--------------------------------------------------------------------------------
CREDIT AGREEMENT
$25,000,000
between
THE XXXX GROUP, INC.
XXXX CARGO SYSTEMS, INC.
XXXX HAULING AND WAREHOUSING SYSTEM, INC.
XXXXXX MARINE SERVICES, INC.
NPR HOLDING CORPORATION
NPR, INC.
NPR-NAVIERAS RECEIVABLES, INC.
NPR, S.A.
THE RIVERFRONT DEVELOPMENT
CORPORATION
WILMINGTON STEVEDORES, INC.
and
CORESTATES BANK, N.A.
dated
November 20, 1997
--------------------------------------------------------------------------------
Table of Contents
1. Certain Definitions ................................................... 1
1.1. Definitions ................................................... 1
1.2. Accounting Terms .............................................. 9
2. The Credit ............................................................ 9
2.1. Credit Facilities .............................................. 9
(a) The Loans .................................................. 9
(b) Letters of Credit ..........................................10
2.2. The Note .......................................................11
2.3. Funding Procedures .............................................11
(a) Requests for Advance .......................................11
(b) Irrevocability . ...........................................11
(c) Availability of Funds ......................................11
(d) Funding of Net Amount ......................................12
2.4. Interest .......................................................12
(a) Base Rate ..................................................12
(b) LIBO Rate ..................................................12
(c) Renewals and Conversions of Loans ..........................12
(d) Automatic Reinstatement ....................................12
2.5. Fees ...........................................................13
2.6. Reduction or Termination of Commitment .........................13
(a) Voluntary ..................................................13
(b) Loan Commitment Termination ................................13
2.7. Voluntary Prepayments ..........................................13
(a) Base Rate Loans ............................................13
(b) LIBO Rate Loans ............................................13
2.8. Payments .......................................................13
(a) Base Rate Loans ............................................13
(b) LIBO Rate Loans ............................................13
(c) Form of Payments, Application of Payments, Payment
Administration, Etc ........................................13
(d) Net Payments ...............................................14
(e) Prepayment of LIBO Rate Loans ..............................14
(f) Demand Deposit Account .....................................15
2.9. Changes in Circumstances; Yield Protection .....................15
2.10. Illegality .....................................................16
3. Representations and Warranties .........................................17
3.1. Organization, Standing .........................................17
3.2. Corporate Authority, Validity, Etc. ............................17
3.3. Litigation .....................................................17
3.4. ERISA ..........................................................17
3.5. Financial Statements ...........................................18
- i -
3.6. Not in Default, Judgments, Etc. ................................18
3.7. Taxes ..........................................................18
3.8. Permits, Licenses, Etc. ........................................19
3.9. No Materially Adverse Contracts, Etc. ..........................19
3.10. Compliance with Laws, Etc. .....................................19
(a) Compliance Generally .......................................19
(b) Hazardous Wastes, Substances and Petroleum Products ........19
3.11. Solvency .......................................................19
3.12. Subsidiaries, Etc. .............................................20
3.13. Title to Properties, Leases ....................................20
3.14. Public Utility Holding Company; Investment Company .............20
3.15. Margin Stock ...................................................20
3.16. Use of Proceeds ................................................20
3.17. Appraisal of Vessels ...........................................20
3.18. Disclosure Generally ...........................................20
4. Conditions Precedent ..................................................21
4.1. All Loans ......................................................21
(a) Documents ..................................................21
(b) Borrowing Base Certificate .................................21
(c) Covenants; Representations .................................21
(d) Defaults ...................................................21
(e) Material Adverse Change ....................................21
4.2. Conditions to First Loan ............................................21
(a) Articles, Bylaws ...........................................21
(b) Evidence of Authorization ..................................21
(c) Legal Opinions .............................................21
(d) Incumbency .................................................21
(e) Note .......................................................22
(f) Security Agreements ........................................22
(g) Pro Forma Balance Sheet ....................................22
(h) Documents ..................................................22
(i) Consents ...................................................22
(j) Other Agreements ...........................................22
(k) Repayment of Loans under 1995 Credit Agreement .............22
(1) Fees, Expenses .............................................22
5. Affirmative Covenants ..................................................22
5.1. Financial Statements and Reports ...............................22
(a) Annual Statements ..........................................22
(b) Quarterly Statements .......................................23
(c) Compliance Certificate .....................................23
(d) ERISA ......................................................23
(e) Material Changes ...........................................23
(f) Borrowing Base Certificate .................................23
- ii-
(g) Summary Annual Budget ......................................24
(h) Other Information ..........................................24
5.2. Corporate Existence ............................................24
5.3. ERISA ..........................................................24
5.4. Compliance with Regulations ....................................24
5.5. Conduct of Business; Permits and Approvals, Compliance with
Laws ...........................................................24
5.6. Maintenance of Insurance .......................................24
5.7. Payment of Debt; Payment of Taxes, Etc. ........................25
5.8. Notice of Events ...............................................25
5.9. Inspection Rights ..............................................26
5.10. Generally Accepted Accounting Principles .......................26
5.11. Compliance with Material Contracts .............................26
5.12. Use of Proceeds ................................................26
5.13. Further Assurances .............................................26
5.14. Restrictive Covenants in Other Agreements ......................26
5.15. Appraisal of Vessels ...........................................26
6. Negative Covenants ....................................................26
6.1. Consolidation and Merger .......................................27
6.2. Liens ..........................................................27
6.3. Guarantees .....................................................27
6.4. Margin Stock ...................................................27
6.5. Acquisitions and Investments ...................................27
6.6. Transfer of Assets; Nature of Business .........................27
6.7. Restricted Payments ............................................27
6.8. Accounting Change ..............................................28
6.9. Transactions with Affiliates ...................................28
6.10. Intentionally Omitted ..........................................28
6.11. Indebtedness ...................................................28
7. Financial Covenants ...................................................28
7.1. Debt to Tangible Net Worth .....................................28
7.2. Minimum Tangible Net Worth .....................................29
7.3. Interest Coverage ..............................................29
7.4. Borrowing Base .................................................29
8. Default ...............................................................29
8.1. Events of Default ..............................................29
(a) Payments ...................................................29
(b) Covenants ..................................................29
(c) Representations, Warranties ................................29
(d) Bankruptcy .................................................29
(e) Certain Other Defaults .....................................30
(f) Judgments ..................................................30
(g) Attachments ................................................30
- iii -
(h) ERISA .....................................................30
(i) Security Interests ........................................30
(j) Material Adverse Change ...................................31
9. Collateral ............................................................31
9.1. Collateral ....................................................31
9.2. Release of Collateral .........................................31
10. Miscellaneous ........................................................32
10.1. Waiver ........................................................32
10.2. Amendments ....................................................32
10.3. Governing Law .................................................32
10.4. Participations and Assignments ................................32
10.5. Captions ......................................................32
10.6. Notices .......................................................32
10.7. Expenses; Indemnification .....................................33
10.8. Survival of Warranties and Certain Agreements .................33
10.9. Severability ..................................................33
10.10. No Fiduciary Relationship .....................................33
10.11. CONSENT TO JURISDICTION AND SERVICE OF PROCESS ................33
10.12. WAIVER OF JURY TRIAL ..........................................34
10.13. Counterparts; Effectiveness ...................................34
10.14. Use of Defined Terms ..........................................34
10.15. Offsets .......................................................34
10.16. Entire Agreement ..............................................34
10.18. Consolidated Basis ............................................35
10.19. 1995 Credit Agreement .........................................35
----------------------------------------
EXHIBIT A NOTE FORM
EXHIBIT B FIRST PREFERRED SHIP MORTGAGE FORM
SCHEDULE 1 DISCLOSURE SCHEDULE
SCHEDULE 2 COLLATERAL SCHEDULE
- iv -
Credit Agreement
This Credit Agreement, dated November 20, 1997, is entered into by and
between THE XXXX GROUP, INC., a Delaware corporation, XXXX CARGO SYSTEMS, INC.,
a Delaware corporation ("Cargo"), XXXX HAULING AND WAREHOUSING SYSTEM, INC., a
Pennsylvania corporation ("Hauling"), XXXXXX MARINE SERVICES, INC., a Delaware
corporation ("Xxxxxx"), NPR HOLDING CORPORATION, a Delaware corporation ("NPR
Holding"), NPR, INC., a Delaware corporation ("NPR, Inc."), NPR-NAVIERAS
RECEIVABLES, INC., a Delaware corporation ("NPR-Navieras"), NPR S.A., Inc., a
Delaware corporation ("NPR S.A."), THE RIVERFRONT DEVELOPMENT CORPORATION, a New
Jersey corporation ("Riverfront"), and WILMINGTON STEVEDORES, INC., a Delaware
corporation ("Wilmington"), (together, sometimes referred to herein as the "Xxxx
Companies" and individually, as a "Xxxx Company"), and CORESTATES BANK. N.A., a
national banking association ("CoreStates", "CoreStates Bank" or the "Bank").
Preliminary Statement
WHEREAS, The Xxxx Group, Inc. has this date acquired all of the issued and
the outstanding capital stock of NPR Holding and restructured its ownership of
various affiliated entities such that the ownership by The Xxxx Group, Inc. of
the other Xxxx Companies is as set forth in Schedule I attached hereto.
WHEREAS, all obligations of the Xxxx Companies, and any of them, to
CoreStates Bank which are outstanding at the date of this Agreement have been
repaid in full, including any unpaid fees and expenses.
WHEREAS, the Xxxx Companies have requested, and CoreStates has agreed, that
a credit facility as herein described be established for their joint benefit,
under the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and promises hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Definitions
1.1. Definitions.
"1995 Credit Agreement" shall mean that certain Loan Agreement, dated July
20, 1995, between Cargo, Hauling, Xxxxxx, Riverfront, Wilmington and various
affiliates, and CoreStates Bank, as successor by merger to Meridian Bank.
"1995 Letter of Credit" shall have the meaning set forth in ss.2.1(b).
"Additional Amount" shall have the meaning set forth in ss.2.8.(e).
Credit Agreement -1- November 1997
"Afffliate" shall mean any Person: (1) which directly or indirectly
controls, or is controlled by, or is under common control with any Xxxx Company;
(2) which directly or indirectly beneficially owns or holds ten percent (10%) or
more of any class of voting stock of any Xxxx Company; or (3) ten percent (10%)
or more of whose voting stock is directly or indirectly owned or held by any
Xxxx Company. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise. For purposes hereof, Atlantic Container Line Aktiebolag, a Swedish
corporation, and FastShip, Inc., a Delaware corporation, shall not be deemed
affiliates.
"Agreement" shall mean this Credit Agreement, as amended, supplemented,
modified, replaced, substituted for or restated from time to time and all
exhibits and schedules attached hereto.
"Appraised Value" shall mean that value determined by an independent
appraiser or appraisers of recognized standing who shall be selected by the Xxxx
Companies with the consent of the Bank (which consent shall not be unreasonably
withheld) as the aggregate of the fair market values of each item of Collateral
listed on Schedule 2 hereto as such schedule shall exist at the time of the
appraisal. Appraised Value shall be adjusted at the time any item of Collateral
is withdrawn or added to Schedule 2 hereto and full compliance with the terms
and conditions hereof with respect to the Collateral shall have been completed.
The fair market value of deletions and additions to the Collateral shall be
determined in good faith by the Xxxx Companies at the time of the addition on a
basis consistent with that employed by the appraiser in connection with the most
recent appraisal, provided, however, if the Bank shall object to the value
placed on any such addition or deletion, the proposed addition or deletion shall
have no value for this purpose until (1) a valuation is agreed upon by the Bank
and the Xxxx Companies, or (2) a valuation is completed for such item at the
time of the next appraisal.
"Base Rate" shall mean, for any day, the higher of the Federal Funds Rate
plus 1/2 of 1% or the prime commercial lending rate of CoreStates Bank, N.A., as
announced from time to time at its head office, calculated on the basis of the
actual number of days elapsed in a year of 360 days.
"Borrowing Base" shall mean an amount equal to (1) 65% of the Appraised
Value of the Collateral if the ratio of Debt to Tangible Net Worth of the Xxxx
Companies as contemplated by ss.7.1 hereof is more than 5.00:1 at the time of
determination of the Borrowing Base, or (2) 70% of the Appraised Value of the
Collateral if the ratio of Debt to Tangible Net Worth of the Xxxx Companies is
5.00:1 or less at such time.
"Borrowing Base Certificate" shall mean a certificate setting forth
detailed information with respect to the Borrowing Base which shall be in the
form and substance requested by the Bank, as such may be modified from time to
time, and shall be signed by the chief financial officer, treasurer or
controller of The Xxxx Group, Inc.
"Business Day" shall mean any day other than a Saturday, Sunday, or other
day on which commercial banks in Philadelphia are authorized or required to
close under the laws of the Commonwealth of Pennsylvania.
Credit Agreement -2- November 1997
"Capitalized Lease" shall mean all lease obligations of any Person for any
property (whether real, personal or mixed) which have been or should be
capitalized on the books of the lessee in accordance with General Accepted
Accounting Principles.
"Capitalized Lease Obligations" with respect to any Person, shall mean the
aggregate amount which, in accordance with GAAP, is required to be reported as a
liability on the balance sheet of such Person at such time in respect of such
Person's interest as lessee under a Capital Lease.
"Cash Flow" shall mean, for any period, without duplication, the amounts
for such period, taken as a single accounting period, of (i) net income, (ii)
non-cash charges, (iii) interest expense, and (iv) to the extent reducing net
income, income tax expenses, as such items are shown in the consolidated
financial statements of the Xxxx Companies.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and all rules and regulations with respect thereto in effect from time
to time.
"Collateral" shall have the meaning set forth in ss.9.1.
"Commitment Fee" shall have the meaning set forth in ss.2.5.
"Compliance Certificate" shall mean a certificate with respect to the
compliance by the Xxxx Companies with the provisions of this Agreement and the
other Loan Documents, including calculations with respect to compliance with the
financial covenants set forth in Article 7 hereof. The Compliance Certificate
shall be in the form and substance requested by the Bank, as such may be
modified from time to time, and shall be signed by the chief financial officer,
treasurer or controller of The Xxxx Group, Inc.
"Credit Termination Date" shall have the meaning set forth in ss.2.2.
"Debt" shall mean, as of any date of determination with respect to the Xxxx
Companies, without duplication, (i) all items which in accordance with Generally
Accepted Accounting Principles would be included in determining total
liabilities as shown on the liability side of a consolidated balance sheet of
the Xxxx Companies as of the date on which Debt is to be determined, (ii) all
indebtedness of others with respect to which any Xxxx Company has become liable
by way of a guarantee or endorsement (other than for collection or deposit in
the ordinary course of business), (iii) all liabilities of any Xxxx Company in
connection with letter of credit reimbursement obligations, and (iv) lease
obligations that, in conformity with GAAP, have been capitalized on the Xxxx
Companies' consolidated balance sheet.
"Default Rate" on any Loan shall mean the higher of 2% per annum above the
Base Rate or 2% per annum above the rate of interest otherwise in effect for
such Loan.
"Dollars" shall mean the lawful currency of the United States of America.
"Environmental Control Statutes" shall mean each and every applicable
federal, state, county or municipal environmental statute, ordinance, rule,
regulation, order, directive or requirement, together with all successor
statutes, ordinances, rules, regulations, orders, directives or
Credit Agreement -3- November 1997
requirements, of any Governmental Authority, including without limitation laws
in any way related to Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"ERISA Affiliate" shall mean any corporation which is a member of the same
controlled group of corporations as any Xxxx Company within the meaning of
ss.414(b) of the Code, or any trade or business which is under common control
with any Xxxx Company within the meaning of ss.414(c) of the Code.
"Event of Default" shall have the meaning set forth in ss.8.1.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 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 Business Day next succeeding such
day, provided that if the day for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day.
"First Preferred Ship Mortgage" shall mean the First Preferred Ship
Mortgage in the form and substance attached hereto as Exhibit B.
"Fiscal Quarter" shall mean a fiscal quarter of the Xxxx Companies, which
shall be any quarterly period ending on March 31, June 30, September 30 or
December 31 of any year.
"Fiscal Year" shall mean a fiscal year of the Xxxx Companies, which shall
end on the last day of December.
"Generally Accepted Accounting Principles" or "GAAP" shall mean generally
accepted accounting principles as in effect from time to time in the United
States, consistently applied.
"Governmental Authority" shall mean the federal, state, county or municipal
government, or any department, agency, bureau or other similar type body
obtaining authority therefrom or created pursuant to any laws, including without
limitation Environmental Control Statutes.
"Hazadous Substances" shall mean without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste, pollution,
pollutant or contaminant, as defined or referred to in the Resource Conservation
and Recovery Act, as amended, 15 U.S.C., ss.2601 et seq.: the Comprehensive
Environmental Response, Compensation and Liability Act, 33 U.S.C. ss.1251 et
seq., the federal underground storage tank law, Subtitle I of the Resource
Conservation and Recovery Act, as amended, P.L. 98-616, 42 U.S.C. ss.6901 et
seq.; together with any amendments thereto, regulations promulgated thereunder
and all substitutions thereof, as well as words of similar purport or meaning
referred to in any other federal, state, county or municipal environmental
statute, ordinance, rule or regulation.
Credit Agreement -4- November 1997
"Indebtedness for Borrowed Money" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising, for money
borrowed by any Xxxx Company or any Subsidiary, whether or not evidenced by any
note, indenture, or agreement (including, without limitation, the Note and any
indebtedness for money borrowed from an Affiliate) and (ii) all indebtedness of
others for money borrowed (including indebtedness of an Affiliate) with respect
to which any Xxxx Company or any Subsidiary has become liable by way of a
guarantee or indemnity.
"Interest Period" shall mean with respect to any LIBO Rate Loan, each
period commencing on the date any such Loan is made, or, with respect to a Loan
being renewed, the last day of the next preceding Interest Period with respect
to a Loan, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day of the calendar month) in the
first, second or third calendar month thereafter as selected under the
procedures specified in ss.2.3, if the Bank is then offering LIBO Rate Loans for
such period; provided that each LIBO Rate Loan Interest Period which would
otherwise end on a day which is not a Business Day (or, for purposes of Loans to
be repaid on a London Business Day, such day is not a London Business Day) shall
end on the next succeeding Business Day (or London Business Day, as appropriate)
unless such next succeeding Business Day (or London Business Day, as
appropriate) falls in the next succeeding calendar month, in which case the
Interest Period shall end on the next preceding Business Day (or London Business
Day, as appropriate).
"Investment" in any Person shall mean without duplication (a) the
acquisition (whether for cash, property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of such Person; (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than any such deposit,
advance, loan or extension of credit having a term not exceeding 90 days in the
case of unaffiliated Persons and 120 days in the case of Affiliates representing
the purchase price of inventory or supplies purchased in the ordinary course of
business) or guarantee or assumption of, or other contingent obligation with
respect to, Indebtedness for Borrowed Money or other liability of such Person;
and (c) (without duplication of the amounts included in (a) and (b)) any amount
that may, pursuant to the terms of such investment, be required to be paid,
deposited, advanced, lent or extended to or guaranteed or assumed on behalf of
such Person.
"Letter of Credit" shall have the meaning set forth in ss.2.1(b).
"LIBO Rate" shall mean, for the applicable Interest Period, (i) the rate,
rounded upwards to the next one-sixteenth of one percent, determined by the Bank
three London Business Days prior to the date of the corresponding LIBO Rate
Loan, at which the Bank is offered deposits in dollars at approximately 11:00
A.M., London time by leading banks in the interbank eurodollar or eurocurrency
market for delivery on the date of such Loan in an amount and for a period
comparable to the amount and Interest Period of such Loan and in like funds,
divided by (ii) a number equal to one (1.0) minus the LIBO Rate Reserve
Percentage. The LIBO Rate shall be adjusted automatically with respect to any
LIBO Rate Loan outstanding on the effective date of any change in the LIBO Rate
Reserve Percentage, as of such effective date. LIBO Rate shall be calculated on
the basis of the actual number of days elapsed in a year of 360 days.
"LIBO Rate Loans" shall mean Loans accruing interest based on the LIBO
Rate.
Credit Agreement -5- November 1997
"LIBO Rate Reserve Percentage" shall mean, for any LIBO Rate Loan for any
Interest Period therefor, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by the Bank against "Eurocurrency
liabilities" (as such term is used in Regulation D) but without benefit of
credit proration, exemptions, or offsets that might otherwise be available to
the Bank from time to time under Regulation D. Without limiting the effect of
the foregoing, the LIBO Rate Reserve Percentage shall reflect any other reserves
required to be maintained by the Bank against (1) any category of liabilities
which includes deposits by reference to which the rate for LIBO Rate Loans is to
be determined; or (2) any category of extension of credit or other assets which
include LIBO Rate Loans.
"Lien" shall mean any lien, mortgage, security interest, chattel mortgage,
pledge or other encumbrance (statutory or otherwise) of any kind securing
satisfaction of an obligation of any Xxxx Company or any Subsidiary of any Xxxx
Company, including any agreement to give any of the foregoing, any conditional
sales or other title retention agreement, and the filing of or the agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction or similar evidence of any encumbrance, whether within or outside
the United States.
"Loan" or "Loans" shall mean the meanings set forth in ss.2.1.
"Loan Commitment" shall have the meaning set forth in ss.2.1.
"Loan Documents" shall mean this Agreement, the Note, any Security
Agreement and all other documents directly related or incidental to said
documents, the Loans or the Collateral.
"London Business Day" shall mean any Business Day on which banks in London,
England are open for business.
"Material Adverse Change" shall mean any event or condition which (a) is
reasonably likely to result in a material adverse change in the financial
condition, assets, operations or prospects of the Xxxx Companies taken as a
group, or (b) gives reasonable grounds to conclude that any Xxxx Company will
not be able to perform or observe (in the normal course) its obligations under
the Loan Documents to which it is a party, including but not limited to the
Note.
"Material Adverse Effect" shall mean any event or condition which (a) is
reasonably likely to have a material adverse effect on the financial condition,
assets, operations or prospects of the Xxxx Companies taken as a group, (b)
gives reasonable grounds to conclude that any Xxxx Company will not be able to
perform its obligations under the Loan Documents to which it is a party,
including but not limited to the Note, or (iii) is reasonably likely to affect
legality, validity or enforceability of this Agreement or the Note or the rights
and remedies of the holder(s) of the Loans.
"Multiemployer Plan" shall mean a multiemployer plan as defined in ERISA
ss.4001(a)(3), which covers employees of any Xxxx Company or any ERISA
Affiliate.
"Note" shall have the meaning set forth in ss.2.2.
Credit Agreement -6- November 1997
"Obligations" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every kind,
matured or unmatured, direct or contingent, owing, arising, due, or payable to
the Bank by or from any Xxxx Company arising out of this Agreement or any other
Loan Document, including, without limitation, all obligations to repay principal
of and interest on the Loans, and to pay interest, fees, costs, charges,
expenses, professional fees, and all sums chargeable to any Xxxx Company or for
which any Xxxx Company is liable as indemnitor under the Loan Documents, whether
or not evidenced by any note or other instrument.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" shall mean, at any time, any Plan (including a Multiemplover
Plan), the funding requirements of which (under ERISA ss.302 or Code ss.412)
are, or at any time within the six years immediately preceding the time in
question, were in whole or in part, the responsibility of any Xxxx Company or
any ERISA Affiliate.
"Permitted Liens" shall mean (a) any Liens for current taxes, assessments
and other governmental charges not yet due and payable or being contested in
good faith by any Xxxx Company by appropriate proceedings and for which adequate
reserves have been established by the Xxxx Company as reflected in the Xxxx
Companies' consolidated financial statements; (b) any mechanic's, materialman's,
carrier's, warehousemen's or similar Liens for sums not yet due or being
contested in good faith by any Xxxx Company by appropriate proceedings and for
which adequate reserves have been established by the Xxxx Company as reflected
in the Xxxx Companies' consolidated financial statements; (c) easements,
rights-of-way, restrictions and other similar encumbrances on the real property
or fixtures of any Xxxx Company incurred in the ordinary course of business
which individually or in the aggregate are not substantial in amount and which
do not in any case materially detract from the value or marketability of the
property subject thereto or interfere with the ordinary conduct of the business
of any Xxxx Company; (d) Liens (other than Liens imposed on any property of any
Xxxx Company pursuant to ERISA or ss.412 of the Code) incurred or deposits made
in the ordinary course of business, including Liens in connection with workers'
compensation, unemployment insurance and other types of social security and
Liens to secure performance of tenders, statutory obligations, surety and appeal
bonds (in the case of appeal bonds such Liens shall not secure any reimbursement
or indemnity obligation in an amount greater than $250,000), bids, leases that
are not Capitalized Leases, performance bonds (in the case of performance bonds
such Liens shall not secure any reimbursement or indemnity obligation in an
amount greater than $1,000,000 in the aggregate), sales contracts and other
similar obligations, in each case, not incurred in connection with the obtaining
of credit or the payment of a deferred purchase price, and which do not, in the
aggregate, result in a Material Adverse Effect; (e) Liens, if any, existing on
the date hereof and listed in Schedule 1 hereto; (f) Liens related to any
capital lease obligations and/or purchase money security interests limited to
assets so leased, purchased, or financed, the aggregate unpaid balance of which
shall not exceed $10,000,000 at any time; (g) Liens in the leasehold interests
of the Xxxx Companies and any of them in any equipment leased from Emerald
Equipment Leasing, Inc. and in the leases themselves, which liens are granted in
favor of MBC Leasing Corp; and (h) liens with respect to the Vessels as
expressly permitted by the First Preferred Ship Mortgages applicable to each.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity, or other entity of
whatever nature.
Credit Agreement -7- November 1997
"Plan" shall mean an employee benefit plan as defined in ss.3(3) of ERISA,
other than a Multiemployer Plan, whether formal or informal and whether legally
binding or not.
"Potential Default" shall mean an event, condition or circumstance that
with the giving of notice or lapse of time or both would become an Event of
Default.
"Prohibited Transaction" shall mean a transaction that is prohibited under
Code ss.4975 or ERISA ss.406 and not exempt under Code ss.4975 or ERISA ss.408.
"Regulation" shall mean any statute, law, ordinance, regulation, order or
rule of any United States or foreign, federal, state, local or other government
or governmental body, including, without limitation, those covering or related
to banking, financial transactions, securities, public utilities, environmental
control, energy, safety, health, transportation, bribery, record keeping,
zoning, antidiscrimination, antitrust, wages and hours, employee benefits, and
price and wage control matters.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"Regulatory Change" shall mean any change after the date of this Agreement
in any Regulation (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests of or under any Regulation
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof
applying to a class of banks but excluding any foreign office of the Bank.
"Release" shall mean without limitation, the presence, leaking, leaching,
pouring, emptying, discharging, spilling, using, generating, manufacturing,
refining, transporting, treating, or storing of Hazardous Substances at, into,
onto, from or about the property or the threat thereof, regardless of whether
the result of an intentional or unintentional action or omission, and which is
in violation of any applicable law, including Environmental Control Statutes.
"Reportable Event" shall mean, with respect to a Pension Plan: (a) any of
the events set forth in ERISA Sections 4043(b) (other than a reportable event as
to which the provision of 30 days' notice to the PBGC is waived under applicable
regulations) or 4063(a) or the regulations thereunder, (b) an event requiring
any Xxxx Company or any ERISA Affiliate to provide security to a Pension Plan
under Code ss.401(a)(29) and (c) any failure by any Xxxx Company or any ERISA
Affiliate to make payments required by Code ss.412(m).
"Security Agreement" shall mean a security agreement in form and substance
acceptable to the Bank, which shall be executed and delivered to the Bank on or
before the first advance as set forth in ss.4.2(f) hereof.
"Solvent" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of the total
amount of its probable liabilities on its existing debts as they become absolute
and matured, such Person has not incurred debts beyond its foreseeable ability
to pay such debts as they mature, and such Person has capital adequate to
conduct the business it is presently engaged in or is about to engage in.
Credit Agreement -8- November 1997
"Subsidiary" shall mean a corporation or other entity the shares of stock
or other equity interests of which having ordinary voting power (other than
stock or other equity interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation are at the time owned, or the management of
which is otherwise controlled, directly or indirectly through one or more
intermediaries or both, by any Xxxx Company.
"Tangible Assets" shall mean total assets, excluding patents, copyrights,
capitalized research and development costs, goodwill, operating rights and other
intangible assets on a consolidated basis.
"Tangible Net Worth" shall mean Tangible Assets less total liabilities
shown on the balance sheet.
"Taxes" shall have the meaning set forth in ss.2.8.(d).
"Termination Event" shall mean, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under ERISA ss.4041(c), (c) the institution of
proceedings to terminate a Pension Plan under ERISA ss.4042 or (d) the
appointment of a trustee to administer any Pension Plan under ERISA ss.4042.
"Unfunded Pension Liabilities" shall mean, with respect to any Pension Plan
at any time, the amount, if any, determined by taking the accumulated benefit
obligation, as disclosed in accordance with Statement of Accounting Standards
No. 87, and deducting the fair market value of Pension Plan assets.
"Unrecognized Retiree Welfare Liability" shall mean, with respect to any
Plan that provides post-retirement benefits other than pension benefits, the
amount of the accumulated post-retirement benefit obligation, as determined in
accordance with Statement of Financial Accounting Standards No. 106, as of the
most recent valuation date. Prior to the date such statement is applicable to
any Xxxx Company. such amount of the obligation shall be based on an estimate
made in good faith.
1.2. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with Generally Accepted Accounting Principles
consistent with those applied in the preparation of the financial statements
referred to in ss.3.5, and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles.
Credit Agreement -9- November 1997
2. The Credit
2.1. Credit Facilities.
(a) The Loans. Subject to the terms and conditions herein set forth,
CoreStates Bank agrees to make loans (herein called individually a "Loan" and
collectively, the "Loans") to the Xxxx Companies upon receipt of loan requests
therefor. All Loans together and the aggregate amount of all Letters of Credit
outstanding shall not exceed an aggregate principal amount outstanding at any
time of TWENTY-FIVE MILLION DOLLARS ($25,000,000) from the date hereof through
the Credit Termination Date (such amount, as the same may be reduced pursuant to
ss.2.6 or ss.2.10 hereof being hereinafter called the "Loan Commitment"). The
maturity date of the Note, as provided in ss.2.2 below, shall be the Credit
Termination Date. All Loans shall be made to the Xxxx Companies at the main
office of the Bank, Xxxxx xxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000.
Notwithstanding the foregoing, the Xxxx Companies shall not be entitled to
any Loan if, after giving effect to such Loan, the aggregate unpaid amount of
the Loan, when added to the aggregate amount of Letters of Credit outstanding as
provided below, would exceed the Loan Commitment. Further, the Xxxx Companies
shall not be entitled to any Loan if, after giving effect to such Loan, the
unpaid amount of the Loan when added to the aggregate amount of Letters of
Credit outstanding would exceed the current Borrowing Base, as stated in the
most recent Borrowing Base Certificate furnished to the Bank as provided herein.
Within the limits of the Loan Commitment and the Borrowing Base, the Xxxx
Companies may borrow, prepay and reborrow.
Each Base Rate Loan shall not be subject to a minimum principal amount.
Each LIBO Rate Loan shall be in the minimum principal amount of $1,000,000 or,
if greater, then in such minimum amount plus a $1,000,000 multiple thereof.
(b) Letters of Credit. The Bank, under the terms and subject to the
conditions of this Agreement, agrees to provide letters of credit at the request
and for the account of the Xxxx Companies, from time to time prior to the Credit
Termination Date, as requested by the Xxxx Companies, provided that:
(i) the aggregate amount of Letters of Credit outstanding at any one
time shall not exceed $10,000,000, at any time hereafter, or such lesser
amount, if any, as will, when added to the amount of the Loans then
outstanding, aggregate $25,000,000 (or such lesser amount as the Xxxx
Companies are entitled to borrow hereunder at such time by reason of the
limitation of the Borrowing Base or otherwise);
(ii) no Letter of Credit shall be issued after the Credit Termination
Date and no Letter of Credit shall be for a term longer than one year; and
(iii) Letters of Credit shall be issued primarily to support insurance
premium requirements of any one or more of the Xxxx Companies.
As used in this Agreement, "Letter of Credit" shall mean only those letters
of credit issued pursuant to a completed application on the form of letter of
credit application required by the Bank at the time of the request for each
Letter of Credit. If and to the extent that any provision of any letter of
credit application required by the Bank shall be inconsistent with or otherwise
be in conflict with this Agreement, this Agreement shall govern.
Credit Agreement -10- November 1997
The $5,000,000 Letter of Credit (as defined in the 1995 Credit Agreement)
dated June 28, 1989, the beneficiary of which is National Union Fire Insurance
Company of Pittsburgh, PA, issued for the account of Cargo under the 1995 Credit
Agreement ("1995 Letter of Credit") shall be deemed a Letter of Credit for
purposes of this Agreement for so long as it shall continue in effect and shall
be included in the calculation of Letters of Credit outstanding hereunder.
The four letters of credit issued by the Bank dated November 10, 1997 in
the aggregate amount of $1,415,000 to National Union Fire Insurance Company of
Pittsburgh, PA, Consolidated Rail Company, US Atlantic & Gulf/Southeastern
Caribbean Agreement c/o Associated Conference, and US Atlantic & Gulf Hispaniola
Steamship Freight Association c/o Associated Conferences at the request of NPR,
Inc. shall be deemed Letters of Credit issued hereunder.
The Xxxx Companies shall request a Letter of Credit by delivering a
completed letter of credit application to the Bank not less than one Business
Day prior to the date specified by the Xxxx Companies as the date the Letter of
Credit is to be issued.
Letters of Credit shall not bear interest until drawn upon but shall each
be subject to an annual charge, payable quarterly in arrears from the date of
issuance, equal to 200 basis points (2.00%) times the aggregate amount of all
Letters of Credit outstanding.
Within the foregoing limit, the Xxxx Companies may request issuance of
Letters of Credit, pay them upon a drawing thereunder and request new issuances.
Any obligation of the Xxxx Companies to pay money in connection with any Letter
of Credit shall be secured as if made as a Loan hereunder. In the event the Xxxx
Companies shall terminate the Loan Commitment as provided in ss.2.6 and shall
pay the outstanding principal amount of the Loans in full and with interest or
the Credit Termination Date shall occur at a time when one or more Letters of
Credit remain outstanding, then the Xxxx Companies shall furnish to the Bank
within three Business Days such amount of cash, to be held as cash collateral
and invested in certificates of deposit of the Bank, as will pay the maximum
amount which may be drawn by beneficiaries of Letters of Credit outstanding at
the date of such termination or Credit Termination Date, as applicable.
2.2. The Note. The Loans made by the Bank shall be evidenced by a single
promissory note of the Xxxx Companies under which they shall be jointly and
severally liable (such promissory note as it may be amended, extended, modified,
restated, replaced, substituted for or renewed, being referred to herein as the
"Note") in principal face amount equal to TWENTY-FIVE MILLION DOLLARS
($25,000,000) payable to the order of the Bank and otherwise in the form
attached hereto as Exhibit A. The Note shall be dated November 20, 1997, shall
bear interest at the rate per annum and be payable as to principal and interest
in accordance with the terms hereof. The Note shall mature on the earliest to
occur of (i) the date the maturity of the Note is accelerated as provided in
ss.8.1 hereof, or (ii) November 20, 1998 (this date to be deemed the "Credit
Termination Date"). Upon maturity, the Loan evidenced by the Note shall be due
and payable. The Bank shall maintain records of all Loans evidenced by the Note
and of all payments thereon, which records shall be conclusive absent manifest
error.
Credit Agreement -11- November 1997
2.3. Funding Procedures.
(a) Requests for Advance. Each request for a Loan or the conversion or
renewal of an interest rate with respect to a Loan shall be made not later than
11:00 a.m. on a Business Day by delivery to the Bank of a written request signed
by the Xxxx Companies or in the alternative a telephone request followed
promptly by written confirmation of the request, specifying the date and amount
of the Loan to be made, converted or renewed, selecting the interest rate option
applicable thereto, and in the case of a LIBO Rate Loan, specifying the Interest
Period applicable to such Loan. Each request shall be received not less than one
Business Day prior to the date of the proposed borrowing, conversion or renewal
in the case of Base Rate Loans and three London Business Days prior to the date
of the proposed borrowing, conversion or renewal in the case of LIBO Rate Loans.
No request shall be effective until actually received in writing by the Bank.
Any request may be made by submission of such request by facsimile transmission
with the signed original being promptly transmitted to the Bank. The Bank shall
be entitled to rely on a facsimile of the signed original as fully as it had
received the signed original.
(b) Irrevocability. Upon receipt of a request for a Loan by the Bank, the
request shall not be revocable by the Xxxx Companies.
(c) Availability of Funds. Unless the Bank knows that any applicable
condition specified herein has not been satisfied, it will make funds
immediately available to the Xxxx Companies on the date of each Loan by a credit
to the account designated by the Xxxx Companies at the Bank's address set forth
opposite its name on the signature page hereof or to such other destination and
in such other form as the Xxxx Companies may request, in writing.
(d) Funding of Net Amount. If the Bank makes a Loan on a day on which all
or any part of an outstanding Loan from the Bank is to be repaid, the 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 and the
amount being repaid shall be made available by the Bank to the Xxxx Companies as
provided in clause (c).
2.4. Interest. The following interest rates may be applicable to any Loan
or Loans, as requested by the Xxxx Companies from time to time.
(a) Base Rate. Each Base Rate Loan shall bear interest on the principal
amount thereof from the date made until such Loan is paid in full or converted,
at a rate per annum equal to the Base Rate.
(b) LIBO Rate. Each LIBO Rate Loan shall bear interest on the principal
amount thereof from the date made until such Loan is paid in full, renewed, or
converted, at a rate per annum equal to the LIBO Rate plus 250 basis points
(2.50%). After receipt of a request for a LIBO Rate Loan, the Bank shall proceed
to determine the LIBO Rate to be applicable thereto. The Bank shall give prompt
notice by telephone or facsimile to the Xxxx Companies of the LIBO Rate thus
determined in respect of each LIBO Rate Loan or any change therein. Not more
than five LIBO Rate Loans shall be in existence at any one time in any
combination of LIBO Rates applicable to the Loans.
(c) Renewals and Conversions of Loans. On the last day of each Interest
Period, the LIBO Rate Loan then maturing shall automatically be renewed for a
new Interest Period of like duration, unless the Xxxx Companies shall have given
the Bank notice of a permitted conversion or renewal for an Interest
Credit Agreement -12- November 1997
Period of different duration as provided in ss.2.3 hereof, or an Event of
Default, or Potential Default exists or would thereby occur. If no Event of
Default or Potential Default exists or would thereby occur, the Xxxx Companies
shall have the right to convert Base Rate Loans into LIBO Rate Loans, to convert
LIBO Rate Loans into Base Rate Loans, and to renew LIBO Rate Loans for Interest
Periods of different duration, from time to time, provided that it shall give
the Bank notice of each permitted conversion or renewal as provided in ss.2.3
hereof, and LIBO Rate Loans may be converted or renewed for different Interest
Periods only as of the last day of the applicable Interest Period for such
Loans. The Bank shall use its best efforts to notify the Xxxx Companies of the
effectiveness of such conversion or renewal (automatic or not automatic), and
the new interest rate to which the converted or renewed Loan is subject, as soon
as practicable after the conversion or renewal; provided, however, that any
failure to give such notice shall not affect the Xxxx Companies' obligations or
the Bank's rights and remedies hereunder in any way whatsoever. In the event a
LIBO Rate Loan is not automatically renewed as provided herein and the Xxxx
Companies shall not have selected an alternative Interest Period for any LIBO
Rate Loan maturing as provided herein, such Loan shall be automatically
converted into a Base Rate Loan on the last day of the Interest Period for such
Loan.
(d) Automatic Reinstatement. The liability of the Xxxx Companies under
this ss.2.4 shall continue to be effective or be automatically reinstated, as
the case may be, if at any time payment, in whole or in part, of any of the
payments to the Bank is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Xxxx Companies, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to any of
the Xxxx Companies or any substantial part of their property, all as though such
payment had not been made.
2.5. Fees. The Xxxx Companies agree to pay the Bank as compensation for its
Loan Commitment, a fee ("Commitment Fee") computed at the rate of 25 basis
points (0.25%) per annum on the average daily amount of the unused portion of
the Loan Commitment accrued from and after the date hereof. The unused portion
of the Loan Commitment shall mean the Loan Commitment less the principal amount
of the outstanding Loan and Letters of Credit issued hereunder. The Commitment
Fee shall be calculated and be payable quarterly in arrears and on the Credit
Termination Date. The Commitment Fee shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
2.6. Reduction or Termination of Commitment.
(a) Voluntary. The Xxxx Companies may at any time and from time to time, on
not less than five (5) days' written notice, (i) permanently reduce the Loan
Commitment, provided that any such reduction shall be in the amount of
$5,000,000 or a multiple thereof and that no such reduction shall cause the
principal amount of Loans outstanding to exceed the Loan Commitment as reduced,
or (ii) terminate the Loan Commitment.
(b) Loan Commitment Termination. In the event the Loan Commitment is
terminated, the Credit Termination Date shall accelerate to such date of
termination and the Xxxx Companies shall, simultaneously with such termination,
repay the Base Rate Loans and LIBO Rate Loans in accordance with ss.2.8.
Credit Agreement -13- November 1997
2.7. Voluntary Prepayments.
(a) Base Rate Loans. On one Business Day's notice to the Bank, the Xxxx
Companies may, at their option, prepay any Base Rate Loan in whole at any time
or in part from time to time.
(b) LIBO Rate Loans. On one Business Day's notice to the Bank, the Xxxx
Companies may, at their option prepay any LIBO Rate Loan provided that if they
shall prepay a LIBO Rate Loan prior to the last day of the applicable Interest
Period, or shall fail to borrow any LIBO Rate Loan on the date such Loan is to
be made, they shall pay to the Bank, in addition to the principal and interest
then to be paid in the case of a prepayment, on such date of prepayment, the
Additional Amount (as defined in ss.2.8(e) below) incurred or sustained by the
Bank as a result of such prepayment or failure to borrow.
2.8. Payments.
(a) Base Rate Loans. Accrued interest on all Base Rate Loans shall be due
and payable on the first Business Day of each calendar month and upon the Credit
Termination Date.
(b) LIBO Rate Loans. Accrued interest on LIBO Loans with Interest Periods
of one, two or three months shall be due and payable on the last day of such
Interest Period.
(c) Form of Payments, Application of Payments, Payment Administration, Etc.
Provided that no Event of Default or Potential Default then exists, all payments
and prepayments shall be applied to the Loans in such order and to such extent
as shall be specified by the Xxxx Companies, by written notice to the Bank at
the time of such payment or prepayment. Except as otherwise provided herein, all
payments of principal, interest, fees, or other amounts payable by the Xxxx
Companies hereunder shall be remitted to the Bank at the address set forth
opposite its name on the signature page hereof or at such office or account as
the Bank shall specify to the Xxxx Companies, in immediately available funds not
later than 2:00 p.m. on the day when due. Whenever any payment is stated as due
on a day which is not a Business Day, the maturity of such payment shall, except
as otherwise provided in the definition of "Interest Period," be extended to the
next succeeding Business Day and interest shall continue to accrue during such
extension. The Xxxx Companies authorize the Bank to deduct from any account of
any Xxxx Company maintained at the Bank or over which the Bank has control any
amount payable under this Agreement, the Notes or any other Loan Document. The
Bank's failure to deliver any xxxx, statement or invoice with respect to
principal amounts due shall not affect the Xxxx Companies' obligation to pay
such principal when due and payable.
(d) Net Payments. All payments made to the Bank by the Xxxx Companies
hereunder, under the Note or under any other Loan Document will be made without
set off, counterclaim or other defense. All such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or any political subdivision or
taxing authority thereof or therein (but excluding, except as provided below,
any tax imposed on or measured by the net income of the Bank (including all
interest, penalties or similar liabilities related thereto) and any tax imposed
on or measured by the gross income of the Bank pursuant to the laws of the
United States of America or any political subdivision thereof, or taxing
authority of the United States of America or any political subdivision thereof,
in which the principal office or applicable lending office of the Bank is
located), and all interest, penalties or similar liabilities with respect
thereto (collectively, all such non-excluded amounts being "Taxes"). If any
Taxes are so levied or imposed, the Xxxx Companies agree to pay the full amount
of such Taxes, and
Credit Agreement -14- November 1997
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, under the Note or under any other Loan Document, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in the Note. The Xxxx Companies will furnish
to the Bank upon request certified copies of tax receipts evidencing such
payment by them. The Xxxx Companies will indemnify and hold harmless the Bank,
and reimburse the Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid or withheld by the Bank.
(e) Prepayment of LIBO Rate Loans. If any principal of a LIBO Rate Loan
shall be repaid (whether upon prepayment, reduction of the Loan Commitment after
acceleration or for any other reason) or converted to a Base Rate Loan prior to
the last day of the Interest Period applicable to such LIBO Rate Loan or if the
Xxxx Companies fail for any reason to borrow a LIBO Rate Loan after giving
irrevocable notice pursuant to ss.2.3, the Xxxx Companies shall pay to the Bank,
in addition to the principal and interest then to be paid, such additional
amounts as may be necessary to compensate the Bank for all direct and indirect
costs and losses (including losses resulting from redeployment of prepaid or
unborrowed funds at rates lower than the cost of such funds to the Bank, and
including lost profits incurred or sustained by the Bank) as a result of such
repayment or failure to borrow (the "Additional Amount"). The Additional Amount
(which the Bank shall take reasonable measures to minimize) shall be specified
in a written notice or certificate delivered to the Xxxx Companies by the Bank.
Such notice or certificate shall contain a calculation in reasonable detail of
the Additional Amount to be compensated and shall be conclusive as to the facts
and the amounts stated therein, absent manifest error.
(f) Demand Deposit Account. At least one of the Xxxx Companies shall
maintain at least one demand deposit account with the Bank for purposes of this
Agreement. The Xxxx Companies authorize the Bank (but the Bank shall not be
obligated) to deposit into said account all amounts to be advanced to the Xxxx
Companies hereunder. Further, the Xxxx Companies authorize the Bank (but the
Bank shall not be obligated) to deduct from said account, or any other account
maintained by any Xxxx Company at the Bank, any amount payable hereunder on or
after the date upon which it is due and payable. Such authorization shall
include but not be limited to amounts payable with respect to principal,
interest, fees and expenses.
2.9. Changes in Circumstances; Yield Protection.
(a) If any Regulatory Change or compliance by the Bank with any request
made after the date of this Agreement by the Board of Governors of the Federal
Reserve System or by any Federal Reserve Bank or other central bank or fiscal,
monetary or similar authority (in each case whether or not having the force of
law) shall:
(i) impose, modify or make applicable any reserve, special deposit,
Federal Deposit Insurance Corporation premium or similar requirement or
imposition against assets held by, or deposits in or for the account of, or
loans made by, or any other acquisition of funds for loans or advances by,
the Bank; or
(ii) impose on the Bank any other condition regarding the Note.
and the result of any of the foregoing events is to increase the cost to the
Bank of making or maintaining any Loan or to reduce the amount of principal,
interest or fees to be received by the Bank hereunder in respect of any Loan,
the Bank will immediately so notify the Xxxx Companies. If the Bank determines
in good faith that the effects of the change resulting in such increased cost or
reduced amount cannot
Credit Agreement -15- November 1997
reasonably be avoided or the cost thereof mitigated, then upon notice by the
Bank to the Xxxx Companies, the Xxxx Companies shall pay to the Bank on each
interest payment date of the Loan, such additional amount as shall be necessary
to compensate the Bank for such increased cost or reduced amount.
(b) If the Bank shall determine that any Regulation regarding capital
adequacy or the adoption of any Regulation regarding capital adequacy, which
Regulation is applicable to banks (or their holding companies) generally and not
CoreStates Bank (or its holding company) specifically, 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 the Bank (or its holding company) with
any such request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
the effect of reducing the rate of return on the Bank's capital as a consequence
of its obligations hereunder to a level below that which the Bank could have
achieved but for such adoption, change or compliance (taking into consideration
the Bank's policies with respect to capital adequacy) by an amount deemed by the
Bank to be material, the Xxxx Companies shall promptly pay to the Bank, upon the
demand of the Bank, such additional amount or amounts as will compensate the
Bank for such reduction.
(c) If the Bank shall determine that by reason of abnormal circumstances
affecting the interbank eurodollar or applicable eurocurrency market, adequate
and reasonable means do not exist for ascertaining the LIBO Rate to be
applicable to the requested LIBO Rate Loan or that eurodollar or eurocurrency
funds in amounts sufficient to fund all the LIBO Rate Loans are not obtainable
on reasonable terms, the Bank shall give notice of such inability or
determination by telephone and thereupon the obligations of the Bank to make,
convert other Loans to, or renew such LIBO Rate Loan shall be excused, subject,
however, to the right of the Xxxx Companies at any time thereafter to submit
another request.
(d) Determination by the Bank for purposes of this Section 2.9 of the
effect of any Regulatory Change or other change or circumstance referred to
above on its costs of making or maintaining Loans or on amounts receivable by it
in respect of the Loans and of the additional amounts required to compensate the
Bank in respect of any additional costs, shall be made in good faith and shall
be evidenced by a certificate, signed by an officer of the Bank and delivered to
the Xxxx Companies, as to the fact and amount of the increased cost incurred by
or the reduced amount accruing to the Bank owing to such event or events. Such
certificate shall be prepared in reasonable detail and shall be conclusive as to
the facts and amounts stated therein, absent manifest error.
(e) The Bank will notify the Xxxx Companies of any event occurring after
the date of this Agreement that will entitle the Bank to compensation pursuant
to this Section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. Said notice shall be in writing,
shall specify the applicable Section or Sections of this Agreement to which it
relates and shall set forth the amount or amounts then payable pursuant to this
Section. The Xxxx Companies shall pay the Bank the amount shown as due on such
notice within 30 days after its receipt of the same.
2.10. Illegality. Notwithstanding any other provision in this Agreement, if
the adoption of any applicable 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 the Bank 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 the Bank to (1)
maintain its Loan Commitment, then upon notice to the Xxxx Companies by
Credit Agreement -16- November 1997
the Bank, the Loan Commitment shall terminate; or (2) maintain or fund its LIBO
Rate Loans, then upon notice to the Xxxx Companies of such event, the Xxxx
Companies' outstanding LIBO Rate Loans shall be converted into Base Rate Loans.
3. Representations and Warranties
Each of the Xxxx Companies represents and warrants to the Bank that:
3.1. Organization, Standing. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority necessary to own its
assets, carry on its business and enter into and perform its obligations
hereunder and under each Loan Document, and (iii) is qualified to do business
and is in good standing in each jurisdiction where the nature of its business or
the ownership of its properties requires such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect.
3.2. Corporate Authority, Validity, Etc. The making and performance of the
Loan Documents to which it is a party are within its power and authority and
have been duly authorized by all necessary corporate action. Except as has been
obtained, the making and performance of the Loan Documents do not and under
present law will not require any consent or approval of any of its shareholders
or any other person, do not and under present law will not violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award, do not violate any provision of its charter or by-laws, do not and will
not result in any breach of any material agreement, lease or instrument to which
it is a party, by which it is bound or to which any of its assets are or may be
subject, and do not and will not give rise to any Lien upon any of its assets,
except for the liens provided for herein. The number of shares and classes of
the capital stock of each of the Xxxx Companies and the ownership thereof are
accurately set forth on Schedule 1 attached hereto; all such shares are validly
issued, fully paid and non-assessable, and the issuance and sale thereof are in
compliance with all applicable federal and state securities and other applicable
laws. Further, none of the Xxxx Companies is in default under any such
agreement, lease or instrument except to the extent such default reasonably
could not have a Material Adverse Effect. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution, delivery or
performance by the Xxxx Companies of any Loan Document or for the validity or
enforceability thereof. Each Loan Document, when executed and delivered, will be
the legal, valid and binding obligation of each of the Xxxx Companies
enforceable against it in accordance with its terms.
3.3. Litigation. Except as disclosed on Schedule 1, there are no actions,
suits or proceedings pending or threatened against or affecting any of the Xxxx
Companies or any of their assets before any court, government agency, or other
tribunal which if adversely determined reasonably could have a Material Adverse
Effect upon the ability of the Xxxx Companies or any of them to perform under
the Loan Documents. If there is any disclosure on Schedule 1, the status
(including the tribunal, the nature of the claim and the amount in controversy)
of each such litigation matter as of the date of this Agreement is set forth in
Schedule 1.
3.4. ERISA. (a) the Xxxx Companies and each ERISA Affiliate are in
compliance in all material respects with all applicable provisions of ERISA and
the regulations promulgated thereunder; and, except as disclosed on Schedule 1,
since April 29, 1980, none of the Xxxx Companies or any ERISA
Credit Agreement -17- November 1997
Affiliate has withdrawn from participation in any "multiemployer plan" (as
defined in section 4001 of ERISA) to which it makes contributions such that any
withdrawal liability has been or may be assessed and remains unpaid, and none of
the Xxxx Companies or any ERISA Affiliate has received any notice and is not
aware that any multiemployer plan to which it contributes is insolvent or in
reorganization status within the meaning of ERISA. With respect to multiemployer
plans to which the Xxxx Companies or any ERISA Affiliate makes contributions but
does not participate in the administration of such plans, none of the Xxxx
Companies or any ERISA Affiliate has received any information from any such
multiemployer plan which would indicate that any of the foregoing representation
would be incorrect as applied to such multiemployer plan; (b) neither the Xxxx
Companies nor any ERISA Affiliate sponsors or maintains any Plan under which
there is an accumulated funding deficiency within the meaning of ss.412 of the
Code, whether or not waived; (c) the aggregate liability for accrued benefits
and other ancillary benefits under each Plan that is or will be sponsored or
maintained by the Xxxx Companies or any ERISA Affiliate (determined on the basis
of the actuarial assumptions prescribed for valuing benefits under terminating
single-employer defined benefit plans under Title IV of ERISA) does not exceed
the aggregate fair market value of the assets under each such defined benefit
pension Plan; (d) the aggregate liability of the Xxxx Companies and each ERISA
Affiliate arising out of or relating to a failure of any Plan to comply with the
provisions of ERISA or the Code, will not have a Material Adverse Effect, (e)
there does not exist any unfunded liability (determined on the basis of
actuarial assumptions utilized by the actuary for the plan in preparing the most
recent Annual Report) of the Xxxx Companies or any ERISA Affiliate under any
plan, program or arrangement providing post-retirement life or health benefits;
and (f) none of the Plans which are "employee pension benefit plans" (as defined
by ERISA) or the trusts created thereunder have been terminated since September
2, 1974; nor has any such Plan incurred any material liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA, other than for
required insurance premiums which have been paid when due, or incurred any
material "accumulated funding deficiency," (as defined by ERISA) whether or not
waived; nor has there been any "reportable event" (as defined by ERISA), or
other event or condition, which represents a material risk of termination of any
such Plan by the Pension Benefit Guaranty Corporation.
3.5. Financial Statements. The combined financial statements of Hauling and
its affiliated companies as of and for the Fiscal Years ending December 31, 1995
and December 31, 1996 and for the interim six-month period ending June 30, 1997,
consisting in each case of a balance sheet, a statement of operations, a
statement of shareholders' equity, a statement of cash flows and accompanying
footnotes (except in the case of interim financial statements), furnished to the
Bank in connection herewith, present fairly, in all material respects, the
financial position, results of operations and operating statistics of the Xxxx
Companies as of the dates and for the periods referred to, in conformity with
Generally Accepted Accounting Principles. Except as set forth on Schedule 1
hereto, there are no material liabilities, fixed or contingent, which are not
reflected in such financial statements, other than liabilities which are not
required to be reflected in such balance sheets. There has been no Material
Adverse Change since June 30, 1997.
3.6. Not in Default, Judgments, Etc. No Event of Default or Potential
Default under any Loan Document has occurred and is continuing. Each of the Xxxx
Companies has satisfied all judgments and is not in default with respect to any
judgment, writ, injunction, decree, rule, or regulation of any court,
arbitrator, or federal, state, municipal, or other governmental authority,
commission, board, bureau, agency, or instrumentality, domestic or foreign which
could reasonably be expected to have a Material Adverse Effect.
Credit Agreement -18- November 1997
3.7. Taxes. Each of the Xxxx Companies has filed all federal, state, local
and foreign tax returns and reports which it is required by law to file and as
to which its failure to file would have a Material Adverse Effect, and has paid
all taxes, including wage taxes, assessments, withholdings and other
governmental charges which are presently due and payable, other than those being
contested in good faith by appropriate proceedings, if any, and/or disclosed on
Schedule 1. The tax charges, accruals and reserves on the books of the Xxxx
Companies are adequate to pay all such taxes that have accrued but are not
presently due and payable.
3.8. Permits, Licenses, Etc. Each of the Xxxx Companies possesses all
permits, licenses, franchises, trademarks, trade names, copyrights and patents
necessary to the conduct of its business as presently conducted or as presently
proposed to be conducted, except where the failure to possess the same would not
have a Material Adverse Effect.
3.9. No Materially Adverse Contracts, Etc. None of the Xxxx Companies is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of its directors or
officers has or is reasonably expected in the future to have a Material Adverse
Effect upon it or any Subsidiary. Neither the Xxxx Companies nor any Subsidiary
is a party to any contract or agreement which in the judgment of its directors
or officers has or is reasonably expected to have any Material Adverse Effect
except as otherwise reflected in adequate reserves.
3.10. Compliance with Laws, Etc.
(a) Compliance Generally. Each of the Xxxx Companies is in compliance in
all material respects with all Regulations applicable to its business (including
obtaining all authorizations, consents, approvals, orders, licenses, exemptions
from, and making all filings or registrations or qualifications with, any court
or governmental department, public body or authority, commission, board, bureau,
agency, or instrumentality), the noncompliance with which reasonably could have
a Material Adverse Effect.
(b) Hazardous Wastes, Substances and Petroleum Products. Except as
disclosed on Schedule 1, (i) each of the Xxxx Companies has received all permits
and filed all notifications necessary to carry on its business; and is in
compliance in all respects with all Environmental Control Statutes, (ii) none of
the Xxxx Companies has not given any written or oral notice, nor has it failed
to give required notice, to the Environmental Protection Agency ("EPA") or any
state or local agency with regard to any actual or imminently threatened Release
of Hazardous Substances on properties owned, leased or operated by it or used in
connection with the conduct of its business and operations; (iii) none of the
Xxxx Companies has received notice that it is potentially responsible for costs
of clean-up or remediation of any actual or imminently threatened Release of
Hazardous Substances pursuant to any Environmental Control Statute, (iv) no real
property owned or leased by any of the Xxxx Companies is in violation of any
Environmental Laws and no Hazardous Substances are present on said real property
in violation of applicable law; and (v) none of the Xxxx Companies has been
identified in any litigation, administrative proceedings or investigation as a
potentially responsible party for any liability under any Environmental Laws,
where such liability could have a Material Adverse Effect.
3.11. Solvency. Each of the Xxxx Companies is, and after giving effect to
the transactions contemplated hereby, will be, Solvent. In determining solvency,
each Xxxx Company shall be entitled to treat as an asset (in the form of
receivables from the other Xxxx Companies) the contribution obligations of the
other Xxxx Companies to the determining Xxxx Company in the event the
determining Xxxx Company
Credit Agreement -19- November 1997
were to pay the entirety of Loans outstanding under this Agreement, provided,
however each contribution obligation shall be net of a reserve for any doubt in
the ability of the applicable contribution obligor to pay its contribution
obligation.
3.12. Subsidiaries. Etc. None of the Xxxx Companies has any Subsidiaries,
except as set forth in Schedule 1 hereto. Set forth in Schedule 1 hereto is a
complete and correct list, as of the date of this Agreement, of all Investments
held by the Xxxx Companies in any joint venture or other Person.
3.13. Title to Properties, Leases. Each of the Xxxx Companies has good and
marketable title to all assets and properties reflected as being owned by it in
its financial statements as well as to all assets and properties acquired since
said date (except property disposed of since said date in the ordinary course of
business). Except for the Liens set forth in Schedule 1 hereto and any other
Permitted Liens, there are no Liens on any of such assets or properties. Each of
the Xxxx Companies has the right to, and does, enjoy peaceful and undisturbed
possession under all material leases under which it is leasing property as a
lessee. All such leases are valid, subsisting and in full force and effect, and
none of such leases is in default, except where such default, either
individually or in the aggregate, could not have a Material Adverse Effect.
3.14. Public Utility Holding Company; Investment Company. None of the Xxxx
Companies is a "public utility company" or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; or a "public utility"
within the meaning of the Federal Power Act, as amended. Further, none of the
Xxxx Companies is an "investment company" or an "affiliated person" of an
"investment company" or a company "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended
3.15. Margin Stock. None of the Xxxx Companies is or will be engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying or trading in any margin stocks
or margin securities (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System as amended from time to time). None of
the Xxxx Companies will use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stocks or margin securities.
3.16. Use of Proceeds. The Xxxx Companies will use the proceeds of each
Loan only for general corporate purposes.
3.17. Disclosure Generally. The representations and statements made by each
of the Xxxx Companies or on its behalf in connection with this credit facility
and the Loans, including representations and statements in each of the Loan
Documents, do not and will not contain any untrue statement of a material fact
or omit to state a material fact or any fact necessary to make the
representations made not materially misleading. No written information, exhibit,
report, brochure or financial statement furnished by any of the Xxxx Companies
to the Bank in connection with this credit facility, the Loans, or any Loan
Document contains or will contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.
Credit Agreement -20- November 1997
4. Conditions Precedent
4.1. All Loans. After this Agreement has become effective, the obligation
of the Bank to make any Loan (including but not limited to the first Loan
hereunder) is conditioned upon the following:
(a) Documents. The Xxxx Companies shall have delivered and the Bank shall
have received a request for a Loan in such form as the Bank may request from
time to time.
(b) Borrowing Base Certificate. The Xxxx Companies shall have delivered and
the Bank shall have received a Borrowing Base Certificate dated the date of the
Loan requested under this Agreement.
(c) Covenants; Representations. The Xxxx Companies shall be in compliance
with all covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true with
the same effect as if such representation or warranty had been made on the date
such Loan is made or issued.
(d) Defaults. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(e) Material Adverse Change. Since June 30, 1997, there shall not have been
any Material Adverse Change with respect to the Xxxx Companies or any
Subsidiary.
4.2. Conditions to First Loan. In addition to the conditions to all Loans
as provided in ss.4.1, the obligation of the Bank to make the first Loan
hereunder is conditioned upon the following:
(a) Articles, Bylaws. The Bank shall have received copies of the Articles
of Incorporation and Bylaws of each Xxxx Company certified by its Secretary or
Assistant Secretary; together with a Certificate of Good Standing from any
jurisdiction where the nature of its business or the ownership of its properties
requires such qualification except where the failure to be so qualified would
not have a Material Adverse Effect.
(b) Evidence of Authorization. The Bank shall have received copies
certified by the Secretary or Assistant Secretary of each Xxxx Company of all
corporate or other action taken by such Xxxx Company to authorize its execution
and delivery and performance of the Loan Documents and to authorize the Loans,
together with such other related papers as the Bank shall reasonably require.
(c) Legal Opinions. The Bank shall have received a favorable written
opinion in form and substance satisfactory to the Bank from Pepper, Xxxxxxxx &
Xxxxxxx LLP, Xxxxx X. Xxxxxxxx, Esq., Xxxx X. Xxxxx, Esq., as counsel for the
Xxxx Companies, and Xxxxxxxx Xxxxxx, which shall be addressed to the Bank and be
dated the date of the first Loan.
(d) Incumbency. The Bank shall have received a certificate signed by the
secretary or assistant secretary of each Xxxx Company, together with the true
signature of the officer or officers authorized to execute and deliver the Loan
Documents and certificates thereunder, upon which the Bank shall be entitled to
rely conclusively until it shall have received a further certificate of the
secretary or assistant secretary of such Xxxx Company amending the prior
certificate and submitting the signature of the
Credit Agreement -21- November 1997
officer or officers named in the new certificate as being authorized to execute
and deliver Loan Documents and certificates thereunder.
(e) Note. The Bank shall have received the Note duly executed, completed
and issued in accordance herewith.
(f) Security Agreements. The Bank shall have received a First Preferred
Ship Mortgage duly executed, completed and issued in accordance herewith
pertaining to each seagoing vessel included in the Collateral each in form and
substance acceptable to the Bank.
(g) Pro Forma Balance Sheet. The Bank shall have received a pro forma
balance sheet with respect to the Xxxx Companies and their Subsidiaries dated as
of November 20, 1997.
(h) Documents. The Bank shall have received all certificates, instruments
and other documents then required to be delivered pursuant to any Loan
Documents, in each instance in form and substance reasonably satisfactory to it.
(i) Consents. The Xxxx Companies shall have provided to the Bank evidence
satisfactory to it that all governmental, shareholder and third party consents
and approvals necessary in connection with the transactions contemplated hereby
have been obtained and remain in effect.
(j) Other Agreements. The Xxxx Companies shall have executed and delivered
each other Loan Document required hereunder.
(k) Repayment of Loans under 1995 Credit Agreement. The applicable Xxxx
Companies shall have paid in full all outstanding indebtedness and satisfied all
of obligations under the 1995 Credit Agreement other than with respect to the
1995 Letters of Credit.
(l) Fees, Expenses. The Xxxx Companies shall simultaneously pay or shall
have paid all fees and expenses due hereunder or any other Loan Document.
5. Affirmative Covenants
The Xxxx Companies covenant and agree, individually and collectively, that
from and after the date hereof and so long as the Loan Commitment is in effect
or any Obligation remains unpaid or outstanding, they and each of them will and
their subsidiaries will:
5.1. Financial Statements and Reports. Furnish to the Bank the following
financial information:
(a) Annual Statements. No later than one hundred and twenty (120) days
after the end of each Fiscal Year or such earlier date as the Xxxx Companies
shall file their annual financial statements with the Securities and Exchange
Commission, the consolidated and consolidating balance sheet (which
consolidating balance sheets may be unaudited and prepared by management of the
Xxxx Companies) of the Xxxx Companies as of the end of such year and the prior
year in comparative form, and related statements of operations, shareholders'
equity, and cash flows for the Fiscal Year and the prior Fiscal Year
Credit Agreement -22- November 1997
in comparative form. The financial statements shall be in reasonable detail with
appropriate notes and be prepared in accordance with Generally Accepted
Accounting Principles. The consolidated annual financial statements shall be
certified (without any qualification or exception) by BDO Xxxxxxx LLP or such
other independent certified public accountants of nationally recognized standing
reasonably acceptable to the Bank. Such financial statements shall be
accompanied by a report of such independent certified public accountants stating
that, in the opinion of such accountants, such financial statements present
fairly, in all material respects, the financial position, and the results of
operations and the cash flows of the Xxxx Companies for the period then ended in
conformity with Generally Accepted Accounting Principles, except for
inconsistencies resulting from changes in accounting principles and methods
agreed to by such accountants and specified in such report, and that, in the
case of such financial statements, the examination by such accountants of such
financial statements has been made in accordance with generally accepted
auditing standards and accordingly included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and assessing
the accounting principles used and significant estimates made, as well as
evaluating the overall financial statement presentation. In addition to the
annual financial statements, the Xxxx Companies shall, promptly upon receipt
thereof, furnish to the Bank a copy of each other report submitted to its board
of directors by its independent accountants in connection with any annual,
interim or special audit made by them of the financial records of the Xxxx
Companies.
(b) Quarterly Statements. No later than sixty (60) days after the end of
each Fiscal Quarter of each Fiscal Year or such earlier date as the Xxxx
Companies shall file their quarterly financial statements with the Securities
and Exchange Commission, the consolidated balance sheet and related statements
of operations, shareholders' equity and cash flows of the Xxxx Companies for
such quarterly period and for the period from the beginning of such fiscal year
to the end of such Fiscal Quarter and a corresponding financial statement for
the same periods in the preceding Fiscal Year certified by the chief financial
officer of the Xxxx Companies as having been prepared in accordance with
Generally Accepted Accounting Principles (subject to changes resulting from
audits and year-end adjustments).
(c) Compliance Certificate. Simultaneously with the delivery of the
financial statements referred to in clauses (a) and (b) of this Section, a
Compliance Certificate signed by the chief financial officer of the Xxxx
Companies.
(d) ERISA. All reports and forms filed with respect to all Plans, except as
filed in the normal course of business and that would not result in an adverse
action to be taken under ERISA, and details of related information of a
Reportable Event, promptly following each filing.
(e) Material Changes. Notification to the Bank of any litigation,
administrative proceeding, investigation, business development, or change in
financial condition which could reasonably have a Material Adverse Effect,
promptly following its discovery.
(f) Borrowing Base Certificate. In the event the Xxxx Companies shall not
have delivered a Borrowing Base Certificate to the Bank during a calendar month,
they will deliver to the Bank, no later than thirty (30) days after the end of
such calendar month as of the last day of the preceding calendar month, a
Borrowing Base Certificate signed by the chief executive officer, chief
financial officer, treasurer or controller of The Xxxx Group, Inc.
(g) Summary Annual Budget. Within one hundred twenty (120) calendar days
after the end of each Fiscal Year, a budget for the then current Fiscal Year
setting forth in reasonable detail at least by
Credit Agreement -23- November 1997
Fiscal Quarters projected profit or loss, resulting balance sheets, cash flows
and anticipated Loans under this credit facility.
(h) Other Information. Promptly, upon request by the Bank from time to time
(which may be on a monthly or other basis), the Xxxx Companies shall provide
such other information and reports regarding its operations, business affairs,
prospects and financial condition as the Bank may reasonably request.
5.2. Corporate Existence. Preserve their, and cause their Subsidiaries to
preserve their, corporate existence and all material franchises, licenses,
patents, copyrights, trademarks and trade names consistent with good business
practice; and maintain, keep, and preserve all of their properties (tangible
and intangible) necessary or useful in the conduct of their businesses in good
working order and condition, ordinary wear and tear expected.
5.3. ERISA. Comply in all material respects with the provisions of ERISA to
the extent applicable to any Plan maintained for the employees of the Xxxx
Companies or any ERISA Affiliate; do or cause to be done all such acts and
things that are required to maintain the qualified status of each Plan and tax
exempt status of each trust forming part of such Plan; not incur any material
accumulated funding deficiency (within the meaning of ERISA and the regulations
promulgated thereunder), or any material liability to the PBGC (as established
by ERISA); not permit any event to occur as described in ss.4042 of ERISA or
which may result in the imposition of a lien on their properties or assets;
notify the Bank in writing promptly after it has come to the attention of senior
management of the Xxxx Companies of the assertion or threat of any "reportable
event" or other event described in ss.4042 of ERISA (relating to the soundness
of a Plan) or the PBGC's ability to assert a material liability against it or
impose a lien on their, or any ERISA Affiliates' properties or assets, and
refrain from engaging in any Prohibited Transactions or actions causing possible
liability under ss.5.02 of ERISA.
5.4. Compliance with Regulations. Comply, and cause their Subsidiaries to
comply, in all material respects with all Regulations applicable to their
businesses, the noncompliance with which reasonably could have a Material
Adverse Effect.
5.5. Conduct of Business; Permits and Approvals, Compliance with Laws.
Continue to engage, and cause their Subsidiaries to continue to engage, in an
efficient and economical manner in businesses substantially the same as
conducted by them on the date of this Agreement; maintain, and cause their
Subsidiaries to maintain, in full force and effect, its and their franchises,
and all licenses, patents, trademarks, trade names, contracts, permits,
approvals and other rights necessary to the profitable conduct of their
businesses.
5.6. Maintenance of Insurance. Keep and maintain, and cause their
Subsidiaries to keep and maintain, all of its and their property and assets
covered by insurance with reputable and financially sound insurance companies
against such hazards and in such amounts as is customary in the industry, under
policies requiring the insurer to furnish thirty (30) days' prior notice to the
Bank and opportunity to cure any non-payment of premiums prior to termination of
coverage; and furnish the Bank with certificates of such insurance and cause the
Bank to be named as an additional insured and the loss payee thereof with
respect to the Collateral, as its interest may appear.
Credit Agreement -24- November 1997
5.7. Payment of Debt; Payment of Taxes, Etc. Where the amount involved
exceeds $1,000,000 or where the non-payment or non-discharge would otherwise
have a Material Adverse Effect on the Xxxx Companies or any of their
Subsidiaries, or any of their assets: promptly pay and discharge, and cause
their Subsidiaries to promptly pay and discharge, (a) all of their Debt in
accordance with the terms thereof, (b) all taxes, assessments, and governmental
charges or levies imposed upon them or upon their income and profits, upon any
of their property, real, personal or mixed, or upon any part thereof, before the
same shall become in default; (c) all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might become a lien or charge upon such
property or any part thereof; provided, however, that so long as the Xxxx
Companies first notifies the Bank of their intention to do so, the Xxxx
Companies or their Subsidiaries shall not be required to pay and discharge any
such Debt, tax, assessment, charge, levy or claim so long as the failure to so
pay or discharge does not constitute or result in an Event of Default or a
Potential Default hereunder and so long as no foreclosure or other similar
proceedings shall have been commenced against any property or any part thereof
and so long as the validity thereof shall be contested in good faith by
appropriate proceedings diligently pursued and they shall have set aside on
their consolidated books adequate reserves with respect thereto.
5.8. Notice of Events. Promptly upon discovery of any of the following
events, the Xxxx Companies shall provide telephone notice to the Bank (confirmed
within three (3) calendar days by written notice), describing the event and all
action the Xxxx Companies proposes to take with respect thereto:
(a) an Event of Default or Potential Default under this Agreement or any
other Loan Document;
(b) any default or event of default under a contract or contracts and the
default or event of default involves payments by the Xxxx Companies in an
aggregate amount equal to or in excess of $1,000,000;
(c) a default or event of default under or as defined in any evidence of or
agreements for Indebtedness for Borrowed Money under which any Xxxx Company's or
its Subsidiaries' liability is equal to or in excess of $1,000,000, singularly
or in the aggregate, whether or not an event of default thereunder has been
declared by any party to such agreement or any event which, upon the lapse of
time or the giving of notice or both, would become an event of default under any
such agreement or instrument or would permit any party to any such instrument or
agreement to terminate or suspend any commitment to lend to the Xxxx Companies
or their Subsidiaries or to declare or to cause any such indebtedness to be
accelerated or payable before it would otherwise be due;
(d) the institution of, any material adverse determination in, or the entry
of any default judgment or order or stipulated judgment or order in, any suit,
action, arbitration, administrative proceeding, criminal prosecution or
governmental investigation against the Xxxx Companies or their Subsidiaries in
which the amount in controversy is in excess of $1,000,000, singularly or in the
aggregate; or
(e) any change in any Regulation, including, without limitation, changes in
tax laws and regulations, which would have a Material Adverse Effect on the Xxxx
Companies or any of their Subsidiaries.
Credit Agreement -25- November 1997
5.9. Inspection Rights. During regular business hours and then as often as
reasonably requested of the Xxxx Companies by the Bank, permit the Bank, or any
authorized officer, employee, agent, or representative of the Bank to examine
and make abstracts from the records and books of account of the Xxxx Companies
and their Subsidiaries, wherever located, and to visit the properties of the
Xxxx Companies and their Subsidiaries; and to discuss the affairs, finances, and
accounts of the Xxxx Companies and their Subsidiaries with The Xxxx Group,
Inc.'s chief executive officer, any executive vice president, its chief
financial officer, treasurer, controller or (with prior written notice to any of
the listed officers) independent accountants.
5.10. Generally Accepted Accounting Principles. Maintain books and records
at all times in accordance with Generally Accepted Accounting Principles.
5.11. Compliance with Material Contracts. The Xxxx Companies and their
Subsidiaries will comply in all material respects with all obligations, terms,
conditions and covenants, as applicable, in all Debt of the Xxxx Companies or
their Subsidiaries and all instruments and agreements related thereto, and all
other instruments and agreements to which any of them is a party or by which any
of them is bound or any of their properties is affected and in respect of which
the failure to comply reasonably could have a Material Adverse Effect.
5.12. Use of Proceeds. The Xxxx Companies will use the proceeds of each
Loan made pursuant hereto for general corporate purposes.
5.13. Further Assurances. Do such further acts and things and execute and
deliver to the Bank such additional assignments, agreements, powers and
instruments, as the Bank may reasonably require or reasonably deem advisable to
carry into affect the purposes of this Agreement or to better assure and confirm
unto the Bank its rights, powers and remedies hereunder.
5.14. Restrictive Covenants in Other Agreements. In the event that any
Xxxx Company shall enter into or otherwise become subject to or suffer to exist
any agreement pertaining to Debt which contains financial covenants or
restrictions that are more restrictive on it than the covenants and restrictions
contained in this Agreement, each and every such financial covenant and
restriction shall be deemed incorporated herein by reference as fully as if set
forth herein. Said financial covenant or restriction shall continue in effect
for so long as the agreement containing said financial covenant or restriction
shall remain in effect, provided however, said agreement may be amended to
change any said financial covenant or restriction so long as the purpose of said
amendment is not to eliminate or avoid an event of default or to a potential
default thereunder. If and to the extent that any such financial covenant or
restriction shall be inconsistent with or otherwise be in conflict with any
covenant or restriction set forth herein (other than by reason of its being more
restrictive), the covenant or restriction contained in this Agreement shall
govern.
5.15. Appraisal of Vessels. On or before January 19, 1998, the Xxxx
Companies will deliver to the Bank an appraisal of the five vessels owned by
NPR, Inc. for which First Preferred Ship Mortgages have been delivered to the
Bank, such appraisal to be in form and substance reasonably acceptable to the
Bank and performed by an appraiser reasonably acceptable to the Bank.
Credit Agreement -26- November 1997
6. Negative Covenants
The Xxxx Companies covenant and agree, individually and collectively, that
from and after the date hereof and so long as the Loan Commitment is in effect
or any Obligation remains unpaid or outstanding, they and each of them will not
and will not permit their Subsidiaries to:
6.1. Consolidation and Merger. (a) Dissolve, (b) adopt or enter into any
plan or agreement of liquidation, or (c) merge or consolidate with or into any
corporation or acquire all or substantially all of the assets of any Person,
unless the surviving entity is a Xxxx Company.
6.2. Liens. Create, assume or permit to exist any Lien on any of their
properties or assets, whether now owned or hereafter acquired, or upon any
income or profits therefrom, except Permitted Liens.
6.3. Guarantees. Except as set forth in Schedule 1 hereto, guarantee or
otherwise in any way become or be responsible for indebtedness or obligations
(including working capital maintenance, take-or-pay contracts) of any other
Person, contingently or otherwise, in any amounts that would exceed $1,000,000
in the aggregate.
6.4. Margin Stock. Use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock within the meaning of Regulation U
of The Board of Governors of the Federal Reserve System, as amended from time to
time.
6.5. Acquisitions and Investments. Except as permitted in ss.ss.6.1 and
6.11 and except for the purchase of additional shares of Atlantic Container Line
Aktiebolag, purchase or otherwise acquire (including without limitation by way
of share exchange) any part or amount of the capital stock or assets of, or make
any Investments in any other Person; or enter into any new business activities
or ventures not directly related to their present businesses, or create any
Subsidiary, except (a) they may acquire and hold stock, obligations or
securities received in settlement of debts (created in the ordinary course of
business) owing to them, and (b) they may make and own (i) Investments in
certificates of deposit or time deposits having maturities in each case not
exceeding one year from the date of issuance thereof and issued by a Bank, or
any FDIC-insured commercial bank incorporated in the United States or any state
thereof having a combined capital and surplus of not less than $150,000,000,
(ii) Investments in marketable direct obligations issued or unconditionally
guaranteed by the United States of America, any agency thereof, or backed by the
full faith and credit of the United States of America, in each case maturing
within one year from the date of issuance or acquisition thereof, (iii)
Investments in commercial paper issued by a corporation incorporated in the
United States or any State thereof maturing no more than one year from the date
of issuance thereof and, at the time of acquisition, having a rating of A-1 (or
better) by Standard & Poor's Corporation or P-1 (or better) by Xxxxx'x Investors
Service, Inc., and (iv) Investments in money market mutual funds all of the
assets of which are invested in cash or investments described in the immediately
preceding clauses (i), (ii) and (iii).
6.6. Transfer of Assets; Nature of Business. Sell, transfer, assign or
otherwise dispose of any of their assets unless such sale or disposition shall
be in the ordinary course of their businesses for value received; or discontinue
or liquidate in any material respect any substantial part of their operations or
business.
Credit Agreement -27- November 1997
6.7. Restricted Payments.
(a) Make or pay any redemptions, repurchases, dividends or distributions of
any kind with respect to the capital stock of The Xxxx Group, Inc., except that
(i) as long as no Event of Default or Potential Default shall be in existence,
The Xxxx Group, Inc. may pay dividends or make distributions in any Fiscal Year
ending after September 30, 1997, up to but not exceeding, in the aggregate, an
amount which is fifty percent (50%) of net income for the immediately preceding
Fiscal Year in the case of each Fiscal Year ending after September 30, 1997; and
(ii) as long as no Event of Default or Potential Default shall be in existence,
The Xxxx Group, Inc. or its Affiliates may purchase the stock of Transroll
Navieras Express, Inc. from former shareholders of NPR Holding Corporation.
(b) Make any repayment or advance any monies to any Subsidiary or Affiliate
in respect of intercompany obligations, except that as long as no Event of
Default or Potential Default shall be in existence repayments or advances may be
made to any Subsidiary or Affiliate in the ordinary course of the business of
the applicable Xxxx Company.
6.8. Accounting Change. Make or permit any change in financial accounting
policies or financial reporting practices, except as required by Generally
Accepted Accounting Principles or regulations of the Securities and Exchange
Commission, if applicable.
6.9. Transactions with Affiliates. Enter into any transaction (including,
without limitation, the purchase, sale or exchange of property, the rendering of
any services or the payment of management fees) with any Affiliate, except
transactions in the ordinary course of, and pursuant to the reasonable
requirements of, their businesses, and in good faith and upon commercially
reasonable terms.
6.10. Intentionally Omitted.
6.11. Indebtedness. Create, enter into or allow to exist any Indebtedness
for Borrowed Money of the Xxxx Companies or any of their Subsidiaries except (i)
the Loans hereunder and the Letters of Credit issued pursuant hereto, (ii)
indebtedness in existence at the date hereof and listed in Schedule 1 hereto,
and refinancing and substitutions thereof, (iii) capital lease obligations
and/or purchase money security interests limited to assets leased, purchased, or
financed, the aggregate unpaid balance of which shall not exceed $10,000,000 at
any time, (iv) performance bonds which shall not exceed $1,000,000 in the
aggregate outstanding at any time, and (v) indebtedness by and among the Xxxx
Companies.
Credit Agreement -28- November 1997
7. Financial Covenants
The Xxxx Companies covenant and agree, individually and collectively,
that from and after the date hereof and so long as the Loan Commitment is in
effect or any Obligation remains unpaid or outstanding:
7.1. Debt to Tangible Net Worth. The ratio of Debt to Tangible Net Worth of
the Xxxx Companies, on a consolidated basis, will not exceed 7.0:1 prior to a
144A Transaction by the Xxxx Companies, or 7.7:1 from and after the date of a
144A Transaction by the Xxxx Companies. The term "144A Transaction" shall mean a
private placement by the Xxxx Companies of approximately $125,000,000 of
debt securities pursuant to a transaction meeting the requirements of Rule 144A
under the Securities Act of 1933.
7.2. Minimum Tangible Net Worth. At the date hereof and at the end of each
Fiscal Quarter, Tangible Net Worth of the Xxxx Companies, on a consolidated
basis, will not at any time be less than the sum of (i) $50,500,000 prior to a
144A Transaction by the Xxxx Companies, or $46,500,000 from and after the date
of a 144A Transaction by the Xxxx Companies, (ii) fifty percent (50%) of net
income for each Fiscal Year ending after September 30, 1997 without deduction
for any net losses and (iii) 100% of the amount of any additional equity issued
after the date hereof, provided however any additions to equity after the date
hereof which are made for the sole purpose of enabling the Xxxx Companies to be
in compliance with the terms and conditions of this Agreement or any other Loan
Document shall not increase the minimum Tangible Net Worth requirement if at the
time of such addition the Xxxx Companies shall provide written notice of such
purpose to the Bank specifying the amount required therefor.
7.3. Interest Coverage. The ratio of Cash Flow to Interest Expense of the
Xxxx Companies for the four (4) most recently ended consecutive Fiscal Quarters
shall not be less than 1.50:1.
7.4. Borrowing Base. The Borrowing Base will not at any time be less than
the aggregate amount of all Loans and Letters of Credit then outstanding;
provided, however, that this covenant shall not be deemed breached if, at the
time the Borrowing Base is less than the aggregate amount of all Loans and
Letters of Credit outstanding, within thirty (30) days after the earlier of the
date any Xxxx Company first has knowledge of such deficiency or the date of the
next Borrowing Base Certificate disclosing the existence of such deficiency, an
addition is made to the Collateral or a reduction of the Loans outstanding is
made in an amount sufficient to assure continued compliance with this covenant
in the future.
8. Default
8.1. Events of Default. The Xxxx Companies shall be in default if any one
or more of the following events (each an "Event of Default") occurs:
(a) Payments. The Xxxx Companies fail to pay any principal of or interest
on the Note when due and payable (whether at maturity, by acceleration or
otherwise) or fail to pay when it is due and payable any other amount payable
under any Loan Document, and such failure shall continue for a period of five
days or more.
(b) Covenants. The Xxxx Companies fail to observe or perform (1) any term,
condition or covenant set forth in ss.ss.5.2 (with respect to corporate
existence only), 5.6 and 5.15; ss.ss.6.1 through
Credit Agreement -29- November 1997
6.11 or ss.ss.7.1 through 7.4 of this Agreement, as and when required, or (2)
any term, condition or covenant contained in this Agreement or any other Loan
Document other than as set forth in (1) above, as and when required and such
failure shall continue for a period of thirty (30) days or more.
(c) Representations, Warranties. Any representation or warranty made or
deemed to be made by the Xxxx Companies herein or in any Loan Document or in any
exhibit, schedule, report or certificate delivered pursuant hereto or thereto
shall prove to have been false, misleading or incorrect in any material respect
when made or deemed to have been made.
(d) Bankruptcy. Any Xxxx Company or any Subsidiary of any Xxxx Company is
dissolved or liquidated, makes an assignment for the benefit of creditors, files
a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or
applies to any tribunal for any receiver or trustee, commences any proceeding
relating to itself under any bankruptcy, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, has commenced
against it any such proceeding which remains undismissed for a period of sixty
(60) days, or indicates its consent to, approval of or acquiescence in any such
proceeding, or any receiver of or trustee for any Xxxx Company or any Subsidiary
of any Xxxx Company or any substantial part of the property of any Xxxx Company
or any Subsidiary of any Xxxx Company is appointed, or if any such receivership
or trusteeship to continues undischarged for a period of sixty (60) days.
(e) Certain Other Defaults. Any Xxxx Company or any Subsidiary of any Xxxx
Company shall fail to pay when due any Indebtedness for Borrowed Money, which
singularly or in the aggregate exceeds $1,000,000, and such failure shall
continue beyond any applicable cure period, or any the Xxxx Company or any
Subsidiary of any Xxxx Company shall suffer to exist any default or event of
default in the performance or observance, subject to any applicable grace
period, of any agreement, term, condition or covenant with respect to any
agreement or document relating to Indebtedness for Borrowed Money if the effect
of such default is to permit, with the giving of notice or passage of time or
both, the holders thereof, or any trustee or agent for said holders, to
terminate or suspend any commitment (which is equal to or in excess of
$1,000,000) to lend money or to cause or declare any portion of any borrowings
thereunder to become due and payable prior to the date on which it would
otherwise be due and payable, provided that during any applicable cure period
the Bank's obligations hereunder to make further Loans shall be suspended.
(f) Judgments. Any judgments against any Xxxx Company or any Subsidiary of
any Xxxx Company or against their assets or property for amounts in excess of
$1,000,000 in the aggregate remain unpaid, unstayed on appeal, undischarged,
unbonded and undismissed for a period of thirty (30) days.
(g) Attachments. Any assets of any Xxxx Company or any Subsidiary of any
Xxxx Company shall be subject to attachments, levies, or garnishments for
amounts in excess of $1,000,000 in the aggregate which have not been dissolved
or satisfied within thirty (30) days after service of notice thereof to the Xxxx
Company or any Subsidiary.
(h) ERISA. Excluding any liability related to withdrawal from Port
Xxxxxxxxx as disclosed on Schedule 1, any Reportable Event or any other fact or
circumstance which the Bank in good faith determines constitutes ground for the
termination of any employee benefit plan maintained for
Credit Agreement -30- November 1997
employees of any Xxxx Company or any ERISA Affiliate and covered by Title IV of
ERISA or grounds for the appointment by an appropriate United States District
Court of a trustee to administer any such plan, shall have occurred and be
continuing for five days, or any such plan shall be terminated within the
meaning of such Title IV, or a trustee shall be appointed by the appropriate
United States District Court to administer such plan or the Pension Benefit
Guaranty Corporation shall institute proceedings to terminate any such plan or
to appoint a trustee to administer such plan, if upon the termination of the
plan or plans with respect to which any of the foregoing events shall have
occurred there is or would be, in the reasonable judgment of the Bank, a
material resultant liability of the Xxxx Companies or any ERISA Affiliate.
(i) Security Interests. Any security interest created pursuant to any Loan
Document shall cease to be in full force and effect, or shall cease in any
material respect to give the Bank, the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), superior to and prior
to the rights of all third Persons, and subject to no other Liens.
(j) Material Adverse Change. There occurs any Material Adverse Change.
THEN and in every such event other than those specified in clause (d) above, the
Bank may, in its sole discretion, terminate the Loan Commitment (the date of
such termination being a Credit Termination Date) and declare the Notes together
with accrued interest thereon and all other amounts payable under any Loan
Document to be, and the same shall thereupon become, due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Xxxx Companies. Upon the occurrence of any event specified
in clause (d) above, the Loan Commitment shall automatically terminate and the
Notes together with accrued interest thereon and all other amounts payable under
any Loan Document shall immediately be due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Xxxx Companies. From and after the date an Event of Default shall have
occurred and for so long as any Event of Default shall be continuing, the Loan
shall bear interest at the Default Rate. Upon the occurrence of an Event of
Default, in addition to the rights set forth above, the Bank shall have the
immediate right to enforce or realize on any collateral security granted to it
in any manner or order it deems expedient without regard to any equitable
principles of marshaling or otherwise. In addition to any rights granted
hereunder or in any of the other Loan Documents, the Bank shall have all the
rights and remedies granted by applicable law, all of which shall be cumulative
in nature.
9. Collateral
9.1. Collateral. Except as otherwise specifically set forth herein or
in any other Loan Document, any Loans and Letters of Credit made and outstanding
and their repayment at all times shall be secured by a first priority,
perfected, security interest in certain assets owned by one or more of the Xxxx
Companies as listed and described in Schedule 2 attached hereto.
9.2. Release of Collateral. The Xxxx Companies may request at any time
and from time to time that the security interest of the Bank in one or more
assets included in the Collateral be released and the Bank shall release such
security interest, provided that (i) immediately following the requested
release, the Borrowing Base represented by assets remaining subject to the first
priority, perfected, lien and security interest of the Bank is at least equal to
the Loans and Letters of Credit then outstanding, and (ii) in the case
Credit Agreement -31- November 1997
of a requested release of a vessel subject to a First Preferred Ship Mortgage,
the identity of the vessel to be released shall be determined by the Bank, it is
sole discretion. In connection with any such release, the Bank shall do such
things as are reasonably requested by the Xxxx Companies to effect the release.
Upon the payment in full of the entire principal balance of all Loans and
Letters of Credit and any interest, fees and other amounts payable under all
Loan Documents, and the termination of the Loan Commitment, the Bank shall
release the lien and security interest it holds in assets owned by one or more
of the Xxxx Companies and do such things as are reasonably requested by the Xxxx
Companies to effect such release.
10. Miscellaneous
10.1. Waiver. No failure or delay on the part of the Bank or any holder of
the Note in exercising any right, power or remedy under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy under any Loan Document. The
remedies provided under the Loan Documents are cumulative and not exclusive of
any remedies provided by law.
10.2. Amendments. No amendment, modification, termination or waiver of any
Loan Document or any provision thereof nor any consent to any departure by the
Xxxx Companies therefrom shall be effective unless the same shall have been
approved in writing by the Bank, be in writing and be signed by the Bank and the
Xxxx Companies and then any such waiver or consent shall be effective only in
the instance and for the specific purpose for which given. No notice to or
demand on the Xxxx Companies shall entitle the Xxxx Companies to any other or
further notice or demand in similar or other circumstances.
10.3. Governing Law. The Loan Documents and all rights and obligations of
the parties thereunder shall be governed by and be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
Pennsylvania or federal principles of conflict of laws.
10.4. Participations and Assignments. The Xxxx Companies hereby acknowledge
and agree that CoreStates may at any time with the consent of the Xxxx Group,
Inc. (which consent shall not be unreasonably withheld): (a) grant
participations in all or any portion of the Note or of its right, title and
interest therein or in or to this Agreement (collectively, "Participations") to
any other lending office of CoreStates or to any other bank, lending institution
or other entity which has the requisite sophistication to evaluate the merits
and risks of investments in Participations ("Participants"); provided, however,
that: (i) all amounts payable by the Xxxx Companies hereunder shall be
determined as if CoreStates had not granted such Participation; and (ii) any
agreement pursuant to which CoreStates may grant a Participation: (x) shall
provide that CoreStates shall retain the sole right and responsibility to
enforce the obligations of the Xxxx Companies hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provisions of this Agreement; and (y) such participation agreement may provide
that CoreStates will not agree to any modification, amendment or waiver of this
Agreement without the consent of the Participant if such modification, amendment
or waiver would reduce the principal of or rate of interest on any Loan or
postpone the date fixed for any payment of principal of or interest on any Loan;
and (b) assign any of its obligations under this Agreement and the Loan
Documents, provided it shall retain at least $15,000,000 of the Loan Commitment
and shall serve as agent for all assignees.
Credit Agreement -32- November 1997
10.5. Captions. Captions in the Loan Documents are included for convenience
of reference only and shall not constitute a part of any Loan Document for any
other purpose.
10.6. Notices. All notices, requests, demands, directions, declarations and
other communications between the Bank and the Xxxx Companies provided for in any
Loan Document shall, except as otherwise expressly provided, be mailed by
registered or certified mail, return receipt requested, or telegraphed, or
faxed, or delivered in hand to the applicable party at its address indicated
opposite its name on the signature pages hereto. The foregoing shall be
effective and deemed received three days after being deposited in the mails,
postage prepaid, addressed as aforesaid and shall whenever sent by telegram,
telegraph or fax or delivered in hand be effective when received. Any party may
change its address by a communication in accordance herewith.
10.7. Expenses; Indemnification. The Xxxx Companies will from time to time
reimburse the Bank promptly following demand for all reasonable out-of-pocket
expenses (including the reasonable fees and expenses of legal counsel) in
connection with (i) the preparation of the Loan Documents, (ii) the making of
any Loans, (iii) the administration of the Loan Documents, and (iv) the
enforcement of the Loan Documents. In addition to the payment of the foregoing
expenses, the Xxxx Companies hereby agrees to indemnify, protect and hold the
Bank and any holder of the Note and the officers, directors, employees, agents,
affiliates and attorneys of the Bank and such holder (collectively, the
"Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature, including reasonable fees and expenses of
legal counsel, which may be imposed on, incurred by, or asserted against such
Indemnitee by the Xxxx Companies or other third parties and arise out of or
relate to this Agreement or the other Loan Documents or any other matter
whatsoever related to the transactions contemplated by or referred to in this
Agreement or the other Loan Documents; provided, however, that the Xxxx
Companies shall have no obligation to an Indemnitee hereunder to the extent that
the liability incurred by such Indemnitee has been determined by a court of
competent jurisdiction to be the result of gross negligence or willful
misconduct of such Indemnitee.
10.8. Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made or deemed made herein shall survive the
execution and delivery of this Agreement, the making of the Loans hereunder and
the execution and delivery of the Note. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of the Xxxx
Companies set forth in ss.ss.2.8, ss.2.9, and 10.7 shall survive the payment of
the Loans and the termination of this Agreement. This Agreement shall remain in
full force and effect until the repayment in full of all amounts owed by the
Xxxx Companies under the Note or any other Loan Document.
10.9. Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement, the Note or
other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
the Note or other Loan Documents or of such provision or obligation in any other
jurisdiction.
10.10. No Fiduciary Relationship. No provision in this Agreement or in any
of the other Loan Documents and no course of dealing between the parties shall
be deemed to create any fiduciary duty by the Bank to any Xxxx Company.
Credit Agreement -33- November 1997
10.11. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH XXXX COMPANY
AND CORESTATES HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE EASTERN DISTRICT OF PENNSYLVANIA AND IRREVOCABLY AGREES THAT,
ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS MAYBE LITIGATED IN SUCH COURTS. EACH XXXX
COMPANY AND CORESTATES ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, ANY
NOTE, OR SUCH OTHER LOAN DOCUMENT.
10.12. WAIVE OF JURY TRIAL. EACH XXXX COMPANY AND CORESTATES HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. EACH XXXX COMPANY AND CORESTATES
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT
EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
XXXX COMPANY AND CORESTATES FURTHER WARRANTS AND REPRESENTS THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, MODIFICATIONS, REPLACEMENTS OR
RESTATEMENTS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.13. Counterparts; Effectiveness. This Agreement and any amendment hereto
or waiver hereof 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 Agreement and any amendments hereto
or waivers hereof shall become effective when the Bank shall have received
signed counterparts or notice by fax of the signature page that the counterpart
has been signed and is being delivered to it or facsimile that such counterparts
have been signed by all the parties hereto or thereto.
10.14. Use of Defined Terms. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
Credit Agreement -34- November 1997
10.15. Offsets. Nothing in this Agreement shall be deemed a waiver or
prohibition of the Bank's right of banker's lien or offset.
10.16. Entire Agreement. This Agreement, the Note issued hereunder and the
other Loan Documents constitute the entire understanding of the parties hereto
as of the date hereof with respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, with respect hereto or thereto.
10.17. 1995 Credit Agreement. Simultaneously with the execution and
delivery of this Agreement, the commitment of CoreStates Bank to make loans or
issue letters of credit under the 1995 Credit Agreement is hereby terminated,
and CoreStates Bank shall be deemed released in full for all matters in
connection therewith or relating thereto.
10.18. Consolidated Basis. Unless the context otherwise requires,
references to the Xxxx Companies in this Agreement shall mean the Xxxx Companies
and their Subsidiaries, and financial information shall be provided on a
consolidated basis.
10.19. 1995 Credit Agreement. Simultaneous with the execution and delivery
of this Agreement, the commitment of the Bank to make loans or issue letters of
credit under the 1995 Credit Agreement are hereby terminated.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed by their duly authorized representatives as of the date first
above written.
THE XXXX GROUP, INC. NPR HOLDING CORPORATION, INC.
XXXX CARGO SYSTEMS, INC. NPR, INC.
XXXX HAULING AND XXXX- NPR-NAVIERAS RECEIVABLES, INC.
HOUSING SYSTEM, INC. NPR S.A., INC.
XXXXXX MARINE SERVICES, INC.
THE RIVERFRONT DEVEL-
OPMENT CORPORATION
WILMINGTON STEVEDORES, INC.
By /s/ Xxxxxxxx Xxxxxx By /s/ Xxxxxx X. Xxxxxx
----------------------------- -----------------------------
Name: Xxxxxxxx Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: EVP Title: President
Notices To:
Xx. Xxxxxxx Xxxxxx
The Xxxx Group, Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxxxxx Xxxx, XX 00000
FAX No. (000) 000-0000
Credit Agreement -35- November 1997
CORESTATES BANK, N.A.
By /s/ Xxxxxxx Xxxx
-----------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
Notices To:
Xx. Xxxxxxx Xxxx
Vice President
CoreStates Bank, N.A.
Transportation Leasing and Construction Industry Services
FC 1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FAX No. 000-000-0000
Credit Agreement -36- November 1997
Reference Table of Definitions
definition page defined
1995 Credit Agreement ............................................1
1995 Letter of Credit ...........................................10
Additional Amount ...............................................14
Affiliate ........................................................2
Agreement ........................................................2
Appraised Value ..................................................2
Bank .............................................................1
Base Rate ........................................................2
Borrowing Base ...................................................2
Borrowing Base Certificate .......................................2
Business Day .....................................................2
Capitalized Lease ................................................3
Capitalized Lease Obligations ....................................3
Cargo ............................................................1
Cash Flow ........................................................3
Code .............................................................3
Commitment Fee ..................................................13
Compliance Certificate ...........................................3
CoreStates .......................................................1
CoreStates Bank ..................................................1
Credit Termination Date .........................................11
Debt .............................................................3
Default Rate .....................................................3
Dollars ..........................................................3
Environmental Control Statutes ...................................3
ERISA ............................................................4
ERISA Affiliate ..................................................4
Event of Default ................................................29
Federal Funds Rate ...............................................4
Fiscal Quarter ...................................................4
Fiscal Year ......................................................4
GAAP .............................................................4
Generally Accepted Accounting Principles .........................4
Governmental Authority ...........................................4
Hauling ..........................................................1
Hazardous Substances .............................................4
Xxxx Companies ...................................................1
Xxxx Company .....................................................1
Indebtedness for Borrowed Money ..................................4
Indemnitees .....................................................33
Interest Period ..................................................5
Credit Agreement -37- November 1997
Investment .......................................................5
Letter of Credit.................................................10
LIBO Rate.........................................................5
LIBO Rate Loans ..................................................5
LIBO Rate Reserve Percentage .....................................5
Lien .............................................................6
Loan .............................................................9
Loan Commitment ..................................................9
Loan Documents ...................................................6
Loans ............................................................9
Material Adverse Change ..........................................6
Material Adverse Effect ..........................................6
Multiemployer Plan ...............................................6
Xxxxxx............................................................1
Note.............................................................11
NPR...............................................................1
NPR Holding.......................................................1
NPR S.A...........................................................1
NPR, Inc..........................................................1
NPR-Navieras......................................................1
Obligations ......................................................6
Participants ....................................................32
Participations ..................................................32
PBGC .............................................................7
Pension Plan .....................................................7
Permitted Liens ..................................................7
Person ...........................................................7
Plan .............................................................7
Potential Default ................................................8
Prohibited Transaction ...........................................8
Regulation .......................................................8
Regulation D .....................................................8
Regulatory Change ................................................8
Release ..........................................................8
Reportable Event .................................................8
Riverfront .......................................................1
Security Agreement ...............................................8
Solvent ..........................................................8
Subsidiary .......................................................8
Tangible Assets ..................................................9
Tangible Net Worth ...............................................9
Taxes ............................................................9
Termination Event ................................................9
Unfunded Pension Liabilities .....................................9
Unrecognized Retiree Welfare Liability ...........................9
Wilmington .......................................................1
Credit Agreement -38- November 1997
[LOGO]
EXHIBIT A
Note
$25,000,000 Philadelphia, PA
November 20, 1997
For Value Received, THE XXXX GROUP, INC., a Delaware corporation, XXXX CARGO
SYSTEMS, INC., a Delaware corporation ("Cargo"), XXXX HAULING AND WAREHOUSING
SYSTEM, INC., a Pennsylvania corporation ("Hauling"), XXXXXX MARINE SERVICES,
INC., a Delaware corporation ("Xxxxxx"), NPR HOLDING CORPORATION, a Delaware
corporation ("NPR Holding"), NPR, INC., a Delaware corporation ("NPR"),
NPR-NAVIERAS RECEIVABLES, INC., a Delaware corporation ("NPR-Navieras"), NPR
S.A., Inc., a Delaware corporation ("NPR S.A."), THE RIVERFRONT DEVELOPMENT
CORPORATION, a New Jersey corporation ("Riverfront"), and WILMINGTON STEVEDORES,
INC., a Delaware corporation ("Wilmington"), (together, sometimes referred to
herein as the "Xxxx Companies" and individually, as a "Xxxx Company"), jointly
and severally, hereby promise to pay to the order of CORESTATES BANK, N.A. (the
"Bank"), in lawful currency of the United States of America in immediately
available funds at the Bank's offices located at Broad and Chestnut Streets,
Philadelphia, Pennsylvania, on the earlier to occur of acceleration of the
maturity date as provided in the Credit Agreement described below or the Credit
Termination Date as therein defined, the principal sum of TWENTY FIVE MILLION
DOLLARS ($25,000,000) or, if less, the then unpaid principal amount of all Loans
made by the Bank pursuant to the Credit Agreement (defined below).
The Xxxx Companies promise also to pay interest on the unpaid principal amount
hereof in like money at such office from the date hereof until paid in full at
the rates and at the times provided in the Credit Agreement.
This Note is the Note referred to in, is entitled to the benefits of and is
secured by security interests referred to in the Credit Agreement, dated
November 20, 1997 by and between the Xxxx Companies and the Bank (as such may be
amended, modified, supplemented, restated or replaced from time to time, the
"Credit Agreement"). Capitalized terms used in this Note but not defined herein
shall have the meanings ascribed to such terms in the Credit Agreement. This
Note is subject to voluntary prepayment and mandatory repayment prior to demand,
acceleration of maturity or the Credit Termination Date, in whole or in part, as
provided in the Credit Agreement.
In case an Event of Default shall occur and be continuing, the maturity date of
the principal of and the accrued interest on this Note may be accelerated and be
declared to be due and payable in the manner and with the effect provided in the
Credit Agreement.
The Xxxx Companies hereby waive presentment, demand, protest or notice of any
kind in connection with this Note.
Note -1- November 1997
Notwithstanding the face amount of this Note, the Xxxx Companies liability
hereunder shall be limited, at all times, to the actual aggregate outstanding
indebtedness to the Bank relating to the Bank's Loans, including all principal
and interest, together with all fees and expenses as provided in the Credit
Agreement, as established by the Bank's books and records which shall be
conclusive absent manifest error.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PENNSYLVANIA OR FEDERAL
PRINCIPLES OR CONFLICT OF LAWS.
IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the Xxxx
Companies has caused this Note to be executed by its duly authorized officer as
of the date and year first above written.
THE XXXX GROUP, INC. NPR HOLDING CORPORATION, INC.
XXXX CARGO SYSTEMS, INC. NPR, INC.
XXXX HAULING AND XXXX- NPR-NAVIERAS RECEIVABLES, INC.
HOUSING SYSTEM, INC. NPR S.A., INC.
XXXXXX MARINE SERVICES, INC.
THE RIVERFRONT DEVEL-
OPMENT CORPORATION
WILMINGTON STEVEDORES, INC.
By /s/ X. Xxxxxx By /s/ Xxxxxx Xxxxxx
---------------------------- ----------------------------
Name: Xxxxxxxx Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: EVP Title: President
Note -2- November 1997
EXHIBIT B
FIRST PREFERRED SHIP MORTGAGE
THIS FIRST PREFERRED SHIP MORTGAGE made effective as of November 20, 1997
by and between NPR, Inc., a Delaware corporation whose address is X.X. Xxx
0000, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the "Mortgagor"), and
CoreStates Bank, N.A., a national banking association which is a federally
insured depository institution and whose address is 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Mortgagee"). The Mortgagee shall be a
Mortgagee in 100% of the Vessel described below.
WITNESSETH:
MORTGAGE AMOUNT: THE AMOUNT OF THE DIRECT OR CONTINGENT OBLIGATIONS THAT
ARE OR MAY BECOME SECURED BY THIS FIRST PREFERRED SHIP MORTGAGE, EXCLUDING
INTEREST, EXPENSES AND FEES, IS $25,000,000.
WHEREAS, the Mortgagor is the sole owner of the whole of the following
vessel:
Name:
Official No.:
Hailing Port:
Gross Tons:
Net Tons:
Built:
Length Overall:
Depth:
which vessel is duly documented under and pursuant to the laws of the United
States; and
WHEREAS, the Mortgagor is justly indebted to Mortgagee in the principal sum
of up to Twenty-Five Million United States Dollars ($25,000,000.00) (hereinafter
referred to as the "Principal Sum"), and interest thereon, which indebtedness is
evidenced, inter alia, by a certain Credit Agreement attached as Exhibit A
hereto and a Note dated November 20, 1997, between Mortgagor and Mortgagee in
the amount of the Principal Sum (the "Credit Agreement"); and
WHEREAS, the Principal Sum, all interest thereon, all late charges as set
forth in the Credit Agreement, all other costs and expenses incurred by the
Mortgagee in the enforcement and administration of the Credit Agreement, the
Note, and this Mortgage, and any and all future advances as may be made from
Mortgagee to Mortgagor the total of which, however, shall not exceed the
Principal Sum, shall be collectively referred to hereafter as the "Secured
Obligations"; and
WHEREAS, the Mortgagor, for the purpose of securing payment to the
Mortgagee of the Secured Obligations, as more fully set forth herein, has duly
executed and delivered this First Preferred Ship Mortgage on the
_____________________to the Mortgagee;
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
EXHIBIT B
In consideration of the foregoing recitals and of the sum of One Dollar
($1.00) to the Mortgagor duly paid by the Mortgagee at and before the sealing
and delivery of these presents, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, and in order to secure the payment
of the Secured Obligations, the Mortgagor, by these presents, does grant,
bargain, sell, convey, transfer, assign, remise, mortgage, set over, pledge,
create a security interest in, and confirm to the Mortgagee, its successors and
assigns, the following described property:
The whole of all that certain vessel designated and known as_, Official
No._, together with all her engines, boilers, machinery, masts, spars, motors,
tools, booms, cranes, rigs, pumps, pipe, tanks, anchors, cables, rigging,
tackle, apparel, fixtures, furniture, boats, chains, equipment, supplies,
fittings, and all her other appurtenances thereunto appertaining and belonging,
whether aboard or removed from the said vessel, together with any and all
additions, improvements, and/or replacements which may hereafter be made to, on
or in said Vessel or any part thereof, whether on board or not, and in or to its
equipment and appurtenances aforesaid, and all rents, charters, charter parties,
charter hire, freights, sub-freights, cargoes, operating agreements and
revenues, lighterage, and all issues, revenues, profits and proceeds of any of
the foregoing, but in no event shall the Vessel include: (a) any accounts of
Mortgagor arising in connection with the operation of the Vessel by Mortgagor,
or the containers, gensets, chassis or other equipment described in clause (b),
and (b) any containers, gensets, chassis, or other equipment leased by Mortgagor
and used on or in connection with the operation of the Vessel, all of the
foregoing being hereinafter referred to as the "VESSEL."
TO HAVE AND TO HOLD all of the Vessel unto the Mortgagee, its successors
and assigns, forever upon the terms herein set forth to secure the performance
and observance of and compliance with the covenants, terms and conditions in
this Mortgage and the Credit Agreement contained; provided, however, that if the
Mortgagor shall pay, or cause to be paid, to the Mortgagee, its successors or
assigns, the debt aforesaid, with interest thereon, as and when the same shall
become due and payable by maturity or otherwise, under the terms and in the
manner provided the Credit Agreement and this Preferred Ship Mortgage, and
keeps, performs and observes all and singular the covenants and promises in the
Credit Agreement and in these presents expressed to be kept, performed, and
observed by or on the part of the Mortgagor, then this First Preferred Ship
Mortgage and the estate and rights hereby granted shall cease.
PAYMENT SCHEDULE: The Mortgagor shall pay or cause to be paid to the
Mortgagee, its successors or assigns, the Principal Sum with the interest
thereon, in accordance with the terms and conditions of the Credit Agreement.
MORTGAGE OBLIGATION: The Mortgagor hereby agrees to pay the Principal Sum
and the interest thereon as stipulated, and to fulfill, perform and observe
each and every one of the covenants, agreements, and conditions contained in
this First Preferred Ship Mortgage and in the Note and the Credit Agreement;
and hereby covenants and agrees to and with the Mortgagee, its successors and
assigns, that the Vessel and the appurtenances thereunto appertaining and
belonging, and all additions, improvements and/or replacements which may
hereafter be made to, on or in said Vessel are to become subject hereto, and
are to be held subject to this First Preferred Ship Mortgage and the further
covenants, representations, warranties, conditions and uses hereinafter set
forth as follows:
Article 1. Corporate Representations and Warranties. Corporate representations
and warranties shall be as set forth in Article 3 of the Credit Agreement.
2
EXHIBIT B
Article 2. Validity of Mortgage. The Mortgagor covenants that this Mortgage is
and will be a valid and enforceable obligation of the Mortgagor in accordance
with its terms.
Article 3. Ownership of Vessel. The Mortgagor warrants that it is and shall
continue to be a citizen of the United States as defined and within the meaning
of the Shipping Act, 1916, as amended, 46 App. U.S.C. Section 802, and a
corporation established under the laws of the United States or of a State, whose
president or other chief executive officer and chairman of its board of
directors are citizens of the United States and no more of its directors are
noncitizens than a minority of the number necessary to constitute a quorum,
within the meaning of Section 7 of the Act of August 26, 1983, P.L. 98-89, 97
Stat. 585, as amended, 46 U.S.C. Section 12102, as amended. The Mortgagor
warrants that it is the true, lawful and sole owner of the whole of the Vessel,
including her engines, boilers, machinery, masts, anchors, cables, rigging
tackle, apparel, furniture, small boats, and all other appurtenances, and that
its ownership is free and clear of all suits, liens, claims, charges, or
encumbrances of any kind or nature except for (a) liens arising prior to the
date of this Mortgage which arose in the ordinary course of business and by
operation of law, which liens are no greater than approximately $1,750,000 as of
this date and (b) liens granted to Mortgagee, and that all action necessary and
required by law for the execution and delivery of this Mortgage has been duly
and effectively taken, and that this Mortgage is a valid and binding obligation
of the Mortgagor enforceable in accordance with its terms, and that it will
forever warrant and defend its title and possession for the benefit of the
Mortgagee against any and all claims and demands.
Article 4. Insurance.
(a) The Mortgagor at its own cost and expense as long as any part of the
Secured Obligations are unpaid shall keep the Vessel insured with responsible
underwriters in good standing and reasonably satisfactory to the Mortgagee fully
and adequately protecting the Vessel and the Mortgagee's interest therein
against any marine perils and disasters and all hazards, risks, or liabilities
in any way arising out of the ownership, operation or maintenance of the Vessel,
as more fully provided the aforesaid Credit Agreement, including but not limited
to insurance as follows:
(i) Marine Hull and Machinery, Increased Value, and War Risk insurance
an amount not less than the full market value of the Vessel, with
responsible underwriters and under policy forms satisfactory to the
Mortgagee, covering the hull and all equipment and appurtenances of the
Vessel against all usual marine risks subject, with respect to an accident,
occurrence, or event that does not result in an actual or constructive
total loss of the Vessel, to no deductible in excess of $250,000.
(ii) Protection and Indemnity Insurance with underwriters and under
policy forms and in amounts reasonably satisfactory to the Mortgagee.
(iii) When and while the Vessel is laid up, and in lieu of the
aforesaid insurance referred to in paragraph (i) of this section, Port Risk
Insurance on the Vessel may be taken out by the Mortgagor under forms of
port risk policies and with underwriters satisfactory to the Mortgagee.
(iv) Insurance protecting against claims under the Longshoremen's and
Harbor Workers, Compensation Act, workmen's Compensation and public
liability.
(v) Upon the request of the Mortgagee, Mortgagee's Interest
Insurance, including Breach of Warranty insurance if reasonably available,
with responsible underwriters and under policy forms satisfactory to
Mortgagee.
(vi) Collision and property damage insurance with underwriters and
under policy forms and in amounts satisfactory to the Mortgagee.
3
EXHIBIT B
(vii) Wreck removal and fire insurance with underwriters and under
policy forms and in amounts satisfactory to the Mortgagee.
(viii) Insurance against loss of hire and strikes with a daily
indemnity of not less than $12,000 per day, commencing after 3 days and
continuing for up to 21 days per instance.
(ix) MII Additional Perils (Pollution) insurance with underwriters and
under policy forms and in amounts satisfactory to the Mortgagee.
(b) All Hull and Machinery insurance shall be taken out in the name of the
Mortgagor, but all losses shall be payable to the Mortgagee for distribution by
it, as its interests may appear, except that: (i) in the case of a total loss,
the Mortgagee consents that the underwriters pay direct to the Mortgagor the
amount by which the total loss exceeds the amount then due under the Mortgage
and the Note, unless and to the extent that the Mortgagor elects to use the
proceeds for the purchase of a replacement vessel under terms and conditions
which are reasonably acceptable to the Mortgagee and with the prior written
consent of the Mortgagee, which shall not be unreasonably withheld; and (ii) 'in
the event of a partial loss, if there is not a default under this Mortgage, the
Mortgagee agrees that the underwriters may pay directly for repairs, salvage, or
other charges and/or reimburse the Mortgagor therefor; however, (iii) in any
event, if the amount of the partial loss is less than $2,000,000, Mortgagee
consents that the underwriters may pay directly to the Mortgagor. If the
Mortgagor is in default under this Mortgage or the Note, the Mortgagee shall be
entitled to receive the proceeds of any such insurance and shall apply such
proceeds in the manner provided in Article 10(f).
(c) All insurance shall be taken out in the names of the Mortgagor and any
bareboat charterer, with Mortgagee named as an additional insured or loss payee
as follows: (i) Hull and Machinery Insurance and Port Risk Insurance shall name
the Mortgagee as first preferred Mortgagee and loss payee; (ii) Protection &
Indemnity Insurance shall name the Mortgagee as an additional insured.
(d) With respect to both the Mortgagee's Interest and the MII Additional
Perils (Pollution) policies, Mortgagor shall effect and maintain, or, at the
option of the Mortgagee from time to time, reimburse to the Mortgagee on the
Mortgagee's first demand from time to time all costs and expenses incurred by
the Mortgagee in effecting and maintaining, on such terms, in such amounts as is
customary in the industry, and with such insurers as the Mortgagee shall
consider reasonably appropriate.
(e) Copies of all policies, binders and cover notes, together with original
underwriter's certificates, shall be delivered to the Mortgagee from time to
time upon its request for approval and custody.
(f) Mortgagor will pay or cause to be paid the premiums on and costs of all
such insurance and all renewals thereof, when and as the same become payable,
and will forthwith furnish to Mortgagee evidence satisfactory to the Mortgagee
that the same has been paid if requested by the Mortgagee.
(g) The Mortgagor will keep the aforesaid insurance and renewals thereof
valid at all times while this First Preferred Ship Mortgage remains in force,
will comply and will cause any charterer or subcharterer to comply with all
Institute Warranties and Clauses, and will not suffer or permit the Vessel to
engage in any voyage or to carry any cargo not permitted by the policies of
insurance in effect at the time of the voyage, nor do, omit, neglect, or permit
to be done anything whereby any insurance, whether procured by the Mortgagor or
Mortgagee, is or is liable to be impaired or defeated. If at any time (i)
Mortgagor shall fail to deliver to and maintain with the Mortgagee, upon
request, original policies or other insurance documents and other evidence
satisfactory to the Mortgagee that the insurance has been effected and
maintained as hereinabove and in the Credit Agreement required or (ii) any
insurance required to be maintained hereunder or under the Credit Agreement is
canceled, terminated or fails to be renewed without replacement coverage
complying with the requirements hereof and of the Credit Agreement, then the
Mortgagee may procure the insurance, and from the date of such expenditure the
4
EXHIBIT B
costs and expenses thereof, with interest at the rate provided in the Credit
Agreement, shall be an additional indebtedness due from the Mortgagor secured by
this First Preferred Ship Mortgage and shall be paid by the Mortgagor on demand.
The Mortgagee shall not be under any obligation to procure any such insurance.
(h) Each insurance policy shall prohibit cancellation or substantial
modification by the insurer without the written consent of both the Mortgagor
and the Mortgagee, or, in the absence of such consent, without at least 10
days' prior written notice to Mortgagor and Mortgagee. Mortgagor shall request
that its P&I Club shall give the Mortgagee as much notice as possible of
Mortgagor's failure to renew its entry in the Club, and in any event Mortgagor
shall so notify Bank immediately if its entry in the Club is not renewed.
(i) Each insurance policy shall provide that there shall be no recourse
against the Mortgagee for premiums in respect thereof
(j) On the date hereof and on or before April 30 of each year thereafter,
the Mortgagor will furnish to the Mortgagee a report signed by a recognized
marine insurance broker(s) selected by the Mortgagor and reasonably satisfactory
to the Mortgagee with respect to the insurance maintained under this Mortgage
(including, without limitation, as to each policy, its number, the amount, the
insurer, the named assureds, the type of risk, the loss payees and the
expiration date).
Article 5. Environmental Matters
(a) The Mortgagor shall operate the Vessel in material compliance with
all Environmental Law, including but not limited to the Oil Pollution Act
of 1990. The Mortgagor has a Vessel Response Plan and a Spill Prevention
Plan and Contingency Plan in force.
(b) The Mortgagor shall indemnify and hold harmless the Mortgagee and
its successors and assigns from and against all losses, costs, injuries,
damages (including consequential, punitive or treble damages) and expenses
(including attorneys' fees and disbursements) and, at the Mortgagee's
request, defend any indemnified person under this provision against any
action, suit, or other proceeding resulting from, arising out of or in any
way connected directly or indirectly with any violation of or liability
under any Environmental Law with respect to the ownership, custody,
management, operation or control of the Vessel or the generation of waste
by, or the transportation of waste from, the Vessel.
(c) The Mortgagor shall maintain a Certificate of Financial
Responsibility issued by the United States pursuant to the Federal Water
Pollution Control Act, and any other applicable legislation.
Article 6. Creation of Liens.
(a) Neither the Mortgagor, the managing owner, ship's husband, master,
or any other person to whom the management of the Vessel may be entrusted,
or any charterer or subcharterer shall have any right, power or authority
to create, incur, or permit to be placed or imposed on the Vessel any liens
or encumbrances whatsoever, other than Ordinary Maritime Liens, which liens
consist of (a) liens in favor of Mortgagee or (b) statutory liens for
crew's wages, wages of stevedores, or for salvage (including contract
salvage), or general average or (c) liens arising in the ordinary course
of business prior to the date hereof or (d) other liens incurred in the
ordinary course of business which are not past due, but only to the extent
that such other liens are subordinate to the lien of this Mortgage.
(b) The Mortgagor shall carry a properly certified copy of this First
Preferred Ship Mortgage with the ship's papers and shall exhibit the same
to any person having business with the Vessel which may give rise to any
lien other than for crew's wages or salvage, or to the sale, mortgage or
other conveyance thereof. The Mortgagor shall place and keep prominently in
the pilot house, master's cabin, or engine room of the Vessel a printed or
typewritten notice written as follows:
5
EXHIBIT B
"This Vessel is owned by NPR, Inc. and is subject to a First Preferred
Ship Mortgage dated effective as of November 20, 1997, in favor of
CORESTATES BANK, N.A. under authority of the Act of November 23, 1988,
P.L. 100-710, as amended, and under the terms of said Mortgage,
neither the owner, the master nor any other person has any right,
power or authority to create, incur or permit to be imposed upon this
vessel, its freights, sub-freights, cargoes, profits, hire, charter
hire or revenues, any liens whatsoever, other than for crew's wages or
salvage, including contract salvage or general average."
(c) In the event that a claim for salvage is asserted against the
Vessel, Mortgagor and/or Mortgagee, the Mortgagor shall discharge any
ultimate lien, liability and/or judgment. Any amount paid by the Mortgagee,
whether in settlement of a claim or in satisfaction of a judgment, shall
be a debt which is part of the Secured Obligations, the repayment of which
is secured by the lien of this First Preferred Ship Mortgage and shall be
payable when demanded by the Mortgagee, with interest at the rate provided
in the Credit Agreement, from the date of payment by the Mortgagee.
(d) In the event that the title or ownership of the Vessel shall be
requisitioned, purchased or taken by the United States of America or any
government of any other country or any department, agency or representative
thereof, pursuant to any present or future law, proclamation, decree, order
or otherwise, the lien of this Mortgage shall be deemed to attach to the
claim for compensation, and the compensation, purchase price, reimbursement
or award for such requisition, purchase or other taking of such title or
ownership is hereby declared payable to Mortgagee, who shall be entitled to
receive the same and shall apply it to the prepayment of the Note; and in
the event of any such requisition, purchase or taking, the Mortgagor shall
promptly execute and deliver to Mortgagee such documents, if any, as in the
opinion of counsel for Mortgagee may be necessary or useful to facilitate
or expedite the collection by Mortgagee of such compensation, purchase
price, reimbursement or award.
(c) In the event that the United States of America or any government
of any other country or any department, agency or representative thereof
shall not take the title or ownership of the Vessel but shall requisition,
charter, or in any manner take over the use of such Vessel pursuant to any
present or future law, proclamation, decree, order or otherwise, and in
the event Mortgagor is in default of the terms of this Mortgage, all
charter hire and compensation resulting therefrom shall be payable to
Mortgagee, and if, as a result of such requisitioning, chartering or taking
of the use of such Vessel such government, department, agency or
representative thereof shall pay or become liable to pay any sum by reason
of the loss of or injury to or depreciation of the Vessel any such sum is
hereby made payable to Mortgagee, and in the event of any such
requisitioning, chartering or taking of the use of the Vessel, the
Mortgagor shall promptly execute and deliver to Mortgagee such documents,
if any, and shall promptly do and perform such acts, if any, as in the
opinion of counsel for Mortgagee may be necessary or useful to facilitate
or expedite the collection by Mortgagee of such claims arising out of the
requisitioning, chartering or taking of the use of such Vessel.
Article 7. Maintenance of Vessel.
(a) The Vessel is tight, staunch, strong and well and sufficiently
tackled, appareled, victualed, fitted, manned, furnished, and equipped, and
in every respect seaworthy and in good running condition and repair and in
all respects fit for service. At all times, at its own cost and expense,
the Mortgagor will exercise due diligence to maintain and preserve the
Vessel in as good condition, working order and repair as at the time of
the execution of this First Preferred Ship Mortgage, ordinary wear and tear
and depreciation excepted, and will maintain the Vessel in accordance with
good marine maintenance
6
EXHIBIT B
practice and procedures and applicable legal or regulatory requirements for
the service in which it then is or will be engaged, and in such condition
as will enable her to pass such inspection as may be required by marine
underwriters as a condition of their writing such insurance and in such
amounts as is required under this First Preferred Ship Mortgage.
Furthermore, if the vessel is not temporarily laid-up, the Mortgagor will
cause the Vessel to be periodically inspected, drydocked and recoated
(hull paint), and its machinery overhauled in accordance with normal
marine practices or as may be required by the United States Coast Guard or
applicable Classification Society.
(b) The Mortgagor shall afford the Mortgagee or its authorized
representatives, at their own risk and expense, full and complete access to
the Vessel for the purpose of inspecting the same and her cargoes and
papers.
(c) Mortgagor shall certify as often as required by Mortgagee that all
wage and other claims which give rise to liens have been paid, but in the
absence of a default or a potential default, no more often than once a
quarter.
(d) The Mortgagor will keep the Vessel duly documented as a vessel of
the United States, under the flag of the United States, and will not suffer
or permit it to be operated in any manner prohibited by the laws or
regulations applicable to the Vessel under its certificate of documentation
or its classification, and will duly comply with all laws and governmental
regulations and contracts applicable to the Vessel and its operation.
Mortgagor will never operate the Vessel outside the navigational limits of
the insurance carried pursuant to Article 4.
(e) Mortgagor shall keep the Vessel in such condition as will entitle
her to the highest classification and rating for a Vessel of the same age,
trade and type in the American Bureau of Shipping (NABSO) or such other
classification society as shall be acceptable to Mortgagee, and, upon
request, Mortgagor shall furnish to Mortgagee a certificate by such
classification bureau or society in which the Vessel is then entered that
such classification is maintained.
(f) The Mortgagor will furnish the Mortgagee within thirty (30) days
after receipt by the Mortgagor, copies of all Certificates of Inspection
delivered by the United States Coast Guard and/or Inspection Reports with
respect to the Vessel delivered by the American Bureau of Shipping
including (as may apply) Annual Classification Surveys, Special Periodic or
Continuous Surveys, Annual Load-Line Surveys and Drydock Surveys.
Article 8. Release of Vessel.
If a libel should be filed against the Vessel or if the Vessel is otherwise
levied against, attached, arrested or taken into custody by virtue of any legal
proceedings in any court, the Mortgagor will, within thirty (30) days
thereafter, cause the Vessel to be released and the lien to be discharged.
Article 9. Payment of Charges.
The Mortgagee shall have the right, but shall be under no obligation, to
make any payments and to do any acts which, under the terms of this First
Preferred Ship Mortgage, the Mortgagor is required to make or do, but the making
of any such payment or the doing of any such act by the Mortgagee shall not
relieve the Mortgagor of any default in that respect or constitute in any
respect a waiver of such default. The Mortgagor will reimburse the Mortgagee
promptly, with interest at the rate or rates provided in the Credit Agreement,
for any and all payments and expenditures so made by it and for any and all
advances and expenses made or incurred by the Mortgagee at any time in taking
possession of Vessel or otherwise protecting its rights hereunder and for any
and all damages sustained by the Mortgagee from or by reason of any default or
defaults of the Mortgagor and such payments, expenditures, advances and expenses
shall be and are secured by this First Preferred Ship Mortgage.
Article 10. Events of Default.
7
EXHIBIT B
(a) The following shall constitute "Events of Default" hereunder:
(i) If the Mortgagor shall (a) sell or transfer, or attempt to
sell or transfer by operation of law or otherwise, its interest in the
Vessel, or (b) permit the attachment of any suit, lien, claim, charge
or encumbrance of any kind (i) in excess of $2,500,000 in the
aggregate at any time if the Vessel is in drydock, (ii) which is not
released within 60 days after it first attaches if the Vessel is in
drydock, (iii) in excess of $1,750,000 in the aggregate at any time if
the Vessel is not in drydock and the costs relate to items other than
non-drydock repairs made while the Vessel is at port, (iv) which is
not released within 45 days after it first attaches if the Vessel is
not in drydock and the costs relate to items other than non-drydock
repairs made while the Vessel is at port, (v) in excess of $500,000
in the aggregate at any time if the Vessel is not in drydock and the
costs are for non-drydock repairs made while the Vessel is at port,
and (vi) which is not released within 30 days after it first attaches
if the Vessel is not in drydock and the costs are for non-drydock
repairs made while the Vessel is at port; or
(ii) If the Mortgagor shall remove or attempt to remove the
Vessel beyond the limits of the United States, save on voyages with
the intention of returning to the United States, or shall abandon the
Vessel; or
(iii) If the Vessel shall be libeled and levied upon or taken by
virtue of any attachment or execution against the Mortgagor and such
libel or levy is not released by Mortgagor within 15 days; or
(iv) The occurrence of an "Event of Default" under the Credit
Agreement; or
(v) The title or ownership of the Vessel shall be requisitioned,
purchased or taken by the government of any country or by any
department, agency or representative thereof and there shall not have
been paid to Mortgagee an amount in cash in United States dollars
equal to the fair value of such Vessel within ninety (90) days after
such event occurs;
(b) Upon the occurrence of an Event of Default the Mortgagee may:
(i) Declare the Secured Obligations to be due and payable
forthwith, whereupon such Secured Obligations shall become and be
immediately due and payable;
(ii) Exercise all of the rights, powers and remedies in
foreclosure and otherwise given to the Mortgagee by the provisions of
Chapter 313 of title 46, United States Code, and acts amendatory
thereof and supplemental thereto;
(iii) Recover judgment for any amount due on the debt and collect
the same out of any property of the Mortgagor without its security
under this First Preferred Ship Mortgage being in any way affected or
impaired thereby;
(iv) Demand and receive all freights, hires, charter hires,
earnings/or profits of the Vessel, due or to become due from any
person whomsoever;
(v) With or without legal process re-enter and take possession of
the Vessel at any time wherever it may be found and, without being
responsible for loss or damage, hold, lease, charter, operate or
otherwise use the Vessel for such time and on such terms as the
Mortgagee may deem advisable and collect and retain all freights,
hires, earnings, and/or other moneys due or to become due and arising
therefrom, and/or if it seems desirable to the Mortgagee, and without
being responsible for loss or damage, with or without possession, sell
the Vessel free from any claim by the Mortgagor in admiralty, in
equity, at law or by statute, after first giving notice of the time
and place of sale, with a general description of the property, by
publishing such notice in such manner as may be required by applicable
rules of court and as may be reasonably calculated to give adequate
notice of the sale to potential buyers through trade publication, via
brokers, or otherwise, and by mailing a similar notice to the
Mortgagor at its
8
EXHIBIT B
last known business address on the day of first publication. Such sale
may be held at any place and at such time as the Mortgagee may
specify, and in such manner as the Mortgagee may deem advisable, and
may be conducted without bringing the Vessel to the place of sale, and
the Mortgagee may become a purchaser at the sale. From time to time
the Mortgagee may adjourn any such sale by announcement at the time
and place appointed for such sale or by any adjourned sale; and
without notice or publication, the Mortgagee may make such sale at the
time and place to which the same shall be so adjourned.
(vi) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for any and all amounts due, and collect
the same from Mortgagor and/or out of any and all property of
Mortgagor whether covered by this Mortgage or otherwise;
(vii) Commence a civil action in rem to foreclose this First
Preferred Ship Mortgage and obtain an order to sell, and sell, the
Vessel, pursuant to the provisions of the Act of November 23, 1988,
P.L. 100-710, 102 Stat. 4735, as amended, 46 U.S.C. 31325 and 31326,
or their successor provisions, or by other judicial process as may be
provided in the statutes.
(c) Mortgagor hereby consents to the appointment of a custodian of the
Vessel by Mortgagee with the costs thereof to be a cost of the sale to be
paid from the proceeds of the sale or by Mortgagor.
(d) Each and every power or remedy herein specifically given to the
Mortgagee shall be cumulative and shall be in addition to every other power
or remedy herein specifically given or now or hereafter existing at law,
in equity, in admiralty or by statute, and each and every power or
remedy, whether specifically herein given or otherwise so existing may be
exercised from time to time and as often and at such order as may be deemed
expedient by the Mortgagee, and the exercise or the beginning of the
exercise of any power or remedy shall not be deemed a waiver of the right
to exercise at the same time or thereafter any other power or remedy. No
delay or omission by the Mortgagee in the exercise of any right or power
accruing upon any Event of Default shall be construed to be a waiver of
such default or any acquiescence therein; nor shall the acceptance by the
Mortgagee of any security or of any payment after such default or any
payment on account of any past default be deemed a waiver of any right to
take advantage of any other default or of any past default not completely
cured thereby.
(e) If, at any time after an Event of Default and previous to the
actual sale of the Vessel by the Mortgagee or to any foreclosure
proceedings, the Mortgagor completely cures all Events of Default and pays
all expenses, advances and damages to the Mortgagee consequent on such
Event of Default with interest at the rate provided in the Credit
Agreement, then the Mortgagee shall accept such payment and cure and
restore the Mortgagor to its former position, but such actions shall not
affect any subsequent Event of Default, nor impair any rights consequent
thereon.
(f) The proceeds of any sale, and the net earnings of any charter,
operation or other use of the Vessel by the Mortgagee under any of the
powers herein specified, and the proceeds of any Judgment collected by the
Mortgagee for any default hereunder and the proceeds of any insurance or of
any claim for damages on account of the Vessel, received by the Mortgagee
while exercising any such power, and any and all other proceeds collected
by the Mortgagee, or in any proceedings hereunder, the application of
which has not elsewhere been specifically provided for, shall be applied as
follows:
First: To payment of all expenses and charges, including expenses of
any sale, expense of any retaking, attorney's fees, court costs, and
any other expenses made or incurred by the Mortgagee in the
protection of its rights hereunder, and to the payment of any damages
sustained by the Mortgagee from any default of the Mortgagor hereunder
with interest as provided herein; and
9
EXHIBIT B
to provide adequate indemnity against liens having priority over this
First Preferred Ship Mortgage.
Second: To the payment of the balance due and outstanding upon the
Secured Obligations or otherwise due under the Credit Agreement,
including accrued and unpaid interest to the date of such payment,
with such payment to be applied pro rata to such outstanding principal
and interest and to the payment of all other unpaid items, costs or
expenses constituting part of the Secured Obligations.
Third: Any surplus thereafter remaining shall be paid to the
Mortgagor.
(g) Any sale of the Vessel made in pursuance of this Mortgage,
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title, and interest of any nature
whatsoever of the Mortgagor therein and thereto, and shall bar the
Mortgagor, its successors and assigns, and all persons claiming by,
through, or under them. At any such sale Mortgagee or other holder of the
Note (the "holder/purchaser") may bid for and purchase such Vessel and upon
compliance with the terms of the sale may hold, retain and dispose of such
property without further accountability therefor. In case of any such sale
the holder/purchaser shall be entitled, for the purpose of making
settlement or payment for the property purchased, to use and apply the Note
or any portion thereof in order that there may be credited against the
amount remaining due and unpaid thereon the sums payable to the
holder/purchaser out of the net proceeds of such sale after allowing for
the costs and expense of sale and other charges; and thereupon the
holder/purchaser shall be credited, on account of such purchase price, with
the net proceeds that shall have been so credited upon the Note. No
purchase shall be bound to inquire whether notice has been given, or
whether any default has occurred, or as to the propriety of the sale or
as to the application of the proceeds thereof.
(h) Whenever any right to enter and take possession of the Vessel
accrues to Mortgagee, it may require the Mortgagor to deliver, and the
Mortgagor shall on demand, at its own cost and expense, deliver such Vessel
to Mortgagee as demanded. If any legal proceedings shall be taken to
enforce any rights under this Mortgage, Mortgagee shall be entitled as a
matter of right to the appointment of a receiver of the Vessel and the
freights, hire, earnings, issues, revenues, income and profits due or to
become due and arising from the operation thereof.
(i) Mortgagee is hereby appointed attorney-in-fact of the Mortgagor to
execute and deliver to any purchaser and is hereby vested with full power
and authority to make, in the name and in behalf of the Mortgagor, a good
conveyance of the title to the Vessel so sold. In the event of any sale of
the Vessel, under any power herein contained, the Mortgagor will, if and
when required by Mortgagee, execute such form of conveyance of such Vessel
as Mortgagee may direct or approve.
(j) Mortgagee is hereby appointed attorney-in-fact of the Mortgagor
upon the happening of any Event of Default, in the name of the Mortgagor
to demand, collect, receive, compromise and xxx for, so far as may be
permitted by law, all freights, hire, earnings, tolls, rents, issues,
revenues, income and profits of the Vessel and all amounts due from
underwriters under any insurance thereon as payment of losses or as return
premiums or otherwise, salvage awards and recoveries, recoveries in general
average or otherwise, and all other sums, due or to become due at the time
of the happening of any Event of Default in respect to the Vessel, or in
respect of any insurance thereof from any person whomsoever, and to make,
give and execute in the name of the Mortgagor acceptances, receipts,
releases, or other discharges for the same, whether under seal or
otherwise, and to endorse and accept in the name of the Mortgagor the
other instruments in writing with respect to the foregoing. All amounts so
received shall
10
EXHIBIT B
first be applied to operating expenses and then to unpaid interest and then
to unpaid principal on the Note.
(k) If the Mortgagor shall default in the observance or performance
of any of the covenants, conditions or agreements in this Mortgage on its
part to be performed or observed (and such default shall constitute an
Event of Default), the Mortgagee may in its discretion, but shall be under
no obligation to, do all acts and make all expenditures necessary to remedy
such default, including, without limitation of the foregoing, entry upon
the Vessel to make repairs, and the Mortgagor shall forthwith reimburse the
Mortgagee, with interest at the Interest Rate, for any and all expenditures
so made or incurred and, until the Mortgagor has so reimbursed the
Mortgagee for such expenditures, the amount thereof shall be a debt due
from the Mortgagor to the Mortgagee secured by a first priority claim on
the Vessel, provided, that the making of any such expenditure shall not
relieve the Mortgagor from the consequences of any such default. The
Mortgagor shall also forthwith reimburse the Mortgagee, with interest at
the Interest Rate, for any and all advances made or expenses of Mortgagee
at any time in taking the Vessel or otherwise protecting its rights
hereunder, and for any and all damages sustained by the Mortgagee from or
by reason of any default or defaults of the Mortgagor, and the amount of
such advances, expenses and damages shall be a debt due from the Mortgagor
to the Mortgagee secured by a first priority claim on the Vessel.
(l) In the event that the Vessel shall be arrested or detained by a
marshal or other officer of any court of law, equity or admiralty
jurisdiction or by any government or other authority, and shall not be
released from arrest or detention within thirty days from the date of
arrest or detention, the Mortgagor hereby irrevocably authorizes and
empowers the Mortgagee and its appointee or appointees, with full power of
substitution, in the name and at the expense of the Mortgagor, to apply
for, claim and receive or take possession of the Vessel with all rights and
powers that the Mortgagor might have and exercise in any such event. The
Mortgagor also irrevocably authorizes and empowers any such persons to
appear, in the name of the Mortgagor, or against the Vessel in any court
of any country or nation of the world where a suit is pending against the
Vessel, because of or on account of any alleged lien against the Vessel
from which the same has not been released, and to take such proceedings as
they or any of them may deem proper for the defense of such suit and for
the release of the Vessel therefrom in the event that the Mortgagor shall
not be taking proceedings reasonably satisfactory to Mortgagee, and in such
case all expenditures made or incurred by Mortgagee or its appointees for
the purpose of such defense or discharge shall be a debt due from the
Mortgagor, its successors and assigns, to Mortgagee, and shall be secured
by the lien of this Mortgage in like manner and extent as if the amount
and description thereof were written herein.
Article 11. Possession Prior to Default. Until one or more of the Events of
Default hereinbefore described shall happen, the Mortgagor shall retain actual
possession of the Vessel, and manage, operate and use the same and collect,
receive, take and use and enjoy the earnings, income, rents, freights, issues
and profits thereof.
Article 12. Statutory Compliance.
(a) The Mortgagor shall comply with and satisfy all applicable formalities
and provisions of the laws and regulations of the United States of America,
including but not limited to the provisions of 46 U.S.C. Chapter 313 et seq,
as amended, including without limitation the provisions of the Act of November
23, 1988, P.L. 100-710, 102 Stat. 4735, as amended, in order to perfect,
establish and maintain this First Preferred Ship Mortgage, and any supplement or
amendment thereto upon the Vessel and upon all renewals, as a first preferred
mortgage thereunder, and the Mortgagor shall not sell, mortgage, transfer, nor
merge or consolidate with any other person, firm or corporation, or dissolve,
nor change the flag, name or the port of documentation of the
11
EXHIBIT B
Vessel, without the written consent of the Mortgagee first obtained. Any such
written consent to any one sale, merger, consolidation, transfer, mortgage or
change of flag, name or port of documentation, shall not be deemed or held to
be a waiver of this provision in respect to any subsequent sale, merger,
consolidation, transfer, mortgage or change of flag, name or port of
documentation.
(b) The Mortgagor will pay and discharge, when due and payable from time to
time, all taxes, assessments, and governmental charges, fines and penalties
lawfully imposed upon the Vessel; provided, however, that the Mortgagor may omit
to pay any such tax, assessment, governmental charge, fine or penalty, so long
as it, in good faith and by appropriate legal proceedings, shall contest the
validity thereof and the Mortgagor shall set aside on its books adequate
reserves in the opinion of the Mortgagor with respect to any such tax,
assessment, charge, fine or penalty so contested, unless and until foreclosure,
distraint, sale or other similar proceedings shall have been commenced with
respect to the property which is subject to any such tax, assessment, charge,
fine or penalty. The right of the Mortgagor to contest the validity of any claim
contemplated by this Article 12 shall in no event be construed as permitting
any libel, attachment or other seizure of the Vessel, under process or color of
legal authority to remain undissolved or undischarged for a period in excess of
30 days.
Article 13. Further Assurances. In the event that this First Preferred Ship
Mortgage or the Credit Agreement, or the Note, or any provision of this First
Preferred Ship Mortgage or the Credit Agreement or the Note is deemed
invalidated, in whole or in part, by any present or future law or court
decision, the Mortgagor shall execute such other or further instruments, as in
the opinion of counsel for the Mortgagee, will carry out the true intent and
spirit of this Mortgage. From time to time, the Mortgagor shall execute such
other assurances as, in the opinion of such counsel, may be required more
effectually to subject the Vessel herein mortgaged or intended to be mortgaged
to the payment of the Credit Agreement secured by this Mortgage.
Article 14. Lawful Operation. The Mortgagor covenants and agrees to comply with
all the laws of the United States of America and/or any subdivision thereof
where the Vessel may be, pertaining to its operation. The Mortgagor will not
cause or permit the Vessel to be used in any manner contrary to law and will
not engage in any unlawful trade or carry any cargo that will expose the Vessel
to penalty, forfeiture, or capture, and will not do, or suffer or permit to be
done, anything which can or may injuriously affect the registration or
enrollment or flag of the Vessel under the laws and regulations of the United
States. Mortgagee does not authorize or consent to any act, failure or omission
on the part of the Mortgagor or any other person which would permit or give
rise to the risk of forfeiture of the Vessel for a violation of any law of the
United States or any other governmental authority.
Article 15. Copy of Entire Agreement. The Mortgagor acknowledges receipt from
the Mortgagee of a true copy of this First Preferred Ship Mortgage which
comprises the entire agreement between the parties respecting the mortgage of
the Vessel, and supersedes any and all other agreements respecting the Vessel,
except as otherwise specifically provided herein.
Article 16. Continuity of Provisions. All the covenants, stipulation and
agreements contained in this First Preferred Ship Mortgage shall be binding
upon and inure to the benefit of the Mortgagor, its successors and assigns, and
the Mortgagee, its successors and assigns. Throughout this Mortgage, the
singular shall include the plural.
Article 17. Applicable Law. This instrument shall be construed in accordance
with the statutory and maritime law of the United States, and, where such law
is silent or inapplicable, then under the laws of the Commonwealth of
Pennsylvania.
12
EXHIBIT B
Article 18. Separate Discharge. Although it is not intended that this Mortgage
include any property other than the Vessel, if any determination is made at
any time that for any reason this Mortgage does include any property other
than a "Vessel" within the meaning of Chapter 313 of title 46, United States
Code, such property may be separately discharged from the lien of this
Mortgage, but only with the consent of the Mortgagee, by the payment of .01%
of the said total amount.
Article 19. Notice. Any notice required or permitted hereunder shall be
sufficient if given in the manner provided in the Credit Agreement.
Article 20. Defined Terms. Any capitalized terms which are not otherwise defined
herein shall have the respective meanings, if any, assigned thereto in the
Credit Agreement.
Article 21. Remedies Not Exclusive. Each and every right, power and remedy
given to the Mortgagee in this Mortgage or in the other Operative Documents
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in
equity, in admiralty, or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often and in such order as may be determined by the
Mortgagee, and the exercise or the beginning of the exercise of any right, power
or remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy. No delay or omission
by the Mortgagee in the exercise of any right, power or remedy shall impair any
such right, power or remedy or be construed to be a waiver of any default or to
be any acquiescence therein nor shall the acceptance by the Mortgagee or any
Holder of any security or of any payment of or on account of the Notes maturing
after a default or of any payment on account of any past default be construed to
be a waiver of any right to take advantage of any future default or of any past
default not completely cured thereby.
13
EXHIBIT B
IN WITNESS WHEREOF, the Mortgagor has caused these presents to be
executed and attested by its duly authorized officers as of the day and year
first above written.
Attest: NPR, Inc.
------------------------------------- ----------------------------
By: By:
Title: Title:
00
XXXXXXX X
XXXXXXXXXXXXXX
XXXXXXXXXXXX XX XXXXXXXXXXXX :
COUNTY OF PHILADELPHIA :
: SS.
On the_ day of November, 1997, before me came __________________ to me
known who, being duly sworn, did depose and say that he is __________________ of
NPR, Inc., the corporation described in and which executed the foregoing
instrument and that he signed his name thereto by like order and acknowledged to
me that he executed the said Mortgage as the ___________________ of said
corporation, and that the same is the free and voluntary act and deed of said
corporation and of himself as _______________________ thereof for the uses and
purposes expressed in said Mortgage.
_____________________________
Notary Public
My commission expires:
15
