thereunder.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) which is a member of a group of which any
member of the ERISA Group is a member and which is under common
control within the meaning of Section 414 of the Internal Revenue
Code.
"ERISA Group" means the Company and those of its
Subsidiaries whose financial statements are from time to time
consolidated with the Company, in accordance with generally
accepted accounting principles.
"Euro-Dollar Business Day" means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in Dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank,
its office, branch or affiliate located at its address set forth
in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office)
or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice
to the Company and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by
a Bank as a Euro-Dollar Loan in accordance with the applicable
Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of The Chase Manhattan Bank (National
Association), Citibank, N.A. and Morgan Guaranty Trust Company of
New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect
of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents).
"Event of Default" has the meaning set forth in Section
6.01.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, or any successor statute.
"Excluded Subsidiary Debt" means (i) unsecured Debt of
a Subsidiary of the Company incurred for the purpose of financing
all or any part of the cost of acquiring any ship from any Person
(other than the Company or any of its Subsidiaries or any of
their respective Affiliates), PROVIDED that such Debt (x) is
incurred or assumed concurrently with or within 180 days after
the acquisition thereof, (y) is supported in full by a direct-pay
or standby letter of credit on which the Company is the sole
account party and the terms of the related reimbursement
agreement shall not permit the issuing bank any recourse against
any Subsidiary or Affiliate of the Company and (z) is not
supported by any other letter of credit, letter of guarantee or
similar instrument in respect of which any Subsidiary or
Affiliate of the Company has any obligation and (ii) Debt of
Subsidiaries of the Company of the types referred to in clauses
(i), (iii), (iv) and (v) of Section 5.09(a).
"Existing Agreement" has the meaning set forth in the
first recital hereto.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, PROVIDED that (i) if such
day is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to Citibank, N.A. on such day on such transactions as determined
by the Administrative Agent.
"Fiscal Quarter" means a fiscal quarter of the Company.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans
or Money Market Loans (excluding Money Market LIBOR Loans bearing
interest at the Base Rate pursuant to Section 8.01(a)) or any
combination of the foregoing.
"Foreign Tax" means, with respect to any Bank, any Tax
now or hereafter imposed on such Bank or upon any Payment due to
or made to such Bank, except a Tax imposed on such Bank by a
governmental authority under the laws of which such Bank is
organized or a Tax (other than a Tax collected by deduction or
withholding from a Payment) imposed by a governmental authority
within the territorial jurisdiction of which such Bank maintains
a place of business.
"Gain (Loss) on Disposal of Vessels" means, for any
period, the aggregate net amount of gains (losses) on disposals
of vessels by the Company and its Consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) during such period, but
only to the extent such gains are not included (or such losses
are not deducted) in determining Net Cash Provided by Operating
Activities for such period, as the same is reflected in a
consolidated statement of cash flows of the Company and its
Consolidated Subsidiaries (other than Non-Recourse Subsidiaries)
for such period.
"Gain (Loss) on Sale of Securities" means, for any
period, the aggregate net amount of gains (losses) on sales of
securities by the Company and its Consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) during such period, but
only to the extent such gains are not included (or such losses
are not deducted) in determining Net Cash Provided by Operating
Activities for such period, as the same is reflected in a
consolidated statement of cash flows of the Company and its
Consolidated Subsidiaries (other than Non-Recourse Subsidiaries)
for such period.
"Guarantee" by any Person means, without duplication,
any obligation, contingent or otherwise, of such Person directly
or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or
in part), PROVIDED that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guaranteed Current Liabilities" means at any date with
respect to any Guaranteed Person the lesser of (i) the aggregate
amount of current liabilities of such Guaranteed Person which are
Guaranteed by the Company or a Consolidated Subsidiary of the
Company and (ii) the excess, if any, of (x) the aggregate amount
of current liabilities of such Guaranteed Person over (y) the
Quick Assets of such Guaranteed Person, all as reflected in the
balance sheet of such Guaranteed Person or the certificate of the
Company with respect to such Guaranteed Person, as the case may
be, most recently delivered or required to be delivered to the
Banks pursuant to Section 4.04(e) or 5.01(d), as the case may be,
prior to such date; PROVIDED that if, as of the date of such
balance sheet or the last day of the fiscal quarter of such
Guaranteed Person covered by such certificate, as the case may
be, the Quick Assets of such Guaranteed Person shall exceed its
current liabilities, the Guaranteed Current Liabilities of such
Guaranteed Person shall be determined to be zero as of such date.
"Guaranteed Person" means any Person (other than the
Company or a Consolidated Subsidiary of the Company) some of the
current liabilities of which are Guaranteed by the Company or a
Consolidated Subsidiary of the Company.
"Intangible Assets" means the amount (to the extent
reflected in determining consolidated total common stockholders'
equity) of (i) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of assets of a going
concern business made after the acquisition of such business in
accordance with generally accepted accounting principles)
subsequent to December 31, 1993 in the book value of any asset
owned by the Company or a Consolidated Subsidiary of the Company,
(ii) all Investments in Persons which are not Subsidiaries of the
Company unless such Investments are accounted for in accordance
with generally accepted accounting principles, (iii) the
aggregate amount of the Investment of the Company and its
Subsidiaries (other than Non-Recourse Subsidiaries) in all
Non-Recourse Subsidiaries and (iv) all unamortized debt discount
and expense, unamortized deferred charges (excluding unamortized
deferred drydock costs), goodwill, patents, trademarks, service
marks, trade names, anticipated future benefit of tax loss
carry-forwards, copyrights, organization or developmental
expenses and other intangible assets. The term "Intangible
Assets", when used in Section 5.07(b)(ii), shall have a
correlative meaning.
"Interest Expense" means, for any period, the aggregate
amount, without duplication, of (i) interest accrued during such
period on Debt of the Company and its Subsidiaries (other than
Non-Recourse Subsidiaries), including the interest portion of
payments under capitalized leases, capitalized interest (except
interest incurred in connection with vessel construction prior to
the delivery thereof, which interest is converted to Debt),
amortization of debt discount and the value of interest paid in
pay-in-kind securities, (ii) interest (as defined in clause (i)
above) on Debt of other Persons paid during such period by the
Company or any of its Subsidiaries (other than Non-Recourse
Subsidiaries) and (iii) dividends accrued (whether or not paid)
during such period on outstanding preferred stock of the Company
or any of its Subsidiaries (other than Non-Recourse
Subsidiaries). For purposes of any determination of Interest
Expense for any period, any amount paid by the Company or any of
its Subsidiaries (other than Non-Recourse Subsidiaries) on, or
with respect to, Debt of other Persons during such period shall
be allocated first to the payment of interest on such Debt (but
only to the extent that the Company or any of its Subsidiaries is
obligated to pay interest on such Debt for such period).
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable Notice of Borrowing (or
such greater number of months or such other number of days as the
Borrower and all of the Banks shall agree in writing not later
than the date of the applicable Notice of Borrowing); PROVIDED
that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which
case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period (other than an Interest
Period determined pursuant to clause (c) below) which
begins on the last Euro-Dollar Business Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(2) with respect to each CD Borrowing, the period commencing on
the date of such Borrowing and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; PROVIDED that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; PROVIDED that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(4) with respect to each Money Market LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending such
whole number of months thereafter as the Borrower may elect in
accordance with Section 2.03; PROVIDED that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which
case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(5) with respect to each Money Market Absolute Rate Borrowing,
the period commencing on the date of such Borrowing and ending
such number of days thereafter (but not less than 14 days) as the
Borrower may elect in accordance with Section 2.03; PROVIDED
that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended, or any successor
statute.
"Investment" means any investment in any Person,
whether by means of share purchase, capital contribution, loan,
advance, Guarantee or otherwise. Each advance of funds to a
Person (whether documented as a loan or advance or otherwise) and
each provision of goods or services to or on behalf of an
Affiliate of the provider at less than the fair market value
thereof shall be an Investment in the amount of such advance or
the excess of the fair market value thereof over the price (if
any) paid therefor, as the case may be.
"Investments in Marketable Securities" means, for any
period, the aggregate amount of all investments by the Company
and its Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) in marketable securities as of the last day of such
period, as the same is reflected in a consolidated balance sheet
of the Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) as of such date.
"Joint Venture" means at any date any Person (other
than a Subsidiary of the Company) in which the Company or any
Subsidiary of the Company has an ownership interest which would
be accounted for in the consolidated financial statements of the
Company and its Consolidated Subsidiaries by the equity method if
such statements were prepared as of such date.
"Letter of Credit" has the meaning set forth in Section
5.13.
"LIBOR Auction" means a solicitation of Money Market
Quotes setting forth Money Market Margins based on the London
Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes of this
Agreement, the Company or any Subsidiary of the Company shall be
deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Liquid Cash Flow Coverage Ratio" means, for any
period, the ratio determined pursuant to the following formula:
LCFC = CFO + GSS + GSV + IE + 1/2 (C + MS + ((1 - CTR) (CCF)) + RF)
-----------------------------------------------------------
IE + TCD
Where:
LCFC = Liquid Cash Flow Coverage Ratio
CFO = Net Cash Provided by Operating Activities
for such period
GSS = Gain (Loss) on Sale of Securities
for such period
GSV = Gain (Loss) on Disposal of Vessels
for such period
C = Cash of the Company for such period
MS = Investments in Marketable Securities
for such period
CTR = Corporate Tax Rate
for such period
CCF = Capital Construction Funds
for such period
RF = Restricted Funds
for such period
IE = Interest Expense
for such period
TCD = Total Current Debt
for such period
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a
Money Market Loan and "Loans" means Domestic Loans or Euro-Dollar
Loans or Money Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set
forth in Section 2.07(c).
"managed" has the meaning set forth in Section 5.04.
"Material Adverse Change" means the occurrence of an
event or condition which materially impairs the ability of the
Company or any of its Subsidiaries to meet any of their
respective obligations under this Agreement or any Note or any of
their respective other obligations that are material to the
Company and its Consolidated Subsidiaries, considered as a whole.
"Material Debt" means Debt (other than the Notes) of
the Company and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, in an aggregate
principal amount exceeding $5,000,000 (or its equivalent in any
other currency).
"Material Financial Obligations" means (i) a principal
or face amount of Debt and/or (ii) payment obligations in respect
of Derivatives Obligations, in each case of the Company and/or
one or more of its Subsidiaries and arising in one or more
related or unrelated transactions, exceeding in the aggregate
$5,000,000 (or its equivalent in any other currency).
"Material Subsidiary" means at any date each of the
following: (i) OBS, (ii) OIN, (iii) any Subsidiary of the Company
(other than OBS or OIN) which owns, leases or charters any ship
on such date and (iv) any Subsidiary or Subsidiaries of the
Company (other than any such Subsidiary or Subsidiaries referred
to in the foregoing clauses) the assets of which, individually or
in the aggregate, had an aggregate book value (net of
depreciation) as of the date of the consolidated balance sheet of
the Company and its Consolidated Subsidiaries most recently
delivered or required to be delivered to the Banks pursuant to
Section 4.04 or 5.01, as the case may be, prior to such date in
excess of the lesser of (x) $50,000,000 and (y) 2% of the
aggregate book value (net of depreciation) of all assets of the
Company and its Consolidated Subsidiaries as of the date of such
balance sheet; PROVIDED that, for purposes of clauses (g) and (h)
of Section 6.01, "Material Subsidiary" shall mean any Subsidiary
of the Company of the type referred to in clause (i), (ii) or
(iv) hereof.
"Maximum Amount" means at any date a percentage of
Consolidated Tangible Net Worth as of the date of the balance
sheet of the Company and its Consolidated Subsidiaries (other
than Non-Recourse Subsidiaries) most recently delivered or
required to be delivered to the Banks pursuant to Section 4.04 or
5.01, as the case may be, equal to (i) prior to February 16,
1995, 51% and (vi) at any time on or after February 16, 1995,
50%.
"Money Market Absolute Rate" has the meaning set forth
in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be
made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank,
its Domestic Lending Office or such other office, branch or
affiliate of such Bank as it may hereafter designate as its Money
Market Lending Office by notice to the Company and the
Administrative Agent; PROVIDED that any Bank may from time to
time by notice to the Company and the Administrative Agent
designate separate Money Market Lending Offices for its Money
Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as
the context may require.
"Money Market LIBOR Loan" means a loan to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing
interest at the Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or
a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.03.
"Multiemployer Plan" means at any time a "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA) to which the
Company or any ERISA Affiliate is making or accruing an
obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means at any time an employee
benefit plan, other than a Multiemployer Plan, subject to Title
IV of ERISA to which the Company or any ERISA Affiliate, and one
or more employers other than the Company or an ERISA Affiliate,
is making or accruing an obligation to make contributions or, in
the event that any such plan has been terminated, to which the
Company or any ERISA Affiliate made or accrued an obligation to
make contributions during any of the five plan years preceding
the date of termination of such plan.
"Net Cash Provided by Operating Activities" means, for
any period, the net cash provided by operating activities of the
Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such period, as the same is
reflected in a consolidated statement of cash flows of the
Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such period.
"Non-Recourse Debt" means Debt of any Subsidiary of the
Company (i) that is not Guaranteed by the Company or any other
Subsidiary of the Company (other than a Non-Recourse Subsidiary),
(ii) that is not secured by a Lien on any asset of the Company or
any other Subsidiary of the Company (other than any asset of any
Non-Recourse Subsidiary) and (iii) in respect of which neither
the Company nor any of its other Subsidiaries (other than a
Non-Recourse Subsidiary) has any express obligation or has
written any instrument or letter indicating its support for such
Subsidiary; PROVIDED that Debt of such Subsidiary shall
constitute Non-Recourse Debt only if (x) the Company shall have
given the Banks, through the Administrative Agent, written notice
at least 20 days prior to the incurrence, issuance, assumption or
Guarantee thereof (or, in the case of Debt of a Person to be
acquired by such Subsidiary, prior to the time of such
acquisition) and (y) the terms and conditions of the related
documentation insofar as they relate to the non-recourse nature
of such Debt, and the final form of such documentation with
respect thereto, shall be reasonably satisfactory to the Required
Banks.
"Non-Recourse Subsidiary" means, at any time, a
Subsidiary of the Company (i) having no Debt at such time (other
than Non-Recourse Debt) and (ii) as to which an officer of the
Company has, prior to the issuance, incurrence, assumption or
Guarantee of any Non-Recourse Debt by such Subsidiary, delivered
a certificate to the Administrative Agent certifying that such
Subsidiary is a Non-Recourse Subsidiary in accordance with the
terms of this Agreement.
"Non-Shipping Asset" has the meaning set forth in
Section 5.04.
"Non-Shipping Person" has the meaning set forth in
Section 5.04.
"Notes" means promissory notes of a Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of such Borrower to repay the Loans made to it, and
"Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"OBS" means OSG Bulk Ships, Inc., a New York
corporation, and its successors.
"OIN" means OSG International, Inc., a Liberian
corporation, and its successors.
"Parent" means, with respect to any Bank, any Person
Controlling such Bank.
"Participant" has the meaning set forth in Section
10.05(b).
"Payment" means any amount due to a Bank from a
Borrower pursuant to this Agreement or a Note.
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Permitted Liens" means Liens permitted under Section
5.07(a).
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or
an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit
plan (other than a Multiemployer Plan or a Multiple Employer
Plan) maintained for the benefit of employees of the Company or
any ERISA Affiliate and subject to Title IV of ERISA.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly
announced by Citibank, N.A. in New York City from time to time as
its base rate.
"Quick Assets" means, with respect to any Guaranteed
Person as of any date, the aggregate amount of Cash, accounts
receivable and marketable securities of such Guaranteed Person as
of such date, as the same is (or would be) reflected in a balance
sheet of such Guaranteed Person as of such date.
"Reconciliation Statement" means a written statement of
the chief financial officer or chief accounting officer of the
Company or of the Company's independent public accountants
setting forth in reasonable detail (i) any changes in generally
accepted accounting principles or the application thereof adopted
by the Company and its Consolidated Subsidiaries from the
principles applied, as so applied, in the preparation of the
financial statements of the Company and its Consolidated
Subsidiaries referred to in Section 4.04(a) which, under the then
applicable rules and regulations of the Securities and Exchange
Commission (or its successor) or the Financial Accounting
Standards Board (or its successor), would be required to be
disclosed in the financial statements of the Company and its
Consolidated Subsidiaries (including the related notes or
auditor's report), (ii) the effect of such changes on the
financial statements of the Company and its Consolidated
Subsidiaries and of the Company and its Consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) delivered to the Banks
concurrently with such statement and (iii) the calculations
required to establish whether the covenants set forth in Sections
5.04, 5.07, 5.08, 5.09(b), 5.16, 5.17, 5.18, 5.19 and 5.20 were
complied with on the date of the financial statements referred to
in clause (ii), using generally accepted accounting principles,
applied consistently with the audited consolidated financial
statements of the Company and its Consolidated Subsidiaries
referred to in Section 4.04(a).
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing
which, after application of the proceeds thereof, results in no
net increase in the outstanding principal amount of Committed
Loans made by any Bank to any Borrower.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
"Required Banks" means at any time Banks having more
than 50% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding Notes evidencing
more than 50% of the aggregate unpaid principal amount of the
Loans.
"Reimbursement Agreement" has the meaning specified in
Section 5.13.
"Restricted Funds" means restricted funds established
and maintained pursuant to Title XI reserve fund and financial
agreements between the Company or any of its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) and the
Secretary of Transportation in accordance with Title XI of the
Merchant Marine Act, 1936, as amended, and the regulations
promulgated thereunder; PROVIDED that "Restricted Funds" means,
for any period, the aggregate amount on deposit in Restricted
Funds as so defined as of the last day of such period, as the
same is reflected in a consolidated balance sheet of the Company
and its Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of such date.
"Revolving Credit Period" means the period from and
including the Amendment Effective Date to but excluding the
Termination Date.
"Sale and Leaseback Transaction" shall mean any
arrangement with any Person (not including the Company or any
Consolidated Subsidiary) or to which any such Person is a party,
providing for the leasing by the Company or a Consolidated
Subsidiary other than a Non-Recourse Subsidiary for a period,
including renewals, in excess of three years of any asset which
has been or is to be sold or transferred more than 180 days after
the acquisition or occupancy thereof or the completion of
construction and commencement of full operation thereof,
whichever is later, by the Company or any Consolidated Subsidiary
other than a Non-Recourse Subsidiary to such Person.
"Secured Debt" has the meaning set forth in Section
5.07(b).
"Secured Issuer" has the meaning set forth in Section
5.13.
"Security Documents" has the meaning set forth in
Section 5.12(a).
"Shipping and Related Businesses" has the meaning set
forth in Section 5.04.
"Shipping Manager" has the meaning set forth in Section
5.04.
"Short-Term Debt" means unsecured Debt of any
Subsidiary of the Company (i) which matures within one year of
the date of the incurrence thereof unless such maturity can be
extended at the sole option of such Subsidiary to a date later
than one year after the incurrence thereof and (ii) the proceeds
of which are used for working capital purposes, PROVIDED that (A)
such Debt is not outstanding for more than 270 days (including
any extensions or renewals thereof) and (B) the aggregate
principal amount of such Debt at any time outstanding does not
exceed (x) $2,000,000 in the case of any Subsidiary of the
Company other than OBS and OIN, (y) $15,000,000 in the case of
each of OBS and OIN and (z) $20,000,000 in the aggregate for all
Subsidiaries of the Company.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by
such Person.
"Successor of the Shipping Manager" has the meaning set
forth in Section 5.04.
"Tangible Assets" has the meaning set forth in Section
5.07(b).
"Tax" means any charge (whether described as a tax or
duty or otherwise and whether measured by income or value or
otherwise, whether collected by withholding or otherwise) imposed
by a governmental authority upon this Agreement, upon or with
respect to a Payment or upon any profit realized in whole or part
from this Agreement, and any interest or penalty with respect to
any such charge.
"Termination Date" means the earliest of (i) the fifth
anniversary of the Amendment Effective Date, (ii) the date that
is four months after the date on which an Unapproved Takeover of
the type referred to in clause (ii) of the definition thereof
shall have occurred and (iii) the fifth Domestic Business Day
after the date on which an Unapproved Takeover of the type
referred to in clause (i) or (iii) of the definition thereof
shall have occurred.
"Termination Event" means (i) a "reportable event", as
such term is defined in Section 4043 of ERISA (other than a
"reportable event" not subject to the provision for 30-day notice
to the PBGC), or an event described in Section 4068(f) of ERISA,
(ii) the withdrawal of the Company or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a
"substantial employer", as such term is defined in Section
4001(a)(2) of ERISA, or the incurrence of liability by the
Company or any ERISA Affiliate under Section 4064 of ERISA upon
the termination of a Multiple Employer Plan, (iii) the filing of
a notice of intent to terminate a Plan under Section 4041 of
ERISA or the treatment of a Plan amendment as a termination under
Section 4041A of ERISA, (iv) the institution of proceedings to
terminate a Plan or a Multiemployer Plan or (v) any other event
or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or Multiemployer Plan.
"Total Current Assets" means at any date the
consolidated current assets of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) determined as
of such date.
"Total Current Debt" means, as of any date, all Debt of
the Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) to the extent that such Debt is
reflected as a current liability in the consolidated balance
sheet of the Company and its Consolidated Subsidiaries (other
than Non-Recourse Subsidiaries) as of such date.
"Total Current Liabilities" means at any date (i) the
consolidated current liabilities of the Company and its
Consolidated Subsidiaries (other than Non-Recourse Subsidiaries)
plus (ii) the aggregate amount of all Guaranteed Current
Liabilities of all Guaranteed Persons, all determined as of such
date.
"Total Debt" means at any date all Debt of the Company
and its Consolidated Subsidiaries (other than Non-Recourse Debt
of Non-Recourse Subsidiaries), determined on a consolidated basis
as of such date.
"Unapproved Acquisition" means the acquisition,
directly or indirectly, by any person or group of persons (within
the meaning of Section 13 or 14 of the Exchange Act) including
the Company or any Subsidiary or Affiliate of the Company or any
combination of the foregoing of Beneficial Ownership of 25% (or
such other percent as shall result in the Beneficial Ownership by
such person or group of persons of 25%) or more of the
outstanding securities of any Person having voting power at such
time to elect a majority of the board of directors of such Person
(other than any Person which prior to such acquisition was a
Subsidiary of the Company), unless such acquisition has been
approved by a majority of the board of directors of such Person
as of the date that the Company or such Subsidiary or Affiliate
or combination of the foregoing shall have first acquired 20% or
more of such securities.
"Unapproved Takeover" means (i) Continuing Directors no
longer constitute a majority of the board of directors of the
Company, (ii) the acquisition by any person or group of persons
(within the meaning of Section 13 or 14 of the Exchange Act) of
Beneficial Ownership of 40% (or such other percent as shall
result in such person or group of persons having Beneficial
Ownership of 40%) or more of the outstanding securities of the
Company having voting power to elect a majority of the board of
directors of the Company, if a majority of the Continuing
Directors shall have disapproved such acquisition; or (iii) the
acquisition by any person or group of persons (within the meaning
of Section 13 or 14 of the Exchange Act) of Beneficial Ownership
of more than 50% (or such other percent as shall result in such
person or group of persons having Beneficial Ownership of more
than 50%) of the outstanding securities of the Company having
voting power at such time to elect a majority of the board of
directors of the Company, if a majority of the Continuing
Directors shall have disapproved such acquisition; PROVIDED that,
for purposes of the definition of "Termination Date", an
Unapproved Takeover of the type referred to in clause (ii) or
(iii) shall be deemed to have occurred on the later of (x) the
relevant acquisition and (y) the date on which a majority of the
Continuing Directors shall disapprove such acquisition.
"Uncontrolled Joint Venture" means a Joint Venture over
which the Company and its Subsidiaries, collectively, do not have
Control.
"Unencumbered Assets" has the meaning set forth in
Section 5.07(b).
"Unsecured Debt" has the meaning set forth in Section
5.07(b).
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary of the Company all of the shares of
capital stock or other ownership interests of which (except
directors' qualifying shares) are at the time directly or
indirectly owned by the Company.
"Withdrawal Liability" shall have the meaning given to
such term under Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made and all financial statements required to
be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect on December
31, 1993, applied on a basis consistent (except, in the case of
any financial statements delivered pursuant to Section 5.01, (x)
for any change which, under the then applicable rules and
regulations of the Securities and Exchange Commission (or its
successor) and the Financial Accounting Standards Board (or its
successor), is not required to be disclosed in the financial
statements of the Company and its Consolidated Subsidiaries
(including the related notes and auditor's report) or (y) for any
change as to which a Reconciliation Statement is delivered
concurrently with the delivery of such financial statements, in
each case, as to which the Company's independent public
accountants have not taken exception) with the audited
consolidated financial statements of the Company and its
Consolidated Subsidiaries for the fiscal year ended December 31,
1993 delivered to the Banks pursuant to Section 4.04(a); PROVIDED
that at any time when, as a result of any such change in
generally accepted accounting principles or the application
thereof, the Company shall be required to deliver a
Reconciliation Statement pursuant hereto, the Company may, by
notice to the Banks, request that the Required Banks amend the
financial covenants to take into account the effect of such
change. Upon receipt thereof by each Bank, such Bank hereby
agrees to negotiate in good faith with the Company an amendment
to the financial covenants that would provide the Banks with
protection equivalent (determined in good faith in the Required
Banks' sole discretion) to that afforded by the financial
covenants prior to such amendment; PROVIDED that no Bank shall
have any obligation (other than its obligation to negotiate in
good faith) to propose any such amendment or to agree to any such
amendment so proposed. From and after the effective date of any
such amendment, the Company shall have no further obligation
hereunder to deliver a Reconciliation Statement with respect to
such change.
SECTION 1.03. TYPES OF BORROWINGS. The term
"Borrowing" denotes the aggregation of Loans of one or more Banks
to be made to a single Borrower pursuant to Article II on a
single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar
Loans) or by reference to the provisions of Article II under
which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks
participate in proportion to their Commitments, while a "Money
Market Borrowing" is a Borrowing under Section 2.03 in which the
Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. During the
Revolving Credit Period each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make loans to any
Borrower pursuant to this Section 2.01 from time to time in
amounts such that the aggregate principal amount of Loans made by
such Bank pursuant to this Section 2.01 at any one time
outstanding to all Borrowers shall not exceed the amount of its
Commitment. Each Borrowing under this Section 2.01 shall be in
an aggregate principal amount of $10,000,000 or any larger
multiple of $1,000,000 (except that any such Borrowing may be in
the aggregate amount of the unused Commitments), and shall be
made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, any
Borrower may borrow under this Section 2.01, repay, or to the
extent permitted by Section 2.11, prepay Loans and reborrow at
any time during the Revolving Credit Period under this Section
2.01.
SECTION 2.02. NOTICE OF COMMITTED BORROWING. The
Borrower shall give the Administrative Agent notice (a "Notice of
Committed Borrowing") not later than 10:30 A.M. (New York City
time) on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or
a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to
be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period.
SECTION 2.03. MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. At any time that Level
I, II or III Status (in each case, as defined in the Pricing
Schedule) exists, any Borrower may, in addition to Committed
Borrowings pursuant to Section 2.01, as set forth in this
Section, request the Banks during the Revolving Credit Period to
make offers to make Money Market Loans to the Borrower, except
that no such request may be made if on the date of such request
Level IV Status or Level V Status exists (each as defined in the
Pricing Schedule), and no Money Market Loans may be made if on
the date such Loans are to be made either Level IV Status or
Level V Status exists. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set
forth in this Section.
(b) MONEY MARKET QUOTE REQUEST. When a Borrower
wishes to request offers to make Money Market Loans under this
Section, it shall transmit to the Administrative Agent by telex
or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B-1 hereto so as to be
received no later than 10:30 A.M. (New York City time) on (x) the
fourth Euro-Dollar Business Day prior to the date of Borrowing
proposed therein, in the case of a LIBOR Auction or (y) the
Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Company and the
Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate
Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period, and
(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute
Rate.
The Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote
Request.
(c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon
receipt of a Money Market Quote Request, the Administrative Agent
shall send to the Banks by telex or facsimile transmission an
Invitation for Money Market Quotes substantially in the form of
Exhibit B-2 hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to
make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any
Invitation for Money Market Quotes. Each Money Market Quote must
comply with the requirements of this subsection (d) and must be
submitted to the Administrative Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section
10.01 not later than 9:30 A.M. (New York City time) on (x) the
third Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Company and the
Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); PROVIDED that
Money Market Quotes submitted by the Administrative Agent (or any
affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the
Administrative Agent or such affiliate notifies the Borrower of
the terms of the offer or offers contained therein not later than
(x) one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the deadline
for the other Banks, in the case of an Absolute Rate Auction.
Subject to Articles III and VI, any Money Market Quote so made
shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially
the form of Exhibit B-3 hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount
(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested, and (z) may be
subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above
or below the applicable London Interbank Offered Rate (the
"Money Market Margin") offered for each such Money Market
Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such
base rate,
(D) in the case of an Absolute Rate Auction, the rate
of interest per annum (specified to the nearest 1/10,000th
of 1%) (the "Money Market Absolute Rate") offered for each
such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by
the quoting Bank with respect to each Interest Period specified
in the related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if
it:
(A) is not substantially in conformity with Exhibit B-
3 hereto or does not specify all of the information required
by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to those
set forth in the applicable Invitation for Money Market
Quotes; or
(D) arrives after the time set forth in subsection
(d)(i).
(e) NOTICE TO BORROWER. The Administrative Agent
shall promptly notify the Borrower of the terms (x) of any Money
Market Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market
Quote shall be disregarded by the Administrative Agent unless
such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in
the related Money Market Quote Request, (B) the respective
principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money Market
Quote may be accepted.
(f) ACCEPTANCE AND NOTICE BY BORROWER. Not later than
10:30 A.M. (New York City time) on (x) the third Euro-Dollar
Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction or (y) the proposed date of Borrowing, in the
case of an Absolute Rate Auction (or, in either case, such other
time or date as the Company and the Administrative Agent shall
have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective), the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case
of acceptance, such notice (a "Notice of Money Market Borrowing")
shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any
Money Market Quote in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $10,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute
Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) ALLOCATION BY ADMINISTRATIVE AGENT. If offers are
made by two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such
offers are accepted shall be allocated by the Administrative
Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest
error.
SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS. (a)
Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank of the contents thereof and of
such Bank's share (if any) of such Borrowing and such Notice of
Borrowing shall not, except as otherwise provided in this
Agreement, thereafter be revocable by the Borrower.
Notwithstanding the foregoing, no more than ten Fixed Rate
Committed Borrowings shall be outstanding at any one time, and
any Borrowing which would exceed such limitation shall be made as
a Base Rate Borrowing.
(b) Not later than 11:00 A.M. (or 1:30 P.M. in the
case of a Base Rate Borrowing) (New York City time) on the date
of each Borrowing, each Bank participating therein shall (except
as provided in subsection (c) of this Section) make available its
share of such Borrowing, in Federal or other funds immediately
available in New York City, to the Administrative Agent at its
address specified in or pursuant to Section 10.01. Unless the
Administrative Agent determines that any applicable condition
specified in Section 3.03 has not been satisfied, the
Administrative Agent will make the funds so received from the
Banks available to the Borrower at the aforesaid address, subject
to the receipt of funds by the Administrative Agent as provided
in the immediately preceding sentence, not later than 2:30 P.M.
(New York City time) on the date of such Borrowing, and in any
event as soon as practicable after receipt.
(c) If any Bank makes a new Loan hereunder to a
Borrower on a day on which such Borrower is to repay all or any
part of an outstanding Loan from such Bank, such Bank shall apply
the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being
borrowed by such Borrower and the amount being repaid shall be
made available by such Bank to the Administrative Agent as
provided in subsection (b) of this Section, or remitted by such
Borrower to the Administrative Agent as provided in Section 2.12,
as the case may be.
(d) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Borrowing
that such Bank will not make available to the Administrative
Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and
the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding
amount. If and to the extent that such Bank shall not have so
made such share available to the Administrative Agent, such Bank
and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to
the Administrative Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate and
the interest rate applicable thereto pursuant to Section 2.07 and
(ii) in the case of such Bank, the Federal Funds Rate. If such
Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.
Nothing in this subsection (d) shall be deemed to relieve any
Bank of its obligation to make Loans to the extent provided in
this Agreement.
SECTION 2.05. NOTES. (a) The Loans of each Bank to
each Borrower shall be evidenced by a single Note of such
Borrower payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of such Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the
Administrative Agent, request that its Loans of a particular type
to such Borrower be evidenced by a separate Note of such Borrower
in an amount equal to the aggregate unpaid principal amount of
such Loans. Each such Note shall be in substantially the form of
Exhibit A hereto with appropriate modifications to reflect the
fact that it evidences solely Loans of the relevant type. Each
reference in this Agreement to a "Note" or the "Notes" of such
Bank shall be deemed to refer to and include any or all of such
Notes, as the context may require.
(c) Upon receipt of each Bank's Notes pursuant to
Section 3.01(b), the Documentation Agent shall send by registered
mail or courier or deliver by hand such Notes to such Bank. Each
Bank shall record the date, amount, type and maturity of each
Loan made by it to each Borrower and the date and amount of each
payment of principal made by the Borrower with respect thereto,
and shall, prior to any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate
notations to evidence the foregoing information with respect to
each such Loan then outstanding; PROVIDED that the failure of any
Bank to make any such recordation or endorsement shall not affect
the obligations of any Borrower hereunder or under the Notes.
Each Bank is hereby irrevocably authorized by each Borrower so to
endorse its Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
SECTION 2.06. MATURITY OF LOANS. Each Loan included
in any Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. INTEREST RATES. (a) Each Base Rate
Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such
day. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2%
plus the rate otherwise applicable to Base Rate Loans for such
day.
(b) Each CD Loan made on or after the Amendment
Effective Date shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
CD Margin applicable on such day plus the Adjusted CD Rate
applicable to such Interest Period; PROVIDED that if any CD Loan
or any portion thereof shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less
than 30 days, such portion shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is
longer than 90 days, 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the higher of (i) the sum
of the CD Margin applicable on such day plus the Adjusted CD Rate
applicable to such Loan for such day and (ii) the rate applicable
to Base Rate Loans for such day.
"CD Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
--------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is
the rate of interest determined by the Administrative Agent to be
the average (rounded upward, if necessary, to the next higher
1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M.
(New York City time) (or as soon thereafter as practicable) on
the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank of its
certificates of deposit in an amount comparable to the principal
amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such
Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
five billion dollars in respect of new non-personal time deposits
in dollars in New York City having a maturity comparable to the
related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of
the effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.3(e) (or any successor provision) to the
Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at
offices of such institution in the United States. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan made on or after the
Amendment Effective Date shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin applicable on such day plus the London
Interbank Offered Rate applicable for such Interest Period. Such
interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined
in accordance with the Pricing Schedule.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum
at which deposits in Dollars are offered to each of the
Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business
Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Euro-Dollar
Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such
Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for each
day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin applicable on such day plus the London
Interbank Offered Rate applicable to such Loan for such day and
(ii) the Euro-Dollar Margin applicable on such day plus the
average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than
one month as the Administrative Agent may select) deposits in
Dollars in an amount approximately equal to such overdue payment
due to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank market
for the applicable period determined as provided above (or, if
the circumstances described in clause (a) or (b) of Section 8.01
shall exist, at a rate per annum equal to the sum of 2% plus the
rate applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the London Interbank Offered
Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money
Market Margin quoted by the Bank making such Loan in accordance
with Section 2.03. Each Money Market Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than three months, at intervals of
three months after the first day thereof. Any overdue principal
of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Base Rate for such day.
(f) The Administrative Agent shall determine each
interest rate applicable to the Loans hereunder. The
Administrative Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence
of manifest error.
(g) Each Reference Bank agrees to use its best efforts
to furnish quotations to the Administrative Agent as contemplated
hereby. If any Reference Bank does not furnish a timely
quotation, the Administrative Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of
Section 8.01 shall apply.
SECTION 2.08. FEES. (a) COMMITMENT FEES. The
Company shall pay to the Administrative Agent for the account of
the Banks ratably in proportion to their Commitments a commitment
fee at the Commitment Fee Rate (determined daily in accordance
with the Pricing Schedule) on the daily amount by which the
aggregate amount of the Commitments exceeds the aggregate
outstanding principal amount of the Loans. Such commitment fees
shall accrue from and including the Amendment Effective Date to
but excluding the Termination Date and shall be payable quarterly
on each January 15, April 15, July 15 and October 15, commencing
on the first such date after the Amendment Effective Date, and
upon the earlier of the Termination Date or the date of
termination of the Commitments in their entirety.
(b) PARTICIPATION FEES. On the Amendment Effective
Date, the Company shall pay to the Administrative Agent (i) for
the account of each of the Co-arrangers a fee equal to .08% of
such Co-arranger's Commitment and (ii) for the account of each
Bank that is not a Co-arranger a fee equal to .05% of such Bank's
Commitment.
(c) FACILITY FEE. The Company shall pay to the
Administrative Agent for the account of the Banks ratably a
facility fee at the Facility Fee Rate (determined daily in
accordance with the Pricing Schedule). Such facility fee shall
accrue (i) from and including the Amendment Effective Date to but
excluding the Termination Date (or earlier date of termination of
the Commitments in their entirety), on the daily aggregate amount
of the Commitments (whether used or unused) and (ii) from and
including the Termination Date or such earlier date of
termination to but excluding the date the Loans shall be repaid
in their entirety, on the daily aggregate outstanding principal
amount of the Loans. Accrued facility fees under this subsection
(c) shall be payable quarterly on each January 15, April 15, July
15 and October 15, commencing on the first such date after the
Amendment Effective Date and upon the date of termination of the
Commitments in their entirety (and, if later, the date the Loans
shall be repaid in their entirety).
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF
COMMITMENTS. The Company may, upon at least three Domestic
Business Days' notice to the Administrative Agent, (i) terminate
the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate
amount of $25,000,000 or any larger multiple of $5,000,000 the
unused portions of the Commitments. If the Commitments are
terminated in their entirety, all accrued commitment fees shall
be payable on the effective date of such termination.
SECTION 2.10. SCHEDULED TERMINATION OF COMMITMENTS.
The Commitments shall terminate on the Termination Date, and any
Loans then outstanding (together with accrued interest thereon)
shall be due and payable on such date.
SECTION 2.11. OPTIONAL PREPAYMENTS. (a) A Borrower
may, upon at least one Domestic Business Days' notice to the
Administrative Agent, prepay any Base Rate Borrowing (or any
Money Market Borrowing bearing interest at the Base Rate pursuant
to Section 8.01(a)) in whole at any time, or from time to time in
part in amounts aggregating $10,000,000 or any larger multiple of
$1,000,000 by paying the principal amount to be prepaid together
with accrued interest thereon to but excluding the date of
prepayment. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such
Borrowing. Upon receipt of a notice of prepayment pursuant to
this subsection (a), the Administrative Agent shall promptly
notify each Bank of the contents thereof and of such Bank's
ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
(b) A Borrower may, upon at least seven Euro-Dollar
Business Days' notice to the Administrative Agent, prepay any CD
Borrowing or Euro-Dollar Borrowing in whole at any time by paying
the principal amount to be prepaid together with accrued interest
thereon to but excluding the date of prepayment; PROVIDED that
the Company shall reimburse each Bank for any loss or expense
incurred by it as a result of such prepayment pursuant to Section
2.13. A Borrower may include in any notice of prepayment
delivered to the Administrative Agent pursuant to this subsection
(b) a request that each Bank submit to the Borrower a reasonable
estimate of the amount of any loss or expense expected to be
incurred by it as a result of such prepayment. Upon receipt of a
notice of prepayment pursuant to this subsection (b), the
Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of
such prepayment. If a Borrower shall have requested an estimate
of losses and expenses to be incurred by the Banks in connection
with any prepayment pursuant to this subsection (b), then at
least four Euro-Dollar Business Days prior to the date of such
proposed prepayment, each Bank shall notify the Administrative
Agent of the estimated amount of the losses and expenses to be
incurred by such Bank; PROVIDED, HOWEVER, that no such estimate
shall be binding on any Bank nor shall any such estimate or the
failure to provide any such estimate by such fourth Euro-Dollar
Business Day affect the obligation of the Borrower to reimburse
any Bank pursuant to, and to the extent provided in, Section 2.13
for the amount of any such losses or expenses incurred as a
result of such prepayment. Upon receipt of any Bank's estimate
of losses or expenses pursuant to this subsection (b), the
Administrative Agent shall promptly notify the Borrower of the
contents thereof. Unless the Borrower notifies the
Administrative Agent at least three Euro-Dollar Business Days
before the date of any proposed prepayment pursuant to this
subsection (b) for which a notice of prepayment has previously
been given that it elects not to prepay the relevant CD Borrowing
or Euro-Dollar Borrowing on such date, such notice of prepayment
shall not thereafter be revocable by the Borrower.
(c) Except as provided in subsection (a) of this
Section, no Borrower may prepay all or any portion of the
principal amount of any Money Market Loan prior to the maturity
thereof.
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS. (a)
All Payments to be made by the Borrowers shall be made not later
than 11:00 A.M. (New York City time) on the date when due, in
Federal or other funds immediately available in New York City, to
the Administrative Agent at its address referred to in Section
10.01. The Administrative Agent will promptly distribute to each
Bank its ratable share of each such Payment received by the
Administrative Agent for the account of the Banks.
(b) Whenever any Payment of principal of, or interest
on, the Domestic Loans or of fees shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall
be extended to the next succeeding Domestic Business Day.
Whenever any Payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day, unless
such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any Payment of
principal of, or interest on, the Money Market Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any Payment of
principal, interest, fees or other amounts payable hereunder is
extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(c) Unless the Administrative Agent shall have
received notice from a Borrower prior to the date on which any
Payment is due from such Borrower to the Banks hereunder that
such Borrower will not make such Payment in full, the
Administrative Agent may assume that such Borrower has made such
Payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Bank on such due date an amount equal
to the amount then due such Bank from such Borrower. If and to
the extent that such Borrower shall not have so made such
Payment, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank together
with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.13. FUNDING LOSSES. If (x) a Borrower makes
any Payment of principal with respect to any Fixed Rate Loan
(pursuant to Article II, VI or VIII or clause (ii) or (iii) of
the definition of Termination Date or otherwise) or (y) any
Assignee purchases the Notes of any Bank pursuant to Section
2.17(c) or 8.05 in either case on any day other than the last day
of the Interest Period applicable thereto or to any Loan
evidenced by such Notes, as the case may be (or, in the case of
clause (x), on any day other than the end of an applicable period
fixed pursuant to Section 2.07(d)), or, in the case of any
Payment pursuant to clause (ii) or (iii) of the definition of
Termination Date, on any day other than the last day of the
Interest Period applicable thereto (determined, for this sentence
only, as if the definition of Termination Date did not contain
either such clause) or if a Borrower fails to borrow or prepay
any Fixed Rate Loans then, in each case, after notice has been
given to any Bank in accordance with Section 2.04(a) or 2.11,
such Borrower shall reimburse each Bank (or the transferor Bank
in the case of a purchase of the Notes thereof pursuant to
Section 2.17(c) or 8.05) within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to
borrow, PROVIDED that such Bank shall have delivered to such
Borrower a certificate in reasonable detail as to the amount of
such loss or expense, which certificate shall be conclusive in
the absence of manifest error.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES.
Interest based on the Prime Rate and commitment and facility fees
hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of
days elapsed (including the first day but excluding the last
day). All other interest shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
SECTION 2.15. REGULATION D COMPENSATION. For so long
as any Bank maintains reserves against "Eurocurrency liabilities"
(or any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such
Bank to United States residents), and as a result the cost to
such Bank (or its Euro-Dollar Lending Office) of making or
maintaining any of its Euro-Dollar Loans is increased, then such
Bank may require the Borrower of such Euro-Dollar Loans to pay,
contemporaneously with each payment of interest on the
Euro-Dollar Loans of such Borrower, additional interest on the
related Euro-Dollar Loan of such Bank at a rate per annum
determined by such Bank up to but not exceeding the excess of (i)
(A) the applicable London Interbank Offered Rate divided by (B)
one MINUS the Euro-Dollar Reserve Percentage over (ii) the
applicable London Interbank Offered Rate. Any Bank wishing to
require payment of such additional interest (x) shall so notify
such Borrower and the Administrative Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank shall
be payable to such Bank at the place indicated in such notice
with respect to each Interest Period commencing at least five
Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to such Borrower at least five Euro-Dollar Business
Days prior to each date on which interest is payable on the
Euro-Dollar Loans an officer's certificate setting forth the
amount to which such Bank is then entitled under this Section
2.15 (which amount shall be consistent with such Bank's good
faith estimate of the level at which the related reserves are
maintained by it and with any such amounts required by such Bank
to be paid by similarly situated borrowers which are parties to
credit or loan documentation containing a provision similar to
this Section 2.15). Each such certificate shall be accompanied
by such information as such Borrower may reasonably request as to
the computation set forth therein.
SECTION 2.16. JUDGMENT CURRENCY. If for the purposes
of obtaining judgment in any court (including the entry thereof),
it is necessary to convert a Payment due from any Borrower
hereunder or under the Notes in Dollars into another currency,
the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures the
Administrative Agent could purchase Dollars with such other
currency at the Administrative Agent's New York office on the
Domestic Business Day preceding that on which final judgment is
given. The obligations of each Borrower in respect of any sum
due to any Bank or either Agent hereunder or under any Note
shall, notwithstanding any judgment in a currency other than
Dollars, be discharged only to the extent that on the Domestic
Business Day following receipt by such Bank or such Agent, as the
case may be, of any sum adjudged to be so due in such other
currency such Bank or such Agent, as the case may be, may in
accordance with normal banking procedures purchase Dollars with
such other currency; if the amount of Dollars so purchased is
less than the sum originally due to such Bank or such Agent, as
the case may be, in Dollars, each Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation
and notwithstanding any such judgment, to indemnify such Bank or
such Agent, as the case may be, against such loss, and if the
amount of Dollars so purchased exceeds the sum originally due to
such Bank or such Agent, as the case may be, in Dollars, such
Bank or such Agent, as the case may be, agrees to remit such
excess to the appropriate Borrower.
SECTION 2.17. WITHHOLDING TAX EXEMPTION. (a) On or
prior to the Amendment Effective Date, each Bank that is not
incorporated under the laws of the United States of America or a
state thereof agrees that it will deliver to each of the Company
and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Bank is entitled to receive Payments
without deduction or withholding of any United States federal
income tax. Each Bank which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Company and the
Administrative Agent two additional copies of such form (or a
successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Company or the Administrative Agent,
in each case certifying that such Bank is entitled to receive
Payments without deduction or withholding of any United States
federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Company and the
Administrative Agent that it is not capable of receiving Payments
without any deduction or withholding of United States federal
income tax.
(b) If at any time the Applicable Lending Office of
any Bank becomes unable to receive any Payment without deduction
or withholding of United States federal income tax, such Bank
shall thereupon designate as its Applicable Lending Office one of
its offices (if any) which can receive all Payments thereafter
due to it without withholding or deduction for United States
federal income tax if such Bank can, in its judgment, do so
without suffering any disadvantage.
(c) If no designation pursuant to subsection (b) of
this Section will result at the time of designation in the
designating Bank being able to receive all Payments thereafter
due to it without deduction or withholding of United States
federal income tax, the Company shall have the right, upon 20
Business Days' prior notice to such Bank, to cause one or more
banks (which may be one or more of the Banks), each such bank
(except any Bank) to be reasonably satisfactory to the Required
Banks (determined for this purpose as if such Bank had no
Commitment and held no Notes hereunder) and, in each case, with
the written acknowledgement of the Administrative Agent, to
purchase the Notes and assume the Commitment of the transferor
Bank pursuant to an Assignment and Assumption Agreement, in
substantially the form of Exhibit D hereto (an "Assignment and
Assumption Agreement"). If one or more such banks are identified
by the Company and, if required pursuant to this subsection (c),
approved as being reasonably satisfactory to the Required Banks
(determined as provided above), the transferor Bank shall consent
to such sale and assumption by executing and delivering an
Assignment and Assumption Agreement. Upon execution and delivery
of an Assignment and Assumption Agreement by the Company, the
transferor Bank, the Assignee, the Administrative Agent and, if
required pursuant to this subsection (c), the Required Banks
(determined as provided above) and payment by the Assignee to the
transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee
shall become a Bank party to this Agreement (if it is not already
a party hereto) and shall have all the rights and obligations of
a Bank with a Commitment (which, if such Assignee is already a
party hereto, shall take into account such Assignee's then
existing Commitment hereunder) as set forth in such Assignment
and Assumption Agreement and the transferor Bank shall be
released from its obligations hereunder and no further consent or
action by any other Person shall be required. Upon the
consummation of any assignment pursuant to this subsection (c),
the transferor Bank, the Administrative Agent and the Borrowers
shall make appropriate arrangements so that, if required, new
Notes are issued to the Assignee. In the event that the
Administrative Agent, in its capacity as a Bank, is required to
sell its Note or Notes and its Commitment hereunder pursuant to
this subsection (c), the Administrative Agent shall, promptly
upon the consummation of any assignment by it pursuant to this
subsection (c), resign as Administrative Agent hereunder and the
Company shall (subject to the consent of the Required Banks) have
the right to appoint another Co-arranger as successor
Administrative Agent, all in accordance with Section 7.08.
(d) Each Bank that is required to deliver a Form 1001
or 4224 pursuant to subsection (a) of this Section or Section
10.05(d) hereby indemnifies each Borrower and the Administrative
Agent and holds each Borrower and the Administrative Agent
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, any Tax and the reasonable fees and disbursements of
counsel, which may be incurred by such Borrower or the
Administrative Agent, as the case may be, in connection with, or
arising out of, any action taken, or omitted to be taken, by it
in good faith and in reliance on any erroneous information
provided by such Bank in such Form or Forms so delivered.
SECTION 2.18. TAXES. (a) Each Payment by each
Borrower shall be made without deduction or withholding of any
Foreign Tax, PROVIDED that if a Borrower is required by law to
deduct or withhold a Foreign Tax from a Payment, it will:
(i) pay, together with that first Payment, a
second Payment sufficient to ensure that the sum of the
two Payments, after all withholdings and deductions
from both, will be equal to the amount of the first
Payment originally provided for in this Agreement;
(ii) pay the full amount deducted or withheld from
both Payments to the relevant taxation or other
authorities within the time allowed under applicable
law; and
(iii) furnish within 45 days thereafter to the
Administrative Agent, the official receipt or receipts
from the relevant taxation or other authorities for the
full amount so deducted or withheld or other
documentary evidence of the deduction or withholding
reasonably satisfactory to the Bank to which such
Payments were made.
(b) Each Borrower will pay (i) any Foreign Tax imposed
on a Bank, other than by deduction or withholding, and (ii) any
Domestic Tax imposed on a Bank, in each case, to the extent that
such Tax results from such Bank receiving or becoming entitled to
reimbursement from such Borrower pursuant to this Section 2.18.
Each Borrower shall furnish to the Administrative Agent, within
45 days after any payment pursuant to this subsection (b), the
official receipt or receipts from the relevant taxation or other
authorities for the full amount of any Foreign Tax so paid or
other documentary evidence of such payment reasonably
satisfactory to such Bank. If any Tax to be paid by a Borrower
pursuant to this Section 2.18 is imposed on and paid by any Bank,
such Borrower shall, upon the request of such Bank and whether or
not such Tax shall have been correctly or legally imposed,
reimburse such Bank therefor (together with any expenses
reasonably incurred by such Bank in connection therewith in any
contest thereof requested by such Borrower) plus interest thereon
at the rate applicable to Base Rate Loans pursuant to the first
sentence of Section 2.07(a). If any Bank reimbursed by a
Borrower pursuant to this subsection (b) thereafter receives any
amount with respect to a Tax for which it has been so reimbursed
such Bank shall thereupon pay such amount over to such Borrower
(without interest except to the extent that such Bank receives
interest with respect to a repayment or refund of such Tax) to
the extent such amount was received by such Bank because such Tax
was erroneously imposed.
(c) OIN agrees not to designate any Borrowing pursuant
to this Agreement as a liability of a trade or business conducted
within the United States pursuant to the amendments to Section
1.884-4T(b)(1)(i)(B) of the regulations under Section 884 of the
Internal Revenue Code described in Section I, Part 2 of Notice
89-80 dated July 6, 1989 issued by the United States Internal
Revenue Service or pursuant to any other statute, regulation or
administrative ruling permitting such a designation.
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS. This Agreement shall
become effective on the date that each of the following
conditions shall have been satisfied (or waived in accordance
with Section 10.04):
(a) receipt by the Documentation Agent of
counterparts of this Amended Agreement signed by each
of the parties hereto (or, in the case of any party as
to which an executed counterpart shall not have been
received, receipt by the Documentation Agent in form
satisfactory to it of telegraphic, telex, facsimile or
other written confirmation from such party of the
execution of a counterpart of this Amended Agreement by
such party);
(b) receipt by the Documentation Agent for the
account of each Bank of a duly executed Note of each
Borrower dated on or before the Amendment Effective
Date complying with the provisions of Section 2.05;
(c) receipt by the Documentation Agent of an
opinion of Proskauer Rose Goetz & Mendelsohn, special
counsel for the Borrowers, dated the Amendment
Effective Date and addressed to the Banks and the
Agents, substantially in the form of Exhibit C-1 hereto
and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(d) receipt by the Documentation Agent of an
opinion of Samuel M. Rosenbloom, Esq., Senior Vice
President of Maritime Overseas Corporation and counsel
for the Borrowers, dated the Amendment Effective Date
and addressed to the Banks and the Agents,
substantially in the form of Exhibit C-2 hereto and
covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(e) receipt by the Documentation Agent of an
opinion of Davis Polk & Wardwell, special counsel for
the Agents, dated the Amendment Effective Date and
addressed to the Banks and the Agents, substantially in
the form of Exhibit C-3 hereto and covering such
additional matters relating to the transactions
contemplated hereby as the Required Banks may
reasonably request;
(f) the fact that (i) no Default (as defined in
the Existing Agreement) and no Default (as defined in
this Amended Agreement) shall have occurred and be
continuing and (ii) the representations and warranties
of the Borrowers contained in this Amended Agreement
shall be true on and as of the Amendment Effective Date
and the Documentation Agent shall have received
certificates signed by the President or the chief
financial officer or chief accounting officer of each
of the Borrowers, dated the Amendment Effective Date,
to the effect of the foregoing;
(g) receipt by the Administrative Agent on or
prior to the Amendment Effective Date for the account
of the Co-arrangers and the other Banks, of the fees
payable under Section 2.08(b);
(h) receipt by the Documentation Agent of a duly
executed copy of the acceptance by North American Ship
Agencies, Inc. of its appointment as agent for service
of process for OIN pursuant to Section 10.07 dated on
or prior to the Amendment Effective Date, in
substantially the form of Exhibit E hereto;
(i) receipt by the Documentation Agent of confirmation
from each of the Company and the Administrative Agent of
receipt by it of the forms, if any, required to be delivered
under Section 2.17 on or prior to the Amendment Effective
Date;
(j) the fact that on the Amendment Effective Date
the principal amount of, and accrued interest on, all
outstanding loans under the Existing Agreement and all
other amounts payable by the Company and its
Subsidiaries and Affiliates thereunder shall have been
paid in full, the commitment of each bank or other
lender thereunder shall have been terminated and the
Administrative Agent shall have received a certificate
signed by the President or chief financial officer or
chief accounting officer of the Company as to the
foregoing (it being understood that satisfaction of
this condition (j) may occur simultaneously with the
first Borrowing hereunder if all other conditions
contained in this Section 3.01 and in Section 3.03 are
first satisfied);
(k) receipt by the Administrative Agent of
evidence satisfactory to it of the existence and
effectiveness of the insurance required to be
maintained by the Company, its Subsidiaries and its
Joint Ventures (other than Uncontrolled Joint Ventures)
pursuant to the last sentence of Section 5.03(b);
(l) receipt by each Bank at least three Domestic
Business Days prior to the Amendment Effective Date of a
copy of the Note Agreement referred to in the definition of
"Attributable Debt" contained in Section 1.01 hereof,
certified as to the accuracy and completeness thereof by the
Secretary or an Assistant Secretary of the Borrower; and
(m) receipt by the Documentation Agent of all
documents, opinions and other instruments it may
reasonably request relating to the existence of each of
the Borrowers, the corporate authority for and the
validity and enforceability of this Amended Agreement
and the Notes and any other matters relevant hereto,
all in form and substance satisfactory to the
Documentation Agent;
PROVIDED that this Amended Agreement shall not become effective
or be binding on any party hereto unless all of the foregoing
conditions are satisfied not later than November 22, 1994. The
Documentation Agent shall promptly notify the Borrowers, the
Banks and the Administrative Agent of the Amendment Effective
Date, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. CONSEQUENCES OF EFFECTIVENESS. (a) On
the Amendment Effective Date the Existing Agreement will be
automatically amended to read as this Amended Agreement reads.
(b) On and after the Amendment Effective Date, the
rights and obligations of the parties hereto shall be governed by
the provisions of this Amended Agreement, and the rights and
obligations of the parties under the Existing Agreement with
respect to the period prior to the Amendment Effective Date shall
continue to be governed by the provisions thereof as in effect
prior to the Amendment Effective Date except that (i) all loans
outstanding under the Existing Agreement shall be due and payable
on the Amendment Effective Date, (ii) all interest and commitment
fees accrued to but not including the Amendment Effective Date
and all other amounts owing by the Borrowers or any of them under
the Existing Agreement shall be due and payable on the Amendment
Effective Date and (iii) the commitment of each non-continuing
bank under the Existing Agreement shall terminate on the
Amendment Effective Date.
SECTION 3.03. BORROWINGS. The obligation of any Bank
to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a
Notice of Borrowing as required by Section 2.02 or
2.03, as the case may be;
(b) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the aggregate amount of
the Commitments;
(c) the fact that, immediately before and after
such Borrowing, no Default shall have occurred and be
continuing; and
(d) the fact that the representations and
warranties of the Borrowers contained in this Agreement
(except, in the case of a Refunding Borrowing, the
representations and warranties set forth in Sections
4.04(f) and 4.05 as to any matter which has theretofore
been disclosed in writing by the Company to the Banks)
shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation
and warranty by the Borrower on the date of such Borrowing as to
the facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrowers jointly and severally represent and
warrant that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. Each of
the Borrowers is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL
AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Borrower of this Agreement and its Notes are
within such Borrower's corporate powers, have been duly
authorized by all necessary corporate action, require no action
by or in respect of, or filing with (except for disclosure in
periodic filings made by the Company with the Securities and
Exchange Commission), any governmental body, agency or official
and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate
of incorporation or by-laws of such Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon such Borrower or any of its assets or result in the creation
or imposition of any Lien on any asset of such Borrower or any of
its Subsidiaries.
SECTION 4.03. BINDING EFFECT. This Agreement
constitutes a valid and binding agreement of each Borrower and
the Notes of each Borrower, when executed and delivered in
accordance with this Agreement, will constitute valid and binding
obligations of such Borrower, in each case enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally or by
equitable principles of general applicability.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of December 31, 1993 and the
related consolidated statements of income and retained earnings
and cash flows for the fiscal year then ended, reported on by
Ernst & Young and set forth in the Company's 1993 Form 10-K, a
copy of which has been delivered to each of the Banks, present
fairly, in all material respects in conformity with generally
accepted accounting principles, the consolidated financial
position of the Company and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash
flows for such fiscal year.
(b) The unaudited consolidated balance sheets of the
Company and its Consolidated Subsidiaries as of March 31, 1994
and June 30, 1994 and the related unaudited consolidated
statements of income and retained earnings and cash flows for the
periods then ended, set forth in the Company's quarterly reports
for the respective Fiscal Quarters then ended, as filed with the
Securities and Exchange Commission on Form 10-Q, copies of which
have been delivered to each of the Banks, present fairly, in all
material respects in conformity with all applicable rules and
regulations promulgated by the Securities and Exchange Commission
with respect to interim financial statements, the consolidated
financial position of the Company and its Consolidated
Subsidiaries as of such dates and their consolidated results of
operations and cash flows for such periods (subject to normal
year-end adjustments).
(c) The unaudited consolidated balance sheet of OBS
and its Consolidated Subsidiaries as of December 31, 1993 and the
related consolidated statements of income and retained earnings
and cash flows for the fiscal year then ended, copies of which
have been delivered to each of the Banks, have been derived on a
reasonable basis from the consolidated financial statements of
the Company and its Consolidated Subsidiaries referred to in
subsection (a) above and, except for the omission of footnotes,
present fairly, in all material respects in conformity with
generally accepted accounting principles, the consolidated
financial position of OBS and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash
flows for such fiscal year.
(d) The unaudited consolidated balance sheet of OIN
and its Consolidated Subsidiaries as of December 31, 1993 and the
related consolidated statements of income and retained earnings
and cash flows for the fiscal year then ended, copies of which
have been delivered to each of the Banks, have been derived on a
reasonable basis from the consolidated financial statements of
the Company and its Consolidated Subsidiaries referred to in
subsection (a) above and, except for the omission of footnotes,
present fairly, in all material respects in conformity with
generally accepted accounting principles, the consolidated
financial position of OIN and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash
flows for such fiscal year.
(e) As of December 31, 1993 and the Amendment
Effective Date, there are no Guaranteed Persons.
(f) Since June 30, 1994, there has been no Material
Adverse Change.
SECTION 4.05. LITIGATION. There is no action, suit or
proceeding pending against, or to the knowledge of any of the
Borrowers threatened against or affecting, the Company or any of
its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could result
in a Material Adverse Change or which in any manner draws into
question the validity or enforceability of this Agreement or any
of the Notes.
SECTION 4.06. COMPLIANCE WITH ERISA. Neither any
member of the ERISA Group nor any ERISA Affiliate, individually
or collectively, has incurred, or reasonably expects to incur,
Withdrawal Liabilities or liabilities upon the happening of a
Termination Event the aggregate of which for all such Withdrawal
Liabilities and other liabilities exceeds or would exceed
$30,000,000. With respect to any Plan, neither the Company nor
any ERISA Affiliate is aware of or has been notified that any
"variance" from the "minimum funding standard" has been requested
(each such term as defined in Part 3, Subtitle B, of Title I of
ERISA). No member of the ERISA Group nor any ERISA Affiliate has
received any notice that any Multiemployer Plan is in
reorganization, within the meaning of Title IV of ERISA, which
reorganization could have a material adverse effect on the
consolidated financial condition of the Company and its
Consolidated Subsidiaries, taken as a whole.
SECTION 4.07. ENVIRONMENTAL MATTERS. The Company and
each of its Subsidiaries is in compliance with all applicable
Environmental Laws, except where non-compliance with such
Environmental Laws could not have a material adverse effect on
the consolidated financial condition of the Company and its
Consolidated Subsidiaries, taken as a whole, after taking into
account any insurance coverage available to the Company or any of
its Subsidiaries under existing policies with respect to any
potential liability resulting from such non-compliance.
SECTION 4.08. TAXES. United States Federal income tax
returns of the Company and its Subsidiaries have been examined
and closed through the fiscal year ended December 31, 1980. The
Company and its Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns which are
required to be filed by them and have paid all material taxes due
pursuant to such returns or pursuant to any assessment received
by the Company or any Subsidiary of the Company, other than taxes
which are being contested in good faith by appropriate
proceedings. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Company, adequate
in all material respects.
SECTION 4.09. SUBSIDIARIES. (a) Each of the
Company's corporate Material Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
(b) There are no Non-Recourse Subsidiaries as of the
Amendment Effective Date.
SECTION 4.10. NOT AN INVESTMENT COMPANY. None of the
Borrowers is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE V
COVENANTS
The Borrowers jointly and severally agree that, so long
as any Bank has any Commitment hereunder or any amount payable
under any Note remains unpaid:
SECTION 5.01. INFORMATION. The Company (or, in the
case of clauses (g), (k) and (l) below, each Borrower) will
deliver to each of the Banks:
(a) as soon as available and in any event within 120
days after the end of each fiscal year of the Company, (i) a
consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income and
retained earnings and cash flows for such fiscal year,
setting forth in each case in comparative form the figures
for the previous fiscal year, complying in all material
respects with all applicable rules and regulations
promulgated by the Securities and Exchange Commission, all
reported on by Ernst & Young or other independent public
accountants of nationally recognized standing and (ii) an
unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of the end of such fiscal year and the
related unaudited consolidated statements of income and
retained earnings and cash flows for such fiscal year,
setting forth in each case in comparative form the figures
for the previous fiscal year, together with a letter from
the independent public accountants referred to in the
foregoing clause (i) confirming the mathematical accuracy of
such financial statements and the derivation thereof on a
reasonable basis from the audited financial statements
referred to in clause (i);
(b) as soon as available and in any event within 60
days after the end of each of the first three Fiscal
Quarters of each fiscal year of the Company (i) an unaudited
consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such Fiscal
Quarter and the related unaudited consolidated statements of
income and retained earnings and cash flows for such Fiscal
Quarter and for the portion of the Company's fiscal year
ended at the end of such Fiscal Quarter, setting forth in
each case in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion
of the Company's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of
presentation and compliance in all material respects with
all applicable rules and regulations of the Securities and
Exchange Commission with respect to interim financial
statements and consistency by the chief financial officer or
the chief accounting officer of the Company and (ii) an
unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of the end of such Fiscal Quarter and the
related unaudited consolidated statements of income and
retained earnings and cash flows for such Fiscal Quarter and
for the portion of the Company's fiscal year ended at the
end of such Fiscal Quarter, setting forth in each case in
comparative form the figures for the corresponding Fiscal
Quarter and the corresponding portion of the Company's
previous fiscal year, together with a certificate of the
chief financial officer or chief accounting officer of the
Company as to the derivation of such financial statements
from the financial statements referred to in clause (i) of
this subsection (b);
(c) as soon as available and in any event within 150
days after the end of each fiscal year of the Company, an
unaudited consolidated balance sheet of OBS and its
Consolidated Subsidiaries and an unaudited consolidated
balance sheet of OIN and its Consolidated Subsidiaries, in
each case as of the end of such fiscal year, and the related
unaudited consolidated statements of income and retained
earnings and cash flows for such fiscal year, all in
reasonable detail and certified as to derivation on a
reasonable basis from the consolidated financial statements
of the Company and its Consolidated Subsidiaries referred to
in clause (a)(i) and, except for the omission of footnotes,
fairness of presentation and conformity in all material
respects with generally accepted accounting principles by
the chief financial officer or chief accounting officer of
OBS or OIN, as the case may be;
(d) (i) as soon as available and in any event within
120 days after the end of each fiscal year of each
Guaranteed Person, an audited balance sheet of such
Guaranteed Person as of the end of such fiscal year,
reported on by independent public accountants of nationally
recognized standing or, if such Guaranteed Person does not
regularly prepare an audited balance sheet in the ordinary
course of its business, an unaudited balance sheet of such
Guaranteed Person as of the end of such fiscal year,
together with a certificate of the chief financial officer
or chief accounting officer of the Company to the effect
that (x) in the case of any Guaranteed Person, the books and
records of which are maintained by, and the financial
statements of which are prepared by, the Company, any
Subsidiary of the Company or any Joint Venture (other than
an Uncontrolled Joint Venture) or the Shipping Manager or
any Successor of the Shipping Manager, in either case acting
as agent for the Company or any Subsidiary of the Company,
such balance sheet presents fairly, in all material respects
in conformity with generally accepted accounting principles
consistently applied, the financial position of such
Guaranteed Person as of the end of such fiscal year and (y)
in any other case, none of the Borrowers has any actual
knowledge that such balance sheet does not present fairly,
in all material respects in conformity with generally
accepted accounting principles consistently applied, the
financial position of such Guaranteed Person as of the end
of such fiscal year and (ii) as soon as practicable and in
any event within 60 days after the end of each fiscal
quarter of each Guaranteed Person, a certificate of the
chief financial officer or chief accounting officer of the
Company setting forth in reasonable detail the amounts and
calculations required to determine the amount of Guaranteed
Current Liabilities of such Guaranteed Person as of the last
day of such fiscal quarter;
(e) simultaneously with the delivery of each set of
financial statements referred to in clauses (a)(i) and
(b)(i) above, a certificate of the Company executed by its
chief financial officer or chief accounting officer (i)
setting forth in reasonable detail the calculations required
to establish whether the covenants set forth in Sections
5.07, 5.08, 5.09(b), 5.16, 5.17, 5.18, 5.19 and 5.20 were
complied with on the date of such financial statements, (ii)
stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth
the details thereof and the action which the Company is
taking or proposes to take with respect thereto and (iii)
(x) if the Company or any Subsidiary of the Company has made
any Investment in any Non-Shipping Person equal to or
greater than $10,000,000 or any purchase or other
acquisition of any Non-Shipping Asset or Non-Shipping Assets
having an aggregate purchase price equal to or greater than
$10,000,000, in each case, in one transaction or a series of
related transactions during the Fiscal Quarter ended on the
date of such financial statements, setting forth in
reasonable detail, to the extent required to establish
whether the covenant set forth in the first sentence of
Section 5.04 was complied with on the date of the last such
Investment, purchase or acquisition made during such Fiscal
Quarter, the applicable pro forma adjustments to the
consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of the end of the preceding
Fiscal Quarter, reflecting the consummation of such last
transaction (and any other purchases or acquisitions of
Non-Shipping Assets and Investments in Non-Shipping Persons
that shall have occurred after the date of such consolidated
balance sheet and on or prior to the date of such last
transaction) or (y) if neither the Company nor any
Subsidiary of the Company has made an Investment, purchase
or other acquisition described in subclause (x) of this
clause (iii) during such Fiscal Quarter, stating the
foregoing;
(f) simultaneously with the delivery of each set of
financial statements referred to in clause (a)(i) above, a
statement of the firm of independent public accountants
which reported on such statements (i) whether anything has
come to their attention to cause them to believe that the
Company and its Subsidiaries were not in compliance with any
of the covenants set forth in Section 5.07, 5.08, 5.09(b),
5.16, 5.17, 5.18, 5.19 or 5.20 on the date of such
statements and (ii) confirming the calculations set forth in
the officer's certificate delivered simultaneously therewith
pursuant to clause (e) above or, with respect to the
calculations required to derive the amount referred to in
the covenants set forth in Section 5.17, verifying the
mathematical accuracy of such calculations and comparing
Consolidated Net Income for each of the relevant Fiscal
Quarters with the consolidated income statement of the
Company and its Consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such Fiscal Quarter;
(g) within three Domestic Business Days after the date
on which any executive officer of any Borrower obtains
knowledge of (i) any Default, if such Default is then
continuing, (ii) a Material Adverse Change or any action,
suit or proceeding of the type referred to in Section 4.05
or (iii) an Unapproved Takeover, a certificate of the chief
financial officer or the chief accounting officer of such
Borrower setting forth the details thereof and the action
which such Borrower is taking or proposes to take with
respect thereto;
(h) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(i) promptly (x) upon the filing thereof, copies of
all registration statements (other than the exhibits thereto
and any registration statements on Form S-8 or its
equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Company shall have filed with
the Securities and Exchange Commission and (y) upon receipt
thereof, copies of each Schedule 13D or Schedule 13G (or any
successor form) or any amendment thereto disclosing the
acquisition by any person or group of persons (within the
meaning of Section 13 or 14 of the Exchange Act) of
Beneficial Ownership of 5% (or such other percent as shall
result in such person or group of persons having Beneficial
Ownership of 5%) or more of any class of equity securities
of the Company or any of its Subsidiaries or Affiliates
which is registered pursuant to Section 12 of the Exchange
Act;
(j) as soon as possible, (i) copies of all reports and
notices which the Company or any of its Subsidiaries files
under ERISA with the Internal Revenue Service or the PBGC or
the U.S. Department of Labor or the sponsor of a
Multiemployer Plan or which the Company or any of its
Subsidiaries receives from the PBGC or the sponsor of a
Multiemployer Plan relating to (a) any Termination Event and
(b) with respect to a Multiemployer Plan, any Withdrawal
Liability, any actual or expected reorganization (within the
meaning of Title IV of ERISA), any termination of a
Multiemployer Plan (within the meaning of Title IV of ERISA)
and (ii) a certificate of the chief financial officer or
chief accounting officer of the Company setting forth in
reasonable detail the calculation of the amount (to the
extent then reasonably determinable) of any liability in
connection with the foregoing;
(k) at least 10 Domestic Business Days prior to (i)
any consolidation or merger of or with the Company, OBS or
OIN or (ii) any sale, lease (other than chartering in the
ordinary course of business, which shall not include
bareboat chartering for periods in excess of 10 years) or
other transfer (including without limitation by means of a
merger or consolidation of any Subsidiary of the Company
(other than OBS and OIN) with or into any other Person) of
all or substantially all of the assets of the Company and
its Consolidated Subsidiaries, considered as a whole, notice
thereof, which notice shall describe in reasonable detail
the contemplated consolidation, merger, sale, lease or other
transfer;
(l) promptly after any officer of the Company becomes
aware of any change in the rating by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group of the
Company's publicly-traded senior unsecured long-term debt
securities, notice of such change; and
(m) from time to time such additional information
regarding the financial position, results of operations,
business or prospects of the Company and its Subsidiaries as
the Administrative Agent, at the request of any Bank, may
reasonably request.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The Company
will pay and discharge, and will cause each of its Material
Subsidiaries to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will
maintain, and will cause each of its Subsidiaries to maintain, in
accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE. (a)
The Company will keep, and will cause each of its Material
Subsidiaries to keep, all material property useful and necessary
in its business in good working order and condition, ordinary
wear and tear excepted.
(b) The Company will maintain, will cause each of its
Subsidiaries and each Joint Venture (other than any Uncontrolled
Joint Venture) to maintain, and will use reasonable efforts to
cause each Uncontrolled Joint Venture to maintain, with
financially sound and reputable insurance companies (which may
include protection and indemnity clubs) (i) in the case of the
Company or any Subsidiary of the Company or any Joint Venture
which engages in any oil or oil-related business (including any
business in products related to oil), including without
limitation, owning, leasing or chartering any ship engaged in the
transport of oil or related products, oil pollution insurance
covering risks in amounts up to and including $700,000,000 or, if
such insurance is not available at reasonable cost after taking
into account the level of exposure to which the Company, its
Subsidiaries and Joint Ventures may be subject, such other amount
as is usually insured against by companies of established repute
engaged in the same or similar business from time to time and
(ii) such other insurance on all their respective properties and
against all such risks in at least such amounts as are usually
insured against by companies of established repute engaged in the
same or similar business from time to time. The Company will
furnish to the Administrative Agent on or prior to the Amendment
Effective Date and annually thereafter documentation from an
independent insurance broker evidencing the insurance required to
be maintained hereunder in such form as is satisfactory to the
Required Banks.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF
EXISTENCE. None of the Company, OBS and OIN shall, and the
Company shall not permit any of its Subsidiaries to (i) purchase
or otherwise acquire any Non-Shipping Asset or Non-Shipping
Assets or (ii) make any Investment in any Non-Shipping Person,
unless immediately after such purchase, acquisition or Investment
not less than 60% of Consolidated Defined Assets of the Company
will be employed in Shipping and Related Businesses; PROVIDED
that, for purposes of this Section only, "Investment" shall not
include (x) the provision of goods or services to or on behalf of
an Affiliate of the provider, (y) the Guarantee of any Debt,
PROVIDED, HOWEVER, that any payment pursuant to any such
Guarantee shall constitute an Investment for purposes of this
Agreement or (z) any Investment in marketable securities of a
Non-Shipping Person which, in accordance with generally accepted
accounting principles, would not be accounted for by the equity
method of accounting. Not less than 66 2/3% of Consolidated
Defined Assets of the Company so employed will at all times be
managed by the Company, any Subsidiary of the Company, the
Shipping Manager, any Subsidiary of the Shipping Manager, any
Successor of the Shipping Manager, one or more other shipping
management companies reasonably acceptable to the Required Banks
or any combination of the foregoing. For the purposes of this
Section 5.04, (a) "Consolidated Defined Assets" means, as of any
date as of which a determination is to be made (a "Determination
Date"), with respect to any Person, all assets of such Person and
its Consolidated Subsidiaries other than cash (including
interest-bearing deposits with maturities of less than one year)
or investments in marketable securities, as reflected (i) if such
Person is the Company, in the consolidated balance sheet of the
Company and its Consolidated Subsidiaries most recently delivered
to the Banks pursuant to Section 4.04 or 5.01, as the case may
be, adjusted on a pro forma basis to reflect the consummation of
the transaction referred to in clause (i) or (ii), as the case
may be, of the first sentence of this Section (and any other such
transactions that shall have occurred after the date of such
consolidated balance sheet and on or prior to such Determination
Date) as if such transaction (and any such other transactions)
had occurred on the date of such balance sheet and (ii) in the
case of any Person other than the Company, in the most recent
audited consolidated balance sheet of such Person and its
Consolidated Subsidiaries, which shall be as of a date not
earlier than 15 months prior to the date of any Investment by the
Company or any Subsidiary of the Company in such Person (or, if
no such audited consolidated balance sheet shall be available,
the most recent unaudited consolidated balance sheet of such
Person and its Consolidated Subsidiaries, which shall be as of a
date not earlier than 15 months prior to the date of such
Investment) and which shall, in either case, be delivered by the
Company to each of the Banks on or prior to the date on which the
Company is required to deliver any certificate referred to in
Section 5.01(e)(iii); (b) any assets (or portion thereof) of a
Joint Venture that are reflected on the consolidated balance
sheet of the Company and its Consolidated Subsidiaries (other
than Non-Recourse Subsidiaries) shall be deemed to be "managed"
by the Company if the Company has the power to elect or appoint
50% of the board of directors (or other persons performing
similar functions) of such Joint Venture; (c) "Shipping Manager"
means the principal company that, as of October 31, 1994, is
acting as agent for the Company and its Subsidiaries in respect
of ships owned, leased or chartered by, and is providing
substantially all of the general and administrative services to,
the Company and its Subsidiaries; (d) "Successor of the Shipping
Manager" means, any Person if, for the period of two years after
the date of formation of such Person, all or substantially all of
the executive officers and directors were executive officers or
directors, as the case may be, of the Shipping Manager
immediately prior to the formation of such Person except any
executive officer or director who shall have been appointed or
elected to such position as a result of any death, disability,
retirement or incapacity of any such executive officer or
director; (e) "Non-Shipping Person" means, at any time, any
Person less than 60% of the Consolidated Defined Assets of which
are employed in Shipping and Related Businesses at such time; (f)
"Non-Shipping Asset" means (i) a capital asset or (ii) an asset
other than a capital asset which, together with any other such
assets purchased in one transaction or a series of related
transactions, has an aggregate purchase price in excess of
$2,500,000, other than (x) cash (including interest-bearing
deposits with maturities of less than one year), (y) an
investment in marketable securities and (z) any asset employed
regularly in Shipping and Related Businesses; and (g) "Shipping
and Related Businesses" means any or all of the following:
owning, chartering, leasing, crewing, navigating, managing,
supplying, operating, building or repairing commercial vessels of
all kinds, including but not limited to cargo ships, liners,
container ships, passenger vessels, fishing vessels, dredges,
submersible and semi-submersible platforms, tugs, barges and
ferries; owning, operating or managing transportation assets
ancillary to or in furtherance of the transportation of freight
and passengers by water; owning, operating or managing
warehouses, terminals and other facilities of any kind incidental
or ancillary to or in furtherance of the transportation of
freight and passengers by water; owning, managing or operating
pipelines, terminals, docks, piers, quays, wharves, dry docks,
storage facilities and port facilities incidental or ancillary to
or in furtherance of the transportation of freight and passengers
by water.
SECTION 5.05. COMPLIANCE WITH LAWS. The Company will
comply, and cause each of its Subsidiaries to comply, in all
respects with all applicable laws, ordinances, rules, regulations
and requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and
regulations thereunder), except where the failure so to comply
could not reasonably be expected to result in a Material Adverse
Change or where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.06. BOOKS AND RECORDS. The Company will
keep, and will cause each of its Material Subsidiaries to keep,
proper books of record and account in which full, true and
correct entries shall be made of all material dealings and
transactions in relation to its business and activities.
SECTION 5.07. NEGATIVE PLEDGE; MINIMUM UNENCUMBERED
ASSETS TO UNSECURED DEBT RATIO. (a) Neither the Company nor any
Subsidiary of the Company will create, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired by it,
except:
(i) Liens securing Debt of the Company and its
Subsidiaries set forth in Schedule 1 hereto, PROVIDED
that no such Debt may be extended, renewed, refinanced
with secured Debt, increased in amount or secured by
additional assets without the consent of the Required
Banks;
(ii) Liens on any asset acquired after October 31,
1994 from Persons other than the Company or any of its
Subsidiaries securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of
acquiring such asset, PROVIDED that such Lien attaches
to such asset concurrently with or within 180 days
after the acquisition thereof;
(iii) Liens arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives
Obligations and (ii) do not, individually or in the
aggregate, materially detract from the value of the
assets of the Company and its Subsidiaries, taken as a
whole, or materially impair the use thereof in the
operation of the business of the Company and its
Subsidiaries, taken as a whole;
(iv) Liens on amounts required to be deposited in
Restricted Funds pursuant to Title XI reserve fund and
financial agreements between the Company or any of its
Subsidiaries and the Secretary of Transportation in
accordance with Title XI of the Merchant Marine Act,
1936, as amended, and the regulations promulgated
thereunder;
(v) Liens on assets of Non-Recourse Subsidiaries
securing Non-Recourse Debt thereof;
(vi) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Company or a Subsidiary
of the Company or becomes a Subsidiary of the Company
and not created in contemplation of such event;
(vii) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Subsidiary of
the Company and not created in contemplation of such
acquisition;
(viii) Liens on cash and cash equivalents securing
Derivatives Obligations; and
(ix) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not
to exceed $20,000,000;
PROVIDED that, immediately after giving effect to the creation or
assumption of any such Lien, the sum, without duplication, of (x)
the aggregate principal amount of Debt of the Company and its
Subsidiaries (other than Non-Recourse Debt of a Non-Recourse
Subsidiary) secured by Permitted Liens and (y) the aggregate
principal amount of Debt of Subsidiaries of the Company (other
than Excluded Subsidiary Debt) shall not exceed the Maximum
Amount.
(b) The ratio of Unencumbered Assets to Unsecured Debt
will not at any time be less than 1.5 to 1. For purposes of this
subsection (b),
(i) "Unencumbered Assets" means, as of any date,
Tangible Assets (excluding any assets which consist of
shares of stock of Subsidiaries (other than Non-Recourse
Subsidiaries) of the Company which have been pledged to
secure any obligations) LESS the sum of (i) Attributable
Debt and (without duplication) (ii) the book value of all
assets of the Company and its Subsidiaries (other than Non-
Recourse Subsidiaries) which are subject to a Lien securing
Secured Debt;
(ii) "Tangible Assets" means, as of any date, the
aggregate book value of all assets (except Intangible
Assets) of the Company and its Subsidiaries (other than Non-
Recourse Subsidiaries), LESS depreciation, depletion and
other properly deductible valuation reserves;
(iii) "Secured Debt" means, as of any date, Debt of
the Company or a Subsidiary of the Company (other than a Non-
Recourse Subsidiary) which is secured by a Lien on any of
the property or assets of the Company or any Subsidiary of
the Company (other than a Non-Recourse Subsidiary), but only
up to the fair value of such property or assets at the time
such Debt was initially incurred PROVIDED that no letter of
credit, letter of guarantee or other similar instrument
shall constitute Debt for purposes of this Section 5.07(b)
unless a drawing thereunder is not reimbursed on the date of
such drawing; and
(iv) "Unsecured Debt" means, as of any date, all Debt
of the Company and its Subsidiaries (other than Non-Recourse
Subsidiaries) as of such date other than Secured Debt
PROVIDED that no letter of credit, letter of guarantee or
other similar instrument shall constitute Debt for purposes
of this Section 5.07(b) unless a drawing thereunder is not
reimbursed on the date of such drawing.
SECTION 5.08. COMPANY DEBT. The Company will not
issue, incur, assume or Guarantee any Debt secured by Permitted
Liens if, immediately after giving effect thereto, the sum,
without duplication, of (x) the aggregate principal amount of
Debt of the Company and its Subsidiaries (other than Non-Recourse
Debt of Non-Recourse Subsidiaries) secured by Permitted Liens and
(y) the aggregate principal amount of Debt of Subsidiaries (other
than Excluded Subsidiary Debt) shall exceed the Maximum Amount.
SECTION 5.09. SUBSIDIARY DEBT. (a) Neither OBS nor
OIN will, and the Company will not permit any of its Subsidiaries
to, issue, incur, assume or Guarantee any Debt other than (i)
Debt to the Banks hereunder, (ii) Debt incurred for the purpose
of financing all or any part of the cost of acquiring any asset
from any Person (other than the Company or any of its
Subsidiaries or any of their respective Affiliates), PROVIDED
that such Debt is incurred concurrently with or within 180 days
after the acquisition thereof, (iii) Non-Recourse Debt of
Non-Recourse Subsidiaries, (iv) Debt of Subsidiaries of the
Company (other than Non-Recourse Subsidiaries) to the Company or
any of its Subsidiaries (other than Non-Recourse Subsidiaries)
and (v) Short-Term Debt.
(b) Neither OBS nor OIN will, and the Company will not
permit any of its Subsidiaries to, issue, incur, assume or
Guarantee any Debt (other than Excluded Subsidiary Debt which, in
the case of any such Debt other than Non-Recourse Debt, is not
secured), including, without limitation, Debt referred to in
subsection (a) if, immediately after giving effect thereto, the
sum, without duplication, of (x) the aggregate principal amount
of Debt of all Subsidiaries of the Company (other than Excluded
Subsidiary Debt) and (y) Debt of the Company and its Subsidiaries
(other than Non-Recourse Debt of Non-Recourse Subsidiaries)
secured by Permitted Liens shall exceed the Maximum Amount.
SECTION 5.10. CONSOLIDATIONS, MERGERS AND SALES OF
ASSETS. (a) None of the Company, OBS or OIN will consolidate or
merge with or into any other Person and (b) none of the Company,
OBS or OIN will, and the Company will not permit any of its
Subsidiaries (other than OBS and OIN) to, sell, lease (other than
chartering in the ordinary course of business, which shall not
include bareboat chartering for periods in excess of 10 years) or
otherwise transfer, directly or indirectly, including without
limitation by means of a merger or consolidation of any
Subsidiary of the Company (other than OBS or OIN) with or into
any other Person, all or substantially all of the assets of the
Company and its Consolidated Subsidiaries, considered as a whole,
to any other Person, unless (x) (i) in the case of any such
consolidation, merger, sale, lease or other transfer by the
Company, the Company is the surviving Person or (ii) in the case
of any such consolidation, merger, sale, lease or other transfer
by OBS, OIN or any other Subsidiary of the Company, the Company
or a Wholly-Owned Consolidated Subsidiary is the surviving Person
and (except in the case of a consolidation, merger, sale, lease
or other transfer by OIN or any other Subsidiary of the Company
that is not on October 31, 1994 organized under the laws of the
United States or any state thereof) if a Wholly-Owned
Consolidated Subsidiary shall be the surviving Person, it shall
be organized under the law of the United States or any state
thereof; (y) immediately before and immediately after giving
effect to such consolidation, merger, sale, lease or transfer, no
Default shall have occurred and be continuing; and (z) if the
Administrative Agent shall have theretofore notified or shall,
within 10 Domestic Business Days after receiving notice of such
consolidation, merger, sale, lease or transfer, notify the
Company of the determination of the Co-arrangers pursuant to
clauses (i) and (ii) of Section 5.12(a), the Company shall,
notwithstanding any provisions of Section 5.12 to the contrary,
prior to or concurrently with such merger, consolidation, sale,
lease or transfer, comply with the provisions of clauses (x)
through (z), inclusive, of Section 5.12(a).
SECTION 5.11. USE OF PROCEEDS. The proceeds of the
Loans made under this Agreement will be used by the Borrowers for
general corporate purposes (which may include acquisitions);
PROVIDED that, without the consent of all the Banks, none of such
proceeds will be used, directly or indirectly, for the purpose of
effecting an Unapproved Acquisition. None of such proceeds will
be used in violation of Regulation U or any applicable law or
regulation.
SECTION 5.12. SECURITY INTEREST. (a) If the Co-
arrangers shall have unanimously determined in their reasonable
judgment that (i) a change in control of the Company has occurred
and (ii) such change in control is materially detrimental to the
Company and its Subsidiaries, considered as a whole, then the
Company shall, or shall cause one or more of its Subsidiaries to,
not later than the 90th day after receipt of notice by the
Company from the Administrative Agent of such determination (or,
if such day is not a Domestic Business Day, the next succeeding
Domestic Business Day), (x) grant a security interest in, pledge,
assign or mortgage, pursuant to one or more agreements or other
instruments to which the Company (and any relevant Subsidiary of
the Company) is a party (collectively, the "Security Documents"),
assets of the Company or any Subsidiary of the Company (the
"Collateral") to or in favor of the Administrative Agent for the
benefit of the Banks as collateral for the Loans made or to be
made hereunder, such assets to be subject to no other Liens
(other than (i) Liens arising in the ordinary course of business
which (A) do not secure Debt and (B) do not, individually or in
the aggregate, materially detract from the value of the
Collateral as collateral hereunder and (ii) Liens securing the
liabilities of each Borrower and its subsidiaries under the
Reimbursement Agreements, in each case with respect to the Liens
referred to in this clause (ii), on an equal and ratable basis
with the obligations of the Borrowers hereunder) and to have an
aggregate fair market value (taking into account such Liens) at
least equal to 130% of the sum of the aggregate principal amount
of all Loans outstanding on such 90th day (or such next
succeeding Domestic Business Day) and the aggregate amount of all
liabilities of each Borrower and its subsidiaries under the
Reimbursement Agreements as of such date, (y) provide to the
Administrative Agent one or more opinions of counsel, the form
and substance of each such opinion and such counsel to be
reasonably satisfactory to the Required Banks, as to the
creation, validity, effectiveness, perfection and priority of
such security interests, pledges, assignments and mortgages,
compliance with Regulation U, the absence of any fraudulent
conveyance or transfer and such other matters as the Required
Banks may reasonably request and (z) amend or modify this
Agreement, pursuant to one or more amendments or modifications in
form and substance satisfactory to the Required Banks, to the
extent necessary or desirable, in the reasonable judgment of the
Required Banks, to take into account the Security Documents and
such security interests, pledges, assignments and mortgages and
such other matters related thereto as the Required Banks may
reasonably request, such amendments and modifications to include,
without limitation, one or more representations and warranties,
covenants, events of default and indemnities relating to the
subject matter addressed in clauses (x) through (z) above, or the
Security Documents, opinions or other writings referred to
therein. In order for the Company to satisfy its obligations
under this Section 5.12 and without limiting the provisions set
forth above, the assets constituting Collateral hereunder, the
determination of the fair market value thereof and the form and
substance of the Security Documents, the opinions referred to in
clause (y) above and the amendments and modifications referred to
in clause (z) above must each be satisfactory in form and
substance to the Required Banks and the Company must have
received a certificate signed by the Required Banks stating that
the Company has complied with its obligations under this Section
5.12.
(b) At all times after the 90th day (or the next
succeeding Domestic Business Day) referred to in subsection (a)
above the fair market value (determined as provided in subsection
(a)) of the Collateral securing Loans hereunder shall be at least
equal to 130% of the aggregate principal amount of all Loans
outstanding hereunder from time to time.
(c) No Co-arranger shall incur any liability to any
Person (including, without limitation, any other Bank) as a
result of any determination (or any failure to make any
determination) pursuant to clauses (i) and (ii) of subsection
(a). Each of the Borrowers hereby indemnifies, and each of the
Banks hereby indemnifies ratably in accordance with its
Commitment (to the extent that the Borrowers do not so
indemnify), each Agent and each of the Co-arrangers against any
cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except
such as result from its gross negligence or wilful misconduct)
that it may suffer or incur in connection with any action taken
or omitted to be taken pursuant to this Section 5.12.
SECTION 5.13. LETTERS OF CREDIT. (a) No Borrower
shall, and the Company shall not permit any of its Subsidiaries
to, incur any obligation to any bank (including any Bank) or
other Person (a "Secured Issuer") in respect of any letter of
credit, letter of guaranty or similar instrument ("Letter of
Credit") issued by such Secured Issuer, which obligation is
secured by a Lien on any asset of the Company or any of its
Subsidiaries, unless (i) such Secured Issuer is acceptable to the
beneficiary of the proposed Letter of Credit, (ii) the relevant
Borrower (or the Company in the case of any Subsidiary of the
Company other than OBS or OIN) shall have, at least 20 days prior
thereto, requested offers to issue such Letter of Credit on an
unsecured basis, from the Banks (or any of them) by notice to
each of the Banks specifying:
(A) the date of issuance of the proposed Letter
of Credit,
(B) the aggregate amount of the proposed Letter
of Credit,
(C) the expiration date of the proposed Letter of
Credit, and
(D) the other terms of the proposed Letter of
Credit; and
(iii) such Borrower (or the Company) shall not have received an
offer from one or more Banks pursuant to subsection (b) below to
issue such Letter of Credit on the proposed terms at a fee which
does not exceed by more than 1/4 of 1% per annum the fee offered
by such Secured Issuer in connection with the issuance of such
Letter of Credit. The Company shall determine in good faith
whether the fee offered by any Bank or Banks which offer to issue
such Letter of Credit on the proposed terms exceeds by more than
1/4 of 1% per annum the fee offered by such Secured Issuer in the
event that such fees are not directly comparable. At the time of
any request by any Borrower for offers to issue any Letter of
Credit pursuant to this subsection, such Borrower shall deliver
to each of the Banks a detailed description of the underlying
transaction in support of which the Letter of Credit is proposed
to be issued.
(b) Each Bank may submit an offer or offers,
individually or in conjunction with any other Bank or Banks, to
issue any proposed Letter of Credit. Any such offer shall be
delivered to the Borrower within 15 days of such Bank's receipt
of notice from such Borrower (or the Company) pursuant to
subsection (a) and shall specify:
(i) the date of issuance of the proposed Letter
of Credit,
(ii) the aggregate amount of the proposed Letter
of Credit,
(iii) the expiration date of the proposed Letter of
Credit and
(iv) the fee offered for such Letter of Credit.
The liability of any Bank with respect to any offer to issue any
Letter of Credit pursuant to this Section shall be several, not
joint.
(c) If such Borrower (or the Company) shall have
received an offer from one or more Banks to issue such Letter of
Credit on the proposed terms at a fee which shall not exceed by
more than 1/4 of 1% per annum (determined as provided in
subsection (a) above) the fee offered by such Secured Issuer for
the issuance of such Letter of Credit, then (i) such Borrower
shall accept the offer of such Bank or Banks to issue such Letter
of Credit or (ii) none of the Borrowers shall, and the Company
shall not permit any of its Subsidiaries to, solicit or accept
any offer from any Secured Issuer for the issuance of any Letter
of Credit relating to the underlying transaction in connection
with which such initial Letter of Credit was proposed to be
issued for a period of six months from the 15th day referred to
in subsection (b) above. If such Borrower (or the Company) shall
have received more than one offer from one or more Banks to issue
such Letter of Credit on the proposed terms at a fee which shall
not exceed by more than 1/4 of 1% per annum the fee offered by
any such Secured Issuer, then such Borrower shall accept the
offer of such Bank or Banks offering to issue such unsecured
Letter of Credit at the lowest fee per annum. The Company shall
determine in good faith which such fee is the lowest in the event
that the fees offered by such Bank or Banks are not directly
comparable. If any Borrower (or the Company) shall accept the
offer of any Bank or Banks to issue a Letter of Credit pursuant
to this Section 5.13, then such Borrower (or the Company) and
such Bank or Banks shall execute and deliver a reimbursement
agreement (a "Reimbursement Agreement") in the form of Exhibit G
hereto, but with such changes and additions thereto and deletions
therefrom as shall be satisfactory to each of such Borrower (or
the Company) and such Bank or Banks. Unless such Borrower (or
the Company) shall have otherwise notified the Administrative
Agent, Banks party to this Agreement shall at all times be
required to have interests in each Letter of Credit issued
pursuant to this Section 5.13 at least equal to the aggregate
percentage interest therein that is required to approve
amendments or waivers (other than any such amendments or waivers
requiring a unanimous vote) under the related Reimbursement
Agreement.
(d) Nothing in this Section is intended to restrict
the ability of the Company or any of its Subsidiaries to incur
any obligation otherwise permitted under this Agreement in
respect of any Letter of Credit, on an unsecured basis, from any
bank that is not a party to this Agreement.
SECTION 5.14. OWNERSHIP OF OBS AND OIN. Each of OBS
and OIN shall at all times be a Wholly-Owned Consolidated
Subsidiary.
SECTION 5.15. AGENT FOR SERVICE OF PROCESS FOR OIN.
The Company shall cause OIN to maintain at all times North
American Ship Agencies, Inc. or another agent acceptable to the
Required Banks as its agent for service of process in the State
of New York and shall cause any other such agent to execute and
deliver to the Company and the Administrative Agent a letter
accepting such agency, in substantially the form of Exhibit E
hereto, prior to or concurrently with such other agent's
acceptance of its appointment as agent for service of process for
OIN and the predecessor agent's resignation as such agent.
SECTION 5.16. MINIMUM CONSOLIDATED WORKING CAPITAL.
Consolidated Working Capital will not at the end of any Fiscal
Quarter be less than $0.
SECTION 5.17. MINIMUM CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth will at no time be less than the
sum of $578,000,000 PLUS an amount equal to 50% of Consolidated
Net Income for each Fiscal Quarter from and including the Fiscal
Quarter ended March 31, 1994 to but excluding the second Fiscal
Quarter preceding the Fiscal Quarter as of the end of which this
determination is to be made.
SECTION 5.18. MAXIMUM TOTAL DEBT TO CONSOLIDATED
TANGIBLE NET WORTH RATIO. The ratio of Total Debt to
Consolidated Tangible Net Worth will at no time be greater than
1.75 to 1.
SECTION 5.19. MINIMUM LIQUID CASH FLOW COVERAGE RATIO.
The Liquid Cash Flow Coverage Ratio for the most recent period of
four consecutive Fiscal Quarters (including Fiscal Quarters
ending prior to the Amendment Effective Date until four Fiscal
Quarters shall have ended subsequent to the Amendment Effective
Date) shall not be less than 2.00 to 1.
SECTION 5.20. MAXIMUM INVESTMENTS IN JOINT VENTURES.
The Company will not, and will not permit any of its Subsidiaries
(other than Non-Recourse Subsidiaries) to, make any Investment in
any Joint Venture on any date if, immediately after giving effect
to such Investment, the aggregate amount of all such Investments
made by the Company and its Subsidiaries (other than Non-Recourse
Subsidiaries) after June 30, 1994 would exceed 22.5% of
Consolidated Net Tangible Assets as of the date of determination.
For purposes of this Section, "Consolidated Net Tangible Assets"
means, as of any date, the aggregate net book value of all assets
of the Company and its Consolidated Subsidiaries (other than Non-
Recourse Subsidiaries), as the same is reflected in the
consolidated balance sheet of the Company and its Consolidated
Subsidiaries (other than Non-Recourse Subsidiaries), LESS the sum
of (x) their consolidated Intangible Assets and (y) Total Current
Liabilities, all determined as of such date.
ARTICLE VI
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT. If one or more of
the following events ("Events of Default") shall have occurred
and be continuing:
(a) (i) any Borrower shall fail to pay when due any
principal of any Loan, (ii) the Company shall fail to pay
when due any amount payable by the Company under Article IX
in respect of the principal of any Loan to OBS or OIN, (iii)
the Company shall fail to pay within two Domestic Business
Days of the due date thereof any other amount payable by the
Company under Article IX or (iv) any Borrower shall fail to
pay within two Domestic Business Days of the due date
thereof any interest on any Loan, any fees or any other
amount payable hereunder;
(b) any Borrower shall fail to observe or perform any
covenant contained in Sections 5.03(b), 5.07 to 5.12,
inclusive, and 5.14 to 5.20, inclusive;
(c) any Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other
than those covered by clause (a) or (b) above) for 15 days
after written notice thereof has been given to the Company
by the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or
statement made by any Borrower in this Agreement or in any
certificate, financial statement or other document delivered
pursuant hereto shall prove to have been incorrect in any
material respect when made (or deemed made);
(e) the Company or any Subsidiary of the Company shall
fail to make any payment in respect of any Material
Financial Obligation (other than the Notes) when due or
within any applicable grace period;
(f) any event or condition shall occur which results
in the acceleration of the maturity of any Material Debt or
enables (or, with the giving of notice or lapse of time or
both, would enable) the holder of such Debt or any Person
acting on such holder's behalf to accelerate the maturity
thereof;
(g) the Company or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Company or any Material Subsidiary
seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered
against the Company or any Material Subsidiary of the
Company under the federal bankruptcy laws as now or
hereafter in effect;
(i) (i) any member of the ERISA Group or any ERISA
Affiliate shall fail to pay when due an amount or amounts
aggregating in excess of $5,000,000 which it or they shall
have become liable to pay under Title IV of ERISA or (ii)
any member of the ERISA Group or any ERISA Affiliate,
individually or collectively, shall incur, or shall
reasonably expect to incur, any Withdrawal Liability or
liability upon the happening of a Termination Event and the
aggregate of all such Withdrawal Liabilities and such other
liabilities shall be in excess of $30,000,000;
(j) judgments or orders for the payment of money in
excess of $5,000,000 (or its equivalent in any other
currency) shall be rendered against the Company or any
Subsidiary of the Company and such judgments or orders shall
continue unsatisfied and unstayed for a period of 30 days;
or
(k) the obligations of the Company under Article IX
shall at any time and for any reason cease to be valid and
binding or the Company shall purport to renounce its
guarantee of the obligations of OBS or OIN hereunder;
then, and in every such event, the Administrative Agent shall (i)
if requested by Banks having more than 50% in aggregate amount of
the Commitments, by notice to the Borrowers, terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrowers, declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately
due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each
Borrower; PROVIDED that in the case of any of the Events of
Default specified in clause (g) or (h) above with respect to the
Company, without any notice to any Borrower or any other act by
the Administrative Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest
thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower and, in the case of any
of the Events of Default specified in clause (g) or (h) above
with respect to any Borrower other than the Company, without any
notice to any Borrower or any other act by the Administrative
Agent or the Banks, the Commitments available to such Borrower
shall thereupon terminate and the Notes of such Borrower
(together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by such
Borrower and the Company.
SECTION 6.02. NOTICE OF DEFAULT. The Administrative
Agent shall give notice to the Company under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENTS
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each
Bank irrevocably appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement and the Notes as are delegated to such Agent by
the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. AGENTS AND AFFILIATES. Morgan Guaranty
Trust Company of New York and Citibank, N.A., shall have the same
rights and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were
not an Agent and each Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of
business with, the Company or any Subsidiary of the Company or
any Affiliate thereof as if it were not an Agent hereunder.
SECTION 7.03. ACTION BY AGENTS. The obligations of
each Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, neither Agent
shall be required to take any action with respect to any Default,
except, in the case of the Administrative Agent, as expressly
provided in Article VI.
SECTION 7.04. CONSULTATION WITH EXPERTS. Each Agent
may consult with legal counsel (who may be counsel for one or
more of the Borrowers), independent public accountants and other
experts selected by it and shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05. LIABILITY OF THE AGENTS. Neither Agent
nor any of their respective directors, officers, agents or
employees shall be liable to any Bank for any action taken or not
taken by it in connection herewith (i) with the consent or at the
request of the Required Banks or (ii) in the absence of its own
gross negligence or willful misconduct. Neither Agent nor any of
their respective directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in
connection with this Agreement or any Borrowing hereunder; (ii)
the performance or observance of any of the covenants or
agreements of any Borrower (including, without limitation,
Section 5.12); (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be delivered
to such Agent; or (iv) the validity, effectiveness or genuineness
of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. Neither Agent shall incur any
liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank
wire, telex or similar writing) believed by it to be genuine or
to be signed by the proper party or parties.
SECTION 7.06. INDEMNIFICATION. Each Bank shall,
ratably in accordance with its Commitment, indemnify each Agent,
its affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Borrowers)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitee's gross negligence or willful
misconduct) that such indemnitees may suffer or incur in
connection with this Agreement or that such indemnitees may
suffer or incur in connection with any action taken or omitted by
such indemnitees hereunder. Without limiting the generality of
the foregoing, each Bank agrees to reimburse each Agent promptly
upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees and disbursements) incurred by
such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities
under, this Agreement, to the extent that such Agent is not
reimbursed for such expenses by the Borrowers. Under no
circumstances shall either Agent be obligated to expend its own
funds for the protection of the interests of the Banks, but each
Agent shall be entitled to be indemnified to its satisfaction
hereunder by the Banks prior to taking any action or expending
any funds hereunder.
SECTION 7.07. CREDIT DECISION. Each Bank acknowledges
that it has, independently and without reliance upon either Agent
or any other Bank, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance
upon either Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
any action under this Agreement.
SECTION 7.08. SUCCESSOR ADMINISTRATIVE AGENT. The
Administrative Agent may resign at any time by giving written
notice thereof to the Banks and the Company. Upon any such
resignation, the Company shall appoint a successor Administrative
Agent, subject to the consent of the Required Banks (determined
for this purpose as if the Bank resigning as Administrative Agent
had no Commitment and held no Notes hereunder). If no successor
Administrative Agent shall have been so appointed by the Company,
and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent gives notice of resignation,
then the retiring Administrative Agent may, on behalf of the
Banks, appoint a successor Administrative Agent, which shall be a
commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent.
SECTION 7.09. AGENTS' FEES. The Company shall pay to
each Agent for its own account fees in the amounts and at the
times previously agreed upon between the Company and such Agent.
In connection with any assignment pursuant to Section 2.17(c),
8.05 or 10.05(c), the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such
assignment in the amount of $2,000.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE
INADEQUATE OR UNFAIR. If on or prior to the first day of any
Interest Period for any Fixed Rate Borrowing:
(a) the Administrative Agent is advised by the
Reference Banks that deposits in Dollars (in the
applicable amounts) are not being offered to the
Reference Banks in the relevant market for such
Interest Period, or
(b) in the case of a Committed Borrowing, Banks
having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the
Adjusted CD Rate or the London Interbank Offered Rate,
as the case may be, as determined by the Administrative
Agent will not adequately and fairly reflect the cost
to such Banks of funding their CD Loans or Euro-Dollar
Loans, as the case may be, for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to
the Company (and the Borrower, if the Company is not the
Borrower) and the Banks, whereupon until the Administrative Agent
notifies the Company that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make
CD Loans or Euro-Dollar Loans, as the case may be, shall be
suspended. Unless the Borrower notifies the Administrative Agent
at least two Domestic Business Days before the date of any
related Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date,
(i) if such Fixed Rate Borrowing is a Committed Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing and (ii)
if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing,
the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto
at the Base Rate for such day.
SECTION 8.02. ILLEGALITY. If, on or after October 31,
1994, the adoption of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans to any Borrower and
such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the
other Banks and the Company (and such Borrower if the Company is
not such Borrower), whereupon until such Bank notifies the
Company (and such Borrower if the Company is not such Borrower)
and the Administrative Agent that the circumstances giving rise
to such suspension no longer exist, the obligation of such Bank
to make Euro-Dollar Loans to such Borrower shall be suspended.
Before giving any notice to the Administrative Agent pursuant to
this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall
determine that it may not lawfully continue to maintain and fund
any of its outstanding Euro-Dollar Loans to such Borrower to
maturity and shall so specify in such notice, such Borrower shall
immediately prepay in full the then outstanding principal amount
of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan,
such Borrower shall borrow a Base Rate Loan in an equal principal
amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of
the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a)
If, on or after (x) October 31, 1994, in the case of any
Committed Loan or any obligation to make Committed Loans or (y)
the date of the related Money Market Quote, in the case of any
Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Bank (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its
Fixed Rate Loans, its Notes or its obligation to make Fixed
Rate Loans, or shall change the basis of taxation of
payments to any Bank (or its Applicable Lending Office) of
the principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate Loans
(except for changes in the rate of tax or the imposition of
a new tax on the overall net income of such Bank or its
Applicable Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Applicable
Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve
System, but excluding (x) with respect to any CD Loan any
such requirement included in an applicable Domestic Reserve
Percentage and (y) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled
to compensation during the relevant Period under Section
2.15), special deposit, insurance assessment (excluding,
with respect to any CD Loan, any such requirement included
in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the United States market for
certificates of deposit or the London interbank market any
other condition affecting its Fixed Rate Loans, its Notes or
its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of any
sum received or receivable by such Bank (or its Applicable
Lending Office) under this Agreement or under its Notes with
respect thereto, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank (with a copy to
the Administrative Agent and the Company if the Company is not
the Borrower), the applicable Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank
for such increased cost or reduction.
(b) If any Bank shall have determined that, after
October 31, 1994, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital of such
Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Company
shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the
Administrative Agent of any event of which it has knowledge,
occurring after October 31, 1994, which will entitle such Bank to
compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth in reasonable
detail the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error.
In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.04. BASE RATE LOANS SUBSTITUTED FOR AFFECTED
FIXED RATE LOANS. If (i) the obligation of any Bank to make
Euro-Dollar Loans to any Borrower has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such
Bank notifies such Borrower (and the Company if it is not such
Borrower) that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans to such Borrower which would
otherwise be made by such Bank as CD Loans or
Euro-Dollar Loans, as the case may be, shall be made
instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, to such Borrower has been
repaid, all Payments of principal which would otherwise
be applied to repay such Fixed Rate Loans shall be
applied to repay its Base Rate Loans instead.
SECTION 8.05. SUBSTITUTION OF BANK. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03, the Company shall have the
right, upon 20 Business Days' prior notice to such Bank, to cause
one or more banks (which may be one or more of the Banks), each
such bank (except any Bank) to be reasonably satisfactory to the
Required Banks (determined for this purpose as if such Bank had
no Commitment and held no Notes hereunder) and, in each case,
with the written acknowledgement of the Administrative Agent, to
purchase the Notes and assume the Commitment of such Bank
pursuant to an Assignment and Assumption Agreement. If one or
more such banks are identified by the Company and, if required
pursuant to this Section, approved as being reasonably
satisfactory to the Required Banks (determined as provided
above), the transferor Bank shall consent to such sale and
assumption by executing and delivering an Assignment and
Assumption Agreement. Upon execution and delivery of an
Assignment and Assumption Agreement by the Company, the
transferor Bank, the Assignee, the Administrative Agent and, if
required pursuant to this Section, the Required Banks (determined
as provided above), and payment by the Assignee to the transferor
Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall become a
Bank party to this Agreement (if it is not already a party
hereto) and shall have all the rights and obligations of a Bank
with a Commitment (which, if such Assignee is already a party
hereto, shall take into account such Assignee's then existing
Commitment hereunder) as set forth in such Assignment and
Assumption Agreement and the transferor Bank shall be released
from its obligations hereunder and no further consent or action
by any other Person shall be required. Upon the consummation of
any assignment pursuant to this Section 8.05, the transferor
Bank, the Administrative Agent and the Borrowers shall make
appropriate arrangements so that, if required, new Notes are
issued to the Assignee. In the event that the Administrative
Agent, in its capacity as a Bank, is required to sell its Notes
and its Commitment hereunder pursuant to this Section 8.05, the
Administrative Agent shall, promptly upon the consummation of any
assignment pursuant to this Section 8.05, resign as
Administrative Agent hereunder and the Company shall (subject to
the consent of the Required Banks) have the right to appoint
another Co-arranger as successor Administrative Agent, all in
accordance with Section 7.08.
ARTICLE IX
GUARANTY
SECTION 9.01. THE GUARANTY. The Company hereby
unconditionally guarantees the full and punctual payment (whether
at stated maturity, upon acceleration or otherwise) of the
principal of and interest on each Note issued by OBS and OIN
pursuant to this Agreement and the full and punctual payment of
all other amounts payable by OBS and OIN under this Agreement.
Upon failure by OBS or OIN to pay punctually any such amount, the
Company shall forthwith on demand pay the amount not so paid at
the place and in the manner specified in this Agreement.
SECTION 9.02. GUARANTY UNCONDITIONAL. The obligations
of the Company hereunder shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of OBS or OIN under this Agreement or any
Note, by operation of law or otherwise;
(ii) any modification or amendment of or
supplement to this Agreement or any Note;
(iii) any release, non-perfection or
invalidity of any direct or indirect security for any
obligation of OBS or OIN under this Agreement or any
Note;
(iv) any change in the corporate existence,
structure or ownership of OBS or OIN, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting OBS or OIN or their respective
assets or any resulting release or discharge of any
obligation of OBS or OIN contained in this Agreement or
any Note;
(v) the existence of any claim, set-off or
other rights which the Company may have at any time
against OBS, OIN, either Agent, any Bank or any other
Person, whether in connection herewith or any unrelated
transaction, PROVIDED that nothing herein shall prevent
the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability
relating to or against OBS or OIN for any reason of
this Agreement or any Note, or any provision of
applicable law or regulation purporting to prohibit the
payment by OBS or OIN of the principal of or interest
on any Note or any other amount payable by OBS or OIN
under this Agreement; or
(vii) any other act or omission to act or delay
of any kind by OBS or OIN, either Agent, any Bank or
any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the
Company's obligations hereunder.
SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL;
REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The Company's
obligations hereunder shall remain in full force and effect until
the principal of and interest on the Notes and all other amounts
payable by OBS and OIN under this Agreement shall have been paid
in full. If at any time any Payment of the principal of or
interest on any Note or any other amount payable by OBS or OIN
under this Agreement is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of
OBS or OIN or otherwise, the Company's obligations hereunder with
respect to such Payment shall be reinstated as though such
Payment had been due but not made at such time.
SECTION 9.04. WAIVER BY THE COMPANY. The Company
irrevocably waives acceptance hereof and presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person
against OBS or OIN or any other Person.
SECTION 9.05. WAIVER OF SUBROGATION. The Company
irrevocably waives, but only until the Commitments hereunder
shall terminate and all amounts payable hereunder by the Company
to the Banks (or any of them) or either Agent have been paid in
full, any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any Payment hereunder
to be subrogated to the rights of the payee against OBS or OIN
with respect to such Payment or otherwise to be reimbursed,
indemnified or exonerated by OBS or OIN in respect thereof.
SECTION 9.06. STAY OF ACCELERATION. If acceleration
of the time for payment of any amount payable by OBS or OIN under
this Agreement or the Notes is stayed upon the insolvency,
bankruptcy or reorganization of OBS or OIN, as the case may be,
all such amounts otherwise subject to acceleration under the
terms of this Agreement shall nonetheless be payable by the
Company hereunder forthwith on demand by the Administrative Agent
made at the request of the requisite proportion of the Banks
specified in Article VI of this Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests,
consents and other communications to any party hereunder shall be
in writing (including bank wire, telex, facsimile transmission or
similar writing) and shall be given to such party: (x) in the
case of any Borrower or any Agent, at its address, telex number
or telecopier number set forth on the signature pages of this
Amended Agreement, (y) in the case of any Bank, at its address,
telex or telecopier number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other
address, telex or telecopier number as such party may hereafter
specify for the purpose by notice to the Administrative Agent and
the Borrowers; PROVIDED that, the Company shall at all times
maintain its address for such purposes in the State of New York
and that, in the case of any other Borrower, notice shall be
given to such Borrower at the address applicable to the Company
pursuant to this Section. Each such notice, request, consent or
other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; PROVIDED that notices to
the Administrative Agent under Article II or Article VIII shall
not be effective until received.
SECTION 10.02. NO WAIVERS. No failure or delay by
either Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.03. EXPENSES; DOCUMENTARY TAXES;
INDEMNIFICATION. (a) The Company shall pay (i) all
out-of-pocket expenses of each Agent, including reasonable fees
and disbursements of Davis Polk & Wardwell, special counsel for
the Agents (or any successor firm selected by the Agents to serve
as such counsel), in connection with the preparation of this
Amended Agreement and each Note, any waiver or consent hereunder
or any amendment hereof (other than any such amendment that
expressly states that it is being entered into at the request of
one or more Banks) or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by each Agent or any Bank, including reasonable
fees and disbursements of its counsel, in connection with such
Event of Default and collection and other enforcement proceedings
resulting therefrom. The Company shall indemnify each Bank
against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Amended Agreement or any Note or
the transfer of any Note pursuant to Section 2.17(c) or 8.05.
(b) Neither Agent nor any of its directors, officers,
agents or employees shall be liable to any Borrower for any
action taken or not taken by it in connection herewith in the
absence of its own gross negligence or willful misconduct. The
Company hereby agrees to indemnify each Agent and each Bank,
their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against
any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating to or
arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; PROVIDED that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's
own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
SECTION 10.04. AMENDMENTS AND WAIVERS. Any provision
of this Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by
each of the Borrowers and the Required Banks (and, if the rights
or duties of either Agent are affected thereby, by such Agent);
PROVIDED that no amendment or waiver shall, unless signed by all
the Banks, (i) increase or decrease the Commitment of any Bank or
subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees
hereunder, (iii) postpone the date fixed for any Payment of
principal of or interest on any Loan or any fees hereunder or for
any termination of any Commitment, (iv) amend, modify or waive
any provision of Article IX or Section 5.12 (other than clause
(y) of subsection (a) thereof) or (v) amend or modify this
Section 10.04 or otherwise change the percentage of the
Commitments or of the aggregate unpaid principal amount of the
Notes, or the number or category of Banks, which shall be
required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement.
SECTION 10.05. SUCCESSORS AND ASSIGNS. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns, except that none of the Borrowers may assign or
otherwise transfer any of its rights under this Agreement without
the prior consent of all Banks.
(b) Any Bank or Assignee may at any time grant to one
or more banks or other financial institutions (each a
"Participant") participating interests in its Commitment or any
or all of its Loans. In the event of any such grant by a Bank of
a participating interest to a Participant, whether or not upon
notice to the Borrowers and the Agents, such Bank shall remain
responsible for the performance of its obligations hereunder, and
the Borrowers and the Agents shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to
which any Bank grants such a participating interest shall provide
that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company and the other Borrowers
hereunder, including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such participation agreement may provide
that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii) or (iii)
of Section 10.04 or any amendment or waiver of any provision of
Article IX or any release of any security delivered as collateral
for the Loans pursuant to Section 5.12 without the written
consent of the Participant. Each Borrower agrees that each
Participant shall, subject to subsection (f) of this Section, be
entitled to a portion of the benefits of Article VIII and
Sections 2.15 and 2.18 to be derived by the Bank that sold such
Participant a participating interest in its Commitment or Loans
hereunder which is attributable to the participating interest of
such Participant. An assignment or other transfer which is not
permitted by subsection (c) or (e) below or Section 2.17(c) or
8.05 shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with
this subsection (b).
(c) Any Bank may at any time assign to any bank
(including, without limitation, a Bank) or other financial
institution all, or a proportionate part in an amount equal to
$10,000,000 or any multiple thereof of all of its rights and
obligations under this Agreement and the Notes of each Borrower,
and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement executed by
such Assignee and such transferor Bank, with (and subject to),
the subscribed consent of the Company, which consent shall not be
unreasonably withheld, and the subscribed acknowledgement of the
Administrative Agent; PROVIDED that if an Assignee is an
affiliate of such transferor Bank or was a Bank immediately prior
to such assignment, no such consent shall be required; and
PROVIDED FURTHER that such assignment may, but need not, include
rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon execution and delivery of an Assignment and
Assumption Agreement pursuant to this subsection (c) and payment
by the Assignee to the transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement
(if it is not already a party hereto) and shall have all the
rights and obligations of a Bank with a Commitment (which, if
such Assignee is already a party hereto, shall take into account
such Assignee's then existing Commitment hereunder) as set forth
in such Assignment and Assumption Agreement and the transferor
Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any
other Person shall be required. Except as set forth in this
Section 10.05 and as provided in Sections 2.17(c) and 8.05, no
Bank may assign or otherwise transfer all or any part of its
rights or obligations under this Agreement without the prior
consent of the Company.
(d) Upon the consummation of any assignment pursuant
to subsection (c) of this Section, the transferor Bank, the
Administrative Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Notes are issued to the
Assignee. If any Assignee which becomes a Bank pursuant to this
Agreement is not incorporated under the laws of the United States
of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account,
deliver to the Company and the Administrative Agent a
certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with
subsection (a) of Section 2.17.
(e) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Notes to any Affiliate
of such Bank or any Federal Reserve Bank, without the consent of
any Borrower, PROVIDED that no Bank shall, without the consent of
the Company, change its Applicable Lending Office with respect to
any Loan or make any assignment pursuant to this Section if (x)
immediately prior to such change or assignment such Bank shall
have been entitled to receive Payments without withholding or
deduction for United States federal income tax and (y)
immediately after such change or assignment such Bank or the
assignee of such Bank, as the case may be, would not be entitled
to receive Payments without any such deduction or withholding.
No assignment pursuant to this subsection (e) shall release the
transferor Bank from its obligations hereunder.
(f) No Assignee, Participant or other transferee of
any Bank's rights shall be entitled to receive any greater
payment under Section 2.15, 2.18 or 8.03 than such Bank would
have been entitled to receive with respect to the rights
transferred, unless such transfer is made (i) with the Company's
prior consent, (ii) by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Applicable
Lending Office under certain circumstances, (iii) with respect to
any Assignee pursuant to subsection (c) or (e) above at a time
when the circumstances giving rise to such greater payment did
not exist or (iv) pursuant to the provisions of Section 2.17(b)
or (c) or 8.05.
SECTION 10.06. COLLATERAL. Each of the Banks
represents to each of the Agents and the other Banks that it in
good faith is not relying upon any "margin stock" (as defined in
Regulation U) as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 10.07. GOVERNING LAW; SUBMISSION TO
JURISDICTION; WAIVER OF JURY TRIAL; AGENT FOR SERVICE OF PROCESS.
(a) This Agreement and each Note shall be governed by and
construed in accordance with the laws of the State of New York.
Each Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New
York and of any New York State Court sitting in New York City for
purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each
Borrower irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Each of the
Borrowers, the Agents and the Banks hereby irrevocably waives any
and all right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions
contemplated hereby.
(b) OIN hereby irrevocably designates and appoints
North American Ship Agencies, Inc., 1114 Avenue of the Americas,
New York, New York 10036, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid or
until the appointment of a successor agent satisfactory to the
Required Banks and such successor agent's acceptance of such
appointment, as the agent of OIN to receive on its behalf service
of all process brought against it with respect to any such
proceeding in any such court in New York, such service being
hereby acknowledged by OIN to be effective and binding in every
respect whether or not OIN shall then be doing or shall have at
any time done business in New York. A copy of any such process
so served shall, if permitted by law, be sent by registered air
mail to OIN and delivered to it at its address specified pursuant
to Section 10.01. Nothing herein shall affect the right to serve
process in any other manner permitted by any law or limit the
right of any Bank or either Agent to institute proceedings
against OIN in the courts of any other jurisdiction.
SECTION 10.08. COUNTERPARTS; INTEGRATION. This
Amended 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.
This Amended Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to
the subject matter hereof.
SECTION 10.09. CERTAIN PROVISIONS OF THE EXISTING
AGREEMENT. If and to the extent that the Amendment Effective
Date occurs and a Borrowing occurs on that date, each Bank agrees
to waive the seven Domestic Business Day notice period contained
in Section 2.08 of the Existing Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amended Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
OVERSEAS SHIPHOLDING GROUP, INC.
By S/Robert N.Cowen
-----------------------------
Title: Senior Vice President
1114 Avenue of the Americas
New York, New York 10036
Attention: General Counsel
Telex number: 426011 OSHG
OSG BULK SHIPS, INC.
By S/Ran Hettena
---------------------------
Title: President
c/o Overseas Shipholding Group, Inc.
1114 Avenue of the Americas
New York, New York 10036
Attention: Secretary
Telex number: 426011 OSHG
OSG INTERNATIONAL, INC.
By S/Ran Hettena
---------------------------
Title: Vice President
c/o Overseas Shipholding Group, Inc.
1114 Avenue of the Americas
New York, New York 10036
Attention: Secretary
Telex number: 426011 OSHG
COMMITMENTS
-----------
CO-ARRANGERS:
$ 51,875,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By S/Diana H. Imhof
----------------------------
Title: Associate
$ 51,875,000 CITIBANK, N.A.
By S/John Hess
----------------------------
Title: Vice President
$ 51,875,000 THE BANK OF NOVA SCOTIA
By S/Terry K. Fryett
---------------------------
Title: Vice President
$ 51,875,000 BARCLAYS BANK PLC
By S/Peter Yetman
--------------------------
Title: Associate Director
$ 51,875,000 CIBC, INC.
By S/Judith D. Domkowski
-------------------------
Title: Vice President
$ 51,875,000 THE CHASE MANHATTAN BANK, N.A.
By S/Francis J. Bergold
-------------------------
Title: Vice President
$ 51,875,000 CHEMICAL BANK
By S/Richard W. Stewart
------------------------
Title: Vice President
$ 51,875,000 LTCB TRUST COMPANY
By S/Rene O. LeBlanc
------------------------
Title: Senior Vice President
OTHER BANKS:
$ 35,000,000 ROYAL BANK OF CANADA
By S/D.G. Calancie
-----------------------
Title: Senior Manager
$ 25,000,000 THE FIRST NATIONAL BANK OF BOSTON
By S/Daniel O'Connor
-----------------------
Title: Director
$ 25,000,000 THE MITSUBISHI BANK, LIMITED
By S/Paula Mueller
------------------------
Title: Vice President
-----------------
Total Commitments
$500,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent
By S/Diana H. Imhof
---------------------------
Title: Associate
60 Wall Street
New York, New York 10260
Telecopy Number:(212)648-5014
Attention: Diana Imhof
CITIBANK, N.A.,
as Administrative Agent
By S/John Hess
--------------------------
Title: Vice President
One Court Square
7th Floor
Long Island City, NY 11120
Telecopy Number: (718)248-4844
Attention: Leonard Sarcona
The undersigned agrees to the amendments made under the foregoing
Amended and Restated Credit Agreement (including without
limitation Section 10.09) and acknowledges that, once it has been
paid all amounts owed to it thereunder, it will not be a Bank
thereunder for purposes of the period commencing on the Amendment
Effective Date.
SWISS BANK CORPORATION
By S/David S. Dickenson
----------------------
Title: Director
International
Merchant Banking
By S/William M. Coulter
----------------------
Title: Director
Commodity Trade Finance
Agreed and accepted as of the
Amendment Effective Date.
CITIBANK, N.A.,
as Manager and Administrative Agent
By: S/John Hess
----------------------
Title: Vice President
<PAGE>
SCHEDULE 1
OSG SUPER FACILITY
SCHEDULE OF PERMITTED LIENS
DEBT/LEASE
OBLIGATION
OUTSTANDING AS
OF SEPTEMBER 30, 1994
---------------------
CAPITAL LEASES
O/S CHICAGO $17,077,202
O/S OHIO 18,291,623
O/S NEW YORK 20,853,285
O/S WASHINGTON 22,048,418
O/S HARRIETTE 10,866,227
O/S MARILYN 11,013,349
O/S PHILADELPHIA 36,807,441
O/S NEW ORLEANS 37,056,747
------------
CAPITAL LEASE SUBTOTAL $174,014,291
TITLE XI BONDS
O/S BOSTON $11,820,000
C. ITOH DEBT
SUZANNE $10,443,317
TEACHERS PRIVATE PLACEMENTS
PACIFIC HUNTER 10,221,319
ATLANTIA 11,827,921
-----------
TEACHERS SUBTOTAL $22,049,240
-----------
TOTAL SCHEDULE 1 LIENS $218,326,848
<PAGE>
SCHEDULE 2
NON-RECOURSE SUBSIDIARIES
There are no Non-Recourse Subsidiaries as of the
Amendment Effective Date. See Section 4.09(b).
<PAGE>
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin", "Commitment
Fee Rate" and "Facility Fee Rate" for any day are the
respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on
such day:
(basis points per annum)
------------------------
Status Level Level Level Level Level
I II III IV V
Euro-Dollar Margin 36.25 43.125 47.50 55.00 92.50
CD Margin 48.75 55.625 60.00 67.50 105.00
Commitment Fee Rate 5.00 5.00 5.00 5.00 5.00
Facility Fee Rate 13.75 16.875 20.00 25.00 32.50
For purposes of this Schedule, the following terms
have the following meanings:
"Level I Status" exists at any date if, at such
date, the Company's long-term debt is rated BBB or higher by
S&P and Baa2 or higher by Moody's.
"Level II Status" exists at any date if, at such
date, (i) the Company's long-term debt is rated BBB- or
higher by S&P and Baa3 or higher by Moody's and (ii) Level I
Status does not exist.
"Level III Status" exists at any date if, at such
date, (i) the Company's long-term debt is rated (x) BBB- or
higher by S&P and Ba1 or higher by Moody's or (y) BB+ or
higher by S&P and Baa3 or higher by Moody's and (ii) neither
Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such
date, (i) the Company's long-term debt is rated BB+ or
higher by S&P and Ba1 or higher by Moody's and (ii) none of
Level I Status, Level II Status and Level III Status exists.
"Level V Status" exists at any date if, at such
date, no other Status exists.
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group.
"Status" refers to the determination of which of
Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status exists at any date.
The credit ratings to be utilized for purposes of this
Schedule are those assigned to the publicly-traded senior
unsecured long-term debt securities of the Company without
third-party credit enhancement, and any rating assigned to
any other debt security of the Company shall be disregarded.
The rating in effect at any date is that in effect at the
close of business on such date.
<PAGE>
EXHIBIT A
NOTE
New York, New York
, 199
-------- -- --
For value received, , a
corporation (the "Borrower"), promises to pay to
the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below
on the last day of the Interest Period relating to such
Loan. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the
rate or rates provided for in the Credit Agreement. All
such payments of principal and interest shall be made in
lawful money of the United States in Federal or other
immediately available funds at the office of Citibank, N.A.,
399 Park Avenue, New York, New York 10043.
All Loans made by the Bank, the respective types
and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank and, prior to any
transfer or enforcement hereof, appropriate notations to
evidence the foregoing information with respect to each such
Loan then outstanding shall be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; PROVIDED that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Amended and Restated Credit Agreement dated as of February
9, 1990, as amended and restated as of October 31, 1994,
among Overseas Shipholding Group, Inc., OSG Bulk Ships, Inc.
and OSG International, Inc., the banks listed on the
signature pages thereof, Citibank, N.A., as Administrative
Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity
hereof.
[BORROWER]
By----------------------------
Title:
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------
Type and Amount of
Amount Principal Maturity Notation
Date of Loan Repaid Date Made By
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
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<PAGE>
EXHIBIT B-1
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Citibank, N.A. (the "Administrative Agent")
From: [Name of Borrower]
Re: Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of February 9, 1990, as amended and
restated as of October 31, 1994, among Overseas
Shipholding Group, Inc., OSG Bulk Ships, Inc. and OSG
International, Inc., the Banks party thereto, the
Administrative Agent and Morgan Guaranty Trust Company of
New York, as Documentation Agent
We hereby give notice pursuant to Section 2.03 of the
Credit Agreement that we request Money Market Quotes for the
following proposed Money Market Borrowing(s):
Date of Borrowing: -----------------
PRINCIPAL AMOUNT* INTEREST PERIOD**
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in
the Credit Agreement.
[NAME OF BORROWER]
By---------------------------
Title:
---------------
*Amount must be $10,000,000 or a larger multiple of
$1,000,000.
**Not less than one month (LIBOR Auction) or not less than
14 days (Absolute Rate Auction), subject to the provisions of the
definition of Interest Period.
<PAGE>
EXHIBIT B-2
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of
Borrower] (the "Borrower")
Pursuant to Section 2.03 of the Amended and Restated
Credit Agreement dated as of February 9, 1990, as amended and
restated as of October 31, 1994, among Overseas Shipholding
Group, Inc., OSG Bulk Ships, Inc. and OSG International, Inc.,
the Banks party thereto, the undersigned, as Administrative
Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent, we are pleased on behalf of the Borrower to
invite you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Borrowing(s):
Date of Borrowing: -----------------
PRINCIPAL AMOUNT INTEREST PERIOD
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]
Please respond to this invitation by no later than
[2:00 P.M.] [9:30 A.M.] (New York City time) on [date].
CITIBANK, N.A.
By---------------------------
Authorized Officer
<PAGE>
EXHIBIT B-3
FORM OF MONEY MARKET QUOTE
To: Citibank, N.A., as Administrative Agent
Re: Money Market Quote to
[Name of Borrower] (the "Borrower")
In response to your invitation on behalf of the
Borrower dated , 19 , we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: -----------------------------
2. Person to contact at Quoting Bank:
---------------------------------
3. Date of Borrowing: --------------*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
AMOUNT** PERIOD*** [MARGIN****] [ABSOLUTE RATE*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $ .]**
-----------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the
sum of the individual offers exceeds the amount the Bank is
willing to lend. Bids must be made for $5,000,000 or a larger
multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the Amended and Restated Credit
Agreement dated as of February 9, 1990, as amended and
restated as of October 31, 1994, among Overseas Shipholding
Group, Inc., OSG Bulk Ships, Inc. and OSG International,
Inc., the Banks party thereto, yourselves, as Administrative
Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent, irrevocably obligates us to make the
Money Market Loan(s) for which any offer(s) are accepted, in
whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:-------------- By:---------------------------
Authorized Officer
--------------
*** Not less than one month or not less than 14 days, as
specified in the related Invitation. No more than five bids are
permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify whether
"PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of , 19 among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
OVERSEAS SHIPHOLDING GROUP, INC. (the "Company") and CITIBANK,
N.A., as Administrative Agent (the "Administrative Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Amended and Restated Credit Agreement
dated as of February 9, 1990, as amended and restated as of
October 31, 1994, as amended (the "Credit Agreement") among the
Assignor and the other Banks party thereto, as Banks, Overseas
Shipholding Group, Inc., OSG Bulk Ships, Inc. and OSG
International, Inc., as borrowers, Citibank, N.A., as
Administrative Agent, and Morgan Guaranty Trust Company of New
York, as Documentation Agent;
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans to the Borrowers in an
aggregate principal amount at any time outstanding not to exceed
$ ;
WHEREAS, Loans made to the Borrowers by the Assignor
under the Credit Agreement in the aggregate principal amount of
$ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of [a portion of]* its Commitment thereunder
in an amount equal to $ (the "Assigned Amount"),
together with [a corresponding portion of] its outstanding Loans,
and the Assignee proposes to accept assignment of such rights and
assume the [corresponding] obligations from the Assignor on such
terms;
-----------
*Bracketed language should be deleted if this Assignment and
Assumption Agreement is executed and delivered pursuant to
Section 2.17(c) or 8.05 of the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein, the parties hereto agree
as follows:
SECTION 1. DEFINITIONS. All capitalized terms not
otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement.
SECTION 2. ASSIGNMENT. The Assignor hereby assigns
and sells to the Assignee all of the rights of the Assignor under
the Credit Agreement [to the extent of the Assigned Amount], and
the Assignee hereby accepts such assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit
Agreement [to the extent of the Assigned Amount], including the
purchase from the Assignor of [the corresponding portion of] the
principal amount of the Loans made by the Assignor outstanding at
the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, the Company and the Administrative Agent
and the payment of the amounts specified in Section 3 required to
be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii)
the Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement [to the extent such
obligations have been assumed by the Assignee]. The assignment
provided for herein shall be without recourse to the Assignor.*
SECTION 3. PAYMENTS. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in Federal
funds an amount equal to $ .** It is understood that
commitment and facility fees accrued to the date hereof are for
the account of the Assignor and such fees accruing from and
---------------
*Bracketed language should be deleted if this Assignment and
Assumption Agreement is executed and delivered pursuant to
Section 2.17(c) or 8.05 of the Credit Agreement.
**Amount should combine principal together with accrued
interest and breakage compensation, if any, to be paid by the
Assignee, net of any portion of any upfront fee to be paid by the
Assignor to the Assignee. It may be preferable in an
appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.
including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for
the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such
other party.
[SECTION 4. CONSENT OF THE COMPANY AND ACKNOWLEDGEMENT
OF THE ADMINISTRATIVE AGENT. This Agreement is conditioned upon
the consent of [the Company and the acknowledgement of the
Administrative Agent pursuant to Section 10.05(c)] [the Company
[and the Required Banks] and the acknowledgement of the
Administrative Agent pursuant to Section [2.17(c)] [8.05]] of the
Credit Agreement. The execution of this Agreement by the Company
[, the Required Banks] and the Administrative Agent is evidence
of this consent and acknowledgement. Pursuant to Section
[2.17(c)] [8.05] [10.05(d)] the Company agrees to execute and
deliver, and to cause each other Borrower to execute and deliver,
a Note payable to the order of the Assignee to evidence the
assignment and assumption provided for herein, and (if such a
Note is delivered to the Assignee) the Assignor agrees to return
its Note to the Borrowers (i) for cancellation, if the Assignor
assigns all of its rights and obligations under the Agreement to
the Assignee or (ii) in exchange for a new Note, reflecting the
unassigned amount, if the Assignor does not assign all of its
rights and obligations under the Agreement.]
SECTION 5. NON-RELIANCE ON ASSIGNOR. The Assignor
makes no representation or warranty in connection with, and shall
have no responsibility with respect to, the solvency, financial
condition or statements of any Borrower, or the validity and
enforceability of the obligations of any Borrower in respect of
the Credit Agreement or any Note. The Assignee acknowledges
that it has, independently and without reliance on the Assignor
or either Agent, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrowers.
SECTION 6. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 7. COUNTERPARTS. This 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.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By--------------------------
Title:
[Address]
Telex Number:
Attention:
[ASSIGNEE]
By--------------------------
Title:
[Address]
Telex Number:
Attention:
OVERSEAS SHIPHOLDING GROUP, INC.
By--------------------------
Title:
[REQUIRED BANKS]*
Acknowledged by:
CITIBANK, N.A.,
as Administrative Agent
By-----------------------
Title:
------------
*The consent of the Required Banks is only required in the
case of an assignment to any bank other than a Bank pursuant to
Section 2.17(c) or 8.05.
<PAGE>
EXHIBIT E
[NORTH AMERICAN SHIP AGENCIES, INC. LETTERHEAD]
[Amendment Effective Date]
OSG International, Inc.
c/o Overseas Shipholding Group, Inc.
511 Fifth Avenue
New York, New York 10019
Morgan Guaranty Trust Company of New York,
as Documentation Agent
60 Wall Street
New York, New York 10260
Citibank, N.A.,
as Administrative Agent
320 Park Avenue
New York, New York 10043
Re: Amended and Restated Credit Agreement dated as of February
9, 1990, as amended and restated as of October 31, 1994,
among Overseas Shipholding Group, Inc., OSG Bulk Ships,
Inc., and OSG International, Inc., the Banks party thereto,
Citibank, N.A., as Administrative Agent, and Morgan Guaranty
Trust Company of New York, as Documentation Agent
Gentlemen:
This letter is to indicate our acceptance of our
appointment as agent for OSG International, Inc. ("OIN"), as
borrower, for service of all process brought against OIN in the
State of New York at 1114 Avenue of the Americas, New York, New
York 10036 pursuant to the above-referenced Credit Agreement (the
"Credit Agreement").
Further, it is our understanding that our appointment
is irrevocable and will remain in effect so long as any Bank has
any Commitment under the Credit Agreement or any amount payable
under the Credit Agreement or any Note issued under the Credit
Agreement remains unpaid or until the appointment of, and
acceptance by, a successor agent.
We agree to give OIN a copy of any such process so
served pursuant to such appointment by hand delivery and
registered air mail.
All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit
Agreement.
Very truly yours,
NORTH AMERICAN SHIP AGENCIES, INC.
By-------------------------------
Name:
Title:
<PAGE>
EXHIBIT F
ADMINISTRATIVE QUESTIONNAIRE
1) NAME OF LENDING ENTITY
FOR SIGNATURE PAGE
2) DOMESTIC LENDING OFFICE
Names and Titles: ------------------------------
------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Facsimile: ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
3) EURODOLLAR LENDING OFFICE
Names and Titles: ------------------------------
------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Facsimile: ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
4) CONTACTS - CREDIT MATTERS
Names and Titles: ------------------------------
------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
5) CONTACTS - OPERATIONS/ADMINISTRATION
Names and Titles: ------------------------------
------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Facsimile: ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
6) CONTACTS-DISTRIBUTIONS OF EXECUTION COPIES
Names and Titles: ------------------------------
------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Facsimile: ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
7) CONTACTS-DISTRIBUTIONS OF CONFORMED COPIES
Names and Titles: ------------------------------
Addresses: ------------------------------
------------------------------
------------------------------
Telephone(s): ------------------------------
Facsimile: ------------------------------
Telex: ------------------------------
Answer Back: ------------------------------
8) PAYMENT INSTRUCTIONS (Specify type of lending office)
Payment to: ------------------------------
(Name of Bank)
------------------------------
City, State: ------------------------------
ABA Number: ------------------------------
Account Number: ------------------------------
Account Name: ------------------------------
Reference: ------------------------------
<PAGE>
EXHIBIT 10(d)(2)
----------------
AMENDMENT NO. 1 TO GENERAL SERVICES AGREEMENT
BETWEEN
OVERSEAS SHIPHOLDING GROUP, INC.
AND
MARITIME OVERSEAS CORPORATION
This Amendment No. 1 dated as of January 1, 1975 to General
Services Agreement dated December 31, 1969 (the "General Services
Agreement") between Overseas Shipholding Group, Inc., a Delaware
corporation (the "Owner") and Maritime Overseas Corporation, a
New York corporation ("MOC").
WITNESSETH:
-----------
WHEREAS, the Owner and MOC desire to amend the General
Services Agreement as hereinafter set forth:
NOW, THEREFORE, the parties hereto do mutually agree as
follows:
1. Section 5(a) of the General Services Agreement is
hereby amended by inserting "(the "Allocable Cost") at the end of
subdivision (i) thereof.
2. Section 5(b) of the General Services Agreement is
hereby deleted in its entirety and the following is substituted
therefor:
"(b) Anything herein to the contrary
notwithstanding, the total fee payable hereunder
for any year commencing with the year 1975 may not
be increased by more than 10% of the Allocable
Cost for the immediately preceding year after
adjusting same to reflect changes in the weighted
number of Vessels owned or operated during the
respective years by the Owner and its subsidiaries
(including the Maritime Service Vessels). For
example, if the weighted number of such vessels in
1974 is 50 and in 1975 is 60, and if the Allocable
Cost for 1974 is $ , the total fee payable
hereunder for 1975 may not be increased by more
than $ (10% of $ times 60/50ths)."
3. Except as hereby amended, the General Services
Agreement shall remain unaltered and continue in full force and
effect.
4. Nothing herein contained shall affect the terms of
letter agreement dated as of August 9, 1973 between the Owner and
MOC, providing, among other things, for certain limitations on
MOC's consolidated net income from shipping operations, which
letter of agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be executed and delivered as of the day and
year first above written.
OVERSEAS SHIPHOLDING GROUP, INC. MARITIME OVERSEAS CORPORATION
By:---------------------------- By:-------------------------
<PAGE>
EXHIBIT 10(d)(6)
----------------
AMENDMENT NO. 4 TO GENERAL SERVICES AGREEMENT
BETWEEN
OVERSEAS SHIPHOLDING GROUP, INC.
AND
MARITIME OVERSEAS CORPORATION
This Amendment No. 4 dated as of July 1, 1994 to General
Services Agreement dated December 31, 1969, as heretofore amended
(the "General Services Agreement") between Overseas Shipholding
Group, Inc., a Delaware corporation (the "Owner") and Maritime
Overseas Corporation, a New York corporation ("MOC").
W I T N E S S E T H:
WHEREAS, the Owner and MOC desire to amend the General
Services Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto do mutually agree as
follows:
1. Section 5 of the General Services Agreement is hereby
deleted in its entirety and the following is substituted
therefor:
"5. COMPENSATION - (a) For the duties and services to be
performed hereunder and in addition to the fees set forth in the
respective American Agency Agreements and Foreign Agency
Agreements, MOC shall receive, for each year a fee equal to (i)
that portion of MOC's total costs of carrying on its shipping
operations for that year which the number of Vessels owned or
operated by the Owner and its subsidiaries (including vessels
operated under Maritime Service Agreements as defined in Section
15 of the American Agency Agreements and herein called "Maritime
Service Vessels") bears to the sum of the number of said Vessels
(including Maritime Service Vessels ) and the number of vessels
managed by MOC and its subsidiaries for third parties in that
year (ii) less the amount of fees (other than brokerage
commissions) paid or payable to MOC and its subsidiaries for that
year under the American Agency Agreements, the Foreign Agency
Agreements and the Maritime Service Agreements.
" (b) For purposes of this Section 5, each vessel
managed by MOC and its subsidiaries whether under this Agreement
or otherwise, shall be counted as one vessel; and, in each case,
a vessel so managed for less than a full year shall be counted as
a fraction of a vessel prorated by days on the basis of a 365 day
year. (To illustrate the operation of the foregoing sentence, a
vessel managed by MOC for 90 days shall count for the computation
hereunder as 90/365th of 1 vessel). Newbuilding vessels shall be
deemed managed and included in the computation from the date of
commencement of work at the builder's shipyard, in accordance
with the advice received from the builder.
" (c) MOC's total costs of carrying on its shipping
operations for any year shall be determined on an accrual basis
in accordance with generally accepted accounting principles
applied on a consistent basis from year to year, and shall
include all necessary expenses of whatsoever kind of MOC and its
subsidiaries relating to shipping operations, including, without
limitation, fees payable to any shipping agency affiliate of MOC
other than subsidiaries of MOC, rent, depreciation of furniture,
fixtures, vehicles and equipment, amortization of leasehold
improvements, interest expense, salaries and other compensation
(excluding 50% of the total amount of salary and related employee
benefit costs paid by MOC to or for the account of persons
employed in its chartering and brokerage department),
contributions to pension plans, profit-sharing plans, or other
employee benefit plans which are not required to be reimbursed to
MOC, office and administration expense, all taxes other than
income taxes and taxes measured by income, and legal and
accounting expenses, but excluding all expenses incurred for the
account of the Vessels' respective owners under Sections 3 and 7
of the American Agency Agreements and Foreign Agency Agreements,
or otherwise. Costs, if any, relating to both shipping and non-
shipping operations shall be equitably allocated between such
operations. The fee hereunder shall be calculated as of the end
of each calendar year and at the termination of this Agreement.
" (d) To illustrate the operation of this Section 5, if
the Owner and its subsidiaries in any year own or operate 30
Vessels and MOC and its subsidiaries manage 20 other vessels, the
total costs of carrying on shipping operations for that year is
$ , and the fees payable under the American Agency
Agreements and Foreign Agency Agreements aggregate $ ,
then the fee payable under this Section would be $ ,
calculated as follows:
" (e) If, in any year, the total fees payable under the
American Agency Agreements and the Foreign Agency Agreements
exceed the fee payable for that year under this Section (said fee
under this Section for this purpose being computed without
deducting therefrom the fee under the American Agency Agreements
and Foreign Agency Agreements) then one half of the amount of
such excess shall be refunded to the Owner.
" (f) The total costs of carrying on shipping operations
and the fee due for each year under this Section 5 shall be
evidenced by a detailed written statement with supporting
schedules in form acceptable to the Owner (the "Accounting")
prepared by independent certified public accountants acceptable
to the Owner, confirming same, which statement shall be presented
to the Owner within 90 days after the end of such year. The
amount due for such year, as shown by such statement, shall be
final, conclusive and binding upon the parties and shall not be
subject to review or dispute.
" (g) It is understood that the fee payable under this
Section 5 is to be paid in consideration of the services set
forth in Section 3 of this Agreement and does not constitute
payment for other services which may be rendered by MOC and its
subsidiaries in respect of any non-shipping activities which the
Owner may hereafter undertake and in writing request MOC to
perform. Compensation for such other services shall be subject
to agreement between the parties."
2. Except as hereby amended, the General Services
Agreement shall remain unaltered and continue in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 4 to be executed and delivered as of the day and
year first above written.
OVERSEAS SHIPHOLDING GROUP, INC. MARITIME OVERSEAS CORPORATION
By:------------------------- By:--------------------------
Senior Vice President Senior Vice President
<PAGE>
EXHIBIT 10 (e)(1)
-----------------
MARITIME OVERSEAS CORPORATION
511 FIFTH AVENUE
NEW YORK, N.Y. 10017
As of August 9, 1973
Overseas Shipholding Group, Inc.
511 Fifth Avenue
New York, N.Y. 10017
Gentlemen:
Reference is made to the various agreements between Maritime
Overseas Corporation ("MOC") and Overseas Shipholding Group, Inc.
("OSG"), OSG's subsidiaries and OSG's 50%-owned corporations
(hereinafter collectively the "OSG Group of Companies"), under
which MOC serves as agent in connection with the management and
operation of vessels, as exclusive chartering broker, and as
exclusive broker in connection with purchase, sale and
construction of vessels for the OSG Group of Companies and
renders certain additional services to the OSG Group of
Companies.
MOC hereby agrees that if its consolidated net income from
shipping operations in any calendar year commencing with the year
ending December 31, 1973 shall exceed the agreed maximum
hereinafter set forth, brokerage commissions payable by the OSG
Group of Companies in respect of such year shall be reduced to
such extent as will result in reducing MOC's consolidated net
income from shipping operations for such year to the agreed
maximum for such year. The agreed maximum consolidated net
income from shipping operations for the year ending December 31,
1973 shall be $ ; the agreed maximum for each year
thereafter shall be 10% more than the agreed maximum for the
immediately preceding year, so that the agreed maximum for the
year ending December 31, 1974 will be $ , the agreed
maximum for the year ending December 31, 1975 will be
$ uand so forth. Consolidated net income from shipping
operations shall be calculated each year by MOC's regularly
employed accountants, subject to verification by OSG, in
accordance with generally accepted accounting principles applied
on a consistent basis, after provision for all federal and state
taxes on income from shipping operations. MOC's shipping
operations include management and operation of vessels, serving
as ship brokers, and any and all operations relating to shipping,
including without limitation all services rendered by MOC or its
subsidiaries to the OSG Group of Companies and any similar
services that may be rendered by MOC or its subsidiaries to any
other person, firm or corporation engaged in the shipping
business.
If there should be any reduction in brokerage fees payable
by the OSG Group of Companies by reason of the foregoing
provisions, the reduction in such fees shall be allocated among
the OSG Group of Companies in such manner and in such amounts as
shall be designated by OSG. Any overpayment of brokerage fees
shall be refunded by MOC promptly upon the determination of the
amount thereof and the designation by OSG of the companies
entitled thereto.
MOC understands that effective from the effective date
hereof the salaries of all officers of OSG will be determined by
the Board of Directors of OSG and paid by OSG. Messrs. Hettena,
Feder and Kliger, all of whom are now officers of OSG, have in
the past served as officers of MOC, and have received
compensation from MOC. It is anticipated that each will continue
to serve as an officer of MOC. We hereby confirm that to the
extent services performed by Messrs. Hettena, Feder and Kliger
are required to be provided by MOC to the OSG Group of Companies
pursuant to existing agreements between MOC and the OSG Group of
Companies, MOC will reimburse such salaries to OSG, with a view
to having the OSG Group of Companies bear the economic cost of
only the same portion of the salaries of Messrs. Hettena, Feder
and Kliger as is required to be borne by the OSG Group of
Companies under the existing agreements.
MOC further undertakes that so long as it manages vessels of
the OSG Group of Companies, the rate of salary MOC pays to its
highest paid executive shall not exceed twice the rate of salary
being paid by OSG to OSG's highest paid executive except with the
specific approval of the Board of Directors of OSG.
Very truly yours,
MARITIME OVERSEAS CORPORATION
By:--------------------------
AGREED TO:
OVERSEAS SHIPHOLDING GROUP, INC.
By: --------------------------
<PAGE>
EXHIBIT 10(e)(2)
----------------
MARITIME OVERSEAS CORPORATION
511 FIFTH AVENUE
NEW YORK, N.Y. 10017
As of August 9, 1973
Overseas Shipholding Group, Inc.
511 Fifth Avenue
New York, N.Y. 10017
Gentlemen:
We wish to confirm our agreement that so long as we continue
to serve as agents for the management and operation of ships and
as ship and chartering broker for Overseas Shipholding Group,
Inc. ("OSG"), its subsidiaries and 50%-owned corporations
(collectively the "OSG Group of Companies"), we shall offer to
OSG for itself or for such of the OSG Group of Companies as OSG
may designate, a right of first refusal on all transactions
(including charters, contracts of affreightment, acquisition of
vessels and newbuildings) which become available to Maritime
Overseas Corporation, of which one of the OSG Group of Companies
is able to avail itself and which the Board of OSG determines
might be suitable for the OSG Group of Companies. Such offers
shall be communicated promptly to such officer or officers of OSG
as may be designated from time to time by the Board of Directors
of OSG. It is, of course, understood that the standards of
suitability for the OSG Group of Companies will be reviewed
periodically by OSG's Board of Directors and, therefore, may be
subject to change from time to time.
Very truly yours,
MARITIME OVERSEAS CORPORATION
By:---------------------------
<PAGE>
EXHIBIT 10(e)(3)
----------------
MARITIME OVERSEAS CORPORATION
511 FIFTH AVENUE
NEW YORK, NEW YORK 10017
As of August 9, 1973
Overseas Shipholding Group, Inc.
511 Fifth Avenue
New York, N.Y. 10017
Gentlemen:
We wish to confirm our undertaking that in case of any
proposed sale of the business of Maritime Overseas Corporation
("MOC") while MOC serves as agent for the management of your
ships MOC shall first offer on substantially the same terms and
conditions for a period of 30 days to sell such business to
Overseas Shipholding Group, Inc. ("OSG"). In case of any
proposed sale of all the equity interests in MOC while MOC serves
as agent for the management of you ships MOC shall cause such
equity interests to be offered to OSG on substantially the same
terms and conditions for a period of 30 days, or failing that,
shall offer to sell the business of MOC to OSG on substantially
such terms and conditions for such period.
Very truly yours,
MARITIME OVERSEAS CORPORATION
By:-------------------------
<PAGE>
EXHIBIT 10(g)(1)
----------------
MANAGEMENT AGREEMENT made and entered into this day of
by and between , a Liberian
corporation (the "Owner"), and MARITIME OVERSEAS CORPORATION, a
New York corporation ("MOC").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, the Owner is or may hereafter become the registered
owner of certain seagoing vessels; and
WHEREAS, the Owner desires to arrange (subject to the
Owner's direction and control) for the sole and exclusive
management by MOC of the said vessels and other vessels
hereinafter owned or operated by the Owner and for the furnishing
of certain facilities and services by MOC to the Owner, on the
terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is agreed as follows:
1. APPOINTMENT OF MOC - The Owner appoints MOC as its sole
and exclusive agent to manage and conduct the business of the
vessel listed in Schedule "A" hereto and all other vessels now or
hereafter owned or operated by the Owner (the "Vessels") and to
furnish the facilities and perform the services hereafter set
forth, in accordance with such directions and orders as the Owner
has issued or from time to time may issue, and upon the terms and
conditions herein provided. For purposes of this Agreement,
vessels which are "owned or operated" by the Owner shall be
deemed to include any vessel which is being constructed for or on
behalf of the Owner or owned by the Owner or leased by the Owner
under bareboat charter or which the Owner has the right to manage
and operate whether by reason of any charter, agreement or
otherwise. The foregoing shall not include, however, (i) any
vessel which the Owner owns jointly with others, unless the Owner
owns a majority interest in such vessel or has the right to
manage and operate such vessel for the joint owners, (ii) any
vessel which is under bareboat charter from the Owner to third
parties, and (iii) any vessel which is under time charter to the
Owner from a person, firm or corporation for whom MOC or a
subsidiary acts as agent under a management agreement in
substantially the same form as this Agreement.
2. ACCEPTANCE OF APPOINTMENT - MOC accepts such
appointment and undertakes to manage the Vessels and to furnish
the facilities and provide the services herein described all
under this Agreement for the account of the Owner and in
accordance with such directions and instructions as the Owner has
issued or from time to time may issue, and upon the terms and
conditions herein provided. MOC shall perform its duties under
this Agreement in accordance with the standards of care of first-
class vessel operators. Nothing in this Agreement shall be
deemed to grant to MOC any interest in any Vessel or in the
profits resulting from its operation or as creating any
relationship other than that of principal and agent. MOC shall
not, on behalf of the Owner, enter in any transaction not in the
ordinary course of shipping business or enter into any commitment
extending (or at the option of the other party, renewable) beyond
two years, without the prior approval of the Owner. All charter
parties will be entered into only with the prior approval of, and
executed by, the Owner.
3. DUTIES OF MOC - For the account of the Owner, in
accordance with such directions, orders, forms and methods of
supervision and inspection as the Owner may from time to time
issue, in an economical and efficient manner, and exercising due
diligence to protect and safeguard the interests of the Owner, in
connection with the duties prescribed in this Agreement, MOC
shall:
(A) AGENCY
(a) Engage and dismiss the Masters, Officers and crews
of the Vessels, and al other personnel necessary for the
operation of the Vessels (all of whom shall be employees of the
Owner), and supervise payment of their wages and other
compensation (including overtime and vacation pay) and payment to
unions.
(b) Prepare and file on behalf of the Owner payroll
tax returns, if any, and make payment of all payroll taxes due
thereon.
(c) Purchase all necessary stores, supplies, services
and provisions for the Vessels and supervise the distribution
thereof to the Vessels.
(d) Arrange for and supervise all repairs and
maintenance of the Vessels and arrange for and supervise vessel
classification and other vessel surveys, shipyard overhaul, major
repairs and drydocking, and appoint classification, Coast Guard
and other surveyors.
(e) Conduct all business of the Vessels, including but
not limited to all matters with respect to voyages, cargoes and
persons to be carried, and procure or provide all services
incident thereto including, but not limited to, cargo handling,
port activities (including pilotage, towing wharfage and
dockage), canal transits, services of agents, brokers and
consultants, and arrange payment of all expenses in respect of
the foregoing as necessary for the operation of the Vessels.
(f) Issue or cause to be issued all necessary shipping
documents, freight contracts and bills of lading.
(g) Place all Hull Machinery, Protection and
Indemnity, War Risk insurances and any other insurance, on
Vessels, crew, cargo or freight, and pay all insurance premiums
thereon.
(h) Process and handle all insurance claims an collect
the proceeds thereof.
(i) Execute voyage schedules, routing, loading and
discharging.
(j) Arrange for all stevedoring, bunkering, towage and
other contracts.
(k) Attend to relations with charterers of Vessels.
(l) Handle all claims and collections arising out of
the operations of the Vessels, including the collection and
handling of all hire payments, demurrage and dispatch.
(m) Arrange for taking inventories of stores, food and
equipment, as required.
(n) Arrange for the entry and clearance of the
Vessels, and or berth and terminal facilities when necessary.
(o) Handle all functions ashore which usually devolve
upon the owner of a vessel.
(p) Perform all necessary services in connection with
salvage and general average.
(q) Keep the Owner advised with respect to the
operation of the Vessels and the performance by MOC of its
services hereunder.
(r) Keep books, records and accounts (which shall be
the property of the Owner) relating to the activities,
maintenance and business of the Vessels in such form as may be
required by the Owner.
(s) Attend to the chartering of Vessels.
(B) ACCOUNTING
(i) Handle all accounting and
financial activities relating to the Owner.
(ii) Keep records and books of
account for the Owner, in accordance with the
procedures heretofore followed by MOC, and provide
it and its accountants and representatives access
to such records and books of account at all times
during normal business hours.
(iii) Process accounts payable and accounts receivable.
(iv) Prepare periodic
accounting and financial reports, including
balance sheets, profit and loss statements and
cash flow statements as required.
(v) Assist the accounts and
tax advisors of the Owner in preparing tax
returns.
(B) FINANCE
(i) Assist, when required, in
arranging for the financing through banks, lending
institutions and others.
(ii) Advise with respect to
alternative means for raising of equity and debt
capital.
(D) SHIPBUILDING AND ACQUISITIONS
(i) As required by the Owner,
prepare and arrange for studies, surveys, and
projections with respect to vessel construction
and conversion, the charter and ship sales market,
economic conditions in the shipping and other
industries, and make recommendations with respect
to vessel construction and acquisition based
thereon.
(ii) Negotiate and supervise
newbuilding construction and other vessel
acquisitions for account of the Owner, advise with
respect thereto, and accept delivery on its behalf
of all vessel being constructed or otherwise
acquired.
(E) GENERAL
(i) Prepare reports and
information which the Owner may from time to time
be required or elect to file with governmental
agencies in connection with any of the Vessels,
and as otherwise required by law.
(ii) Furnish office space and
facilities.
In connection with the performance of its duties under the
Agreement, MOC shall, from time to time, consult with members of
its legal department and, upon instructions of the Owner, retain
independent counsel for the account of the Owner.
Nothing in this Agreement shall be deemed to obligate MOC to
expend its own funds in the payment of any amounts to be
disbursed for the account of the Owner and for which Owner is,
pursuant to Section 6 of this Agreement, required to reimburse
MOC, it being understood that all such funds shall be provided by
the Owner as herein set forth.
4. OFFICE AND STAFF; BONDING - MOC shall at all times
maintain appropriate offices, facilities and staff in order to
perform properly the duties and services set forth in this
Agreement. MOC's employees who handle or are responsible for the
funds of the Owner shall be bonded by a fidelity bond for the
benefit of MOC and the Owner as their interests may appear.
5. COMPENSATION - (a) For the duties and services to be
performed hereunder, MOC shall receive in respect of each Vessel
(i) during the period commencing with the date of delivery of
such vessel by the builder thereof to the Owner or the date of
acquisition of such Vessel by the Owner, as the case may be, the
sum of $ per month, payable in each case in advance on
the first business day of each month and (ii) if such Vessel is
being constructed for or on behalf of the Owner, during the
period from the date of the laying of the keel of such Vessel
until such date of delivery the sum of $ per month,
payable in the same manner as in clause (i).
(b) The fee payable to MOC shall be automatically
increased or decreased at the end of each year (commencing at the
end of 1970) in proportion to the increase or decrease from the
preceding year in the total fees (the "General Services Fee")
which MOC would be entitled to receive in such years from
Overseas Shipholding Group, Inc. ("Overseas") under Section 5 of
the General Services Agreement dated December 31, 1969 between
Overseas and MOC, if no effect were given in the computation of
such fee payable by Overseas to the deduction provided for in
clause (ii) of Section 5(a) of such General Services Agreement,
and with appropriate adjustment for changes in the number of
ships managed by MOC for Overseas and its subsidiaries during the
respective years (not including ships jointly owned, directly or
indirectly, by Overseas and any other company which has an equity
interest in the Owner), to the extent such increase or decrease
is unrelated to a material change in the services to be performed
by MOC for Overseas and its subsidiaries. Such adjustment shall
be effective commencing January 1 of the year as to which such
increase or decrease is calculated. Any payments relating to
such year to be made as a result of such adjustment shall be made
not later than April 30 of the following year, and the fee as
adjusted shall be paid commencing January 1 of such following
year. If, at any time there shall be no General Services Fee in
effect, the fee payable to MOC shall be subject to adjustment
from time to time by written agreement of the parties to reflect
fees generally paid in the industry for comparable services and
to reflect changes in the costs of providing services
contemplated by this Agreement, it being understood that the fee
set forth in this Section 5 has been computed in such a manner as
to contain all components of the General Services Fee plus
chartering brokerage commissions.
Anything herein to the contrary notwithstanding, the
total fee payable hereunder for any Vessel for any year may not
be increased by more than 10% of the total fee paid for the
immediately preceding year nor be less than the applicable rate
set forth in Section 5(a).
(c) For purposes of this Section 5, in respect of a
Vessel managed by MOC for less than a full month, or as to which
a fee at a given rate as provided in Section 5(a) is applicable
for less than a full month, MOC's fees shall be pro-rated on a
daily basis on the basis of the number of days in such month.
6. EXPENSES - The fees set forth in Section 5 of this
Agreement shall not include, and the Owner shall promptly
reimburse MOC for, all amounts incurred, expended or disbursed by
MOC for the direct account of the Vessels or the Owner pursuant
to Section 3 of this Agreement or otherwise including without
limitation, travel expenses (including without limitation living
expenses during travel), awards and costs of arbitration and
litigation, and outside legal, accounting and other professional
fees and charges, but not including MOC's office and other
overhead expenses (such office and other overhead expenses
include, without limitation, telegrams, cables, long-distance
telephone calls, postage, stationery, printing for MOC, and
salaries of employees of MOC and its subsidiaries). MOC shall,
when it may legally do so, pay and pass on to the Owner the full
amounts and benefits of any refunds, rebates, credits or
commissions which it may receive from any persons furnishing
services or supplies for the account of the Vessels.
7. ADVANCE AND COLLECTIONS - The Owner shall from time to
time advance or cause to be advanced to MOC all funds necessary
to enable MOC to pay those of the necessary costs and expenses of
managing the Vessels and performing its duties under this
Agreement for which Owner is, pursuant to Section 6 of this
Agreement, required to reimburse MOC. MOC shall collect when due
all freights and other funds accruing to the Owner arising out of
the performance of its duties hereunder. MOC shall keep all
funds received by way of advances or collections separate and
apart from its own funds and such funds shall be held in trust
for the Owner.
8. AGENTS. MOC may appoint steamship or other agents in
various ports of call of the Vessels for the husbanding, handling
and servicing thereof, from the regularly established list of
agents customarily used by MOC. Such agents may include Maritime
Overseas Company, Ltd., London, or any other shipping agency
affiliate of MOC. MOC assumes no responsibility for the acts or
omissions of any agents so appointed which are not affiliated
with MOC provided that MOC shall use reasonable care in the
selection and supervision of such agents. MOC shall, however, be
responsible for the acts or omissions of any agents so appointed
which are affiliated with MOC to the same extent as if such acts
or omissions had been acts or omissions of MOC. Compensation
payable by MOC to such agents shall not exceed the scales of fees
from time to time in effect in the respective ports or as is
customary in the trade at such locality and shall be for the
Owner's account, provided that the Owner shall not be responsible
for or required to reimburse MOC for fees payable by it to
Maritime Overseas Company Ltd., London, or to any other shipping
or management affiliate of MOC.
9. INDEMNIFICATION OF MOC - The Owner shall indemnify
hold harmless and defend MOC against any and all claims and
demands (including costs and reasonable attorneys' fees in
defending such claims and demands), whether or not any such
claims or demands be found to be valid, of whatsoever kind or
nature and by whomsoever asserted (but not arising out of MOC's
negligence or willful misconduct), for injury to persons or
property arising out of or in any way connected with the
condition, use or operation of the Vessels or the performance of
MOC's services in good faith hereunder, including, but not
limited to, claims for damages or injuries to, or loss of,
property, cargo or personal effects, claims for damages for
personal injury or loss of life and claims for maintenance and
cure; and shall warrant MOC free of any right or subrogation by
insurance underwriters against MOC with respect to any and all of
the foregoing risks or claims. The Owner shall cause MOC to be
named as an additional insured party in all liability policies
relating to the Vessels.
MOC shall be under no responsibility or liability for
loss or damage to any of the Vessels, or for loss of profits, or
otherwise to the Owner, arising out of any act or omission (other
than acts or omissions constituting negligence or willful
misconduct) on the part of its officers or employees, selected
with due care, in connection with the management of the Vessels
or in the performance of MOC's duties under this Agreement.
MOC shall promptly notify the Owner of any claim or
demand in respect of which MOC may be indemnified hereunder and
shall cooperate with the Owner in the defense thereof.
10. FORCE MAJEURE - MOC shall be under no liability of any
kind or nature whatsoever in the event that it should fail to
perform any services hereunder if such failure is directly or
indirectly caused by war, war-like activities, government order,
supervening illegality, riot, civil commotion or any labor
shortage, labor trouble, strike or lock-out, or any shortage of
material or Act of God or peril of the sea or any other cause
whatsoever beyond MOC's control, whether or not of the same or
similar nature.
11. DEALINGS WITH AFFILIATES - If MOC shall utilize any
related or affiliated company to render any service or to furnish
any stores, supplies, equipment, provisions, materials or
facilities in connection with the performance of its duties under
this Agreement, it shall disclose such relationship to the Owner
and shall purchase or acquire same at prices and on terms at
least as favorable as those generally obtainable from independent
furnishes of such services or supplies.
12. DIRECTIONS AND APPROVALS - In acting under this
Agreement, MOC may, subject to any other arrangement then in
effect between MOC and the parents of the Owner, accept and rely
upon directions or approvals made or given on behalf of the
Owner by any officer of the Owner or by any other person
designated by the Owner to give such directions and approvals,
unless and until MOC shall have received written notice from the
Owner of the revocation or limitation of the authority of such
persons to act on behalf of the Owner. Nothing in this Section
12 or in any other arrangement between MOC and the parents of the
Owner shall be construed as requiring MOC to obtain such
direction or approvals in any particular case, irrespective of
whether the amount of any commitment or expenditure may exceed
the amounts specified in any such arrangement.
13. EXISTING MANAGEMENT AGREEMENTS - All existing
management or agency agreements between the Owner and MOC are
hereby terminated and cancelled, and the Owner and MOC each
acknowledge that neither has, nor shall hereafter have, any
obligation to the other arising out of any such agreement or
agreements between the Owner and MOC heretofore in effect except
as provided in any other arrangement between MOC and the parents
of the Owner and except for obligations of MOC to the Owner
relating to commissions to be paid by the builder in connection
with the construction of the Vessel listed on Schedule A. Credit
against payment to MOC of amounts which may hereafter be owing by
the Owner to MOC hereunder shall be allowed the Owner for any
amounts reimbursed to MOC prior to the date of this Agreement
which would not have been so reimbursed under Section 6 of this
Agreement had this Agreement been effect on the date of such
reimbursement.
14. TERM OF AGREEMENT. This Agreement shall commence on
the date hereof and shall not be terminated except as expressly
set forth herein or as may be expressly set forth in any other
arrangement then in effect between MOC and the parents of the
Owner.
Anything herein to the contrary notwithstanding, this
Agreement shall terminate upon the happening of any of the
following events:
(a) The Owner shall sell or otherwise dispose of all
its Vessels and cease to be engaged in the shipping business.
(b) At the option of the Owner, if a petition in
bankruptcy or for arrangement or reorganization shall be filed by
MOC or such a petition shall be filed against MOC and shall not
be dismissed within 90 days after such filing, or MOC shall
become insolvent or commit an act of bankruptcy or make an
assignment for the benefit of creditors.
(c) At the option of MOC, if a petition in bankruptcy
or for arrangement or reorganization shall be filed by the Owner
or such a petition shall be filed against the Owner and shall not
be dismissed within 90 days after such filing, or the Owner shall
become insolvent or commit an act of bankruptcy or make an
assignment for the benefit of creditors.
Upon termination of this Agreement, the Owner shall
make prompt arrangements to have all outstanding matters with
respect to the Vessels taken over by the successor agent. MOC
shall co-operate with the Owner and with the successor agent whom
the Owner appoints to effect the prompt and efficient transfer of
all records, funds and duties relating to the Vessels, and
thereafter MOC shall be permitted to inspect all such records at
any reasonable time during normal business hours. MOC and the
Owner agree that any successor agent shall be appointed in such
manner as may be set forth in any other arrangement then in
effect between MOC and the parents of the Owner.
15. MANAGEMENT FOR THIRD PARTIES - The Owner recognizes
that MOC has managed and may continue to manage vessels for
persons other than the Owner and that such services may be
performed for persons, firms or corporations which are affiliated
with MOC.
16. ASSIGNMENT - This Agreement shall not be assigned by
either party without the consent in writing of the other.
17. NOTICES - All notices, demands, requests, approvals
and other communications ("Notices") which are given or required
to be given under or with respect to this Agreement, shall be
sent by registered or certified mail, postage prepaid (except in
case of emergency or urgency when they shall be sent by telex,
cable or telegram and confirmed by such registered or certified
mail), addressed to the party for whom intended at its address
specified below or to such other address as such party shall
hereafter specify by like Notice. Notices to the Owner shall be
sent in duplicate addressed to such addresses as may be furnished
to the parties by the parents of the Owner in writing.
Notices to MOC shall be addressed, until further
notice as follows:
511 Fifth Avenue
New York, New York 10017
18. ENTIRE AGREEMENT AND AMENDMENTS - Subject to any
other written agreement now or hereafter existing between MOC and
the parents of the Owner, this Agreement sets forth the entire
understanding of the parties relating to the subject matter
thereof and supersedes all other proposals and agreements, oral
or written, between the parties concerning the subject matter
hereof. None of the terms or provisions hereof shall be
modified, and this Agreement may not be amended, except by a
written instrument signed by the party against which such
modification or amendment is to be enforced.
19. WAIVER - No waiver of any provision of this Agreement
shall be effective unless in writing signed by the waiving party
and no waiver of any breach or default hereunder shall constitute
a waiver of any other subsequent breach or default, whether of
the same or different nature.
20. GOVERNING LAW - This Agreement shall be governed,
construed, performed and enforced in accordance with the laws of
the State of New York applicable to agreements made and to be
performed within that State.
21. PARTIES IN INTEREST - This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their duly authorized officers the day and year
first above written.
ATTEST:
By:--------------------------- By:---------------------------
MARITIME OVERSEAS CORPORATION
ATTEST:
By:--------------------------- By:---------------------------
<PAGE>
EXHIBIT 10(G)(3)
----------------
AMENDMENT NO. 3
DATED AS OF
TO MANAGEMENT AGREEMENT DATED
BETWEEN CORPORATION (THE "OWNER")
AND MARITIME OVERSEAS CORPORATION ("MOC")
W I T N E S S E T H :
IT IS HEREBY MUTUALLY AGREED as follows:
l. Section 5(a) of the Management Agreement is hereby
amended, commencing as of , to read as
follows:
"(a) For the duties and services to be performed
hereunder, MOC shall receive in respect of the Vessel
listed on Schedule "A" hereto, during such period as said
Vessel is chartered under Time Charter Party dated
,as amended from time to time, the sum of
$ per month, payable in advance on the first
business day of each month."
2. Except as amended hereby, all of the terms and condi
tions of the Management Agreement, as amended by Amendment No.
2, shall remain unaltered and continue in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 3 to the Management Agreement the day and year
first above written.
CORPORATION
By:--------------------------
MARITIME OVERSEAS CORPORATION
By:-------------------------
<PAGE>
EXHIBIT 10(g)(4)
---------------
COMPANY SERVICE EMPLOYEES AGREEMENT made and entered
into this day of , by and between
, a company incorporated in the Republic of Liberia
(the "Company"), and MARITIME OVERSEAS CORPORATION, a company
incorporated in New York ("MOC").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company may hereafter become the
registered owner of a certain Metric DWT double hulled
tank vessel, Hull No. (the "Vessel"), to be built by Hyundai
Corporation and Hyundai Heavy Industries Co., Ltd.;
WHEREAS, the Vessel will be time chartered by the
Company to pursuant to a Time
Charter (the "Time Charter") dated ; and
WHEREAS, the Company in order to operate the Vessel,
wishes to avail itself of the services of MOC and certain
employees of MOC and MOC is willing to perform such services and
lease certain of its employees to the Company for full or part-
time service with the Company, on the terms herein provided.
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter contained, it is agreed as follows:
1. COMPANY SERVICE EMPLOYEES. MOC agrees to provide
employees to assist the Company in the operation of the Vessel
and the management and operation of the Company's business, and
to perform such services as the Company may from time to time
request in connection therewith. Such employees shall consist of
employees of MOC who will perform on behalf of the Company the
functions described in Section 3 of this Agreement. All
employees subject to this Agreement from time to time are
referred to in this Agreement as "Company Service Employees".
Company Service Employees shall be and remain the employees of
MOC.
2. COMPENSATION FOR COMPANY SERVICE EMPLOYEES. (a) MOC
will continue to pay the salary of the Company Service Employees
and will permit them to participate in insurance and benefit
plans of MOC for which they are or may become eligible and will
at all times in respect of such personnel have the rights of
promotion, discharge, job classification and determination of
salary, expense allowance and special allowances, including
vacation and leave of absence.
(b) The Company will pay MOC for providing such
Company Service Employees and such other services as are provided
for in this Agreement (i) a monthly fee of $ during the
period commencing with the date of delivery of the Vessel by the
builders thereof to the Company or (ii) a monthly fee of $
during the period from the date of laying the keel of the Vessel
until such date of delivery.
(c) MOC shall be solely responsible for paying the
monthly salary of each Company Service Employee provided to the
Company under this Agreement and shall be solely responsible for
the payment of Social Security and other insurances and
employment taxes imposed on MOC on account of such personnel;
expenses and special allowances; and MOC's accrual of benefit
plans' expense on behalf of Company Service Employees.
(d) For purposes of this Section 2, in respect of
MOC providing Company Service Employees to the Company for less
than a full month, such fee as set forth in Section 2(b) shall be
pro-rated on a daily basis on the basis of the number of days in
such month.
3. DUTIES OF COMPANY SERVICE EMPLOYEES. The Company
Service Employees will be under the direction of MOC, shall
observe the working schedule of MOC and shall comply with such
directions, orders, forms and methods of supervision and
inspection as MOC may from time to time issue, in an economical
and efficient manner, and exercising due diligence to protect and
safeguard the interests of the Company, in connection with the
duties prescribed in this Agreement.
The Company shall be entitled to exercise MOC's
authority with respect to setting the working schedules of the
Company Service Employees and directing and supervising the work
activities of the Company Service Employees, subject to MOC's
right to override or modify any such act of the Company. The
Company shall not have the authority to perform any other
functions of MOC, such as the right to discharge Company Service
Employees.
The Company Service Employees shall follow all
instructions of MOC and/or the Company that are given pursuant to
this Section.
The Company Service Employees and MOC when requested
by one or more of the Company Service Employees or the Company
shall perform the duties and services set forth in Exhibit A
hereto.
In connection with the performance of their duties
under this Agreement, the Company Service Employees may, from
time to time, consult with members of the legal department of MOC
or, if MOC has no legal department at the time, with members of
the legal department of one of MOC's affiliates, and, upon
instructions of the Executive Committee of the Company, shall
retain independent counsel for the account of the Company.
Nothing in this Agreement shall be deemed to obligate
MOC to expend its own funds in the payment of any amounts to be
disbursed for the account of the Company and for which Company
is, pursuant to Section 5 of this Agreement, required to
reimburse MOC, it being understood that all such funds shall be
provided by the Company as herein set forth.
4. OFFICE AND STAFF; BONDING. MOC shall at all times
maintain appropriate offices, facilities and staff in order to
permit the Company Service Employees to perform properly the
duties and services set forth in this Agreement. Company Service
Employees who handle or are responsible for the funds of the
Company shall at the sole cost of MOC and in accordance with
MOC's normal procedures be bonded by a fidelity bond for the
benefit of MOC and the Company as their interests may appear.
5. COMPANY EXPENSES. All amounts incurred, expended or
disbursed by Company Service Employees for the direct account of
the Vessel or the Company pursuant to Section 3 of this Agreement
or otherwise including without limitation, travel expenses
(including without limitation living expenses during travel),
awards and costs of arbitration and litigation, and outside
legal, accounting and other professional fees and charges,
(together, "Company Expenses") shall be paid by the Company. In
the event that any funds of MOC are used to pay any Company
Expenses, the Company shall promptly reimburse MOC for the amount
of such Company Expenses paid by MOC, and the Company
acknowledges and agrees that the monthly fee set forth in Section
2 does not include any amount with respect to Company Expense.
Except as otherwise included in the monthly fee referred to in
Section 2(b), in no event shall Company Expenses include, and the
Company shall not be obligated to reimburse MOC for, MOC's office
and other overhead expenses (such office and other overhead
expenses include, without limitation, telegrams, cables, long-
distance telephone calls, postage, stationery, printing for MOC,
and salaries of employees of MOC and its subsidiaries). The
Company shall be entitled to the full amounts and benefits of any
refunds, rebates, credits or commissions which MOC or any of the
Company Service Employees may receive from any persons furnishing
services or supplies for the account of the Vessel.
6. ADVANCES AND COLLECTIONS. The Company shall from
time to time deposit funds in its bank account sufficient to
enable the Company Service Employees to pay necessary Company
Expenses and MOC shall from time to time obtain the Company's
consent to the Company Service Employees to be authorized to
access such account and to sign checks on behalf of the Company.
7. AGENTS. The Company Service Employees may appoint
steamship or other agents in various ports of call of the Vessel
for the husbanding, handling and servicing thereof, from the
regularly established list of agents customarily used by MOC.
Such agents may include any shipping agency affiliate of MOC.
MOC assumes no responsibility for the acts or omissions of any
agents so appointed which are not affiliated with MOC provided
that the Company Service Employees shall use reasonable care in
the selection and supervision of such agents. MOC shall,
however, be responsible for the acts or omissions of any agents
so appointed which are affiliated with MOC to the same extent as
if such acts or omissions had been acts or omissions of MOC.
Compensation payable to such agents shall not exceed the scales
of fees from time to time in effect in the respective ports as is
customary in the trade at such locality and shall be for the
Company's account, provided that the Company shall not be
responsible for or required to reimburse MOC for fees payable by
it to any shipping or management affiliate of MOC.
8. INDEMNIFICATION OF MOC. The Company shall
indemnify, hold harmless and defend MOC and the Company Service
Employees against any and all claims and demands (including costs
and reasonable lawyers' fees in defending such claims and
demands), whether or not any such claims or demands be found to
be valid, of whatsoever kind or nature and by whomsoever asserted
(but not arising out of MOC's or any of the Company Service
Employees' negligence or wilful misconduct), for injury to
persons or property arising out of or in any way connected with
the condition, use or operation of the Vessel or the performance
of the Company Service Employees' services in good faith
hereunder, including, but not limited to, claims for damages or
injuries to, or loss of, property, cargo or personal effects,
claims for damages for personal injury or loss of life and claims
for maintenance and cure; and shall warrant MOC free of any right
of subrogation by insurance underwriters against MOC with respect
to any and all of the foregoing risks or claims. The Company
shall cause MOC to be named as an additional insured party in all
insurance policies relating to the Vessel.
MOC shall be under no responsibility or liability
for loss or damage to the Vessel, or for loss of profits, or
otherwise to the Company, arising out of any act or omission
(other than acts or omissions constituting negligence or wilful
misconduct) on the part of its officers or employees selected
with due care, in the performance of the duties under this
Agreement.
MOC shall promptly notify the Company of any claim
or demand in respect of which MOC may be indemnified hereunder
and shall cooperate with the Company in the defense thereof.
9. FORCE MAJEURE. MOC shall be under no liability of
any kind or nature whatsoever in the event that the Company
Service Employees should fail to perform any services hereunder
if such failure is directly or indirectly caused by war, war-like
activities, government order, supervening illegality, riot, civil
commotion or any labor shortage, labor trouble, strike or lock-
out, or any shortage of material or Act of God or peril of the
sea or any other cause whatsoever beyond MOC's control, whether
or not of the same or similar nature.
10. DEALINGS WITH AFFILIATES. If any Company Service
Employee shall utilize on behalf of the Company any related or
affiliated company of MOC to render any service or to furnish any
stores, supplies, equipment, provisions, materials or facilities
in connection with the performance of the Company Service
Employee's duties under this Agreement, the Company Service
Employees and/or MOC shall disclose such relationship to the
Executive Committee of the Company and shall purchase or acquire
same at prices and on terms at least as favorable as those
generally obtainable from independent furnishers of such services
or supplies.
11. DIRECTIONS AND APPROVALS. In activities under this
Agreement, MOC and the Company Service Employees shall accept and
rely upon directions or approvals made or given on behalf of the
Company by the Executive Committee of the Company, by any officer
of the Company or by any other person designated by the Company
to give such directions and approvals, unless and until MOC or
the Company Service Employees shall have received written notice
from the Company of the revocation or limitation of the authority
of such persons to act on behalf of the Company.
12. TERM OF AGREEMENT. This Agreement shall commence
on the date hereof and unless terminated in accordance with the
other provisions of this Agreement shall continue for the term of
the Time Charter and thereafter until terminated by not less than
ninety days' notice in writing from one party to the other.
Anything herein to the contrary notwithstanding,
this Agreement shall terminate upon the happening of any of the
following events:
(a) The Company shall sell or otherwise dispose of
the Vessel or the Vessel shall be deemed an actual total loss, a
construction total loss or a compromised total loss.
(b) At the option of the Company, if a petition in
bankruptcy or for arrangement or reorganization shall be filed by
MOC or such a petition shall be filed against MOC and shall not
be dismissed within 90 days after such filing, or MOC shall
become insolvent or commit an act of bankruptcy or make an
assignment for the benefit of creditors;
(c) At the option of MOC, if a petition in
bankruptcy or for arrangement or reorganization shall be filed by
the Company or such a petition shall be filed against the Company
and shall not be dismissed within 90 days after such filing, or
the Company shall become insolvent or commit an act of bankruptcy
or make an assignment for the benefit of creditors.
Upon termination of this Agreement, the Company
shall make prompt arrangements to have all outstanding matters
with respect to the Vessel taken over from the Company Service
Employees and/or MOC, as the case may be, by persons hired or
appointed by it. MOC shall cooperate, and shall cause the
Company Service Employees to cooperate, with the Company and with
any persons whom the Company hires or appoints pursuant to this
Section 12 to effect the prompt and efficient transfer of all
records, funds and duties relating to the Vessel and the business
of the Company, and for three years subsequent to such
termination, MOC shall be permitted to inspect all such records
at any reasonable time during normal business hours.
13. ASSIGNMENT. This Agreement shall not be assigned
by either party without the consent in writing of the other.
14. NOTICES. All notices, demands, request, approvals
and other communications ("Notices") which are given or required
to be given under or with respect to this Agreement, shall be
sent by registered or certified mail, postage prepaid, (except in
case of emergency or urgency when they shall be sent by telex,
cable, telefax or telegram and confirmed by such registered or
certified mail), addressed to the party for whom intended at its
address specified below or to such other address as such party
shall hereafter specify by like Notice. Notices to the Company
shall be sent in duplicate addressed, until further notice, as
follows:
One Copy:
c/o
Another Copy:
Notices to MOC shall be addressed, until further notice as
follows:
Maritime Overseas Corporation
511 Fifth Avenue
New York, New York 10017
Attention: Secretary
15. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement
and the Joint Venture Companies Agreement set forth the entire
understanding of the parties relating to the subject matter
hereof and supersede all other proposals and agreements, oral or
written, between the parties concerning the subject matter
hereof. None of the terms or provisions hereof shall be
modified, and this Agreement may not be amended, except by a
written instrument signed by the party against which such
modification or amendment is to enforced.
16. WAIVER. No waiver of any provision of this
Agreement shall be effective unless in writing signed by the
waiving party and no waiver of any breach or default hereunder
shall constitute a waiver of any other subsequent breach or
default, whether of the same or different nature.
17. GOVERNING LAW. This Agreement shall be governed,
construed, performed and enforced in accordance with the laws of
State of New York as applied to contracts to be performed
entirely within the State of New York.
18. PARTIES IN INTEREST. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their fully authorized officers the day and
year first above written.
By:-------------------------------
Name:
Title:
MARITIME OVERSEAS CORPORATION
By:-------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
A. OPERATIONS
(1) Engage and dismiss the Masters, Officers and crew of
the Vessel, and all other personnel necessary for the operation
of the Vessel and the conduct of the Company's business, (all of
whom shall be employees of the Company).
(2) Prepare and file on behalf of the Company tax returns
relating to the Vessel, if any, and make payment of all taxes due
thereon.
(3) Purchase all necessary stores, supplies, services and
provisions for the Vessel and supervise the distribution thereof
to the Vessel.
(4) Arrange for and supervise all repairs and maintenance
of the Vessel and arrange for and supervise vessel classification
and other vessel surveys, shipyard overhaul, major repairs and
drydocking, and appoint classification, Coast Guard and other
surveyors.
(5) Conduct all business of the Vessel, including but not
limited to all matters with respect to voyages, cargoes and
persons to be carried, and procure or provide all services
incident thereto including, but not limited to, cargo handling,
port activities (including pilotage, towing, wharfage and
dockage), canal transits, services of agents, brokers and
consultants, and arrange payment of all expenses in respect of
the foregoing as necessary for the operation of the Vessel.
(6) Issue or cause to be issued all necessary shipping
documents, freight contracts and bills of lading.
(7) Place all Hull Machinery, Protection and Indemnity, War
Risk insurances and any other insurance, on the Vessel, crew,
cargo or freight, and pay all insurance premiums thereon.
(8) Process and handle all insurance claims and collect the
proceeds thereof.
(9) Execute voyage schedules, routing, loading and
discharging.
(10) Arrange for all stevedoring, bunkering, towage and
other contracts.
(11) Attend to relations with charterers of the Vessel.
(12) Handle all claims and collections arising out of the
operations of the Vessel and the business of the Company,
including the collection and handling of all hire payments,
freight, demurrage, dispatch and other funds accruing to the
Company.
(13) Arrange for taking inventories of stores, food and
equipment, as required.
(14) Arrange for the entry and clearance of the Vessel, and
for berth and terminal facilities when necessary.
(15) Handle all functions ashore which usually devolve upon
the owner of a vessel.
(16) Perform all necessary services in connection with
salvage and general average.
(17) Keep the Executive Committee of the Company advised
with respect to the operation of the Vessel.
(18) Keep books, records and accounts (which shall be the
property of the Company) relating to the activities, maintenance
and business of the Vessel in such form as may be required by the
Executive Committee of the Company.
(B) ACCOUNTING
(1) Handle all accounting and financial activities relating
to the Vessel.
(2) Keep records and books of account for the Vessel, in
accordance with the procedures generally followed in the shipping
industry.
(3) Process accounts payable and accounts receivable for
the Vessel.
(4) Prepare periodic accounting and financial reports,
including balance sheets, profit and loss statements and cash
flow statements as required by the Executive Committee of the
Company.
(5) Assist the accountants and tax advisors of the Company
in preparing tax returns.
(C) FINANCE
(1) Assist, when required, in arranging for financing
through banks, lending institutions and others.
(2) Advise with respect to alternative means for raising of
equity and debt capital.
(D) SHIPBUILDING - Negotiate and supervise the construction of
the Vessel, advise with respect thereto, and accept delivery of
the Vessel.
(E) GENERAL - Prepare reports and information which the Executive
Committee of the Company may from time to time require or elect
to file with governmental agencies in connection with the Vessel,
and as otherwise required by law.
<PAGE>
EXHIBIT 10(k)
-------------
OVERSEAS SHIPHOLDING GROUP, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AS AMENDED AND RESTATED AS OF JANUARY 1, 1995
This Plan is restated, effective as of January 1, 1995.
Maritime Overseas Corporation ("MOC") initially established a
supplemental executive retirement plan in 1984 and established a
subsequent supplemental executive retirement plan in 1988 (the
"Prior Plans"), both primarily for the purpose of providing
supplementary retirement benefits for a select group of
management and highly compensated employees of MOC and certain
Participating Entities (as defined herein). Overseas Shipholding
Group, Inc. (the "Company") was a Participating Entity in the
Prior Plans. This Plan merges and restates the provisions of the
Prior Plans as they apply to Participants who are Employees of
the Company on January 1, 1995. Any participant in the Prior
Plans who terminated employment prior to January 1, 1995 remains
under the terms of the Prior Plan in existence at the time of his
termination. Plan in This Plan also applies to future
Participants designated by the Board.
1. DEFINITIONS. For purposes of this Plan, the following
definitions apply:
(a) "ACTUARIAL EQUIVALENT" means an amount equal in value
on an actuarial basis, as determined by an actuary selected by
the Committee, based upon the mortality and interest rates set
forth in the Qualified Plan, as amended from time to time.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CHANGE OF CONTROL" means a Change of Control as
provided in Exhibit A hereto.
(d) "CODE" means the Internal Revenue Code of 1986, as
amended.
(e) "COMMITTEE" means the committee, if any, appointed by
the Board to administer this Plan on its behalf. If no committee
is appointed, the Board shall be deemed to be the Committee.
(f) "COMPANY" means Overseas Shipholding Group, Inc. or any
successor thereto as a result of a merger or consolidation.
(g) "EMPLOYEE" means any person employed by the Company.
(h) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(i) "INITIAL PAYMENT DATE" means, except as otherwise
provided herein, the first day of the month coinciding with or
next following the latest of (i) three (3) months after the date
on which the Participant incurs a Termination of Employment, (ii)
the Participant's fifty-fifth (55th) birthday, or (iii) such
later date as the Participant elects in a writing filed with the
Committee at least one (1) year prior to the Employee's
Termination of Employment, provided, that such election is
approved by the Committee in its sole discretion. Such an
election may be revoked by the Participant by written notice
filed with the Committee at least one (1) year prior to
Termination of Employment.
(j) "MOC" means Maritime Overseas Corporation or any
successor thereto as a result of a merger or consolidation.
(k) "PARTICIPANT" means the persons set forth on Exhibit B
hereto and any other Employee of the Company who is designated as
a Participant in this Plan by the Board.
(l) "PARTICIPATING ENTITY" means any entity that
participates in the Qualified Plan or that is otherwise
classified as a Participating Entity by the Committee.
(m) "PLAN" means this Overseas Shipholding Group, Inc.
Supplemental Executive Retirement Plan, as amended from time to
time.
(n) "QUALIFIED PLAN" means the Pension Plan for Employees
of Maritime Overseas Corporation, as it is amended from time to
time.
(o) "STANDARD FORM" means a straight life annuity with no
contingent benefit and no period certain.
(p) "SUPPLEMENTAL BENEFIT" means the lump sum benefit
payable under this Plan.
(q) "TERMINATION OF EMPLOYMENT" means termination of
employment as an Employee of the Company and all Participating
Entities for any reason whatsoever, including but not limited to
death, retirement, resignation or firing (with or without cause).
2. SUPPLEMENTAL BENEFITS.
(a) The Supplemental Benefit shall be equal to the
Actuarial Equivalent lump sum of the (i) hypothetical vested
monthly accrued benefit (based on the provisions of the Qualified
Plan) in the Standard Form the Participant would have received
under the Qualified Plan (based solely on the Participant's
compensation and service with the Company), on the Initial
Payment Date if the limitations of Code Sections 401(a)(17), 415
and 416 (as applied under The Qualified Plan) did not apply, less
(ii) the Actuarial Equivalent monthly benefit on the Initial
Payment Date of the Participant's actual monthly benefit in the
Standard Form being received (or, if not then being received,
assuming benefits under the Qualified Plan then commenced) under
the Qualified Plan. The Supplemental Benefit shall be calculated
based on all compensation and service recognized under the
Qualified Plan, whether or not with the Company, and then
prorated as set forth in (b) below.
(b) If the compensation and service used in determining the
Supplemental Benefit pursuant to (a) above includes compensation
or service with a Participating Entity other than the Company,
the Supplemental Benefit paid hereunder shall be limited to the
allocable portion attributable to the Company. The allocable
portion attributable to the Company shall be determined by (i)
calculating the total benefit payable under the Qualified Plan
and this Plan, if any, to a Participant from each Participating
Entity based only on his compensation and service with such
Participating Entity (but aggregating total Hours of Employment
in a Plan Year for purposes of determining Years of Service) and
(ii) multiplying the Supplemental Benefit under this Plan by the
ratio of such benefit attributable to the Company to the
aggregate benefit attributable to all Participating Entities.
Notwithstanding the foregoing, the Committee may, in its sole
discretion, if it determines it to be equitable based on the
Participant's compensation and service, otherwise allocate
responsibility for any portion of the Supplemental Benefit,
provided that the Participating Entity allocated to has a plan
similar to this and its Committee agrees to such allocation. The
Company shall not be responsible for any portion of the
Supplemental Benefit attributable to or allocated to service with
another Participating Entity and no such other Participating
Entity shall have any obligation by virtue of the Plan.
(c) Notwithstanding (a) above, the Board, in its sole
discretion, may increase a Participant's Supplemental Benefit,
his recognized service or his recognized compensation and may
establish such conditions on such increase as it deems
appropriate. Extra service shall be recognized as provided in
Exhibit C hereto.
3. PAYMENT.
(a) BASIC FORM OF BENEFIT. Subject to (b) below, a
Participant's Supplemental Benefit shall be paid in the form of a
lump sum benefit, payable as soon as administratively feasible
after the Initial Payment Date.
(b) OPTIONAL FORM OF BENEFIT. The Participant shall have
the right, in a writing filed with the Committee, to elect a form
of benefit other than that specified in (a) above, provided,
however, that such optional form of benefit is available under
the Qualified Plan on the Initial Payment Date and that such
election is made and filed at least one (1) year prior to the
Participant's Termination of Employment and is approved by the
Committee in its sole discretion. Such an election may be
revoked by the Participant by written notice filed with the
Committee at least one (1) year prior to Termination of
Employment.
(c) RIGHT TO ACCELERATE PAYMENT. Notwithstanding anything
else herein, the Company shall have the right, in its sole and
absolute discretion, to accelerate the payment of any
Supplemental Benefit payable hereunder; provided, that any
accelerated payment(s) shall be equal to the Actuarial Equivalent
of the Participant's Supplemental Benefit assuming that the
acceleration date is the Initial Payment Date and that the
Participant has commenced to receive his benefits under the
Qualified Plan on the date of such payment.
(d) CHANGE OF CONTROL. Notwithstanding the above, upon the
occurrence of a Change of Control, the Actuarial Equivalent of
each Participant's then accrued Supplemental Benefit (calculated
based on the assumption that the Participant has commenced to
receive his benefits under the Qualified Plan on the date of such
payment) shall be promptly paid in a lump sum to such Participant
and, the Actuarial Equivalent of such payment shall be offset
from the Supplemental Benefit due the Participant on the Initial
Payment Date.
(e) FORFEITURE. A Participant shall, in the sole
discretion of the Committee, forfeit his Supplemental Benefit in
the event that within three (3) years after his Termination of
Employment he engages, without the prior written consent of the
Committee, in any activity which the Committee, in its sole
discretion, believes to be competitive with the activities of the
Company or MOC. Such forfeiture shall be equal to the greater of
(i) the unpaid portion of his Supplemental Benefit and (ii) the
portion of his Supplemental Benefit, whether theretofore paid or
not paid, which in the Standard Form would be attributable to the
period after which he commences to compete. To the extent any
forfeited amounts shall have theretofore been paid to the
Participant, upon demand, he shall promptly refund such amounts
to the Company. If he fails to promptly do so, he shall be
liable to the Company for its costs of collection, including
reasonable attorneys' fees and disbursements. This Section 3(e)
shall not be applicable to any Participant whose Termination of
Employment is less than ninety (90) days before or less than two
(2) years after a Change of Control.
4. DEATH OF PARTICIPANT.
(a) DEATH PRIOR TO INITIAL PAYMENT DATE. In the event of
the death of a Participant who has accrued a Supplemental Benefit
prior to his Initial Payment Date, his spouse and/or beneficiary
shall receive a benefit calculated in the same manner as in the
Qualified Plan (but without regard to Code Sections 401(a)(17),
415 and 416)) to the extent such benefit would be receivable
under the terms of the Qualified Plan upon his death prior to
commencement of benefits if the benefit was payable from the
Qualified Plan less the benefit payable from the Qualified Plan.
His spouse and/or beneficiary shall be the same persons or
entities as designated or determined under the Qualified Plan.
The benefit payable hereunder, however, shall be paid in an
Actuarial Equivalent lump sum as soon as administratively
feasible after the Participant's death.
(b) DEATH AFTER INITIAL PAYMENT DATE. If a Participant
dies on or after the Initial Payment Date, no death benefits will
be payable hereunder upon the death of the Participant unless the
Participant is receiving a form of benefit with a survivor
benefit pursuant to Section 3(b) above. If a Participant is
receiving a form of benefit with a survivor benefit, any benefits
becoming due will, subject to Section 3(c) above, be paid in
accordance with such form of benefit.
5. REEMPLOYMENT
If a Participant is reemployed by the Company after
commencing to receive a Supplemental Benefit hereunder but does
not again become a Participant, the Company shall have the right
at its election to suspend benefits payable hereunder during such
period of employment with an appropriate Actuarial Equivalent
adjustment in his benefits when they recommence. If the former
Participant again becomes a Participant accruing benefits under
the Plan, he shall cease to receive Supplemental Benefits, his
prior election as to his form of benefit shall be deemed
cancelled, he shall have his benefits recalculated based on his
entire service for the Company offset by the Actuarial Equivalent
of the previously received Supplemental Benefit, and benefits
shall be payable in accordance with Sections 3 and 4 above. In
no event shall the combined Supplemental Benefit (as actuarially
adjusted to reflect Actuarial Equivalents) be greater than the
Supplemental Benefit the Participant would have received if his
service had been continuous.
6. CLAIMS PROCEDURE.
(a) The Committee shall be responsible for determining all
claims for benefits under this Plan by the Participants or their
beneficiaries. Within ninety (90) days after receiving a claim
(or within up to one hundred eighty (180) days, if the claimant
is so notified, including notification of the reason for the
delay), the Committee shall notify the Participant or beneficiary
of its decision in writing, giving the reasons for its decision
if adverse to the claim. If the decision is adverse to the
claimant, the Committee shall advise him of the Plan provisions
involved, of any additional information which he must provide to
perfect his claim and why, and of his right to request a review
of the decision.
(b) A claimant may request a review of an adverse decision
by written request to the Committee made within sixty (60) days
after receipt of the decision. The claimant, or his duly
authorized representative, may review pertinent documents and
submit written issues and comments.
(c) Within sixty (60) days after receiving a request for
review, the Committee shall notify the claimant in writing of
(i) its decision, (ii) the reasons therefore, and (iii) the Plan
provisions upon which it is based.
(d) The Committee may at any time alter the claims
procedure set forth above, so long as the revised claims
procedure complies with ERISA, and the regulations issued
thereunder.
(e) The Committee shall have the full power and authority
to interpret, construe and administer this Plan in their sole
discretion based on the provisions of the Plan and to decide any
questions and settle all controversies that may arise in
connection with the Plan. Both the Committee's and the Board's
interpretations and construction thereof, and actions thereunder,
made in the sole discretion of the Committee and the Board,
including any valuation of the Supplemental Benefit, any
determination under this Section 6, or the amount of the payment
to be made hereunder, shall be final, binding and conclusive on
all persons for all persons. No member of the Board or Committee
shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this
Plan.
(f) The Board shall determine, subject to the provisions of
this Plan: (i) the additional Employees who shall participate in
the Plan from time to time; and (ii) when an Employee shall cease
to be a Participant.
7. CONSTRUCTION OF PLAN.
Nothing contained in this Plan and no action taken
pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between the Company and the Participants, their
designated beneficiaries or any other person. Any funds which
may be invested under the provisions of this Plan shall continue
for all purposes to be part of the general funds of the Company
and no person other than the Company shall by virtue of the
provisions of this Plan have any interest in such funds. To the
extent that any person acquires a right to receive payments from
the Company under this Plan, such right shall be no greater than
the right of any unsecured general creditor of the Company.
8. MINORS AND INCOMPETENTS.
If the Committee shall find that any person to whom
payment is payable under this Plan is unable to care for his
affairs because of illness or accident, or is a minor, any
payment due (unless a prior claim therefore shall have been made
by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, a child, parent, or
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine it its sole discretion. Any such payment shall be a
complete discharge of the liabilities of the Company, the
Committee and the Board under this Plan.
9. LIMITATION OF RIGHTS.
Nothing contained herein shall be construed as
conferring upon an Employee the right to continue in the employ
of the Company as an executive or in any other capacity or to
interfere with the Company's right to discharge him at any time
for any reason whatsoever.
10. PAYMENT NOT SALARY.
Any Supplemental Benefit payable under this Plan shall
not be deemed salary or other compensation to the Employee for
the purposes of computing benefits to which he may be entitled
under any pension plan or other arrangement of the Company for
the benefit of its employees.
11. SEVERABILITY.
In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be
construed and enforced as if such illegal and invalid provision
never existed.
12. WITHHOLDING.
The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any
obligations it may have to withhold federal, state or local
income or other taxes incurred by reason of payments or accrual
pursuant to this Plan.
13. ASSIGNMENT.
This Plan shall be binding upon and inure to the
benefit of the Company, its successors and assigns and the
Participants and their heirs, executors, administrators and legal
representatives. In the event that the Company sells all or
substantially all of the assets of its business and the acquiror
of such assets assumes the obligations hereunder, the Company
shall be released from any liability imposed herein and shall
have no obligation to provide any benefits payable hereunder.
14. NON-ALIENATION OF BENEFITS.
The benefits payable under this Plan shall not be
subject to alienation, transfer, assignment, garnishment,
execution or levy of any kind, and any attempt to cause any
benefits to be so subjected shall not be recognized.
15. GOVERNING LAW.
To the extent legally required, the Code and ERISA
shall govern this Plan and, if any provision hereof is in
violation of any applicable requirement thereof, the Company
reserves the right to retroactively amend this Plan to comply
therewith. To the extent not governed by the Code and ERISA,
this Plan shall be governed by the laws of the State of New York,
without regard to conflict of law provisions.
16. AMENDMENT OR TERMINATION OF PLAN.
The Board or the Committee may amend this Plan from
time to time in any respect, and may at any time terminate the
Plan in its entirety. In addition, at any time, the Board or the
Committee may exclude any Participant from further participation
in the Plan. In the event of any amendment, Termination or
exclusion, the Participant shall have a vested right to a benefit
from this Plan equal to his total vested benefit from this Plan
as of the date of such Termination, amendment or exclusion
reduced by future growth, if any, of the benefit under the
Qualified Plan attributable to increases thereafter, but prior to
payment of the benefit, in the Code Sections 401(a)(17), 415 and
416 limits, including without limitation increase in the
Participant's final average compensation recognized under the
Qualified Plan as a result of increases in the Code 401(a)(17)
limit even though it is applied to future earnings so long as it
is not in excess of the Participant's compensation at the time of
the amendment, termination or exclusion, but not increases in the
Qualified Plan benefit attributable to future service credit,
future compensation, future vesting or increase in the benefit
formula. In the event of a Termination of the Plan or exclusion
of a Participant, the Company may distribute to each or any
Participant, as it deems appropriate, the Actuarial Equivalent of
his vested accrued benefit as of such date (as if a Termination
of Employment had occurred) and have no further obligation
hereunder. Section 3(e) above shall continue to apply to the
Participant. Any such action by the Board or the Committee with
respect to the Plan shall be binding on the Company and Employee.
17. NON-EXCLUSIVITY.
The adoption of the Plan by the Company shall not be
construed as creating any limitations on the power of the Company
to adopt such other supplemental retirement income arrangements
as it deems desirable, and such arrangements may be either
generally applicable or limited in application.
18. GENDER AND NUMBER.
Wherever used in this Plan, the masculine shall be
deemed to include the feminine and the singular shall be deemed
to include the plural, unless the context clearly indicates
otherwise.
19. HEADINGS AND CAPTIONS.
The headings and captions herein are provided for
reference and convenience only. They shall not be considered
part of the Plan and shall not be employed in the construction of
the Plan.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed this 17th day of March, 1995.
OVERSEAS SHIPHOLDING GROUP, INC.
By: S/ALAN CARUS
-----------------------------
Title: Controller
<PAGE>
EXHIBIT A
CHANGE OF CONTROL
For purposes of this Plan, a "Change of Control" shall
be deemed to have occurred if: (i) any person (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and as used in Sections 13(d) and
14(d) thereof)), excluding the Company, Maritime Overseas
Corporation ("MOC"), any "Subsidiary" of either, any employee
benefit plan sponsored or maintained by the Company, MOC or any
Subsidiary of either (including any trustee of any such plan
acting in his capacity as trustee) and any person who (or group
which includes a person who) is the beneficial owner (as defined
in Rule 13(d)-3 under the Exchange Act) as of January 1, 1994 of
at least fifteen percent (15%) of the common stock of the
Company, becomes the beneficial owner (as defined in Rule 13(d)-3
under the Exchange Act) of shares of the Company having at least
thirty percent (30%) of the total number of votes that may be
cast for the election of directors of the Company; (ii) the
shareholders of the Company shall approve any merger or other
business combination of the Company, sale of all or substantially
all of the Company's assets or combination of the foregoing
transactions (a "Transaction"), other than a Transaction
involving only the Company and one or more of its Subsidiaries,
or a Transaction immediately following which the shareholders of
the Company immediately prior to the Transaction continue to have
a majority of the voting power in the resulting entity (excluding
for this purpose any shareholder of the Company owning directly
or indirectly more than ten percent (10%) of the shares of the
other company involved in the Transaction if such shareholder is
not as of January 1, 1994, the beneficial owner (as defined in
Rule 13(d)-3 under the Exchange Act) of at least fifteen percent
(15%) of the common stock of the Company); or (iii) within any
twenty-four (24) month period beginning on or after the date
hereof, the persons who were directors of the Company immediately
before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at
least a majority of the board of directors of the Company or the
board of directors of any successor to the Company (the "Board"),
provided that, any director who was not a director as of the date
hereof shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of
or with the approval of, at least two-thirds of the directors who
then qualified as Incumbent Directors either actually or by prior
operation of the foregoing unless such election, recommendation
or approval was the result of an actual or threatened election
contest of the type contemplated by Regulation 14a-11 promulgated
under the Exchange Act or any successor provision. Notwithstand
ing the foregoing, no Change of Control of the Company shall be
deemed to have occurred for purposes of this Plan by reason of
any Transaction which shall have been approved by action or vote
of a majority of the Incumbent Directors.
<PAGE>
EXHIBIT B
Morton P. Hyman
Michael A. Recanati
George Blake
Alan Carus
Francis De Salvo
Robert N. Cowen
<PAGE>
EXHIBIT C
Morton P. Hyman shall be credited with four (4) years
extra service for purposes of calculating his Supplemental
Benefit and the death benefit.
<PAGE>
EXHIBIT 12
----------
OVERSEAS SHIPHOLDING GROUP, INC.
RATIO OF EARNINGS TO FIXED CHARGES
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)
PRESENTED IN CONNECTION WITH AMENDMENT NO. 1
FILED ON NOVEMBER 9, 1993 TO REGISTRATION STATEMENT NO. 33-50441
Loss before Federal income taxes $( 9,950)
Adjustments of income related to
companies owned less than 100% ( 2,310)
Interest expense 56,988
Proportionate share of interest of
50% - owned companies 9,137
Interest component of an operating lease 3,003
Amortization of capitalized interest 2,352
--------
Earnings
$ 59,220
========
Interest expense $ 56,988
Proportionate share of fixed charges
of 50% - owned companies 12,049
Capitalized interest 14,157
Interest component of an operating lease 3,003
Fixed charges $ 86,197
========
Deficiency of earnings available to cover $(26,977)
fixed charges =========
<PAGE>
EXHIBIT 13
----------
<TABLE>
[From page 2 of the 1994 Annual Report]
TWO-YEAR CHARTER POSITION OF OSG FLEET
--------------------------------------
(Including Scheduled Deliveries)
<CAPTION>
Through Year-End 1995 1996
<S> <C> <C>
Total Fleet DWT 6,436,600 7,166,500
% of Total Fleet on Charter 23 20
U.S. Fleet DWT 993,350 993,350
% of U.S. Fleet on Charter 2 2
Intl. Fleet DWT 5,443,250 6,173,150
% of Intl. Fleet on Charter 27 24
</TABLE>
<PAGE>
THE FLEET
--------- Operating Bulk Fleet: 61 vessels, 5,846,100 dwt
On Order: 8 vessels, 2,050,300 dwt
February 21, 1995 Total Bulk Tonnage: 69 vessels, 7,896,400 dwt
<TABLE>
INTERNATIONAL BULK FLEET
------------------------
<CAPTION>
Year Deadweight Charter
Type of Ship Built Tonnage Expiration Date
<S> <C> <C> <C>
Tankers 1973 50%-owned 264,900 November 1996
1975 50%-owned 264,850 September 1998
1974 50%-owned 264,850 December 1997
1974 50%-owned 264,850 July 1997
1989 254,000 Voyage Charter
1990 254,000 March 2002
1989 133,000 Voyage Charter
1989 133,000 June 2005
1976 128,450 Voyage Charter
1975 128,250 Voyage Charter
1975 128,200 Voyage Charter
1980 96,050 March 1995
1981 96,000 Voyage Charter
1979 95,600 Voyage Charter
1994 94,850 (a)
1994 94,650 (a)
1994 93,350 Voyage Charter
1994 93,350 Voyage Charter
1994 93,300 Voyage Charter
1994 93,300 Voyage Charter
Petroleum Products
Carriers 1986 65,150 August 1995
1986 65,150 Voyage Charter
1986 63,200 September 1995
1987 63,150 September 1995
1989 39,450 Voyage Charter
1988 39,450 Voyage Charter
1989 39,100 Voyage Charter
1989 39,050 July 1995
1979 31,600 Voyage Charter
1981 30,800 Voyage Charter
1981 30,800 (b)
1982 29,500 Voyage Charter
Bulk Carriers 1982 138,800 Voyage Charter
1982 138,800 Voyage Charter
1975 121,050 March 1995
1975 121,000 April 1995
1990 120,900 Voyage Charter
1990 120,800 Voyage Charter
1973 116,100 Voyage Charter
1981 64,550 March 1995
1983 64,200 Voyage Charter
1989 63,350 March 1995
1989 63,250 Voyage Charter
1977 49%-owned 60,300 Voyage Charter
1973 49%-owned 54,450 August 1995
------------------------------------------------------------------------
OPERATING INTERNATIONAL
BULK FLEET TOTAL 45 vessels 4,852,750 dwt
========================================================================
<CAPTION>
ON ORDER BULK FLEET
-------------------
Delivery Deadweight Charter
Type of Ship Date Tonnage Expiration Date
<S> <C> <C> <C>
Tankers August 1995 295,250
October 1995 295,250
December 1996 50%-owned 269,650 2004
Quarter 4 1996 302,150
March 1997 50%-owned 269,650 2005
Quarter 1 1997 302,150
Bulk Carriers December 1996 158,100
March 1997 158,100
------------------------------------------------------------------------
8 vessels 2,050,300 dwt
------------------------------------------------------------------------
INTERNATIONAL BULK
FLEET TOTAL 53 vessels 6,903,050 dwt
========================================================================
</TABLE>
<TABLE>
U.S. BULK FLEET
---------------
<CAPTION>
Year Deadweight Charter
Type of Ship Built Tonnage Expiration Date
<S> <C> <C> <C>
Tankers 1974 120,800 Idle
1973 120,500 Idle
1977 (c) 80%-owned 90,650 Idle
1977 (c) 80%-owned 90,550 March 1995
1978 (c) 80%-owned 90,500 March 1995
1977 (c) 80%-owned 90,400 Idle
1971 62,000 May 1995
1970 62,000 August 1995
Petroleum Products
Carriers 1983 (d) 42,950 Voyage Charter
1982 (d) 42,600 May 1995
1969 37,800 August 1995
1968 37,800 Voyage Charter
1968 37,800 September 1995
Geared Bulk Carriers 1978 (c) 25,550 Voyage Charter
1978 (c) 25,550 Voyage Charter
Pure Car Carrier
(5,000 cars) 1987 15,900 1997
------------------------------------------------------------------------
OPERATING U.S. BULK
FLEET TOTAL(e) 16 vessels 993,350 dwt
========================================================================
<FN>
(a) The Company recently contracted to purchase these two ships for
delivery in March 1995.
(b) Undergoing major shipyard work.
(c) 25-year capital leases, commencing in year built.
(d) 22-year capital leases, commencing in 1989
(e) Does not include a 29,300 dwt petroleum barge, 50%-owned by OSG.
</TABLE>
<PAGE>
<TABLE>
CELEBRITY CRUISE LINES INC.
---------------------------
<CAPTION>
Gross
Year Registered
Name of Ship Built/Rebuilt Berths Tonnage
<S> <C> <C> <C>
Zenith 1992 1,374 47,250
Horizon 1990 1,354 46,800
Meridian 1990 1,106 30,450
------------------------------------------------------------------------
OPERATING CRUISE FLEET TOTAL* 3 ships 3,834 berths
========================================================================
<FN>
* The fleet of CCLI's Fantasy Cruises division consists of Britanis
(926 berths) and Amerikanis (617 berths).
</TABLE>
<TABLE>
ON ORDER CRUISE FLEET
---------------------
<CAPTION>
Gross
Delivery Registered
Name of Ship Date Berths Tonnage
<S> <C> <C> <C>
Century November 1995 1,760 70,000
Galaxy November 1996 1,870 72,000
To be named October 1997 1,870 72,000
------------------------------------------------------------------------
ON ORDER CRUISE FLEET
TOTAL 3 ships 5,500 berths
========================================================================
</TABLE>
<PAGE>
GLOBAL BULK SHIPPING MARKETS
----------------------------
The bulk shipping industry is highly fragmented, with no one shipowner
holding more than 2% of the world fleet. With 61 ships totaling 5.8
million dwt, OSG ranks among the ten largest owners, including fleets
owned by oil companies and by national governments. Approximately 78%
of the Company's voyage revenues in 1994, 75% in 1993 and 78% in 1992
came from carrying petroleum and its derivatives. These liquid cargoes
also accounted for the majority of the voyage revenues of OSG's bulk
shipping joint ventures.
INTERNATIONAL TANKER MARKETS
----------------------------
In 1994, the international tanker markets remained under pressure
despite a modest increase in the volume of seaborne oil trade and a
decline in the size of the international tanker fleet. Oil demand in
the major oil-importing regions increased 2.8% in 1994 as Europe and
Japan began to emerge from recession. In Europe, demand rose by less
than 1%, while in Japan, demand improved by 5%, spurred in part by a
hot summer that resulted in greater oil usage for electricity
generation. An unusually cold winter and strong economic growth helped
lift U.S. oil demand by 2.6%. Growth in oil consumption in developing
Asia maintained its upward course, expanding by over 6%.
SHIFTING SUPPLY PATTERNS
While crude oil supplies from the Middle East increased only
marginally, those from other areas rose substantially, particularly
from the North Sea and Latin America. In addition, oil exports from
the former Soviet Union (FSU) continued to be significant despite the
steady decline in its production. The net effect of increased
quantities moving on shorter routes was to moderate the rise in
tonnage requirements.
WORLD TANKER FLEET DECLINES SLIGHTLY
For the first time since 1988, the world tanker fleet registered a
decline, easing by about 3 million dwt to 263 million dwt at year-end
1994. Newbuilding deliveries totaled only 10 million dwt, compared
with 18 million dwt a year ago, and were the smallest since 1990.
Higher charter rates in the Capesize sector (dry bulk carriers over
100,000 dwt) drew combination carriers from the tanker markets into
the dry trades, further reducing available tanker supply. The amount
of international tanker tonnage in lay-up at year-end 1994 remained
relatively small at 4 million dwt.
Low charter rates, more stringent inspection requirements, an aging
fleet and rising scrap steel prices resulted in sales of ships for
demolition increasing to 13 million dwt from 11 million dwt in 1993.
Given the age of the fleet, it is anticipated that scrappings will
continue at relatively robust levels over the next few years.
Newbuilding prices trended lower during 1994, reflecting poor
charter rates and increased competition among shipbuilders. Secondhand
prices for modern vessels were steady to slightly improved except for
VLCCs (very large crude carriers), which declined. Contracting for
newbuildings rose from 11 million dwt in 1993 to 13 million dwt in
1994. The newbuilding orderbook increased 2 million dwt to 26 million
dwt for delivery over the next three years, of which 12 million dwt is
scheduled for 1995.
INCREASING ENVIRONMENTAL REGULATIONS AND CONCERNS
Over the past five years, the shipping industry has experienced a more
stringent regulatory environment. Classification societies,
governmental authorities and charterers have strengthened their
inspection programs, and there has been an increasing reluctance among
charterers to accept older vessels due to safety and pollution
concerns.
During 1994, these trends continued. The shipping industry again
addressed requirements of the Oil Pollution Act of 1990 (OPA 90) as
well as heightened safety and environmental concerns worldwide.
Between 1995 and 2015, OPA 90 will phase in a requirement that all
tankers entering U.S. waters have double hulls. The Act also
significantly expands the potential liability of tanker owners for
environmental accidents in U.S. waters. Some operators are reluctant
to trade their vessels to the United States because of OPA 90. In
addition to the OPA 90 requirements, the International Maritime
Organization (IMO) will phase out all single-hulled tankers in
international waters at 25 years of age unless other environmental
safety steps are taken. IMO regulations also require double hulls or
equivalent tanker designs for newbuilding orders.
Since OSG maintains a modern fleet, these double-hull requirements
will not apply to most of the Company's existing tanker fleet until
after the year 2000, at which time the affected ships will have
operated for substantially all of their economic lives. All of the
tankers OSG has on order will be double-hulled.
INTERNATIONAL DRY BULK MARKETS
------------------------------
Rates for international dry bulk carriers improved markedly in the
second half of 1994 as seaborne trade in iron ore and coal expanded.
Demand for Capesize ships, which haul about 80% of the world's
seaborne iron ore and a third of seaborne coal, was particularly
strong.
STRONG DEMAND FOR IRON ORE AND COAL
Seaborne shipments of iron ore moved upward as world steel production
(excluding the FSU) rose, fueled by economic recovery in Europe and
continued strong growth in the Far East. Seaborne steam coal trade
also benefited from revived economic growth in Europe as well as new
coal-fired power stations in Asia and increased electrical demand
brought on by hotter than normal weather. U.S. East Coast coal users
continued to import record levels of low sulfur coal, mainly from
Colombia and Venezuela, in order to meet Clean Air Act requirements.
While seaborne grain shipments were lower in 1994 than in 1993, there
was a marked increase in the trade late in the year, buoyed by record
U.S. corn and soybean harvests and sharply reduced short-haul supplies
from drought-stricken Australia to the Far East.
DRY BULK FLEET EXPANDING
The international dry bulk fleet increased by nearly 4% in 1994 to an
all-time high of 229 million dwt. Newbuilding deliveries rose for the
second consecutive year, reaching 12 million dwt, the largest since
1985. At 4 million dwt, sales for scrap were close to the highest
levels of the previous six years. The amount of vessels in lay-up at
year-end remained small at less than 2 million dwt.
Contracting for new orders increased over 1993 and exceeded 1994
deliveries in every quarter. Consequently, the newbuilding orderbook
for delivery over the next three years increased steadily during 1994,
reaching 29 million dwt at year-end, up from 21 million dwt in 1993.
Approximately 15 million dwt is scheduled for delivery in 1995.
U. S. MARKETS
-------------
Under the Jones Act, shipping between U.S. coastal ports, including
the movement of Alaskan oil, is reserved primarily to U.S. flag
vessels, owned by U.S. citizens, crewed by U.S. seafarers, and built
in the United States without construction subsidies and operated
without operating differential subsidies. U.S. flag vessels also
receive preference in carrying U.S. military and U.S. government-
sponsored shipments throughout the world. OSG is the largest
independent owner of unsubsidized U.S. flag tankers. The Company also
has two dry bulk carriers that participate in the preference trades
and one car carrier, which is on a long-term charter and is presently
transporting vehicles to and from Japan.
The size of the total U.S. flag fleet has been declining in recent
years because of decreasing commercial opportunities, higher operating
and construction costs, and the stricter operating environment
mandated by OPA 90. There has been no significant U.S. flag tanker
construction in the last six years and the average age of the existing
fleet is approximately 19.5 years. At year-end, the unsubsidized U.S.
tanker fleet totaled 7.9 million dwt, a decline of 105,000 dwt from a
year earlier.
ALASKAN CRUDE DEVELOPMENTS
Alaskan crude shipments are the main source of employment for U.S.
flag crude carriers. Four of OSG's U.S. flag crude carriers are
presently employed in this trade. Four are currently idle.
In 1994, as the rate of decline in Alaskan production moderated,
Alaskan crude shipments fell only modestly. Increased efficiencies and
the installation of new equipment in some of Alaska's major oil fields
helped to bolster oil production, which is estimated at 1.63 million
barrels per day (b/d) in 1994, just 2% below the previous year. Based
on forecasts by the State of Alaska, 1995 production is expected to
remain near the level of 1994.
However, long-haul shipments of Alaskan crude via Panama declined in
1994, reducing tonnage requirements. In addition, the entry of
previously laid-up tonnage into the trade further adversely affected
employment opportunities for OSG vessels.
REGULATORY MATTERS
By law, exports of Alaskan crude oil are effectively prohibited.
Initiatives are under way in Washington to permit the export of
Alaskan crude oil, which, if successful, are expected to provide
significant new employment opportunities for the U.S. flag tanker
fleet.
Vessels built with construction differential subsidies and operated
with operating differential subsidies (ODS) are not permitted in the
Jones Act trade. Under an interpretation of the law by the Maritime
Administration, tankers built with subsidies have been deemed eligible
for full coastwise privileges after they have reached 20 years of age
and their ODS contracts have expired. The Company believes that this
interpretation is contrary to law and has commenced litigation seeking
to overrule it. Recently, there have been increased calls by members
of Congress and efforts to reduce or eliminate cargo preference and,
in some cases, to weaken the long-standing requirement that U.S.
coastwise trade be conducted by U.S. flag Jones Act ships. If such
changes were implemented, they would adversely affect the already
diminished U.S. flag merchant marine. The Company believes such
changes are not in the national interest and, as a major owner and
operator of Jones Act tonnage, remains committed to its U.S. flag
fleet.
--------------
Primary Data Sources: Fearnleys Review 1994, Clarkson Research
Studies, International Energy Agency, Maritime Administration, State
of Alaska and U.S. Department of Energy
<PAGE>
CELEBRITY CRUISE LINES INC.
---------------------------
Celebrity Cruise Lines Inc. (CCLI), OSG's joint venture in the cruise
industry, is a leading provider of premium cruises in the North
American cruise market. Formed in 1992, CCLI markets its ships
primarily under the brand name Celebrity Cruises. Today the five-star
Celebrity fleet consists of three ships - Zenith, Horizon and Meridian
- having a total of 3,834 berths and sailing mainly in the Caribbean
and to Bermuda.
Last year, two vessels operated as part of CCLI's budget-priced
Fantasy Cruises division. One of these ships, Britanis, was chartered
in late 1994 to the U.S. Military Sealift Command, while the line's
other ship, Amerikanis, sailed on European itineraries.
In 1994, Celebrity and Fantasy Cruises' five ships sailed on 45
different itineraries that ranged from two to 52 nights and called at
114 destinations on five continents.
Celebrity Cruises Ships No. of Berths Primary Areas of Operation
Zenith 1,374 Caribbean
Horizon 1,354 Bermuda, Caribbean
Meridian 1,106 Bermuda, Caribbean
NORTH AMERICAN CRUISE MARKET
CCLI operates its vessels primarily in the North American cruise
market, which accounts for approximately 80% of the total cruise
passengers carried. The North American cruise industry is
characterized by large and generally well-capitalized companies and is
highly competitive. According to the Cruise Lines International
Association (CLIA), the largest three companies have about 46% of
total capacity, and the largest seven companies, including CCLI, have
approximately 75% of total capacity.
GROWTH IN CRUISE DEMAND
Over the past decade, growth in demand (measured by the number of
passengers carried) averaged 9% per annum for the North American
cruise market. In 1994, U.S. and Canadian passengers carried reached
an industry record of 4.5 million, up 1% from the prior year.
Growth in the cruise industry has been influenced by a number of
factors. The all-inclusive price of a cruise - which encompasses
airfare, lodging, meals and entertainment - appeals to many
vacationers. A reduction in the average cruise length, more and varied
itineraries, and an expansion of shipboard and shoreside activities
have also stimulated demand for cruises. Studies by CLIA indicate that
awareness of cruising and intent to try a cruise vacation are at an
all-time high.
Even though growth has been strong, the North American cruise market
still holds significant untapped potential. According to industry
estimates, cruise vacations currently represent 5% or less of the
overall vacation market.
SUPPLY OUTLOOK
Capacity additions in the North American cruise market averaged 7% per
year during the past decade versus the 9% demand growth noted above.
In 1994, capacity increases slowed to 1% as 6,300 berths were added
and nearly 5,400 berths were removed through retirements,
redeployments and shutdowns. At year-end 1994, North American cruise
capacity was estimated to be 105,000 berths.
Consolidation continues in the industry. CCLI and three other cruise
companies account for 91% of the total capacity additions slated for
1995 through 1998. On the basis of the newbuilding orderbook, CLIA
forecasts that capacity will increase 7% in 1995. Before taking into
consideration any retirements and deletions from the existing fleet,
CLIA expects capacity to increase 13% in 1996 and 10% in 1997.
An important factor influencing supply in the next several years is
the International Maritime Organization's Safety of Life at Sea
(SOLAS) convention, which establishes minimum safety, fire prevention
and fire protection standards. Under SOLAS requirements, all passenger
ships must have upgraded fire detection and fire protection systems by
October 1, 1997. About 40,000 berths are on ships that are expected to
need SOLAS upgrades. The actual number of deletions will depend upon
shipowners' willingness to incur the potentially significant cost
needed to bring a vessel up to the required standards.
Two of Celebrity's vessels were delivered in 1990 and 1992 and the
third was rebuilt in 1990. Because Celebrity maintains a modern fleet,
the work necessary for its ships to meet 1997 SOLAS requirements can
be done without material capital expenditures.
CELEBRITY NEWBUILDING PROGRAM
To achieve operating efficiencies, extend its market coverage and
offer passengers more itineraries, Celebrity is expanding its fleet
through the construction of three new vessels. The first of these new
ships, Century, will be delivered in late 1995. Century will be joined
by two sisterships, one in the fall of 1996 and one in the fall of
1997.
GOING FORWARD
Over the past decade, the cruise business has enjoyed robust growth as
the industry has increased its product offerings and itineraries. The
next few years will be challenging as new ships enter the market and
SOLAS regulations take effect. With the delivery of its new ships and
its reputation for outstanding cuisine and service, CCLI is well
positioned to compete as a leading provider of premium cruises.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION
---------------------------------------
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
OPERATIONS
INCOME FROM VESSEL OPERATIONS
Revenues and income from vessel operations of the Company are highly
sensitive to patterns of supply and demand for vessels of the types
and sizes owned and operated by the Company and the markets in which
those vessels operate. Freight rates for major bulk commodities are
determined by market forces including local and worldwide demand for
such commodities, volumes of trade, distances between sources and
destinations of cargoes and amount of available tonnage both at the
time such tonnage is required and over periods of projected
requirements. Available tonnage is affected, over time, by the amount
of newbuilding deliveries and removal of existing tonnage from
service.
Results in particular periods are also affected by such factors as
the mix between voyage and time charters, the timing of the completion
of voyage charters, the time and prevailing rates when charters that
are currently being performed were negotiated, the levels of
applicable rates and the business available as particular vessels come
off existing charters, and the timing of drydocking of vessels.
Overall, rates during 1994 were disappointing for international flag
crude carriers, particularly for VLCCs (over 200,000 dwt) and, on
average, were below those in 1993. Rates for certain size categories
of tankers improved toward the end of 1994. Dry bulk rates generally
stabilized during the first half of 1994, but remained near the lowest
levels seen in the past several years, except for Capesize vessels
(100,000 dwt or more). Rates for the Capesize ships were at about the
same levels as in the first half of 1993. In the second half of 1994,
dry bulk rates rose above those of the comparable 1993 period for all
sizes. Dry bulk rates remained firm in the early part of 1995. Rates
for most sizes of tankers trended downward in early 1995 compared with
their late 1994 levels, although small products tankers were earning
substantially more in early 1995 than the average rates prevailing
during the last two years. Rates for U.S. flag products tankers fell
sharply in early 1994 as seasonal requirements eased and tankers that
had operated in the crude market for a time returned to the products
trades. Rates for such vessels did not improve until the early part of
the fourth quarter of 1994, when there was a significant firming;
these rates declined somewhat in early 1995. Tonnage demand for U.S.
flag crude carriers was weak throughout 1994 and early 1995; as of
February 21, 1995, four of the Company's U.S. flag crude carriers were
unemployed.
Income from vessel operations for 1994 decreased by approximately
$12,300,000 compared with the results for 1993. This decrease occurred
due to a decline in the results of operations of the U.S. flag fleet.
In the second quarter of 1994, there was an unusually sharp decline in
demand for OSG's tonnage in the U.S. crude market that persisted
throughout the second half of 1994. Three of the Company's U.S. flag
crude carriers and an older U.S. flag products carrier were idle for
substantial portions of the second half of 1994. Results from two U.S.
flag dry bulk carriers were less favorable in 1994 compared with 1993.
The effect on revenues of increased drydockings in 1994 compared with
1993 is also included. The U.S. flag decline was partially mitigated
by increased rates in 1994 for a U.S. flag crude carrier and certain
modern U.S. flag petroleum products carrier tonnage and increased
employment for a U.S. flag crude carrier in 1994 compared with 1993.
Income from foreign flag vessel operations was approximately the same
in 1994 as it was in 1993. This reflected lower rates obtained for
foreign flag crude carrier tonnage, primarily Suezmaxes (approximately
128,000 dwt) and Aframaxes (approximately 96,000 dwt). This was offset
by higher rates obtained in 1994 than in 1993 for a VLCC that
commenced a long-term charter in early 1994 and improved rates earned
by certain dry cargo vessels in the second half of 1994 compared with
1993. The effect of vessels delivered in 1994 and vessels sold in 1994
and 1993 is also reflected.
Income from vessel operations for 1993 increased by approximately
$3,000,000 from the results for 1992. This increase was attributable
to an improvement of $9,500,000 in income from foreign flag vessel
operations, which reflects increased charter market rates obtained in
1993 for certain Suezmax and Aframax tonnage, primarily in the second
half of the year, compared with the rates obtained during 1992 for
those vessels. The favorable effects of less tonnage being idle due to
lack of employment in 1993 compared with 1992 and reduced agency fees
are also reflected. Income from foreign flag vessel operations in 1993
was adversely affected by lower charter rates in the first half of
1993 (primarily in the first quarter) for most classes of tankers and
dry bulk vessels compared with rates obtained in 1992, and by
substantially lower VLCC rates for certain tonnage throughout 1993.
During 1992, certain foreign flag vessels were operating on time
charters negotiated in prior periods when rates were more favorable.
Income from operations of the U.S. flag fleet declined approximately
$6,500,000 in 1993 compared with 1992, resulting primarily from a
crude carrier being idle due to lack of employment. This was partially
offset by better operating results for two U.S. flag dry bulk
carriers, reflecting fewer idle days and better rates.
EQUITY IN RESULTS OF CELEBRITY CRUISE LINES INC. ("CCLI")
OSG's share of CCLI's earnings was approximately $800,000 for 1994
compared with approximately $6,800,000 for 1993. This decline reflects
the 11-day withdrawal of a vessel from service during the third
quarter of 1994, normally CCLI's most profitable quarter of the year,
following isolated cases of Legionnaires' disease among passengers.
The 1994 results also reflect greater pricing pressure experienced in
the premium segment of the industry during the fourth quarter of 1994;
this situation continued in early 1995. In 1992, OSG had a loss of
$200,000 from its equity in the results of CCLI, which was acquired in
October of that year. The Company's equity in the results of CCLI is
before interest expense of approximately $12,800,000 (1994),
$12,500,000 (1993) and $3,600,000 (1992), estimated to have been
incurred in connection with the funding of its investment in CCLI.
OTHER INCOME (NET)
The details of other income for the three-year period are shown in
Note K on page 34 of this report. Interest and dividends increased in
1994 compared with 1993 because of higher rates of return on interest-
bearing deposits and investments and increased amounts utilized for
such deposits and investments. The 1994 increase was net of a
decrease, reflecting the sale or redemption of certain preferred
stocks during and subsequent to 1993 that were replaced with lower
yielding investments. Interest and dividends decreased in 1993 from
1992 because of reduced amounts utilized for interest-bearing deposits
and investments and generally lower rates of return on such deposits
and investments. Disposal of vessels resulted in gains of
approximately $6,800,000 in 1994 and $12,100,000 in 1993 and a
provision for loss of approximately $1,300,000 in 1992. Gain on sale
of securities was approximately $8,000,000 in 1994 compared with
approximately $9,100,000 in 1993 and $14,100,000 in 1992. There was a
decrease in income earned from other investments in 1994 compared with
1993 and an increase in that item in 1993 over 1992 (such income is
included in miscellaneous - net). Other income also reflects the
results of foreign currency transactions and the effect of minority
interest in all three years.
In 1992, the Company took a reserve of $20,000,000 ($13,100,000, or
$.40 per share, net of income tax) for its entire investment in GPA
Group plc.
INTEREST EXPENSE
Interest expense increased in 1994 from 1993 primarily as a result of
increased rates on floating rate debt and increases in the average
amount of debt outstanding in 1994, net of increased interest costs
capitalized in connection with vessel construction. Interest expense
decreased in 1993 from 1992 as a result of reduced rates on floating
rate debt and increased interest costs capitalized in connection with
vessel construction. The decrease was net of the effect of more debt
being outstanding in 1993 compared with 1992. Interest expense in
1994, 1993 and 1992 also reflects $6,500,000, $13,300,000 and
$5,600,000, respectively, of net benefits from the interest rate swaps
referred to below in Liquidity and Sources of Capital.
PROVISION FOR FEDERAL INCOME TAXES
There was an income tax credit in 1994 of $3,750,000 as a result of
the pretax loss, adjusted to reflect income items that are not subject
to tax and the dividends received deduction. The provision for taxes
of $8,900,000 in 1993 includes $2,900,000, or $.09 per share, of
additional deferred taxes resulting from the increase in the Federal
statutory rate from 34% to 35% enacted in August 1993. The balance of
the 1993 provision was based on pretax income, adjusted for the same
items referred to above. The tax credit in 1992 results from the
pretax loss, similarly adjusted.
Federal income taxes for each of the three years reflect the effects
of the Tax Reform Act of 1986, including current taxation of the post-
1986 results of the Company's foreign-owned bulk vessels.
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
The Company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("FAS 109"), starting in 1992. The
impact of applying FAS 109 was to reduce deferred tax liabilities by
$16,000,000, with a corresponding increase in net income (cumulative
effect of change in accounting) for 1992.
LIQUIDITY AND SOURCES OF CAPITAL
Working capital at December 31, 1994 was approximately $90,000,000
compared with $99,000,000 at year-end 1993 and $101,000,000 at year-
end 1992. Current assets are highly liquid, consisting principally of
cash, interest-bearing deposits and receivables. The Company also has
investments in marketable securities carried as noncurrent assets,
other than securities included in restricted funds, with a market
value of approximately $36,000,000 at December 31, 1994. Net cash
provided by operating activities approximated $10,000,000 in 1994,
$69,000,000 in 1993 and $10,000,000 in 1992. The reserve in 1992 of
$20,000,000 referred to in Other Income (Net) above had no effect on
the Company's cash flow or cash resources. In addition to payments of
current installments of long-term debt in all three years, the Company
prepaid long-term debt aggregating $62,332,000 in 1992. Current
financial resources, together with cash anticipated to be generated
from operations, are expected to be adequate to meet requirements for
short-term funds in 1995.
The Company has an unsecured long-term credit facility of
$500,000,000, of which $152,000,000 was used at December 31, 1994, and
an unsecured short-term credit facility of $30,000,000, which was
unused at that date. The Company finances vessel additions primarily
with cash provided by operating activities, long-term borrowings and
capital lease obligations. Long-term borrowings in 1994, 1993 and 1992
aggregated approximately $60,000,000, $310,000,000 and $292,000,000
(including amounts borrowed in connection with the investment in CCLI
- see below), respectively.
The Company has used interest rate swaps to effectively convert a
portion of its fixed rate debt to a floating rate basis, reflecting
management's interest rate outlook. As of December 31, 1994, the
Company is a party to fixed to floating interest rate swaps
(designated as hedges against certain debt) with various banks
covering notional amounts aggregating $685,000,000, pursuant to which
it pays LIBOR and receives fixed rates ranging from 5.3% to 8.1%
calculated on the notional amounts. These agreements contain no
leverage features and have various maturity dates from 1995 to 2008.
The Company uses derivative financial instruments for trading purposes
from time to time. The Company has hedged its exchange rate risk with
respect to contracted future charter revenues receivable in Japanese
yen to minimize the effect of foreign exchange rate fluctuations on
reported income by entering into currency swaps with a major financial
institution to deliver such foreign currency at fixed rates that will
result in the Company receiving approximately $145,000,000 for such
foreign currency from 1995 through 2004.
In March 1994, the Company sold 3,450,000 shares of its common stock
for net proceeds of approximately $76,000,000, of which $50,000,000
was used to reduce amounts outstanding under the Revolving Credit
Agreement. The remaining proceeds were added to working capital.
In 1994, 1993 and 1992, cash used for vessel additions approximated
$146,000,000, $164,000,000 and $81,000,000, respectively. In February
1995, foreign subsidiaries contracted to buy two Aframax tankers at an
aggregate cost of approximately $80,000,000. At February 21, 1995, the
Company has commitments with an aggregate unpaid cost of approximately
$300,000,000 for the construction of six foreign flag bulk vessels,
two of which are scheduled for delivery in 1995, two in late 1996 and
the other two in 1997. Long-term shipyard financing arrangements are
anticipated for approximately $76,000,000 of the unpaid cost of
certain of the vessels.
In 1992, the Company invested cash of approximately $220,000,000 for
49% of the equity of CCLI. The cash invested by the Company in CCLI is
being used primarily to finance the expansion of CCLI's fleet.
EFFECTS OF INFLATION
Additions to the costs of operating the fleet due to wage increases
and price level increases in certain other expense categories were
experienced over the three-year period. In some cases, these increases
were offset by rates available to tonnage open for chartering and to
some extent by charter escalation provisions.
ENVIRONMENTAL MATTERS
See "Increasing Environmental Regulations and Concerns" on page 15
hereof for a discussion regarding OPA 90 and certain regulations of
the IMO.
<PAGE>
[from page 22 of the Annual Report]
<TABLE>
STOCK PRICE AND DIVIDEND DATA
<CAPTION>
1994
Quarter 1st 2nd 3rd 4th
-------------------------------------------------
<S> <C> <C> <C> <C>
High 26-3/4 21-5/8 21-7/8 24-3/8
Low 19-7/8 17-7/8 17-1/4 19-1/2
Dividend $.15 $.15 $.15(a) $.15
<CAPTION>
1993
Quarter 1st 2nd 3rd 4th
-------------------------------------------------
<S> <C> <C> <C> <C>
High 19-3/4 19-7/8 20-1/2 24-1/4
Low 15-3/4 18 17 19-1/8
Dividend $.15 $.15 $.15(a) $.15(b)
<FN>
(a) Declared in second quarter of the respective year.
(b) Declared in third quarter.
</TABLE>
<PAGE>
[from inside back cover of Annual Report "Shareholder Information"]
The Company's stock is listed for trading on the
New York Stock Exchange and the Pacific Stock Exchange.
Stock Symbol: OSG
Shareholders of Record February 21, 1995: 1,146
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
-----------------------------------------------------------
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
In thousands, except per share amounts, for the year ended December 31,
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
SHIPPING REVENUES:
Revenues from voyages - Note B $358,537 $376,885 $367,324
Income attributable to bulk shipping
joint ventures - Note E 5,599 5,695 3,761
-------------------------------------------------------------------------
364,136 382,580 371,085
-------------------------------------------------------------------------
SHIPPING EXPENSES:
Vessel and voyage - Note H 243,684 252,153 244,205
Depreciation of vessels and
amortization of capital leases 59,992 58,734 56,472
Agency fees - Note H 30,302 30,225 33,310
General and administrative 9,825 8,826 7,484
-------------------------------------------------------------------------
343,803 349,938 341,471
-------------------------------------------------------------------------
Income from Vessel Operations 20,333 32,642 29,614
Equity in Results of Celebrity
Cruise Lines Inc. - Note D 797 6,841 (200)
Other Income (Net) - Note K 25,908 30,674 12,337
-------------------------------------------------------------------------
47,038 70,157 41,751
Interest Expense 56,988 43,311 44,580
-------------------------------------------------------------------------
Income/(Loss) before Federal
Income Taxes and Cumulative
Effect of Accounting Change (9,950) 26,846 (2,829)
Provision/(Credit) for Federal
Income Taxes - Note J (3,750) 8,900 (2,900)
-------------------------------------------------------------------------
Income/(Loss) before Cumulative
Effect of Accounting Change (6,200) 17,946 71
Cumulative Effect of Change in
Accounting for Income Taxes - Note A6 - - 16,000
-------------------------------------------------------------------------
Net Income/(Loss) (6,200) 17,946 16,071
Retained Earnings at Beginning of Year 764,987 766,647 770,265
-------------------------------------------------------------------------
758,787 784,593 786,336
Cash Dividends Declared and Paid 21,204 19,606 19,689
-------------------------------------------------------------------------
Retained Earnings at End of Year $737,583 $764,987 $766,647
=========================================================================
PER SHARE AMOUNTS - NOTE N:
Income/(loss) before cumulative
effect of accounting change $ (.17) $ .55 $ -
Cumulative effect of change in
accounting for income taxes - - $ .49
Net income/(loss) $ (.17) $ .55 $ .49
Cash dividends declared and paid $ .60 $ .60 $ .60
-------------------------------------------------------------------------
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
<CAPTION>
Dollars in thousands at December 31, 1994 1993
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash Including interest-bearing deposits
of $88,490 and $101,790 $ 100,034 $ 110,167
Receivables:
Voyages 11,699 8,523
Refundable Federal income taxes 5,200 -
Other 16,905 18,659
Prepaid expenses 26,868 25,738
---------------------------------------------------------------------------
Total Current Assets 160,706 163,087
Investments in Marketable Securities - Note F 36,052 21,158
Capital Construction and Restricted Funds -
Notes F, J and M1 105,570 105,654
Vessels, at cost, less accumulated
depreciation of $500,477 and
$463,864 - Notes G and L1 1,063,784 999,782
Vessels Under Capital Leases, less
accumulated amortization of $140,020
and $129,135 - Note M1 119,457 130,342
Investment in Celebrity Cruise Lines Inc. -
Note D 230,642 229,780
Investments in Bulk Shipping Joint Ventures -
Note E 82,894 78,484
Other Assets 106,304 95,450
---------------------------------------------------------------------------
$1,905,409 $1,823,737
===========================================================================
<CAPTION>
Dollars in thousands at December 31, 1994 1993
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable $ 4,563 $ 3,811
Sundry liabilities and accrued expenses -
Note L2 33,042 25,848
Federal income taxes - Note J 6,200 10,403
---------------------------------------------------------------------------
43,805 40,062
Current installments of long-term debt -
Note G 17,638 15,003
Current obligations under capital leases -
Note M1 9,737 8,555
---------------------------------------------------------------------------
Total Current Liabilities 71,180 63,620
Advance Time Charter Revenues 4,828 7,722
Long-term Debt - Note G 749,185 705,558
Obligations Under Capital Leases - Note M1 160,871 170,716
Minority Interest 3,803 4,368
Deferred Federal Income Taxes
($102,170 and $100,161) and
Deferred Credits - Notes A6 and J 105,763 103,316
Shareholders' Equity - Notes F, G, J and N:
Common Stock, par value $1 per share:
Authorized - 60,000,000 shares
Issued - 39,590,759 and 36,140,759 shares 39,591 36,141
Paid-in Additional Capital 93,599 21,035
Retained Earnings 737,583 764,987
---------------------------------------------------------------------------
870,773 822,163
Less-cost of Treasury Stock - 3,380,838
and 3,436,765 shares 49,491 50,136
---------------------------------------------------------------------------
821,282 772,027
Less-net unrealized loss on marketable
securities 11,503 3,590
---------------------------------------------------------------------------
Total Shareholders' Equity 809,779 768,437
Commitments, Leases and Other Comments -
Notes L and M
---------------------------------------------------------------------------
$1,905,409 $1,823,737
===========================================================================
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
<CAPTION>
In thousands for the year ended December 31, 1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C) <C> <C>
Net income/(loss) $ (6,200) $ 17,946 $ 16,071
Items included in net income/(loss)
not affecting cash flows:
Depreciation and amortization 59,992 58,734 56,472
Cumulative effect of change in
accounting for income taxes - - (16,000)
Provision/(credit) for deferred
Federal income taxes 1,909 5,315 (2,842)
Equity in results of Celebrity
Cruise Lines Inc. (797) (6,841) 200
Equity in net income of bulk
shipping joint ventures (6,360) (5,796) (2,704)
Other - net (6,243) (7,036) (12,928)
Items included in net income/(loss)
related to investing activities:
Provision for loss (noncash) on
investment in GPA Group plc - - 20,000
(Gain) on sale of securities - net (7,986) (9,128) (14,112)
(Gain) on disposal of vessels (6,815) (12,088) -
Changes in operating assets and
liabilities:
Decrease/(increase) in receivables (12,147) 12,420 (9,599)
Net change in prepaid items,
accounts payable and sundry
liabilities and accrued expenses (2,596) 15,078 (20,221)
Increase/(decrease) in advance time
charter revenues (2,894) 492 (4,374)
----------------------------------------------------------------------------
Net cash provided by operating
activities 9,863 69,096 9,963
----------------------------------------------------------------------------
<CAPTION>
CASH FLOWS FROM INVESTING ACTIVITIES:
<S> <C> <C> <C>
Purchases of marketable securities (34,811) (42,529) (54,881)
Proceeds from sales of marketable
securities 21,022 44,509 107,889
Additions to vessels (146,133) (163,538) (81,213)*
Proceeds from disposal of vessels 40,780 48,994 -
Investment in Celebrity Cruise Lines Inc. - (2,733) (220,086)
Other investments (667) (16,996) (2,937)
Proceeds from dispositions of other
investments 4,406 13,939 19,117
Other - net 1,078 (1,001) 2,193
----------------------------------------------------------------------------
Net cash (used in) investing
activities (114,325) (119,355) (229,918)
----------------------------------------------------------------------------
<CAPTION>
CASH FLOWS FROM FINANCING ACTIVITIES:
<S> <C> <C> <C>
Issuance of common stock 76,004 - -
Purchases of treasury stock - (237) (4,968)
Withdrawals from restricted funds - - 20,017
Issuance of long-term debt 60,000 309,439 292,000
Payments on long-term debt and obligations
under capital leases (22,442) (215,542) (95,835)
Cash dividends paid (21,204) (19,606) (19,689)
Other - net 1,971 673 81
----------------------------------------------------------------------------
Net cash provided by financing
activities 94,329 74,727 191,606
----------------------------------------------------------------------------
Net increase/(decrease) in cash (10,133) 24,468 (28,349)
Cash, including interest-bearing
deposits, at beginning of year 110,167 85,699 114,048
----------------------------------------------------------------------------
Cash, including interest-bearing
deposits, at end of year $ 100,034 $ 110,167 $ 85,699
============================================================================
<FN>
* Excludes the carrying amount ($19,350) of a vessel reclassified from
investments in bulk shipping joint ventures, upon dissolution of
partnership.
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
OVERSEAS SHIPHOLDING GROUP, INC. AND SUBSIDIARIES
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1. The consolidated financial statements include the accounts of the
Company and its subsidiaries ("Company" or "OSG"). All subsidiaries
are wholly owned, except four which are 80%-owned. Significant
intercompany items and transactions have been eliminated in
consolidation. Investments in Celebrity Cruise Lines Inc. and the bulk
shipping joint ventures (which are 50%-owned except one small venture
which is 49%-owned) are stated at the Company's cost thereof adjusted
for its proportionate share of the undistributed operating results of
such companies. The consolidated statements of operations for 1993 and
1992 and Notes B and O have been reclassified to conform with the 1994
presentation of equity in results of Celebrity Cruise Lines Inc.
2. As required by Statement of Financial Accounting Standards No. 95,
"Statement of Cash Flows," only interest-bearing deposits that are
highly liquid investments and have a maturity of three months or less
when purchased are included in cash.
3. Depreciation of vessels is computed for financial reporting
purposes based on cost, less estimated salvage value, by the straight-
line method primarily using a vessel life of 25 years.
4. Certain subsidiaries have bareboat charters-in on vessels that are
accounted for as capital leases. Amortization of capital leases is
computed by the straight-line method over 22 or 25 years, representing
the terms of the leases (see Note M).
5. Time charters and a bareboat charter that are operating leases are
reported on the accrual basis. Voyage charters are reported on the
completed voyage basis.
6. The Company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("FAS 109"), starting in the first
quarter of 1992. In accordance with FAS 109, the financial statements
of years prior to 1992 were not restated. The impact of applying FAS
109 was to reduce deferred tax liabilities by $16,000,000, with a
corresponding increase in net income (cumulative effect of change in
accounting) for 1992.
7. Interest costs incurred during the construction of vessels (until
the vessel is substantially complete and ready for its intended use)
are capitalized. Interest capitalized aggregated $14,157,000 (1994),
$7,416,000 (1993) and $6,158,000 (1992). Interest paid amounted to
$53,182,000 (1994), $42,093,000 (1993) and $42,865,000 (1992),
excluding capitalized interest.
8. The Company adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("FAS 115"), as of December 31, 1993.
Adoption of this standard had no significant effect on the Company's
financial statements. Under FAS 115, the Company's investments in
marketable securities are classified as available-for-sale and are
carried at market value. Net unrealized gains or losses are reported
as a separate component of shareholders' equity. For prior years, the
Company's investments in marketable equity securities were carried at
the lower of aggregate cost or market, and the amount of the allowance
for net unrealized loss on the noncurrent marketable equity securities
was shown as a reduction of shareholders' equity.
9. Amounts receivable or payable under interest rate swaps (designated
as hedges against certain existing debt and capital lease obligations
- see Note G) are accrued and reflected as adjustments of interest
expense. Such receivables or payables are included in other
receivables or sundry liabilities and accrued expenses, respectively.
Any gain or loss realized upon the early termination of an interest
rate swap is recognized as an adjustment of interest expense over the
remaining term of the hedged debt.
Changes in the value of currency swaps (designated as hedges against
contracted future charter revenues receivable in a foreign currency)
are deferred and are offset against corresponding changes in the value
of the charter hire, over the related charter periods (see Note M2).
Any gain or loss realized upon the termination of foreign currency
swaps would be recognized as an adjustment of voyage revenues over the
remaining term of the related charter.
The Company uses derivative financial instruments for trading
purposes from time to time. Realized and unrealized changes in fair
values are recognized in income in the period in which the changes
occur (see Note K).
<TABLE>
NOTE B - BUSINESS-DOMESTIC AND FOREIGN OPERATIONS:
The Company is principally engaged in the ocean transportation of
liquid and dry bulk cargoes in both the worldwide markets and the self-
contained U.S. markets through the ownership and operation of a
diversified fleet of bulk cargo vessels (principally tankers and dry
bulk carriers). It also owns an equity investment in Celebrity Cruise
Lines Inc. (see Note D), an owner and operator of cruise ships.
Information about the Company's operations for the three years ended
December 31, 1994 follows:
<CAPTION>
Foreign Flag
(principally
In thousands Consolidated U.S. Flag Liberian)
<S> <C> <C> <C>
1994
Shipping Revenues $ 364,136 $ 130,832 $ 233,304
Net Income/(Loss) $ (6,200) $ (30,505) $ 24,305
Identifiable Assets at
December 31, 1994 $1,905,409 $ 538,596 $1,366,813
1993
Shipping Revenues $ 382,580 $ 154,652 $ 227,928
Net Income/(Loss) $ 17,946 $ (12,842) $ 30,788
Identifiable Assets at
December 31, 1993 $1,823,737 $ 551,341 $1,272,396
1992
Shipping Revenues $ 371,085 $ 151,191 $ 219,894
Net Income $ 16,071 $ 11,523* $ 4,548
Identifiable Assets at
December 31, 1992 $1,714,548 $530,996 $1,183,552
<FN>
*Reflects $16,000,000 from change in accounting for income taxes (see
Note A6).
</TABLE>
See Note J for information relating to taxation of income and
undistributed earnings of foreign companies.
The Company had one charterer (a U.S. oil company) during the above
periods from which revenues exceeded 10% of revenues from voyages.
Revenues from such charterer amounted to $63,668,000 in 1994,
$73,656,000 in 1993 and $84,349,000 in 1992.
<TABLE>
NOTE C - ASSETS AND LIABILITIES OF FOREIGN SUBSIDIARIES:
A condensed summary of the combined assets and liabilities of the
Company's foreign (incorporated outside the U.S.) subsidiaries, whose
operations are principally conducted in U.S. dollars, follows:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Current assets $ 41,515 $ 38,730
Vessels, net 859,939 765,850
Investment in Celebrity Cruise Lines Inc. 230,642 229,780
Other assets 119,065 95,628
-----------------------------------------------------------------------
1,251,161 1,129,988
-----------------------------------------------------------------------
Current installments of long-term debt 11,958 9,728
Other current liabilities 17,212 8,692
-----------------------------------------------------------------------
Total current liabilities 29,170 18,420
Long-term debt (including intercompany)
and deferred credits, etc. 276,477 187,252
-----------------------------------------------------------------------
305,647 205,672
-----------------------------------------------------------------------
Net assets $ 945,514 $ 924,316
=======================================================================
</TABLE>
NOTE D - INVESTMENT IN CELEBRITY CRUISE LINES INC.:
The Company owns a 49% equity investment in Celebrity Cruise Lines
Inc. ("CCLI"), a joint venture that owns and operates five cruise
vessels. Pursuant to related agreements, CCLI functions as an equal
joint venture and the approval of both shareholders is required for
all substantive policy matters.
<TABLE>
A condensed summary of the assets and liabilities of CCLI and the
results of its operations follows:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Current assets $ 101,149 $147,344
Vessels, net 696,126 670,459
Other assets 51,084 48,072
-----------------------------------------------------------------------
848,359 865,875
-----------------------------------------------------------------------
Short-term debt and current installments
of long-term debt 54,676 42,593
Other current liabilities 65,289 70,612
-----------------------------------------------------------------------
Total current liabilities 119,965 113,205
Long-term debt 260,643 286,624
-----------------------------------------------------------------------
380,608 399,829
-----------------------------------------------------------------------
Net assets (principally capital
contributions) $ 467,751 $466,046
=======================================================================
<CAPTION>
Year Ended December 31, October 1 to
In thousands 1994 1993 December 31, 1992
<S> <C> <C> <C>
Revenue $ 307,565 $ 315,700 $ 68,046
Gain on sale of vessel - - 2,190
Costs and expenses (305,860) (301,642) (70,667)
--------------------------------------------------------------------------
Net income/(loss) $ 1,705 $ 14,058 $ (431)
==========================================================================
</TABLE>
The Company's equity in the results of CCLI for each of the periods is
before interest expense of approximately $12,800,000 (1994),
$12,500,000 (1993) and $3,600,000 (1992), estimated to have been
incurred by the Company in connection with the funding of its
investment in CCLI. These amounts were calculated based on the
Company's average long-term interest rates during the respective
periods.
As of February 21, 1995, CCLI has commitments (which are nonrecourse
to OSG) with an approximate aggregate unpaid cost of $940,000,000 for
the construction of three cruise ships, one scheduled for delivery in
late 1995, one in late 1996 and the third in late 1997. Unpaid costs
are net of $81,400,000 of progress payments (all paid prior to January
1, 1995). Long-term financing arrangements exist for substantially all
of the unpaid cost of these ships. Approximately 57% of the unpaid
cost is denominated in German marks. Approximately 27% of the unpaid
cost was hedged by currency option contracts that terminate in the
event that the exchange rate of the German mark to the dollar falls
below certain levels.
<TABLE>
NOTE E - BULK SHIPPING JOINT VENTURES:
Certain subsidiaries have investments in bulk shipping joint ventures
(see Note A1). A condensed summary of the combined assets and
liabilities and results of operations of the bulk shipping joint
ventures follows:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Cash ($62,486 and $60,070) and other
current assets (including
$8,265 and $6,814 due from owners) $ 78,412 $ 75,236
Vessels, net 73,286 64,013
Other assets (including $26,279 and
$33,172 due from owners) 29,573 34,880
--------------------------------------------------------------------
181,271 174,129
Current liabilities 4,214 6,792
--------------------------------------------------------------------
Net assets (principally undistributed
net earnings) $177,057 $167,337
====================================================================
<CAPTION>
In thousands for the year ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Revenue, primarily from voyages
(including $28,627, $36,008
and $36,490 from vessels
chartered to other owners) $42,825 $42,083 $48,461
Costs and expenses 30,105 30,495 43,053
------------------------------------------------------------------------
Net income $12,720 $11,588 $ 5,408
========================================================================
</TABLE>
As of February 21, 1995, certain 50%-owned companies have
commitments (which are nonrecourse to OSG) with an aggregate unpaid
cost of $162,000,000 for the construction of two foreign flag VLCCs
(very large crude carriers) scheduled for delivery in late 1996 and
early 1997. Unpaid costs are net of $18,000,000 of progress payments
(all paid prior to January 1, 1995). The joint venture companies
expect to pay the unpaid costs from their available cash resources and
to utilize existing long-term shipyard financing arrangements as
needed. Upon delivery, these vessels will commence eight-year charters
to the joint venture partner.
<TABLE>
NOTE F - INVESTMENTS IN MARKETABLE SECURITIES:
Certain information concerning the Company's marketable securities
(including securities in Capital Construction and Restricted Funds),
which consist of available-for-sale securities, follows:
<CAPTION>
Approximate
Gross Unrealized Market and
In thousands at December 31, Cost Gains Losses Carrying Amount
<S> <C> <C> <C> <C>
1994
Equity securities $ 80,638 $ 1,350 $ 10,589 $ 71,399
U.S. Treasury securities
and obligations of U.S.
government agencies 50,788 - 2,264 48,524
---------------------------------------------------------------------------
$131,426 $ 1,350 $ 12,853 $119,923
===========================================================================
1993
Equity securities $ 72,974 $ 972 $ 4,562 $ 69,384
===========================================================================
<CAPTION>
The cost and approximate market value of debt securities, by contractual
maturity, are shown below:
Approximate
In thousands at December 31, 1994 Cost Market
<S> <C> <C>
Due after one year through five years $ 41,391 $ 39,660
Due after five years through ten years 5,063 4,801
Due after ten years 4,334 4,063
--------------------------------------------------------------------------
$ 50,788 $ 48,524
==========================================================================
</TABLE>
The unrealized loss on marketable securities included as a separate
component of shareholders' equity increased $7,913,000 (1994) and
decreased $7,261,000 (1993) and $10,775,000 (1992).
At February 21, 1995, the approximate aggregate market quotation of
the above marketable securities was $123,300,000 and the net
unrealized loss was reduced to approximately $8,150,000.
<TABLE>
NOTE G - DEBT:
Long-term debt exclusive of current installments follows:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Unsecured Senior Notes, due from 2000
through 2013, interest from 7.77% to 9.57% $310,000 $310,000
Unsecured Revolving Credit Agreement with banks 152,000 92,000
8 3/4% Debentures due 2013, net of unamortized
discount of $305 and $321 99,695 99,679
8% Notes due 2003, net of unamortized discount
of $215 and $239 99,785 99,761
8% to 10.58% unsecured Promissory Notes and
Term Loans, due through 2001 49,661 47,925
10.5% and 10.58% secured Promissory Notes and
Term Loans, due through 2001 27,254 44,373
8.45% United States Government Guaranteed
Merchant Marine Bonds, due through 2006 10,790 11,820
------------------------------------------------------------------------
$749,185 $705,558
========================================================================
</TABLE>
The Revolving Credit Agreement, as amended, provides for borrowings of
up to $500,000,000 on a revolving credit basis through November 1999,
at which time any outstanding balance is due. As of December 31, 1994,
interest was at the rate of .475% above the London Interbank Offered
rate ("LIBOR"). The Company also has interest rate options related to
the certificate of deposit, money market or prime rates.
Agreements related to long-term debt provide for prepayment
privileges (in certain instances with penalties), limitations on the
amount of secured debt and total borrowings, and acceleration of
payment under certain circumstances, including if any of the minimum
consolidated financial covenants contained in certain of such
agreements are not met. The most restrictive of these covenants
require the Company to maintain positive consolidated working capital,
consolidated net worth as of December 31, 1994 of approximately
$581,000,000 (increasing quarterly by an amount related to net
income), a ratio of total debt to net worth of not more than 1.75:1,
and a liquid cash flow coverage ratio of at least 2.00:1. The amount
that the Company can use for Restricted Payments, as defined,
including dividends and purchases of its capital stock, is limited as
of December 31, 1994, to $75,600,000.
The Company has used interest rate swaps to effectively convert a
portion of its fixed rate debt to a floating rate basis, reflecting
management's interest rate outlook. As of December 31, 1994, the
Company is a party to fixed to floating interest rate swaps with
various banks covering notional amounts aggregating $685,000,000,
pursuant to which it pays LIBOR (7% as of December 31, 1994) and
receives fixed rates ranging from 5.3% to 8.1% calculated on the
notional amounts. These agreements contain no leverage features and
have various maturity dates from 1995 to 2008. In March 1994, the
Company terminated a floating to fixed interest rate swap (which was
designated as a hedge against certain debt) expiring in 1996, covering
a notional amount of $24,000,000.
Approximately 20% of the net book amount of the Company's vessels,
representing approximately 8% of the number of foreign flag and 55% of
the number of U.S. flag vessels, is pledged as collateral for certain
long-term debt. In some instances, debt is collateralized by revenues
from certain charters.
The aggregate annual principal payments required to be made on long-
term debt for the five years subsequent to December 31, 1994 are
$17,638,000 (1995), $21,337,000 (1996), $19,336,000 (1997),
$13,774,000 (1998) and $167,085,000 (1999).
The Company also has a $30,000,000 committed short-term line of
credit facility with a bank, under which there were no outstanding
borrowings as of December 31, 1994.
NOTE H - AGENCY FEES AND BROKERAGE COMMISSIONS:
All subsidiaries with vessels and certain joint ventures are parties
to agreements with Maritime Overseas Corporation ("Maritime") that
provide, among other matters, for Maritime and its subsidiaries to
render services related to the chartering and operation of the vessels
and certain general and administrative services for which Maritime and
its subsidiaries receive specified compensation. Vessel and voyage
expenses include $5,118,000 (1994), $6,009,000 (1993) and $5,743,000
(1992) of brokerage commissions to Maritime. By agreement, Maritime's
compensation for any year is limited to the extent Maritime's
consolidated net income from shipping operations would exceed a
specified amount (approximately $834,000 (1994), $758,000 (1993) and
$689,000 (1992)). Maritime is owned by a director of the Company;
directors or officers of the Company constitute all four of the
directors and the majority of the principal officers of Maritime.
NOTE I - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments:
CASH AND INTEREST-BEARING DEPOSITS
The carrying amount reported in the balance sheet for interest-bearing
deposits approximates its fair value.
INVESTMENT SECURITIES
The fair value for marketable securities is based on quoted market
prices or dealer quotes.
DEBT
The carrying amounts of the borrowings under the Revolving Credit
Agreement approximate their fair value. The fair values of the
Company's other debt are estimated using discounted cash flow
analyses, based on the rates currently available for debt with similar
terms and remaining maturities.
INTEREST RATE SWAPS
The fair value of interest rate swaps (used for hedging purposes) is
the estimated amount that the Company would receive or pay to
terminate the swaps at the reporting date.
FOREIGN CURRENCY SWAPS AND FORWARD CONTRACTS
The fair value of foreign currency swaps (used for hedging purposes)
is the estimated amount that the Company would receive or pay to
terminate the swaps at the reporting date. At December 31, 1994, the
Company had foreign currency forward contracts (held for trading
purposes) scheduled to mature in March 1995 with a notional amount of
approximately $15,000,000, the unrealized loss on which was
insignificant at that date. The average fair values of foreign
currency forward contracts held for trading during 1994 and 1993 were
not material.
<TABLE>
The estimated fair value of the Company's financial instruments follows:
<CAPTION>
Carrying Fair Carrying Fair
Amount Value Amount Value
In thousands at December 31, 1994 1994 1993 1993
<S> <C> <C> <C> <C>
Financial assets (liabilities)
Cash and interest-bearing deposits $100,034 $100,034 $110,167 $110,167
Interest-bearing deposits in
restricted funds 20,544 20,544 57,428 57,428
Investments in marketable
securities 119,923 119,923 69,384 69,384
Debt (937,431) (913,238) (899,832) (952,920)
Interest rate swaps - (51,869) - 29,755
Foreign currency swaps - (16,267) - (2,666)
</TABLE>
NOTE J - TAXES:
Effective from January 1, 1987, earnings of the foreign shipping
companies (exclusive of CCLI) are subject to U.S. income taxation
currently; post-1986 taxable income may be distributed to the U.S.
parent without further tax. The foreign companies' shipping income
earned from January 1, 1976 through December 31, 1986 ("Deferred
Income") is excluded from U.S. income taxation to the extent that such
income is reinvested in foreign shipping operations and the foreign
shipping income earned before 1976 is not subject to tax unless
distributed to the U.S. parent. A determination of the amount of
qualified investments in foreign shipping operations, as defined, is
made at the end of each year and such amount is compared to the
corresponding amount at December 31, 1986. If during any determination
period there is a reduction of qualified investments in foreign
shipping operations, Deferred Income, limited to the amount of such
reduction, would become subject to tax. Treasury Department
regulations regarding the foregoing have not been revised to reflect
law changes effective for post-1986 years. The Company believes that
it will be reinvesting sufficient amounts in foreign shipping
operations so that any significant U.S. income taxes on the
undistributed income of its foreign companies accumulated through
December 31, 1986 will be postponed indefinitely. U.S. income taxes on
the income of its foreign companies accumulated through December 31,
1986 will be provided at such time as it becomes probable that a
liability for such taxes will be incurred and the amount thereof can
reasonably be estimated. No provision for U. S. income taxes on the
income of the foreign shipping companies accumulated through December
31, 1986 was required at December 31, 1994 since undistributed
earnings of foreign shipping companies have been reinvested or are
intended to be reinvested in foreign shipping operations. As of
December 31, 1994, such undistributed earnings aggregated
approximately $475,000,000, including $114,000,000 earned prior to
1976; the unrecognized deferred U.S. income tax attributable to such
undistributed earnings approximated $165,000,000. Further, no
provision for U.S. income taxes on the Company's share of the
undistributed earnings of CCLI was required, since it is intended that
such undistributed earnings ($7,500,000 at December 31, 1994) will be
indefinitely reinvested; the unrecognized deferred U.S. income tax
attributable thereto approximated $2,600,000.
Pursuant to the Merchant Marine Act of 1936, as amended, the Company
is a party to an agreement that permits annual deposits, related to
taxable income of certain of its domestic subsidiaries, into a Capital
Construction Fund. Payments of Federal income taxes on such deposits
and earnings thereon are deferred until, and if, such funds are
withdrawn for nonqualified purposes or termination of the agreement;
however, if withdrawn for qualified purposes (acquisition of vessels
or retirement of debt on vessels), such funds remain tax deferred and
the Federal income tax basis of any such vessel is reduced by the
amount of such withdrawals. Under the agreement, the general objective
is (by use of assets accumulated in the fund) for two vessels to be
constructed or acquired by the end of 1999. Monies can remain tax
deferred in the fund for a maximum of 25 years (commencing January 1,
1987 for deposits prior thereto). The Company has historically
provided deferred taxes on amounts in the fund.
<TABLE>
The significant components of the Company's deferred tax liabilities and
assets follow:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Deferred tax liabilities:
Excess of tax over statement depreciation-net $ 73,369 $ 74,159
Tax benefits of the Merchant Marine Act of
1936, as amended, on amounts accumulated
in the Capital Construction Fund 30,503 28,739
Costs capitalized and amortized for statement,
expensed for tax 9,678 9,656
Other-net 24,640 19,868
------------------------------------------------------------------------
Total deferred tax liabilities 138,190 132,422
------------------------------------------------------------------------
Deferred tax assets:
Capital leases 11,760 12,052
Excess of tax over statement basis of investment
in securities 2,188 7,070
Alternative minimum tax credit carry forwards,
which can be carried forward indefinitely 15,872 6,839
------------------------------------------------------------------------
Total deferred tax assets 29,820 25,961
------------------------------------------------------------------------
Net deferred tax liabilities $108,370 $106,461
========================================================================
</TABLE>
Federal income taxes paid amounted to $4,200,000 in 1994 (all of which
related to 1993) and $6,400,000 in 1992. A Federal income tax refund of
$6,221,000 was received in 1993.
<TABLE>
The components of income/(loss) before Federal income taxes and
cumulative effect of accounting change follow:
<CAPTION>
In thousands for the year ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Domestic $(31,456) $(15,980) $(11,584)
Foreign 21,506 42,826 8,755
--------------------------------------------------------------------------
$ (9,950) $ 26,846 $ (2,829)
==========================================================================
</TABLE>
Substantially all of the above foreign income was earned by companies
that were not subject to income taxes in their countries of
incorporation.
<TABLE>
The components of the provision/(credit) for Federal income taxes
follow:
<CAPTION>
In thousands for the year ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Current $(5,659) $ 3,585 $ (58)
Deferred 1,909 2,415 (2,842)
Adjustment of net deferred tax liabilities
to reflect increase in tax rates - 2,900 -
--------------------------------------------------------------------------
$(3,750) $ 8,900 $(2,900)
==========================================================================
</TABLE>
<TABLE>
Reconciliations of the actual Federal income tax rate and the U.S.
statutory income tax rate follow:
<CAPTION>
For the year ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Actual Federal income tax provision/
(credit) rate (37.7%) 33.1% (102.5%)
Adjustment of net deferred tax liabilities
to reflect increase in tax rates - (10.8%) -
Adjustment due to:
Dividends received deduction 4.9% 3.2% 54.0%
Income not subject to U.S. income taxes 2.2% 9.7% 13.2%
Other (4.4%) (.2%) 1.3%
--------------------------------------------------------------------------
U.S. statutory income tax provision/
(credit) rate (35.0%) 35.0% (34.0%)
==========================================================================
</TABLE>
<TABLE>
NOTE K - OTHER INCOME (NET):
Other income (net) consists of:
<CAPTION>
In thousands for the year ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Interest $ 6,116 $ 4,017 $ 5,293
Dividends 2,072 3,473 6,502
Gain on sales of securities-net (based on
first-in, first-out method) 7,986 9,128 14,112
Provision for loss on investment in GPA
Group plc - - (20,000)
Gain/(loss) on disposal of vessels 6,815 12,088 (1,259)*
Foreign currency exchange gains/(losses) 490 (1,647) 4,830
Minority interest 285 (116) 735
Miscellaneous-net 2,144 3,731 2,124
----------------------------------------------------------------------------
$ 25,908 $ 30,674 $ 12,337
============================================================================
<FN>
* Represents a provision for loss on a vessel sold subsequent to year-
end.
Gross realized gains on sales of securities were $10,199,000 (1994),
$10,802,000 (1993) and $15,728,000 (1992), and gross realized losses
were $2,213,000 (1994), $1,674,000 (1993) and $1,616,000 (1992).
</TABLE>
NOTE L - COMMITMENTS AND OTHER COMMENTS:
1. In February 1995, foreign subsidiaries contracted to buy two
Aframax tankers at an aggregate cost of approximately $80,000,000.
As of February 21, 1995, the Company has commitments with an
aggregate unpaid cost of approximately $300,000,000 for the
construction of six foreign flag bulk vessels, two of which are
scheduled for delivery in 1995, two in late 1996 and the other two in
1997. Unpaid costs are net of $150,000,000 of progress payments (all
paid prior to January 1, 1995). Long-term shipyard financing
arrangements are anticipated for approximately $76,000,000 of the
unpaid cost of certain of the vessels.
<TABLE>
2. Sundry liabilities and accrued expenses consist of:
<CAPTION>
In thousands at December 31, 1994 1993
<S> <C> <C>
Payroll and benefits $ 2,501 $ 3,384
Interest 12,697 11,902
Insurance 10,778 4,350
Other 7,066 6,212
-----------------------------------------------------------------
$33,042 $ 25,848
=================================================================
</TABLE>
3. Certain subsidiaries make contributions to union-sponsored multi-
employer pension plans covering seagoing personnel. The Employee
Retirement Income Security Act requires employers who are contributors
to domestic multi-employer plans to continue funding their allocable
share of each plan's unfunded vested benefits in the event of
withdrawal from or termination of such plans. The Company has been
advised by the trustees of such plans that it has no withdrawal
liability as of December 31, 1994.
Certain other seagoing personnel of U.S. flag vessels are covered
under a subsidiary's defined contribution plan, the cost of which is
funded as accrued.
NOTE M - LEASES:
<TABLE>
1. Charters-in:
The approximate minimum commitments under capital leases for eight
U.S. flag vessels were:
<CAPTION>
In thousands at December 31, 1994
<S> <C>
1996 25,528
1997 25,528
1998 25,528
1999 25,660
Beyond 1999 165,958
-----------------------------------------------------------------
Net minimum lease payments 293,730
Less amount representing interest 123,122
-----------------------------------------------------------------
Present value of net minimum lease payments $170,608
=================================================================
</TABLE>
Certain of the capital leases provide for deposits in restricted funds
under certain circumstances. Such deposits aggregated approximately
$4,821,000 at December 31, 1994 and are held as collateral for the
related obligations.
The Company has a time charter (which is an operating lease) for a
1992-built foreign flag tanker, which charter has a remaining term of
approximately four years, at an annual time charter rental of
approximately $8,800,000, assuming a full year's operations. Under the
charter, the Company has renewal and purchase options. Time charter
rental expense is not payable when the vessel is off-hire. The total
rental expense for charters accounted for as operating leases,
including the one referred to above, amounted to $12,150,000 in 1994,
$8,842,000 in 1993 and $8,048,000 in 1992.
2. Charters-out:
The Company's subsidiaries, as the owners of a diversified fleet of
bulk vessels, engage in chartering out the vessels primarily on time
and voyage charters and occasionally on bareboat charters. Revenues
from vessels on time charter are dependent upon the ability to deliver
and operate vessels in accordance with charter terms. Revenues from a
time charter are not received when a vessel is off-hire, including
time required for normal periodic maintenance of the vessel. The
minimum future revenues expected to be received subsequent to December
31, 1994 on noncancelable time charters and a bareboat charter are
$79,080,000 (1995), $25,872,000 (1996), $23,032,000 (1997),
$19,535,000 (1998) and $18,288,000 (1999); the aggregate for 2000 and
later years is $99,724,000.
The foregoing amounts do not include escalations and do not purport
to be an estimate of aggregate voyage revenues for any of the years.
In arriving at the minimum future charter revenues, an estimated time
off-hire to perform periodic maintenance on each vessel has been
deducted, although there is no assurance that such estimate will be
reflective of the actual off-hire in the future.
The Company has hedged its exchange rate risk with respect to
contracted future charter revenues receivable in Japanese yen to
minimize the effect of foreign exchange rate fluctuations on reported
income by entering into currency swaps with a major financial
institution to deliver such foreign currency at fixed rates that will
result in the Company receiving approximately $145,000,000 for such
foreign currency from 1995 through 2004.
NOTE N - CAPITAL STOCK AND PER SHARE AMOUNTS:
The Company's 1989 nonqualified stock option plan, as amended, covered
570,000 treasury shares. Options were granted to certain officers of
the Company and a subsidiary for the purchase of all the shares
covered by the amended plan, at $14.00 per share, which was in excess
of the market price at the date of grant; 20% of the options vest and
become exercisable on each October 9, from 1991 through 1995. These
options remain exercisable until October 2000. During 1993, options
for 10,000 shares were exercised. Options for 560,000 shares are
outstanding and options for 446,000 shares are exercisable at December
31, 1994.
At December 31, 1994, the Company has reserved 707,579 treasury
shares for issuance pursuant to (i) its 1990 nonqualified stock option
plan, which covered options for 3,515 shares granted by the Company to
employees (except senior officers), and (ii) an agreement, as amended,
to make available for purchase by Maritime (see Note H) 704,064 shares
(including an increase of 200,000 shares in 1993). Maritime can
acquire the shares reserved for it only for the purpose of fulfilling
its obligations under its 1990 nonqualified stock option plan, as
amended. The exercise price of the options granted by the Company to
its employees is $16.00 per share, and the prices for any shares
Maritime purchases from the Company range from $16.00 to $19.63 per
share (the market prices at dates of grant). The options granted have
a term of approximately ten years and become exercisable in annual
increments of 20% upon the option holder's completion of five years of
service. Certain details of activity in the Company's 1990 plan and
Maritime's plan are summarized as follows:
<TABLE>
<CAPTION>
Company's 1990 Plan Maritime's Plan
<S> <C> <C>
Options Outstanding at January 1, 1992 16,360 464,518
Granted - 30,000
Canceled (9,968) (31,262)
Exercised ($16.00 per share) - (5,035)
--------------------------------------------------------------------------
Options Outstanding at December 31, 1992 6,392 458,221
Granted - 190,000
Canceled - (23,899)
Exercised ($16.00 per share) (872) (20,409)
--------------------------------------------------------------------------
Options Outstanding at December 31, 1993 5,520 603,913
Granted - 24,600
Canceled (1,005) (80,430)
Exercised ($16.00 per share) (1,000) (54,927)
--------------------------------------------------------------------------
Options Outstanding at December 31, 1994 3,515 493,156
==========================================================================
Options Exercisable at December 31, 1994 1,880 244,858
==========================================================================
</TABLE>
Net income/(loss) per share is based on the weighted average number of
common shares outstanding during each year, 35,587,856 shares (1994),
32,678,031 shares (1993) and 32,805,549 shares (1992). The
aforementioned stock options have not been included in the computation
of net income/(loss) per share since their effect thereon would either
be antidilutive or not be material.
In March 1994, the Company sold 3,450,000 shares of its common stock
in a public offering. Net proceeds were $76,004,000, which were
credited to common stock ($3,450,000) and paid-in additional capital
($72,554,000). The effect on net loss per share assuming that the
aforementioned sale of shares and the use of a portion of the proceeds
to reduce amounts outstanding under the Revolving Credit Agreement had
occurred at the beginning of 1994 was not material.
<TABLE>
NOTE O - 1994 AND 1993 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
<CAPTION>
Results of Operations for Quarter Ended
(in thousands, except per share amounts)
March 31, June 30, September 30, December 31,
<S> <C> <C> <C> <C>
1994
Shipping revenues $100,498 $78,316 $ 89,563 $95,759
Income/(loss) from vessel
operations 10,759 (2,827) 4,037 8,364
Gain on disposal of vessels 2,512 - 4,303 -
Net income/(loss) $ 5,016 $(4,599) $ (2,313) $ 4,304)
---------------------------------------------------------------------------
Net income/(loss) per share $ .15 $ (.14) $ (.06) $ (.12)
===========================================================================
1993
Shipping revenues $101,250 $93,151 $ 95,267 $92,912
Income from vessel operations 9,167 6,914 9,702 6,859
Gain on disposal of vessels 6,077 6,011 - -
Net income $ 4,876 $ 5,514 $ 4,519 $ 3,037
---------------------------------------------------------------------------
Net income per share $ .15 $ .17 $ .14 $ .09
===========================================================================
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders
Overseas Shipholding Group, Inc.
We have audited the accompanying consolidated balance sheets of
Overseas Shipholding Group, Inc. and subsidiaries as of December
31, 1994 and 1993, and the related consolidated statements of
operations and retained earnings and cash flows for each of the
three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Overseas Shipholding Group, Inc. and
subsidiaries at December 31, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994 in conformity
with generally accepted accounting principles.
As discussed in Note A6 to the consolidated financial statements,
in 1992, the Company changed its method of accounting for income
taxes, in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes."
ERNST & YOUNG LLP
New York, New York
February 21, 1995
<PAGE>
<TABLE>
ELEVEN-YEAR STATISTICAL REVIEW (UNAUDITED)
In thousands, except per share amounts
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total revenues(a) $390,841 $420,095 $383,222 $452,459 $429,040
Income from vessel operations 20,333 32,642 29,614 102,046 112,894
Income/(loss) before Federal
income taxes (9,950) 26,846 (2,829) 79,826 80,757
Net income/(loss) (6,200) 17,946 16,071(c) 55,076 55,857
Depreciation of vessels and
amortization of capital
leases 59,992 58,734 56,472 56,214 55,567
Vessels, capital leases and
direct financing leases,
at net book amount 1,183,241 1,130,124 1,067,122 1,026,817 1,046,103
Total assets 1,905,409 1,823,737 1,714,548 1,545,675 1,498,277
Long-term debt and lease
obligations (exclusive of
current portions) 910,056 876,274 784,452 576,321 612,819
Reserve for deferred Federal
income taxes - noncurrent 102,170 100,161 94,247 114,589 102,575
Shareholders' equity $809,779 $768,437 $762,425 $760,322 $707,128
Per share amounts(b):
Net income/(loss) $ (.17) $ .55 $ .49(c) $ 1.67 $ 1.63
Shareholders' equity $ 22.36 $ 23.50 $ 23.33 $ 23.05 $ 21.40
Cash dividends paid $ .60 $ .60 $ .60 $ .55 $ .50
Average shares outstanding 35,588 32,678 32,806 33,012 34,317
<FN>
(a) Represents shipping revenues and other income.
(b) Gives effect to a 7-for-5 stock split declared in February 1989.
(c) Includes $16,000,000 ($.49 per share) from the cumulative effect of the
change in accounting for income taxes in accordance with FAS 109, and a
provision of $13,100,000 ($.40 per share) for loss on investment in GPA Group
plc.
</TABLE>
<PAGE>
EXHIBIT 21
----------
as of 3/21/95
SUBSIDIARIES OF OVERSEAS SHIPHOLDING GROUP, INC.
The following table lists all subsidiaries of the registrant and
all companies in which the registrant directly or indirectly owns
at least a 49% interest, except for certain companies which, if
considered in the aggregate as a single entity, would not
constitute a significant entity. All the entities named below
are corporations, unless otherwise noted.
Where Incorporated
Name or Organized
Ajax Navigation Corporation Liberia
Alice Tankships Corporation New York
American Shipholding Group, Inc. New York
Amity Products Carriers, Inc. Delaware
Ania Tanker Corporation Liberia
Antilles Bulk Holdings N.V. Netherlands Antilles
Atlantia Tanker Corporation Liberia
Baywatch Marine Inc. Liberia
Blue Sapphire Marine Inc. Liberia
Cambridge Tankers, Inc. New York
Canopus Tankers, Inc. Liberia
Caribbean Tanker Corporation Liberia
Celebrity Cruise Lines Inc. Cayman Islands
Celebrity Cruises (Management) Inc. Liberia
Celebrity Cruises Inc. Liberia
Chrismir Shipping Corporation Liberia
Columbia Tanker Corporation Liberia
Commonwealth Shipping Company Limited Bermuda
Community Ocean Services, Inc. New York
Concert Tanker Corporation Liberia
Concord Tanker S.A. Panama
Corolla Shipping S.A. Panama
Cruise Mar Investment Inc. Liberia
Cruise Mar Shipping Holdings Ltd. Liberia
Delphina Tanker Corporation Delaware
Diane Tanker Corporation Liberia
Edinburgh Bulk Carriers Limited Bermuda
Enterprise Shipping Company Limited Bermuda
ERN Holdings Inc. Panama
Esker Marine Shipping Inc. Liberia
Excelsior Bulk Carriers Limited Bermuda
Exemplar Bulk Carriers Limited Bermuda
Explorer Bulk Carriers, Inc. Liberia
Fantasia Cruising Inc. Liberia
Fifth Transoceanic Shipping Liberia
Company Limited
First Aframax Tanker Corporation Liberia
First Pacific Corporation. Liberia
First Products Tankers, Inc. Liberia
First Shipco Inc. Liberia
First Shipmor Associates (partnership) Delaware
First Union Tanker Corporation Liberia
First United Shipping Corporation Liberia
Fourth Aframax Tanker Corporation Liberia
Fourth Products Tankers, Inc. Liberia
Fourth Shipmor Associates (partnership) Delaware
Fourth Spirit Holding N.V. Netherlands Antilles
Fourth Transoceanic Shipping Liberia
Company Limited
Friendship Marine Inc. Liberia
General Guaranty Corporation Delaware
General Ship Services, Inc. Delaware
Glasgow Bulk Carriers Limited Bermuda
Global Bulk Oil S.A. Panama
Global Tankers S.A. Panama
Hyperion Shipping Corporation Liberia
Hyperion Transportation S.A. Panama
Imperial Tankers Corporation Liberia
Intercontinental Bulktank Corporation New York
Intercontinental Coal Transport Inc. Delaware
Intercontinental Coal Transport Limited Bermuda
International Seaways, Inc. Delaware
International Seaways, Inc. Liberia
Interocean Tanker Corporation Liberia
Island Tanker S.A. Panama
ITI Shipping S.A. Panama
Jostelle Shipping Company Limited Bermuda
Juneau Tanker Corporation New York
Kaigai Shipping Corporation Liberia
Lake Michigan Bulk Carriers, Inc. New York
Lake Ontario Bulk Carriers, Inc. New York
Lion Insurance Company Ltd. Bermuda
Lion Shipping Ltd. Liberia
Majestic Tankers Corporation Liberia
Mansfield Marine Corporation Liberia
Marina Tanker Corporation. Liberia
Matilde Tanker Corporation Liberia
Mediterranean Blue Sea Holdings Ltd. Liberia
Mercury Bulkcarriers S.A. Panama
Mermi Shipping Holdings Ltd. Liberia
Monarch Tanker S.A. Panama
Moran Maritime Associates (partnership) Delaware
New Orleans Tanker Corporation Delaware
North American Ship Agencies, Inc. New York
Northanger Shipping Corporation Liberia
Northwestern Tanker Corporation Liberia
Ocean Bulk Ships, Inc. Delaware
Oleron Tanker S.A. Panama
Olympia Tanker Corporation Liberia
Ore-Oil Carriers S.A. Panama
OSG Bulk Ships, Inc. New York
OSG Car Carriers, Inc. New York
OSG Financial Corp. Delaware
OSG Foundation New York
OSG International, Inc. Liberia
OSG International Partners (partnership) Liberia
Overseas Airship Corporation Delaware
Overseas Bulktank Corporation New York
Overseas Coal Transport Inc. Delaware
Overseas Coal Transport Limited Bermuda
Overseas Cruiseship Inc. Cayman Islands
Overseas Petroleum Carriers, Inc. Delaware
Phaidon Navegacion S.A. Panama
Philadelphia Tanker Corporation Delaware
Pluto Tankers, Inc. Liberia
Polycon Investment Inc. Liberia
Regency Tankers Corporation Liberia
Reliance Shipping B.V. Netherlands
Rex Shipholdings Inc. . Liberia
Rio Grande Bulk Carriers, Inc. Liberia
Royal Tankers Corporation Liberia
Ruby Tanker Corporation Liberia
San Diego Tankers, Inc. Delaware
San Jose Tankers, Inc. Delaware
Santa Barbara Tankers, Inc. Delaware
Santa Monica Tankers, Inc. Delaware
Sapphire Tanker Corporation Liberia
Sargasso Tanker Corporation Liberia
Saturn Bulk Carriers, Inc. Liberia
Seabrook Maritime Inc. Liberia
Second Pacific Corporation Liberia
Second Products Tankers, Inc. Liberia
Second Shipmor Associates (partnership) Delaware
Second Union Tanker Corporation Liberia
Second United Shipping Corporation Liberia
Ship Paying Corporation No. 1 Delaware
Ship Paying Corporation No. 2 Delaware
Ship Paying Corporation No. 3 Liberia
Spirit Shipping B.V. Netherlands
Third Aframax Tanker Corporation Liberia
Third Products Tankers, Inc. Liberia
Third Shipco Inc. Delaware
Third Shipmor Associates (partnership) Delaware
Third United Shipping Corporation Liberia
Timor Navigation Ltd. Liberia
TRA Shipping S.A. Panama
Trader Shipping Corporation. Liberia
Tranquillity Maritime Ltd. Liberia
Transbulk Carriers, Inc. Delaware
Tropical United Shipping Corporation Liberia
TSC Shipping S.A. Panama
Tubarao Bulk Carriers, Inc. Liberia
U.S. Shipholding Group, Inc. New York
United Partners (partnership) Liberia
United Steamship Corporation Panama
Universal Cruise Holdings Limited British Virgin Islands
Upperway Investments Ltd. Liberia
Valdez Tankships Corporation New York
Vega Tanker Corporation Delaware
Venus Tanker Corporation Liberia
Vivian Tankships Corporation New York
Western Ship Agencies Limited England
Wolcon Corp. Delaware
Zenith Shipping Corporation Liberia
<PAGE>
EXHIBIT 23
----------
Consent of Independent Auditors
We consent to the incorporation by reference in this
Annual Report (Form 10-K) of Overseas Shipholding Group,
Inc. of our report dated February 21, 1995, included in the
1994 Annual Report to Shareholders of Overseas Shipholding
Group, Inc.
We also consent to the incorporation by reference in
the Registration Statements, Form S-8 (No. 33-44013)
pertaining to the Overseas Shipholding Group, Inc. 1989
Stock Option Plan, the Overseas Shipholding Group, Inc. 1990
Stock Option Plan, and the Maritime Overseas Corporation
1990 Stock Option Plan, and Form S-3 (No. 33-50441)
pertaining to the registration of $500,000,000 of Overseas
Shipholding Group, Inc. debt securities, of our report dated
February 21, 1995, with respect to the consolidated
financial statements of Overseas Shipholding Group, Inc.,
incorporated herein by reference.
ERNST & YOUNG LLP
New York, New York
March 29, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-K and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 100,034
<SECURITIES> 0
<RECEIVABLES> 33,804
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 160,706
<PP&E> 1,823,738
<DEPRECIATION> 640,497
<TOTAL-ASSETS> 1,905,409
<CURRENT-LIABILITIES> 71,180
<BONDS> 910,056
<COMMON> 39,591
0
0
<OTHER-SE> 770,188
<TOTAL-LIABILITY-AND-EQUITY> 1,905,409
<SALES> 0
<TOTAL-REVENUES> 390,841
<CGS> 0
<TOTAL-COSTS> 343,803
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56,988
<INCOME-PRETAX> ( 9,950 )
<INCOME-TAX> ( 3,750 )
<INCOME-CONTINUING> ( 6,200 )
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ( 6,200 )
<EPS-PRIMARY> ( 0.17 )
<EPS-DILUTED> ( 0.17 )
</TABLE>
