$95,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of February 9, 1999
Among
GENMAR XXXXXXXXXXX LIMITED,
GENMAR AGAMEMNON LIMITED,
GENMAR MINOTAUR LIMITED, and
GENMAR AJAX LIMITED
AS BORROWERS AND AS GUARANTORS
and
AJAX LIMITED PARTNERSHIP
AS A GUARANTOR
and
THE INITIAL LENDERS NAMED HEREIN
AS INITIAL LENDERS
and
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH
AS COLLATERAL AGENT AND AS SECURITY TRUSTEE
and
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH
AS ADMINISTRATIVE AGENT
EXHIBIT 10.24
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 9, 1999
among GENMAR XXXXXXXXXXX LIMITED ("XXXXXXXXXXX"), a company organized under the
laws of the Cayman Islands, GENMAR AGAMEMNON LIMITED ("AGAMEMNON"), a company
organized under the laws of the Cayman Islands, GENMAR MINOTAUR LIMITED
("MINOTAUR"), a company organized under the laws of the Cayman Islands, and
GENMAR AJAX LIMITED ("AJAX"), a company organized under the laws of the Cayman
Islands (each a "BORROWER" and together the "BORROWERS"), Ajax Limited
Partnership (the "PARENT", and together with the Borrowers, the "GUARANTORS"), a
limited partnership organized under the laws of the Cayman Islands, the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "INITIAL LENDERS"), and CHRISTIANIA
BANK OG KREDITKASSE ASA, New York Branch ("CBNY"), as collateral agent (together
with any successor collateral agent appointed pursuant to Article VIII, the
"COLLATERAL AGENT") for the Lenders (as hereinafter defined), as security
trustee (together with any successor trustee appointed pursuant to Article XI of
the Master Vessel Trust Agreement, the "SECURITY Trustee") and as administrative
agent (together with any successor administrative agent appointed pursuant to
Article VII, the "ADMINISTRATIVE AGENT") for the Lenders.
PRELIMINARY STATEMENTS:
(1) The Borrowers are parties to the Floating Rate Bridge Loan Facility
Agreement dated May 15, 1998 (the "EXISTING BRIDGE AGREEMENT") with Christiania
Bank og Kreditkasse ASA, Skandinaviska Enskilda Xxxxxx XX (publ), Union Bank of
Norway and De Nationale Investeringsbank N.V., as banks, and Christiania Bank og
Kreditkasse ASA, as Agent and as Security Trustee for said banks.
(2) The Parent entered into a Guaranty dated May 15, 1998 (the
"EXISTING GUARANTY") in favor of Christiania Bank og Kreditkasse ASA, as Agent,
whereby the Parent agreed to guarantee the obligations of each of the Borrowers
under the Existing Bridge Agreement.
(3) The Equity Investors (as hereinafter defined) will contribute
certain funds to the Parent (the "CONTRIBUTION"), which in turn will downstream
such funds as a capital contribution to the Borrowers which together with cash
on hand of the Borrowers in excess of $2,000,000 will equal an aggregate amount
of at least $24,025,000. The Borrowers will use the proceeds of such capital
contribution and such cash on hand together with additional cash on hand in
excess of $1,000,000 in aggregate (after payment of certain fees and expenses)
to repay in part the indebtedness outstanding under the Existing Bridge
Agreement (the "REPAYMENT").
(4) The Parent will amend and restate its limited partnership agreement
to provide for the Contribution and for a restructuring of the partnership
interests among the limited partners of the Parent (the "AMENDMENT" and,
together with the Contribution, the Repayment and the other transactions
contemplated hereby, the "TRANSACTION").
(5) The Borrowers have requested that the Lenders restructure the
outstanding principal amount owed by the Borrowers to the Lenders under the
Existing Bridge Agreement remaining after the Repayment (the "EXISTING DEBT")
and the Lenders have indicated their willingness to extend the maturity of such
Existing Debt upon the terms and conditions stated herein.
(6) The Borrowers have requested that the Lenders enter into this
Agreement to amend and restate the Existing Bridge Agreement in order to permit
the extension of the maturity of the Existing Debt, it being understood that all
prior claims, rights and remedies of the Lenders and the Agents under the
Existing Bridge Agreement and documents and agreements executed in connection
therewith shall not be extinguished by this amended and restated Agreement
unless consented to in writing by all of the Lenders and the Agents. The Lenders
have indicated their willingness to so amend and restate the Existing Bridge
Agreement upon the terms and conditions stated herein.
(7) The Existing Guaranty is hereby amended and restated by the
guaranty contained in Article VII of this Agreement.
(8) The Guarantors will receive substantial direct and indirect benefit
from this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with The
Bank of New York, located in New York, New York, Account No.
8026120277, ABA No. 000000000 or SWIFT address XXXXXX0X for account:
Christiania Bank New York Branch, or such other account as the
Administrative Agent shall specify in writing to the Lenders.
"ADVANCE" has the meaning specified in Section 2.01.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Interests of such Person or to direct or
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cause the direction of the management and policies of such Person, whether
through the ownership of Voting Interests, by contract or otherwise.
"AGAMEMNON" has the meaning specified in the recital of parties to this
Agreement.
"AGENTS" means, collectively, the Collateral Agent, the Administrative
Agent and the Security Trustee.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap
and Derivatives Association, Inc. (the "MASTER AGREEMENT"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement
was being terminated early on such date of determination, (ii) such Loan
Party or Subsidiary was the sole "Affected Party", and (iii) the
Administrative Agent was the sole party determining such payment amount
(with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the xxxx-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the
Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement
determined by the Administrative Agent based on the settlement price of
such Hedge Agreement on such date of determination, or (c) in all other
cases, the xxxx-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of
a Loan Party party to such Hedge Agreement determined by the Administrative
Agent as the amount, if any, by which (i) the present value of the future
cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the
present value of the future cash flows to be received by such Loan Party or
Subsidiary pursuant to such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the respective meanings set
forth in the above described Master Agreement.
"AJAX" has the meaning specified in the recital of parties to this
Agreement.
"AMENDMENT" has the meaning specified in the Preliminary Statements.
"APPLICABLE MARGIN" means, with respect to each Advance during the
Initial Period, 2 1/2% per annum, and thereafter, 2% per annum.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit C hereto.
"ASSIGNMENT OF ACCOUNTS" has the meaning specified in Section
3.01(a)(vi).
"ASSIGNMENT OF CHARTERPARTIES" has the meaning specified in Section
3.01(a)(iv)(I).
"ASSIGNMENT OF EARNINGS" has the meaning specified in Section
3.01(a)(v).
"ASSIGNMENT OF INSURANCES" has the meaning specified in Section
3.01(a)(vii).
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"BORROWER" and "BORROWERS" each has the meaning specified in the
recital of parties to this Agreement.
"BORROWER SUBLIMIT" means, with respect to each Borrower, the amount
set forth opposite the name of such Borrower on Schedule 1.01(b) hereto.
"BORROWER'S ACCOUNT" means, in respect of any Borrower, the deposit
account of such Borrower maintained by such Borrower with CBNY at 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, having the account number set
opposite such Borrower below:
BORROWER ACCOUNT NO.
-------- -----------
Xxxxxxxxxxx 000-00-00-000
Agamemnon 000-00-00-000
Minotaur 000-00-00-000
Ajax 000-00-00-000
"BORROWING" means a borrowing consisting of simultaneous Advances made
by the Lenders.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in New York, New York, Oslo, Norway and The
Hague, The Netherlands and, if the applicable Business Day relates to any
Advances, on which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum
of, without duplication, (a) all expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be,
in accordance with GAAP, reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person or have a useful
life of more than one year plus (b) the aggregate principal amount of all
Debt (including Obligations under Capitalized Leases) assumed or incurred
in connection with any such expenditures.
"CAPITALIZED LEASES" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means time deposits or other similar deposit
accounts with the Administrative Agent, to the extent owned by any Borrower
free and clear of all Liens other than Liens created under the Collateral
Documents and having a maturity of not greater than 180 days from the date
of acquisition thereof.
"CBNY" has the meaning specified in the recital of parties to this
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
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"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"CHANGE OF CONTROL" means the occurrence of any of the following: (a)
Xxxxx X. Xxxxxxxxxxxxx shall at any time for any reason cease to be active
in the management of any of the Borrowers or the Parent or cease to own
100% of the Equity Interests in the Parent held by him on the Effective
Date as set forth on Schedule 4.01(a) hereto, or (b) Genmar Ajax Ltd. shall
cease to be a general partner of the Parent, or (c) the Parent shall at any
time for any reason cease to be the record and beneficial owner of 100% of
the ownership interests of any Borrower or the beneficial owner of 100% of
the ownership interests of any entity that controls any Borrower, or (d)
any Person or two or more Persons acting in concert other than the Equity
Investors shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result
in its or their acquisition of control over Voting Interests of the Parent
(or other securities convertible into such Voting Interests) representing
20% or more of the combined voting power of all Voting Interests of the
Parent.
"CHARTERPARTIES" means:
(a) a Tanker Time Charter Party dated January 16, 1998 between
Shikako S.A., as owner, and Amoco Oil Company, as charterer, with
respect to the motor tanker EMILIE (since renamed GENMAR AGAMEMNON), as
amended pursuant to an Addendum dated May 1998 by and between Shikako
S.A., Amoco Oil Company and Agamemnon; and
(b) any other tanker time charter party entered into by any
Borrower from time to time;
in each case, as amended, to the extent permitted under the Loan Documents.
"COLLATERAL" means all collateral referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Collateral Agent for the benefit of the Secured
Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of parties
to this Agreement.
"COLLATERAL DOCUMENTS" means the Mortgages, the Security Agreement, the
Share Mortgage, the Assignments of Earnings, the Assignments of Accounts,
the Assignment of Insurances, the Assignment of Charterparties and any
other agreement that creates or purports to create a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties.
"COMMERCIAL MANAGEMENT AGREEMENTS" has the meaning specified in Section
3.01(a)(iv)(B).
"COMMITMENT" means, with respect to any Lender at any time, the amount
set forth opposite such Lender's name on Schedule I hereto or, if such
Lender has entered into one or more Assignment and Acceptances, set forth
for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 9.07(d) as such Lender's "Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.04.
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"CONFIDENTIAL INFORMATION" means information that any Loan Party
furnishes to any Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to such
Agent or such Lender from a source other than the Loan Parties.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.
"XXXXXXXXXXX" has the meaning specified in the recital of parties to
this Agreement.
"CONSTITUTIVE DOCUMENTS" means, with respect to any Person, the
certificate of incorporation or registration (including, if applicable,
certificate of change of name), articles of incorporation or association,
memorandum of association, charter, bylaws, partnership agreement, trust
agreement, joint venture agreement, limited liability company operating or
members agreement, joint venture agreement or one or more similar
agreements, instruments or documents constituting the organization or
formation of such Person.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the Obligation of a
primary obligor, (b) the Obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any Obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
"CONTRIBUTION" has the meaning specified in the Preliminary Statements.
"CURRENT ASSETS" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve
is proper in accordance with GAAP.
6
"CURRENT LIABILITIES" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the
date of determination (excluding (i) any Debt renewable or extendible, at
the option of such Person, to a date more than one year from such date or
arising under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date and (ii) all amounts of Funded Debt of such Person required
to be paid or prepaid within one year after the date of determination) and
(b) all other items (including taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such
Person.
"DEBT" of any Person means, without duplication for purposes of
calculating financial ratios, (a) all indebtedness of such Person for
borrowed money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under Capitalized
Leases, (f) all Obligations of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect
of any Equity Interests in such Person or any other Person or any warrants,
rights or options to acquire such capital stock, valued, in the case of
Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference PLUS accrued and unpaid dividends, (h)
all Obligations of such Person in respect of Hedge Agreements, valued at
the Agreement Value thereof, (i) all Contingent Obligations of such Person
and (j) all indebtedness and other payment Obligations referred to in
clauses (a) through (i) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such indebtedness or
other payment Obligations.
"DEBT FOR BORROWED MONEY" of any Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a Consolidated
balance sheet of such Person.
"DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time
elapse or both.
"DOLLARS" and "$" each means lawful money of the United States of
America.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis, of (a) net income (or net loss), (b) interest expense, (c) income
tax expense, (d) depreciation expense and (e) amortization expense, in each
case of the Parent and its Subsidiaries, determined in accordance with GAAP
for such period.
"EFFECTIVE DATE" means the first date on which the conditions set forth
in Article III shall have satisfied.
7
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of at least
$500,000,000; (d) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $500,000,000; (e) a commercial
bank organized under the laws of any other country that is a member of the
OECD or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow or a
political subdivision of any such country, and having a combined capital
and surplus of at least $500,000,000, so long as such bank is acting
through a branch or agency located in the country in which it is organized
or another country that is described in this clause (e); (f) the central
bank of any country that is a member of the OECD; (g) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at
least $500,000,000; and (h) any other Person approved by the Administrative
Agent and, unless a Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 9.07, the Borrower, such
approval not to be unreasonably withheld or delayed; PROVIDED, HOWEVER,
that neither any Loan Party nor any Affiliate of a Loan Party shall qualify
as an Eligible Assignee under this definition.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, treaty, international convention,
protocol, code, order, writ, judgment, injunction, decree or judicial or
agency interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"EQUITY INTERESTS" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such
Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition
from such Person of such shares (or such other interests), and other
ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting
or nonvoting, and whether or not such shares, warrants, options, rights or
other interests are authorized or otherwise existing on any date of
determination.
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"EQUITY INVESTORS" means the Persons set forth on Schedule 4.01(x)
hereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrowers and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Advances
comprising part of the same Borrowing, an interest rate per annum equal to
the rate per annum obtained by dividing (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period for a period equal to such
Interest Period (PROVIDED that, if for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Interest Period
for all Advances comprising part of the same Borrowing, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period; PROVIDED, HOWEVER, if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic
mean of all such rates) by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for all
Advances comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by reference to
which the interest rate on Advances is determined) having a term equal to
such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCESS AMOUNT" means, on any Business Day, an amount equal to the
amount by which (a) the aggregate amount of the Borrowers' cash on hand
(including, without limitation, amounts
9
on deposit in any deposit account of any Borrower) exceeds (b) the sum
of (i) $3,000,000 and (ii) the next scheduled payment of principal and
interest payable by the Borrowers.
"EXISTING BRIDGE AGREEMENT" has the meaning specified in the
Preliminary Statements.
"EXISTING DEBT" has the meaning specified in the Preliminary
Statements.
"EXISTING GUARANTY" has the meaning specified in the Preliminary
Statements.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments, amounts released from the Oaktree Account upon termination of the
Oaktree Escrow Agreement and any purchase price adjustment received in
connection with any purchase agreement; PROVIDED, HOWEVER, that an
Extraordinary Receipt shall not include cash receipts received from
proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or payments in
respect of loss or damage to equipment, fixed assets or real property are
applied (or in respect of which expenditures were previously incurred) to
replace or repair the equipment, fixed assets or real property in respect
of which such proceeds were received in accordance with the terms of the
Loan Documents, including, without limitation, the loss payable clauses set
forth in the Assignments of Insurances, so long as such application is made
within 6 months after the occurrence of such damage or loss or such longer
period approved by the Administrative Agent.
"FACILITY" means, at any time, the aggregate amount of the Lenders'
Commitments at such time.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"FISCAL YEAR" means a fiscal year of the Parent and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"FUNDED DEBT" of any Person means Debt in respect of the Advances, in
the case of the Borrowers, and all other Debt of such Person that by its
terms matures more than one year after the date of determination or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination.
10
"GAAP" has the meaning specified in Section 1.03.
"GENMAR AGAMEMNON" means M/T "Genmar Agamemnon" (ex. "Emilie"), an
aframax crude tanker built in 1995 at Samsung yard of approximately 96,213
dwt registered in the name of Agamemnon as owner in the Liberian Ship
Registry.
"GENMAR AJAX" means M/T "Genmar Ajax" (ex. "Xxxxx"), an aframax crude
tanker built in 1996 at Samsung yard of approximately 96,213 dwt registered
in the name of Ajax as owner in the Liberian Ship Registry.
"GENMAR AJAX LTD." means Genmar Ajax Ltd., a New York corporation and
managing general partner of the Parent.
"GENMAR XXXXXXXXXXX" means M/T "Genmar Xxxxxxxxxxx" (ex. "Artois"), an
aframax crude tanker built in 1992 at Kurushima yard of approximately
106,000 dwt registered in the name of Xxxxxxxxxxx as owner in the Liberian
Ship Registry.
"GENMAR MINOTAUR" means M/T "Genmar Minotaur" (ex. "Xxxxxxxxx"), an
aframax crude tanker built in 1995 at Samsung yard of approximately 96,213
dwt registered in the name of Minotaur as owner in the Liberian Ship
Registry.
"GMC" means General Maritime Corporation, a New York corporation.
"GUARANTEED OBLIGATIONS" has the meaning specified in Section 7.01(a)
hereof.
"GUARANTORS" has the meaning specified in the recital of parties to
this Agreement.
"GUARANTY" means the guaranty of the Guarantors contained in Article
VII hereof.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements.
"INDEMNIFIED PARTY" has the meaning specified in Section 9.04(b).
"INITIAL LENDERS" has the meaning specified in the recital of parties
to this Agreement.
"INITIAL PERIOD" means the period from the Effective Date until the
18-month anniversary of the Effective Date.
"INTEREST COVERAGE RATIO" means, at any date of determination, the
ratio of (a) Consolidated EBITDA to (b) interest payable on all Debt for
Borrowed Money, in each case, of
11
or by the Parent and its Subsidiaries during the most recent Measurement
Period for which financial statements are required to be delivered to the
Lenders pursuant to Section 5.03(b) or (c), as the case may be.
"INTEREST PERIOD" means, for each Advance comprising part of the same
Borrowing, the period commencing on the date of such Advance and ending on
the last day of the period selected by such Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the
last day of the period selected by such Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one or three
months, as such Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; PROVIDED,
HOWEVER, that:
(a) no Borrower may select any Interest Period with respect to any
Advance that ends after any principal repayment installment date
hereunder unless, after giving effect to such selection, the aggregate
principal amount of Advances having Interest Periods that end on or
prior to such principal repayment installment date shall be at least
equal to the aggregate principal amount of Advances hereunder due and
payable on or prior to such date;
(b) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
PROVIDED, HOWEVER, that, if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "DEBT" (other than
the Loan Parties' Obligations with respect to the Oaktree Claim) in respect
of such Person.
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"LENDERS" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 9.07 for so long as such Initial
Lender or Person, as the case may be, shall be a party to this Agreement.
"LIBERIAN SHIP REGISTRY" means the Office of the Deputy Commissioner of
Maritime Affairs of the Republic of Liberia at the port of New York.
"LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including,
without limitation, the lien or retained security title of a conditional
vendor and any easement, right of way or other encumbrance on title to real
property.
"LOAN DOCUMENTS" means (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) the Master Vessel Trust Agreement and (e) the Collateral
Documents, in each case as amended.
"LOAN PARTIES" means the Borrowers and the Guarantors.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MARKET VALUE" means, at any date of determination, (a) in the case of
any Vessel, the arithmetic mean of valuations, made by any three
shipbrokers appointed by the Borrower from among (i) Fearnleys, Oslo,
Norway, (ii) X.X. Xxxxxx Shipbrokers a.s., Oslo, Norway, (iii) Braemar
Valuations Ltd., London, England, (iv) Xxxxxxxxx & Stemoco Shipbrokers,
Oslo, Norway, and (v) X. Xxxxxxxx & Company Ltd., London, England, of a
Vessel on the basis of a voluntary cash sale between a willing buyer and a
willing seller, free of any charter, employment contract or pool agreement
as set forth in the appraisals most recently delivered to the
Administrative Agent pursuant to Section 5.01 prior to such date, and (b)
in the case of other assets, the market value of such assets calculated in
a manner determined by the Lenders, in their reasonable discretion, as of
such date.
"MASTER VESSEL TRUST AGREEMENT" has the meaning specified in Section
3.01(a)(iv)(H).
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries (it
being understood and agreed by the parties hereto that the diminution in
Market Value of the Vessels during the period from May 15, 1998 through
October 20, 1998 shall not, in and of itself, constitute a Material Adverse
Change).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries (it
being understood and agreed by the parties hereto that the diminution in
Market Value of the Vessels during the period from May 15, 1998 through
October 20, 1998 shall not, in and of itself, constitute a Material Adverse
Effect), (b) the rights and remedies of any Agent or any Lender under any
Transaction Document or (c) the ability of any Loan Party to perform its
Obligations under any Transaction Document to which it is or is to be a
party.
"MEASUREMENT PERIOD" means, at any date of determination, the period of
the four consecutive fiscal quarters of the Parent then most recently
ended; PROVIDED that, for the first
13
three fiscal quarters of the Fiscal Year ending December 31, 1999,
"MEASUREMENT PERIOD" means the period commencing on the first day of such
Fiscal Year and ending on the last day of such fiscal quarter.
"MINOTAUR" has the meaning specified in the recital of parties to this
Agreement.
"MORTGAGES" has the meaning specified in Section 3.01(a)(iv).
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any Debt or
the sale or issuance of any Equity Interests (including, without
limitation, any capital contribution) by any Person, or any Extraordinary
Receipt received by or paid to or for the account of any Person, the
aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration)
by or on behalf of such Person in connection with such transaction after
deducting therefrom only (without duplication) (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar fees and commissions, and (b) the amount of
taxes payable in connection with or as a result of such transaction, and
(c) the amount of any Debt secured by a Lien on such asset that, by the
terms of the agreement or instrument governing such Debt, is required to be
repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid to a Person that is not an Affiliate of such Person or
any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the asset that is the subject
thereof.
"NOTE" means a promissory note of any Borrower payable to the order of
any Lender, in substantially the form of Exhibit A hereto, evidencing the
indebtedness of such Borrower to such Lender resulting from the Advance
made by such Lender, as amended.
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
"NPL" means the National Priorities List under CERCLA.
"OAKTREE" means OCM Ajax Investments, Inc., a Delaware corporation.
"OAKTREE ACCOUNT" means the escrow account maintained pursuant to the
Oaktree Escrow Agreement.
14
"OAKTREE CLAIM" means all claims by Oaktree or its Affiliates for
indemnification by the Parent pursuant to Article VI of the Subscription
Agreement.
"OAKTREE ESCROW AGREEMENT" means the escrow agreement dated February 9,
1999 between Oaktree, the Parent, the Administrative Agent and Wilmington
Trust of Pennsylvania, as escrow agent.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of any Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of
the foregoing that any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"OTHER TAXES" has the meaning specified in Section 2.10(b).
"PARENT" has the meaning specified in the recital of parties to this
Agreement.
"PARTNERSHIP AGREEMENT" means, pursuant to the Amendment, the second
amended and restated limited partnership agreement of the Parent dated as
of February 9, 1999, as further amended, to the extent permitted under the
Loan Documents.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b); (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days; (c) Liens imposed by law, such
as Liens in respect of seamen's wages and other maritime Liens arising in
the ordinary course of business securing obligations that are not overdue
for a period of more than 30 days; (d) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations; and (e) easements, rights of way
and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely
affect the use of such property for its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
15
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED DEBT" has the meaning specified in the Security Agreement.
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
"PRO RATA PERCENTAGE" means, with respect to any Borrower at any time,
a percentage equal to (a) the aggregate principal amount of the Advances
owing by such Borrower at such time DIVIDED BY (b) the aggregate principal
amount of the Advances owing by all of the Borrowers at such time.
"PRO RATA SHARE" of any amount means, with respect to any Lender at any
time, the product of such amount TIMES a fraction the numerator of which is
the amount of such Lender's Commitment at such time (or, if the Commitments
shall have been terminated pursuant to Section 2.04 or 6.01, such Lender's
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Facility at such time (or, if the Commitments
shall have been terminated pursuant to Section 2.04 or 6.01, the Facility
as in effect immediately prior to such termination).
"REDEEMABLE" means, with respect to any Equity Interest, any Debt or
any other right or Obligation, any such Equity Interest, Debt, right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 9.07(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Partnership Agreement, the Subscription
Agreement, the Oaktree Escrow Agreement, the Technical Management
Agreements, the Commercial Management Agreements, the Charterparties and
the other documents effecting the Transaction, in each case as amended, to
the extent permitted under the Loan Documents.
"REPAYMENT" has the meaning specified in the Preliminary Statements.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding at least
seventy percent (70%) of the aggregate principal amount of the Advances
outstanding at such time.
"RESPONSIBLE OFFICER" means any officer of any Loan Party or any of its
Subsidiaries.
"SECURED OBLIGATIONS" has the meaning specified in the Security
Agreement.
16
"SECURED PARTIES" means the Agents and the Lenders.
"SECURITY AGREEMENT" has the meaning specified in Section 3.01(a)(ii).
"SECURITY TRUSTEE" has the meaning specified in the recital of parties
to this Agreement.
"SHARE MORTGAGE" has the meaning specified in Section 3.01(a)(iii).
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"SUBORDINATED DEBT" means any Debt of any of the Borrowers that is
subordinated to the Obligations of the Borrowers under the Loan Documents
on, and that otherwise contains, terms and conditions satisfactory to the
Required Lenders.
"SUBSCRIPTION AGREEMENT" means the subscription agreement dated as of
February 9, 1999 between Oaktree, the Borrowers and the Parent.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"TAX CERTIFICATE" has the meaning specified in Section 5.03(j).
"TAXES" has the meaning specified in Section 2.10(a).
17
"TECHNICAL MANAGEMENT AGREEMENTS" has the meaning specified in Section
3.01(a)(iv)(C).
"TERMINATION DATE" means the earlier of February 9, 2002 and the date
of termination in whole of the Commitments pursuant to Section 2.04 or
6.01.
"TRANSACTION" has the meaning set forth in the Preliminary Statements.
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents and the
Related Documents.
"VESSELS" means, collectively, Genmar Xxxxxxxxxxx, Genmar Agamemnon,
Genmar Minotaur and Genmar Ajax.
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
PROVISIONS. In this Agreement and the other Loan Documents in 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 mean "to but
excluding". References in the Loan Documents to any agreement or contract "AS
AMENDED" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in effect from time to time in the United States
of America consistent with those applied in the preparation of the financial
statements referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. Each Initial Lender severally agrees to, on
the Effective Date, contribute to the Administrative Agent for the account of
each Borrower such Initial Lender's right to receive payment of the principal
amount outstanding of the Existing Debt owed to it by such Borrower (each such
contribution being an "ADVANCE"). Under no circumstances shall any Lender make
an Advance to any Borrower, to the extent that, after giving effect to the
making of such Advance and all other Advances to be made concurrently to such
Borrower, (i) the aggregate principal amount of all then outstanding Advances
owing by such Borrower would exceed such Borrower's Borrower Sublimit or (ii)
the aggregate principal amount of all outstanding Advances to all Borrowers
would exceed the aggregate Commitments of the Lenders. Notwithstanding anything
to the contrary set forth herein above or elsewhere in this Agreement, this
Agreement is an amendment and restatement of the Existing Bridge Agreement, no
funds are being repaid or readvanced hereunder, and any reference to an Advance
18
hereunder is made solely for the purpose of effectuating the amendment and
restatement of the Existing Bridge Agreement upon the terms and conditions set
forth herein. Amounts borrowed under this Section 2.01 and repaid or prepaid may
not be reborrowed.
SECTION 2.02. MAKING THE ADVANCES. (a) The Advances shall be made on
notice, given not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the Borrowing, by the Borrowers to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier. The notice of Borrowing (the "NOTICE OF BORROWING") shall be by
telephone, confirmed immediately in writing or telecopier, in substantially the
form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing, (ii) aggregate amount of such Borrowing, (iii) amount of such
Borrowing requested by each Borrower and (iv) initial Interest Period for each
such Advance. Upon fulfillment of the applicable conditions set forth in Article
III, the Notes referred to in Section 3.01 shall be issued in consideration of
the contribution by the Lenders of their respective rights to receive payment of
the principal amount outstanding of the Existing Debt.
(b) The Advances may not be outstanding as part of more than eight
separate Borrowings.
(c) The Notice of Borrowing shall be irrevocable and binding on the
Borrowers. Each Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in the Notice of Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund the Advance to be made by such Lender as part of such Borrowing when
such Advance, as a result of such failure, is not made on such date.
SECTION 2.03. REPAYMENT OF ADVANCES. Each Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders the aggregate
outstanding principal amount of the Advances owing by such Borrower on the last
Business Day of each calendar month in an amount equal to (a) during the Initial
Period, $37,500 and (b) thereafter, $125,000 (which amounts shall be reduced as
a result of the application of prepayments in accordance with the order of
priority set forth in the applicable subsection of Section 2.05); PROVIDED,
HOWEVER, that the final principal installment shall be repaid by the Borrower on
the Termination Date and in any event shall be in an amount equal to the
aggregate principal amount of the Advances owing by such Borrower and
outstanding on such date.
SECTION 2.04. TERMINATION OR REDUCTION OF THE COMMITMENTS. On
the date of the Borrowing, after giving effect to such Borrowing, and from time
to time thereafter upon each repayment or prepayment of the Advances, the
aggregate Commitments of the Lenders shall be automatically and permanently
reduced, on a pro rata basis, by an amount equal to the amount by which the
aggregate Commitments immediately prior to such reduction exceed the aggregate
unpaid principal amount of the Advances then outstanding.
SECTION 2.05. PREPAYMENTS. (a) OPTIONAL. The Borrowers may,
upon at least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given each Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowings owing by such
Borrower comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; PROVIDED, HOWEVER,
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that (x) each partial prepayment by a Borrower shall be in an aggregate
principal amount of $500,000 or an integral multiple of $500,000 in excess
thereof and (y) no such prepayment shall be made other than on the last day of
an Interest Period therefor. Each such prepayment shall be applied to the
installments thereof in inverse order of maturity.
(b) MANDATORY. (i) Each Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings owing by it in an amount equal to such Borrower's Pro Rata Percentage
of the Excess Amount for such Business Day; PROVIDED, HOWEVER, that, if any
Borrower's Advances shall have been paid in full, such Borrower's prepayment
received hereunder shall be applied to such other Advances owing by the other
Borrowers as determined by the Administrative Agent in the Administrative
Agent's discretion, in consultation with the Parent. Each such prepayment by a
Borrower shall be applied ratably to the Advances comprising part of the same
Borrowings owing by such Borrower and to the installments thereof in inverse
order of maturity.
(ii) Each Borrower shall, on the date of receipt of the Net Cash
Proceeds by such Borrower or any of its Subsidiaries from (A) the sale, lease,
transfer or other disposition of any assets of such Borrower or any of its
Subsidiaries, (B) the incurrence or issuance by such Borrower or any of its
Subsidiaries of any Debt (other than Debt incurred or issued pursuant to Section
5.02(b)), (C) the sale or issuance by such Borrower or any of its Subsidiaries
of any Equity Interests (including, without limitation, receipt of any capital
contribution) and (D) any Extraordinary Receipt received by or paid to or for
the account of such Borrower or any of its Subsidiaries and not otherwise
included in clause (A), (B) or (C) above, prepay an aggregate principal amount
of the Advances comprising part of the same Borrowings owing by such Borrower in
an amount equal to the amount of such Net Cash Proceeds. Each such prepayment by
a Borrower shall be applied to the Advances comprising part of the same
Borrowings owing by such Borrower and to the installments thereof in inverse
order of maturity; PROVIDED, HOWEVER, that, if such Borrower's Advances shall
have been paid in full, such Borrower's prepayment received hereunder shall be
applied to such other Advances owing by the other Borrowers as determined by the
Administrative Agent in the Administrative Agent's discretion, in consultation
with the Parent.
(iii) The Parent shall, on the date of receipt of the Net Cash Proceeds
by the Parent from (A) the sale, lease, transfer or other disposition of any
assets of the Parent, (B) the incurrence or issuance by the Parent of any Debt
(other than Debt incurred or issued pursuant to Section 5.02(b)), (C) the sale
or issuance by the Parent of any Equity Interests (including, without
limitation, receipt of any capital contribution) and (D) any Extraordinary
Receipt received by or paid to or for the account of the Parent and not
otherwise included in clause (A), (B) or (C) above, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings in an
amount equal to the amount of such Net Cash Proceeds. Each such prepayment by
the Parent shall be applied to the Advances comprising part of the same
Borrowings owing by one or more Borrowers, as determined by the Administrative
Agent in the Administrative Agent's discretion, in consultation with the Parent,
and to the installments thereof in inverse order of maturity.
(iv) Each Borrower shall, on each Business Day for which the
calculation set forth in this subsection (iv) requires a prepayment to be made,
prepay the aggregate principal amount of the Advances comprising part of the
same Borrowings owing by such Borrower to the extent that (A) the aggregate
principal amount of all such Advances owing by the Borrowers exceeds (B) an
amount equal to (x) the aggregate Market Value of the Vessels DIVIDED BY (y)
during the Initial Period, 1.10, and
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thereafter, 1.25, which prepayment shall be made by each Borrower ratably in
accordance with the principal amount of the Advances owing by such Borrower and
shall be applied to the Advances comprising part of the same Borrowings owing by
such Borrower and the installments thereof in the inverse order of maturity. .
(v) Each Borrower shall prepay, on the 18-month anniversary of the
Effective Date, the aggregate principal amount of the Advances comprising part
of the same Borrowings owing by such Borrower to the extent that the aggregate
principal amount of all such Advances owing by the Borrowers exceeds $90,000,000
at such time, which prepayment shall be made by each Borrower ratably in
accordance with the principal amount of the Advances owing by such Borrower and
shall be applied to the Advances comprising part of the same Borrowings owing by
such Borrower and the installments thereof in the inverse order of maturity.
(vi) All prepayments under this subsection (b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid.
SECTION 2.06. INTEREST. (a) SCHEDULED INTEREST. Each Borrower shall pay
interest on the unpaid principal amount of each Advance owing by such Borrower
to each Lender from the date of such Advance until such principal amount shall
be paid in full, at a rate per annum equal at all times during each Interest
Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest
Period for such Advance PLUS (B) the Applicable Margin in effect on the first
day of such Interest Period, payable in arrears on the last day of such Interest
Period and on the date such Advance shall be paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
a Default, each Borrower shall pay interest on (i) the unpaid principal amount
of such Borrower's Advance owing to each Lender, payable in arrears on the dates
referred to in clause (a) above and on demand, at a rate per annum equal at all
times to 3% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a) above and (ii) to the fullest extent permitted by
law, the amount of any interest, fee or other amount payable under the Loan
Documents that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 3% per annum above the rate per annum required to be paid on the
Advance pursuant to clause (a) of this Section 2.06.
(c) NOTICE OF INTEREST PERIOD AND INTEREST RATE. Promptly after receipt
of a Notice of Borrowing pursuant to Section 2.02(a) or a notice of selection of
an Interest Period pursuant to the terms of the definition of "Interest Period",
the Administrative Agent shall give notice to each Borrower and each Lender of
the applicable Interest Period and the applicable interest rate determined by
the Administrative Agent for purposes of clause (a) above.
(d) DETERMINATION OF INTEREST RATE. If for any reason the
Administrative Agent shall be unable to establish the Eurodollar Rate for the
relevant Interest Period, the Borrowers shall pay interest to each Lender at a
rate which equals the cost to such Lender of making, funding or maintaining its
participation in the Advances plus the Applicable Margin for such Interest
Period.
SECTION 2.07. FEES. (a) FINANCING FEES. Each Borrower agrees jointly
and severally to pay to the Administrative Agent for the account of the Lenders
a financing fee, payable in three equal installments of $166,667 on (i) the
Effective Date, (ii) the earlier of the one-year anniversary of the
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Effective Date and the payment in full of the Advances and (iii) the earlier of
the 18-month anniversary of the Effective Date and the payment in full of the
Advances.
(b) AGENTS' FEES. Each Borrower agrees jointly and severally to pay to
the Administrative Agent for its own account (in its capacity as any of the
Agents) $25,000 per annum payable annually, in advance, commencing on the
Effective Date.
SECTION 2.08. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining Advances to or with any Borrower, then such
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the applicable Borrower by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend to
any Borrower, then, upon demand by such Lender or such corporation (with a copy
of such demand to the Administrative Agent), such Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend. A certificate as to such amounts submitted
to the applicable Borrower by such Lender shall be conclusive and binding for
all purposes, absent manifest error.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Advances or to
continue to fund or maintain Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrowers through the Administrative
Agent, each Borrower shall immediately prepay in full the Advances owing by it
to such Lender, together with accrued interest thereon.
SECTION 2.09. PAYMENTS AND COMPUTATIONS. (a) Each Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on the
next succeeding Business Day. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by a Borrower is in
respect of principal, interest, commitment fees or any other Obligation then
payable hereunder and under the Notes to more than one Lender, to such Lenders
for the account of their respective Eurodollar Lending Offices ratably in
accordance with the amounts of such respective
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Obligations then payable to such Lender and (ii) if such payment by a Borrower
is in respect of any Obligation then payable hereunder to one Lender, to such
Lender for the account of its Eurodollar Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 9.07(d), from and after the effective date
of such Assignment and Acceptance, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender, if and to the extent
payment owed by such Borrower to such Lender is not made when due hereunder or
under the Note held by such Lender, to charge from time to time against any or
all of such Borrower's accounts with such Lender any amount so due.
(c) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Administrative Agent of an interest rate, fee
or commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes 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, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of
interest on or principal of Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from any
Borrower prior to the date on which any payment is due from such Borrower to any
Lender hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent any Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances to which, or the manner in which, such
funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
outstanding Advances then outstanding, in repayment or prepayment of such of the
outstanding Advances or other Obligations owed to such Lender, and for
application to such principal installments, as the Administrative Agent shall
direct.
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SECTION 2.10. TAXES. (a) Any and all payments by the Loan Parties
hereunder or under the Notes or other Loan Documents shall be made, in
accordance with Section 2.09, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the case
of each Lender and each Agent, taxes that are imposed on its overall net income
by the state or jurisdiction under the laws of which such Lender or such Agent,
as the case may be, is organized or any political subdivision thereof and, in
the case of each Lender, taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or jurisdiction of such
Lender's Eurodollar Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes or other Loan
Documents being hereinafter referred to as "TAXES"). If any Loan Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note or other Loan Document to any Lender or any Agent,
(i) the sum payable by such Loan Party shall be increased as may be necessary so
that after such Loan Party and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 2.10) such Lender or such Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Loan Party shall make all such deductions and (iii) such Loan Party
shall timely pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, each Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made by it hereunder or under the Notes or other Loan Documents
or from the execution, delivery or registration by such Loan Party of,
performance by such Loan Party under, or otherwise with respect to, this
Agreement or the Notes or other Loan Documents (hereinafter referred to as
"OTHER TAXES").
(c) Each Loan Party shall indemnify each Lender and each Agent for and
hold them harmless against the full amount of Taxes and Other Taxes, and for the
full amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.10, imposed on or paid by such Lender or such Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be joint and several among the Loan Parties and shall be paid within 30
days from the date such Lender or such Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment by any Loan Party of
Taxes or Other Taxes, such Loan Party shall furnish to the Administrative Agent,
at its address referred to in Section 9.02, the original or a certified copy of
a receipt evidencing such payment. In the case of any payment hereunder or under
the Notes or other Loan Documents by or on behalf of any Loan Party through an
account or branch outside the Cayman Islands or by or on behalf of such Loan
Party by a payor that is not a Cayman Islands person, if such Loan Party
determines that no Taxes or Other Taxes are payable in respect thereof, such
Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes or Other
Taxes.
(e) Each Lender that is entitled to an exemption from or reduction of
withholding tax under the laws of the jurisdiction from where payments under the
Notes or other Loan Documents may be made, or under any treaty to which such
jurisdiction is a party, with respect to payments under the Notes or other Loan
Documents shall deliver to the Loan Parties, any documentation prescribed by
applicable
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law that is necessary to permit such payments to be made without withholding or
at a reduced rate, PROVIDED that (i) at least 60 days prior to the first payment
date on which any such payment may be made free of any withholding or at a
reduced rate the applicable Loan Party shall have notified such Lender in
writing that it will be required to provide such necessary documentation and
shall have provided such Lender with the necessary form, if any, and (ii) the
terms of such documentary requirements are not more onerous than comparable
requirements under the applicable tax laws of the United States.
(f) If any Lender fails to comply with the provisions of Section
2.10(e) (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such form
otherwise is not required under Section 2.10(e)), then the Loan Parties shall
not be obligated to pay any additional amounts pursuant to Section 2.10(a) or
Section 2.10(c) in respect to Taxes or Other Taxes that would not have been
imposed but for the failure by such Lender to so comply; PROVIDED, HOWEVER, that
should a Lender become subject to Taxes or Other Taxes because of its failure to
deliver a form required hereunder, the Loan Parties shall take such steps as
such Lender shall reasonably request to assist such Lender to recover such Taxes
or Other Taxes.
SECTION 2.11. SHARING OF PAYMENTS, ETC. If any Lender shall obtain at
any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of Obligations due and payable to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lender
hereunder and under the Notes at such time obtained by all the Lender at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender's ratable share
(according to the proportion of (i) the purchase price paid to such Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. Each Borrower agrees that any Lender so purchasing an interest or
participating interest from another Lender pursuant to this Section 2.11 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or participating
interest, as the case may be, as fully as if such Lender were the direct
creditor of such Borrower in the amount of such interest or participating
interest, as the case may be.
ARTICLE III
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CONDITIONS OF EFFECTIVENESS
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS. The amendment and
restatement of the Existing Bridge Agreement pursuant hereto shall become
effective on and as of the first date (the "EFFECTIVE Date") on which all of the
following conditions precedent shall have been met:
(a) The Administrative Agent shall have received on or before the
Effective Date the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to the Administrative Agent
(unless otherwise specified) and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes payable to the order of the Lenders.
(ii) A security agreement in substantially the form of Exhibit D
hereto (as amended, the "SECURITY AGREEMENT"), duly executed by each
Loan Party, together with:
(A) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,
(B) copies of proper financing statements or other documents
executed by each Loan Party under the Uniform Commercial Code or
other applicable law of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created
under the Security Agreement,
(C) completed requests for information, dated on or before the
Effective Date, listing all effective financing statements or other
documents filed or recorded in the jurisdictions referred to in
clause (B) above that name any Loan Party as debtor, together with
copies of such other financing statements or other documents (none
of which shall cover any Collateral under and as described in the
Security Agreement or the other Collateral Documents),
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby,
(E) copies of the Assigned Agreements referred to in the
Security Agreement, together with a consent to such assignment, in
substantially the form of Exhibit B to the Security Agreement, duly
executed by each party to such Assigned Agreements other than the
Loan Parties, and
(F) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created
under the Security Agreement has been taken.
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(iii) A share mortgage in form and substance satisfactory to the
Lenders (as amended, the "Share Mortgage"), duly executed by the Parent,
pursuant to which the Parent mortgages, under local law, the Pledged
Shares referred to in the Security Agreement to the Collateral Agent for
the ratable benefit of the Secured Parties, together with evidence that
all other action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority liens and
security interests created under the Share Mortgage has been taken.
(iv) Amendment No. 1 to each of the first preferred mortgages
covering each of the Vessels in substantially the form of Exhibit G
hereto (such mortgages, as so amended and as amended further, the
"MORTGAGES"), duly executed by the appropriate Loan Party, together with:
(A) evidence that counterparts of the Mortgages have been duly
recorded on or before the Effective Date in the Liberian Ship
Registry and all other filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to
create a valid first preferred mortgage and Lien on the property
described therein enforceable against the respective Borrowers and
all third parties in accordance with the applicable laws of the
United States of America and the Republic of Liberia in favor of
the Security Trustee for the benefit of the Secured Parties and
that all filing and recording taxes and fees have been paid,
(B) certified copies of each of the commercial management
agreements made between GMC and each of the Borrowers, which shall
be in form and substance satisfactory to the Lenders, for the
commercial management of the Vessels (as amended, to the extent
permitted under the Loan Documents, the "COMMERCIAL MANAGEMENT
Agreements") duly executed by each of the parties thereto,
(C) certified copies of each of the agreements made between
Universe Tankships (Delaware) Inc., a Delaware limited liability
company, or any other ship manager and each of the Borrowers, which
shall be in form and substance satisfactory to the Lenders, for the
technical management of the Vessels (as amended, to the extent
permitted under the Loan Documents, the "TECHNICAL MANAGEMENT
AGREEMENTS") duly executed by each of the parties thereto,
(D) such consents and agreements of third parties, and such
other confirmations, as the Administrative Agent may deem necessary
or desirable,
(E) evidence of insurance from insurers acceptable to the
Lenders, covering such risks (including, without limitation, hull
and machinery, war risks, protection and indemnity, loss of hire
and mortgagee's interest insurance) with endorsements and in
amounts acceptable to the Lenders, in form and substance
satisfactory to the Lenders and otherwise in accordance with the
applicable Mortgage, and shall include, without limitation,
appropriate brokers' letters of
27
undertaking and cover notes and protection and indemnity
association certificates of entry and letters of undertaking.
(F) confirmation of class certificate (without extensions or
recommendations),
(G) a certificate of ownership and encumbrance in respect of
each of the Vessels from the Liberian Ship Registry evidencing
ownership by the relevant Borrower and due recording of such
amendment to such Mortgage in favor of the Security Trustee and no
other encumbrances,
(H) a master vessel trust agreement (as amended, the "MASTER
VESSEL TRUST AGREEMENT"), in form and substance satisfactory to the
Administrative Agent, duly executed by each party thereto,
(I) assignment of charter (together with any other assignments
of charter required to be delivered under the Loan Documents, in
each case as amended, the "ASSIGNMENT OF CHARTERPARTIES"), in form
and substance satisfactory to the Administrative Agent, and, if
available, the consent and agreement of assignment of Amoco Oil
Company (and the Loan Parties shall have used their best efforts to
obtain such consent and agreement), in form and substance
satisfactory to the Administrative Agent, in each case duly
executed by each party thereto, and
(J) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to create valid
first priority Liens on the property described in the Mortgages has
been taken.
(v) Amended and restated assignments of earnings (as amended, the
"ASSIGNMENT OF EARNINGS"), in form and substance satisfactory to the
Administrative Agent, together with notices and acknowledgments of notice
of assignment of the Earnings referred to therein as requested by the
Administrative Agent, in each case duly executed by each party thereto.
(vi) An amendment to the assignments of accounts (as further
amended, the "ASSIGNMENT OF ACCOUNTS"), in form and substance satisfactory
to the Administrative Agent, duly executed by each Loan Party party
thereto.
(vii) Amended and restated assignments of insurances (as amended,
the "ASSIGNMENT OF INSURANCES"), in form and substance satisfactory to the
Administrative Agent, together with the notices and acknowledgments of
notice of assignment of the Insurances referred to therein, in each case
duly executed by each party thereto.
(viii) A letter from Poles, Tublin, Patestides & Stratakis LLP,
presently located at 00 Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
consenting to its appointment by the Loan Parties as their agent for
service of process (the "PROCESS AGENT"), without reservation, until at
least one year after the Termination Date, together with evidence of the
payment in full of all fees thereof.
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(ix) Certified copies of the resolutions of the sole director or
partnership consents, as the case may be, of each Loan Party approving the
Transaction and the other transactions contemplated by the Transaction
Documents and each Transaction Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any, with
respect to the Transaction and the other transactions contemplated by the
Transaction Documents and each Transaction Document to which it is or is to
be a party.
(x) A copy of a certificate of the appropriate governmental
authority of the jurisdiction of organization of each Loan Party, dated
reasonably near the Effective Date, certifying (A) as to a true and correct
copy of the Constitutive Documents of such Loan Party and each amendment
thereto on file in such governmental authority's office and (B) that (1)
such amendments are the only amendments to such Loan Party's Constitutive
Documents on file in such governmental authority's office, (2) such Loan
Party has paid all franchise taxes (or the equivalent thereof) to the date
of such certificate and (C) such Loan Party is duly organized and in good
standing or presently subsisting under the laws of the jurisdiction of its
organization.
(xi) a certificate of the appropriate governmental authority of the
Republic of Liberia dated reasonably near the Effective Date certifying the
due registration of each Borrower as a foreign maritime entity under the
laws of the Republic of Liberia.
(xii) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or any
Assistant Secretary (or persons performing similar functions) or its
general partner, as the case may be, dated the Effective Date (the
statements made in which certificate shall be true on and as of the
Effective Date), certifying as to (A) the absence of any amendments to the
Constitutive Documents of such Loan Party since the date of the appropriate
governmental authority's certificate referred to in Section 3.01(a)(x), (B)
a true and correct copy of the bylaws or similar Constitutive Document of
such Loan Party as in effect on the date on which the resolutions referred
to in Section 3.01(a)(ix) were adopted and on the Effective Date, (C) the
due organization and good standing or valid existence of such Loan Party as
a corporation or partnership, as the case may be, organized under the laws
of the jurisdiction of its organization, and the absence of any proceeding
for the dissolution or liquidation of such Loan Party, (D) the truth of the
representations and warranties contained in the Loan Documents as though
made on and as of the Effective Date and (E) the absence of any event
occurring and continuing, or resulting from the Borrowing on the Effective
Date, that constitutes a Default.
(xiii) A certificate of the Secretary or an Assistant Secretary (or
persons performing similar functions) or the general partner, as the case
may be, of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Transaction Document to
which it is or is to be a party and the other documents to be delivered
hereunder and thereunder.
29
(xiv) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance satisfactory to
the Lenders, together with all agreements, instruments and other documents
delivered in connection therewith as the Administrative Agent shall
request.
(xv) Certificates, in substantially the form of Exhibit I hereto,
attesting to the Solvency of each Loan Party before and after giving effect
to the Transaction and the other transactions contemplated by the
Transaction Documents, from its Chief Financial Officer (or person
performing similar functions).
(xvi) Such financial, business and other information regarding each
Loan Party and its Subsidiaries as the Lenders shall have requested,
including, without limitation, information as to possible contingent
liabilities, tax matters, environmental matters, collective bargaining
agreements and other arrangements with employees, unaudited Consolidated
financial statements of the Parent and the Borrowers dated June 30, 1998
and September 30, 1998, pro forma Consolidated and consolidating balance
sheets for the Loan Parties as of the Effective Date, forecasts of cash
flows for each Borrower in substantially the form of Exhibit F hereto
prepared for the 12 month period ending December 31, 1999, and forecasts of
Consolidated and consolidating balance sheets of the Loan Parties as of
December 31, 1999 and Consolidated and consolidating income statements of
the Loan Parties as of December 31, 1999, each in form satisfactory to the
Administrative Agent.
(xvii) Certified copies of each employment agreement and other
compensation arrangement with each executive officer of any Loan Party or
any of its Subsidiaries as the Administrative Agent shall request.
(xviii) A favorable opinion of Poles, Tublin, Patestides &
Stratakis LLP, counsel for the Loan Parties, in substantially the form of
Exhibit H hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.
(xix) A favorable opinion of Hunter & Hunter, Cayman Islands
counsel to the Lenders, in form and substance satisfactory to the Lenders.
(xx) A favorable opinion of Xxxxxx, Xxxxxx & Xxxxxxxx, maritime and
Liberian law counsel to the Lenders in form and substance satisfactory to
the Lenders.
(xxi) A favorable opinion of Shearman & Sterling, counsel to the
Agents, in form and substance satisfactory to the Administrative Agent.
(b) Before giving effect to the Transaction and the other transactions
contemplated by the Transaction Documents, there shall have occurred no
Material Adverse Change since May 15, 1998.
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(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the Transaction or the other
transactions contemplated by the Transaction Documents.
(d) All governmental and third party consents and approvals necessary
in connection with the Transaction and the other transactions contemplated
by the Transaction Documents shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lenders) and
shall remain in effect; all applicable waiting periods in connection with
the Transaction and the other transactions contemplated by the Transaction
Documents shall have expired without any action being taken by any
competent authority, and no law or regulation shall be applicable in the
judgment of the Lenders, in each case that restrains, prevents or imposes
materially adverse conditions upon the Transaction or the other
transactions contemplated by the Transaction Documents or the rights of the
Loan Parties or their Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(e) The Lenders shall have completed a due diligence investigation of
each Loan Party and its Subsidiaries in scope, and with results,
satisfactory to the Lenders, and nothing shall have come to the attention
of the Lenders during the course of such due diligence investigation to
lead them to believe (i) any information provided by or on behalf on any
Loan Party prior to the Effective Date was or has become misleading,
incorrect or incomplete in any material respect, (ii) that, following the
consummation of the Transaction and the other transactions contemplated
hereby, each Loan Party would not have good and marketable title to the
Collateral of such Loan Party and (iii) that the Transaction and the other
transactions contemplated hereby will have a Material Adverse Effect;
without limiting the generality of the foregoing, the Lenders shall have
been given such access to the management, records, books of account,
contracts and properties of each Loan Party and its Subsidiaries as they
shall have requested.
(f) The Lenders shall be satisfied with the corporate and legal
structure and capitalization of the Parent and each other Loan Party,
including the terms and conditions of the charter, bylaws (or other similar
Constitutive Documents), Partnership Agreement and each class of Equity
Interest in the Parent and each other Loan Party and of each agreement or
instrument relating to such structure or capitalization; including without
limitation the terms and conditions of, and all documentation relating to,
the Transaction, and the identities of each of the general and limited
partners of the Parent.
(g) The Parent shall have received net cash proceeds in an aggregate
amount of not less than $23,981,806.68 from the Contribution made by the
Equity Investors.
(h) The Amendment to the Partnership Agreement shall be in full force
and effect.
(i) The Borrowers shall have received a common equity capital
contribution from the Parent from the proceeds of the Contribution which
together with cash on hand of the
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Borrowers in excess of $2,000,000 shall equal at least $24,025,000 and
shall have applied at least $24,025,000 in full to the repayment of the
Existing Debt.
(j) Each Borrower shall have cash on hand in an amount equal to at
least $500,000 on the Effective Date (before giving effect to the
prepayment of the Existing Debt and the payment of the accrued fees and
expenses of the Lenders pursuant to clause (k) below).
(k) The Borrowers shall have applied cash on hand in excess of
$1,000,000 in aggregate for all Borrowers (i) first, to the payment of
accrued fees and expenses of the Lenders (including the accrued fees and
expenses of counsel to the Agents and special counsel to the Lenders) and
(ii) second, to the repayment of the Existing Debt in an amount which,
together with all amounts applied to the prepayment of the Existing Debt
pursuant to Section 3.01(i), shall not exceed $25,000,000; PROVIDED that
the payment under this subclause (ii) shall not be required to be paid to
the extent that such payment would result in a violation of any of the
financial covenants set forth in Section 5.04 hereof.
(l) The Borrowers shall have paid all accrued fees of the Agents and
the Lenders and all accrued expenses of the Agents (including the accrued
fees and expenses of counsel to the Agents and special counsel to the
Lenders).
SECTION 3.02. DETERMINATIONS UNDER SECTION 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the
Effective Date specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES. Each
Loan Party represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a corporation
or partnership duly organized and validly existing under the laws of the
jurisdiction of its respective organization, (ii) is duly qualified and in
good standing as a foreign corporation or partnership in each other
jurisdiction in which the ownership, lease or operation of its property and
assets or the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. All of the outstanding Equity Interests in each
of the Loan Parties have been validly issued, are fully paid and
non-assessable and are owned by the Persons and in the amounts specified on
Schedule 4.01(a) hereto free and clear of all Liens, except those created
under the Collateral Documents.
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(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of the Parent, showing as of the date hereof (as
to each such Subsidiary) the jurisdiction of its organization, the number
and type of each class of its Equity Interests authorized, and the number
outstanding, on the date hereof and the percentage of each such class of
its Equity Interests owned (directly or indirectly) by the Parent and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding Equity Interests in the Parent's Subsidiaries has been validly
issued, are fully paid and non-assessable and are owned by the Parent or
one or more of its Subsidiaries free and clear of all Liens, except those
created under the Collateral Documents. None of the Borrowers has any
Subsidiaries.
(c) The execution, delivery and performance by each Loan Party of each
Transaction Document to which it is or is to be a party, and the
consummation of the Transaction and the other transactions contemplated by
the Transaction Documents, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's Constitutive Documents, (ii) violate any law,
rule, regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or any of
their properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which could be reasonably likely to have a Material
Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of any Transaction Document to
which it is or is to be a party, or for the consummation of the Transaction
or the other transactions contemplated by the Transaction Documents, (ii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by any Agent or any Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents. All applicable waiting periods in
connection with the Transaction and the other transactions contemplated by
the Transaction Documents have expired without any action having been taken
by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Transaction or the rights of the Loan Parties
or their Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any
of them.
(e) This Agreement has been, and each other Transaction Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Transaction
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan
Party in accordance with its terms.
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(f) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of any Transaction Document or the consummation of the
Transaction or the other transactions contemplated by the Transaction
Documents.
(g) The Consolidated balance sheet of the Parent and the Borrowers as
at June 30, 1998 and September 30, 1998, and the related statements of
income and statements of cash flows of the Parent and the Borrowers for the
three and six months, respectively, then ended, duly certified by the Chief
Financial Officer of the Borrowers, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance sheets as
at June 30, 1998 and September 30, 1998, and said statements of income and
cash flows for the three and six months, respectively, then ended, to
year-end audit adjustments, the financial condition of the Parent and the
Borrowers as at such dates and the results of operations of the Parent and
the Borrowers for the periods ended on such dates, all in accordance with
GAAP. Since May 15, 1998, there has been no Material Adverse Change.
(h) The Consolidated and consolidating pro forma balance sheets of the
Parent and its Subsidiaries as at the Effective Date, and the related
Consolidated and consolidating pro forma statements of income and cash
flows of the Parent and its Subsidiaries for the seven months then ended,
certified by the Chief Financial Officer of the Parent, copies of which
have been furnished to each Lender, fairly present the Consolidated and
consolidating pro forma financial condition of the Parent and its
Subsidiaries as at such date and the Consolidated and consolidating pro
forma results of operations of the Parent and its Subsidiaries for the
period ended on such date, in each case giving effect to the Transaction
and the other transactions contemplated by the Transaction Documents, all
in accordance with GAAP.
(i) The Consolidated and consolidating forecasted balance sheets,
statements of income and statements of cash flows of the Parent and its
Subsidiaries delivered to the Lenders pursuant to Section 3.01(a)(xv) or
5.03 were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in light of the conditions existing at
the time of delivery of such forecasts, and represented, at the time of
delivery, the Parent's and the Borrowers' best estimate of their future
financial performance.
(j) No information, exhibit or report furnished by or on behalf of any
Loan Party to any Agent or any Lender prior to the Effective Date in
connection with the negotiation of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
made therein not misleading.
(k) No Loan Party is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance will be used or was used to purchase or carry any Margin Stock or
to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
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(l) Neither any Loan Party nor any of its Subsidiaries is an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances nor the application of the proceeds or repayment
thereof by the Borrowers, nor the consummation of the other transactions
contemplated by the Transaction Documents, will violate any provision of
such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(m) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could be
reasonably likely to have a Material Adverse Effect.
(n) The Collateral Documents create a valid and, upon filing of the
financing statements delivered pursuant to Section 3.01(a)(ii)(B) in the
office of the Secretary of State of the State of New York and the New York
City Register's Office for New York County, perfected first priority
security interest in the Collateral, securing the payment of the Secured
Obligations and the Outstanding Indebtedness (as defined in the Mortgages),
and all filings and other actions necessary or desirable to perfect and
protect such security interest have been duly taken or will be duly taken
immediately following the Effective Date. The Loan Parties are the legal
and beneficial owners of the Collateral free and clear of any Lien, except
for the liens and security interests created or permitted under the Loan
Documents.
(o) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(p) (i) Neither any Loan Party nor any ERISA Affiliate has any Plan or
Multiemployer Plan.
(ii) Neither any Loan Party nor any Subsidiary that is not subject
to United States law maintains or contributes to, has any obligation to
maintain or contribute to, or has any liability with respect to, any
employee benefit plan or any scheme or arrangement mandated by a
government other than the United States.
(q) (i) Except as otherwise set forth on Part I of Schedule 4.01(q)
hereto, the operations and properties (including, without limitation, the
Vessels) of each Loan Party and each of its Subsidiaries comply in all
material respects with all applicable Environmental Laws and Environmental
Permits, all past non-compliance with such Environmental Laws and
Environmental Permits, if any, has been resolved without ongoing
obligations or costs, and no circumstances exist that could be reasonably
likely to (A) form the basis of an Environmental Action against any Loan
Party or any of its Subsidiaries or any of their properties (including,
without limitation, the Vessels) that could have a Material Adverse Effect
or (B) cause any such property (including, without limitation, the Vessels)
to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(ii) To the best of its knowledge, none of the properties currently
or formerly owned or operated by any Loan Party or any of its
Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to
any such property; there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks,
pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or
operated by
35
any Loan Party or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by any Loan Party
or any of its Subsidiaries; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party
or any of its Subsidiaries; and Hazardous Materials have not been
released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries.
(iii) Except as otherwise set forth on Part II of Schedule 4.01(q)
hereto, neither any Loan Party nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site (including,
without limitation, the Vessels), location or operation, either voluntarily
or pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from,
any property (including, without limitation, the Vessels) currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries
have been disposed of in a manner not reasonably expected to result in
material liability to any Loan Party or any of its Subsidiaries.
(r) Each Loan Party and each of its Subsidiaries and Affiliates has
timely filed, has caused to be timely filed or has been included in all tax
returns (Federal, state, local and foreign) required to be filed (and such
tax returns accurately reflect the actual tax liability of such party) and
has timely paid all taxes shown thereon to be due or otherwise due,
together with applicable interest and penalties.
(s) Neither the business nor the properties of any Loan Party or any of
its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that could be reasonably likely to have a Material Adverse
Effect.
(t) Set forth on Schedule 4.01(t) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and book and fair value
thereof. Each Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such real property, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.
(u) Set forth on Schedule 4.01(u) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries
on the date hereof, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
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(w) No Loan Party has any contract or arrangement with any Affiliate of
any Loan Party other than the Commercial Management Agreements and the
Technical Management Agreements.
(x) Set forth on Schedule 4.01(x) hereto is a complete and accurate
list of the Equity Investors, showing as of the date hereof the contact
name, telephone and facsimile number and address for notices for each
Equity Investor and the portion of the Contribution contributed by each
Equity Investor.
(y) As of the Effective Date, the Loan Parties and their Subsidiaries
have no Debt outstanding other than Debt under the Existing Bridge
Agreement and the documents and agreements executed in connection
therewith.
(z) As of the Effective Date, the Loan Parties and their Subsidiaries
have no Liens on any of their properties or assets other than Permitted
Liens and the Liens created under the Existing Bridge Agreement and the
documents and agreements executed in connection therewith.
(aa) Each Loan Party has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could
be adversely affected by the risk that computer applications used by such
Loan Party or any of its Subsidiaries (or suppliers and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999 (the "YEAR 2000
PROBLEM"), (ii) developed a plan and timetable for addressing the Year 2000
Problem on a timely basis and (iii) to date, implemented that plan in
accordance with such timetable. Based on the foregoing with respect to
itself, its Subsidiaries and its material suppliers and vendors and, to the
best of its knowledge in the case of its customers, each Loan Party
believes that all computer applications (including those of its material
suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a timely
basis to be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 ("YEAR 2000 COMPLIANT"), except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender shall have any Commitment hereunder, each of the Loan Parties
will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; PROVIDED, HOWEVER, that no Loan
37
Party nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom is initiated with
respect to any of their property.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of
its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials released as a
result of its operations (including, without limitation, from any of its
Vessels), in accordance with the requirements of all Environmental Laws;
PROVIDED, HOWEVER, that neither the Loan Parties nor any of their
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which such Loan Party or
such Subsidiary operates.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises.
(f) VISITATION RIGHTS. At any reasonable time and from time to time,
permit any of the Agents or any of the Lenders, or any agents or
representatives thereof, to examine and make copies of and abstracts from
the records and books of account of, and visit the properties of, the Loan
Parties and any of their Subsidiaries, and to discuss the affairs, finances
and accounts of the Loan Parties and any of their Subsidiaries with any of
their officers or directors and with their independent certified public
accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of such
Loan Party and each such Subsidiary in accordance with GAAP.
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(i) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to such Loan Party or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate, except that (i) the Loan Parties may enter into and, subject
to clause (ii) below, perform
38
their obligations under the Commercial Management Agreements and the
Technical Management Agreements, (ii) the Borrowers may, so long as no
Default shall have occurred and be continuing, pay the management fees
payable to GMC or any other Affiliate from time to time under the
Commercial Management Agreements and the Technical Management Agreements in
an aggregate amount not to exceed the aggregate amount of such fees so
payable under such Agreements as in effect on the Effective Date and (iii)
the Loan Parties may perform their obligations under, and to the extent
required by, the Subscription Agreement.
(j) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon (x) the
request of the Collateral Agent following the occurrence and during the
continuance of a Default, (y) the formation or acquisition of any new
direct or indirect Subsidiaries by any Loan Party or (z) the acquisition of
any property by any Loan Party, and such property, in the judgment of the
Collateral Agent, shall not already be subject to a perfected first
priority security interest in favor of the Collateral Agent for the benefit
of the Secured Parties, then each Loan Party shall, in each case at such
Loan Party's expense:
(i) in connection with the formation or acquisition of a
Subsidiary, within 10 days after such formation or acquisition, cause each
such Subsidiary, and cause each direct and indirect parent of such
Subsidiary (if it has not already done so), to duly execute and deliver to
the Collateral Agent a guaranty or guaranty supplement, in form and
substance satisfactory to the Collateral Agent, guaranteeing the other Loan
Parties' obligations under the Loan Documents,
(ii) within 10 days after such request, formation or acquisition,
furnish to the Collateral Agent a description of the real and personal
properties of the Loan Parties and their respective Subsidiaries in detail
satisfactory to the Collateral Agent,
(iii) within 15 days after such request, formation or acquisition,
duly execute and deliver, and cause each such Subsidiary and each direct
and indirect parent of such Subsidiary (if it has not already done so) to
duly execute and deliver, to the Collateral Agent mortgages, pledges,
assignments, security agreement supplements and other security agreements,
as specified by and in form and substance satisfactory to the Collateral
Agent, securing payment of all the Obligations of the applicable Loan
Party, such Subsidiary or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such properties,
(iv) within 30 days after such request, formation or acquisition,
take, and cause such Subsidiary or such parent to take, whatever action
(including, without limitation, the recording of mortgages, the filing or
recording of Uniform Commercial Code financing statements or other
appropriate documents, the giving of notices and the endorsement of notices
on title documents) may be necessary or advisable in the opinion of the
Collateral Agent to vest in the Collateral Agent (or in any representative
of the Collateral Agent designated by it) valid and subsisting Liens on the
properties purported to be subject to the mortgages, pledges, assignments,
security agreement supplements and security agreements delivered pursuant
to this Section 5.01(j), enforceable against all third parties in
accordance with their terms,
39
(v) within 60 days after such request, formation or acquisition,
deliver to the Collateral Agent, upon the request of the Collateral Agent
in its sole discretion, a signed copy of a favorable opinion, addressed to
the Collateral Agent and the other Secured Parties, of counsel for the Loan
Parties acceptable to the Collateral Agent as to the matters contained in
clauses (i), (iii) and (iv) above, as to such guaranties, guaranty
supplements, mortgages, pledges, assignments, security agreement
supplements and security agreements being legal, valid and binding
obligations of each Loan Party party thereto enforceable in accordance with
their terms, as to the matters contained in clause (iv) above, as to such
recordings, filings, notices, endorsements and other actions being
sufficient to create valid perfected Liens on such properties, and as to
such other matters as the Collateral Agent may reasonably request,
(vi) as promptly as practicable after such request, formation or
acquisition, deliver, upon the request of the Collateral Agent in its sole
discretion, to the Collateral Agent with respect to each parcel of real
property owned or held by the entity that is the subject of such request,
formation or acquisition title reports, surveys and engineering, soils and
other reports, and environmental assessment reports, each in scope, form
and substance satisfactory to the Collateral Agent, PROVIDED, HOWEVER, that
to the extent that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such real
property, such items shall, promptly after the receipt thereof, be
delivered to the Collateral Agent,
(vii) upon the occurrence and during the continuance of a Default,
promptly cause to be deposited any and all cash dividends paid or payable
to it or any of its Subsidiaries from any of its Subsidiaries from time to
time into a cash collateral account maintained with the Collateral Agent,
and with respect to all other dividends paid or payable to it or any of its
Subsidiaries from time to time, promptly execute and deliver, or cause such
Subsidiary to promptly execute and deliver, as the case may be, any and all
further instruments and take or cause such Subsidiary to take, as the case
may be, all such other action as the Collateral Agent may deem necessary or
desirable in order to obtain and maintain from and after the time such
dividend is paid or payable a perfected, first priority lien on and
security interest in such dividends, and
(viii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all such
other action as the Collateral Agent may deem necessary or desirable in
obtaining the full benefits of, or in perfecting and preserving the Liens
of, such guaranties, mortgages, pledges, assignments, security agreement
supplements and security agreements.
(k) FURTHER ASSURANCES. (i) Promptly upon request by any Agent, or any
Lender through the Administrative Agent, correct, and cause each of its
Subsidiaries promptly to correct, any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing
or recordation thereof, and
(ii) Promptly upon request by any Agent, or any Lender through the
Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts,
deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust
deeds, assignments, financing statements and continuations thereof,
termination statements,
40
notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender through the Administrative Agent,
may reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C)
perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created thereunder
and (D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Secured Parties the rights granted or now
or hereafter intended to be granted to the Secured Parties under any Loan
Document or under any other instrument executed in connection with any Loan
Document to which any Loan Party or any of its Subsidiaries is or is to be
a party, and cause each of its Subsidiaries to do so.
(l) PERFORMANCE OF RELATED DOCUMENTS. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect, enforce such
Related Document in accordance with its terms, take all such action to such
end as may be from time to time requested by the Administrative Agent and,
upon request of the Administrative Agent, make to each other party to each
such Related Document such demands and requests for information and reports
or for action as any Loan Party or any of its Subsidiaries is entitled to
make under such Related Document.
(m) PREPARATION OF ENVIRONMENTAL REPORTS. Promptly upon the occurrence
of any of the following conditions, provide to the Administrative Agent a
certificate of the chief executive officer thereof, specifying in detail
the nature of such condition and the Loan Parties' proposed response or the
proposed response of any Environmental Affiliate: (a) any Loan Party's
receipt or the receipt by any Environmental Affiliate of any communication
whatsoever that alleges, or knowledge by any Loan Party or any
Environmental Affiliate, that such Person is not in compliance with any
applicable Environmental Law or Environmental Permit, if such noncompliance
could reasonably be expected to have a Material Adverse Effect, (b)
knowledge by any Loan Party or any Environmental Affiliate that there
exists any Environmental Action pending or threatened against any such
Person which could reasonably be expected to have a Material Adverse
Effect, or (c) any release, emission, discharge or disposal of any material
that could form the basis of liability under any Environmental Law for any
Loan Party or Environmental Affiliate if such liability could reasonably be
expected to have a Material Adverse Effect. Upon the written request by the
Administrative Agent, the Loan Parties shall submit to the Administrative
Agent at reasonable intervals, a report providing an update of the status
of any issue or claim identified in any certificate required pursuant to
this Section 5.01(m). For the purposes of this Section 5.01(m),
"Environmental Affiliate" shall mean any Person whose liability under
Environmental Law any of the Loan Parties may have assumed by contract or
operation of law.
(n) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which such Loan Party or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or be
terminated or any rights to renew such leases to be forfeited or canceled,
notify the Administrative Agent of any default by any party with respect to
such leases and cooperate with the Administrative Agent in all respects to
cure any such default, and cause each of its
41
Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to
have a Material Adverse Effect.
(o) DEPOSIT ACCOUNTS. Maintain, and cause each of its Subsidiaries to
maintain, all deposit accounts (other than the Oaktree Account) with CBNY
or another bank acceptable to the Collateral Agent that has accepted the
assignment of such accounts to the Collateral Agent for the benefit of the
Secured Parties.
(p) APPRAISALS OF VESSELS. Deliver to the Administrative Agent within
45 days after the end of each fiscal quarter commencing with the fiscal
quarter ending March 31, 1999, at the Borrowers' expense (or more often as
the Administrative Agent may reasonably request, in such case, so long as
no Default shall have occurred and be continuing, at the Administrative
Agent's expense and otherwise at the Borrowers' expense), an appraisal of
each Vessel in form and substance satisfactory to the Administrative Agent
setting forth the Market Value of such Vessel.
(q) CONDITIONS SUBSEQUENT TO EFFECTIVE DATE. Deliver to the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent (i) within 30 days following the Effective Date, a
certified copy of the Register of Mortgages maintained by each Loan Party
at its registered office evidencing that the Collateral pledged by such
Loan Party under the Collateral Documents has been duly recorded therein,
and (ii) within 60 days following the Effective Date, executed notices of
assignment and loss payable clauses in substantially the form attached to
the Assignments of Insurances duly endorsed to each insurance policy issued
by each insurer of each Vessel together with evidence that the Collateral
Agent has been named as additional assured (without responsibility for
payment of premiums or calls) on each such insurance policy.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender shall have any Commitment hereunder, each Loan Party will not, at any
time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
on or with respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter acquired, or
sign or file or record or suffer to exist, or permit any of its
Subsidiaries to sign or file or record or suffer to exist, under the
Uniform Commercial Code or other applicable law of any jurisdiction, a
financing statement or analogous document that names such Loan Party or any
of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of
its Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file or record such financing
statement or analogous document, or assign, or permit any of its
Subsidiaries to assign, any accounts or other right to receive income,
except:
(i) Liens created under the Loan Documents,
(ii) Permitted Liens, and
(iii) Liens on amounts on deposit in the Oaktree Account of up to a
principal amount of $500,000, plus interest thereon, of the Parent created
under the Oaktree Escrow Agreement.
42
(b) DEBT. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(i) Debt under the Loan Documents,
(ii) Debt owed to a Loan Party, which Debt (x) shall constitute
Pledged Debt, (y) shall be on terms acceptable to the Administrative Agent
and (z) shall be evidenced by promissory notes in form and substance
satisfactory to the Administrative Agent and such promissory notes shall be
pledged as security for the Obligations of the holder thereof under the
Loan Documents to which such holder is a party and delivered to the
Collateral Agent pursuant to the terms of the Security Agreement, and
(iii) Debt consisting of the Oaktree Claim.
(c) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof; or engage in, or permit any of its
Subsidiaries to engage in, any business other than shipping and other
businesses directly related thereto as carried on at the date hereof.
(d) MERGERS, ETC. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so.
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or grant any option or other right to purchase,
lease or otherwise acquire any assets other than sales of worn out or
obsolete machinery, fixtures, equipment and materials (other than the
Vessels), PROVIDED that with respect to any such assets that are material
to the operation of the Vessels, such assets are promptly replaced by
comparable machinery, fixture, equipment or materials.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:
(i) equity Investments by the Parent in the Borrowers;
(ii) Investments by the Borrowers in Cash Equivalents; and
(iii) Investments consisting of intercompany Debt permitted under
Section 5.02(b)(ii).
(g) RESTRICTED PAYMENTS. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity
Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as
such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent
Persons thereof) as such or issue or sell any Equity Interests or accept
any capital contributions, or permit any of its Subsidiaries to do any of
the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in such
Loan Party or to issue or sell any Equity Interests therein, except that,
so long as no Default shall have occurred and be continuing at the time of
any action described below or would result therefrom any Loan Party may
accept capital
43
contributions from its parent, its partners or the Equity Investors
(including, without limitation, any recognition or reinstatement of any
prior capital contributions from any of the Equity Investors arising in
connection with the Amendment).
(h) LEASE OBLIGATIONS. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for
the rental or hire of other real or personal property of any kind under
leases or agreements to lease (including, without limitation, Capitalized
Leases) having an original term of one year or more.
(i) AMENDMENTS OF CONSTITUTIVE DOCUMENTS. Amend, or permit any of its
Subsidiaries to amend, its Constitutive Documents except for amendments to
the schedules to the Partnership Agreement to reflect any recognition or
reinstatement of any prior capital contributions from any of the Equity
Investors arising in connection with the Amendment.
(j) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by GAAP, or (ii) Fiscal Year.
(k) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Debt,
except the prepayment of the Advances in accordance with the terms of this
Agreement.
(l) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive
any default under or any breach of any term or condition of any Related
Document, agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document or take any other
action in connection with any Related Document that, in each case, would
impair in any material respect the value of the interest or rights of any
Loan Party thereunder or that would impair the rights or interests of any
Agent or any Lender, or permit any of its Subsidiaries to do any of the
foregoing.
(m) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets except in favor of the Secured Parties.
(n) PARTNERSHIPS, ETC. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so.
(o) SPECULATIVE TRANSACTIONS. Engage, or permit any of its Subsidiaries
to engage, in any transaction involving commodity options or futures
contracts or any similar speculative transactions.
(p) CAPITAL EXPENDITURES. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures that would cause the aggregate of all such
Capital Expenditures made by
44
the Loan Parties in any Fiscal Year to exceed $1,000,000 without the prior
written consent of the Administrative Agent which consent shall not be
unreasonably withheld.
(q) FORMATION OF SUBSIDIARIES. Organize or invest, or permit any
Subsidiary to organize or invest, in any new Subsidiary.
(r) PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or arrangement
limiting the ability of any of its Subsidiaries to declare or pay dividends
or other distributions in respect of its Equity Interests or repay or
prepay any Debt owed to, make loans or advances to, or otherwise transfer
assets to or invest in, such Loan Party or any of its Subsidiaries (whether
through a covenant restricting dividends, loans, asset transfers or
investments, a financial covenant or otherwise), except the Loan Documents.
(s) ERISA. Have, or permit any other Loan Party or any ERISA Affiliate
to have, any Plan or Multiemployer Plan.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender shall have any Commitment hereunder, the Loan Parties will furnish
to the Agents and the Lenders:
(a) DEFAULT NOTICE. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of such Loan Party setting forth details of such Default and the action
that such Loan Party has taken and proposes to take with respect thereto.
(b) ANNUAL FINANCIALS. As soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit report
for such year for the Parent and its Subsidiaries, including therein
Consolidated and consolidating balance sheets of the Parent and its
Subsidiaries as of the end of such Fiscal Year and Consolidated and
consolidating statements of income and a Consolidated statement of cash
flows of the Parent and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of independent
public accountants of recognized standing acceptable to the Required
Lenders, together with (i) a certificate of such accounting firm to the
Lenders stating that in the course of the regular audit of the business of
the Parent and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a Default has occurred
and is continuing, or if, in the opinion of such accounting firm, a Default
has occurred and is continuing, a statement as to the nature thereof, (ii)
a schedule in form satisfactory to the Administrative Agent of the
computations used by such accountants in determining, as of the end of such
Fiscal Year, compliance with the covenants contained in Section 5.04,
PROVIDED that in the event of any change in GAAP used in the preparation of
such financial statements, the Parent shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP and (iii) a
certificate of the Chief Financial Officer (or person performing similar
functions) of the Parent stating that no Default has occurred and is
continuing or, if a default has occurred and is continuing, a statement as
to
45
the nature thereof and the action that the Parent has taken and proposes to
take with respect thereto.
(c) QUARTERLY FINANCIALS. As soon as available and in any event within
45 days after the end of each of the first three quarters of each Fiscal
Year, Consolidated and consolidating balance sheets of the Parent and its
Subsidiaries as of the end of such quarter and Consolidated and
consolidating statements of income and a Consolidated statement of cash
flows of the Parent and its Subsidiaries for the period commencing at the
end of the previous fiscal quarter and ending with the end of such fiscal
quarter and Consolidated and consolidating statements of income and a
Consolidated statement of cash flows of the Parent and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding date or period of the
preceding Fiscal Year, all in reasonable detail and duly certified (subject
to normal year-end audit adjustments) by the Chief Financial Officer (or
person performing similar functions) of the Parent as having been prepared
in accordance with GAAP, together with a certificate of said officer in
substantially the form of Exhibit E hereto stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the Parent has
taken and proposes to take with respect thereto and a schedule of the
computations used by the Parent in determining compliance with the
covenants contained in Section 5.04, PROVIDED that in the event of any
change in GAAP used in the preparation of such financial statements, the
Parent shall also provide, if necessary for the determination of compliance
with Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP.
(d) MONTHLY FINANCIALS AND FORECAST. As soon as available and in any
event within 30 days after the end of each month, forecasts, prepared by
management of the Parent in substantially the form of Exhibit F hereto, of
cash flows for each Borrower together with a comparison of forecasted cash
flow projections versus actual cash flow figures for the previous month, a
summary of the number of days each Vessel was in operation for the previous
month and the applicable time charter equivalent rate for such Vessel for
such period.
(e) ANNUAL FORECAST. As soon as available and in any event no later
than 15 days before the end of each Fiscal Year, forecasts prepared by
management of the Parent, in substantially the form of an annual report
(without notes) prepared by the Parent in the normal course of business and
satisfactory to the Administrative Agent, of Consolidated and consolidating
balance sheets and Consolidated and consolidating income statements and
statements of cash flows on an annual basis for each Fiscal Year until the
Termination Date.
(f) LITIGATION. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f).
(g) SECURITIES REPORTS. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements, reports and
correspondence that any Loan Party or any of its Subsidiaries sends to its
stockholders, partners or other equity holders, and copies of all regular,
periodic and special reports, and all registration statements, that any
Loan Party or any of
46
its Subsidiaries files with the Securities and Exchange Commission or other
applicable governmental or regulatory agency, or with any national
securities exchange.
(h) AGREEMENT NOTICES. Promptly upon receipt thereof, (i) copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to the Partnership Agreement and (ii)
with respect to any other Related Document or instrument, indenture, loan
or credit or similar agreement, copies of all notices, requests and other
documents received by any Loan Party or any of its Subsidiaries regarding
or related to any breach or default by any party thereto or any other event
that could materially impair the value of the interests or the rights of
any Loan Party or otherwise have a Material Adverse Effect and copies of
any amendment, modification or waiver of any provision of any Related
Document (including the Partnership Agreement) or indenture, loan or credit
or similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the Related
Documents and such instruments, indentures and loan and credit and similar
agreements as the Administrative Agent may reasonably request.
(i) TAX AUTHORITY REPORTS. Within 10 days after receipt, copies of all
reports issued by any taxing authority, or other written proposals of any
taxing authority, that propose, determine or otherwise set forth
adjustments to the income, franchise, property or any other similar tax
liability of any Loan Party that, in the aggregate, would reasonably likely
to have a Material Adverse Effect.
(j) TAX CERTIFICATES. Promptly, and in any event within five Business
Days after the due date (with extensions) for filing a tax return (or other
similar tax forms) in respect of each taxable year, a certificate (a "TAX
CERTIFICATE"), signed by the President or the Chief Financial Officer (or
person performing similar functions) of the Parent, stating that the Parent
and its Subsidiaries (i) have paid to the relevant taxing authority, the
full amount that they are required to pay in respect of income, franchise,
property and other similar taxes (as applicable) for such year, (ii) have
received any amounts payable to them in respect of any tax refund, rebate
or similar payments, and (iii) have not paid amounts in respect of taxes in
excess of the amount they are required to pay in respect of such taxable
year.
(k) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(l) YEAR 2000 COMPLIANCE. Promptly after any Loan Party's discovery or
determination thereof, notice (in reasonable detail) that any computer
application (including those of its material suppliers, vendors and
customers) that is material to its or any of its Subsidiaries' business and
operations will not be Year 2000 Compliant (as defined in Section
4.01(aa)), except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
(m) EQUITY INVESTORS. (i) Promptly upon any change in the Equity
Investors or the Equity Interests of any Equity Investor in the Parent from
the Equity Interests set forth on
47
Schedule 4.01(a) hereto, notice of such change, including, without
limitation, the name, contact person, address and telephone numbers of any
new equity investor in the Parent and such other information as the
Administrative Agent may reasonably request and (ii) within 10 Business
Days after the end of each fiscal quarter of the Parent a certificate
stating that there has been no other change in the Equity Interests of any
Equity Investor in the Parent other than those, if any, specified in
accordance with clause (i) above.
(n) OTHER INFORMATION. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Agent, or any
Lender through the Administrative Agent, may from time to time reasonably
request.
SECTION 5.04. FINANCIAL COVENANTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender shall have any Commitment hereunder, the Loan Parties will:
(a) INTEREST COVERAGE RATIO. Maintain at the end of each fiscal quarter
of the Parent an Interest Coverage Ratio of not less than (i) during the
Initial Period, 1.0:1.0, and (ii) thereafter, 1.5:1.0.
(b) WORKING CAPITAL. Maintain at all times Current Assets in excess of
Current Liabilities, in each case, of the Parent and its Subsidiaries on a
Consolidated basis.
(c) MINIMUM CASH ON HAND. Maintain at all times cash on hand of the
Borrowers (including, without limitation, amounts on deposit in any deposit
account of the Borrowers) (i) during the period from the Effective Date
until the six month anniversary of the Effective Date, (x) $250,000 for
each Borrower and (y) $1,000,000 for all Borrowers in the aggregate, and
(ii) thereafter, (x) $500,000 for each Borrower and (y) $2,000,000 for all
Borrowers in the aggregate.
(d) MINIMUM COLLATERAL COVERAGE. Maintain at all times for each
Borrower a ratio of (i) the Market Value of the Vessel registered in the
name of such Borrower to (ii) the aggregate principal amount of the
Advances owing by such Borrower, of not less than (x) during the Initial
Period, 1.1:1.0, and (y) thereafter, 1.25:1.0.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) any Borrower shall fail to pay any principal of any Advance or any
interest on any Advance, or any Loan Party shall fail to make any other
payment under any Loan Document, in each case when the same becomes due and
payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
48
(c) any Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 5.01(e), (f), (i), (j), (o) or (p), 5.02,
5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 10 days
after the earlier of the date on which (i) a Responsible Officer becomes
aware of such failure or (ii) written notice thereof shall have been given
to such Loan Party by any Agent or any Lender; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal amount (or, in the case of
any Hedge Agreement, an Agreement Value) of at least $1,000,000 (or the
equivalent thereof in the applicable currency of such Debt) either
individually or in the aggregate (but excluding Debt outstanding hereunder)
of such Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be declared
to be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
any Loan Party or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above
in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$1,000,000 (or the equivalent thereof in the applicable currency of such
judgment or order) shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 10
49
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could be reasonably likely to
have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it, or any such Loan Party
shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to Section
3.01 shall for any reason (other than pursuant to the terms thereof) cease
to create a valid and perfected first priority lien on and security
interest in the Collateral purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) an "Event of Default" (as defined in any Mortgage) shall have
occurred and be continuing; or
(m) there shall occur any Material Adverse Change as determined in the
sole judgment of the Lenders; or
(n) a maritime or other lien, arrest, distress or similar charge is
levied upon, or against any of the Vessels or any substantial part of the
assets of any of the Loan Parties and such Vessel or assets are not
released from such arrest, attachment or detention within ten days; or
(o) a substantial part of any Loan Party's business or assets is
destroyed, abandoned, seized, appropriated or forfeited for any reason.
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Commitments of each Lender and the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders, (A)
by notice to the Borrowers, declare the Notes, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such 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 the Borrowers; PROVIDED, HOWEVER, that in the event of an actual or
deemed entry of an order for relief with respect to any Borrower under the
Federal Bankruptcy Code, (x) the Commitments of each Lender and the obligation
of each Lender to make Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrowers.
ARTICLE VII
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GUARANTY
SECTION 7.01. GUARANTY; LIMITATION OF LIABILITY. (a) Each Guarantor,
jointly and severally, hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or at a
date fixed for prepayment under the terms of the Loan Documents or by
acceleration, demand or otherwise under the terms of the Loan Documents, of all
Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnification payments,
contract causes of action, costs, expenses or otherwise (such Obligations being
the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Administrative Agent or any other Secured Party in enforcing any
rights under this Guaranty and the other Loan Documents. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any Loan Party to the Administrative Agent or any other Secured Party under or
in respect of the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Loan Party.
(b) Each Guarantor and the Administrative Agent and each other Secured
Party, hereby confirms that it is the intention of all such Persons that this
Guaranty and the Obligations of each Guarantor hereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law relating to the protection of creditors' rights or
the relief of debtors to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Guaranteed Obligations and all of the other
liabilities of each Guarantor (other than the Parent) under this Guaranty shall
be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor (other
than guaranties of such Guarantor in respect of Subordinated Debt) that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other guarantor in respect of the Obligations of such other guarantor under this
Guaranty or any other guaranty, result in the Guaranteed Obligations and all of
the other liabilities of each Guarantor under this Guaranty not constituting a
fraudulent transfer or conveyance. For purposes hereof, "BANKRUPTCY LAW" means
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to the Secured Parties
under this Guaranty or any other guaranty, such Guarantor will contribute, to
the maximum extent permitted by applicable law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid
to the Secured Parties under or in respect of the Loan Documents.
SECTION 7.02. GUARANTY ABSOLUTE. (a) Each Guarantor guarantees that all
of the Guaranteed Obligations will be paid strictly in accordance with the terms
of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any other Loan Party
under or in respect of the Loan Documents, and a separate
51
action or actions may be brought and prosecuted against each Guarantor to
enforce this Guaranty, irrespective of whether any action is brought against any
other Loan Party or whether any other Loan Party is joined in any such action or
actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives (to the maximum extent permitted by applicable law)
any defenses it may now have or may hereafter acquire in any way relating to,
any or all of the following:
(i) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of, or consent to departure from, any other guaranty, for all or any
of the Guaranteed Obligations;
(iv) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral
or any other collateral for all or any of the Guaranteed Obligations or any
other Obligations of any Loan Party under or in respect of the Loan
Documents or any other property or assets of any Loan Party or any of its
Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(vi) any failure of any Secured Party to disclose to any Loan Party
any information relating to the business, condition (financial or
otherwise), operations, performance, assets, nature of assets, liabilities
(including, without limitation, tax and environmental liabilities) or
prospects of any other Loan Party now or hereafter known to such Secured
Party (each Guarantor waiving any duty on the part of the Secured Parties
to disclose such information);
(vii) the failure of any other Person to execute this Guaranty or
any other guaranty or agreement or the release or reduction of liability of
any Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
(viii) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any other Secured Party that
might otherwise constitute a defense available to, or a discharge of, any
Borrower, any Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any other Secured
Party or by any other Person upon the insolvency, bankruptcy
52
or reorganization of any Loan Party or otherwise, all as though such payment had
not been made, and each Guarantor hereby unconditionally and irrevocably agrees
that it will indemnify the Administrative Agent and each other Secured Party,
upon demand, for all costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by the Administrative Agent or
such other Secured Party in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, a fraudulent transfer or a
similar payment under any bankruptcy, insolvency or similar law, regulation or
order.
(b) Each Guarantor hereby further agrees that (i) the Guaranteed
Obligations of such Guarantor may be declared to be forthwith due and payable as
provided in Section 6.01 (and shall be deemed to have become automatically due
and payable in the circumstances provided in Section 6.01) for all purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such declaration in respect of the Obligations of any Loan Party
guaranteed hereunder (or preventing such Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and (ii) in the event
of any declaration of acceleration of such Guaranteed Obligations (or such
Guaranteed Obligations being deemed to have become automatically due and
payable) as provided in Section 6.01, such Guaranteed Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by such Guarantor for all purposes of this Guaranty.
SECTION 7.03. WAIVERS AND ACKNOWLEDGMENTS. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property or assets subject thereto or exhaust any right
or take any action against any Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty, and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by the Administrative Agent or the other Secured Parties which in any
manner impairs, reduces, releases or otherwise adversely affects such
Guarantor's subrogation, reimbursement, exoneration, contribution or
indemnification rights or any other rights of such Guarantor to proceed against
any Borrower, any other Guarantor, any other guarantor or any other Person or
any Collateral, and (ii) any defense based on any right of setoff or
counterclaim against or in respect of such Guarantor's Obligations under this
Guaranty.
(d) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of the Administrative Agent or any other Secured Party to
disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, assets, nature of
assets, liabilities, (including, without limitation, tax and environmental
liabilities) or prospects of any other Loan Party or any of its Subsidiaries now
or hereafter known by the Administrative Agent or such other Secured Party.
53
(e) Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 7.02 and in this Section
7.03 are knowingly made in contemplation of such benefits.
SECTION 7.04. SUBROGATION. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or may
hereafter acquire against any Borrower, any other Loan Party or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under or in respect of this Guaranty
or any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Administrative Agent or any
other Secured Party against such Borrower, such other Loan Party or any other
insider guarantor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from such Borrower, such other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other
property or by setoff or in any other manner, payment or security on account of
such claim, remedy or right, unless and until such time as all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Commitments shall have expired or been terminated.
If any amount shall be paid to any Guarantor in violation of the immediately
preceding sentence at any time prior to the later of (a) the payment in full in
cash of all Guaranteed Obligations and all other amounts payable under this
Guaranty and (b) the Termination Date, such amount shall be received and held in
trust for the benefit of the Administrative Agent and the other Secured Parties,
shall be segregated from other property and funds of such Guarantor and shall
forthwith be delivered to the Administrative Agent in the same form as so
received (with any necessary endorsement or assignment) to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or the
other amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to the Administrative Agent or any other Secured
Party of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and (iii) the Termination Date shall have
occurred, the Administrative Agent and the other Secured Parties shall, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor under this Guaranty.
SECTION 7.05. CONTINUING GUARANTY; ASSIGNMENTS. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
later of (i) the payment in full in cash of all Guaranteed Obligations and all
other amounts payable under this Guaranty and (ii) the Termination Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Administrative Agent and the other Secured
Parties and their successors, transferees and assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, any Secured
Party may assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Commitments, the Advances owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Secured Party herein or
otherwise, in each case as and to the extent provided in Section 9.07.
54
ARTICLE VIII
THE AGENTS
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), no Agent shall be required to exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lenders and all holders of Notes; PROVIDED, HOWEVER,
that no Agent shall be required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or applicable law. Each
Agent agrees to give to each Lender prompt notice of each notice given to it by
the Borrowers pursuant to the terms of this Agreement.
SECTION 8.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 9.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents; (d)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any Loan Document on
the part of any Loan Party or to inspect the property (including the books and
records) of any Loan Party; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram or
telecopy) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03. CBNY AND AFFILIATES. With respect to its Commitment, the
Advances made by it and the Notes issued to it, CBNY shall have the same rights
and powers under the Loan Documents as any other Lender and may exercise the
same as though it were not an Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include CBNY in its individual capacity.
CBNY and its affiliates may accept deposits from, lend money to, act as trustee
under indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its Subsidiaries and
any Person that may do business with or own securities
55
of any Loan Party or any such Subsidiary, all as if CBNY was not an Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon any Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. INDEMNIFICATION. (a) Each Lender severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Loan Parties)
from and against such Lender's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents; PROVIDED, HOWEVER, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender agrees to reimburse each Agent promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Loan Parties under
Section 9.04, to the extent that such Agent is not promptly reimbursed for such
costs and expenses by the Loan Parties.
(b) For purposes of this Section 8.05, the Lenders' respective ratable
shares of any amount shall be determined, at any time, according to the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lenders. The failure of any Lender to reimburse any Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lenders to such Agent as provided herein shall not relieve any other Lender
of its obligation hereunder to reimburse such Agent for its ratable share of
such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse such Agent for such other Lender's ratable share of such
amount. Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this
Section 8.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
SECTION 8.06. SUCCESSOR AGENTS. Any Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrowers and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank that is an
Eligible Assignee. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent and, in the case of a successor Collateral Agent, upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral
56
Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. If within 45 days after written notice is given of the retiring
Agent's resignation or removal under this Section 8.06 no successor Agent shall
have been appointed and shall have accepted such appointment, then on such 45th
day (i) the retiring Agent's resignation or removal shall become effective, (ii)
the retiring Agent shall thereupon be discharged from its duties and obligations
under the Loan Documents and (iii) the Required Lenders shall thereafter perform
all duties of the retiring Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as provided above. After
any retiring Agent's resignation or removal hereunder as Agent shall have become
effective, the provisions of this Article VIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver or consent
shall, unless in writing and signed by all of the Lenders, do any of the
following at any time: (a) waive any of the conditions specified in Section
3.01, (b) change the number of Lenders or the percentage of (i) the Commitments
or (ii) the aggregate unpaid principal amount of the Advances that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (c) reduce or limit the obligations of any Guarantor under Section
7.01 of the Guaranty set forth in Article VII hereof or release such Guarantor
or otherwise limit such Guarantor's liability with respect to the Obligations
owing to the Agents and the Lenders, (d) release any portion of the Collateral
in any transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien other than Permitted Liens on
any portion of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Secured Parties under the Loan Documents, (e) amend this Section 9.01, (f)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (g) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable hereunder, (h) postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, or (i) limit the liability of any Loan Party under any of the Loan
Documents; PROVIDED FURTHER that no amendment, waiver or consent shall, unless
in writing and signed by an Agent in addition to the Lenders required above to
take such action, affect the rights or duties of such Agent under this Agreement
or the other Loan Documents.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to the
Borrowers or the Parent, c/o General Maritime Corporation at its address at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxxxxxx
(facsimile No.: (000) 000-0000); if to any Initial Lender, at its Eurodollar
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender, at its Eurodollar Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; if to CBNY, individually or as
an Agent, at its address at 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Shipping
57
Department; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed or telecopied, be effective when
deposited in the mails, delivered to the telegraph company or transmitted by
telecopier, respectively, except that notices and communications to any Agent
pursuant to Article II, III or VIII shall not be effective until received by
such Agent. Manual delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any Lender
or any Agent to exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES. (a) Each of the Loan Parties agrees
to pay on demand (i) all costs and expenses of each Agent and each Lender in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for each Agent with respect thereto, with respect to advising such Agent as to
its rights and responsibilities, or the perfection, protection or preservation
of rights or interests, under the Loan Documents, with respect to negotiations
with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of each Agent and each Lender in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent and each
Lender with respect thereto).
(b) Each of the Loan Parties agrees to indemnify and hold harmless each
Agent, each Lender and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Facility, the actual
or proposed use of the proceeds of the Advances, the Transaction Documents or
any of the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition or similar business combination (including
the Transaction and any other transaction contemplated hereby) by any Loan Party
or any of its Subsidiaries or Affiliates of all or any portion of the Equity
Interests or substantially all of the assets of any other Person or (ii) the
actual or alleged presence of Hazardous Materials on, or in connection with, any
property (including, without limitation, the Vessels) of any Loan Party or any
of its Subsidiaries or any Environmental Action relating in any way to any Loan
Party or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified
58
Party's gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Transaction Documents are consummated. Each Loan Party also agrees not to
assert any claim against any Agent, any Lender or any of their Affiliates, or
any of their respective officers, directors, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facility, the actual or
proposed use of the proceeds of the Advances, the Transaction Documents or any
of the transactions contemplated by the Transaction Documents.
(c) If any payment of principal of any Advance is made by a Loan Party
to or for the account of a Lender other than on the last day of the Interest
Period for such Advance, as a result of a payment pursuant to Section 2.05 or
2.08(c), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or if any Loan Party fails to make any payment or
prepayment of an Advance for which a notice of prepayment has been given or that
is otherwise required to be made, whether pursuant to Section 2.03, 2.05 or 6.01
or otherwise, such Loan Party shall, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment or such failure to pay or prepay, as the case may be,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender, in
its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Loan Parties contained in Sections 2.08 and 2.10 and this
Section 9.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of the Loan Parties against any
and all of the Obligations of the Loan Parties now or hereafter existing under
the Loan Documents, irrespective of whether such Agent or such Lender shall have
made any demand under this Agreement or such Note or Notes and although such
obligations may be unmatured. Each Agent and each Lender agrees promptly to
notify such Loan Party after any such set-off and application; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Agent and each Lender and their
respective Affiliates
59
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Agent, such Lender and
their respective Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Loan Parties and each Agent and the
Administrative Agent shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Loan Parties, each Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Note held by it);
PROVIDED, HOWEVER, that (i) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender or an Affiliate of any
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the aggregate amount of the Commitment being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (ii) each such assignment shall be to an Eligible
Assignee, and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $2,500.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.08, 2.10 and 9.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
60
(iv) such assignee will, independently and without reliance upon any Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to such
Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Agent or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and each other Agent. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, the Borrowers, at
their own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if any assigning Lender has retained a Commitment
hereunder, a new Note to the order of such assigning Lender in an amount equal
to the Commitment retained by it hereunder. Such new Note or Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of such
surrendered Note, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto.
(f) Each Lender may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Advances owing to it and the Note (if any)
held by it); PROVIDED, HOWEVER, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrowers, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable
61
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Borrowers furnished to such Lender by or on behalf
of the Borrowers; PROVIDED, HOWEVER, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information received by it from
such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Manual delivery of an executed counterpart of a signature page to this Agreement
by telecopier shall be effective as delivery of an original executed counterpart
of this Agreement.
SECTION 9.09. CONFIDENTIALITY. Neither any Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent of the
Borrowers, other than (a) to such Agent's or such Lender's Affiliates and their
officers, directors, employees, agents and advisors and to actual or prospective
Eligible Assignees and participants, and then only on a confidential basis, (b)
as required by any law, rule or regulation or judicial process, (c) as requested
or required by any state, Federal or foreign authority or examiner regulating
such Lender and (d) to any rating agency when required by it, PROVIDED that,
prior to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan Parties
received by it from such Lender.
SECTION 9.10. RELEASE OF COLLATERAL. Upon the sale, lease, transfer or
other disposition of any item of Collateral of any Loan Party in accordance with
the terms of the Loan Documents, the Collateral Agent will, at such Loan Party's
expense, execute and deliver to such Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral Documents
in accordance with the terms of the Loan Documents.
SECTION 9.11. RELEASE OF EQUITY INVESTORS' UNDERTAKINGS. Each Lender
hereby authorizes the Administrative Agent to act on behalf of such Lender in
executing such documents as may be required to release each Equity Investor from
its obligations under the Undertaking (as defined in the Existing Bridge
Agreement) to which it is a party in consideration of such Equity Investor's
paying its share of the Contribution as contemplated by Section 3.01(g).
SECTION 9.12. JURISDICTION, ETC. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of
62
the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.13. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
[The remainder of this page is intentionally left blank]
63
SECTION 9.14. WAIVER OF JURY TRIAL. Each of the Loan Parties, the
Agents and the Lenders irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of any Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a Deed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
EXECUTED AS DEED by
GENMAR XXXXXXXXXXX LIMITED _________________
in the presence of: Name
Title
__________________
Witness
EXECUTED AS DEED by
GENMAR AGAMEMNON LIMITED _________________
in the presence of: Name
Title
__________________
Witness
EXECUTED AS DEED by
GENMAR MINOTAUR LIMITED _________________
in the presence of: Name
Title
__________________
Witness
EXECUTED AS DEED by
GENMAR AJAX LIMITED _________________
in the presence of: Name
Title
__________________
Witness
EXECUTED AS DEED by
GENMAR AJAX LIMITED,as
Managing General Partner of _________________
AJAX LIMITED PARTNERSHIP Name
in the presence of: Title
__________________
Witness
64
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH, as Administrative
Agent and Collateral Agent
By_____________________________________
Title:
By_____________________________________
Title:
65
INITIAL LENDERS
CHRISTIANIA BANK OG KREDITKASSE ASA,
NEW YORK BRANCH
By_____________________________________
Title:
By_____________________________________
Title:
00
XXXXXXXXXXXXX XXXXXXXX XXXXXX XX
By_____________________________________
Title:
By_____________________________________
Title:
UNION BANK OF NORWAY
By_____________________________________
Title:
By_____________________________________
Title:
DE NATIONAL INVESTERINGSBANK N.V.
By_____________________________________
Title:
By_____________________________________
Title:
SCHEDULE 4.01(A)
EQUITY INTERESTS IN LOAN PARTIES
1) AJAX LIMITED PARTNERSHIP :
EQUITY INTERESTS
EQUITY INVESTORS (IN UNITED STATES DOLLARS) PERCENTAGE OWNERSHIP
---------------- -------------------------- --------------------
GENMAR AJAX LTD. $ 257,155.68 1%
MANAGING GENERAL PARTNER
GMC ADMINISTRATION LTD. $ 601.64 0.002%
ADMINISTRATIVE GENERAL PARTNER
BELVEDERE MARITIME HOLDINGS, LLC $ 3,080,003.20 12%
(SUCCESSOR TO XXXXX X. XXXXX) Class A Limited Partner
ALTA AJAX LTD. $ 3,616,097.96 15.5%
Class A Limited Partner
SPECIAL SITUATIONS HOLDINGS II, LTD. 4 $ 1,681,176.30 6.6%
SHIPS ( SUCCESSOR TO CSFB) Class A Limited Partner
GMC AJAX LLC (SUCCESSOR TO VALMORA $ 669,789.92 2.6%
PARTNERS, L.P.) Class A Limited Partner
MERITAGE FUND LTD. (SUCCESSOR TO $ 1,935,937.00 7.7%
MARITIME VENTURES, LTD.) Class B Limited Partner
LJR TANKERS LLC $ 3,065,277.20 12%
Class B Limited Partner
OCM AJAX INVESTMENTS, INC. $ 10,000,000 40%
Class C Limited Partner
GMC I (AJAX), L.L.C. $ 407,594.94 1.6%
Class A Limited Partner
ALTA PARTICIPANTS II LTD. $ 122, 059.00 0.48%
Class A Limited Partner
MARITIME ASSOCIATES LLC $ 122,059.00 0.48 %
Class A Limited Partner
XXXXX JOINT VENTURE, L.P. $ 10,988.69 0.04 %
Class A Limited Partner
2) GENMAR AGAMEMNON LIMITED :
Ajax Limited Partnership 100% of the Capital Stock of
Genmar Agamemnon Limited
3) GENMAR AJAX LIMITED :
Ajax Limited Partnership 100% of the Capital Stock of
Genmar Ajax Limited
4) GENMAR XXXXXXXXXXX LIMITED :
Ajax Limited Partnership 100% of the Capital Stock of
Genmar Xxxxxxxxxxx Limited
5) GENMAR MINOTAUR LIMITED :
Ajax Limited Partnership 100% of the Capital Stock of
Genmar Minotaur Limited
SCHEDULE 4.01(b)
SUBSIDIARIES
AJAX LIMITED PARTNERSHIP :
a) Genmar Agamemnon Limited,
b) Genmar Ajax Limited,
c) Genmar Xxxxxxxxxxx Limited and
d) Genmar Minotaur Limited.
GENMAR AGAMEMNON LIMITED :
None.
GENMAR AJAX LIMITED :
None.
GENMAR XXXXXXXXXXX LIMITED :
None.
GENMAR MINOTAUR LIMITED :
None.
SCHEDULE 4.01(q)
ENVIRONMENTAL DISCLOSURES
None.
SCHEDULE 4.01(t)
OWNED REAL PROPERTY
None.
SCHEDULE 4.01(u)
LEASED REAL PROPERTY
None.
SCHEDULE 4.01(v)
INVESTMENTS
None.
SCHEDULE 4.01(x)
EQUITY INVESTORS
INVESTORS - PARTICIPATING PARTNERS PORTION OF CONTRIBUTION (IN UNITED STATES DOLLARS)
---------------------------------------------------------- --------------------------------------------------------
ALTA AJAX LTD. $ 3,616,097.96
Class A Limited Partner
Attn: Xxxxxxx Xxxxxxxxx
Xxxxx Capital Management
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 Fax
BELVEDERE MARITIME HOLDINGS, LLC (Successor to Xxxxx X. $ 2,876,120.73
Bacon)
Class A Limited Partner
Att: Xxxxxxx Xxxxxxxxx
Xxxxx Capital Management
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
GMC AJAX, LLC (Successor to Valmora Partners L.P.) $ 625,497.04
Class A Limited Partner
Att: Xxx Xxxxx
Xxxxx Operating Company
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
SPECIAL SITUATIONS HOLDINGS II, LTD. - 4 SHIPS $ 1,569,091.79
(Successor to CSFB)
Class A Limited Partner
Att: Xxxxx Xxxxxxxx
CS First Boston
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
LJR TANKERS LLC $ 2,863,592.52
Class B Limited Partner
Att: Xxxx Xxxxxx
Xxxxxxxx Management Company
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000 xx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000 Fax
INVESTORS - PARTICIPATING PARTNERS PORTION OF CONTRIBUTION (IN UNITED STATES DOLLARS)
---------------------------------------------------------- --------------------------------------------------------
MERITAGE FUND LTD (Successor to Maritime Ventures Ltd.) $ 1,801,875.00
Class B Limited Partner
Att: Xxx Xxxxxx / Xxxxxx Xxxxxx
Renaissance Technologies Corporation
000 Xxxxx 00X
Xxxx Xxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
CC: DGM INVESTMENTS LTD
Att: Xxx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxx 00
Xxxxxxxxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
OCM AJAX INVESTMENTS, LLC $10,000,000.00
Class C Limited Partner
Att: Xxx Xxxx
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 Fax
GMC ADMINISTRATION LTD. $ 561.64
Administrative General Partner
c/o General Maritime Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 Fax
GENMAR AJAX LTD. $ 240,250.00
Managing General Partner
c/o General Maritime Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 Fax
INVESTORS - NON PARTICIPATING PARTNERS PORTION OF CONTRIBUTION (IN UNITED STATES DOLLARS)
---------------------------------------------------------- --------------------------------------------------------
GMC I (AJAX), L.L.C. $ 0
Class A Limited Partner
c/o The Beacon Group
Att: Xxx Xxxxxxx
(000) 000-0000
(000) 000-0000 Fax
ALTA PARTICIPANTS II LTD. $ 0
Class A Limited Partner
Xxxxx Capital Management
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 Fax
MARITIME ASSOCIATES LLC $ 0
Class A Limited Partner
c/o Perry Corporation
Att: Xxxxxxxx Xx
(000) 000-0000
(000) 000-0000 Fax
XXXXX JOINT VENTURE, L.P. $ 0
Class A Limited Partner
Att: Xxxx Xxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
(000) 000-0000 Fax
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms............................................................................2
1.02. Computation of Time Periods; Other Definitional Provisions......................................18
1.03. Accounting Terms................................................................................18
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Advances....................................................................................19
2.02. Making the Advances.............................................................................19
2.03. Repayment of Advances...........................................................................19
2.04. Termination or Reduction of the Commitments.....................................................20
2.05. Prepayments.....................................................................................20
2.06. Interest........................................................................................21
2.07. Fees............................................................................................22
2.08. Increased Costs, Etc............................................................................22
2.09. Payments and Computations.......................................................................23
2.10. Taxes...........................................................................................24
2.11. Sharing of Payments, Etc........................................................................25
ARTICLE III CONDITIONS OF EFFECTIVENESS
3.01. Conditions Precedent to Effectiveness...........................................................26
3.02. Determinations Under Section 3.01...............................................................32
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Loan Parties..............................................33
ARTICLE V COVENANTS OF THE LOAN PARTIES
5.01. Affirmative Covenants...........................................................................38
5.02. Negative Covenants..............................................................................43
5.03. Reporting Requirements..........................................................................46
5.04. Financial Covenants.............................................................................48
ARTICLE VI EVENTS OF DEFAULT
6.01. Events of Default...............................................................................49
ARTICLE VII GUARANTY
7.01. Guaranty; Limitation of Liability...............................................................51
7.02. Guaranty Absolute...............................................................................52
7.03. Waivers and Acknowledgments.....................................................................54
7.04. Subrogation.....................................................................................54
7.05. Continuing Guaranty; Assignments................................................................55
ARTICLE VIII THE AGENTS
8.01. Authorization and Action........................................................................55
8.02. Agents' Reliance, Etc...........................................................................56
8.03. CBNY and Affiliates.............................................................................56
8.04. Lender Credit Decision..........................................................................56
8.05. Indemnification.................................................................................56
8.06. Successor Agents................................................................................57
ARTICLE IX MISCELLANEOUS
9.01. Amendments, Etc.................................................................................58
9.02. Notices, Etc....................................................................................58
9.03. No Waiver; Remedies.............................................................................58
9.04. Costs and Expenses..............................................................................59
9.05. Right of Set-off................................................................................60
9.06. Binding Effect..................................................................................60
9.07. Assignments and Participations..................................................................61
9.08. Execution in Counterparts.......................................................................63
9.09. Confidentiality.................................................................................63
9.10. Release of Collateral...........................................................................63
9.12. Jurisdiction, Etc...............................................................................63
9.13. Governing Law...................................................................................64
9.14. Waiver of Jury Trial............................................................................65
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SECTION PAGE
SCHEDULES
Schedule I - Commitments and Lending Offices
Schedule II - Borrower Sublimits
Schedule 4.01(a) - Equity Interests in Loan Parties
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(q) - Environmental Disclosure
Schedule 4.01(t) - Owned Real Property
Schedule 4.01(u) - Leased Real Property
Schedule 4.01(v) - Investments
Schedule 4.01(x) - Equity Investors
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Monthly Forecast
Exhibit G - Form of Mortgage
Exhibit H - Form of Opinion of Counsel to the Loan Parties
Exhibit I - Form of Solvency Certificate
