1
Exhibit 4.22
================================================================================
LOAN AGREEMENT
BY AND BETWEEN
STATIA MARINE, INC.
AND
TRANSAMERICA EQUIPMENT FINANCIAL
SERVICES CORPORATION
DATED AS OF DECEMBER 20, 2000
================================================================================
2
TABLE OF CONTENTS
PRELIMINARY STATEMENT.............................................................................................1
ARTICLE 1 -- DEFINITIONS..........................................................................................1
SECTION 1.01. DEFINITIONS...................................................................................1
ARTICLE 2 -- AMOUNT, TERMS AND REPAYMENT OF THE LOAN..............................................................8
SECTION 2.01. THE LOAN......................................................................................8
SECTION 2.02. CLOSING; DISBURSEMENT OF PROCEEDS.............................................................8
SECTION 2.03. THE NOTE......................................................................................8
SECTION 2.04. LOAN ACCOUNTING...............................................................................8
SECTION 2.05. INTEREST......................................................................................9
SECTION 2.06. PAYMENT.......................................................................................9
SECTION 2.07. VOLUNTARY PREPAYMENT..........................................................................9
SECTION 2.08. PREPAYMENT RESULTING FROM ACCELERATION........................................................9
SECTION 2.09. TAXES, ASSESSMENTS............................................................................9
SECTION 2.10. TERM..........................................................................................9
ARTICLE 3 -- CONDITIONS OF LENDING...............................................................................10
SECTION 3.01. CONDITIONS PRECEDENT TO THE LOAN.............................................................10
ARTICLE 4 -- REPRESENTATIONS AND WARRANTIES......................................................................12
SECTION 4.01. CORPORATE EXISTENCE AND POWER................................................................12
SECTION 4.02. AUTHORIZATION OF BORROWING; NO CONFLICT AS TO LAW OR AGREEMENTS..............................12
SECTION 4.03. LEGAL AGREEMENTS.............................................................................12
SECTION 4.04. FINANCIAL CONDITION..........................................................................12
SECTION 4.05. NO MATERIAL ADVERSE CHANGE...................................................................12
SECTION 4.06. LABOR MATTERS; ACTS OF GOD...................................................................13
SECTION 4.07. LITIGATION...................................................................................13
SECTION 4.08. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS...............................................13
SECTION 4.09. COMPLIANCE WITH LAWS AND REGULATIONS.........................................................13
SECTION 4.10. TITLE TO PROPERTIES..........................................................................13
SECTION 4.11. LIENS........................................................................................13
SECTION 4.12. ACCURACY OF INFORMATION......................................................................13
SECTION 4.13. TAXES........................................................................................14
SECTION 4.14. OTHER AGREEMENTS.............................................................................14
SECTION 4.15. SUBSIDIARIES AND OWNERSHIP OF STOCK..........................................................14
SECTION 4.16. OPERATION OF BUSINESS........................................................................14
SECTION 4.17. ENVIRONMENTAL MATTERS........................................................................14
ARTICLE 5 -- AFFIRMATIVE COVENANTS...............................................................................15
SECTION 5.01. FINANCIAL STATEMENTS; OTHER INFORMATION......................................................15
SECTION 5.02. COMPLIANCE CERTIFICATE.......................................................................16
SECTION 5.03. INSURANCE....................................................................................17
SECTION 5.04. PRESERVATION OF CORPORATE EXISTENCE..........................................................17
SECTION 5.05. INSPECTION...................................................................................17
SECTION 5.06. MAINTENANCE OF PROPERTIES....................................................................17
SECTION 5.07. MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT..................................................17
SECTION 5.08. DISCHARGE OF INDEBTEDNESS....................................................................17
SECTION 5.10. UNINSURED LOSS...............................................................................17
SECTION 5.11. OWNERSHIP OF BORROWER........................................................................18
Page i
3
ARTICLE 6 -- NEGATIVE COVENANTS..................................................................................18
SECTION 6.01. MERGER OR CONSOLIDATION; ASSET SALES.........................................................18
SECTION 6.03. LIENS AND ENCUMBRANCES.......................................................................18
ARTICLE 7 -- EVENTS OF DEFAULT, RIGHTS AND REMEDIES..............................................................18
SECTION 7.01. EVENTS OF DEFAULT............................................................................18
SECTION 7.02. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT....................................................20
ARTICLE 8 -- MISCELLANEOUS.......................................................................................20
SECTION 8.01. NO WAIVER; CUMULATIVE REMEDIES...............................................................20
SECTION 8.02. AMENDMENTS...................................................................................21
SECTION 8.03. RIGHT OF SETOFF..............................................................................21
SECTION 8.04. ADDRESSES FOR NOTICES........................................................................21
SECTION 8.05. COSTS, EXPENSES AND INDEMNIFICATION..........................................................22
SECTION 8.06. EXECUTION IN COUNTERPARTS....................................................................23
SECTION 8.07. BINDING EFFECT; ASSIGNMENT...................................................................23
SECTION 8.08. GOVERNING LAW................................................................................23
SECTION 8.09. JUDICIAL PROCEEDINGS.........................................................................23
SECTION 8.10. SEVERABILITY OF PROVISIONS...................................................................24
SECTION 8.11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.......................................24
SECTION 8.12. HEADINGS.....................................................................................24
SECTION 8.13. JURY TRIAL WAIVER............................................................................24
Page ii
4
LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered into this 20th day of December,
2000, is by and between STATIA MARINE, INC., an exempted company organized and
existing under the laws of the Cayman Islands ("Borrower") and TRANSAMERICA
EQUIPMENT FINANCIAL SERVICES CORPORATION, a Delaware corporation, Riverway II,
West Office Tower, 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Lender").
PRELIMINARY STATEMENT
A. Borrower is organized and existing under the laws of the Cayman
Islands, and is the owner of the vessel known as M/V STATIA RESPONDER,
registered under the Maritime Laws of the Republic of Vanuatu, Gross Tons: 996
ITC, Net Tons: 298 ITC, bearing Certificate of Registration Number 211, as more
particularly described hereinafter (the "Vessel"); and,
B. Borrower has requested that Lender provide Borrower with a loan in
the principal amount of Seven Million and 00/100 Dollars ($7,000,000.00) (the
"Loan") to be used for general corporate purposes; and
C. Lender has agreed to make the Loan to Borrower, subject to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, Borrower
and Lender hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article shall have the meanings assigned
to such terms in this Article, and include the plural as well as the singular;
and
(b) All accounting terms not otherwise defined herein shall have the
meanings assigned to them in accordance with Generally Accepted Accounting
Principles (as defined below).
(c) Computation of Time Periods in this Agreement shall mean the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Page 1
5
"ACKNOWLEDGMENT" means the Letter of Acknowledgment and Consent to
Assignment of Bareboat Charter Agreement dated December 20, 2000,
acknowledged by Charterer on December 20, 2000.
"AGREEMENT" means this Loan Agreement, as amended, supplemented and
modified from time to time in accordance with the terms hereof.
"APPLICABLE LAW" means the laws of the State of Illinois (or any other
jurisdiction whose laws are mandatorily applicable notwithstanding the
parties' choice of Illinois law) or the laws of the United States of
America, whichever laws allow the greater interest, as such laws now
exist or may be changed or amended or come into effect in the future.
"ASSIGNMENT OF CHARTER" means that certain Assignment of Bareboat
Charter Agreement dated as of December 20, 2000, executed by Borrower
in favor of Lender assigning all of Borrower's rights under the Charter
Agreement.
"ASSIGNMENT OF INSURANCE" means that certain Assignment of Insurance
Claims dated as of December 20, 2000, executed by Borrower in favor of
Lender, assigning all of Borrower's rights with respect to any
insurance claims involving the Vessel.
"BORROWER" means Statia Marine, Inc., an exempted company organized and
existing under the laws of the Cayman Islands, together with its
successors and assigns.
"BUSINESS DAY" means any day other than a Saturday, Sunday or public
holiday or the equivalent for banks in Illinois.
"CHARTER AGREEMENT" means that certain Bareboat Charter Party regarding
the Vessel dated as of December 20, 2000 between Borrower, as owner,
and Statia Terminals N.V. , as Charterer, as the same may be modified,
amended or supplemented from time to time.
"CHARTERER" means Statia Terminals N.V., a corporation organized and
existing under the laws of the Netherlands Antilles.
"CLOSING DATE" means the date on which this Agreement and the other
Loan Documents are executed and delivered to Lender.
"COLLATERAL" means, collectively, the Vessel, all of Borrower's
property and interests encumbered by the Assignment of Charter and the
Assignment of Insurance from time to time during the term of this
Agreement, and all substitutions and replacements therefor. It is the
intent of Borrower and Lender that the Collateral shall secure all of
the Obligations.
Page 2
6
"DISTRIBUTIONS" in respect of any corporation means and includes: (i)
the payment of any dividends or other distributions on capital stock of
the Borrower (except distributions in such stock) and (ii) the
redemption or acquisition of securities unless made contemporaneously
from the net proceeds of the sale of securities.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EVENT OF DEFAULT" means the occurrence of any one or more of the
events set forth in Section 7.01 of this Agreement.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" OR "GAAP" means those
accounting principles as in effect in the United States of America on
the date of, and consistent with those followed in the preparation of,
the financial statements referred to in Section 4.04 hereof.
"GOVERNMENTAL AUTHORITY" shall mean any nation, state, sovereign or
government, any federal, regional, state, local or political
subdivision and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"GUARANTOR" means Statia Terminals Group N.V., a limited liability
company organized and existing under the laws of the Netherlands
Antilles, STANDING ALONE AND NOT CONSOLIDATED WITH ANY OF ITS
SUBSIDIARIES ALL AS MORE FULLY PRESENTED IN THE FINANCIAL STATEMENTS OF
GUARANTOR WHICH ARE ATTACHED HERETO AS EXHIBIT "A".
"GUARANTY" means that certain Guaranty executed by the Guarantor and
dated the date of this Agreement.
"INDEBTEDNESS" means all items of indebtedness which, in accordance
with Generally Accepted Accounting Principles, would be deemed a
liability of a Person as of the date as of which such indebtedness is
to be determined, and shall also include all indebtedness and
liabilities of others assumed or guaranteed by such Person or in
respect of which such Person is secondarily or contingently liable,
whether by reason of any agreement to acquire such indebtedness, to
supply or advance sums, or otherwise. Without limiting the scope of the
foregoing, such term shall include (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) all obligations to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (d) all lease obligations
which are required to be capitalized for financial reporting purposes
in accordance with GAAP, (e) all debts secured by any mortgage, lien,
pledge, attachment, charge, or other security interest or encumbrance
of any kind in respect of any property or upon the income or profits
therefrom, whether or not such debt is assumed by the party granting
such security, and (f) all debt of third persons guaranteed by a party.
"LENDER" Transamerica Equipment Financial Services Corporation, a
Delaware corporation, together with its successors and assigns.
Page 3
7
"LIEN" means any preferred ship or other mortgage, deed of trust,
pledge, security interest, hypothecation, assignment, deposit
arrangements, encumbrance, lien (statutory or other), or preference,
priority, or other security agreement or preferential arrangement,
charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement), any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code, the Ship Mortgage Act or
comparable law of any jurisdiction (including, without limitation, the
Republic of Vanuatu or the Netherlands Antilles) to evidence any of the
foregoing, but excluding any Permitted Liens.
"LIQUID INVESTMENTS" means:
(a) securities issued or directly and fully guaranteed or
insured by the United States;
(b) bankers acceptances or time deposits and certificates of
deposit with maturities of not more than one hundred eighty (180) days
from the date of acquisition thereof ("bank debt securities"), which
are either issued by (i) any bank or (ii) any other bank or trust
company which has a combined capital surplus and undivided profit of
not less than $500,000,000, if at the time of deposit or purchase, such
bank debt securities are rated not less that "A" (or the then
equivalent) by S&P or Moody's, and
(c) commercial paper with maturities of not more than one
hundred eighty (180) days from the date of acquisition thereof issued
by (A) a bank or (B) any other Person if at the time of purchase such
commercial paper is rated not less that "A-2" (or the then equivalent)
by S&P or not less than "P-2" (or the then equivalent) by Moody's;
(d) repurchase or reverse purchase agreements relating to
investments described in clauses (a), (b) and (c) above with a market
value at least equal to the consideration paid in connection therewith,
with any Person who regularly engages in the business of entering into
repurchase agreements and has a combined capital surplus and undivided
profit of not less than $500,000,000, if at the time of entering into
such agreement the debt securities of such Person are rated not less
than "A" (or the equivalent) by S&P or of Moody's; and
(e) such other instruments as the Borrower may request and the
Lender may approve in writing, which approval will not be unreasonably
withheld.
"LOAN" has the meaning set forth in the Preliminary Statement to this
Agreement.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
Guaranty, the Security Documents, including all exhibits and schedules
to such documents.
Page 4
8
"MATERIAL ADVERSE CHANGE" means, with respect to any Person, a material
adverse change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise)
of such Person taken as a whole, and which has a material impairment of
the ability of Borrower, Guarantor or Chaterer, or any one of them, to
repay or perform the Obligations.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a material
adverse effect on the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise)
of such Person taken as a whole, and which has a material impairment of
the ability of Borrower, Guarantor or Charterer, or any one of them, to
repay or perform the Obligations.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor to
its business.
"NET CASH PROCEEDS" means, with respect to any sale, transfer or other
disposition of any of Borrower's or any of its Subsidiaries' Property
(including the sale or transfer of stock or other equity interest by
Borrower or such Subsidiary) all cash and Liquid Investments received
by Borrower or any Guarantor from such sale, transfer or other
disposition after (a) payment of, or provision for, all brokerage
commissions and other reasonable out-of-pocket fees and expenses
actually incurred; (b) payment of any outstanding obligations relating
to such Property paid in connection with, and necessary for, any such
sale, transfer, or other disposition; and (c) the amount of reserves
recorded in accordance with GAAP for indemnity or similar obligations
of the Borrower and the Subsidiaries directly related to such sale,
transfer or other disposition.
"NOTE" means the promissory note made and subscribed by Borrower to the
order of Lender, dated as of December 20, 2000, in the original
principal sum of Seven Million and 00/100 Dollars ($7,000,000.00),
together with any amendments thereto and renewals, replacements,
refinancings and consolidations thereof.
"OBLIGATIONS" means all indebtedness, obligations and liabilities of
Borrower under this Agreement, the Note or any of the Security
Documents, whether on account of principal, interest, indemnities, fees
(including, without limitation, attorneys' fees, remarketing fees,
origination fees, collection fees and all other professionals' fees),
costs, expenses, taxes or otherwise.
"PAYMENT DATE" means the first day of each month, said dates being the
dates on which principal and interest shall be payable as specified in
the Note and on which interest rates on the Note shall be adjusted.
Page 5
9
"PERMITTED LIENS" means:
(a) Liens for taxes, assessments or other charges the payment
of which is not past due or the validity of which is being contested,
with notice to Lender, in good faith and by appropriate legal
proceedings which stay the collection of such taxes, assessments or
other charges and the enforcement of such Liens, provided adequate
reserves have been established on the books of Borrower;
(b) Liens of carriers and warehousemen and similar liens
incurred in the ordinary course of business for sums that are not past
due or the validity of which is being contested in good faith,
including, but not limited to, liens for crew's wages and salvage,
including contract salvage and liens for general average, provided
adequate reserves have been established on the books of Borrower
(c) Liens incurred in ordinary course of business in
connection with workers' compensation, unemployment insurance or other
forms of insurance or benefits;
(d) Any attachment or judgment Lien, unless the judgment it
secures shall not, within thirty (30) days after the entry thereof,
have been discharged or execution thereof stayed pending appeal, or
shall not have been discharged within thirty (30) days after expiration
of any such stay; and
(e) Liens required by the terms of this Agreement.
"PERSON" means any individual, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, unaffiliated
corporation or any government or any agency or political subdivision
thereof.
"PREFERRED SHIP MORTGAGE" shall mean that certain First Preferred Ship
Mortgage dated December 20, 2000, by Borrower in favor of Lender
encumbering the Vessel, to be recorded in the Office of the Deputy
Commissioner of Maritime Affairs of the Republic of Vanuatu, as
amended, supplemented and modified from time to time in accordance with
the terms thereof.
"REQUIREMENTS OF LAW" shall mean, as to any Person, the charter and
bylaws or other organizational or governing documents of such Person,
and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject, including, without
limitation, the Securities Act of 1933, the Securities Exchange Act of
0000, Xxxxxxxxxx X, X, U and X of the Federal Reserve Board, and any
certificates of occupancy, zoning ordinances, building, environmental
or land use ordinance, law, rule, or regulation, or occupational safety
or health law, rule or regulation.
"S&P" means Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc. or any successor to its business.
Page 6
10
"SECURITY DOCUMENTS" means, collectively, the Charter Agreement, the
Preferred Ship Mortgage, the Assignment of Charter, the Assignment of
Insurance, the Acknowledgment and all other security agreements, pledge
agreements, mortgages, deeds of trust, collateral assignments, pledge
agreements, financing statements, insurance policies, vessel surveys,
appraisals and any other agreements or certificates now or hereafter
delivered to evidence, secure or guarantee the payment and/or
performance of the Obligations.
"SUBSIDIARY" means, as to any Person, a corporation of which shares of
stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority
of the board of directors or other manager 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 such Person.
"TERMINATION DATE" means that date by which all payments of principal
and interest, all other sums, and all duties and obligations owing or
to be discharged under the Loan Documents and the Security Documents,
or any extensions thereof, must be made in full or completely
performed.
"THREE (3) MONTH LIBOR RATE" means the variable rate of interest
determined by the Lender and adjusted monthly on each Payment Date,
which rate shall be equal to the three (3) month rate for "London
InterBank Offered Rates" as published in the Money Rates section of The
Wall Street Journal on the immediately preceding Payment Date. In the
event that the London InterBank Offered Rates becomes unavailable at
any time during the term of the Note, then Lender may select and
designate a comparable substitute index rate after notice to the
Borrower.
"VESSEL" shall mean the Vessel M/V Statia Responder, which consists of
996 gross tons (ITC), 298 net tons (ITC), bears Official Number 211,
and whose home hailing port is Port Villa, Vanuatu, together with all
engines, machinery, masts, boats, anchors, cables, chains, rigging,
tackle, apparel, furniture, spare parts and gear and all other
appurtenances appertaining or belonging thereunto, whether now owned or
hereafter acquired, and any and all additions, improvements and
replacements hereafter made in or to the Vessel, or any part thereof,
or in or to the aforesaid equipment and appurtenances.
Page 7
11
ARTICLE 2
AMOUNT, TERMS AND REPAYMENT OF THE LOAN
SECTION 2.01. THE LOAN. Lender agrees to make the Loan to Borrower, on the terms
and subject to the conditions set forth herein, and in the Loan Documents, as
determined by Lender from time to time in its reasonable discretion. The Loan
shall be funded and disbursed to Borrower on the Closing Date, upon satisfaction
of the conditions set forth in Section 3.01 of this Agreement.
SECTION 2.02. CLOSING; DISBURSEMENT OF PROCEEDS. The closing shall be held at
the offices of Lender or Lender's counsel, or such other location as Borrower
and Lender may mutually agree upon, on the Closing Date. Disbursement of the
Loan proceeds shall be by bank wire transfer to an account of Borrower or any
other Person designated to Lender in writing by Borrower or by check payable to
the order of Borrower or any other Person designated to Lender in writing by
Borrower, all in accordance with a pay proceeds letter delivered to Lender. The
proceeds of the Loan shall be used by Borrower for general corporate purposes.
SECTION 2.03. THE NOTE. The Borrower's obligation to repay the Loan shall be
evidenced by and repayable with interest in accordance with the terms of the
Promissory Note dated December 20, 2000 (the "Note"), payable to the order of
Lender. Principal on the Note shall be payable in Seventy-One (71) equal and
consecutive monthly payments of NINETY-SEVEN THOUSAND TWO HUNDRED TWENTY-TWO AND
22/100 DOLLARS ($97,222.22) each, payable on the first day of each month,
commencing on February 1, 2001, with the seventy-second and final installment of
all outstanding principal and interest being due and payable on January 1, 2007.
Commencing on February 1, 2001, and continuing on each Payment Date thereafter,
Borrower shall pay interest in arrears to Lender on the unpaid principal amount
on the Note, from and including the date hereof until paid in full at a rate per
annum equal to the Three (3) Month LIBOR Rate plus Three and Twenty
One-Hundredths percent (3.20%) per annum, which rate shall be adjusted monthly
on each Payment Date, based upon the Three (3) Month LIBOR Rate in effect on the
immediately preceding Payment Date; PROVIDED, HOWEVER, that from the date of
funding of the Loan until February 1, 2001, the interest rate on the Note shall
be Nine and Seventy-four One-Hundredths percent (9.74%) per annum. Interest on
the Note shall be computed on the basis of a 360-day year based on the actual
number of days elapsed and shall be payable in arrears. All payments under the
Note shall be made in lawful money of the United States of America and in
immediately available funds.
SECTION 2.04. LOAN ACCOUNTING. Lender shall maintain, in accordance with its
usual and customary practice, an account or accounts evidencing the outstanding
indebtedness of Borrower under the Note and the amount of principal and interest
payable and paid from time to time by Borrower under the Note. In any legal
action or proceeding respecting this Agreement or the Note, the entries made in
such account or accounts shall be conclusive evidence of the existence, amounts,
and terms of the obligations of Borrower therein or thereon recorded, absent
manifest error.
Page 8
12
SECTION 2.05. INTEREST. Borrower shall pay interest on the principal balance
from time to time outstanding on the Note, in accordance with the terms more
fully set forth therein. Interest shall accrue on the Note commencing on the
date of funding and shall continue until such time as the entire principal
balance thereof is fully repaid, together with all other Obligations hereunder
and on such other terms as are specified herein and in the Note.
SECTION 2.06. PAYMENT. Except as Lender or holder of the Note may otherwise
direct in writing, Borrower agrees to make all payments directly to Lender or to
the holder of the Note from time to time at such address as Lender or such
holder shall specify and in accordance with the terms of payment set forth in
the Note. All payments of principal and interest due under the Note and of any
other amounts due hereunder shall be made to Lender or the holder of the Note in
immediately available funds by not later than 2:00 p.m., Eastern Standard Time,
on the due date thereof without any deduction or offset whatsoever. Whenever any
payment to be made under this Agreement or under the Note shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.
SECTION 2.07. VOLUNTARY PREPAYMENT. Borrower shall have the right to prepay the
principal amount outstanding on the Note, in whole or in part, subject to the
conditions more fully set forth in the Note.
SECTION 2.08. PREPAYMENT RESULTING FROM ACCELERATION. If Lender shall elect as
one of its remedies acceleration of payment of the balance owing under the Note
pursuant to the terms thereof, or otherwise, Borrower shall pay a premium
determined in accordance with the computation set forth in the Note as to all
amounts then payable under the accelerated Note.
SECTION 2.09. TAXES, ASSESSMENTS, ETC. Borrower shall be responsible for, and
shall promptly pay and discharge, all taxes, fees, duties and assessments that
may be payable by or imposed upon Lender arising out of the Loan Documents or
the Security Documents. Notwithstanding the forgoing, Borrower shall not be
liable for or required to pay or reimburse Lender any income or franchise taxes
imposed at any time upon Lender by any taxing authority in any jurisdiction,
whether any such jurisdiction is in the United States or any foreign country;
PROVIDED, HOWEVER, that Lender shall be furnished with opinions of Cayman
Islands counsel and Netherlands Antilles counsel stating that there will be no
income or franchise taxes imposed upon Lender by any taxing authority in the
aforesaid jurisdictions as a result of the mortgages, security interests,
pledges and other rights granted to Lender pursuant to the Security Documents.
SECTION 2.10. TERM. This Agreement shall remain in effect so long as any sums
are owing or any duties or Obligations remain to be performed by Borrower to or
for the benefit of Lender under the Loan Documents.
Page 9
13
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO THE LOAN. The obligation of Lender to make
the Loan hereunder is subject to the condition precedent that Lender shall have
received, on or before the Closing Date (unless otherwise indicated), all of the
following, each dated (unless otherwise indicated) as of the Closing Date, in
form and substance satisfactory to Lender in its sole discretion:
(a) the Note, properly executed on behalf of Borrower;
(b) each of the other Loan Documents, properly executed on behalf of
Borrower or Guarantor, as the case may be;
(c) copies of the Memorandum of Association and Articles of Association
of Borrower, certified by an authorized officer of Borrower as being true and
correct copies thereof;
(d) copies of the Articles of Incorporation of Guarantor and Charterer,
respectively, certified by an authorized officer of Guarantor or Charterer, as
applicable, as being true and correct copies thereof;
(e) a signed copy of a certificate of an authorized officer of
Borrower, which shall certify the names of the officers of Borrower authorized
to execute and deliver this Agreement and the other Loan Documents, and other
documents or certificates to be delivered pursuant to the Loan Documents by
Borrower or any of Borrower's officers, together with the true signatures of
such officers. Lender may conclusively rely on such certificate until Lender
shall receive a further certificate of an authorized officer of Borrower
canceling or amending the prior certificate and submitting the signatures of the
officers named in such further certificate;
(f) signed copies of a certificate of authorized officers of each of
Guarantor and Charterer, respectively, which shall certify the names of the
officers of Guarantor or Charterer, as applicable, authorized to execute and
deliver the Guaranty or the Charter Agreement, as applicable, or any other
documents or certificates which may be required under this Agreement or any of
the other Loan Documents, together with the true signatures of such officers.
Lender is hereby authorized to conclusively rely on such certificate until
Lender shall receive a further certificate of an authorized officer of Guarantor
or Charterer canceling or amending the prior certificate and submitting the
signature of the officers named in such further certificate.
(g) opinions of counsel to the Borrower covering various matters of law
with respect to (i) the State of Illinois, (ii) the Cayman Islands, British West
Indies, and (iii) the Republic of Vanuatu, which opinions shall be in form and
substance reasonably satisfactory to Lender.
Page 10
14
(h) copies of the respective corporate resolutions of Borrower and
Guarantor authorizing and approving the Loan and the execution and delivery of
the applicable Loan Documents, certified by the respective Secretary of Borrower
and Guarantor as being a true and correct copy thereof;
(i) a copy of the corporate resolution of Charterer authorizing the
execution and delivery of the Charter, the Acknowledgment and any other
documents related thereto;
(j) a good standing certificate with respect to Borrower, issued as of
a recent date by the Secretary of State or other appropriate and authorized
official of Borrower's respective jurisdiction of incorporation;
(k) Guaranty Agreement executed by Guarantor, with the Guarantor
providing a full and unconditional Guaranty of all Obligations of Borrower under
this Agreement and the Note, which shall guaranty the Obligations on a joint and
several basis;
(l) an opinion of counsel to Guarantor, which opinion shall be in form
and substance reasonably satisfactory to Lender;
(m) an opinion of counsel to Charterer, which opinion shall be in form
and substance reasonably satisfactory to Lender;
(n) duly executed and filed Security Documents establishing in Lender,
as determined by Lender's counsel, to be received by Lender prior to the
disbursement of any Loan proceeds; it being agreed that Lender is under no
obligation to disburse any proceeds until it receives satisfactory evidence of
its first preferred mortgage position on the Vessel;
(o) evidence that all insurance policies required under any of the Loan
Documents and all other documents which may be required thereunder, are in full
force and effect;
(p) all accrued and unpaid fees and expenses payable hereunder or
pursuant to the terms hereof;
(q) evidence satisfactory to Lender regarding ownership and
documentation of the Vessel and confirming that all licenses have been obtained
by Borrower and are in full force and effect to operate the Vessel according to
their intended use.
(r) such other documents, certification, acknowledgments or opinions of
counsel or other experts respecting the Loan Documents as Lender shall
reasonably request.
Page 11
15
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower, with the knowledge that Lender is relying thereon in
executing this Agreement and making the Loan, represents and warrants the
following to Lender as of the date hereof for the entire term of this Agreement
or at the closing, as applicable:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. Borrower is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and is duly licensed or qualified to transact business in all
jurisdictions where the character of the property owned or leased or the nature
of the business transacted by said party makes such licensing or qualification
necessary. Borrower has all requisite power and authority, corporate or
otherwise, to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under this Agreement or any of
the other Loan Documents, as applicable.
SECTION 4.02. AUTHORIZATION OF BORROWING; NO CONFLICT AS TO LAW OR AGREEMENTS.
The execution, delivery and performance by Borrower of the respective Loan
Documents to which it is a party, and the borrowing under this Agreement, have
been duly authorized by all necessary corporate action and do not and will not
(i) require any consent or approval of the respective stockholders of Borrower,
or any authorization, consent or approval by any domestic or foreign
governmental department, commission, board, bureau, agency or instrumentality,
(ii) violate any provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect having applicability to Borrower or of
the Memorandum of Association and Articles of Association of Borrower, or (iii)
at the time of closing, result in a material breach of or constitute a material
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which Borrower is a party or by which Borrower or its
property may be materially bound or affected.
SECTION 4.03. LEGAL AGREEMENTS. This Agreement and each of the other Loan
Documents to which Borrower is a party constitute the legal, valid and binding
obligations of Borrower, enforceable against Borrower, in accordance with their
respective terms. The Guaranty constitutes the legal, valid and binding
obligation of Guarantor enforceable against such Guarantor in accordance with
its terms.
SECTION 4.04. FINANCIAL CONDITION. Borrower shall furnish to Lender the
financial statements required to be furnished in accordance with the terms of
this Agreement. Such financial statements fairly present the respective
financial condition of Borrower on the dates thereof and the results of
operations for the periods then ended, and were prepared in accordance with
GAAP. There are no liabilities of Borrower, fixed or contingent, which are
material and are not reflected in the financial statements or the notes thereto,
other than liabilities arising in the ordinary course of business since
inception.
SECTION 4.05. NO MATERIAL ADVERSE CHANGE. There has been no Material Adverse
Change in the business, assets, liabilities, business prospects, properties or
condition (financial or otherwise) of Borrower since its inception.
Page 12
16
SECTION 4.06. LABOR MATTERS; ACTS OF GOD. As of the closing, no attempt to
organize the employees of Borrower, and no labor disputes, strikes or walkouts
affecting the operations of Borrower is pending, or, to Borrower's knowledge,
threatened, planned or contemplated. Likewise, neither the business nor the
properties of the Borrower are presently affected by any fire, explosion,
accident, drought, storm, hail, earthquake, embargo, act of God or of any public
enemy or any other casualty (whether or not covered by insurance), which would
have a Material Adverse Effect Borrower.
SECTION 4.07. LITIGATION. As of the closing, except as set forth on Exhibit "B"
attached hereto, there are no actions, suits or proceedings pending (including
any environmental claims or other matters) or, to the knowledge of Borrower,
threatened against or affecting Borrower or the properties of Borrower, before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which, if determined adversely to Borrower
would have a Material Adverse Effect on Borrower.
SECTION 4.08. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. As of the closing,
except for Permitted Liens, Borrower has satisfied all respective judgments, and
Borrower 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 on Borrower.
SECTION 4.09. COMPLIANCE WITH LAWS AND REGULATIONS. Borrower, in the conduct of
its business affairs, has complied in all material respects with the
requirements of all applicable laws and regulations, noncompliance with which
would have a Material Adverse Effect on Borrower.
SECTION 4.10. TITLE TO PROPERTIES. Borrower has good, valid and marketable title
to all its material properties and assets, both real and personal, including,
without limitation, the Vessel, and all material property reflected in the
financial statements of Borrower referred to in Section 4.04, above, (except for
such material property as has been sold or otherwise disposed of in the ordinary
course of business since the date thereof), free from any Liens, except as
described in such financial statements.
SECTION 4.11. LIENS. The assets of Borrower which comprise the Collateral,
including, without limitation, the Vessel, are not and will not be subject to
any Lien or the terms of any security agreement during the term hereof, other
than any Permitted Liens.
SECTION 4.12. ACCURACY OF INFORMATION. All written and electronic information
supplied to Lender by or on behalf of Borrower with respect to any properties of
Borrower (whether prior to entering into this Agreement, in this Agreement, or
after entering into this Agreement), is and shall be true and correct in all
material respects; and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading.
Page 13
17
SECTION 4.13. TAXES. Borrower has filed or caused to be filed all tax returns
which are required to be filed by it pursuant to all applicable federal, state
and local laws, regulations, or orders. Borrower has paid, or made provision for
the payment of, all taxes which have or may have become due pursuant to said
returns or otherwise or pursuant to any assessment received by Borrower. The
charges, accruals, and reserves in respect of income taxes on the books of
Borrower are adequate. Borrower does not know of any proposed material tax
assessment against it or any extension of time necessary for the assessment of
federal, state or local taxes of Borrower which is in effect or has been
required or applied for, except as disclosed in the financial statements
furnished to Lender in accordance with Section 4.04 hereof.
SECTION 4.14. OTHER AGREEMENTS. Borrower is not a party to any indenture, loan,
or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction which could have a Material
Adverse Effect on Borrower. Borrower is not in default in any material respect
in the performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material to
its business to which it is a party which could reasonably be expected to have a
Material Adverse Effect on Borrower.
SECTION 4.15. SUBSIDIARIES AND OWNERSHIP OF STOCK. Upon the request of the
Lender, Borrower shall furnish to Lender a complete and accurate list of the
Subsidiaries and Affiliates of Borrower, showing the jurisdiction of
incorporation of each and showing the percentage of Borrower's ownership of the
outstanding stock of each Subsidiary or Affiliate and the percentage of each
Affiliate's ownership of the outstanding capital stock of Borrower.
SECTION 4.16. OPERATION OF BUSINESS. Borrower possesses all material licenses,
permits, franchises, patents, copyrights, trademarks, and trade names, or rights
thereto, to conduct its business substantially as now conducted and as presently
proposed to be conducted, and Borrower is not in violation of any valid rights
of others with respect to any of the foregoing.
SECTION 4.17. ENVIRONMENTAL MATTERS. As of the closing, except for those matters
disclosed on Exhibit "B", attached hereto:
(a) The operations of Borrower and its Subsidiaries comply in all
material respects with all applicable environmental, health and safety
requirements;
(b) Borrower and each of its Subsidiaries has obtained all
environmental, health and safety permits necessary for its operations and all
such permits are in good standing and Borrower and each of its Subsidiaries is
in compliance with all terms and conditions of such permits;
(c) Neither Borrower nor any of its Subsidiaries, nor any of their
property or operations, whether presently or previously owned or operated, is
subject to any order from or agreement with any Governmental Authority or
private party or any judicial or administrative proceeding or investigations
respecting any environmental, health or safety Requirements of Law, or is the
subject of any investigation by any Governmental Authority evaluating the need
for remedial action to respond to a material release or threatened release of a
contaminant into
Page 14
18
the environment, or is subject to any remedial action or other liabilities or
costs arising from the release or threatened release of a contaminant into the
environment which could reasonably be expected to have a Material Adverse Effect
on Borrower's ability to repay or perform the Obligations;
(d) None of the operations of Borrower or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging a violation of any
environmental, health or safety Requirement of Law which could reasonably be
expected to have a Material Adverse Effect on Borrower's ability to repay or
perform the Obligations;
(e) None of the present or, to the knowledge of Borrower, past
operations of Borrower or its respective Subsidiaries is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a release or threatened release of a contaminant
into the environment which could reasonably be expected to have a Material
Adverse Effect on Borrower's ability to repay or perform the Obligations;
(f) Neither Borrower nor any of its respective Subsidiaries has
received any notice or claim to the effect that it is or might be liable to any
Person as a result of the release or threatened release of a contaminant into
the environment or as a result of exposure to asbestos or to any other hazardous
substance, which would (i) result in liability in excess of workers'
compensation coverage and (ii) have a Material Adverse Effect on Borrower's
ability to carry out its Obligations.
ARTICLE 5
AFFIRMATIVE COVENANTS
So long as any Obligations shall remain unpaid or Borrower shall have
any unfulfilled or undischarged Obligations under this Agreement or any of the
other Loan Documents, Borrower will comply with the following requirements:
SECTION 5.01. FINANCIAL STATEMENTS; OTHER INFORMATION. Borrower will deliver to
Lender:
(a) As soon as available, but not later than one hundred twenty (120)
days after the end of each fiscal year of the Borrower and its consolidated
Subsidiaries, if any, the balance sheet, income statement and statements of cash
flows and shareholders equity set forth on a comparative basis with the prior
year, where applicable, for Borrower and its consolidated Subsidiaries, if any
(the "Financial Statements") for such year, prepared by Borrower and reviewed by
independent certified public accountants.
(b) As soon as available, but not later than sixty (60) days after the
end of each fiscal quarter of each fiscal year of Borrower, consolidated and
unaudited Financial Statements (excluding cash flows and shareholder equity) as
of the end of such fiscal quarter.
Page 15
19
(c) immediately after the commencement thereof, notice in writing of
all litigation (except for Permitted Liens) and of all proceedings before any
state or federal court or any governmental or regulatory agency, bureau or
commission affecting Borrower or Charterer or any Subsidiary thereof of the type
described in Section 4.07 of this Agreement or which seek a monetary recovery
against such party in excess of Two Hundred Fifty Thousand Dollars ($250,000) or
Five Hundred Thousand Dollars in the aggregate, along with, if requested in
writing by Lender, an opinion of counsel to such party regarding the
circumstances underlying and merit of such litigation or proceedings;
(d) as promptly as practicable upon request of Lender (but in any event
not later than fifteen (15) Business Days following the last Business Day of
each calendar quarter during the term hereof), a certificate in a form
reasonably acceptable to Lender specifying, as of the date of such certificate,
(i) the total amounts outstanding or payable under any loan or credit agreements
between Borrower and its respective banks, cooperative associations, credit or
finance companies; and to any trade creditors of Borrower; and (ii) any loan or
credit agreements entered into between Borrower and any respective bank,
cooperative or finance company not previously reported by Borrower to Lender,
stating, as to each such agreement, the total amounts borrowable under said
agreement, the date of execution and term of said agreement, and any amounts
outstanding under said agreement;
(e) as promptly as practicable (but in any event not later than five
(5) Business Days) after Borrower obtains actual knowledge of the occurrence of
any event which constitutes an Event of Default (as hereinafter defined) or
would have a Material Adverse Effect on Borrower and constitute an Event of
Default with the passage of time or the giving of notice or both, notice of such
occurrence, together with a detailed statement by an officer of Borrower of the
steps being taken by Borrower to cure such Event of Default;
(f) from time to time and promptly upon the request of Lender, such
data, certificates, reports, statements, opinions of counsel and other experts,
documents or further information or assurances regarding (i) the Loan Documents,
or (ii) the business, assets, liabilities, financial condition, results of
operations or business prospects of Borrower as Lender may request, in each case
in form and substance, and certified in a manner reasonably satisfactory to
Lender.
SECTION 5.02. COMPLIANCE CERTIFICATE. In connection with each delivery of the
financial statements required pursuant to Section 5.01(a) and 5.01(b) of this
Agreement, Borrower will deliver to Lender a certificate, signed by the chief
financial officer of Borrower stating that (i) said officer has reviewed the
aforesaid financial statements and the provisions of this Agreement, (ii) the
aforesaid financial statements have been prepared in accordance with GAAP and
are fairly stated in all material respects, and (iii) there is no condition or
event at the end of such fiscal period or at the time of such certificate which
constitutes an Event of Default or specifying the nature and period of existence
of any such Event of Default, at the end of such fiscal period, all in
reasonable detail, and (iv) said officer has reviewed the terms of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision, a review in reasonable detail of the transactions and
condition of Borrower and its Subsidiaries during the accounting period covered
by such financial statements and
Page 16
20
demonstrating, in reasonable detail, compliance during and at the end of such
accounting period with the financial covenants set forth in this Agreement, if
any. The aforesaid certificate shall include calculations showing compliance
with any financial covenants together with a comparison of actual and required
results.
SECTION 5.03. INSURANCE. Borrower shall obtain and maintain insurance on the
Vessel in accordance with the terms of the Security Documents. Borrower shall
promptly provide Lender with evidence of such insurance coverage. Additionally,
Borrower shall provide not less than twenty (20) days advance written
notification to Lender in the event of cancellation or material change in the
terms of such coverage requested by Borrower.
SECTION 5.04. PRESERVATION OF CORPORATE EXISTENCE. Borrower and Charterer shall
each preserve and maintain its respective corporate existence and all of its
respective rights, privileges, licenses, patents and franchises; provided,
HOWEVER, that neither Borrower nor Charterer shall be required to preserve any
such rights, privileges, licenses, patents, and franchises if (i) its Board of
Directors shall determine that the preservation thereof is no longer desirable
or necessary in the conduct of the current business of such corporation and (ii)
the loss thereof would not reasonably be expected to have a Material Adverse
Effect on such corporation.
SECTION 5.05. INSPECTION. At any reasonable time and from time to time, upon
prior notice to Borrower, Lender or any agents or representatives of Lender
shall be allowed to examine and make and prepare copies of and abstracts from
the records and books of account of, and visit and inspect the Collateral and
the other properties of, Borrower and to discuss the affairs, finances and
accounts of Borrower with any officer of Borrower.
SECTION 5.06. MAINTENANCE OF PROPERTIES, ETC. Borrower shall maintain and
preserve the Collateral and all of its other properties necessary or useful in
the proper conduct of its current business in good mechanical condition and
running order, ordinary wear and tear excepted.
SECTION 5.07. MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Borrower shall keep
accurate records and books of account, in accordance with GAAP, consistently
applied.
SECTION 5.08. DISCHARGE OF INDEBTEDNESS. Borrower shall promptly pay and
discharge any and all Indebtedness and lawful claims which, if unpaid, might
become a Lien upon the Collateral or other property of Borrower, except such as
may in good faith be contested or disputed or for which arrangements for
deferred payment have been made, provided appropriate reserves are maintained,
to the satisfaction of Lender, for the eventual payment thereof.
SECTION 5.09. EVIDENCE OF OWNERSHIP. Borrower shall deliver to Lender at any
time or times, upon request of Lender, all invoices, bills of sale, or other
documents, reasonably necessary to evidence Borrower's ownership of the
Collateral.
SECTION 5.10. UNINSURED LOSS. Borrower shall give Lender written notice of any
uninsured loss suffered by Borrower through fire, theft, liability or property
damage in excess of an aggregate of Two Hundred Fifty Thousand Dollars
($250,000).
Page 17
21
SECTION 5.11. OWNERSHIP OF BORROWER. There shall be no sale, transfer, pledge,
donation, hypothecation, alienation or other encumbrance of any of the
outstanding shares of Borrower.
ARTICLE 6
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid or Borrower shall have
any commitment hereunder or under any of the other Loan Documents, Borrower
agrees that, without the prior written consent of Lender, Borrower will not:
SECTION 6.01. MERGER OR CONSOLIDATION; ASSET SALES. Borrower will not, and will
not permit any of its Subsidiaries to,
(a) merge or consolidate with or into any other Person, except that (i)
Borrower may merge with any of its wholly owned Subsidiaries and (ii) any of
Borrower's wholly owned Subsidiaries may merge with another of Borrower's wholly
owned Subsidiaries, provided that immediately after giving effect to any such
proposed transaction no Event of Default would exist and, in the case of any
such merger to which Borrower is a party, Borrower or Guarantor is the surviving
corporation or
(b) sell, lease, transfer, or otherwise dispose of any of its property
or assets other than (i) sales of assets in the ordinary course of business, or
(ii) sales of equipment no longer used or useful in the conduct of Borrower's
business.
SECTION 6.02. CHANGE IN BUSINESS. Borrower shall not, nor shall it permit any of
its Subsidiaries to, materially change the character of their business as
presently and normally conducted or engage in any type of business not related
to their business as presently and normally conducted.
SECTION 6.03. LIENS AND ENCUMBRANCES. Permit or suffer to exist or to be created
any Lien upon the Collateral (except such Lien as may be granted to Lender and
the Permitted Liens).
ARTICLE 7
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
SECTION 7.01. EVENTS OF DEFAULT. "Event of Default", wherever used herein, means
any one of the following events:
(a) default by Borrower in the payment of any principal of or interest
on the Note or any other amount when it becomes due hereunder or under the Note
or any other Loan Documents (whether at maturity, by reason of notice of
prepayment or acceleration or otherwise) and any such default shall continue for
ten (10) days unremedied; or
Page 18
22
(b) default in the performance, or breach, of any covenant or agreement
of Borrower under this Agreement or any of the other Loan Documents, or a
default by Guarantor under the Guaranty Agreement or a default under, or
termination of, the Charter Agreement and such default shall continue unremedied
for a period of thirty (30) days from the date of written notice thereof from
Lender; or
(c) default in the performance, or breach, of any material covenant or
agreement of Borrower in any loan or credit agreement or any note issued
pursuant thereto or default in the payment of any sum due under any such
agreement or any note issued pursuant thereto (whether payment is due at
maturity, by reason of notice of prepayment or acceleration or otherwise) and
such default shall continue unremedied for a period of fifteen (15) days from
the date of notice thereof and such default shall have a Material Adverse Effect
on Borrower; or
(d) Borrower or any Subsidiary thereof shall be adjudicated a bankrupt
or insolvent, or admit in writing its inability to pay its debts as they mature,
or make an assignment for the benefit of creditors; or Borrower or any
Subsidiary thereof shall apply for or consent to the appointment of any
receiver, trustee, or similar officer for it or for all or any substantial part
of its property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of Borrower or any Subsidiary thereof and
such appointment shall continue undischarged for a period of sixty (60) days; or
Borrower shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation or similar proceeding relating to it under the
laws of any jurisdiction; or any such proceeding shall be instituted (by
petition, application or otherwise) against Borrower or any Subsidiary thereof
and shall remain undismissed for a period of sixty (60) days; or any judgment,
writ, warrant of attachment or execution or similar process shall be issued or
levied against a substantial part of the property of Borrower or any Subsidiary
thereof and such judgment, writ, or similar process shall not be released,
vacated or fully bonded within ninety (90) days after its issue or levy; or
(e) any material representation or warranty made by Borrower in this
Agreement or any of the other Loan Documents, or in any certificate, instrument,
or statement contemplated by or made or delivered pursuant to or in connection
with this Agreement, shall prove to be incorrect or misleading in any material
respect and such default shall continue unremedied for a period of thirty (30)
days from the date of notice thereof from Lender; or
(f) Borrower, or any Subsidiary thereof suffers a final judgment in
excess of Two Hundred Fifty Thousand Dollars ($250,000) against it which, within
sixty (60) days from the date such judgment is entered, shall not have been
discharged or execution thereof stayed pending appeal unless (i) such judgment
in the reasonable opinion of Lender is adequately covered by insurance; or (ii)
adequate accruals with respect to such judgment have been established in
accordance with GAAP and the aggregate amount of all such judgments at any time
during the term hereof, not adequately covered by insurance is not at any time
in excess of Two Hundred Fifty Thousand Dollars ($250,000); or
Page 19
23
(g) a default under any bond, debenture, note or other evidence of
indebtedness of Borrower (other than to Lender) or under any indenture or other
instrument under which any such evidence of indebtedness has been issued or by
which it is governed which, in the opinion of Lender, would have a Material
Adverse Effect on Borrower and such default shall continue unremedied for a
period of fifteen (15) days from the date of notice thereof from Lender; or
(h) a sale, hypothecation or other disposition of any beneficial
interest in any class of voting stock of the Borrower which, in the opinion of
Lender causes a Material Adverse Change with respect to Borrower.
SECTION 7.02. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of
an Event of Default or at any time thereafter until such Event of Default is
cured to the satisfaction of Lender, Lender may exercise any or all of the
following rights and remedies:
(a) Lender may, by notice to Borrower, declare the entire unpaid
principal amount of the Note, all interest accrued and unpaid thereon, and all
other amounts payable under this Agreement (including, but not limited to, any
prepayment amount payable under Section 2.07 hereof) to be forthwith due and
payable, whereupon the Note, all such accrued interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrower;
(b) Lender may proceed to protect and enforce this Agreement and the
Note by suit or suits or proceedings in equity, at law or in bankruptcy, and
whether for the specific performance of any covenant or agreement herein
contained or in execution or aid of any power herein granted or for the recovery
of judgment for the indebtedness hereby owed, or for the enforcement of any
other proper legal or equitable remedy available under applicable law; and
(c) Lender may exercise any other rights and remedies available to it
by law or under any of the other Loan Documents.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of
Lender in exercising any right, power or remedy hereunder 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 hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by or available under law.
Page 20
24
SECTION 8.02. AMENDMENTS, ETC. No amendment, modification, termination or waiver
of any provision of this Agreement, the Note or any other Loan Documents or
consent to any departure by Borrower therefrom shall be effective unless the
same shall be in writing and signed by the authorized representatives of Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Any such amendment, modification,
termination or waiver shall bind and benefit Borrower and Lender and their
respective successors and assigns, subject to the consent requirements set forth
in Section 8.07 hereof. No notice to or demand on Borrower in any case shall
entitle Borrower to any other or further notice or demand in similar or other
circumstances. Except as may be expressly provided to the contrary in this
Agreement or in any of the other Loan Documents (as applicable), in any instance
under this Agreement or any of the other Loan Documents where the approval,
consent, or exercise of judgment of Lender is requested or required, the
granting or denial of such approval or consent and the exercise of such judgment
shall be within the sole discretion of Lender, and Lender shall not, for any
reason or to any extent, be required to grant such approval or consent or to
exercise such judgment in any particular manner, regardless of the
reasonableness of the request or the action or judgment of Lender.
SECTION 8.03. RIGHT OF SETOFF. As collateral security for the repayment of
Obligations, Borrower hereby grants to Lender and Lender's successors and
assigns the right to apply, at any time and from time to time should an Event of
Default exist hereunder, any and all obligations owing from Lender to Borrower
toward repayment of any sums owing from Borrower to Lender hereunder or under
the Note.
SECTION 8.04. ADDRESSES FOR NOTICES, ETC. Except as otherwise expressly provided
herein, all notices, requests, demands and other communications provided for
hereunder shall be in writing and sent by certified mail (return receipt
requested) or nationally recognized overnight courier service delivered to the
applicable party at its address indicated below:
IF TO BORROWER:
Statia Marine, Inc.
Post Xxxxxx Xxx 000, Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxx
Grand Cayman, Cayman Islands
British West Indies
Telephone: 000-000-0000
Facsimile: 000-000-0000
Page 21
25
With a copy to:
Statia Terminals, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Vice President and Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
IF TO LENDER:
Transamerica Equipment Financial Services Corporation
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: Region Credit Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Transamerica Equipment Financial Services Corporation
Riverway II, West Office Tower
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Legal Department
or, as to each party, at such other address or to the attention of such other
representative as shall be designated by such party in a written notice to the
other party provided in accordance with the terms of this Section. All such
notices, requests, demands and other communications shall, when mailed or
transmitted (postage or other charges pre-paid), be effective when deposited in
the mails or with the applicable courier service, addressed as aforesaid.
SECTION 8.05. COSTS, EXPENSES AND INDEMNIFICATION. Borrower agrees to pay all
costs and expenses in connection with the preparation, execution, delivery and
enforcement of this Agreement and the other Loan Documents or any other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for Lender with respect
thereto and with respect to advising Lender as to its rights and
responsibilities under this Agreement. Borrower agrees to pay on demand all
losses, costs and expenses, if any (including reasonable counsel fees and
expenses), incurred in connection with the preservation of any rights of Lender
under, or the enforcement of, or legal advice in respect of, the rights or
responsibilities of Lender under this Agreement, the Note, the Security
Documents, and any other documents delivered hereunder including, without
limitation, reasonable losses, costs and expenses sustained by Lender as a
result of any failure by Borrower to perform or observe its obligations
contained herein or in any of the Note or any other document related thereto.
Borrower further agrees to indemnify and hold harmless Lender from and against
any and all damages, losses, liabilities, costs and expenses resulting from,
related to
Page 22
26
or connected with this Agreement, the Note, the Security Documents and any
document or instrument delivered in connection herewith or the transactions
contemplated hereby.
SECTION 8.06. EXECUTION IN COUNTERPARTS. This Agreement may be executed
separately by Borrower and Lender in any number of counterparts, each of which,
when so executed and delivered, shall be deemed to be an original and all of
which, taken together, shall constitute but one and the same instrument.
SECTION 8.07. BINDING EFFECT; ASSIGNMENT. This Agreement and the Note shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower may not assign its
rights hereunder or thereunder or any interest herein or therein without the
prior written consent of Lender, which consent shall not be unreasonably
withheld.
SECTION 8.08. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS WITHOUT REGARD TO ANY RULES, REGULATIONS OR LAWS
CONCERNING CONFLICTS OF LAWS.
SECTION 8.09. JUDICIAL PROCEEDINGS. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR SECURITY DOCUMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN XXXX COUNTY, OR OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING, (A) ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (B) THE RIGHT TO INTERPOSE
ANY NONCOMPULSORY SETOFF, COUNTERCLAIM OR CROSS-CLAIM. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR IT SPECIFIED
IN SECTION 8.04 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION,
SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH RESPECT TO RIGHTS AND
REMEDIES.
Page 23
27
SECTION 8.10. SEVERABILITY OF PROVISIONS. Any provision of this Agreement which
is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
SECTION 8.11. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES, ETC. All
warranties, representations and agreements made by Borrower herein or in the
Notes or by any person in any certificate or other document or instrument
required to be delivered in connection with this Agreement shall be considered
to have been relied upon by Lender and shall survive the issuance and delivery
to Lender of the Note regardless of any investigation made by Lender or on its
behalf, and shall terminate only upon the full and final payment and performance
by Borrower of the Loan. All statements in any such certificate or other
document or instrument shall constitute representations and warranties by
Borrower hereunder.
SECTION 8.12. HEADINGS. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 8.13. JURY TRIAL WAIVER. THE BORROWER AND THE LENDER IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE SECURITY
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO LENDER
ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING UPON THE FOREGOING
WAIVER IN THEIR FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL COUNSEL AND HAS
KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Remainder of Page Intentionally Left Blank]
Page 24
28
IN WITNESS WHEREOF, the undersigned parties hereto have executed and
delivered this Agreement as of the date first above written.
BORROWER:
STATIA MARINE, INC.
----------------------------------------
By: Xxxxx X. Xxxxxxx
Title: Vice President and Treasurer
Page 25
29
IN WITNESS WHEREOF, the undersigned parties hereto have executed and
delivered this Agreement as of the date first above written.
LENDER:
TRANSAMERICA EQUIPMENT FINANCIAL
SERVICES CORPORATION
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
Page 26
30
ACKNOWLEDGMENT AND CONSENT BY GUARANTOR
Guarantor hereby (i) appears and declares that it has read the Loan Agreement in
its entirety, (ii) acknowledges that the foregoing Loan Agreement is the same
Loan Agreement referenced in the Guaranty executed by Guarantor in favor of
Transamerica Equipment Financial Services Corporation, and (iii) agrees and
consents to the terms, conditions and obligations set forth therein.
GUARANTOR:
STATIA TERMINALS GROUP N.V.
----------------------------------------
By: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President
Page 27