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LOAN AGREEMENT
dated as of September 30, 2003,
among
MARITRANS, INC.,
MARITRANS FREEDOM CO.
and
MARITRANS 215 CO.
as Borrowers
and
LOMBARD US EQUIPMENT FINANCE CORPORATION,
as Lender
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TABLE OF CONTENTS
ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS......................................................................1
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Section 1.01. Defined Terms....................................................................................1
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Section 1.02. Rules of Construction............................................................................5
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Section 1.03. Accounting and Financial Determinations..........................................................5
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ARTICLE II: THE LOAN............................................................................................5
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Section 2.01. Loan.............................................................................................5
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Section 2.02. Note.............................................................................................6
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Section 2.03. Scheduled Payments...............................................................................6
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Section 2.04. Prepayments......................................................................................6
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Section 2.05. Interest Provisions..............................................................................7
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Section 2.06. Payments Absolute................................................................................7
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Section 2.07. Increased Capital Costs..........................................................................7
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Section 2.08. Taxes............................................................................................8
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Section 2.09. Borrowers' Liability.............................................................................8
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ARTICLE III: CONDITIONS TO LOAN..................................................................................9
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ARTICLE IV: REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER...............................................10
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ARTICLE V: ASSIGNMENT OF EARNINGS; SECURITY INTEREST............................................................14
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Section 5.01. Assignment of Earnings..........................................................................14
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Section 5.02. Authorization. Freedom and 215..................................................................15
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ARTICLE VI: COVENANTS...........................................................................................15
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Section 6.01. Affirmative Covenants...........................................................................15
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Section 6.02. Negative Covenants..............................................................................18
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Section 6.03. Indemnity.......................................................................................19
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Section 6.04. Performance by Lender...........................................................................20
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ARTICLE VII: EVENTS OF DEFAULT..................................................................................20
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Section 7.01. Events of Default...............................................................................20
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Section 7.02. Remedies........................................................................................21
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Section 7.03. Use of Proceeds.................................................................................22
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GEFISHER 498256 i (LOAN AGREEMENT)
ARTICLE VIII: MISCELLANEOUS PROVISIONS.........................................................................23
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Section 8.01. Waivers, Amendments.............................................................................23
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Section 8.02. Notices.........................................................................................23
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Section 8.03. Severability....................................................................................23
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Section 8.04. Execution in Counterparts.......................................................................23
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Section 8.05. Further Assurance and Corrective Instruments....................................................23
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Section 8.06. Time of the Essence.............................................................................24
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Section 8.07. Entire Agreement................................................................................24
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Section 8.08. Governing Law...................................................................................24
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Section 8.09. Successors and Assigns; Assignments by Lender...................................................24
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Section 8.10. Assignments, Participations and Securitizations.................................................24
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Section 8.11. Waiver of Jury Trial............................................................................24
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Section 8.12. Forum Selection and Consent to Jurisdiction. EACH...............................................25
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Section 8.13. Waiver of Certain Claims........................................................................25
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SCHEDULES
SCHEDULE I Additional Conditions Precedent
SCHEDULE II Disclosure Statements
SCHEDULE III List of Subsidiaries
GEFISHER 498256 ii (LOAN AGREEMENT)
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") dated as of September 30, 2003,
is made by and among MARITRANS, INC., a Delaware corporation ("Maritrans"),
MARITRANS FREEDOM CO., a Nevada corporation ("Freedom") and MARITRANS 215 CO., a
Nevada corporation ("215", and collectively with Maritrans, Freedom and their
successors and assigns, "Borrowers"), and LOMBARD US EQUIPMENT FINANCE
CORPORATION, a New York corporation (together with its successors and assigns,
"Lender").
W I T N E S S E T H:
WHEREAS, Borrowers desire to obtain a loan from Lender in the original
principal amount of $7,290,000, secured by the Collateral (as defined below).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and in consideration of the premises contained in this
Agreement, Lender and Borrowers agree as follows:
ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. The following terms shall have the
following meanings for all purposes of this Agreement:
"215 Earnings" has the meaning ascribed to such term in Section 5.01(a)
hereof.
"Affiliate" means any Person that, directly or indirectly, controls, is
controlled by or is under common control with any other Person. "Controls,"
"controlled by" or "under common control with" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether by ownership of voting securities, contract or
otherwise. Without limitation, any director, executive officer or beneficial
owner of 20% or more of the equity of a Person shall for purposes of this
Agreement be deemed to control the other Person. In no event shall Lender be
deemed an "Affiliate" of Borrower.
"Agreement" means this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
hereof.
"Assignments of Insurances" means the Assignments of Insurances dated as
of the Closing Date, by Freedom and 215 each in favor of Lender, pursuant to
which Freedom and 215 shall collaterally assign, and grant to Lender a first
priority security interest in all of its right, title and interest in and to all
insurance proceeds, return premiums, etc., payable to such Borrower as a result
of any loss or damage, taking, confiscation, etc. to the FREEDOM and the OCEAN
215 respectively.
"Business Day" means any day on which Lender is open for business and is
neither a Saturday nor a Sunday nor a legal holiday on which banks are
authorized or required to be closed in New York, New York or Chicago, Illinois.
"Change of Control" means a change in control of any Borrower,
including, without limitation, a change in control resulting from direct or
indirect transfers of voting stock or partnership, membership or other ownership
interests, whether in one or a series of transactions. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any Borrower, and a Change of
Control shall occur if any of the following occurs: any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) acquires, after the date
of this Agreement, the beneficial ownership directly or indirectly, of 50% or
more of the voting power of the total outstanding stock or other ownership
interests of any Borrower.
GEFISHER 498256 (LOAN AGREEMENT)
"Closing Date" means the date that the proceeds of the Loan are
disbursed to, or on behalf of, the Borrowers.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means collectively, the Vessels, and any other assets of
any Borrower or any other Person that are subject to a Lien in favor of Lender
pursuant to any Loan Document.
"Default" means any Event of Default or any condition, occurrence or
event that, after notice or lapse of time or both, would constitute an Event of
Default.
"Default Rate" has the meaning ascribed to such term in Section 2.05(c)
hereof.
"Earnings" means collectively the FREEDOM Earnings and the 215 Earnings.
"Environmental Laws" means (a) all Federal Toxic Waste Laws, (b) all
local, state or foreign law, statute, regulation, or ordinance analogous to any
of the Federal Toxic Waste Laws and (c) all other federal, state, local, or
foreign law (including any common law, consent decrees and administrative
orders), statute, regulation, or ordinance regulating, permitting, prohibiting
or otherwise restricting the placement, discharge, release, generation,
treatment or disposal upon or into any environmental media of any substance,
pollutant, contaminant or waste that is now or hereafter classified or
considered to be hazardous or toxic; "Environmental Laws" shall also include any
and all amendments to any of (a), (b) or (c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with any Borrower is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived by the Pension
Benefit Guaranty Corporation), (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section
412 (d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan, (d) the incurrence by any
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan, (e) the receipt by any Borrower or
any of its ERISA Affiliates from the Pension Benefit Guaranty Corporation or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by
any Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the
receipt by any Borrower or any of its ERISA Affiliates of any notice, or the
receipt by any Multiemployer Plan from any Borrower or any its ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in Section 7.01
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
GEFISHER 498256 2 (LOAN AGREEMENT)
"Federal Toxic Waste Laws" means any federal law or implementing
regulation regulating any substance, matter, material, waste, contaminant or
pollutant, the generation, storage, disposal, handling, release, treatment,
discharge or emission of which is regulated, prohibited or limited, including,
without limitation: (i) the Resource Conservation and Recovery Act, as amended
by the Hazardous and Solid Waste Amendments of 1984, as now or hereafter amended
(42 U.S.C. Section 6901 et seq.), (ii) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986, as now or hereafter amended (42 U.S.C. Section 9601
et seq.), (iii) the Clean Water Act, as now or hereafter amended (33 U.S.C.
Section 1251 et seq.), (iv) the Toxic Substances and Control Act, as now or
hereafter amended (15 U.S.C. Section 2601 et seq.) and (v) the Clean Air Act, as
now or hereafter amended (42 U.S.C. Section 7401 et seq.).
"Fixed Rate" means the rate per annum at which interest accrues on the
unpaid principal balance of the Note as set forth therein.
"Freedom Earnings" has the meaning ascribed to such term in Section
5.01(a) hereof.
"GAAP" means generally accepted accounting principles in the United
States.
"Indebtedness" means (a) all items of indebtedness or liability which in
accordance with GAAP or federal tax law would be included in determining total
liabilities as shown on the liabilities side of a balance sheet, (b)
indebtedness secured by any mortgage, pledge, lien or security interest existing
on property owned by any Borrower, whether or not the indebtedness secured
thereby shall have been assumed and (c) guaranties and endorsements (other than
for purposes of collection in the ordinary course of business) by any Borrower
and other contingent obligations of any Borrower in respect of, or to purchase
or otherwise acquire, indebtedness of others.
"Interim Interest Date" has the meaning ascribed to such term in the
Note.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means the $7,290,000 loan from Lender to Borrowers pursuant to
this Agreement.
"Loan Documents" means, collectively, this Agreement, the Note, the Loan
Request, the Mortgages, the Assignments of Insurances and each other instrument
or document executed or delivered pursuant to or in connection with this
Agreement and the other Loan Documents, including, without limitation, any
instrument or agreement given to evidence or further secure the Obligations.
"Loan Request" means a Loan Request, duly executed by an authorized
officer of Maritrans, in form and substance acceptable to Lender.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, properties or condition (financial or otherwise)
of any Borrower or any of its Subsidiaries in the aggregate, (b) the ability of
any Borrower to perform or pay its Obligations or any material Indebtedness in
accordance with the terms thereof, (c) Lender's Lien on the Collateral or the
priority of such Lien, or (d) the validity or enforceability of any Loan
Document or the rights and remedies available to Lender under any Loan Document.
"Mortgages" means collectively, (i) the First Preferred Mortgage dated
as of the Closing Date, by Freedom in favor of Lender over the whole of the
FREEDOM and (ii) the First Preferred Mortgage dated as of the Closing Date, by
215 in favor of Lender over the whole of the OCEAN 215.
GEFISHER 498256 3 (LOAN AGREEMENT)
"Multiemployer Plan" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Note" has the meaning ascribed to such term in Section 2.02 hereof.
"Obligations" means, subject to Section 8.10(c) hereof, the obligations
to make the payment of all indebtedness evidenced by the Note, together with all
extensions, renewals, amendments and modifications thereof and the payment of
all other Indebtedness and other sums owed under, and the payment and the
performance of all obligations and covenants contained in the Loan Documents, in
each case whether now existing or hereafter incurred, direct or indirect,
absolute or contingent, and due or to become due, together with all fees and
expenses (including, without limitation, all attorneys' fees and expenses)
incurred by Lender in connection with the collection or enforcement of any of
the Obligations.
"Organizational Documents" means the certificate of incorporation and
by-laws.
"Permitted Liens" means any of the following: (a) Liens (other than
Liens relating to Environmental Laws) for taxes, assessments or other
governmental charges not yet due and payable, (b) Liens in favor of Lender, and
(c) Liens explicitly identified in any Loan Document as "permitted liens."
"Permitted Maritime Liens" shall mean any ▇▇▇▇▇▇'▇ liens (including
those of masters) for wages, maintenance and cure, salvage and general average
Liens, stevedore's wages, tort liens (including personal injury and death) and
Liens for necessaries incurred in the ordinary course and not delinquent, all of
the foregoing Liens which are either unclaimed or covered by insurance (other
than, and after giving effect to, any deductibles that the Borrowers may have on
such insurance); provided, that, no such Permitted Maritime Lien shall be
preferred or have a priority over the lien of either Mortgage unless it is
specifically recognized as a "preferred maritime lien" under Chapter 13 of Title
46, United States Code, as amended (the "Code"). Nothing herein shall constitute
a waiver or subordination by Lender of the preferred status of the lien of
either Mortgage under the Code; and further provided that, once any such Lien is
claimed, Borrowers shall be permitted to contest any such Lien in good faith by
appropriate action promptly initiated and diligently conducted, if (i) such
reserve as shall be required by GAAP shall be made therefore, or (ii) Borrowers
shall have arranged for a bond or insurance (other than, and after giving effect
to, any deductibles that Borrowers may have on such insurance) related to such
Lien in a manner that is satisfactory to Lender in accordance with law and it
does not involve any material risk of the seizure or sale of the Vessels.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or
any of its ERISA Affiliates is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prepayment Fee" has the meaning ascribed to such term in the Note.
"Stated Maturity Date" has the meaning ascribed to such term in the
Note.
"Subsidiary" shall mean, with respect to any Person (the "Parent") at
any date, (a) any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the Parent in the Parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, (b)
any corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors or other
governing body of such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or might have
GEFISHER 498256 4 (LOAN AGREEMENT)
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned by the Parent, or by one or more Subsidiaries of such Parent or
(c) any partnership, joint venture, limited liability company, or other entity
as to which the Parent, or one or more Subsidiaries of such Parent, owns more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies, or the power to elect the managing
partner (or the equivalent), of such partnership, joint venture or other entity,
as the case may be.
"Total Loss" means collectively, (i) the actual or constructive total
loss or compromised, agreed or arranged total loss of either or both Vessels;
(ii) the loss, theft or destruction of either or both Vessels or damage thereto
to such extent as shall make repair thereof uneconomical or shall render either
or both Vessels permanently unfit for normal use for any reason whatsoever; or
(iii) the capture, seizure, arrest, detention, condemnation, confiscation or
requisition, forfeiture or other taking of title to or use of either or both
Vessels by any government or by persons acting or purporting to act on behalf of
any government.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Vessels" means, collectively, the ocean tank barge, OCEAN 215, Official
No. 562452, and the tug, FREEDOM, Official No. 615200 and the term "Vessel"
means each vessel individually.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Rules of Construction.
(a) The singular form of any word used herein, including the
terms defined in Section 1.01 hereof, shall include the plural, and vice versa.
The use herein of a word of any gender shall include correlative words of all
genders.
(b) Unless otherwise specified, references to Articles, Sections
and other subdivisions of this Agreement are to the designated Articles,
Sections and other subdivision of this Agreement as originally executed. The
words "hereof," "herein," "hereunder" and words of similar import refer to this
Agreement as a whole.
(c) The headings or titles of the several articles and sections
shall be solely for convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.
Section 1.03. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with GAAP consistently
applied. In the event that GAAP changes during the term of this Agreement such
that the financial covenants contained herein would then be calculated in a
different manner or with different components, Borrowers and Lender shall amend
such provisions of this Agreement in such respects as necessary to conform the
financial covenants as criteria for evaluating the financial condition of
Borrowers, to substantially the same criteria as were effective prior to such
change in GAAP.
GEFISHER 498256 5 (LOAN AGREEMENT)
ARTICLE II: THE LOAN
Section 2.01. Loan.
(a) Commitment. Lender hereby agrees, subject to the terms and
conditions of this Agreement (including, without limitation, the fulfillment of
the conditions set forth in Article III or Lender's written waiver thereof), to
make the Loan to Borrowers. This commitment shall terminate automatically and
without any further action on September 30, 2003. Borrowers' joint and several
obligation to repay the Loan shall commence, and interest shall begin to accrue,
on the Closing Date.
(b) Loan Request. By delivering a duly completed and executed
Loan Request by each Borrower to Lender, on a Business Day, Borrowers may
irrevocably request that the Loan be made on the Closing Date specified in the
Loan Request (which date shall be at least two (2) Business Days but no more
than ten (10) Business Days after the date of delivery to Lender of the Loan
Request). On such Closing Date, subject to the terms and conditions contained
herein (including, without limitation, the fulfillment of the conditions set
forth in Article III or Lender's written waiver thereof), Lender shall disburse
the amount of the Loan, or on behalf of, Borrowers to the accounts or entities
specified in the Loan Request. The Loan Request shall specify the Closing Date
and the applicable disbursement instructions. Borrowers agree that the proceeds
of the Loan shall be used solely for the purposes described in the Loan Request.
Section 2.02. Note. The Loan shall be evidenced by, and repaid with
interest in accordance with, a promissory note of Borrowers in form and
substance acceptable to Lender, duly completed, in the principal amount of
$7,290,000, dated as of the Closing Date, made payable to Lender or order, and
maturing on the Stated Maturity Date or such earlier date pursuant to an
acceleration hereunder (as amended from time to time, the "Note").
Section 2.03. Scheduled Payments. On the first Business Day of each
calendar quarter, Borrowers shall jointly and severally pay the scheduled
principal and interest payments owed with respect to the Loan as set forth in
the Note and any prepayment fee as provided in Section 2.04 hereof; provided,
however, on the Stated Maturity Date or date of acceleration of the Loan,
Borrowers shall jointly and severally repay in full the then outstanding
principal amount of the Note plus all accrued and unpaid interest thereon and
all other amounts owed hereunder or under any other Loan Document.
All amounts required to be paid by Borrowers hereunder, under the Note
or under any other Loan Document shall be paid in lawful money of the United
States of America in immediately available funds to the following account, or to
such other account as designated by Lender to Borrowers in writing:
Clearing Bank: ▇▇ ▇▇▇▇▇▇ Chase NYC
ABA: ▇▇▇▇▇▇▇▇▇
Beneficiary: Lombard US Equipment Finance Corporation
Account: 323945724
Borrower: Maritrans, Inc., et al.
Any payment received after 12:00 p.m. New York time will be deemed to be
received on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest or the fees
hereunder, as the case may be. All payments shall be applied first to accrued
interest and then to principal.
Section 2.04. Prepayments.
(a) Voluntary Prepayments. Prior to the Stated Maturity Date,
Borrowers may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of the
Note; provided, however, that (a) any such voluntary partial prepayment shall be
made only of the Loan in full; (b) all such voluntary prepayments shall require
notice on or before the date that is thirty (30) calendar days in advance of any
prepayment of the Loan; and (c) in connection with each such voluntary
prepayment, Borrowers jointly and severally shall pay all accrued interest on
the outstanding principal amount of the Note prepaid, all other amount owed
under any Loan Document and, except as otherwise provided in any Loan Document,
the Prepayment Fee, which shall not be refundable.
GEFISHER 498256 6 (LOAN AGREEMENT)
(b) Mandatory Prepayment. (i) Upon any acceleration of the Loan
pursuant to Section 7.02 hereof, Borrowers shall immediately jointly and
severally repay all the Loan then outstanding, including accrued and unpaid
interest thereon, plus the Prepayment Fee and all other amounts owed under the
Loan Documents.
(ii) If either of the Vessels sustains a Total Loss,
Borrowers shall promptly jointly and severally repay all the Loan then
outstanding, including accrued and unpaid interest thereon, plus the Prepayment
Fee and all other amounts owed under the Loan Documents.
Section 2.05. Interest Provisions.
(a) Interest on the outstanding principal amount of the Note
shall accrue at a rate per annum equal to the Fixed Rate. Interest shall be
computed on the basis of a 360-day year consisting of twelve (12) 30-day months.
On the Interim Interest Payment Date, Borrowers shall jointly and severally pay
interest accruing on the outstanding principal amount of the Note from the
Closing Date through and including the last day of the calendar month
immediately preceding the Interim Interest Date. Interest accruing on the
outstanding principal amount of the Note on and after the Interim Interest Date
shall be payable on the first Business Day of each calendar quarter or the date
of prepayment, as applicable.
(b) Any payment under the Note or any other Loan Document that
is not paid by Borrowers on the due date thereof shall, to the extent
permissible by law, bear a late charge equal to the lesser of three cents ($.03)
per dollar of the delinquent amount or the lawful maximum, and Borrowers shall
jointly and severally be obligated to pay the same immediately upon receipt of
Lender's written invoice therefor.
(c) Upon the occurrence and during the continuation of any Event
of Default or after acceleration, Borrowers shall jointly and severally pay
interest (i) with respect to the outstanding principal amount of the Note at a
rate per annum equal to the rate otherwise in effect plus an additional three
percent (3%) per annum and (ii) with respect to all other Obligations of any
Borrower to Lender at a rate per annum equal to the highest Fixed Rate then in
effect plus an additional 3% per annum (each such rate, a "Default Rate").
(d) The obligations of Borrowers hereunder and under the Note
and the other Loan Documents shall be subject to the limitation that payments of
interest to Lender, plus any other amounts paid to Lender in connection herewith
and therewith, shall not be required to the extent (but only to the extent) that
contracting for and receiving such payment by Lender would be contrary to the
provisions of any law applicable to Lender limiting the highest rate of interest
which may be contracted for, charged or received by Lender, and in such event
Borrowers jointly and severally shall pay such Lender interest and other amounts
at the highest rate permitted by applicable law.
Section 2.06. Payments Absolute. The obligations of Borrowers to pay
interest and principal required under this Article II and to make other payments
under the Loan Documents and to perform and observe the covenants and agreements
contained herein and therein shall be joint and several, absolute and
unconditional in all events, without abatement, diminution, deduction, setoff or
defense for any reason, including, without limitation, any failure of the
Collateral to be delivered, installed or constructed, as applicable, any
defects, malfunctions, breakdowns or infirmities in the Collateral or any
accident, condemnation, destruction or unforeseen circumstances. Notwithstanding
any dispute between Borrowers and Lender or any other person, Borrowers shall
make all payments under the Loan Documents when due and shall not withhold any
payments pending final resolution of such dispute, nor shall Borrowers assert
any right of set-off or counterclaim against its obligation to make such
payments required under the Loan Documents.
GEFISHER 498256 7 (LOAN AGREEMENT)
Section 2.07. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by Lender or any Person controlling
Lender, and Lender determines that the rate of return on its or such controlling
Person's capital as a consequence of the Loan made by Lender is reduced to a
level below that which Lender or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such case upon notice
from time to time by Lender to Borrowers, Borrowers jointly and severally shall
immediately pay directly to Lender additional amounts sufficient to compensate
Lender or such controlling Person for such reduction in rate of return or shall
have the option to terminate the Loan Agreement and prepay the loan in full
together with all accrued and unpaid interest and expenses without incurring the
Prepayment Fee. A statement of Lender as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on Borrowers. In
determining such amount, Lender may use any method of averaging and attribution
that it shall deem applicable.
Section 2.08. Taxes.
(a) Withholding Taxes. Any and all payments by Borrowers of
principal of, and interest on, the Loan and all other amounts payable hereunder
and under the Loan Documents shall be made free and clear of and without
deduction for any present or future taxes, levies, imposts, deductions, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and taxes imposed on or measured
by Lender's gross or net income or receipts by the jurisdiction under the laws
of which Lender is organized or any political subdivision thereof or in which
Lender is maintaining a lending office (such non-excluded items are referred to
herein as "Taxes"). In the event that any withholding or deduction from any
payment to be made by Borrowers hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then Borrowers will (i)
jointly and severally pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to Lender an
official receipt or other documentation satisfactory to Lender evidencing such
payment to such authority; and (iii) jointly and severally pay to Lender such
additional amount or amounts as is necessary to ensure that the net amount
actually received by Lender will equal the full amount Lender would have
received had no such withholding or deduction been required (including
penalties, interest, additional taxes and expenses (including reasonable
attorney's fees and expenses) arising therefrom or with respect thereto).
(b) Other Taxes. In addition, Borrowers shall jointly and
severally pay any present or future stamp, documentary, excise, property or
similar taxes, charges or levies that arise from any payment made hereunder or
under the Note or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (collectively, "Other
Taxes").
(c) Tax Indemnity. Borrowers shall jointly and severally
indemnify Lender for the full amount of Taxes and Other Taxes (including,
without limitation, any amounts paid by Lender) and any liability (including,
without limitation, penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
thirty (30) days from the date Lender makes written demand therefor and shall
survive the termination of this Agreement.
Section 2.09. Borrowers' Liability. Each Borrower acknowledges that it
is jointly and severally liable for all of the Obligations and, as a result
hereby, unconditionally guarantees the full and prompt payment when due, whether
at maturity or earlier, by reason of acceleration or otherwise, and at all times
thereafter, of all obligations of every kind and nature of the other Borrowers
to Lender under the Loan Documents, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, joint or several, now or
hereafter existing, or due or to become due, and howsoever owned, held or
acquired by Lender.
GEFISHER 498256 8 (LOAN AGREEMENT)
Each Borrower hereby agrees that its obligations hereunder shall be
unconditional, irrespective of (a) the validity or enforceability of the
Obligations or any part thereof, or of any promissory note or other document
evidencing all or any part of the Obligations, (b) the absence of any attempt to
collect the Obligations from any Borrower or other action to enforce the same,
(c) the waiver or consent by Lender with respect to any provision of any
agreement, instrument or document evidencing or securing all or any part of the
Obligations, or any other agreement, instrument or document now or hereafter
executed by any Borrower and delivered to Lender, (d) the failure by Lender to
take any steps to perfect and maintain its security interest in, or to preserve
its rights to, the Collateral, for the benefit of itself, (e) Lender's election,
in any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code, (f) any borrowing or grant of a
security interest by any Borrower as debtor-in-possession, under Section 364 of
the Bankruptcy Code, (g) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of Lender's claim(s) for repayment of the
Obligations, or (h) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of any Borrower.
Each Borrower hereby waives, to the fullest extent permitted by
applicable law, diligence, presentment, demand of payment, filing of claims with
a court in the event of receivership or bankruptcy of any Borrower, protest or
notice with respect to the Obligations (other than notices required to be given
pursuant to the terms of this Agreement or any of the other Loan Documents), and
all demands whatsoever, and covenants that its obligations hereunder will not be
discharged, except by complete and irrevocable payment and performance of the
Obligations (other than contingent and unasserted indemnification obligations).
No notice to any Borrower or any other party (other than notices required to be
given pursuant to the terms of this Agreement or any of the other Loan
Documents) shall be required for Lender to make demand hereunder. Such demand
shall constitute a mature and liquidated claim against any Borrower. Upon the
occurrence and continuance of any Event of Default, Lender may, in its sole
discretion, proceed directly and at once, without notice, against any one or
more of the Borrowers to collect and recover the full amount of any portion of
the Obligations, without first proceeding against the other Borrowers, any other
Person, or any security or collateral for the Obligations. To the extent not
expressly provided for herein, Lender shall have the exclusive right to
determine the application of all payments made and credits, if any, given by or
from any Borrower, any other Person, or any security or collateral for the
Obligations, on account of the Obligations.
At any time after and during the continuance of an Event of Default,
Lender may, in its sole discretion, without notice to any Borrower and
regardless of the acceptance of any collateral for the payment hereof,
appropriate and apply toward payment of the Obligations (i) any indebtedness due
or to become due from Lender to such Borrower, and (ii) any moneys, credits or
other property belonging to such Borrower at any time held by or coming into the
possession of Lender or any of its affiliates pursuant to any Loan Documents,
whether for deposit or otherwise.
Each Borrower, individually, expressly understands, agrees and
acknowledges, that the Loan would not be made available on the terms herein in
the absence of the collective credit of all Borrowers, the joint and several
liability of all Borrowers, and the collateralization of the Vessels.
Accordingly, each Borrower, individually acknowledges that the benefit to such
Borrower constitutes reasonably equivalent value, regardless of the amount of
the Loan actually borrowed by, advanced to, or the amount of collateral provided
by, any Borrower.
ARTICLE III: CONDITIONS TO LOAN
Lender's agreement to make the Loan to Borrowers hereunder and to
disburse the proceeds thereof shall be subject to the condition precedent that
Lender shall have received, on or prior to the Closing Date (or by such other
time as may be specified herein with respect thereto), all of the following,
each in form and substance satisfactory to Lender:
(a) This Agreement and all other Loan Documents, properly
executed on behalf of the applicable Borrower(s), and each of the exhibits and
schedules hereto and thereto properly completed.
(b) The Note, properly executed on behalf of Borrowers.
(c) A Loan Request for the Loan, duly completed and properly
executed by Maritrans on behalf of each Borrower.
GEFISHER 498256 9 (LOAN AGREEMENT)
(d) A certificate of the Secretary or an Assistant Secretary of
each Borrower, certifying as to (i) the resolutions of the board of directors of
such Borrower and, if required, the shareholders of such Borrower, authorizing
the execution, delivery and performance of this Agreement, the Note, the other
Loan Documents and any related documents, (ii) the Organizational Documents of
each Borrower, and (iii) the signatures of the officers or agents of each
Borrower authorized to execute and deliver this Agreement, the Note, the other
Loan Documents and other instruments, agreements and certificates on behalf of
such Borrower.
(e) Current certified copies of the Organizational Documents of
each Borrower.
(f) A Certificate of Good Standing issued as to each Borrower by
the Secretary of the State of its incorporation, which shall be dated not more
than thirty (30) days prior to the Closing Date.
(g) Opinion of counsel to Borrowers and such opinions of local
counsel to Borrowers, as required by Lender.
(h) Current searches of appropriate filing offices showing that
(i) no state or federal tax liens have been filed and remain in effect against
any Borrower, and (ii) no financing statements have been filed and remain in
effect against any Borrower relating to the Collateral except those financing
statements filed by Lender.
(i) Payment of the $18,225 closing fee and, if any, all of
Lender's other fees, commissions and expenses in connection with the funding of
the Loan.
(j) Evidence that no Default or event or circumstance that could
reasonably be likely to have a Material Adverse Effect has occurred.
(k) Any other documents or items required by Lender.
(l) Any other documents or items listed on Schedule I hereto.
ARTICLE IV: REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
(a) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization. Each
Borrower is in good standing and is duly licensed or qualified to transact
business in each jurisdiction where the nature of its business requires such
qualification, except for those jurisdictions in which the failure to qualify
could not reasonably be expected to have a Material Adverse Effect. Each
Borrower's exact legal name is as set forth on the execution page hereof.
(b) Maritrans represents, warrants and covenants for the benefit
of Lender that it has full power and authority and holds all requisite
governmental licenses, permits and other approvals to (i) enter into and perform
its obligations under this Agreement, the Note and each other Loan Document to
which it is a party and to own its property, (ii) conduct its business
substantially as currently conducted by it, except solely as to clause (iii)
where the failure to hold such licenses, permits and approvals could not
reasonably be expected to have a Material Adverse Effect.
(c) Freedom represents, warrants and covenants for the benefit
of Lender that it has full power and authority in all of its requisite
governmental licenses, permits and other approvals to (i) enter into and perform
its obligations under this Agreement, the Note, the Mortgage (over the FREEDOM)
and each other Loan Document to which it is a party and to own its property
(including the FREEDOM), (ii) use the Collateral it owns, (iii) mortgage the
FREEDOM, and (iv) conduct its business substantially as currently conducted by
it, except solely as to clause (iv) where the failure to hold such licenses,
permits and approvals could not reasonably be expected to have a Material
Adverse Effect.
GEFISHER 498256 10 (LOAN AGREEMENT)
(d) 215 represents, warrants and covenants for the benefit of
Lender that it has full power and authority in all of its requisite governmental
licenses, permits and other approvals to (i) enter into and perform its
obligations under this Agreement, the Note, the Mortgage (over the OCEAN 215)
and each other Loan Document to which it is a party and to own its property
(including the OCEAN 215), (ii) use the Collateral it owns, (iii) mortgage the
OCEAN 215, and (iv) conduct its business substantially as currently conducted by
it, except solely as to clause (iv) where the failure to hold such licenses,
permits and approvals could not reasonably be expected to have a Material
Adverse Effect.
(e) Each Borrower represents, warrants and covenants for the
benefit of Lender that this Agreement, the Note and the other Loan Documents to
which it is a party have been duly authorized, executed and delivered by such
Borrower and constitute legal, valid and binding obligations of each Borrower,
enforceable against such Borrower in accordance with their respective terms,
except to the extent limited by bankruptcy, reorganization or other laws of
general application relating to or effecting the enforcement of creditors'
rights.
(f) Borrowers represent, warrant and covenant for the benefit of
Lender that the execution and delivery of this Agreement, the Note and the other
Loan Documents, the consummation of the transactions contemplated hereby and
thereby and the fulfillment of the terms and conditions hereof and thereof do
not and will not violate any law, rule, regulation or order, conflict with or
result in a breach of any of the terms or conditions of any Organizational
Document of any Borrower or of any corporate restriction or of any agreement or
instrument to which any Borrower is now a party and do not and will not
constitute a default under any of the foregoing or result in the creation or
imposition of any liens, charges or encumbrances of any nature upon any of the
Collateral other than Liens in favor of Lender.
(g) Borrowers represent, warrant and covenant for the benefit of
Lender that neither the execution and delivery by Borrowers of this Agreement,
the Note and any of the other Loan Documents, nor the consummation by Borrowers
of any of the transactions contemplated hereby or thereby requires the consent
or approval of, giving of notice to, the registration with, or the taking of any
other action in respect of, any governmental authority or agency, domestic or
foreign, other than the filing and recording of the Mortgages with the United
States Coast Guard, National Marine Vessel Documentation Office, and the UCC-1
financing statements with the Office of the Secretary of State of Nevada.
(h) Freedom represents, warrants and covenants for the benefit
of Lender that each of the Loan Documents that purports to create a security
interest creates a valid first priority Lien on the FREEDOM, securing the
payment and performance of the Obligations.
(i) 215 represents, warrants and covenants for the benefit of
Lender that each of the Loan Documents that purports to create a security
interest creates a valid first priority Lien on the 215, securing the payment
and performance of the Obligations.
(j) Borrowers represent, warrant and covenant for the benefit of
Lender except as disclosed on Schedule II hereto, there is no action, suit,
proceeding, claim, inquiry or investigation, at law or in equity, before or by
any court, regulatory agency, public board or body pending or, to the best of
Borrowers' knowledge, threatened against or affecting any Borrower or any of its
Subsidiaries, challenging any Borrower's authority to enter into this Agreement,
the Note or any of the other Loan Documents or any other action wherein an
unfavorable ruling or finding would adversely affect the enforceability of this
Agreement, the Note or any of the other Loan Documents, or could reasonably be
expected to have a Material Adverse Effect.
(k) Freedom represents, warrants and covenants for the benefit
of Lender that it has good and marketable title to the FREEDOM, free and clear
of all mortgages, maritime liens and other encumbrances except Permitted
Maritime Liens and upon execution, filing and recording of the mortgage, Lender
will have a duly recorded first preferred lien over the whole of the FREEDOM.
(l) 215 represents, warrants and covenants for the benefit of
Lender that it has good and marketable title to the OCEAN 215, free and clear of
all mortgages, maritime liens and other encumbrances except Permitted Maritime
Liens and upon execution, filing and recording of the mortgage, Lender will have
a duly recorded first preferred lien over the whole of the OCEAN 215.
GEFISHER 498256 11 (LOAN AGREEMENT)
(m) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower is in compliance with all laws, rules, regulations and
orders of governmental authorities applicable to it and its properties except to
the extent the non-compliance with which could not reasonably be expected to
have a Material Adverse Effect.
(n) Freedom represents, warrants and covenants for the benefit
of the Lender that it has been issued all required permits, licenses,
certificates and other approvals of all governmental authorities under all
applicable laws that are material and necessary for the ownership or operation
of the FREEDOM, and such permits, certificates and approvals are in full force
and effect.
(o) 215 represents, warrants and covenants for the benefit of
the Lender that it has been issued all required permits, licenses, certificates
and other approvals of all governmental authorities under all applicable laws
that are material and necessary for the ownership or operation of the OCEAN 215,
and such permits, certificates and approvals are in full force and effect.
(p) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower has heretofore furnished to Lender the consolidated
audited financial statement of Maritrans, Inc. for its fiscal year ended
December 31, 2002, and the consolidated unaudited financial statement of
Maritrans, Inc. and for the months ended June 30, 2003, and those statements
fairly present the financial condition of each Borrower on the dates thereof and
the results of its operations and cash flows for the periods then ended and were
prepared in accordance with GAAP. Since the date of such financial statements,
there has been no material adverse change in the business, properties or
condition (financial or otherwise) of any Borrower. Except as disclosed in such
financial statements or the notes thereto and for the items disclosed on
Schedule II hereto, no Borrower, as of the Closing Date, has or will have any
liabilities, contingent or otherwise, that could reasonably be expected to have
a Material Adverse Effect.
(q) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower has paid or caused to be paid, and will pay, to the
proper authorities when due all federal, state and local taxes required to be
withheld by it. Each Borrower has filed, and will pay, all federal, state and
local tax returns which are required to be filed, and each Borrower has paid or
caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent such taxes have
become due, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside on its books.
(r) Freedom and 215 represent, warrant and covenant for the
benefit of Lender that, for purposes of Section 9-307 of the UCC, each Borrower
is and will remain located in the State of Nevada. Freedom and 215 have
authorized Lender to file financing statements that are sufficient when filed to
perfect the security interests created pursuant to this Agreement and the other
Loan Documents in the Collateral that constitutes personal property subject to
Article 9 of the UCC. When such financing statements are filed in the offices
noted therein and the Mortgages are filed with the United States Coast Guard,
Lender will have a valid and perfected security interest in the Collateral that
constitutes personal property subject to Article 9 of the UCC, subject to no
other Lien other than Permitted Liens.
(s) Freedom and 215 represent, warrant and covenant for the
benefit of Lender that, none of the Collateral constitutes a replacement of,
substitution for or accessory to any of their respective property subject to a
Lien of any kind.
(t) Borrowers represent, warrant and covenant for the benefit of
Lender that no ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than 10% of the fair market value of the assets of such Plan.
GEFISHER 498256 12 (LOAN AGREEMENT)
(u) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower has obtained all permits, licenses and other
authorizations that are required under all Environmental Laws at such Borrower's
facilities or in connection with the operation of its business. Except as
disclosed on Schedule III hereto, each Borrower and all activities of such
Borrower at its facilities are in material compliance with all Environmental
Laws and with all terms and conditions of any required permits, licenses and
authorizations applicable to such Borrower with respect thereto. Except as
disclosed on Schedule II hereto, each Borrower is also in compliance with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in Environmental Laws or
contained in any plan, order, decree, judgment or notice of which such Borrower
is aware. Except as disclosed on Schedule II hereto, no Borrower is aware of,
nor has any Borrower received notice of, any events, conditions, circumstances,
activities, practices, incidents, actions or plans which may materially
interfere with or prevent continued compliance with, or which may give rise to
any material liability under, any Environmental Laws.
(v) Borrowers represent, warrant and covenant for the benefit of
Lender that all factual information heretofore or contemporaneously furnished by
or on behalf of Borrowers in writing to Lender for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all other
such factual information hereafter furnished by or on behalf of Borrowers to
Lender will be, true and correct in every material respect on the date as of
which such information is dated or certified, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading.
(w) Borrowers represent, warrant and covenant for the benefit of
Lender that no Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying "margin stock." None of the proceeds of the
Loan will be used for the purpose of, or be made available by any Borrower or
any of its Subsidiaries in any manner to any other Person to enable or assist
such Person in, directly or indirectly purchasing or carrying "margin stock".
Terms for which meanings are provided in F.R.S. Board Regulation T, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
(x) Borrowers represent, warrant and covenant for the benefit of
Lender that no Borrower nor any of its Subsidiaries is an "investment company"
nor a "company controlled by an investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
(y) Borrowers represent, warrant and covenant for the benefit of
Lender that Schedule III hereto is an accurate and complete list of all
Subsidiaries of each Borrower and its ownership interests therein.
(z) Borrowers represent, warrant and covenant for the benefit of
Lender that each Borrower is solvent and will not be rendered insolvent by the
Loan Documents or the transactions contemplated thereby and, after giving effect
to such transactions, no Borrower will be left with an unreasonably small amount
of capital with which to engage in its business, nor does any Borrower intend to
incur, or believe that it has incurred, debts beyond its ability to pay as they
mature. No Borrower contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of such Borrower
or any of its assets. Borrowers are not entering into the transactions
contemplated by the Loan Documents with any intent to hinder, delay or defraud
any Borrower's creditors.
GEFISHER 498256 13 (LOAN AGREEMENT)
ARTICLE V: ASSIGNMENT OF EARNINGS; SECURITY INTEREST
Section 5.01. Assignment of Earnings.
(a) Grant of Security. As security for the prompt payment and
performance of Borrowers' obligations to Lender hereunder, under the Note and
other Loan Documents, Freedom does hereby grant, convey, assign, transfer and
set over unto Lender, for its benefit and that of its successors and assigns,
and does hereby grant Lender a continuing, first priority security interest in,
all of Freedom's right, title and interest in and to: (i) all charters or other
contracts entered into by Freedom in respect of the FREEDOM; (ii) all earnings
of the FREEDOM, including, but not limited, to all moneys and claims for moneys
due and to become due with respect thereto, whether as charter hire, freights,
passage moneys, loans, indemnities, payments or otherwise, under, and all claims
for damages arising out of any breach of (or payment for variation or
termination), any charter, contract of affreightment or other contract for the
use or employment of the FREEDOM or other operation of the Vessels of every kind
whatsoever, (iii) all remuneration for salvage and towage services, demurrage
and detention moneys and any other earnings whatsoever due or to become due to
Freedom arising from the use or employment of the FREEDOM, (iv) all moneys or
other compensation payable by reason of requisition for title or for hire or
other compulsory acquisition of the FREEDOM and all claims for damages in
respect of the actual or constructive total loss of the FREEDOM, and (v) all
proceeds of all of the foregoing (collectively, herein called "Freedom
Earnings"). As security for the prompt payment and performance of Borrowers'
obligations to Lender hereunder, under the Note and other Loan Documents, 215
does hereby grant, convey, assign, transfer and setover to Lender, for its
benefit and that of its successors and assigns, and does hereby grant Lender a
continuing, first priority security interest in, all of 215's right, title and
interest in and to: (ii) all charters or other contracts entered into by 215 in
respect of the OCEAN 215; (ii) all earnings of the OCEAN 215, including, but not
limited to, all monies and claims for monies due and to become due with respect
thereto, whether as charter hire, freights, passage monies, loans, indemnities,
payments or otherwise, under, and all claims for damages arising out of any
breach of (or payment for variation or termination), any charter, contract of
affreightment or other contract for the use or employment of the OCEAN 215 or
other operation of the OCEAN 215 of every kind whatsoever, (iii) all
remuneration for salvage and towage services, demiurge and detention monies and
any other earnings whatsoever due or to become due to 215 arising from the use
or employment of the OCEAN 215, (iv) all monies or other compensation payable by
reason or requisition for title or for hire or other compulsory acquisition of
the OCEAN 215 and all claims for damages in respect of the actual constructive
total loss of the OCEAN 215, and (v) all proceeds of all the foregoing
(collectively, herein called "215 Earnings"). Notwithstanding anything herein to
the contrary, Lender will not exercise any of its rights with respect to this
Section 5.01(a) unless an Event of Default shall have occurred and be
continuing.
(b) Notice of Assignment. Freedom and 215 shall, upon the
occurrence and during the continuance of an Event of Default, (a) have all the
freights, hire and other moneys hereby assigned paid over to Lender directly,
(b) procure a notice of assignment, in substantially the form of Exhibit A
attached hereto, and a letter of instructions shall be duly given to each Person
who becomes party to any charter or contract entered into with either Freedom or
215 in respect of its respective Vessel or to any Person who may receive any
earnings and moneys hereby assigned, (c) instruct each such Person to provide
consent where the consent of any such Person is required pursuant to any charter
or contract of affreightment assigned hereby, and (d) instruct such Person to
acknowledge directly to Lender receipt of such notification and instructions.
(c) Performance under Charters; No Duty of Inquiry. Freedom and
215 hereby undertake that, notwithstanding the assignment contained herein, each
shall punctually perform all its obligations under all charters and contracts
pertaining to its Vessel to which it is a party. It is hereby expressly agreed
that, anything contained herein to the contrary notwithstanding, Freedom and 215
(as applicable) alone shall remain liable under all charters and contracts
pertaining to its Vessel to which it is a party to perform the obligations
assumed by it thereunder, and Lender shall have no obligation or liability under
any such charter or contract by reason of or arising out of the assignment
contained herein, nor shall Lender be required to assume or be obligated in any
manner to perform or fulfill any obligations of Freedom or 215 under or pursuant
to any such charter or contract or to make any payment or to make any inquiry as
to the nature or sufficiency of any payment received by Lender, or, unless and
until indemnified to its satisfaction, to present or file any claim or to take
any other action to collect or enforce the payment of any amounts that may have
been assigned to it or to which it may be entitled hereunder or pursuant hereto
at any time or times.
GEFISHER 498256 14 (LOAN AGREEMENT)
(d) Negative Pledge. Freedom and 215 each hereby warrants and
represents that it has not assigned, pledged or encumbered, and hereby covenants
that it will not assign, pledge or encumber so long as this Agreement shall
remain in effect, any of its right, title or interest in and to the whole or any
part of the Earnings hereby assigned to anyone other than Lender, its successors
and assigns, and it will not take or omit to take any action, the taking or
omission of which might result in an alteration or impairment of the rights
hereby assigned or any of the rights created in this Agreement; and Freedom and
215 each do hereby irrevocably appoint and constitute Lender, its successors and
assigns as its true and lawful attorney-in-fact with full power of substitution
(in the name of Freedom and 215 (as applicable) or otherwise) should an Event of
Default have occurred and be continuing under this Agreement or other Loan
Documents, to ask, require, demand, receive, compound and give acquittance for
any and all moneys and claims for moneys assigned hereby, to endorse any checks
or other instruments or orders in connection therewith, to file any claims or
take any action or institute any proceedings that Lender may deem to be
necessary or advisable.
Section 5.02. Authorization. Freedom and 215 hereby authorize, and
ratify any previous authorization for, Lender to file UCC financing statements
and any amendments thereto describing the Collateral and Earnings and containing
any other information required by the applicable UCC. Freedom and 215 authorize
Lender, and hereby grant Lender a power of attorney (which is coupled with an
interest), to file financing statements and amendments thereto describing the
Collateral and Earnings and containing any other information required by the
applicable UCC and all proper terminations of the filings of other secured
parties with respect to the Collateral and Earnings, in such form and substance
as Lender, in its sole discretion, may determine. Borrowers hereby waive any
right that any Borrower may have to file with the applicable filing officer, and
agrees that no Borrower will file or authorize the filing of, any financing
statement, amendment, termination or other record pertaining to the Collateral
and Earnings and/or Lender's interest therein, except as authorized by Lender in
writing.
ARTICLE VI: COVENANTS
Section 6.01. Affirmative Covenants. So long as the Loan shall remain
unpaid, Borrowers will comply with the following requirements unless waived by
Lender in writing:
(a) Financial Statements. Maritrans, Inc. shall deliver to
Lender for it: (i) as soon as practicable, and in any event within forty-five
(45) days after the end of each fiscal quarter (other than the last fiscal
quarter), unaudited financial statements including in each instance, balance
sheets, income statements, and statements of cash flow, on a consolidated and
consolidating basis, as appropriate, and separate profit and loss statements as
of and for the quarterly period then ended and for the fiscal year to date,
prepared in accordance with GAAP, and certified by Maritrans, Inc.'s chief
financial officer, to be true and correct, (ii) as soon as practicable, and in
any event within ninety (90) days after the end of each fiscal year, annual
audited financial statements, including balance sheets, income statements and
statements of cash flow for the fiscal year then ended, on a consolidated and
consolidating basis, as appropriate, which have been prepared by the independent
accountants of Maritrans, Inc., in accordance with GAAP, and (iii) as soon as
practicable, any certifications required by the Securities and Exchange
Commission of the United States or by securities laws applicable to Maritrans,
Inc. concerning financial statements of Maritrans, Inc. Such audited financial
statements shall be accompanied by the independent accountant's opinion, which
opinion shall be in form generally recognized as "unqualified." Borrowers shall
be deemed to have complied with the foregoing requirements with respect to each
Borrower, if such entity files Forms 10-K and 10-Q with the Securities and
Exchange Commission that are publicly available within the time frames set forth
above.
GEFISHER 498256 15 (LOAN AGREEMENT)
(b) Notices. Borrowers shall deliver to Lender each of the
following:
(i) as soon as possible and in any event within three (3) Business
Days after the occurrence of a Default, an Event of Default or an event that
could reasonably be expected to result in a Material Adverse Effect, a statement
of Borrowers setting forth reasonably detailed information regarding such
Default, Event of Default or event and the action that Borrowers have taken and
propose to take with respect thereto;
(ii) promptly after the commencement thereof, notice in writing of
all litigation and of all proceedings before any governmental or regulatory
agency affecting any Borrower or any of its Subsidiaries of the type described
in Article IV hereof or that seek a monetary recovery against any Borrower or
any of its Subsidiaries in excess of $3,000,000;
(iii) promptly upon knowledge thereof, notice of any loss, theft or
destruction of or material damage to, Collateral having a value in excess of
$500,000;
(iv) promptly after the amending thereof, copies of any and all
amendments to any of its Organizational Documents;
(v) promptly upon knowledge thereof, notice of the violation by any
Borrower of any law, rule or regulation applicable to such Borrower, which
violation could reasonably be expected to have a Material Adverse Effect; and
(vi) as soon as possible and in any event within three (3) Business
Days after the occurrence thereof, notice of any event that, alone or together
with any other events that have occurred, could reasonably be expected to result
in liability of any Borrower or any of its Subsidiaries under ERISA in an
aggregate amount exceeding $3,000,000.
(c) Compliance with Laws. Each Borrower and each of its
Subsidiaries shall comply in all material respects with all governmental rules
and regulations and all other applicable laws, rules, regulations and orders,
including, without limitation, all Environmental Laws.
(d) Maintenance of Properties. Freedom and 215 shall, at their
own joint and several expense, maintain, preserve, protect and keep the
Collateral in good repair, working order and condition in compliance with all
applicable laws, rules, regulations and the requirements of all applicable
insurance policies, and make necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times and shall maintain in full force and effect all
rights, franchises, permits, licenses, trademarks, trade names, approvals,
authorizations, leases and contracts necessary to carry on its business as
presently or proposed to be conducted where the failure to so maintain the same
could reasonably be expected to have a Material Adverse Effect. Neither Freedom
nor 215 will make any material alterations, modifications or additions to the
Collateral that cannot be removed without materially damaging the functional
capabilities or economic value of the Collateral unless Lender has provided its
prior written consent. Notwithstanding the foregoing, if 215 requests that the
OCEAN 215 be rebuilt with a double hull during the term of this Agreement, and
Lender does not provide its consent, Borrower may prepay the Loan, together with
all accrued and unpaid interest and expenses, without incurring Prepayment Fees.
(e) Insurance. Freedom and 215 shall obtain and keep the
Vessels insured against the risks described below:
(i) hull and machinery and war risk insurance on full conditions as
per Institute Time Clauses Hull (1/10/83), or American Institute Hull Clauses
(June 2, 1977) or other conditions approved by Lender insuring the Vessels
against the usual risks including collision and liability, for an agreed value
of not less than the greater of the fair market value of the Vessels or one
hundred thirty percent (130%) of the outstanding principal balance of the Note,
with deductibles acceptable to Lender; and
GEFISHER 498256 16 (LOAN AGREEMENT)
(ii) full protection indemnity covered on terms and conditions as
per the rules of a protection and indemnity club that is a member of the
International Group of Protection and Indemnity Associations, or equivalent
cover acceptable to Lender, providing for liability cover at a level presently
acceptable to Lender for any one accident or occurrence, excepting oil pollution
which is limited to $1,000,000,000 combined single limit, but no event shall it
be less than the amount obtainable from its protection and indemnity club.
The Vessels shall not carry any cargos nor proceed into any area then
excluded by trading warranties under the above-referenced policies without first
obtaining any necessary additional coverage, satisfactory in form and substance,
and evidence of which shall be furnished, to Lender. All insurances shall be in
form and with companies reasonably satisfactory to Lender. All insurance for
loss or damage shall provide that losses, if any, shall be payable to Lender for
distribution by it to itself and Borrower, as their respective interests may
appear. Notwithstanding the foregoing, and unless otherwise required by Lender
by notice to the underwriters, (i) any loss under any insurance on the Vessels
with respect to protection and indemnity risk may be paid directly to Freedom
and 215 (as applicable) to reimburse it for any loss, damage or expense incurred
by it and covered by such insurance or to the Person to whom any liability
covered by such insurance has been incurred or may be advanced to Freedom or 215
for direct payment to claimant, and (ii) in the case of any loss (other than a
Total Loss) under any insurance with respect to the Vessels involving any damage
to the Vessels, the underwriters may, so long as they have not been notified
that an Event of Default has occurred and is continuing and upon receipt of
evidence satisfactory to them of the completion of such repairs for other
charges, pay directly for the repair, salvage or other charges involved or if
Freedom or 215 has first fully repaired the damage or paid all of the salvage or
other charges, may pay Freedom or 215 (as applicable) as reimbursement
therefore; provided, however, that if such damage to such Vessel involves damage
in excess of $500,000 the underwriter shall not make such payment without first
obtaining the written consent thereto of Lender. Any loss covered by the
provisions of this paragraph, directly to any Borrower or others, shall be paid
by Lender to, or as directed by, Borrowers and any other payments to Lender of
losses covered by this paragraph shall be applied by Lender towards payment of
the Obligations hereunder and/or under the other Loan Documents, as Lender, in
its sole description sees fit. Freedom and 215 shall pay the premiums and costs,
if any, therefore and delivered to Lender the policies of insurance or
duplicates thereof, or other evidence satisfactory to Lender of such insurance
coverages and of each rider and endorsement thereto or renewal thereof. In
addition, Freedom and 215 shall furnish to Lender annually a detailed report
signed by a firm of marine insurance brokers satisfactory to Lender as to the
insurance maintained in respect of the Vessels. Each insurer shall agree, by
endorsement upon the policy or polices issued by it, or by independent
instrument furnished to Lender, that (i) it will give Lender fourteen (14) days'
prior written notice of the effective date of any material alteration,
cancellation or non-renewal of such policy or policies; and (ii) the insurance
as to the interest of any named loss payee other than Freedom and 215 shall not
be invalidated by any actions, inactions, breach of warranty or condition of
negligence of Freedom or 215 with respect to such policy or policies.
Upon the occurrence of a Total Loss of either Vessel, Borrowers shall
give prompt notice thereof to Lender. Upon receipt of such notice, Lender shall
apply all insurance proceeds received by it toward prepayment of the Loan in
accordance with the terms hereof.
Freedom and 215 agree that the Vessels shall be operated within the
confines of the cover provided by all insurances. Freedom and 215 further agree
that neither will make, do, consent or agree to any act or omission that would
or could render any insurance covering either Vessel invalid, void, voidable or
enforceable or render any sum payable thereunder repayable in whole or in part.
Freedom and 215 further covenant to (i) make no material changes regarding the
management of either Vessel without the prior written consent of Lender; and
(ii) make all insurance premium payments when due, and, if applicable, make all
quarterly protection and indemnity club U.S. voyage quarterly declarations for
each such quarter no later than six weeks after the end of each quarter and
ensure that copies of the same be sent to Lender. Freedom and 215 shall be
responsible for pursuing all claims under the insurances indicated above, and
take such actions as may be necessary to satisfy all insurer's inquiries. Unless
notified by Lender to the contrary, Freedom and 215 shall arrange for collision
and/or salvage guarantees and/or securities to be provided to third parties as
may be required to prevent the arrest, or secure the release of the Vessels.
GEFISHER 498256 17 (LOAN AGREEMENT)
(f) Books and Records; Inspections. Borrowers will keep books
and records that accurately reflect all of its business affairs and
transactions. Borrowers will permit Lender or any of its representatives
(including outside auditors), at reasonable times and intervals, to visit all of
its offices, to discuss its financial matters with its respective officers and
independent public accountants (and Borrowers hereby authorize such independent
accountants to discuss Borrowers' financial matters with Lender or its
representatives whether or not any representative of Borrowers are present) and
to examine (and, at the expense of Borrowers, copy extracts from) books or other
corporate records (including computer records). If Lender exercises its rights
under this Section following the occurrence of a Default, Borrowers shall
jointly and severally pay any fees of such independent accountants incurred in
connection therewith.
(g) Perfection of Liens. Freedom and 215 shall take such action
as may be necessary or as Lender may request in order to perfect and protect
Lender's Lien on the Collateral and Earnings.
(h) Title. Freedom and 215 will at all times protect and
defend, at their own cost and expense, their respective title to the Collateral
from and against all claims, liens and legal processes of creditors of Freedom
and 215 (other than Lender), and keep all Collateral and Earnings free and clear
of all such claims, liens and processes other than Permitted Liens or Permitted
Maritime Liens.
(i) Mortgage Supplement. Freedom and 215 shall at any time upon
request of Lender execute and deliver to Lender one or more amendments or
supplements to the Mortgages, in form and substance satisfactory to Lender, for
the purpose of ensuring that the amount and other terms of such Mortgage are
adequate to provide Lender with securities sufficient to cover the Obligations.
(j) Nature of Mortgage. Freedom and 215 shall, within thirty
(30) days after the Closing Date, cause a certified copy of the applicable
Mortgage to be placed on board each Vessel.
(k) Maintenance of Vessels. At all times and without cost or
expense to Lender, Freedom and 215 will maintain and preserve, or cause to be
maintained and preserved, its Vessel in good running order and repair, so that
each Vessel shall be, insofar as due diligence can make them so, tight, staunch,
strong and sufficiently well tackled, appareled, furnished, equipped in every
respect to seaworthy and in good operating condition. Each Vessel shall, and
Freedom and 215 covenant that they will, at all times comply with all applicable
laws, treaties and conventions of the United States of America and rules and
regulations issued thereunder, it shall have on board as and when required
thereby valid certificates showing compliance therewith. Freedom and 215 each
will cause its Vessel to be dry-docked as per class requirements. Freedom and
215 shall give Lender five (5) business day's prior notice of dry-docking of
either Vessel so as to afford Lender the opportunity to be present and inspect
the same. Neither Freedom nor 215 shall make, or permit to be made, any
substantial change in the structure, type and speed of either Vessel or change
in the Vessels rigs that might result in a decrease or reduction in the value or
utility of such Vessel.
(l) Inspection. At all times, Freedom and 215 shall afford
Lender or its authorized representatives full and complete access to the Vessels
for the purpose of inspecting the same and their papers and, at the request of
Lender, Freedom and 215 will deliver for inspection copies of any and all
contracts and documents related to the Vessels, whether on board or not. If upon
such inspection Lender shall discovery that either Vessel is in a condition of
disrepair, Lender shall have the right to call for the dry-docking and repair of
such Vessel within thirty (30) days of discharge of the cargo then on board at
Borrowers' sole cost and expense and to the satisfaction of Lender.
Section 6.02. Negative Covenants. So long as the Loan shall remain
unpaid, Borrowers agree that unless waived by Lender in writing:
GEFISHER 498256 18 (LOAN AGREEMENT)
(a) Liens. Neither Freedom nor 215 shall create, incur or
suffer to exist any mortgage, deed of trust, pledge, lien, security interest,
assignment or transfer in, on or of any of the Collateral or Earnings except for
Permitted Liens or Permitted Maritime Liens.
(b) Fundamental Changes. Borrowers will not, enter into any
merger, consolidation, reorganization, or recapitalization, or reclassify its
capital stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or, other than in the ordinary course of its
business, convey, sell assign, lease, transfer, or otherwise dispose of, in one
transaction or series of transactions, all or any substantial part of its
property or assets.
(c) Sale of Collateral. Neither Freedom nor 215 shall, and
shall, permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey or dispose of (in each case in one transaction or series of
transactions), or grant options, warrants or other rights with respect to (in
each case in one transaction or series of related transactions), or agree to do
any of the foregoing with respect to, its interest in all or any part of the
Collateral.
(d) Location or Name Changes. Neither Freedom nor 215 shall
change its location for purposes of Section 9-307 of the UCC or its name in any
manner that could make any financing statement filed in connection with any Loan
Document seriously misleading within the meaning of Section 9-506 of the UCC or
any similar statute, unless it shall have given Lender at least thirty (30)
days' prior written notice thereof.
(e) Flag of Vessels. Neither Freedom nor 215 shall change the
flag of its Vessel. Furthermore, neither Freedom nor 215 shall change the prior
port of documentation of its Vessel without the prior written consent of Lender,
and any such written consent to any one change of the port of documentation
shall not be construed to be a waiver of this provision with respect to any
subsequent proposed change of the portion of documentation.
Section 6.03. Indemnity.
(a) Whether or not covered by insurance, Borrowers hereby
jointly and severally assume responsibility for and agree to reimburse Lender,
its affiliates and its and their respective officers, directors, employees and
agents (individually and collectively, the "Indemnified Parties") for and will
jointly and severally indemnify, defend and hold the Indemnified Parties
harmless from and against all liabilities, obligations, losses, damages,
penalties, claims, suits, actions, proceedings, judgments, awards, amounts paid
in settlements, obligations, debts, diminutions in value, fines, penalties,
charges, fees, costs and expenses (including reasonable attorneys' fees and
expenses) of whatsoever kind and nature, imposed on, incurred by or asserted
against any Indemnified Party that in any way relate to or arise out of any of
the Loan Documents, the transactions contemplated thereby or the Collateral or
Earnings (collectively, the "Losses"), including, without limitation, (i) the
selection, manufacture, construction, acquisition, acceptance or rejection of
the Collateral, (ii) the ownership of the Collateral, (iii) the delivery,
installation, lease, possession, maintenance, use, condition, return or
operation of the Collateral, (iv) the condition of the Collateral sold or
otherwise disposed of after possession by Freedom or 215, (v) any patent or
copyright infringement, (vi) any act or omission on the part of any Borrower or
any of its officers, employees, agents, contractors, lessees, licensees or
invitees, (vii) any misrepresentation or inaccuracy in any representation or
warranty of any Borrower or a breach of any Borrower of any of its covenants or
obligations under any of the Loan Documents, (viii) any claim, loss, cost or
expense involving alleged damage to the environment relating to the Collateral,
including, without limitation, investigation, removal, cleanup and remedial
costs, (ix) any personal injury, wrongful death or property damage arising under
any statutory or common law or tort law theory, including, without limitation,
damages assess for the maintenance of a private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Collateral, (x)
any past, present or threatened, in writing, injury to, or destruction of, the
Collateral, including, without limitation, costs to investigate and assess such
injury or damage and (xi) any administrative process or proceeding or judicial
or other similar proceeding (including, without limitation, any alternative
dispute resolution process and any bankruptcy proceeding) in any way connected
with any matter addressed in any of the Loan Documents.
GEFISHER 498256 19 (LOAN AGREEMENT)
(b) If any action or proceeding be commenced, to which action
or proceeding the Indemnified Parties are made a party by reason of the
execution or performance of this Agreement or any other Loan Document, or in
which it becomes necessary to defend or uphold the Lien of this Agreement and of
the other Loan Documents, all sums paid by the Indemnified Parties, for the
expense of any litigation to prosecute or defend the rights and Lien created
hereby or otherwise, shall be paid by Borrowers jointly and severally to such
Indemnified Parties, as the case may be, as hereinafter provided. Borrowers will
jointly and severally pay and save the Indemnified Parties harmless against any
and all liability with respect to any intangible personal property tax or
similar imposition of any state or any subdivision or authority thereof now or
hereafter in effect, to the extent that the same may be payable by the
Indemnified Parties in respect of this Agreement or any Obligation.
(c) All amounts payable to the Indemnified Parties under this
Section shall be deemed Obligations secured by this Agreement and shall be
payable immediately upon demand. In case any action, suit or proceeding is
brought against the Indemnified Parties by reason of any such occurrence,
Borrower, upon request of such Indemnified Parties, will, at Borrowers' joint
and several expense, resist and defend such action, suit or proceeding or cause
the same to be resisted or defended by counsel approved by Lender. The
obligations of Borrowers under this Section shall survive the termination of
this Agreement and not be merged with any applicable judgment. If and to the
extent that the foregoing undertaking may be unenforceable for any reason,
Borrowers hereby agree to make the maximum contribution to the payment and
satisfaction of each of the Losses that is permissible under applicable law.
Section 6.04. Performance by Lender. If any Borrower at any time fails to
perform or observe any of the covenants or agreements contained in this
Agreement, Lender may, but need not, perform or observe such covenant on behalf
and in the name, place and stead of such Borrower (or, at Lender's option, in
Lender's name) and may, but need not, take any and all other actions which
Lender may reasonably deem necessary to cure or correct such failure (including,
without limitation, the payment of taxes, the satisfaction of security
interests, liens or encumbrances, the performance of obligations owed to account
debtors or other obligors, the procurement and maintenance of insurance, the
execution of assignments, security agreements and financing statements, and the
endorsement of instruments), and Borrowers shall thereupon jointly and severally
pay to Lender on demand the amount of all moneys expended and all costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Lender in connection with or as a result of the performance or observance of
such agreements or the taking of such action by Lender, together with interest
thereon from the date expended or incurred at the lesser of the highest Default
Rate then in effect or the highest rate permitted by law. To facilitate the
performance or observance by Lender of such covenants of Borrowers, each
Borrower hereby irrevocably appoints Lender, or the delegate of Lender, acting
alone, as the attorney in fact of such Borrower with the right (but not the
duty) from time to time to create, prepare, complete, execute, deliver, endorse
or file in the name and on behalf of such Borrower any and all instruments,
documents, assignments, security agreements, financing statements, applications
for insurance and other agreements and writings required to be obtained,
executed, delivered or endorsed by Borrowers under this Agreement.
ARTICLE VII: EVENTS OF DEFAULT
Section 7.01. Events of Default. Each of the following events or
occurrences shall constitute an "Event of Default":
(a) Any Borrower shall default in the payment of any Obligation
when due and such failure continues for ten (10) calendar days;
(b) Any representation or warranty of any Borrower made in any
Loan Document or any other writing or certificate furnished by or on behalf of
any Borrower pursuant to any Loan Document is or shall be incorrect when made in
any material respect;
(c) Any Borrower shall fail to perform any of its obligations
under Section 6.01(b), 6.01(e), 6.01(h) or 6.02(a) through 6.02(e) hereof;
GEFISHER 498256 20 (LOAN AGREEMENT)
(d) Any Borrower shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
(other than items set forth elsewhere in this Section 7.01), and such default
shall continue unremedied for a period of thirty (30) days after any Borrower
has actual knowledge thereof or has received notice by Lender thereof;
(e) The occurrence of an event of default or a breach or
default, after the passage of all applicable notice and cure or grace periods
provided therefor, under any other Loan Document or any other agreement between
or among any Borrower or any of its Subsidiaries and Lender or any of its
Affiliates;
(f) The occurrence of a default or an event of default (however
defined) under any instrument, agreement or other document evidencing or
relating to, and the acceleration of, any indebtedness or other monetary
obligation of any Borrower or any of its Subsidiaries having a principal amount,
individually or in the aggregate, in excess of $10,000,000;
(g) Any judgment or order for the payment of money (not paid or
fully covered by insurance maintained in accordance with the requirements of
this Agreement and as to which the relevant insurance company has acknowledged
coverage) in excess of $10,000,000 shall be rendered against any Borrower or any
of its Subsidiaries;
(h) The occurrence of any Change in Control;
(i) Any Borrower or any of its Subsidiaries shall be or become
insolvent, or admit in writing its inability to pay its debts as they mature, or
make an assignment for the benefit of creditors; or any Borrower or any of its
Subsidiaries shall apply for or consent to the appointment of any receiver,
trustee or similar officer for it or for all or any substantial part of its
property; or such receiver, trustee or similar officer shall be appointed
without the application or consent of any Borrower or any of its Subsidiaries;
or any Borrower or any of its Subsidiaries shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it under the laws of any jurisdiction; or any
such proceeding shall be instituted (by petition, application or otherwise)
against any Borrower or any of its Subsidiaries;
(j) Any Loan Document or any Lien granted thereunder shall
(except in accordance with its terms), in whole or in part, terminate, cease to
be effective or cease to be the legally valid, binding and enforceable
obligation of any Borrower; any Borrower, any of its Subsidiaries or any other
party shall, directly or indirectly, contest in any manner the effectiveness,
validity, binding nature or enforceability of any Loan Document or any Lien
granted thereunder; or any Lien securing (or required to secure) any Obligation
shall, in whole or in part, cease to be a first priority perfected Lien;
(k) The occurrence of an ERISA Event that, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in liability of any Borrower or any of its Subsidiaries in an aggregate
exceeding $3,000,000;
(l) The occurrence of a Material Adverse Change; or
(m) Any notice shall have been issued by the United States
Coast Guard to the effect that either Vessel is subject to deletion from
registry or the certification of documentation for either Vessel or the
endorsements noted thereon is subject to revocation or cancellation, for any
reason whatsoever and such notice is not revoked within five (5) business days
of any Borrower's receipt thereof.
GEFISHER 498256 21 (LOAN AGREEMENT)
Section 7.02. Remedies.
(a) Following the occurrence of an Event of Default described
in subsection (i) of Section 7.01 hereof, all of the outstanding principal
amount of the Note and other Obligations shall be due and payable, whereupon the
full unpaid amount of the Note and other Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without
presentment, notice of dishonor, protest or further notice of any kind, all of
which are hereby expressly waived by Borrowers.
(b) Following the occurrence of any Event of Default and
subject to subsection (a) of this Section, Lender may exercise, at its option,
concurrently, successively or in any combination, all rights and remedies of a
secured party in, to and against the Collateral granted by the UCC or otherwise
available at law or in equity, including, without limitation:
(i) by notice to any Borrower, declare all or any portion of the
outstanding principal amount of the Note and other Obligations to be due and
payable, whereupon the full unpaid amount of the Note and other Obligations
which shall be so declared due and payable shall be and become immediately due
and payable, without presentment, notice of dishonor, protest or further notice
of any kind, all of which are hereby expressly waived by Borrowers;
(ii) recover all fees and expenses (including, without limitation,
reasonable attorneys' fees) in connection with the collection or enforcement of
the Obligations, which fees and expenses shall constitute additional Obligations
of Borrowers hereunder;
(iii) take immediate and exclusive possession of the Collateral,
which constitutes personal property, or any part thereof, with or without any
court order or other process of law and enter the premises where such Collateral
is located and remove the same therefrom, or require Borrowers to assemble and
package such Collateral and make it available to Lender for its possession at a
place designated by Lender;
(iv) sell, lease, sublease, hold or otherwise dispose of all or any
part of the Collateral and hold, maintain, preserve and prepare the Collateral
for sale until disposed of;
(v) act as, and each Borrower hereby constitutes and appoints
Lender, such Borrower's true, lawful and irrevocable attorney-in-fact (which
appointment is coupled with an interest) to demand, receive and enforce payments
and to give receipts, releases, satisfaction for and to ▇▇▇ for moneys payable
such Borrower under or with respect to any of the Collateral, and actions taken
pursuant to this appointment may be taken either in the name of such Borrower or
in the name of Lender with the same force and effect as if this appointment had
not been made;
(vi) ▇▇▇ for specific performance of any Obligation or recover
damages for breach thereof; and
(vii) exercise any one or more of the remedies available under any
Loan Document.
(c) No delay or failure by Lender hereof in exercising any right, power,
privilege or remedy shall be deemed to be a waiver of the same or any part
thereof; nor shall any single or partial exercise thereof or any failure to
exercise the same in any instance preclude any future exercise thereof, or
exercise of any other right, power, privilege or remedy, and the rights and
remedies provided for hereunder are cumulative and not exclusive of any other
right or remedy available at law or in equity.
Section 7.03. Use of Proceeds. Any proceeds received by Lender in
exercising the rights and remedies specified in Section 7.02 hereof shall be
first applied to pay the costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred by Lender as a result of an
Event of Default. Any proceeds remaining after payment of such costs and
expenses shall be applied to the satisfaction of the Obligations as determined
by Lender in its sole discretion and, unless Lender accepts the Collateral in
full or partial satisfaction of the Obligations, any excess proceeds after
satisfaction of all Obligations shall be paid to Borrowers.
GEFISHER 498256 22 (LOAN AGREEMENT)
ARTICLE VIII: MISCELLANEOUS PROVISIONS
Section 8.01. Waivers, Amendments. No provision of this Agreement or any
of the other Loan Documents shall be deemed waived or amended except by a
written instrument setting forth the matter waived or amended and signed by the
party against which enforcement of such waiver or amendment is sought. Waiver of
any matter shall not be deemed a waiver of the same or any other matter on any
future occasion. No notice to or demand on any Borrower in any case shall
entitle it to any notice or demand in similar or other circumstances.
Section 8.02. Notices. All notices, certificates, requests, demands and
other communications provided for hereunder or under any Loan Document shall be
in writing and shall be (a) personally delivered or (b) sent by overnight
courier of national reputation, and shall be deemed to have been given on (i)
the date received if personally delivered and (ii) the next Business Day if sent
by overnight courier. All communications shall be addressed to the party to whom
notice is being given at its address set forth below or such other address as
such party may designate in writing to the other party:
If to Borrowers: Maritrans, Inc.
Maritrans 215 Co.
Maritrans Freedom Co.
Two Harbour Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: Lombard US Equipment Finance Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If notice to Borrowers of any intended disposition of the Collateral or any
other intended action is required by law in a particular instance, such notice
shall be deemed commercially reasonable if given (in the manner specified in
this Section) at least ten (10) calendar days prior to the date of intended
disposition or other action.
Section 8.03. Severability. Any provision of this Agreement or any other
Loan Document which is invalid, illegal or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity, legality or enforceability of such provision in any other
jurisdiction.
Section 8.04. Execution in Counterparts. This Agreement may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute one and the same document, and any of the parties hereto may
execute this Agreement by signing any such counterpart, provided that only the
original marked "ORIGINAL: 1 of 4" on the execution page thereof shall
constitute chattel paper under the UCC.
Section 8.05. Further Assurance and Corrective Instruments. Borrowers
hereby agree that they will, from time to time, execute, acknowledge and deliver
or authorize, as applicable, or cause to be executed, acknowledged and delivered
or authorized, such further acts, instruments, conveyances, transfers and
assurances and take such other actions, as Lender reasonably deems necessary or
advisable for the implementation, correction, confirmation or perfection of this
Agreement or the other Loan Documents and any rights of Lender hereunder or
thereunder. Each Borrower hereby designates and appoints Lender as its agent,
and grants to Lender a power of attorney (which is coupled with an interest), to
execute on behalf of such Borrower such additional documents and to take such
other action.
GEFISHER 498256 23 (LOAN AGREEMENT)
Section 8.06. Time of the Essence. Time is of the essence with respect to
the performance by Borrowers of the Obligations.
Section 8.07. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire agreement among Lender and Borrowers. There are
no other understandings, agreements, representations or warranties, written or
oral, among Lender and Borrowers with respect to the subject matter of this
Agreement and the other Loan Documents. Upon the execution and delivery of this
Agreement and the other Loan Documents, any proposal or loan commitment with
respect to the transactions contemplated by this Agreement shall be deemed null
and void and of no further force and effect (except to the extent of the
provisions therein concerning any closing fee), and the terms and conditions of
this Agreement and the other Loan Documents shall control notwithstanding that
such terms and conditions may be inconsistent with or vary from those set forth
in such bid proposal or loan commitment.
Section 8.08. Governing Law. THIS AGREEMENT AND THE NOTE SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF
(other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
Section 8.09. Successors and Assigns; Assignments by Lender. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns; provided, however, that
Borrowers may not assign or transfer their rights or obligations hereunder.
Lender may assign, in whole or in part, its rights under this Agreement,
including, without limitation, in connection with any assignment, participation
and/or securitization. Upon any assignment by Lender of its entire right and
interest under the Loan Documents, Lender shall automatically be relieved, from
and after the date of such assignment, of any liability for the performance of
any obligation of Lender therein.
Section 8.10. Assignments, Participations and Securitizations. Borrowers
acknowledge and agree that a material inducement to Lender's willingness to
complete the transactions contemplated by the Loan Documents is that Lender may,
at any time, complete an assignment, participation or securitization with
respect to any Loan Document or any or all of the servicing rights with respect
thereto. In connection with any such assignment, participation or
securitization, Borrowers agree to cooperate in good faith with Lender,
including, without limitation, providing such documents, financial information
and other information ("Information") reasonably requested by Lender or any
entity involved with respect to such assignment, participation or
securitization. Borrowers consent to Lender's providing the Information,
including any other information that Lender may now have or hereafter acquire
with respect to Borrowers or the Collateral to any entity involved with respect
to such assignment, participation or securitization;
Section 8.11. Waiver of Jury Trial. LENDER AND EACH BORROWER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, ANY DEALINGS AMONG LENDER AND BORROWERS RELATING TO THE SUBJECT
MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND
BORROWERS. EACH BORROWER ACKNOWLEDGES AND AGREES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY LOAN DOCUMENT, OR TO ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED TRANSACTION. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
GEFISHER 498256 24 (LOAN AGREEMENT)
Section 8.12. Forum Selection and Consent to Jurisdiction. EACH BORROWER
AND LENDER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
LENDER'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL MAY BE
FOUND. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 8.13. Waiver of Certain Claims. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWERS SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST
LENDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF, ANY LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED THEREBY, ANY LOAN OR THE USE OF THE PROCEEDS THEREOF.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]
GEFISHER 498256 25 (LOAN AGREEMENT)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS:
MARITRANS, INC.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: VP & CFO
MARITRANS FREEDOM CO.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
VP
MARITRANS 215 CO.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
VP
LENDER:
LOMBARD US EQUIPMENT FINANCE
CORPORATION
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice President
ORIGINAL: 1 OF 4
[EXECUTION PAGE OF LOAN AGREEMENT]
GEFISHER 498256 26 (LOAN AGREEMENT)
SCHEDULE I
ADDITIONAL CONDITIONS PRECEDENT
In addition to the conditions precedent contained in Article III of the
Loan Agreement, Borrowers shall deliver to Lender, on or prior to the Closing
Date each of the following items, in form and substance acceptable to Lender:
(a) The Mortgages, properly executed on behalf of the applicable
Borrower;
(b) The Assignment of Insurances, properly executed on behalf of the
applicable Borrower.
(c) True copies of the current Certificates of Documentation and, if
applicable, Certificates of Inspection for the Vessels.
(d) The forms of Notices of Mortgage and applicable Borrower's
certificate that such Notices of Mortgage have been posted on the Vessels;
(e) The letter of undertaking evidencing the insurances covering the
Vessels; and
(f) Written advice from Freedom's and 215's insurance brokers of the
insurances currently in place.
GEFISHER 498256 27 (LOAN AGREEMENT)
SCHEDULE II
DISCLOSURE STATEMENTS
GEFISHER 498256 28 (LOAN AGREEMENT)
SCHEDULE III
LIST OF SUBSIDIARIES
Entity or Entities Holding
Name of Subsidiary Organizational Structure Ownership Interests Percentage Interest
GEFISHER 498256 29 (LOAN AGREEMENT)
EXHIBIT A
EARNINGS ASSIGNMENT NOTICE
TO:
TAKE NOTICE:
(a) that by a Loan Agreement dated as of September __, 2003, between us,
______________________, Maritrans, Inc. and LOMBARD US EQUIPMENT
FINANCE CORPORATION ("Lombard"), we, the owner of the vessels described
on Schedule 1 attached hereto (the "Vessel"), have assigned to Lombard
as from the date thereof all our right, title and interest in and to:
(i) any moneys whatsoever payable to us under all charters,
contracts of affreightment or other contracts for the use or
employment of the Vessel, all freight, hires, passage moneys
and all other rights and benefits whatsoever accruing to us
thereunder, including (but without prejudice to the generality
of the foregoing) all claims for damages in respect of any
breach by any charterer or other party thereto of any such
charter, contract of affreightment or other contract for the
use or employment of the Vessel; and
(ii) all freights, passage moneys, hire moneys or other
compensation payable to us in the event of the requisition of
the Vessel for title or hire, remuneration for salvage and
towage services, demurrage and detention moneys and any other
earnings whatsoever due or to become due to us arising from
the use or employment of the Vessel;
as security for our obligations under the Loan Agreement.
(b) that you are hereby irrevocably authorized and instructed to pay from
the date hereof all of such aforesaid moneys to Lombard at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn:
[________________] (or at such other place as Lombard may direct).
DATED THIS ___ day of ___________, _____. ____________________________
By:_________________________
Name:
Title:
GEFISHER 498256 (LOAN AGREEMENT)