Greystone Business Credit II, L.L.C.
--------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (as it may be amended, this "Agreement")
is entered into on March 27, 2007, between GREYSTONE BUSINESS CREDIT II, L.L.C.
("Lender"), having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇. 60th Fl., New York, New York
10019, MARINE GROWTH CANADA LTD. ("Owner"), a company organized under the laws
of the Province of British Columbia, Canada having its principal address at
▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and MARINE GROWTH FINANCE &
CHARTER, INC., a Delaware corporation, having its principal address at ▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MGFC"). Owner and MGFC being
collectively, jointly and severally, hereinafter referred to as "Borrowers".
1. DEFINITIONS.
As used in the Agreement, the following terms have the following meanings:
"Affiliate" means, with respect to any Person, a relative, partner,
shareholder, member, manager, director, officer, or employee of such Person, any
parent or subsidiary of such Person, or any Person controlling, controlled by or
under common control with such Person or any other Person affiliated, directly
or indirectly, by virtue of family membership, ownership, management or
otherwise.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. ss.
101 et seq.) or the Bankruptcy and Insolvency Act (Canada), the Companies
Creditors Arrangement Act (Canada) or the Winding-Up Act (Canada) or any other
applicable bankruptcy or insolvency law or any rule or regulations promulgated
thereunder.
"Business Day" means a day other than a Saturday or Sunday or any other
day on which Lender or banks in New York are authorized to close.
"Canadian Plans" shall mean all the employee benefit, fringe benefit,
supplemental unemployment benefit, bonus, incentive, profit sharing,
termination, change of control, pension, retirement, stock option, stock
purchase, stock appreciation, health, welfare, medical, dental, disability, life
insurance and similar plans, programs, arrangements or practices relating to the
current or former employees, officers or directors of the Borrowers maintained,
sponsored or funded by any of them, whether written or oral, funded or unfunded,
insured or self insured, registered or unregistered.
"Collateral" means all property and interests in property in which a
security interest is granted pursuant to this Agreement, as more fully defined
in Section 4.1.
"Currency Exchange Rate" means, with respect to a currency, the rate
quoted by the Reference Bank as the spot rate for the purchase by the Reference
Bank of such currency with another currency at approximately 10:30 a.m. (New
York time) on the date two (2) Business Days prior to the date as of which the
foreign exchange computation is made.
"ERISA" means the Employee Retirement Income Security Act of 1974 and all
rules, regulations and orders promulgated thereunder.
"GAAP" means generally accepted accounting principles as in effect from
time to time, consistently applied.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on common law, statute or contract, including rights of sellers under
sales contracts and leases and other encumbrances affecting property.
"Loan Documents" means, collectively, this Agreement, the Note, and all
notes, guaranties, mortgages and other security agreements, certificates,
landlord's agreements and other agreements, documents and instruments now or
hereafter executed or delivered by Borrowers (or either one of them) or any
Obligor in connection with, or to evidence the transactions contemplated by,
this Agreement.
"Maturity Date" means the second anniversary of the date hereof.
"Obligations" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrowers (or either one of them) to Lender, whether evidenced by
this Agreement, the Note, any other Loan Document or otherwise, whether direct
or indirect (including those acquired by assignment and any participation by
Lender in Borrowers' indebtedness owing to others), whether absolute or
contingent, whether due or to become due, and whether arising before or after
the commencement of a proceeding under the Bankruptcy Code or any similar
statute, including all interest, charges, expenses, fees, attorney's fees, and
any other sums chargeable to Borrowers (or either one of them) under this
Agreement or any other Loan Document.
"Obligor" means any guarantor or other person liable on, or with respect
to, the Obligations or who is the owner of any property that secures the
Obligations, other than Borrowers.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, government or any agency or political division
thereof, or any other entity.
"Prime Rate" means, at any given time, the prime rate as quoted in The
Wall Street Journal as the base rate on corporate loans posted as of such time
by at least seventy-five percent (75%) of the nation's 30 largest banks (which
rate is not necessarily the lowest rate offered by such banks).
-2-
"Reference Bank" means The Bank of Nova Scotia, or such other bank as
Lender may from time to time designate.
"UCC" means, at any given time, the Uniform Commercial Code as adopted and
in effect at such time in the State of New York.
All accounting terms used in this Agreement, unless otherwise indicated,
shall have the meanings given to such terms in accordance with GAAP. All other
terms contained in this Agreement, unless otherwise indicated, shall have the
meanings provided by the UCC, to the extent such terms are defined therein. The
term "including," whenever used in this Agreement, shall mean "including but not
limited to." The singular form of any term shall include the plural form, and
vice versa, when the context so requires. References to Sections, subsections
and Schedules are to Sections and subsections of, and Schedules to, this
Agreement. All references to agreements and statutes shall include all
amendments thereto and successor statutes in the case of statutes.
2. LOAN.
2.1 Amount. Subject to the terms and conditions contained in this
Agreement, Lender will, on the date hereof, make a loan to Borrowers (the
"Loan") in the principal amount of One Million Five Hundred Thousand Dollars
($1,500,000). The proceeds of the Loan will be applied to the purchase price of
the vessel described in Section 1 of Schedule A attached hereto (the "Ship") and
the payment of closing costs related to the purchase of the Ship and those
related to this Agreement. The Loan will be evidenced by a Term Note in the form
attached hereto as Exhibit A (the "Note").
2.2 Repayment. Accrued interest on, and principal of, the Loan shall be
payable as set forth in Section 2 of Schedule A. All unpaid Obligations shall be
payable in full on the Maturity Date or as otherwise provided herein.
2.3 Reserves. A portion of the proceeds of the Loan (in the amount set
forth in Section 3 of Schedule A) has been retained by Lender, designated by
Lender as a reserve for the payment of interest, fees and installments of
principal, as they become due and payable. Such retained loan proceeds, together
with such amount as may be deposited by Borrowers with Lender for such purpose
from time to time, is hereinafter referred to as the "Reserve." Borrowers hereby
authorize Lender to, from time to time, apply the Reserve to pay interest, fees
and installments of principal on the Loan as they become due and payable.
Establishment of the Reserve shall in no way relieve Borrowers of their
obligation to pay interest, fees or principal when due, whether or not the
Reserve is exhausted. The Reserve shall not be disbursed by Lender to Borrowers.
Notwithstanding the foregoing, Lender shall have no obligation to apply any
portion of the Reserve following the occurrence of a default by any Obligor in
the payment or performance of any obligation of Obligor under any Loan Document;
provided, however, in the event that the Reserve has not been exhausted, the
Reserve shall be distributed to the Lender and applied to the payment of
interest, fees and installments of principal on the Loan with respect to the
final two (2) installments on the Loan. The loan proceeds comprising the Reserve
shall accrue interest in favor of Lender as part of the Loan. Lender shall not
be obligated to compensate Borrowers for use of the funds comprising the
Reserve.
-3-
2.4 Taxes. All payments made by Borrowers hereunder or under any other
Loan Document shall be made without setoff, compensation, counterclaim, or other
defense. To the extent permitted by applicable law, all payments hereunder or
under the Loan Documents (including any payment of principal, interest, or fees)
to, or for the benefit, of any Person shall be made by Borrowers free and clear
of and without deduction or withholding for, or account of, any taxes now or
hereinafter imposed by any taxing authority. If Borrowers make any payment
hereunder or under any other Loan Document in respect of which it is required by
applicable law to deduct or withhold any taxes, Borrowers shall increase the
payment hereunder or under any such Loan Document such that after the reduction
for the amount of taxes withheld (and any taxes withheld or imposed with respect
to the additional payments required under this Section 2.4), the amount paid to
Lender equals the amount that was payable hereunder or under any such Loan
Document without regard to this Section 2.4. To the extent a Borrower withholds
any taxes on payments hereunder or under any Loan Document, such Borrower shall
pay the full amount deducted to the relevant taxing authority within the time
allowed for payment under applicable law and shall deliver to Lender within 30
days after such Borrower has made payment to such authority a receipt issued by
such authority evidencing the payment of all amounts so required to be deducted
or withheld from such payment. Other than Lender's income taxes, if Lender is
required by law to make any payments of any taxes on or with respect to any
amounts received or receivable hereunder or under any other Loan Document, or
any tax is assessed against Lender with respect to amounts received or
receivable hereunder or under any other Loan Document, Borrowers will, jointly
and severally, indemnify Lender against (i) such tax (and any reasonable counsel
fees and expenses associated with such tax) and (ii) any taxes imposed as a
result of the receipt of the payment under this Section 2.4. A certificate
prepared in good faith as to the amount of such payment by Lender shall, absent
manifest error, be final, conclusive, and binding on all parties unless
Borrowers notify Lender in writing to the contrary within thirty days after such
certificate is rendered, describing the nature of any alleged errors or
omissions.
3. INTEREST AND FEES.
3.1 Interest. The Loan shall bear interest at the Interest Rate set forth
in Section 4 of Schedule A attached hereto; provided, that after the occurrence
of an Event of Default, the Loan shall, at Lender's option, bear interest at a
rate per annum equal to two percent (2.0 %) in excess of the rate otherwise
applicable thereto (the "Default Rate") until paid in full (notwithstanding the
entry of any judgment against Borrowers or the exercise of any other right or
remedy by Lender), and all such interest shall be payable on demand.
Notwithstanding anything to the contrary contained herein, the aggregate of all
interest hereunder and charged or collected by Lender is not intended to exceed
the highest rate permissible under any applicable law, but if it should, such
interest shall automatically be reduced to the extent necessary to comply with
applicable law and Lender will refund to Borrowers any such excess interest
received by Lender. Without limiting the generality of the foregoing, if any
provision of this Agreement or any of the Loan Documents would obligate
Borrowers or any Obligor to make any payment of interest or other amount payable
to Lender in an amount or calculated at a rate which would be prohibited by law
or would result in a receipt by Lender of interest at a criminal rate (as
construed under the Criminal Code (Canada)), then notwithstanding that
provision, that amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or result in a receipt by the Lender of
interest at a criminal rate, the adjustment to be effected, to the extent
necessary, as follows:
-4-
(a) firstly, by reducing the amount or rate of interest required to be
paid to Lender under this Agreement or any other Loan Document; and
(b) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to the Lender which would constitute interest for
purposes of Section 347 of the Criminal Code (Canada).
Notwithstanding this Section 3.1, and after giving effect to all
adjustments contemplated thereby, if Lender shall have received an amount in
excess of the maximum permitted by the Criminal Code (Canada), then Borrowers or
the relevant Obligor shall be entitled, by notice in writing to Lender, to
obtain reimbursement from Lender in an amount equal to the excess, and pending
reimbursement, the amount of the excess shall be deemed to be an amount payable
by Lender to Borrowers or the relevant Obligor.
3.2 Fees. Borrowers shall pay Lender the following fees, which are in
addition to all interest and other sums payable by Borrowers to Lender under
this Agreement, and are not refundable:
(a) Closing Commitment Fee. A closing commitment fee (the "Closing Fee")
in the amount set forth in Section 5(a) of Schedule A, which shall be deemed to
be fully earned as of, and payable on, the date hereof.
(b) Servicing Fee. A monthly servicing fee (the "Servicing Fee") in the
amount set forth in Section 5(b) of Schedule A (expressed as a percentage of the
principal of the Loan then outstanding), in consideration of the Lender's
administration and other services pursuant to this Agreement for each month (or
part thereof), which shall be fully earned as of, and payable in advance on, the
date hereof and on the first day of each month thereafter so long as any of the
Obligations are outstanding.
3.3 Computation of Interest and Fees. All interest and fees shall be
calculated daily on the principal balance of the Loan based on the actual number
of days elapsed in a year of 360 days. For the purposes of the Interest Act
(Canada), any amount of interest or fees calculated hereunder using 360, 365 or
366 days per year and expressed as an annual rate is equal to the said rate of
interest or fees multiplied by the actual number of days comprised within the
calendar year, divided by 360, 365 or 366, as the case may be.
-5-
4. SECURITY INTEREST; ADMINISTRATION.
4.1 Grant of Security Interest. To secure the full payment and performance
of all of the Obligations, Borrowers hereby grant to Lender a continuing
security interest in the following property of Borrowers (or either one of
them), whether tangible or intangible, now or hereafter owned, existing,
acquired or arising and wherever now or hereafter located (the "Collateral"):
(i) the Ship and any other vessels; (ii) all licenses, software, claims against
vendors (including the vendor of the Ship), carriers and shippers, contracts
rights, rights to indemnification and other general intangibles relating to the
Ship; (iii) all Accounts (as defined in the UCC) and all Goods (as defined in
the UCC) whose sale, lease or other disposition by Borrowers has given rise to
Accounts and have been returned to, or repossessed or stopped in transit by,
Borrowers; (iv) all Chattel Paper (as defined in the UCC), Instruments (as
defined in the UCC), Documents (as defined in the UCC) and General Intangibles
(as defined in the UCC) (including all patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, goodwill, copyrights,
copyright applications, registrations, licenses, software, franchises, customer
lists, tax refund claims, claims against carriers and shippers, guarantee
claims, contracts rights, payment intangibles, security interests, security
deposits and rights to indemnification); (v) all Inventory (as defined in the
UCC); (vi) all Goods (other than Inventory), including Equipment (as defined in
the UCC), vehicles and Fixtures (as defined in the UCC); (vii) all Investment
Property (as defined in the UCC); (viii) all Deposit Accounts (as defined in the
UCC), bank accounts, deposits and cash; (ix) all Letter-of-Credit Rights (as
defined in the UCC); (x) all Commercial Tort Claims (as defined in the UCC);
(xi) all Supporting Obligations (as defined in the UCC); (xii) any other
property of Borrowers (or either one of them) now or hereafter in the
possession, custody or control of Lender or any agent or mandatary or any
parent, Affiliate or subsidiary of Lender or any participant with Lender in the
Loan, for any purpose (whether for safekeeping, deposit, collection, custody,
pledge, transmission or otherwise); (xiii) the Collateral under any Loan and
Security Agreement or other agreement between Lender and an Affiliate of
Borrowers; and (ix) all additions and accessions to, substitutions for, and
replacements, products and proceeds of the foregoing property, including,
without limitation, proceeds of all insurance policies insuring the foregoing
property, and all of Borrowers' books and records relating to any of the
foregoing and to Borrowers' business. Borrowers shall execute any and all
mortgages or other security documents as Lender may require to create and
perfect Lender's security interest in the Collateral.
4.2 Preservation of Collateral and Perfection of Security Interest
Therein. Borrowers shall, at Lender's request, at any time and from time to
time, authenticate, execute and deliver to Lender such financing statements,
documents and other agreements and instruments (and pay the cost of filing or
recording the same in all public offices deemed necessary or desirable by
Lender) and do such other acts and things or cause third parties to do such
other acts and things as Lender may deem necessary or desirable in its sole
discretion in order to establish and maintain a valid, attached and perfected
first priority security interest in the Collateral in favor of Lender (free and
clear of all other liens, claims, encumbrances and rights of third parties
whatsoever, whether voluntarily or involuntarily created) to secure payment of
the Obligations, and in order to facilitate the collection of the Collateral.
Borrowers authorize Lender to file, transmit, or communicate, as applicable,
financing statements and amendments describing the Collateral as "all personal
property of debtor" or "all assets of debtor" or words of similar effect, in
order to perfect Lender's security interest in the Collateral without either
Borrower's signature. Borrowers also hereby ratify their authorization for
Lender to have filed in any jurisdiction any financing statements filed prior to
the date hereof.
-6-
4.3 Lock Boxes and Blocked Accounts. Borrowers will, at their expense,
establish (and revise from time to time as Lender may require) procedures
acceptable to Lender, in Lender's sole discretion, for the collection of checks,
wire transfers and other proceeds of Accounts, including proceeds from any time
share sales or associated sales contracts with respect to the Ship ("Account
Proceeds"), which may include (i) directing all Account Debtors (as defined in
the UCC) to send all such proceeds directly to a post office box designated by
Lender either in the name of Borrowers (or either one of them) (but as to which
Lender has exclusive access) or, at Lender's option, in the name of Lender (a
"Lock Box") or (ii) depositing all Account Proceeds received by Borrowers (or
either one of them) into one or more bank accounts maintained in Lender's name
(each, a "Blocked Account"), under an arrangement acceptable to Lender with a
depository bank acceptable to Lender, pursuant to which all funds deposited into
each Blocked Account are to be transferred to Lender in such manner, and with
such frequency, as Lender shall specify or (iii) a combination of the foregoing.
Borrowers agree to execute, and to cause its depository banks to execute, such
Lock Box and Blocked Account agreements and other documentation as Lender shall
require from time to time in connection with the foregoing.
4.4 Remittance of Proceeds. Except as provided in Section 4.3, all
proceeds arising from the sale or other disposition of any Collateral shall be
delivered, in kind, by Borrowers to Lender in the original form in which
received by Borrowers not later than the following Business Day after receipt by
Borrowers. Until so delivered to Lender, Borrowers shall hold such proceeds
separate and apart from Borrowers' other funds and property in an express trust
for Lender. Nothing in this Section 4.4 shall limit the restrictions on
disposition of Collateral set forth elsewhere in this Agreement.
4.5 Application of Payments. Lender may, in its sole discretion, apply,
reverse and re-apply all cash and non-cash proceeds of Collateral or other
payments received with respect to the Obligations, in such order and manner as
Lender shall determine, whether or not the Obligations are due, and whether
before or after the occurrence of a Default or an Event of Default. For purposes
of computing interest on the Obligations, such items shall be deemed applied by
Lender three (3) Business Days after Lender's receipt of advice of deposit
thereof at Lender's Bank.
4.6 Notification; Verification. Lender or its designee may, from time to
time, whether or not a Default or Event of Default has occurred: (i) verify
directly with the Account Debtors the validity, amount and other matters
relating to the Accounts and Chattel Paper, by means of mail, telephone or
otherwise, in the name of Borrowers (or either one of them) or Lender or such
other name as Lender may choose; (ii) notify Account Debtors that Lender has a
security interest in the Accounts and that payment thereof is to be made
directly to Lender; and (iii) upon an Event of Default demand, collect or
enforce payment of any Accounts and Chattel Paper (but without any duty to do
so).
-7-
4.7 Power of Attorney. Borrowers hereby grant to Lender an irrevocable
power of attorney, coupled with an interest, authorizing and permitting Lender
(acting through any of its officers, employees, attorneys, agents or
mandataries), at any time (whether or not a Default or Event of Default has
occurred and is continuing, except as expressly provided below), at Lender's
option, but without obligation, with or without notice to Borrowers (except that
Lender shall provide notice to the Borrowers so long as no Event of Default has
occurred or is continuing), and at Borrowers' expense, to do any or all of the
following, in Borrowers' name (or either one) or otherwise: (i) execute on
behalf of Borrowers any documents that Lender may, in its sole discretion, deem
advisable in order to perfect and maintain Lender's security interests in the
Collateral, to exercise a right of Borrowers or Lender, or to fully consummate
all the transactions contemplated by this Agreement and the other Loan Documents
(including such financing statements and continuation financing statements, and
amendments thereto, as Lender shall deem necessary or appropriate) and to file
as a financing statement any copy of this Agreement or any financing statement
signed by Borrowers; (ii) upon the occurrence and during the continuance of an
Event of Default, execute on behalf of Borrowers any document exercising,
transferring or assigning any option to purchase, sell or otherwise dispose of
or lease (as lessor or lessee) any real or personal property which is part of
the Collateral or in which Lender has an interest; (iii) execute on behalf of
Borrowers any invoices relating to any Accounts, any draft against any Account
Debtor, any proof of claim in bankruptcy, any notice of Lien or claim, and any
assignment or satisfaction of mechanic's, materialman's or other Lien; (iv)
execute on behalf of Borrowers any notice to any Account Debtor; (v) receive and
otherwise take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral; (vi) endorse either Borrower's name on all checks and
other forms of remittances received by Lender; (vii) upon the occurrence and
during the continuance of an Event of Default, pay, contest or settle any Lien,
charge, encumbrance, security interest and adverse claim in or to any of the
Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; (viii) after the occurrence of a Default or
Event of Default, grant extensions of time to pay, compromise claims relating
to, and settle Accounts, Chattel Paper and General Intangibles for less than
face value and execute all releases and other documents in connection therewith;
(ix) pay any sums required on account of Borrowers' taxes or to secure the
release of any Liens therefor; (x) pay any amounts necessary to obtain, or
maintain in effect, any of the insurance described in Section 5.10; (xi) upon
the occurrence and during the continuance of an Event of Default, settle and
adjust, and give releases of, any insurance claim that relates to any of the
Collateral and obtain payment therefor; (xii) instruct any third party having
custody or control of any Collateral or books or records belonging to, or
relating to, Borrowers to give Lender the same rights of access and other rights
with respect thereto as Lender has under this Agreement; (xiii) after the
occurrence of a Default or Event of Default, change the address for delivery of
Borrowers' mail and receive and open all mail addressed to Borrowers; and (xiv)
endorse or assign to Lender on Borrowers' behalf any portion of Collateral
evidenced by an agreement, Instrument or Document if an endorsement or
assignment of any such items is not made by Borrowers. Any and all sums paid,
and any and all costs, expenses, liabilities, obligations and reasonable
attorneys' fees incurred, by Lender with respect to the foregoing shall be added
to and become part of the Obligations, shall be payable on demand, and shall
bear interest at a rate equal to the highest interest rate applicable to any of
the Obligations. Borrowers agree that Lender's rights under the foregoing power
of attorney or any of Lender's other rights under this Agreement or the other
Loan Documents shall not be construed to indicate that Lender is in control of
the business, management or properties of Borrowers.
-8-
4.8 Disputes. Borrowers shall promptly notify Lender of all disputes or
claims relating to Accounts and Chattel Paper that exceed $10,000. Borrowers
will not, without Lender's prior written consent, compromise or settle any
Account or Chattel Paper for less than the full amount thereof, grant any
extension of time of payment of any Account or Chattel Paper, release (in whole
or in part) any Account Debtor or other person liable for the payment of any
Account or Chattel Paper or grant any credits, discounts, allowances,
deductions, return authorizations or the like with respect to any Account or
Chattel Paper; except that prior to the occurrence of an Event of Default,
Borrowers may take any of such actions in the ordinary course of business,
provided that Borrowers promptly report the same to Lender.
4.9 Access to Collateral, Books and Records. At reasonable times, and on
one Business Day's notice, prior to the occurrence of an Event of Default, and
at any time and with or without notice after the occurrence of an Event of
Default, Lender or its agents or mandataries shall have the right to inspect the
Collateral, and the right to examine and copy Borrowers' books and records with
respect thereto. Lender shall take reasonable steps to keep confidential all
information obtained in any such inspection or examination, but Lender shall
have the right to disclose any such information to its auditors, regulatory
agencies, attorneys and participants, and pursuant to any subpoena or other
legal process. Borrowers agree to give Lender access to any or all of Borrowers'
premises to enable Lender to conduct such inspections and examinations. Such
inspections shall be at Borrowers' expense and the charge therefor shall be $950
per person per day (or such higher amount as shall represent Lender's then
current standard charge), plus out-of-pocket costs and expenses.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS.
To induce Lender to enter into this Agreement, Borrowers jointly and
severally represent, warrant and covenant as follows:
5.1 Existence and Authority; Ownership. Owner is duly organized, validly
existing and in good standing under the laws of the Province of British
Columbia, Canada. MGFC is duly organized, validly existing and in good standing
under the laws of the State of Delaware. Owner is a wholly-owned subsidiary of
MGFC, and MGFC is a wholly-owned subsidiary of Guarantor (as defined in Section
5.17). Borrowers are qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material adverse effect on them (or
either one of them). The execution, delivery and performance by Borrowers of
this Agreement and all of the other Loan Documents have been duly and validly
authorized, do not violate Borrowers' organizational documents, or any law or
any agreement or instrument or any court order which is binding upon Borrowers
or their property, do not constitute grounds for acceleration of any
indebtedness or obligation under any agreement or instrument which is binding
upon Borrowers or their property, and do not require the consent of any Person.
This Agreement and such other Loan Documents have been duly executed and
delivered by, and are enforceable against, Borrowers, and all other Obligors who
have signed them, in accordance with their respective terms.
-9-
5.2 Name. The names of Borrowers set forth in the heading to this
Agreement are their correct and complete legal names as of the date hereof.
Borrowers shall give Lender at least thirty days' prior written notice before
changing names or doing business under any other name.
5.3 Title to Collateral. Borrowers have good and marketable title to the
Collateral. The Collateral now is and will remain free and clear of any and all
Liens, charges, security interests, encumbrances and adverse claims, other than
those in favor of the Lender. Lender now has, and will continue to have, a
first-priority perfected and enforceable security interest in the Collateral,
and Borrowers will at all times defend Lender and the Collateral against all
claims of others.
5.4 Jurisdiction of Organization; Location of Collateral. Owner is
organized under the laws of the Province of British Columbia, Canada. MGFC is
organized under the laws of the State of Delaware. Borrowers' chief executive
offices and their books and records relating to the Collateral are located at
the addresses set forth in the preamble to this Agreement or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Borrowers will give Lender at least thirty
days' prior written notice before changing either Borrower's jurisdiction of
organization, opening any additional place of business, changing its chief
executive office or the location of its books and records, or moving any of the
Collateral (other than the Ship) to a location other than as set forth above,
and will execute and deliver all financing statements and other agreements,
instruments and documents which Lender shall require as a result thereof.
Borrowers shall keep the Ship in the waters of Canada at all times and Borrowers
shall cause, at Borrowers' expense, a third party service, satisfactory to
Lender, to monitor the location of the Ship for Lender at all times. Borrowers
shall deliver monthly statements in form and substance satisfactory to Lender of
all unpaid expenses in connection with the Ship, the non-payment of which could
give rise to a lien upon the Ship, and, promptly upon receipt thereof, notice of
any claims for such expenses and Borrowers shall deliver to Lender monthly
statements in form and substance satisfactory to Lender of all such paid
expenses, together with proof of payment of such expenses.
5.5 Financial Condition, Statements and Reports. All financial statements
delivered to Lender by or on behalf of Borrowers have been prepared in
conformity with GAAP and completely and fairly reflect the financial condition
of Borrowers, at the times and for the periods therein stated. Between the last
date covered by any such financial statement provided to Lender and the date
hereof there has been no material adverse change in the financial condition or
business of Borrowers (or either one of them). Borrowers are solvent and able to
pay their debts as they come due, and have sufficient capital to carry on their
business as now conducted and as proposed to be conducted. All schedules,
reports and other information and documentation delivered by Borrowers to Lender
with respect to the Collateral are, or will be, when delivered, true, correct
and complete as of the date delivered or the date specified therein.
5.6 Tax Returns and Payments. Borrowers have timely filed all tax returns
and reports required by applicable law, have timely paid all applicable taxes,
assessments, deposits and contributions owing by Borrowers and will timely pay
all such items in the future as they became due and payable. Borrowers are
unaware of any claims or adjustments proposed for any of Borrowers' prior tax
years that could result in additional taxes becoming due and payable by
Borrowers. Borrowers have paid, and shall continue to pay, all amounts necessary
to fund all present and future pension, benefit, profit sharing and deferred
compensation plans, if any, in accordance with their terms, and Borrowers have
not withdrawn from participation in, permitted partial or complete termination
of, or permitted the occurrence of any other event with respect to, any such
plan which could result in any liability of Borrowers, including any liability
to any governmental agency.
-10-
5.7 Compliance with Laws. Borrowers have complied in all material respects
with all provisions of all applicable laws and regulations, including those
relating to Borrowers' ownership of real or personal property, the conduct and
licensing of Borrowers' business, the payment and withholding of taxes, ERISA,
the Canada Pension Plan Act (Canada), the Income Tax Act (Canada), the
Employment Insurance Act (Canada) and the Workers Compensation Act (British
Columbia) and other employee matters, safety and environmental matters.
5.8 Litigation; Indebtedness. Section 6(a) of Schedule A discloses all
claims, proceedings, litigation or investigations pending or (to the best of
Borrowers' knowledge) threatened against Borrowers. There is no claim, suit,
litigation, proceeding or investigation pending or (to the best of Borrowers'
knowledge) threatened by or against or affecting Borrowers in any court or
before any governmental agency (or any basis therefor known to Borrowers) which
may result, either separately or in the aggregate, in any material adverse
change in the financial condition or business of Borrowers (or either one of
them), or in any material impairment in the ability of Borrowers (or either one
of them) to carry on their business in substantially the same manner as it is
now being conducted. Borrowers will promptly inform Lender in writing of any
claim, proceeding, litigation or investigation in the future threatened or
instituted by or against Borrowers (or either one of them). Except as set forth
on Section 6(b) of Schedule A, neither Borrower is obligated (directly or
indirectly), for any loans or other indebtedness for borrowed money.
5.9 Use of Proceeds. All proceeds of the Loan will be used solely to
acquire the Ship, and for costs related thereto and in connection with this
Agreement.
5.10 Insurance. Borrowers will at all times carry property, liability and
other insurance (including hull and machinery coverage and protection and
indemnity coverage), with insurers acceptable to Lender, in such form and
amounts, and with such deductibles and other provisions, as Lender shall
require, and Borrowers will provide evidence of such insurance to Lender, so
that Lender is satisfied that such insurance is, at all times, in full force and
effect. Each property insurance policy shall name Lender as loss payee and shall
contain a lender's loss payable endorsement in form acceptable to Lender, each
liability insurance policy shall name Lender as an additional insured, and each
business interruption insurance policy shall be collaterally assigned to Lender,
all in form and substance satisfactory to Lender. All policies of insurance
shall provide that they may not be cancelled or changed without at least thirty
days' prior written notice to Lender, shall contain breach of warranty coverage,
and shall otherwise be in form and substance satisfactory to Lender. Upon
receipt of the proceeds of any such insurance, Lender shall apply such proceeds
in reduction of the Obligations as Lender shall determine in its sole
discretion. Borrowers will promptly deliver to Lender copies of all reports made
to insurance companies.
-11-
5.11 Financial and Collateral Reports. Borrowers have kept and will keep
adequate records and books of account with respect to their business activities
and the Collateral in which proper entries are made in accordance with GAAP
reflecting all its financial transactions, and will cause to be prepared and
furnished to Lender the following (all to be prepared in accordance with GAAP,
unless Borrowers' certified public accountants concur in any change therein and
such change is disclosed to Lender):
(a) Annual Statements. Not later than one hundred and five days after the
close of each fiscal year of Borrowers, unqualified (except for (i) a
qualification for a change in accounting principles and (ii) a qualification
whereby the auditors express doubt about the Borrowers' ability to continue as a
going concern) audited financial statements of Borrowers and their Subsidiaries
as of the end of such year, on a consolidated and consolidating basis, certified
by a firm of independent certified public accountants of recognized standing
selected by Borrowers but acceptable to Lender, together with a copy of any
management letter issued in connection therewith and a letter from such
accountants acknowledging that Lender is relying on such financial statements;
(b) Monthly Statements. Not later than twenty-five days after the end of
each month hereafter, including the last month of Borrowers' fiscal year,
unaudited interim financial statements of Borrowers as of the end of such month
and of the portion of Borrowers' fiscal year then elapsed, on a consolidated and
consolidating basis, certified by the principal financial officer of each
Borrower as prepared in accordance with GAAP and fairly presenting the
consolidated financial position and results of operations of Borrowers for such
month and period subject only to changes from audit and year-end adjustments and
except that such statements need not contain notes;
(c) Other Information. Such other data and information (financial and
otherwise) as Lender, from time to time, may reasonably request, bearing upon or
related to the Collateral or Borrowers' financial condition or results of
operations.
5.12 Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against Lender with respect to any Collateral or in any manner
relating to Borrowers, Borrowers shall, without expense to Lender, make
available Borrowers and their officers, employees, agents and mandataries, and
Borrowers' books and records, without charge, to the extent that Lender may deem
them reasonably necessary in order to prosecute or defend any such suit or
proceeding.
5.13 Maintenance of Collateral. Borrowers will maintain all of the
Collateral in good working condition, ordinary wear and tear excepted, and
Borrowers will not use any of the Collateral for any unlawful purpose. Borrowers
will immediately advise Lender in writing of any material loss or damage to the
Collateral, or any portion thereof. Borrowers will not, without Lender's prior
written consent, sell, transfer or otherwise dispose of any of the Collateral or
any interest therein.
5.14 Notification of Changes. Borrowers will promptly notify Lender in
writing of any change in officers or directors, the opening of any new bank
account or other deposit account, or any material adverse changes in the
business or financial affairs of Borrowers (or either one of them) or the
existence of any circumstance which would make any representation or warranty of
Borrowers untrue in any material respect or constitute a material breach of any
covenant of Borrowers.
-12-
5.15 Further Assurances. Borrowers agree, at their expense, to take all
actions, and execute or cause to be executed and delivered to Lender all
promissory notes, security agreements, agreements with landlords, mortgagees and
processors and other bailees, subordination and intercreditor agreements and
other agreements, instruments and documents as Lender may request from time to
time, to perfect and maintain Lender's security interests in the Collateral and
to fully effectuate the transactions contemplated by this Agreement.
5.16 Financial Covenants. Borrowers will comply with any additional
financial covenants set forth in Section 7 of Schedule A.
5.17 Broker. Except as set forth on Section 8 of Schedule A, no broker was
used, and no broker fee was incurred, in connection with the purchase of the
Ship or the obtaining of the Loan. Borrowers shall pay all such broker's fees
and shall indemnify Lender against any and all claims, losses, costs and damages
(including attorneys' fees) incurred by Lender in connection with any claim by
any broker relating to the transactions described in this Agreement.
5.18 Timeshares and Similar Arrangements. Agreements with respect to time
share sales or associated arrangements shall be in form and substance
satisfactory to Lender, and shall in no event affect or impair Borrower's good
and marketable title to the Collateral, result in any Liens, charges, security
interests, encumbrances and adverse claims on the Collateral, other than those
in favor of the Lender, or otherwise affect or impair Lender's first-priority
perfected and enforceable security interest in the Collateral or other rights
and remedies under this Agreement or any Loan Documents (including, without
limitation, with respect to Accounts and insurance proceeds).
5.19 Negative Covenants. Borrowers will not, without Lender's prior
written consent, (i) merge, amalgamate or consolidate with another Person, form
any new subsidiary or acquire any interest in any Person; (ii) acquire any
assets except in the ordinary course of business and as otherwise permitted by
this Agreement and the other Loan Documents; (iii) enter into any transaction
outside the ordinary course of business; (iv) sell or transfer any Collateral or
other assets; (v) make any loans to, or investments in, any Affiliate or other
Person in the form of money or other assets; (vi) incur any debt outside the
ordinary course of business; (vii) guaranty or otherwise become liable with
respect to the obligations of another party or entity; (viii) pay or declare any
dividends or other distributions on Borrowers' stock, if such Borrower is a
corporation (except for dividends payable solely in capital stock of such
Borrower) or with respect to any equity interests, if such Borrower is not a
corporation; (ix) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrowers' capital stock or other equity interests; (x) make
any change in Borrowers' capital structure; (xi) dissolve or elect to dissolve;
(xii) pay any principal or interest on any indebtedness owing to an Affiliate,
(xiii) enter into any transaction with an Affiliate, including with respect to
any loans from an Affiliate, other than unsecured loans on arms-length terms
disclosed to, and subordinate in all respects to the Loan pursuant to terms and
documentation in form and substance approved by, Lender in writing; (xiv) change
the jurisdiction of Borrowers' organization or enter into any transaction which
has the effect of changing Borrowers' jurisdiction of organization; (xv) fail to
contribute to any Canadian Plan any amount required to be contributed thereto in
accordance with applicable law or the terms of such Canadian Plan or permit or
take any action which would result in the aggregate going concern unfunded
liability or the aggregate solvency deficiency in respect of all the Canadian
Plans which are funded plans, determined pursuant to the actuarial assumptions
and methodology utilized in the most recent actuarial valuations therefor, to
exceed U.S.$200,000; or (xvi) agree to do any of the foregoing.
-13-
6. RELEASE AND INDEMNITY.
6.1 Release. Borrowers hereby release Lender and its Affiliates and their
respective directors, officers, employees, attorneys, agents and mandataries and
any other Person affiliated with or representing Lender (the "Released Parties")
from any and all liability arising from acts or omissions under or pursuant to
this Agreement, whether based on errors of judgment or mistake of law or fact,
except for those arising from willful misconduct. However, in no circumstance
will any of the Released Parties be liable for lost profits or other special or
consequential damages.
6.2 Indemnity. Borrowers hereby agree, jointly and severally, to indemnify
the Released Parties and hold them harmless from and against any and all claims,
debts, liabilities, demands, obligations, actions, causes of action, penalties,
costs and expenses (including attorneys' fees), of every nature, character and
description, which the Released Parties may sustain or incur based upon or
arising out of the Collateral or any other security for the Loan, including with
limitation any use of the Ship by Borrowers, or any of the transactions
contemplated by this Agreement or the other Loan Documents or any of the
Obligations, any claim by any broker relating to the Ship or the Loan or any
other matter, cause or thing whatsoever occurred, done, omitted or suffered to
be done by Lender relating to Borrowers or the Obligations (except any such
amounts sustained or incurred as the result of the willful misconduct of the
Released Parties). Notwithstanding any provision in this Agreement to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination of this Agreement.
6.3 Currencies.
(a) U.S. Dollars. All advances, charges and fees of Borrowers to Lender,
and all financial and collateral reports, shall be in United States dollars and
all collections and payments of Borrowers to Lender shall be in United States
dollars.
(b) Currency Indemnity. If, for the purposes of obtaining or enforcing
judgment in any court in any jurisdiction with respect to this Agreement or any
other Loan Document, it becomes necessary to convert into the currency of such
jurisdiction (the "Judgment Currency") any amount due under this Agreement or
under any other Loan Document in any currency other than the Judgment Currency
(the "Currency Due"), then, to the extent permitted by law, conversion shall be
made at the Currency Exchange Rate on the Business Day before the day on which
judgment is given. In the event that there is a change in the Currency Exchange
Rate between the Business Day before the day on which the judgment is given and
the date of receipt by the Lender of the amount due, Borrowers shall to the
extent permitted by law, on the date of receipt by Lender, pay such additional
amounts, if any, or be entitled to receive reimbursement of such amount, if any
as may be necessary to ensure that the amount received by Lender on such date is
the amount in the Judgment Currency which (when converted at the currency
exchange rate on the date of receipt by Lender in accordance with normal banking
procedures in the relevant jurisdiction) is the amount then due under this
Agreement or such other Loan Document in the Currency Due. If the amount of the
Currency Due which the Lender is so able to purchase is less than the amount of
the Currency Due originally due to it, Borrowers shall, to the extent permitted
by law, jointly and severally, indemnify and save Lender harmless from and
against loss or damage arising as a result of such deficiency. To the extent
permitted by law, this indemnity shall (i) constitute an obligation separate and
independent from the other obligations contained in this Agreement and the other
Loan Documents, (ii) give rise to a separate and independent cause of action,
(iii) apply irrespective of any indulgence granted by Lender from time to time,
(iv) survive the payment in full of the Obligations and the termination of this
Agreement, and (v) continue in full force and effect notwithstanding any
judgment or order for a liquidated sum in respect of an amount due under this
Agreement or any other Loan Document or under any judgment or order.
-14-
7. MATURITY DATE.
7.1 Maturity Date. On the Maturity Date, Borrowers shall pay in full all
Obligations, whether or not all or any part of such Obligations are otherwise
then due and payable. This Agreement and the other Loan Documents and Lender's
security interests in and Liens upon the Collateral, and all representations,
warranties and covenants of Borrowers contained herein and therein, shall remain
in full force and effect after the Maturity Date until all of the monetary
Obligations are indefeasibly paid in full.
8. EVENTS OF DEFAULT AND REMEDIES.
8.1 Events of Default. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement: (i) if any warranty,
representation, statement, report or certificate made or delivered to Lender by
Borrowers (or either one of them) or any of Borrowers' officers, employees,
agents or mandataries or any Obligor is untrue or misleading; (ii) if Borrowers
fail to pay when due any principal or interest on the Loan; (iii) if Borrowers
breach any covenant or obligation contained in this Agreement or any other Loan
Document or fail to perform any other non-monetary Obligation; (iv) if any levy,
assessment, attachment, seizure, lien or encumbrance is made or permitted to
exist on all or any part of the Collateral or any other security for the Loan;
(v) if one or more judgments aggregating in excess of $150,000, or any
injunction or attachment, is obtained against Borrowers (or either one of them)
or any Obligor and remains unstayed for more than ten days or is enforced; (vi)
the occurrence of any default under any financing agreement, security agreement
or other agreement, instrument or document executed and delivered by (A)
Borrowers (or either one of them) or any Obligor with, or in favor of, any
Person other than Lender or (B) Borrowers (or either one of them) or any
Affiliate of Borrowers or any Obligor with, or in favor of, Lender or any
Affiliate of Lender; (vii) the dissolution, termination of existence in good
standing, insolvency, business failure or suspension or cessation of business as
usual of Borrowers (or either one of them) or any Obligor or the appointment of
a receiver, trustee, liquidator, monitor, interim receiver, receiver and manager
or sequestrator (or similar official) or custodian for all or any part of the
property of, or an assignment for the benefit of creditors by, Borrowers (or
either one of them) or any Obligor, or the commencement of any proceeding by
Borrowers (or either one of them) or any Obligor under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect,
or if Borrowers (or either one of them) call a meeting of creditors; (viii) the
commencement of any proceeding against Borrowers (or either one of them) or any
Obligor under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect; (ix) the actual or attempted
revocation or termination of, or limitation or denial of liability upon, any
guaranty of the Obligations, or any security document securing the Obligations,
by any Obligor; (x) an actual or threatened indictment of Borrowers (or either
one of them) or any Obligor under any criminal statute or commencement or
threatened commencement of criminal or civil proceedings against Borrowers (or
either one of them) or any Obligor, pursuant to which the potential penalties or
remedies sought or available include forfeiture of any property of Borrowers (or
either one of them) or such Obligor; (xi) if Lender determines in good faith
that the Collateral is insufficient to fully secure the Obligations or that the
prospect of payment of performance of the Obligations is impaired; (xii) the
commencement of any proceeding against the Ship, or (xiii) if an Event of
Default occurs under any Loan and Security Agreement or other agreement between
Lender and an Affiliate of Borrowers.
-15-
8.2 Remedies. Upon the occurrence of an Event of Default, Lender may
exercise from time to time any rights and remedies available to it under the UCC
and any other applicable law in addition to, and not in lieu of, any rights and
remedies expressly granted in this Agreement or in any of the other Loan
Documents, and all of Lender's rights and remedies shall be cumulative and
non-exclusive to the extent permitted by law. In particular, but not by way of
limitation of the foregoing, upon the occurrence of any Event of Default, and at
any time thereafter, Lender, at its option, and without notice or demand of any
kind (all of which are hereby expressly waived by Borrowers), may do any one or
more of the following: (i) accelerate and declare all or any part of the
Obligations to be immediately due, payable and performable, notwithstanding any
deferred or installment payments allowed by the Note or any other instrument
evidencing or relating to any of the Obligations; (ii) take possession of any or
all of the Collateral wherever it may be found, and for that purpose Borrowers
hereby authorize Lender, without judicial process, to enter onto any of
Borrowers' premises without interference to search for, take possession of,
keep, store, or remove any of the Collateral, and remain (or cause a custodian
to remain) on the premises in exclusive control thereof, without charge for so
long as Lender deems it reasonably necessary in order to complete the
enforcement of its rights under this Agreement or any of the other Loan
Documents; provided, that if Lender seeks to take possession of any of the
Collateral by court process, Borrowers hereby irrevocably waive (A) any bond and
any surety or security relating thereto required by law as an incident to such
possession, (B) any demand for possession prior to the commencement of any suit
or action to recover possession thereof, and (C) any requirement that Lender
retain possession of, and not dispose of, any such Collateral until after trial
or final judgment; (iv) require Borrowers to assemble any or all of the
Collateral and make it available to Lender at one or more places designated by
Lender which are reasonably convenient to Lender and Borrowers, and to remove
the Collateral to such locations as Lender may deem advisable; and (v) sell,
lease or otherwise dispose of any of the Collateral at one or more public or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit (a "Sale"), and to adjourn any such Sale from time to time without notice
other than oral announcement at the time scheduled for Sale (and, in connection
therewith, (A) Lender shall have the right to conduct such Sale on Borrowers'
premises without charge, for such times as Lender deems reasonable, on Lender's
premises, or elsewhere, and the Collateral need not be located at the place of
Sale, (B) Lender may directly or through any of its Affiliates purchase or lease
any of the Collateral at any such public disposition, and if permissible under
applicable law, at any private disposition, and (C) any Sale of Collateral shall
not relieve Borrowers of any liability Borrowers may have if any Collateral is
defective as to title, physical condition or otherwise at the time of the Sale).
Borrowers recognize that if Borrowers fail to perform, observe or discharge any
of their Obligations under this Agreement or any of the Loan Documents, no
remedy at law will provide adequate relief to Lender, and agree that Lender
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages. Any notification of intended
disposition of any of the Collateral required by law will be deemed to be a
reasonable authenticated notification of disposition if given at least ten (10)
days prior to such disposition and such notice shall (i) describe Lender and
Borrowers, (ii) describe the Collateral that is the subject of the intended
disposition, (iii) state the method of the intended disposition, (iv) state that
Borrowers are entitled to an accounting of the Obligations and state the charge,
if any, for an accounting and (v) state the time and place of any public
disposition or the time after which any private sale is to be made. Lender may
disclaim any warranties that might arise in connection with the sale, lease or
other disposition of the Collateral and has no obligation to provide any
warranties at such time. Exercise or partial exercise by Lender of one or more
of its rights or remedies shall not be deemed an election or bar Lender from
subsequent exercise or partial exercise of any other rights or remedies. The
failure or delay of Lender to exercise any rights or remedies shall not operate
as a waiver thereof, but all rights and remedies shall continue in full force
and effect until all of the Obligations have been fully paid and performed. If
any Collateral is sold or leased by Lender on credit terms or for future
delivery, the Obligations shall not be reduced as a result thereof until payment
is collected by Lender.
8.3 Application of Proceeds. Subject to any application required by law,
any proceeds of any disposition by Lender of any of the Collateral may be
applied by Lender to the payment of expenses in connection with the Collateral,
including, without limitation, legal expenses and reasonable attorneys' fees,
and any balance of such proceeds may be applied by Lender toward the payment of
such of the Obligations, and in such order of application, as Lender may from
time to time elect in its sole discretion. Any surplus shall be paid to
Borrowers or other persons legally entitled thereto; but Borrowers shall remain
liable to Lender for any deficiency. If Lender, in its sole discretion, directly
or indirectly enters into a deferred payment or other credit transaction with
any purchaser at any Sale, Lender shall have the option, exercisable at any
time, in its sole discretion, of either reducing the Obligations by the
principal amount of the purchase price or deferring the reduction of the
Obligations until the actual receipt by Lender of the cash therefor.
-16-
9. GENERAL PROVISIONS.
9.1 Notices. All notices to be given under this Agreement shall be in
writing and shall be given either personally, by reputable private delivery
service, by regular first-class mail or certified mail return receipt requested,
addressed to Lender or Borrowers as set forth in Section 9 of Schedule A, or at
any other address (or to any other facsimile number) designated in writing by
one party to the other party in the manner prescribed in this Section 9.1. All
notices shall be deemed to have been given when received or when delivery is
refused by the recipient.
9.2 Severability. If any provision of this Agreement, or the application
thereof to any party or circumstance, is held to be void or unenforceable by any
court of competent jurisdiction, such defect shall not affect the remainder of
this Agreement, which shall continue in full force and effect.
9.3 Integration. This Agreement and the other Loan Documents represent the
final, entire and complete agreement between Borrowers and Lender and supersede
all prior and contemporaneous negotiations, oral representations and agreements,
all of which are merged and integrated into this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES THAT ARE NOT
SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
9.4 Waivers. The failure of Lender at any time or times to require
Borrowers to strictly comply with any of the provisions of this Agreement or any
other Loan Documents shall not waive or diminish any right of Lender later to
demand and receive strict compliance therewith. Any waiver of any default shall
not waive or affect any other default, whether prior or subsequent, and whether
or not similar. None of the provisions of this Agreement or any other Loan
Document shall be deemed to have been waived by any act or knowledge of Lender
or its agents or mandataries or employees, but only by a specific written waiver
signed by an authorized officer of Lender and delivered to Borrowers. Borrowers
waive demand, protest, notice of protest and notice of default or dishonor,
notice of payment and nonpayment, release, compromise, settlement, extension or
renewal of any commercial paper, Instrument, Account, General Intangible,
Document, Chattel Paper, Investment Property or guaranty at any time held by
Lender on which Borrowers (or either one of them) are or may in any way be
liable, and notice of any action taken by Lender and notice of acceptance
hereof.
9.5 Amendment. This Agreement may not be amended or modified except in a
writing executed by Borrowers and a duly authorized officer of Lender.
9.6 Time of Essence. Time is of the essence in the performance by
Borrowers of each and every obligation under this Agreement and the other Loan
Documents.
9.7 Attorneys Fees and Costs. Borrowers shall reimburse Lender for all
reasonable attorneys' and paralegals' fees (including in-house attorneys and
paralegals employed by Lender) and all filing, recording, search, title
insurance, appraisal, audit, and other costs incurred by Lender, pursuant to, in
connection with, or relating to this Agreement, including all reasonable
attorneys' fees and costs Lender incurs to prepare and negotiate this Agreement
and the other Loan Documents; to obtain legal advice in connection with this
Agreement and the other Loan Documents or Borrowers or any Obligor; to
administer this Agreement and the other Loan Documents (including the cost of
periodic financing statement, tax lien and other searches conducted by Lender);
to enforce, or seek to enforce, any of its rights; to commence, intervene in, or
defend any action or proceeding; to enforce and protect, or to seek to enforce
and protect, any of its rights and interests in any bankruptcy case filed by or
against Borrowers, including by initiating and prosecuting any motion for relief
from the automatic stay and by initiating, prosecuting or defending any other
contested matter or adversary proceeding in bankruptcy; to file or prosecute any
probate claim, bankruptcy claim, third-party claim, or other claim; to examine,
audit, copy, and inspect any of the Collateral or any of Borrowers' books and
records; to protect, obtain possession of, lease, dispose of, or otherwise
enforce Lender's security interests in, the Collateral; and to otherwise
represent Lender in any litigation relating to Borrowers or any Obligor. If
either Lender or Borrowers files any lawsuit against the other predicated on a
breach of this Agreement, the prevailing party in such action shall be entitled
to recover its reasonable costs and attorneys' fees, including reasonable
attorneys' fees and costs incurred in the enforcement of, execution upon or
defense of any order, decree, award or judgment. All attorneys' fees and costs
to which Lender may be entitled pursuant to this Section shall immediately
become part of the Obligations, shall be due on demand, and shall bear interest
at a rate equal to the highest interest rate applicable to any of the
Obligations.
9.8 Benefit of Agreement; Assignability. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors,
assigns, heirs, beneficiaries and representatives of Borrowers and Lender;
provided, that Borrowers may not assign or transfer any rights under this
Agreement without the prior written consent of Lender, and any prohibited
assignment shall be void. No consent by Lender to any assignment shall release
Borrowers from liability for any of the Obligations. Lender shall have the right
to assign all or any of its rights and obligations under the Loan Documents, and
to sell participating interests therein, to one or more other Persons, and
Borrowers agree to execute all agreements, instruments and documents requested
by Lender in connection with each such assignment and participation.
9.9 Headings; Construction. Section and subsection headings are used in
this Agreement only for convenience, and do not affect the meanings of the
provisions that they precede. This Agreement has been fully reviewed and
negotiated between the parties and no uncertainty or ambiguity in any term or
provision of this Agreement shall be construed strictly against Lender or
Borrowers under any rule of construction or otherwise.
-17-
9.10 GOVERNING LAW; CONSENT TO FORUM, ETC. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED AND DELIVERED, AND SHALL BE DEEMED TO HAVE BEEN MADE, IN
NEW YORK COUNTY, NEW YORK, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. BORROWERS HEREBY CONSENT AND AGREE THAT
THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK OR THE STATE
IN WHICH ANY OF THE COLLATERAL IS LOCATED SHALL HAVE NON-EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWERS AND LENDER
PERTAINING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS OR ANY MATTER ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. BORROWERS EXPRESSLY
SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND WAIVE ANY OBJECTION WHICH BORROWERS MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS. BORROWERS ALSO AGREE THAT ANY CLAIM OR DISPUTE BROUGHT BY BORROWERS
AGAINST LENDER PURSUANT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY MATTER
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
EXCLUSIVELY IN THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW
YORK. BORROWERS HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREE THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE IN THE MANNER AND SHALL BE
DEEMED RECEIVED AS SET FORTH IN SECTION 9.1 FOR NOTICES, TO THE EXTENT PERMITTED
BY LAW. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT
OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE SAME IN
ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
9.11 WAIVER OF JURY TRIAL, ETC. BORROWERS WAIVE (i) THE RIGHT TO TRIAL BY
JURY (WHICH LENDER ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS OR THE COLLATERAL OR ANY CONDUCT, ACTS OR OMISSIONS OF LENDER OR
BORROWERS OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS,
AGENTS OR MANDATARIES OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWERS,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE; (ii) THE RIGHT TO INTERPOSE ANY
CLAIMS, DEDUCTIONS, SETOFFS OR COUNTERCLAIMS OF ANY KIND IN ANY ACTION OR
PROCEEDING INSTITUTED BY LENDER WITH RESPECT TO THE LOAN DOCUMENTS OR ANY MATTER
RELATING THERETO, EXCEPT FOR COMPULSORY COUNTERCLAIMS; (iii) NOTICE PRIOR TO
LENDER'S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY
WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF
LENDER'S REMEDIES AND (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND
EXEMPTION LAWS. BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING
UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS. BORROWERS
WARRANT AND REPRESENT THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH LEGAL
COUNSEL AND HAVE KNOWINGLY AND VOLUNTARILY WAIVED JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
-18-
9.12 Lender Right of First Refusal; Cross-Collateralization and
Cross-Default. If at any time Borrowers receive from a third party an offer,
terms sheet or commitment or makes a proposal accepted by any Person which
provides for any type of financing to or for Borrowers (or either one of them)
that Borrowers desire to accept and proceed to close with such Person (an
"Offer"), Borrowers shall immediately notify such third party making the Offer
of Lender's rights hereunder and shall further immediately notify Lender of the
Offer in writing (including all material terms of the Offer.) Lender shall have
twenty (20) calendar days after receipt of such notice to agree to provide
similar financing in the place of such Person upon substantially the same terms
and conditions (or terms more favorable to Borrowers) as set forth in the Offer.
Lender shall notify Borrowers of Lender's acceptance of the Offer, in which case
Borrowers shall obtain such financing from Lender and shall not accept the Offer
from such other Person. If no acceptance notice has been received from Lender
within the twenty (20) calendar days, Borrowers may consummate the Offer with
the other Person on the terms and conditions set forth in the Offer. If at any
time Borrowers (or either one of them) or any of its Affiliates are parties to a
Loan and Security Agreement or other agreement with Lender or its Affiliates,
Borrowers acknowledge and agree that such arrangements are intended to be
cross-collateralized and to cross-default.
9.13 Joint and Several Liability.
(a) Each of the parties undersigned as a Borrower is accepting joint and
several liability hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by Lender under this Agreement,
for the mutual benefit, directly and indirectly, of each of them and in
consideration of the undertakings of the other to accept joint and several
liability for the Obligations.
(b) Each of the parties undersigned as a Borrower, jointly and severally,
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other, with respect to the
payment and performance of all of the Obligations, it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Person composing a Borrower without preferences or
distinction among them.
(c) If and to the extent that any of the parties undersigned as a Borrower
shall fail to make any payment with respect to any of the Obligations as and
when due or to perform any of the Obligations in accordance with the terms
thereof, then in each such event the other Person composing a Borrower will make
such payment with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing a Borrower under the
provisions of this Section constitute the absolute and unconditional, full
recourse Obligations of each Person composing a Borrower enforceable against
each of the parties undersigned as a Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
-19-
(e) Except as otherwise expressly provided in this Agreement, each Person
composing a Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any advances issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Lender under or in respect of any of the Obligations, any requirement
of diligence or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this Agreement).
Each Person composing a Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Lender at any time or times in respect of any default by any Person composing a
Borrower in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by Lender
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Person composing a Borrower. Without limiting the generality of the
foregoing, each of the parties undersigned as a Borrower assents to any other
action or delay in acting or failure to act on the part of Lender with respect
to the failure by any Person composing a Borrower to comply with any of its
respective Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder, which might, but for the provisions
of this Section afford grounds for terminating, discharging or relieving any
Person composing a Borrower, in whole or in part, from any of its Obligations
under this Section, it being the intention of each Person composing a Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of such Person composing a Borrower under this Section shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each Person composing a Borrower under this
Section shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any Person composing a Borrower or Lender. The joint and several
liability of the Persons composing a Borrower hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, constitution or place of formation of any
of the Persons composing a Borrower or Lender.
(f) Each Person composing a Borrower represents and warrants to Lender and
Lenders that it is currently informed of the financial condition of Borrowers
and of all other circumstances which a diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Each Person composing a
Borrower further represents and warrants to Lender that it has read and
understands the terms and conditions of the Loan Documents. Each Person
composing a Borrower hereby covenants that it will continue to keep informed of
Borrowers' financial condition, the financial condition of guarantors, if any,
and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.
(g) The provisions of this Section are made for the benefit of Lender and
its respective successors and assigns, and may be enforced by it or them from
time to time against any or all of the Persons composing a Borrower as often as
occasion therefor may arise and without requirement on the part of Lender,
successor or assign first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Persona composing a Borrower
or to exhaust any remedies available to it or them against any of the other
Persons composing a Borrower or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this Section shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied. If at any
time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by Lender
upon the insolvency, bankruptcy or reorganization of any of the Persons
composing a Borrower, or otherwise, the provisions of this Section will
forthwith be reinstated in effect, as though such payment had not been made.
-20-
(h) Each of the Persons composing a Borrower hereby agrees that it will
not enforce any of its rights of contribution or subrogation against the other
Persons composing a Borrower with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
Lender with respect to any of the Obligations or any collateral security
therefor until such time as all of the Obligations have been paid in full in
cash. Any claim which any of the parties undersigned as a Borrower may have
against any other party with respect to any payments to Lender hereunder or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any of the parties undersigned as a Borrower, its debts
or its assets, whether voluntary or involuntary, all such Obligations shall be
paid in full in cash before any payment or distribution of any character,
whether in cash, securities or other property, shall be made to any other of the
parties undersigned as a Borrower therefor.
(i) Each of the Persons composing a Borrower hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, the
payment of any amounts due with respect to the indebtedness owing by any of the
parties undersigned as a Borrower to any other party undersigned as a Borrower
is hereby subordinated to the prior payment in full in cash of the Obligations.
Each of the parties undersigned as a Borrower hereby agrees that after the
occurrence and during the continuance of any Default or Event of Default, it
will not demand, ▇▇▇ for or otherwise attempt to collect any indebtedness of any
other of the parties undersigned as a Borrower owing to it until the Obligations
shall have been paid in full in cash. If, notwithstanding the foregoing
sentence, it shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by it as
trustee for Lender, and it shall deliver any such amounts to Lender for
application to the Obligations.
-21-
IN WITNESS WHEREOF, Borrowers and Lender have signed this Agreement as of
the date first set forth above.
Borrowers: Lender:
MARINE GROWTH CANADA LTD. GREYSTONE BUSINESS CREDIT II, L.L.C.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇
------------------------------- -------------------------------
Print Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Print Name ▇▇▇▇ ▇▇▇▇
---------------------------- -----------------------
Its President Its Executive Vice President
------------------------------ ------------------------------
MARINE GROWTH CHARTER & FINANCE, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Print Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Its President
------------------------------
Schedule A
1. Description of Ship: The passenger vessel named "PACIFIC AURORA", formerly the
"Taverner", IMO Ship Identification No. 5353983, Official
Number 318341, Port of Registry, Port of Prince Rupert,
British Columbia, Canada, registered under the Canada
Shipping Act, which vessel was built in 1962 by Canadian
Shipbuilding & Engineering Ltd. of ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇, having a length of 53.260 metres, a depth of 6.550
metres, a breadth of 11.580 metres, and is of 1183.00033
tons gross and 355.00012 tons net, including without
limitation any share or interest therein, all of the
vessel's present and after acquired licenses, permits,
appurtenances, engines, motors, boilers, propellers, shafts,
screws, electrical systems and equipment, mechanical systems
and equipment, plumbing systems and equipment, emergency
systems and equipment, communications systems and equipment
(including radio and radar equipment), data systems and
equipment, life saving gear, body suits, skiffs, dinghies,
inflatables, outboard motors, winches, including motors,
lines, marine equipment, fittings, fuel, machinery, spare
gear and stores, whether on board or ashore, and all
additions thereto and substitutions therefor.
2. Repayment: Until maturity, interest on the outstanding principal amount
of the Loan shall be payable in arrears on the first day of
each calendar month, commencing on commencing on the first
month following the date hereof (e.g., if this Agreement is
dated March 31, 2007, then the payments shall commence
April 1, 2007). Principal shall be repaid in equal
consecutive monthly installments amortized over 72 months,
payable on the first day of each calendar month, commencing
on commencing on the first month following the date hereof
(e.g., if this Agreement is dated March 31, 2007, then the
payments shall commence April 1, 2007), with the entire
unpaid balance due and payable on the Maturity Date.
A-1
3. Reserve: $67,916 of the proceeds of the Loan shall be held by Lender
as a Reserve.
4. Interest Rate: 2.25% per annum in excess of the Prime Rate
5. Fees:
(a) Closing Fee: $20,250
(b) Servicing Fee: 0.20%
6. Borrowers Information:
(a) Litigation: NONE
(b) Indebtedness: 400,000 owing to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, based on a Revolving
Note, dated January 5, 2006, by and between Marine Growth
Ventures Inc., Marine Growth Charter, Inc., Marine Growth
Finance, Inc., Marine Growth Freight, Inc., Marine Growth
Real Estate, Inc., and Gulf Casino Cruises, Inc. and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, as amended.
7. Other Financial Covenants:NONE
8. Broker and broker fees: NONE
9. Notice Information:
Borrowers:
Marine Growth Finance & Charter, Inc.
(and Marine Growth Canada Ltd.,
c/o Marine Growth Finance & Charter, Inc.)
▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A-2
Lender: Greystone Business Credit II, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A-3
IN WITNESS WHEREOF, Borrowers and Lender have signed this Schedule A as of
the date set forth in the preamble to the Agreement.
Borrowers: Lender:
MARINE GROWTH CANADA LTD. GREYSTONE BUSINESS CREDIT II, L.L.C.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By
------------------------------- ---------------------------------
Print Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Print Name
----------------------- -----------------------
Its President Its
------------------------------ ------------------------------
MARINE GROWTH CHARTER & FINANCE, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Print Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Its President
------------------------------
A-4
Exhibit A
Form of Term Note
$1,500,000 New York, New York
March __, 2007
FOR VALUE RECEIVED, the undersigned, MARINE GROWTH CANADA LTD. ("Owner"),
a company organized under the laws of the Province of British Columbia, Canada,
having its principal address at ▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and MARINE GROWTH FINANCE & CHARTER, INC., a Delaware corporation, having
its principal address at ▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("MGFC"; Owner and MGFC being collectively, jointly and severally, hereinafter
referred to as "Borrowers") hereby unconditionally promise to pay to the order
of GREYSTONE BUSINESS CREDIT II, L.L.C. ("Lender"), at its office at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as the holder of
this Term Note may from time to time designate in writing, in lawful money of
the United States of America and in immediately available funds, the principal
sum of One Million Five Hundred Thousand Dollars ($1,500,000). Except as
expressly provided herein, reference is hereby made to the Loan and Security
Agreement between Borrowers and Lender of even date herewith (the "Loan
Agreement") for a statement of the terms and conditions under which the loan
evidenced hereby was made and is to be repaid. This Term Note evidences the Loan
described in the Loan Agreement. Capitalized terms used herein that are not
otherwise specifically defined herein shall have the meanings ascribed to such
terms in the Loan Agreement.
The outstanding principal balance of this Term Note shall be payable in
equal consecutive monthly installments amortized over seventy-two (72) months,
payable on the first day of each calendar month, commencing on the first month
following the date hereof (e.g., if this Term Note is dated March 31, 2007, then
the payments shall commence April 1, 2007) with a final payment of all
outstanding principal, together with all accrued interest thereon, being due on
the Maturity Date.
Borrowers further promise to pay interest on the outstanding principal
amount hereof from the date hereof until payment in full hereof at the per annum
rate of two and a quarter percent (2.25%) in excess of the Prime Rate. Following
the occurrence and during the continuance of an Event of Default, the entire
outstanding principal balance of this Term Note shall, at Lender's option, bear
interest until paid in full at a per annum rate equal to the interest rate
applicable to the Term Loan from time to time in effect plus two percent (2%).
Until maturity, interest on the outstanding principal amount hereof shall be
payable in arrears on the first day of each calendar month, commencing on the
first month following the date hereof (e.g., if this Term Note is dated March
31, 2007, then the payments shall commence April 1, 2007), and on the Maturity
Date. After maturity, whether by acceleration or otherwise, accrued interest
shall be payable on demand. Interest as aforesaid shall be charged for the
actual number of days elapsed over a year consisting of three hundred sixty
(360) days on the actual daily outstanding balance hereof.
Notwithstanding anything to the contrary contained herein, the aggregate
of all interest hereunder and charged or collected by Lender is not intended to
exceed the highest rate permissible under any applicable law, but if it should,
such interest shall automatically be reduced to the extent necessary to comply
with applicable law and Lender will refund to Borrowers any such excess interest
received by Lender.
Borrowers may prepay the outstanding principal balance hereof in whole or
in part. Any partial prepayment of the Term Loan shall be applied to the unpaid
installments of the Term Loan in the inverse order of their maturities.
Upon and after the occurrence of an Event of Default, this Term Note may,
at the option of Lender, and without demand, notice or legal process of any
kind, be declared, and immediately shall become, due and payable.
Payments received by Lender from Borrowers on this Term Note shall be
applied to the Obligations as provided in the Loan Agreement.
Presentment, demand, protest and notice of presentment, demand, nonpayment
and protest are hereby waived by Borrowers.
The obligations of the entities undersigned as Borrowers shall be joint
and several in nature.
-2-
THIS TERM NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
If any provision of this Term Note or the application thereof shall be held to
be void or unenforceable by any court of competent jurisdiction, such defect
shall not affect the remainder of this Term Note, which shall continue in full
force and effect. Whenever in this Term Note reference is made to Lender or
Borrowers, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns. The provisions of this Term Note
shall be binding upon Borrowers and their successors and assigns, and shall
inure to the benefit of Lender and its successors and assigns.
MARINE GROWTH CANADA LTD.
By
---------------------------------
Print Name
-------------------------
Its
--------------------------------
MARINE GROWTH CHARTER & FINANCE, INC.
By
---------------------------------
Print Name
-------------------------
Its
--------------------------------
-3-