Common use of Failure to Go Effective Clause in Contracts

Failure to Go Effective. If a Registration Statement required to be filed by Section 2.01(a) is not declared effective on or prior to the Effectiveness Deadline, then each Holder shall be entitled to a payment in cash (with respect to each Registrable Security held by the Holder), as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period, which shall accrue daily, for the first 60 calendar days immediately following the Effectiveness Deadline, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-calendar-day period, which shall accrue daily, for each subsequent 30-calendar-day period (i.e., 0.5% for 61-90 calendar days, 0.75% for 91-120 calendar days and 1.00% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-calendar-day period, until such time as such Registration Statement is declared effective or when the Registrable Securities covered by such Registration Statement cease to be Registrable Securities (the “Liquidated Damages”). The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within 10 Business Days after the end of each such 30-calendar-day period. Any Liquidated Damages shall be paid to each Holder in immediately available funds. The accrual of Liquidated Damages to a Holder shall cease (an “LD Termination Date,” and, each such period beginning on an Effectiveness Deadline and ending on an LD Termination Date being, an “LD Period”) at the earlier of (1) the Registration Statement being declared effective and (2) when the Holder’s Registrable Securities covered by such Registration Statement cease to be Registrable Securities. Any amount of Liquidated Damages shall be prorated for any period of less than 30 calendar days accruing during an LD Period. If the Company is unable to cause a Registration Statement to be declared effective on or prior to the Effectiveness Deadline as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Company may request a waiver of the Liquidated Damages, and each Holder may individually grant or withhold its consent to such request in its discretion. Nothing in this Section 2.01(b) shall relieve the Company from its obligations under Section 2.01(a).

Failure to Go Effective. If a the Shelf Registration Statement required to be filed by Section 2.01(a) 2.01 is not declared effective on within 120 days (or prior to 150 days if the Effectiveness DeadlineCompany is not S-3 eligible at the time of filing) after expiration of the Lock Up Period, then each Holder the Purchaser shall be entitled to a payment in cash (with respect to each Registrable Security held by the Holder)payment, as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier Purchase Price per 30-day period, which shall accrue daily, period for the first 60 calendar days immediately following the Effectiveness Deadline120th day (or the 150th day if the Company is not S-3 eligible at the time of filing), increasing by an additional 0.25% of the Liquidated Damages Multiplier Purchase Price per 30-calendar-day period, which shall accrue daily, period for each subsequent 30-calendar-day period (i.e., 0.5% for 61-90 calendar 60 days, 0.75% for 91-120 calendar days and 1.00% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier Purchase Price per 30-calendar-day period, until such time as such Registration Statement is declared effective or when the Registrable Securities covered by such Registration Statement cease to be Registrable Securities period (the “Liquidated Damages”). The Liquidated Damages payable pursuant to the immediately preceding sentence , which shall be payable within 10 30 Business Days after of the end of each such 30-calendar-day period. Any The Liquidated Damages shall be paid to each Holder the Purchaser in immediately available funds. The accrual of Liquidated Damages to a Holder shall cease (an “LD Termination Date,” andcash; provided, each such period beginning on an Effectiveness Deadline and ending on an LD Termination Date beinghowever, an “LD Period”) at the earlier of (1) the Registration Statement being declared effective and (2) when the Holder’s Registrable Securities covered by such Registration Statement cease to be Registrable Securities. Any amount of Liquidated Damages shall be prorated for any period of less than 30 calendar days accruing during an LD Period. If if the Company certifies that it is unable to cause pay the Liquidated Damages in cash because such payment would result in a Registration Statement to be declared effective on breach under any of the Company’s or prior the Company’s Subsidiaries’ credit facilities filed as exhibits to the Effectiveness Deadline as a result of an acquisition, merger, reorganization, disposition or other similar transactionCompany’s SEC Documents, then the Company may request a waiver pay the Liquidated Damages in kind in the form of the issuance of additional Common Stock (“Additional Common Stock”). Upon any issuance of Additional Common Stock as Liquidated Damages, the Company shall promptly prepare and file an amendment to the Shelf Registration Statement prior to its effectiveness adding such Additional Common Stock to such Shelf Registration Statement as additional Registrable Securities. The determination of the number of shares of Additional Common Stock to be issued as Liquidated Damages shall be equal to the Liquidated Damages divided by the average closing price of the Company’s Common Stock on The Nasdaq Global Market for the ten trading days immediately preceding the date on which the Liquidated Damages payment is due. The payment of the Liquidated DamagesDamages to the Purchaser shall cease at such time as the Purchased Common Stock of the Purchaser becomes eligible for resale under Rule 144(k). The Company covenants and agrees that any credit facilities entered into following the date hereof shall not prohibit, limit or restrict the payment of any Liquidated Damages pursuant to this Agreement in cash, and each Holder may individually grant or withhold its consent to such request in its discretion. Nothing in this Section 2.01(b) shall relieve the Company from its obligations under Section 2.01(a)shall not, after the date hereof, amend any existing credit facilities to prohibit, restrict or limit any such payment.

Failure to Go Effective. If a the Registration Statement required to be filed by Section 2.01(a) is not declared effective within ninety (90) days after the Closing Date, in the case of a registration statement on or prior Form S-3, within one hundred eighty (180) days of the Closing Date, in the case of a registration statement on Form S-1 or, in any case, within five (5) days of the date the Company is notified by the staff of the SEC that the Registration Statement will not be subject to review by the Effectiveness Deadlinestaff of the SEC (the “Trigger Date”), then each Holder shall be entitled to a payment in cash (with respect to the Registrable Securities of each Registrable Security held by the such Holder), as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period, which that shall accrue daily, for the first 60 calendar days immediately following the Effectiveness DeadlineTrigger Date, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-calendar-day period, which that shall accrue daily, for each subsequent 30-calendar-day period (i.e., 0.5% for 61-90 calendar 60 days, 0.75% for 91-120 calendar days and 1.00% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-calendar-day period, until such time as such Registration Statement is declared effective or when the Registrable Securities covered by such Registration Statement cease to be Registrable Securities period (the “Liquidated Damages”); provided, however, the aggregate amount of Liquidated Damages payable by the Company under this Agreement to each Holder shall not exceed 5.00% of the Liquidated Damages Multiplier with respect to such Holder. The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within 10 ten (10) Business Days after the end of each such 30-calendar-day period. Any Liquidated Damages shall be paid to each Holder in immediately available funds. The accrual payment of Liquidated Damages to a Holder shall cease (an “LD Termination Date,” and, each such period beginning on an Effectiveness Deadline and ending on an LD Termination Date being, an “LD Period”) at the earlier of (1) once the Registration Statement being is declared effective by the SEC, and (2) when the Holder’s Registrable Securities covered by such Registration Statement cease to be Registrable Securities. Any amount any payment of Liquidated Damages shall be prorated for any period of less than 30 calendar days accruing during an LD Periodin which the payment of Liquidated Damages ceases. If the Company is unable to cause a Registration Statement to be declared go effective on or prior to within 180 days after the Effectiveness Deadline applicable Closing Date as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Company may request a waiver of the Liquidated Damages, and each Holder may individually grant or withhold its consent to such request in its discretion. Nothing in this Section 2.01(b) shall relieve the Company from its obligations under Section 2.01(a).

Failure to Go Effective. If a the Shelf Registration Statement required to be filed by Section 2.01(a) 2.01 is not declared effective on or prior to the Effectiveness Deadlinewithin 150 days after Closing, then each Holder Purchaser shall be entitled to a payment in cash (with respect to the Purchased Units of each Registrable Security held by the Holdersuch Purchaser), as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period, which shall accrue daily, period for the first 60 calendar days immediately following the Effectiveness Deadline150th day, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-calendar-day period, which shall accrue daily, period for each subsequent 30-calendar-day period (i.e., 0.5% for 61-90 calendar 60 days, 0.75% for 91-120 calendar days and 1.00% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-calendar-day period, until such time as such Registration Statement is declared effective or when the Registrable Securities covered by such Registration Statement cease to be Registrable Securities period (the “Liquidated Damages”); provided, however, the aggregate amount of Liquidated Damages payable by U.S. Shipping under this Agreement to each Purchaser shall not exceed 10.0% of the Liquidated Da mages Multiplier with respect to such Purchaser. The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within 10 ten Business Days after the end of each such 30-calendar-day period. Any Liquidated Damages shall be paid to each Holder Purchaser in immediately available funds; provided, however, if U.S. Shipping certifies that it is unable to pay Liquidated Damages in cash because such payment would result in a breach under a credit facility or other debt instrument filed as exhibits to the U.S. Shipping SEC Documents, then U.S. Shipping may pay the Liquidated Damages in kind in the form of the issuance of additional (A) Common Units and/or (B) Class B Units. Class B Units may only be issued as Liquidated Damages if and to the extent required by the NYSE or similar regulation. If Class B Units are issued as Liquidated Damages as a result of a requirement by the NYSE or similar regulation, then Common Units will first be issued to each Purchaser on a pro rata basis based on the number of Purchased Common Units purchased by such Purchaser until the maximum aggregate number of Common Units permitted by the NYSE or similar regulation have been issued, and afterwards, Class B Units shall then be issued to each such Purchaser as payment of the balance of any such Liquidated Damages owed to such Purchaser. Upon any issuance of Common Units and/or Class B Units as Liquidated Damages, U.S. Shipping shall promptly prepare and file an amendment to the Shelf Registration Statement prior to its effectiveness adding such Common Units and/or Class B Units to such Shelf Registration Statement as additional Registrable Securities. The accrual determination of the number of Common Units and/or Class B Units to be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by, in the case of Common Units, the average closing price of U.S. Shipping’s Common Units on the NYSE for the ten trading days immediately preceding the date on which the Liquidated Damages payment is due, less a discount of 20%. The payment of the Liquidated Damages to a Holder Purchaser shall cease (an “LD Termination Date,” and, each at such period beginning on an Effectiveness Deadline and ending on an LD Termination Date being, an “LD Period”time as the Purchased Units of such Purchaser become eligible for resale under Rule 144(k) at under the earlier of (1) the Registration Statement being declared effective and (2) when the Holder’s Registrable Securities covered by such Registration Statement cease to be Registrable Securities. Any amount of Liquidated Damages shall be prorated for any period of less than 30 calendar days accruing during an LD Period. If the Company is unable to cause a Registration Statement to be declared effective on or prior to the Effectiveness Deadline as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Company may request a waiver of the Liquidated Damages, and each Holder may individually grant or withhold its consent to such request in its discretion. Nothing in this Section 2.01(b) shall relieve the Company from its obligations under Section 2.01(a)Act.

Failure to Go Effective. If a the Registration Statement required to be filed by Section 2.01(a) is not declared effective on or prior to within 90 days after the Effectiveness DeadlineClosing Date, then each Holder shall be entitled to a payment in cash (with respect to the Purchased Units of each Registrable Security held by the such Holder), as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period, which that shall accrue daily, for the first 60 calendar days immediately following the Effectiveness Deadline90th day after the Closing Date, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-calendar-day periodperiod following the 60th date after such 90th day, which that shall accrue daily, for each subsequent 30-calendar-day period (i.e., 0.5% for 61-90 calendar 30 days, 0.75% for 91-120 calendar days and 1.00% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-calendar-day period, until such time as such Registration Statement is declared effective or when the Registrable Securities covered by such Registration Statement cease to be Registrable Securities period (the “Liquidated Damages”); provided, however, that the aggregate amount of Liquidated Damages payable by the Partnership per Purchased Unit may not exceed 5.0% of the Common Unit Price. The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within 10 ten (10) Business Days after the end of each such 30-calendar-day period. Any Liquidated Damages shall be paid to each Holder in immediately available funds; provided, however, if the Partnership certifies that it is unable to pay Liquidated Damages in cash because such payment would result in a breach under a credit facility or other debt instrument, then the Partnership shall pay such Liquidated Damages using as much cash as permitted without breaching any such credit facility or other debt instrument and shall pay the balance of any such Liquidated Damages in kind in the form of the issuance of additional Common Units. Upon any issuance of Common Units as Liquidated Damages, the Partnership shall promptly (i) prepare and file an amendment to the Registration Statement prior to its effectiveness adding such Common Units to such Registration Statement as additional Registrable Securities and (ii) prepare and file a supplemental listing application with the NYSE to list such additional Common Units. The accrual determination of the number of Common Units to be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by the volume-weighted average closing price of the Common Units on the NYSE for the ten (10) trading days immediately preceding the date on which the Liquidated Damages payment is due, less a discount to such average closing price of 2.00%. The payment of Liquidated Damages to a Holder shall cease (an “LD Termination Date,” and, each such period beginning on an Effectiveness Deadline and ending on an LD Termination Date being, an “LD Period”) at the earlier of (1i) the Registration Statement being declared becoming effective or (ii) the Purchased Units of such Holder becoming eligible for resale without restriction under any section of Rule 144 (or any similar provision then in effect) under the Securities Act, assuming that each Holder is not an Affiliate of the Partnership, and (2) when the Holder’s Registrable Securities covered by such Registration Statement cease to be Registrable Securities. Any amount any payment of Liquidated Damages shall be prorated for any period of less than 30 calendar days accruing during an LD Periodin which the payment of Liquidated Damages ceases. If the Company Partnership is unable to cause a Registration Statement to be declared go effective on or prior to within 180 days after the Effectiveness Deadline Closing Date as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Company Partnership may request a waiver of the Liquidated Damages, and each Holder may individually grant or withhold its consent to such request in its discretion. Nothing in this Section 2.01(b) The foregoing Liquidated Damages shall relieve be the Company from its obligations under Section 2.01(a)sole and exclusive remedy of the Holders for any failure of the Registration Statement to be declared effective.