1
Exhibit 10.12
TERM LOAN AND REVOLVING CREDIT FACILITY AGREEMENT
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MARINE TRANSPORT CORPORATION
Borrower
The Financial Institutions Listed on Schedule 1,
Lenders
and
DEN NORSKE BANK ASA,
Agent
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as of June 17, 1998
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INDEX
PAGE
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SECTION 1 DEFINITIONS.................................................... 1
1.1 Defined Terms........................................ 1
1.2 Construction......................................... 21
1.3 Accounting Terms..................................... 22
SECTION 2 REPRESENTATIONS AND WARRANTIES................................. 22
2.1(a) Due Organization and Power........................... 22
2.1(b) Authorization and Consents........................... 22
2.1(c) Binding Obligations.................................. 22
2.1(d) No Violation......................................... 22
2.1(e) Litigation........................................... 23
2.1(f) No Default........................................... 23
2.1(g) Vessels.............................................. 23
2.1(h) Insurance............................................ 24
2.1(i) Citizenship and Qualification as Owner............... 24
2.1(j) Financial Information................................ 24
2.1(k) Tax Returns.......................................... 24
2.1(l) ERISA................................................ 24
2.1(m) Chief Executive Office............................... 25
2.1(n) Foreign Trade Control Regulations.................... 25
2.1(o) Equity Ownership..................................... 25
2.1(p) Environmental Matters................................ 26
2.1(q) Pending, Threatened or Potential Environmental Claims 26
2.1(r) Compliance with ISM Code............................. 27
2.1(s) Threatened Withdrawal of DOC or SMC.................. 27
2.1(t) Year 2000 Issue...................................... 27
SECTION 3 ADVANCES....................................................... 27
3.1 Purposes............................................. 27
3.2 Term Loan Advances................................... 27
3.3 Revolving Credit Facility Advances................... 27
3.4 Drawdown Notice...................................... 28
3.5 Effect of Drawdown Notices........................... 28
3.6 Notation of Advances................................. 28
SECTION 4 CONDITIONS..................................................... 28
4.1 Conditions to Advance of Term Loan and the Initial
Revolving Credit Facility Advance................. 28
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4.2 Further Conditions Precedent......................... 34
4.3 Satisfaction After Drawdown.......................... 35
4.4 Breakfunding Costs................................... 35
SECTION 5 REPAYMENT, PREPAYMENT AND REDUCTION
OF FACILITY............................................ 35
5.1 Repayment of Term Loan............................... 35
5.2 Revolving Credit Facility............................ 35
5.3 Voluntary Prepayment of Term Loan.................... 35
5.4 Mandatory Prepayment of Term Loan.................... 36
5.5 Prepay Term Loans Pro Rata........................... 36
5.6 Application of Prepayments........................... 36
5.7 Mandatory Reduction of Revolving Credit Facility..... 36
5.8 Voluntary Reduction of Revolving Credit Facility..... 36
SECTION 6 INTEREST AND RATE.............................................. 37
6.1 Term Loan Applicable Rate and Default Rate........... 37
6.2 Revolving Credit Facility Applicable Rate and
Default Rate...................................... 37
6.3 Determination of Applicable Margin................... 37
6.4 Determination of LIBOR............................... 37
6.5 Interest Periods..................................... 38
6.6 Interest Payments.................................... 38
6.7 Payment on Banking Day............................... 38
6.8 Calculation of Interest.............................. 38
SECTION 7 PAYMENTS....................................................... 39
7.1 Place of Payments, No Set Off........................ 39
7.2 Tax Credits.......................................... 39
SECTION 8 EVENTS OF DEFAULT.............................................. 39
8.1(a) Non-Payment of Principal............................. 39
8.1(b) Non-Payment of Interest or Other Amounts............. 39
8.1(c) Representations...................................... 39
8.1(d) Covenants............................................ 40
8.1(e) Indebtedness......................................... 40
8.1(f) Change of Control; Ownership or Management of
Other Security.................................... 40
8.1(g) U.S. Citizenship..................................... 40
8.1(h) Bankruptcy........................................... 41
8.1(i) Termination of Operations; Sale of Assets............ 41
8.1(j) Judgments............................................ 41
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8.1(k) Inability to Pay Debts............................... 41
8.1(l) Change in Financial Position......................... 41
8.1(m) Relevant Contracts................................... 41
8.1(n) Key Management Agreements............................ 41
8.1(o) Related Credit Agreement; OMI COLUMBIA
Loan Documents and Mortgage Securing
OMI Debt.......................................... 42
8.2 Indemnification...................................... 42
8.3 Application of Moneys................................ 42
SECTION 9 COVENANTS...................................................... 43
9.1(A)(i) Performance of Agreements............................ 43
9.1(A)(ii) Notice of Default; Litigation and Adverse Change .... 43
9.1(A)(iii) Obtain Consents...................................... 44
9.1(A)(iv) Financial Information................................ 44
9.1(A)(v) U.S. Citizenship; Qualification to Own
Foreign Flag Vessels.............................. 45
9.1(A)(vi) Corporate Existence.................................. 45
9.1(A)(vii) Books and Records.................................... 45
9.1(A)(viii) Taxes and Assessments................................ 45
9.1(A)(ix) Inspection........................................... 45
9.1(A)(x) Compliance with Statutes, etc........................ 45
9.1(A)(xi) Environmental Matters................................ 46
9.1(A)(xii) ERISA................................................ 46
9.1(A)(xiii) Vessel Management.................................... 46
9.1(A)(xiv) Cash................................................. 46
9.1(A)(xv) Working Capital...................................... 47
9.1(A)(xvi) Debt Service Coverage Ratio.......................... 47
9.1(A)(xvii) Total Debt to EBITDA................................. 47
9.1(A)(xviii) Brokerage Commissions, etc........................... 47
9.1(A)(xix) Deposit Accounts; Assignment......................... 47
9.1(A)(xx) MARINE ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and SAVONETTA.......... 48
9.1(A)(xxi) Proceeds of Marine Car Carriers (MI).............. 48
9.1(A)(xxi) Year 2000 Issue...................................... 48
9.1(A)(xxii) ISM Code Matter...................................... 48
9.1(A)(xxiii) OMI Columbia......................................... 49
9.1(B)(i) Liens ............................................... 49
9.1(B)(ii) Loans, Advances and Investments...................... 50
9.1(B)(iii) Indebtedness......................................... 50
9.1(B)(iv) Permitted Third Party Debt........................... 50
9.1(B)(v) Guarantees, etc...................................... 51
9.1(B)(vi) Changes in Business.................................. 51
9.1(B)(vii) Use of Corporate Funds............................... 51
9.1(B)(viii) Issuance of Shares................................... 51
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9.1(B)(ix) Sale of Shares....................................... 51
9.1(B)(x) Sale of Assets....................................... 51
9.1(B)(xi) Capital Expenditures................................. 51
9.1(B)(xii) Changes in Offices or Names.......................... 52
9.1(B)(xiii) Changes in Management................................ 52
9.1(B)(xiv) Consolidation and Merger............................. 52
9.1(B)(xv) Chartering-in of Vessels............................. 52
9.1(B)(xvi) Dividends............................................ 52
9.1(B)(xvii) Loan From Marine Car Carriers (MI)................... 52
9.2 Vessel Valuations.................................... 52
9.3 Asset Maintenance.................................... 53
9.4 Inspection and Survey Reports........................ 53
SECTION 10 ASSIGNMENT.................................................... 53
SECTION 11 ILLEGALITY, INCREASED COST,
NON-AVAILABILITY, ETC.................................... 54
11.1 Illegality........................................... 54
11.2 Increased Cost....................................... 54
11.3 Nonavailability of Funds............................. 55
11.4 Agent's Certificate Conclusive....................... 55
11.5 Compensation for Losses.............................. 56
SECTION 12 CURRENCY INDEMNITY............................................ 56
12.1 Currency Conversion.................................. 56
12.2 Change in Exchange Rate.............................. 56
12.3 Additional Debt Due.................................. 56
12.4 Rate of Exchange..................................... 56
SECTION 13 FEES AND EXPENSES............................................. 56
13.1 Commitment Fee....................................... 56
13.2 Facility Fee......................................... 57
13.3 Other Fees........................................... 57
13.4 Expenses............................................. 57
SECTION 14 APPLICABLE LAW, JURISDICTION AND WAIVER....................... 57
14.1 Applicable Law....................................... 57
14.2 Jurisdiction......................................... 58
14.3 Waiver Of Jury Trial................................. 58
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SECTION 15 THE AGENT..................................................... 58
15.1(a) Appointment of Agent................................. 58
15.1(b) Appointment of Security Trustee...................... 58
15.2 Distribution of Payments............................. 59
15.3 Holder of Interest in Note........................... 59
15.4 No Duty to Examine, Etc.............................. 59
15.5 Agent as Lender...................................... 59
15.6(a) Obligations of Agent................................. 59
15.6(b) No Duty to Investigate............................... 59
15.7(a) Discretion of Agent.................................. 60
15.7(b) Instructions of Majority Lenders..................... 60
15.8 Assumption re Event of Default....................... 60
15.9 No Liability of Agent or Lenders..................... 60
15.10 Indemnification of Agent............................. 61
15.11 Consultation with Counsel............................ 61
15.12 Resignation.......................................... 61
15.13 Representations of Lenders........................... 61
15.14 Notification of Event of Default..................... 61
SECTION 16 NOT ICES AND DEMANDS...................................... 62
16.1 Notices in Writing................................... 62
16.2 Addresses for Notice................................. 62
16.3 Notices Deemed Received.............................. 62
SECTION 17 MISCELLANEOUS................................................. 62
17.1 Time of Essence...................................... 62
17.2 Unenforceable, etc., Provisions - Effect............. 63
17.3 Indemnification...................................... 63
17.4 References........................................... 63
17.5 Further Assurances................................... 63
17.6 Prior Agreements, Merger............................. 64
17.7 Entire Agreement, Amendments......................... 64
17.8 Headings............................................. 64
CONSENT AND AGREEMENT AND ACCOUNT ASSIGNMENT.............................. 65
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SCHEDULES
1 LENDERS
2 GUARANTORS
3 OTHER SUBSIDIARIES
4 MORTGAGED VESSELS
5 OTHER VESSELS
6 MANAGEMENT AGREEMENTS
7 LITIGATION, SUITS, PROCEEDINGS AND
ENVIRONMENTAL CLAIMS
EXHIBITS
1 TERM LOAN NOTE
2 REVOLVING CREDIT FACILITY NOTE
3 GUARANTY
4 U.S. MORTGAGE
5 LIBERIAN MORTGAGE
6 EARNINGS ASSIGNMENTS
7 INSURANCES ASSIGNMENTS
8 GENERAL SECURITY AGREEMENT
9 ASSIGNMENT OF VESSEL MANAGEMENT RECEIVABLES
10 ASSIGNMENT OF JOINT VENTURE PROCEEDS
11 ASSIGNMENT OF GOVERNMENT RECEIVABLES
12 NEGATIVE PLEDGE
13 DRAWDOWN NOTICE
14 COMPLIANCE CERTIFICATE
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15 ASSIGNMENT AND ASSUMPTION AGREEMENT
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TERM LOAN AND REVOLVING CREDIT FACILITY AGREEMENT
THIS TERM LOAN AND REVOLVING CREDIT FACILITY AGREEMENT (this
"Agreement") is made as of the day of June, 1998, by and between (1) MARINE
TRANSPORT CORPORATION, a corporation incorporated under the laws of the State of
Delaware with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, 9th Floor, Weehawken, New
Jersey (the "Borrower"), (2) the financial institutions listed on Schedule 1
hereto (together with their respective successors and assigns hereinafter called
the "Lenders") and (3) DEN NORSKE BANK ASA, acting through its New York branch,
with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Agent").
WITNESSETH THAT:
1. DEFINITIONS
1.1 Defined Terms. The words and expressions specified in this Agreement shall,
except where the context otherwise requires, have the meanings attributed to
them below:
"Acceptable Accounting Firm" Ernst & Young, or such other recognized
international accounting firm as shall be
approved by the Agent, such approval not to be
unreasonably withheld;
"Acquisition Agreement" that certain acquisition agreement, dated as of
September 15, 1997, among OMI Corp., Universal
Bulk Carriers, Inc., Marine Transport Lines and
the persons set forth on Exhibit A attached
thereto, together with any and all amendments,
modifications or waivers of provisions thereof
and supplements thereto;
"Advance" each Term Loan Advance and each Revolving
Credit Facility Advance;
"Affiliate" as to any Person, any other Person that,
directly or indirectly, controls or is
controlled by or is under common control with
such Person. (For purposes of this definition,
the term "control", including the terms
"controlling", "controlled by" and "under
common control with", of a Person means the
possession, direct or indirect, of the power to
vote 5% or more of the securities having
ordinary voting power for
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the election of directors of such Person or to
direct or cause the direction of the management
and policies of such Person, whether through
the ownership of voting securities, by contract
or otherwise);
"AMELINA" that certain 10,922 dwt Liberian flag ammonia
tanker named AMELINA, Official No. 2015
documented under the laws and flag of the
Republic of Liberia in the name of Oswego
Chemical Carriers Corporation;
"Argosy" Argosy Ventures Ltd., a Delaware not-for-profit
corporation.
"Assignment and Assumption the Assignment and Assumption Agreement(s)
Agreement(s)" executed pursuant to Section 10 substantially
in the form of Exhibit 15;
"Assignment Notices" notices for the (a) Earnings Assignments
substantially in the form set out in Exhibit 1
thereto or in such other form as the Agent may
agree;
(b) Insurances Assignments substantially in the
form set out in Exhibit 3 thereto or in such
other form as the Agent may agree;
(c) Assignments of Vessel Management
Receivables substantially in the form set out
in Exhibit 1 thereto or in such other form as
the Agent may agree;
(d) Assignment of Joint Venture Proceeds
substantially in the form set out in Exhibit 1
thereto or in such other form as the Agent may
agree; and
(e) Assignments of Government Receivables
substantially in the forms set out in Exhibits
1 and 2 thereto or in such other form as the
Agent may agree;
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"Assignment of Government the assignments of receivables payable to
Receivables" Marine Transport Lines or Intrepid Ship
Management, Inc., as the case may be, for their
respective contracts with MARAD executed or to
be executed by Marine Transport Lines and
Intrepid Ship Management, Inc. in favor of the
Agent pursuant to Section 4.1 of this
Agreement, substantially in the form of Exhibit
11 or in such other form as the Agent may
agree;
"Assignment of Joint Venture the second assignment of those proceeds to
Proceeds" which Marine Car Carriers (Del) is entitled
based upon its shares in Marine Car Carriers
(MI) such assignment to be executed by Marine
Car Carriers (Del) in favor of the Agent
pursuant to the Original Credit Agreement in
the form set out in Exhibit 12 or in such other
form as the Agent may agree;
"Assignment of Vessel the assignments executed or to be executed by
Management Receivables" Marine Transport Management and Intrepid Ship
Management, Inc. in favor of the Agent of all
right, title and interest of such Guarantors in
its receivables pursuant to Section 4.1 of this
Agreement, substantially in the form set out in
Exhibit 11 or in such other form as the Agent
may require;
"Assignments" the Earnings Assignments, the Insurances
Assignments, the Assignments of Government
Receivables, the General Security Agreements,
the Assignments of Vessel Management
Receivables and the Assignment of Joint Venture
Proceeds;
"Banking Day(s)" day(s) on which banks are open for the
transaction of business of the nature required
by this Agreement or any other documents
executed in connection herewith in London,
England and New York, New York;
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"CALINA" that certain 15,661 dwt Liberian flag ammonia
tanker named CALINA, Official No. 2774
documented under the laws and flag of the
Republic of Liberia in the name of Oswego
Chemical Carriers Corporation;
"Cash Equivalents" (i) securities issued or directly and fully
guaranteed or insured by the United States of
America or any agency or instrumentality
thereof (provided that the full faith and
credit of the United States of America is
pledged in support thereof) having maturities
of not more than ninety (90) days from the date
of acquisition, (ii) time deposits and
certificates of deposit, denominated in
Dollars, of the Agent, of any Lender or of any
commercial bank of recognized standing
organized under the laws of any country which
is a member of the Organization of Economic
Cooperation and Development or any governmental
subdivision or taxing authority of any such
country having capital and surplus in excess of
Five Hundred Million Dollars ($500,000,000) or
its equivalent in such country's currency, (any
such commercial bank, a "Qualified Bank"),
(iii) repurchase obligations with a term of not
more than seven (7) days for underlying
securities of the types described in (i) above
entered into with the Agent, any Lender or any
Qualified Bank, and (iv) commercial paper,
denominated in Dollars, issued by the Agent,
any Lender or by the parent corporation of any
Qualified Bank, and commercial paper rated at
least A-1 or the equivalent thereof by Standard
& Poor's Corporation or at least P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investor
Services, Inc., and in each case maturing
within ninety (90) days after the date of
acquisition;
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"Code" the Internal Revenue Code of 1986, as amended,
and any successor statute and regulations
promulgated thereunder;
"Collateral Vessel Value" the aggregate, as calculated from time to time
in the manner provided in Sections 9.2 and 9.3,
of (a) the FMVs of each of the Vessels then
mortgaged to secure obligations owed to the
Lenders under or in connection with either this
Agreement or the Related Credit Agreement and
(b) the value of the OMI COLUMBIA;
"Commitment(s)" that portion of the Term Loan and the Revolving
Credit Facility set out opposite a Lender's
name in Schedule 1 hereto or, as the case may
be, in any relevant Assignment and Assumption
Agreement, as reduced from time to time
pursuant to the terms of this Agreement;
"Compliance Certificate" a certificate of the Chief Financial Officer of
the Borrower certifying the compliance with all
of the covenants of the Borrower contained
herein, delivered to the Agent from time to
time pursuant to Section 9.1(A)(iv) hereof in
the form set out in Exhibit 14, or in such
other form as the Agent may require;
"Consents and Agreements" such third party consents as may be required
under any contract to which a Security Party is
a party in order for a Security Party to grant
a security interest pursuant to any Security
Document;
"COURIER" that certain 1977 built 35,662 dwt product
tanker named COURIER, Official No. 578746,
documented under the laws and flag of the
United States in the name of Courier Transport,
Inc.;
"DOC" means a document of compliance issued to an
Operator in accordance with rule 13 of the ISM
Code;
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"Dollars" and the sign "$" the legal currency, at any relevant time
hereunder, of the United States of America and,
for all payments hereunder, in same day funds
settled through the New York Clearing House
Interbank Payments system (or such other Dollar
funds as may be determined by the Agent to be
customary for the settlement in New York City
of banking transactions of the type herein
involved);
"Drawdown Date" each Term Loan Drawdown Date and each Revolving
Credit Facility Drawdown Date;
"Drawdown Notice" the meaning ascribed thereto in Section 3.4;
"Earnings Assignments" assignments of the earnings of the Mortgaged
Vessels executed or to be executed by the
appropriate Shipowning Guarantor or OMI
Challenger Transport, in favor of the Agent
pursuant to Section 4.1 substantially in the
form set out in Exhibit 8 or in such other form
as the Agent may require;
"EBITDA" means, on a consolidated basis, the Borrower's
earnings before interest, taxes, depreciation
and amortization (calculated in accordance with
GAAP) less income from 50% or less, directly or
indirectly, owned affiliates, based on the
preceding twelve (12) months actual operating
income (for purposes of calculating EBITDA for
the period commencing from the date hereof and
ending on the first anniversary of the date
hereof, the results for each quarterly
reporting period shall be annualized);
"Environmental Affiliate" any person or entity liable for Environmental
Claims, which claims any Security Party may
have assumed by contract or operation of law;
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"Environmental Approvals" the meaning ascribed thereto in Section 2.1(p);
"Environmental Claim" the meaning ascribed thereto in Section 2.1(p);
"Environmental Laws" the meaning ascribed thereto in Section 2.1(p);
"ERISA" the Employee Retirement Income Security Act of
1974, as amended;
"ERISA Affiliate" a trade or business (whether or not
incorporated) which is under common control
with, or part of a controlled group of
corporations with, any Security Party within
the meaning of Sections 414(b), (c), (m) or (o)
of the Code;
"Events of Default" any of the events set out in Section 8.1;
"Final Payment Date" June , 2003, or if such day is not a
Banking Day, the next following Banking Day
unless such next following Banking Day falls in
the following month, in which case the Final
Payment Date shall be the immediately preceding
Banking Day;
"Financing Documents" this Agreement, the Notes, the Guaranty and the
Security Documents;
"FMV" with respect to a Vessel, fair market value as
determined in accordance with Section 9.2
hereof;
"Former Lenders" Harrowston and ▇▇▇▇▇▇▇;
"Former Lenders Indebtedness" the indebtedness of the Borrower and/or its
Affiliates formerly owed to the Former Lenders
in the aggregate principal amount of Two
Million Eight Hundred Ninety Thousand] Dollars
($2,890,000), plus accrued and unpaid interest
thereon;
"GAAP" the meaning ascribed thereto in Section 1.3;
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"General Security Agreements" general security agreements to be executed by
each of the Guarantors which does not own a
Mortgaged Vessel in favor of the Agent pursuant
to Section 4.1 substantially in the form set
out in Exhibit 10 or in such other form as the
Agent may require;
"Guarantor(s)" each of the companies listed on Schedule 2;
"Guaranty" the guaranty of the obligations of the Borrower
under this Agreement and under the Notes to be
executed by each Guarantor in favor of the
Agent pursuant to Section 4.l substantially in
the form set out in Exhibit 3 or in such other
form as the Agent may require;
"Harrowston" Harrowston Corporation, a company organized
under the laws of Canada;
"Indebtedness" for any Person at any date of determination
(without duplication), all (i) indebtedness of
such Person for borrowed money, (ii)
obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) obligations of such Person arising from
letters of credit or other similar instruments
(including reimbursement obligations with
respect thereto), (iv) except trade payables,
obligations of such Person to pay the deferred
and unpaid purchase price of property or
services, which purchase price is due more than
six (6) months after the date of placing such
property in service or taking delivery thereof
or the completion of such services, (v)
obligations on account of principal of such
Person as lessee under capitalized leases, (vi)
indebtedness of other Persons secured by a lien
on any asset of such Person, whether or not
such indebtedness is assumed by such Person;
provided that the amount of such indebtedness
shall be the lesser of (a) the
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fair market value of such asset at such date of
determination and (b) the amount of such
indebtedness, and (vii) indebtedness of other
Persons guaranteed by such Person to the extent
such indebtedness is so guaranteed. The amount
of Indebtedness of any Person at any date shall
be the outstanding balance at such date of all
unconditional obligations as described above
and, with respect to contingent obligations,
the maximum liability upon the occurrence of
the contingency giving rise to the obligation,
provided that the amount outstanding at any
time of any indebtedness issued with original
issue discount is the face amount of such
indebtedness less the remaining unamortized
portion of the original issue discount of such
indebtedness at such time as determined in
conformity with GAAP; and provided further that
Indebtedness shall not include any liability
for federal, state, local or other taxes;
"Insurances Assignments" assignments of the insurances of the Mortgaged
Vessels to be executed by the appropriate
Shipowning Guarantor in favor of the Agent,
pursuant to Section 4.1 substantially in the
form set out in Exhibit 9 or in such other form
as the Agent may require;
"Interest Notice" a notice delivered to the Agent pursuant to
Section 6.5 specifying the duration of any
relevant Interest Period;
"Interest Period(s)" period(s) of one (1), two (2), three (3) or six
(6) months selected by the Borrower or such
other period(s) as may be agreed between the
Borrower and the Lenders;
"Intrepid Ship Management, Intrepid Ship Management, Inc., a corporation
Inc." organized and existing under the laws of the
State of Delaware;
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"ISM Code" means the International Safety Management Code
for the Safe Operating of Ships and for
Pollution Prevention constituted pursuant to
Resolution A. 741(18) of the International
maritime organization and incorporated into the
Safety of Life at Sea Convention including any
amendments or extensions thereto and any
regulation issued pursuant thereto;
"Key Management Agreements" a) that certain vessel operating agreement
between Marine Transport Management and Union
Carbide Corporation, dated as of January 1,
1996, for the United States flag vessel
CHEMICAL PIONEER (Official No. 661060) and any
renewals or extensions thereof,
b) that certain operating agreement, dated
December 18, 1979 between Marine Alaska and
Marine Transport Management, relating to the
United States flag vessel B.T. ALASKA (Official
No. 590208) and any renewals or extensions
thereof,
c) that certain vessel management agreement
between the Borrower and OMI Challenger
Transport, dated as of January 29, 1997, as
amended, for the OMI COLUMBIA and any renewals
or extensions thereof,
d) that certain contract No. DTMA98-98-C-00004,
awarded June 12, 1998, between MTL and MARAD
relating to the United States flag vessels CAPE
COD and CAPE CHALMERS and any renewals or
extensions thereof,
e) that certain contract No. DTMA98-98-C-00009,
awarded June 12, 1998, between MTL and MARAD
relating to the United States flag vessels CAPE
EDMONT and CAPE DUCATO and any renewals or
extensions thereof,
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f) that certain contract No. DTMA98-98-C-00010,
awarded June 12, 1998, between MTL and MARAD
relating to the United States flag vessels CAPE
DECISION and CAPE ▇▇▇▇▇▇▇ and any renewals or
extensions thereof,
g) that certain contract No. DTMA98-98-C-00011,
awarded June 12, 1998, between MTL and MARAD
relating to the United States flag vessels CAPE
DIAMOND and CAPE ▇▇▇▇▇▇▇ and any renewals or
extensions thereof, and
h) that certain contract No. DTMA98-98-C-00033,
awarded June 12, 1998, between MTL and MARAD
relating to the United States vessels CAPE BON
and NORTHERN LIGHT and any renewals or
extensions thereof;
"Liberian Mortgages" those second preferred Liberian ship mortgages
on the each Mortgaged Vessel registered under
the laws and flag of the Republic of Liberia to
be executed by the appropriate Shipowning
Guarantor in favor of the Agent pursuant to
Section 9.1(A)(xx) substantially in the form
set out in Exhibit 6 or in such form as the
Agent may require;
"LIBOR" the rate (rounded upward to the nearest 1/16th
of one percent) for deposits of Dollars for a
period equivalent to the relevant Interest
Period at or about 11:00 a.m. (London time) on
the second London Banking Day before the first
day of such period as displayed on Telerate
page 3750 (British Bankers' Association
Interest Settlement Rates) (or such other page
as may replace such page 3750 on such system or
on any other system of the information vendor
for the time being designated by the British
Bankers' Association to calculate the BBA
Interest
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Settlement Rate (as defined in the British
Bankers' Association's Recommended Terms and
Conditions ("BBAIRS" terms) dated August
1985)), provided that if on such date no such
rate is so displayed for the relevant Interest
Period, LIBOR for such period shall be the rate
offered by the Agent for deposits of Dollars in
an amount approximately equal to the amount for
which LIBOR is to be determined for a period
equivalent to the relevant Interest Period to
prime banks in the London Interbank Market at
or about 11:00 a.m. (London time) on the second
Banking Day before the first day of such
period;
"Majority Lenders" Lenders whose Commitments exceed sixty-seven
percent (67%) of the total Commitments;
"Management Agreements" the management and/or operating contracts
listed on Schedule 6 hereto;
"MARAD" the United States Maritime Administration:
"Marine Alaska" Marine Alaska, Inc., a Delaware corporation;
"Marine Car Carriers (Del)" Marine Car Carriers, Inc., a Delaware
corporation;
"Marine Car Carriers (MI)" Marine Car Carriers, Inc. (MI), a ▇▇▇▇▇▇▇▇
Islands corporation;
"Marine Transport Lines" Marine Transport Lines, Inc., a corporation
incorporated under the laws of the State
Delaware;
"Marine Transport Management" Marine Transport Management, Inc., a
corporation incorporated under the laws of the
State of Delaware;
"Margin" the meaning ascribed thereto in Section 6.3;
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"MARINE CHEMIST" that certain 1970 built 36,526 dwt chemical
tanker named MARINE CHEMIST, Official No.
529399, documented under the laws and flag of
the United States in the name of Marine
Chemical Navigation Corporation;
"MARINE ▇▇▇▇▇" that certain 1970 rebuilt 25,131 dwt molten
sulphur carrier named MARINE ▇▇▇▇▇, Official
No. 245851, documented under the laws and flag
of the United States in the name of Marine
Sulphur Shipping Corporation;
"Materials of Environmental the meaning ascribed thereto in Section 2.1(p);
Concern"
"MCCMI Shareholders Agreement" that certain
shareholders agreement among the shareholders
of Marine Car Carriers (MI) dated as of March
1, 1995;
"Mortgaged Vessels" the vessels identified on Schedule 4;
"Mortgages" the U.S. Mortgages and the Liberian Mortgages;
"Mortgages Securing the those certain first preferred ship mortgages
OMI Debt" over the Workboats in favor of and securing the
OMI Debt;
"Negative Pledge" the negative pledge by OMI Challenger Transport
of all of its interest in OMI COLUMBIA or any
Vessel Agreement relating to such Vessel,
substantially in the form of Exhibit 12.
"New Workboats" the United States flag vessels OMS ▇▇▇▇▇▇
(Official No. 587445) and OMS MAVERICK
(Official No. 517406);
"Notes" the Term Loan Note and the Revolving Credit
Facility Note;
"OMI" OMI Corporation, a corporation incorporated
under the laws of the ▇▇▇▇▇▇▇▇ Islands;
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"OMI Challenger Transport" OMI Challenger Transport, Inc., a corporation
incorporated under the laws of the State of
Delaware;
"OMI COLUMBIA" that certain 1974 built 138,698 dwt oil tanker
named OMI COLUMBIA, Official No. 663428,
documented under the laws and flag of the
United States in the name of Argosy;
"OMI COLUMBIA Loan Documents" that certain credit agreement, dated as of
January 29, 1997, among Citicorp North America
Inc., as agent, the Lenders (as defined
therein), Argosy, et al., and any documents
executed in connection therewith or securing
any obligation owing thereunder;
"OMI Debt" Indebtedness of the Borrower to OMI in the
original principal amount of Six Million Four
Hundred Forty-Three Thousand Dollars
($6,443,000);
"Operator" means any Person approved by the Agent who is
from time to time during the Security Period,
concerned with the operation of a Vessel and
falls within the definition of "Company" set
out in rule 1.1.2 of the ISM Code;
"Other Vessels" the vessels identified on Schedule 5;
"PATRIOT" that certain 1976 built 35,662 dwt product
tanker named PATRIOT, Official No. 571049,
documented under the laws and flag of the
United States in the name of Patriot Transport,
Inc.;
"Permitted Indebtedness" collectively, the Indebtedness incurred under
this Agreement, the Related Indebtedness, the
OMI Indebtedness and Permitted Third Party
Debt;
"Permitted Liens" the meaning ascribed thereto in Section
9.1(B)(i);
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"Permitted Third Party Debt" Indebtedness, incurred with recourse to any
Security Party or any other party owned
directly or indirectly by the Borrower and for
the purposes of acquiring new assets or
supporting MARAD vessel management contracts,
not to exceed, in the aggregate, the principal
amount of US$20,000,000 outstanding at any
time;
"Person" means any individual, sole proprietorship,
corporation, partnership (general or limited),
business trust, bank, trust company, joint
venture, association, joint stock company,
trust or other unincorporated organization,
whether or not a legal entity, or any
government or agency or political subdivision
thereof;
"Plan" any employee benefit plan covered by Title IV
of ERISA;
"Reduction Date" June , 2001, or if such day is not a
Banking Day, the next following Banking Day
unless such next following Banking Day falls in
the following month, in which case the
Revolving Credit Facility Termination Date
shall be the immediately preceding Banking Day;
"Related Credit Agreement" that certain amended and restated term loan and
revolving credit agreement of even date
herewith among Marine Transport Lines, as
borrower, the Lenders and the Agent, as the
same may hereafter be amended or supplemented;
"Related Indebtedness" the Indebtedness of the Security Parties owed
under and in connection with the Related Credit
Agreement;
"Related Security Documents" the "Security Documents" as defined in the
Related Credit Agreement;
"Related Term Loan" the "Term Loan" as defined in the Related
Credit Agreement;
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"Relevant Contracts" a) that certain time charter, dated April 31,
1982, of the MARINE ▇▇▇▇▇ to Freeport MacMoran
Resource Partners, Limited Partnership and any
renewals or extensions thereof;
b) the contract of affreightment, dated as of
January 1, 1996, with Shell Oil Company for the
MARINE CHEMIST and any renewals or extensions
thereof;
c) the contract of affreightment, dated
September 24, 1994, with PPG Industries, Inc.
for the MARINE CHEMIST and any renewals or
extensions thereof;
d) the contract of affreightment, dated as of
July 1, 1996, with ARCO Products Company for
the MARINE CHEMIST and any renewals or
extensions thereof;
e) that certain bareboat charter dated on or
about July 29, 1965, of the CALINA between
Oswego Chemical Carriers Corporation, as owner,
and Oswego Corporation, as charterer and any
renewals or extensions thereof; and
f) that certain time charter, dated as of March
14, 1978 between Marine Alaska, Inc. and BP Oil
Shipping Company, USA, for the United States
flag vessel B.T. ALASKA (Official No. 590208)
and any renewals or extensions thereof;
g) that certain time charter, dated as of June
1, 1994 between OMI Challenger Transport and BP
Oil Shipping Company, USA for the OMI COLUMBIA
and any renewals or extensions thereof; and
h) that certain time charter, dated as of
January 29, 1997, between Argosy and OMI
Challenger Transport for the OMI
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COLUMBIA and any renewals or extensions
thereof;
"Revolving Credit Facility" the sums to be advanced by the Lenders to the
Borrower in an aggregate amount not to exceed
at any one time outstanding Two Million Dollars
($2,000,000) pursuant to Section 3.3 as the
same may be reduced as provided in this
Agreement;
"Revolving Credit Facility any amount advanced to the Borrower under the
Advance" Revolving Credit Facility on any Revolving
Credit Facility Drawdown Date;
"Revolving Credit Facility Applicable Rate" any rate of
interest on the Revolving Credit Facility
Balance from time to time prescribed by Section
6.2;
"Revolving Credit Facility the outstanding Dollar amount of the Revolving
Balance" Credit Facility Advances at any relevant time;
"Revolving Credit Facility has the meaning ascribed thereto in Section
Default Rate" 6.2;
"Revolving Credit Facility each date which is a Banking Day not later
Drawdown Date" than May , 2000, upon which the Borrower has
requested any Revolving Credit Facility
Advance as provided in Section 3.3;
"Revolving Credit Facility the promissory note, to be executed by the
Note" Borrower to the order of the Lenders to
evidence the Revolving Credit Facility
substantially in the form set out in Exhibit 2
or in such other form as the Agent may require;
"Revolving Credit Facility June , 2002, or if such day is not a
Termination Date" Banking Day, the next following Banking Day
unless such next following Banking Day falls in
the following month, in which case the
Revolving Credit Facility Termination Date
shall be the immediately preceding Banking Day;
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"ROVER" that certain 1977 built 35,662 dwt product
tanker named ROVER, Official No. 577241,
documented under the laws and flag of the
United States in the name of Rover Transport,
Inc.;
"SAVONETTA" that certain 10,947 dwt Liberian flag ammonia
tanker named SAVONETTA, Official No. 2129,
documented under the laws and flag of the
Republic of Liberia in the name of Oswego
Chemical Carriers Corporation;
"Security Documents" the Mortgages, the Assignments, the Assignment
Notices, the Subordination Agreement, the
Consents and Agreements. the Negative Pledge
and any other documents that may be executed as
security for the Term Loan and/or the Revolving
Credit Facility and the Borrower's obligations
arising therefrom;
"Security Parties" the Borrower and each Guarantor;
"Security Period" the period from the initial Drawdown Date of
the initial Term Loan Advance to the date upon
which all amounts owing under the Term Loan and
the Revolving Credit Facility and all other
amounts due to the Lenders and the Agent
pursuant to the Financing Documents are prepaid
in full or become repayable and are repaid in
full and no further Revolving Credit Facility
Advances are available;
"Shipowning Guarantors" each of the Guarantors which owns a Mortgaged
Vessel;
`SMC" means a safety management certificate issued
for a Vessel in Accordance with rule 13 of the
ISM Code;
"Taxes" any present or future income or other taxes,
levies, duties, charges, fees, deductions, or
withholdings of any nature now or hereafter
imposed, levied,
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27
collected, withheld or assessed by any taxing
authority whatsoever, except for taxes on or
measured by the income of the Agent or any
Lender imposed by the Agent's or such Lender's
jurisdiction of organization, the jurisdiction
of the principal place of business of the Agent
or such Lender, the United States of America,
the State or City of New York or any
governmental subdivision or taxing authority of
any of them or by any other jurisdiction or
taxing authority having jurisdiction over the
Agent or such Lender (unless such jurisdiction
is asserted by reason of the activities of the
Security Parties or any of them);
"Term Loan" the sum advanced by the Lenders pursuant to
this Agreement in the principal amount of Eight
Million Eight Hundred Eighty-Seven Thousand
Dollars ($8,887,000);
"Term Loan Advance" the amount advanced to the Borrower pursuant to
Section 3.2 on a Term Loan Drawdown Date;
"Term Loan Applicable Rate" any rate of interest on the Term Loan Balance
from time to time applicable pursuant to
Section 6.1;
"Term Loan Balance" the Dollar amount of the Term Loan at any
relevant time as reduced by payments pursuant
to the terms of this Agreement;
"Term Loan Default Rate" has the meaning ascribed thereto in Section
6.1;
"Term Loan Drawdown Date" each date, which is a Banking Day not later
than June 30, 1998, upon which the Borrower has
requested that a Term Loan Advance be made
available to the Borrower as provided in
Section 3.2;
"Term Loan Note" the promissory note to be executed by the
Borrower to the order of the Lenders to
evidence the Term Loan substantially in
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the form set out in Exhibit 1 or in such other
form as the Agent may require;
"Term Loan Payment Dates" (i) September , 1998 and (ii) each of
the dates falling at intervals of three (3)
months after such date up to and including the
Final Payment Date, provided, however, that if
any such day is not a Banking Day, the next
following Banking Day, unless such next
following Banking Day falls in the following
calendar month, in which case the relevant Term
Loan Payment Date shall be the immediately
preceding Banking Day;
"Total Debt" the Indebtedness of the Borrower on a
consolidated basis;
"Total Loss" the actual, agreed, arranged or compromised
total loss of any Vessel;
"Unrestricted Cash and Cash Equivalents" cash or Cash
Equivalents (excluding, however, undrawn
amounts available under the Revolving Credit
Facility or under the Related Credit Agreement)
which are free of liens and unencumbered to any
party other than the Agent and the Lenders in
connection herewith;
"U.S. Mortgages" the second preferred United States ship
mortgages on each Mortgaged Vessel registered
under the laws and flag of the United States of
America to be executed by the appropriate
Shipowning Guarantor in favor of the Agent
pursuant to Section 4.1 substantially in the
form set out in Exhibit 4 or in such other form
as the Agent may require;
"Vessel Agreements" a) the Relevant Contracts;
b) that certain time charter, dated January 1,
1985 (as amended), of the SAVONETTA to Hydro
Agri Ammonia, Inc.;
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29
c) that certain time charter, dated September
16, 1987 (as amended), of the CALINA to Hydro
Agri Ammonia, Inc.;
d) that certain time charter, dated January 1,
1985 (as amended), of the AMELINA to Hydro Agri
Ammonia, Inc.;
e) the Mortgage(s) Securing the OMI Debt; and
f) the OMI COLUMBIA Loan Documents.
"Vessels" the Mortgaged Vessels and the Other Vessels;
"▇▇▇▇▇▇▇" The ▇▇▇▇▇▇▇ Descendants' 1983 Trust, a grantor
trust established under the laws of New Jersey;
and
"Work Boats" the United States flag vessels OMS ▇▇▇▇▇▇
(Official No. 650997), OMS NUECES (Official ▇▇.
▇▇▇▇▇▇), ▇▇▇ ▇▇▇▇▇▇▇ (Official No. 602050) and
OMS SHELBY (Official No. 603076).
"Year 2000 Issue" the failure of computer software, hardware and
firmware systems and equipment containing
embedded computer chips properly to receive,
transmit, process, manipulate, store, retrieve,
re-transmit or in any other way utilize data
and information due to the occurrence of the
year 2000 or the inclusion of dates on or after
January1, 2000.
1.2 Construction. Words importing the singular number only shall include the
plural and vice versa. Words importing persons shall include companies, firms,
corporations, partnerships, unincorporated associations and their respective
successors and assigns.
1.3 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles as in
effect from time to time in the United States of America consistently applied
("GAAP") and all financial statements submitted pursuant to this Agreement shall
be prepared in
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accordance with, and all historical financial data submitted pursuant hereto
shall be derived from financial statements prepared in accordance with, GAAP.
2. REPRESENTATIONS AND WARRANTIES
2.1 In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Term Loan and Revolving Credit Facility available to the
Borrower, the Borrower hereby represents and warrants to the Agent and the
Lenders (which representations and warranties shall survive the execution and
delivery of this Agreement and the Notes and the making of such advances) that:
(a) Due Organization and Power. Each of the Security Parties is duly
formed and is validly existing in good standing under the laws of its
jurisdiction of incorporation, has full power to carry on its business as now
being conducted and to enter into and perform its obligations under those
Financing Documents to which it is or is to be a party pursuant to this
Agreement, and has complied with all (i) statutory, regulatory and other
requirements relative to such business; and (ii) such agreements which if not
complied with, could reasonably be expected to have a material adverse effect on
its business, assets or operations, financial or otherwise;
(b) Authorization and Consents. All necessary corporate action has
been taken to authorize, and all necessary consents and authorities have been
obtained and remain in full force and effect to permit, each Security Party to
enter into and perform its obligations under those Financing Documents to which
it is or is to be a party pursuant to this Agreement and, in the case of the
Borrower, to borrow, service and repay the Term Loan and the Revolving Credit
Facility and, as of the date of this Agreement, no further consents or
authorities are necessary for the borrowing, service and repayment of the Term
Loan and/or the Revolving Credit Facility or any part thereof;
(c) Binding Obligations. Each of the Financing Documents constitutes
or, when executed will constitute, the legal, valid and binding obligation of
each Security Party which is a party thereto enforceable against such Security
Party in accordance with its terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting generally the enforcement of creditors' rights;
(d) No Violation. The execution and delivery of, and the performance
of the provisions of, each Financing Document by each Security Party which is a
party thereto do not, and will not during the Security Period, contravene any
applicable law or regulation existing at the date hereof or any contractual
restriction binding on such Security Party or its certificate of incorporation,
by-laws or equivalent documents;
(e) Litigation. Except as set forth on Schedule 7 hereto, no action,
suit or proceeding is pending or threatened against any Security Party before
any court, board of arbitration or administrative agency which (after taking
into account the benefits of any applicable insurance which can reasonably be
expected to be recovered by the
22
31
relevant Security Party, as the case may be) could or might result in any
material adverse change in the business or condition (financial or otherwise) of
any thereof;
(f) No Default. No Security Party or Marine Car Carriers (MI) is in
default under any material agreement by which it is bound, or is in default in
respect of any material financial commitment or obligation;
(g) Vessels. As of the date hereof:
(i) each of the Mortgaged Vessels is in the sole and
absolute ownership of the respective Guarantor, as
listed opposite its name in Schedule 4, unencumbered,
save and except for, the respective Mortgage recorded
thereagainst, the relevant Related Security Documents
and the respective Vessel Agreements,] and duly
registered in the name of such Guarantor under the
respective flag as set forth in Schedule 4;
(ii) each of the Other Vessels is in the sole and absolute
ownership of an Affiliate of the Borrower or, in the
case of OMI COLUMBIA, Argosy, as listed opposite its
name in Schedule 5, unencumbered, save and except for,
the respective Vessel Agreements and the relevant
Related Security Documents, and duly registered in the
name of such Affiliate of the Borrower under the
respective flag as set forth in Schedule 5;
(iii) each Vessel will be classed in the highest
classification and rating for vessels of the same age
and type with the respective classification society as
set forth in Schedules 4 and 5 without any material
outstanding recommendations;
(v) each Vessel will be operationally seaworthy and in all
material respects fit for its intended service;
(v) each of the Mortgaged Vessels will be insured in
accordance with the provisions of the governing Mortgage
and the requirements thereof for such insurances will
have been complied with and each of the Other Vessels
will be insured against such risks, in such amounts and
with such insurance companies as would a reasonably
prudent shipowner engaged in the same trades; and
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(vi) each Vessel subject to a charter or other contract of
carriage constituting a Vessel Agreement has been
accepted by its respective charterer and is in service
under such Vessel Agreement;
(h) Insurance. Each of the Security Parties has insured its
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses;
(i) Citizenship and Qualification as Owner. Each Security Party or
other Affiliate of the Borrower owning a United States flag Vessel is a United
States citizen within the meaning of Section 2 of the United States Shipping
Act, 1916, as amended (46 U.S.C. ss.802), qualified to own and operate vessels
in the coastwise trade of the United States of America and each Security Party
or other Affiliate of the Borrower which is the registered owner of a Vessel
registered under a flag other than the United States of America is duly
qualified under the laws of such flag to be the registered owner and operator of
a vessel registered under such flag;
(j) Financial Information. Except as otherwise disclosed in writing
to the Agent on or prior to the date hereof, all financial statements,
information and other data furnished by the Borrower to the Agent are complete
and correct, and such financial statements have been prepared in accordance with
GAAP and accurately and fairly present the financial condition of the parties
covered thereby as of the respective dates thereof and the results of the
operations thereof for the period or respective periods covered by such
financial statements and since such date or dates, there has been no material
adverse change in the financial condition or results of the operations of any of
such parties and none thereof has any contingent obligations, liabilities for
taxes or other outstanding financial obligations which are material in the
aggregate except as disclosed in (a) such statements, information and data or
(b) in Schedule 7 prepared pursuant to Section 2.1(e) of this Agreement;
(k) Tax Returns. Except as previously advised to the Lender in
writing, each Security Party has filed all tax returns required to be filed
thereby and has paid all taxes payable thereby which have become due, other than
those (a) not yet delinquent or the nonpayment of which would not have a
material adverse effect on such Security Party; and (b) being contested in good
faith and by appropriate proceedings or other acts and for which adequate
reserves have been set aside on its books;
(l) ERISA. The execution and delivery of this Agreement and the
consummation of the transactions hereunder will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code and no
condition exists or event or transaction has occurred in connection with any
Plan maintained or contributed to by any Security Party or any ERISA Affiliate
(as such term is hereinafter defined) resulting from the failure of any such
party to comply with ERISA insofar as ERISA applies thereto which is reasonably
likely to result in such Security Party or any ERISA Affiliate incurring any
liability, fine or penalty which individually or in the aggregate
24
33
would have a material adverse effect on such Security Party or ERISA Affiliate.
As used herein the term "ERISA Affiliate" means a trade or business (whether or
not incorporated) which is under common control with the Security Party in
question within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
Prior to the date hereof, the Borrower has delivered to the Agent a list of all
the employee benefit plans to which each Security Party or any ERISA Affiliate
is a "party in interest" (within the meaning of Section 3(14) of ERISA) or a
"disqualified person" (within the meaning of Section 4975(e)(2) of the Code);
(m) Chief Executive Office. Each Security Party's chief executive
office and chief place of business and the office in which the records relating
to the earnings and other receivables of such Security Party are kept is, and
will continue to be, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, 9th Floor, Weehawken,
New Jersey or, in the case of OMI Petrolink Corp. and its Subsidiaries, ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ and, in the case of Intrepid Ship Management
Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇;
(n) Foreign Trade Control Regulations. None of the transactions
contemplated herein will violate any of the provisions of the Foreign Assets
Control Regulations of the United States of America (Title 31, Code of Federal
Regulations, Chapter V, Part 500, as amended), any of the provisions of the
Cuban Assets Control Regulations of the United States of America (Title 31, Code
of Federal Regulations, Chapter V, Part 515, as amended), any of the provisions
of the Libyan Assets Control Regulations of the United States of America (Title
31, Code of Federal Regulations, Chapter V, Part 550, as amended), any of the
provisions of the Iraqi Sanctions Regulations (Title 31, Code of Federal
Regulations, Chapter V, Part 575, as amended), any of the provisions of the
Iranian Transactions Regulations of the United States of America (Title 31, Code
of Federal Regulations, Chapter V, part 560, as amended) any of the provisions
of the Federal Republic of Yugoslavia (Serbia and Montenegro) Assets Control
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 585 as
amended) or any of the provisions of the Regulations of the United States of
America Governing Transactions in Foreign Shipping of Merchandise (Title 31,
Code of Federal Regulations, Chapter V, Part 505, as amended);
(o) Equity Ownership. Each of the Security Parties (other than the
Borrower) is a, direct or indirect, wholly-owned subsidiary of the Borrower. As
of the date hereof, the Borrower does not own any shares of capital stock,
partnership interest or any other direct or indirect equity interest in any
corporation, partnership or other entity except the Security Parties and the
companies listed on Schedule 3;
(p) Environmental Matters. Except as heretofore disclosed on
Schedule 7, (i) each of the Security Parties and their Environmental Affiliates
will, when required, be in full compliance with all applicable United States
federal and state, local, foreign and international laws, regulations,
conventions and agreements relating to pollution prevention or protection of
human health or the environment (including, without limitation, ambient air,
surface water, ground water, navigable waters, waters of
25
34
the contiguous zone, ocean waters and international waters), including, without
limitation, laws, regulations, conventions and agreements relating to (1)
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous materials, oil, hazardous
substances, petroleum and petroleum products and by-products ("Materials of
Environmental Concern"), or (2) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern ("Environmental Laws"); (ii) each of the Security Parties
and their Environmental Affiliates will, when required, have all permits,
licenses, approvals, rulings, variances, exemptions, clearances, consents or
other authorizations required under applicable Environmental Laws
("Environmental Approvals") and will, when required, be in full compliance with
all Environmental Approvals required to operate their business as then being
conducted; (iii) none of the Security Parties or their Environmental Affiliates
has received any notice of any claim, action, cause of action, investigation or
demand by any person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or instrumentality
thereof, alleging potential liability for, or a requirement to incur,
investigatory costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, personal injuries, attorneys' fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by such person,
or (2) circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law or Environmental Approval ("Environmental Claim")
(other than Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any, payable
by the Security Parties or any Environmental Affiliate any thereof in respect
thereof have been paid in full or are fully covered by insurance (including
permitted deductibles)); and (iv) there are no circumstances existing as of the
date hereof that may prevent or interfere with such full compliance in the
future;
(q) Pending, Threatened or Potential Environmental Claims. Except as
heretofore disclosed on Schedule 7 there are no (1) Environmental Claims pending
or threatened against any Security Party or its Environmental Affiliates and (2)
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or
disposal of any Materials of Environmental Concern, that could form the basis of
any Environmental Claim against any Security Party or its Environmental
Affiliates;
(r) Compliance with ISM Code. Each Vessel and any Operator complies
with the requirement s of the ISM Code, including (but not limited to) the
maintenance and renewal of valid certificates pursuant thereto;
(s) Threatened Withdrawal of DOC or SMC. There is no threatened or
actual withdrawal of any Operator's DOC or the SMC in respect of any Vessel; and
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35
(t) Year 2000 Issue. The Borrower and each of the guarantors have
reviewed the effect of the Year 2000 Issue on the computer software, hardware
and firmware systems and equipment containing embedded microchips owned or
operated by or for the Borrower and the Guarantors or used or relied upon in the
conduct of their business (including systems and equipment supplied by others or
with which such computer systems of the Borrower and the guarantors interface).
The costs to the Borrower and the Guarantors of any reprogramming required as a
result of the Year 2000 Issue to permit the proper functioning of such systems
and equipment and the proper processing of data, and the testing of such
reprogramming, and of the reasonably foreseeable consequences of the Year 2000
Issue to the Borrower or any of the Guarantors (including reprogramming errors
and the failure of systems or equipment supplied by others) are not reasonably
expected to result in a Default or Event of Default or to have a material
adverse effect on the business, assets, operations, prospects or condition
(financial or otherwise) of the Borrower or any of the Guarantors.
3. ADVANCES
3.1 Purposes. (a) The proceeds of Term Loan shall be applied solely and
exclusively for the purposes of (i) refinancing, in full, the Former Lenders
Indebtedness and (ii) to pay transaction expenses, financing fees and other
expenses or obligations payable in connection with the transactions contemplated
by this Agreement, the Related Credit Agreement and the Acquisition Agreement;
and
(b) the proceeds of Revolving Credit Facility shall be applied
solely and exclusively for working capital purposes of the Borrower and the
Guarantors.
3.2 Term Loan Advances. Each of the Lenders, relying upon each of the
representations and warranties set out in Section 2, hereby agrees with the
Borrower that, subject to and upon the terms of this Agreement, it will on the
Term Loan Drawdown Dates, make the Term Loan Advances available to the Borrower
in an aggregate amount not to exceed, on a pro rata basis, its Commitment for
its respective portion of the Term Loan, provided, however, that (a) the Term
Loan may only be drawn down in a single Advance and (b) to the extent that any
portion of the Term Loan remains undrawn as of 12:00 noon (New York time) on
June 25, 1998, each Lender's commitment to advance such undrawn portion of its
Commitment thereunder shall expire.
3.3 Revolving Credit Facility Advances. Each of the Lenders, relying upon each
of the representations and warranties set out in Section 2, hereby agrees with
the Borrower that, subject to the terms of this Agreement, it will on or before
12:00 noon New York time on the Revolving Credit Facility Drawdown Dates make
the Revolving Credit Facility Advances available to the Borrower in an aggregate
amount not to exceed, on a pro rata basis, its Commitment for its respective
portion of the Revolving Credit Facility, provided, however, that (a) each such
Advance shall be in the minimum amount of One Hundred Thousand Dollars
($100,000) and (b) the maximum aggregate amount of all Revolving Credit Facility
Advances which may be outstanding under this Agreement is Two Million Dollars
($2,000,000), as the same may be reduced from time to time as
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provided in Sections 5.7 and 5.8. Within the limits of the Revolving Credit
Facility and upon the conditions herein provided, the Borrower may from time to
time, and on as many occasions as the Borrower may deem appropriate, borrow
pursuant to this Section 3.3, repay pursuant to Section 5.2 and reborrow
pursuant to this Section 3.3.
3.4 Drawdown Notice. The Borrower shall not less than three (3) Banking Days
before any Drawdown Date serve a notice (a "Drawdown Notice") on the Agent,
substantially in the form set out in Exhibit 13 or in such other form as the
Agent may agree, which notice shall (a) be in writing addressed to the Agent,
(b) be effective upon receipt by the Agent as aforesaid, provided it is received
before 11:00 a.m. New York time (otherwise it shall be deemed to have been
received on the next Banking Day), (c) specify the Banking Day on which the
relevant Advance is to be drawn down, (d) specify the initial Interest Period,
(e) specify the disbursement instructions and (f) be irrevocable.
3.5 Effect of Drawdown Notice. Each Drawdown Notice shall be deemed to
constitute a warranty by the Borrower that (a) the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
in all material respects on the date of such Drawdown Notice and will be true
and correct in all material respects on such drawdown date as if made on such
date, and (b) that no Event of Default or any event which with the giving of
notice or lapse of time or both would constitute an Event of Default has
occurred and is continuing.
3.6 Notation of Advances. Each Revolving Credit Facility Advance made by the
Lenders to the Borrower may be evidenced by a notation of the same made by the
Agent on the grid attached to the Revolving Credit Facility Note, which
notation, absent manifest error, shall be prima facie evidence of the amount of
the relevant Advance.
4. CONDITIONS
4.1 Conditions to Advance of Term Loan and the Initial Revolving Credit Facility
Advance. The obligations of the Lenders to advance the Term Loan and the initial
Revolving Credit Facility Advance are expressly subject to the satisfaction of
the following conditions precedent:
(a) the Agent shall have received the following documents in form and
substance satisfactory to the Agent and its legal advisors:
(i) copies, certified as true and complete by an officer of
each Security Party, of the resolutions of the board of
directors and, in the case of the Guarantors, the
shareholders thereof evidencing approval of this
Agreement and the other Financing Documents called for
hereby to which such Security Party is a party and
authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the
same on its behalf;
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(ii) copies, certified as true and complete by an officer of
the Borrower or other party acceptable to the Agent, of
all documents evidencing any other necessary action
(including actions by such parties thereto other than
the Borrower as may be required by the Agent), approvals
or consents with respect to the Financing Documents;
(iii) copies, certified as true and complete by an officer of
the respective Security Party of the certificate of
incorporation and by-laws (or equivalent instruments)
thereof;
(iv) a certificate of the Secretary of the Borrower
certifying that it legally and beneficially, directly or
indirectly, owns all of the issued and outstanding
shares of the capital stock of each of the other
Security Parties, in each case, free and clear of any
liens, claims, pledges or other encumbrances;
(v) a certificate of the Secretary of Marine Car Carriers
(Del) certifying that it legally and beneficially owns
fifty percent (50%) of the issued and outstanding shares
of Marine Car Carriers (MI), free and clear of any
liens, claims, pledges or other encumbrances whatsoever
except for a pledge in favor of the Agent;
(vi) certificate of the Secretary of each Security Party
(other than the Borrower) certifying as to the record
ownership of all of its issued and outstanding capital
stock;
(vii) certificates of the jurisdiction of incorporation of
each Security Party as to the good standing of such
corporation;
(viii) copies of each Vessel Agreement, Management Agreement,
the MCCMI Shareholders Agreement, all agreements and
other documents evidencing Permitted Indebtedness and
Permitted Liens outstanding and existing as of the date
hereof and the Acquisition Agreement each certified by
an officer of the Borrower to be a true and complete
copy thereof;
(ix) letters, in form and substance satisfactory to the
Agent, from counsel representing the Borrower (or its
relevant Affiliate) in connection with each action, suit
or proceeding listed on Schedule 7 or in connection with
any Environmental Claim disclosed to the Agent,
regarding details of such action, suit, proceeding or
claim including a description of the nature of the
claim, and the Borrower's
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(or its Affiliate's) potential liabilities and an
opinion as to the likely outcome of the relevant matter;
and
(x) a pro forma consolidated balance sheet for the Borrower,
certified to be true and correct by its chief financial
officer, demonstrating that, as of the date hereof and
after giving effect to the transactions contemplated
hereby and by the Related Credit Agreement and the
Acquisition Agreement, the Borrower has Unrestricted
Cash and Cash Equivalents in an amount at least equal to
Two Million Dollars ($2,000,000) (for purposes of
determining compliance with this condition, Unrestricted
Cash or Cash Equivalents held by Marine Car Carriers
(MI) for the benefit of Marine Car Carriers (Del) shall
be calculated on the basis of the Borrower's share of
such sums after deduction of any taxes that would be
payable (as of the time of determination) upon the
distribution and repatriation of such sums by Marine Car
Carriers (MI) to Marine Car Carriers (Del) or any other
Affiliate of the Borrower).
(b) the Agent shall have received evidence satisfactory to it and
its legal advisors that:
(i) each of the Mortgaged Vessels is in the sole and
absolute ownership of the respective Guarantors, other
Affiliates of the Borrower as set forth in Schedules 4
and 5 or Argosy save and except for, in the case of the
Mortgaged Vessels, the respective Mortgage recorded
thereagainst and for the respective Vessel Agreements
and Related Security Documents, and duly registered in
the name of such Guarantor or such Affiliate under the
respective flag as set forth in Schedules 4 and 5;
(ii) each Vessel is classed in the highest classification and
rating for vessels of the same age and type with the
respective classification society as set forth in
Schedules 4 and 5 without any material outstanding
recommendations;
(iii) each of the Vessels is operationally seaworthy and in
every material respect fit for its intended service;
(iv) each of the Mortgaged Vessels will be insured in
accordance with the provisions of the Mortgage on her in
favor of the Agent, as the case may be, and the
requirements thereof in respect of such insurances will
have been met and each of the Other Vessels will be
insured
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against such risks, in such amounts and with such
insurance companies as would be required by a reasonably
prudent shipowner engaged in the same trades;
(v) each Vessel subject to a charter or other contract of
carriage constituting a Vessel Agreement has been
accepted by its respective charterer and is in service
under such Vessel Agreement; and
(vi) that, except as provided in the Financing Documents,
there are no restrictions or limitations on the
Borrower's ability to withdraw or apply any funds of
Marine Car Carriers (MI) held for the benefit of Marine
Car Carriers (Del) and payable to the Borrower for such
purposes as the Borrower may deem fit.
(c) the Borrower shall have duly executed and delivered:
(i) this Agreement and
(ii) the Notes;
(iii) its Assignment of Vessel Management Receivables;
(iv) its Assignment Notices, and
(v) Uniform Commercial Code Financing Statements for filing
in New Jersey and its jurisdiction of incorporation;
(d) each Guarantor shall have executed and delivered:
(i) the Guaranty,
(ii) the Consent and Agreement and Account Assignment
provided at the end of this Agreement, and
(iii) Uniform Commercial Code Financing Statements for filing
in New Jersey;
(e) each Shipowning Guarantor shall have duly executed and
delivered:
(i) the Mortgage over its Mortgaged Vessel(s),
(ii) an Insurances Assignment with respect to such Vessel(s),
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(iii) an Earnings Assignment with respect to such Vessel(s),
(iv) its Assignment Notices, and
(v) Uniform Commercial Code Financing Statements for filing
in New Jersey and its jurisdiction of Incorporation;
(f) OMI Challenger Transport shall have duly executed and delivered
the Negative Pledge.
(g) the Guarantors which do not own a Mortgaged Vessel (other than
OMI Challenger Transport) shall have executed and delivered:
(i) its General Security Agreement, and,
(ii) Uniform Commercial Code Financing Statements for filing
in New Jersey and in its jurisdiction of incorporation;
(h) Intrepid Ship Management, Inc. shall have executed and
delivered:
(i) its Assignment of Government Receivables,
(ii) its Assignment Notices, and
(iv) Uniform Commercial Code Financing Statements for filing
in New Jersey and in its jurisdiction of incorporation;
(i) Marine Transport Lines shall have executed and delivered:
(i) its Assignment of Government Receivables,
(ii) its Assignment Notices, and
(iii) Uniform Commercial Code Financing Statements for filing
in New Jersey and in its jurisdiction of incorporation;
(j) Marine Transport Management shall have executed and delivered:
(i) its Assignment of Vessel Management Receivables,
(ii) its Assignment Notices, and
(iii) Uniform Commercial Code Financing Statements for filing
in New Jersey and in its jurisdiction of incorporation;
(k) Marine Car Carriers (Del) shall have executed and delivered:
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(i) the Assignment of Joint Venture Proceeds,
(ii) its Assignment Notices, and]
(iiiv) Uniform Commercial Code Financing Statements for filing
in New Jersey and in its jurisdiction of incorporation;
(l) the Agent shall have received appraisals, in form and substance
satisfactory to the Agent, from two independent shipbrokers acceptable to the
Agent evidencing that the Borrower is in compliance with Section 9.3, each of
which appraisals shall be dated, and the appraisals contained therein shall be
as of a date, no earlier than ninety (90) days prior to the date hereof;
(m) the Agent shall have received a certificate of the chief
financial officer of each Guarantor confirming the representations and
warranties with respect to solvency set forth in its Guaranty and containing
conclusions as to the solvency of such Guarantor;
(n) the Agent shall be satisfied that no Security Party is subject
to any Environmental Claim (except as set forth on Schedule 7) which could have
a material adverse effect on the business, assets or results of operations of
any thereof;
(o) the Agent shall have received payment in full of all fees and
expenses due to the Agent and the Lenders on or prior to the date thereof under
Section 13;
(p) the Agent shall have received evidence satisfactory to it and to
its legal advisors that, save for the liens created by the Mortgages, the
Assignments, the Related Security Agreements and the Vessel Agreements there are
no liens, charges or encumbrances of any kind whatsoever on any of the Vessels
or on their respective earnings except as permitted hereby or by any of the
Security Documents;
(q) each party which the Agent shall have required to execute a
Consent and Agreement shall have executed a Consent and Agreement, in each case,
in form and substance satisfactory to the Agent;
(r) all conditions precedent to the advancement of the term loan
under the Related Credit Agreement shall have been met or waived to the
satisfaction of the Lenders;
(s) the transactions contemplated by the Acquisition Agreement shall
subject only to consummation of this Agreement and the Related Credit Agreement,
have been consummated in accordance with the provisions thereof, and the legal
status and corporate structure of the Borrower shall be satisfactory to the
Agent and its legal counsel;
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(t) the terms and conditions of the Permitted Indebtedness and
Permitted Liens shall be in form and substance acceptable to the Agent; and
(u) the Agent shall have received legal opinions from (i) ▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq., in-house counsel for the Security Parties, (ii) ▇▇▇▇, Scholer,
Fierman, ▇▇▇▇ & Handler, L.L.P., special counsel to the Security Parties and
(iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel to the Agent and the Lenders, in each
case in such form as the Agent may require, as well as such other legal opinions
as the Agent shall have required as to all or any matters under the laws of the
United States of America, the States of New York, New Jersey and Texas covering
the representations and conditions which are the subjects of Sections 2 and 4.1.
4.2 Further Conditions Precedent. The obligation of the Lenders to enter into
this Agreement or to make any Advance available to the Borrower shall be
expressly and separately from the foregoing conditional upon, as of the date
hereof and at each Drawdown Date:
(a) the Agent having received the Drawdown Notice in accordance with
the terms of Section 3.4;
(b) the representations stated in Section 2 (updated mutatis
mutandis to such date) being true and correct as if made on that date;
(c) no Event of Default having occurred and being continuing and no
event having occurred and being continuing which, with the giving of notice or
lapse of time, or both, would constitute such an Event of Default;
(d) the Agent being satisfied that no change in any applicable laws,
regulations, rules or in the interpretation thereof shall have occurred which
make it unlawful for the Borrower or any other of the parties thereto to make
any payment as required under the terms of the Financing Documents or any of
them; and
(e) there having been no material adverse change in the financial
condition of the Security Parties taken as a whole since the date hereof.
4.3 Satisfaction after Drawdown. Without prejudice to any of the terms and
conditions of this Agreement, in the event the Lenders, in their sole
discretion, makes any Advance prior to the satisfaction of all or any of the
conditions precedent set forth in Sections 4.1 and 4.2, the Borrower hereby
covenants and undertakes to satisfy or procure the satisfaction of such
condition or conditions within fourteen (14) days after the relevant Drawdown
Date (or such longer period as the Lenders, in their sole discretion, may
agree).
4.4 Breakfunding Costs. In the event that, on any date specified for the making
of an Advance in any Drawdown Notice, the Lenders shall not be required under
this Agreement to make such advance available under this Agreement, the Borrower
shall
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indemnify and hold the Lenders fully harmless against any losses which the
Lenders or any thereof may sustain as a result of borrowing or agreeing to
borrow funds to meet the drawdown requirement of the Borrower and the
certificate of the relevant Lender(s) shall, absent manifest error, be
conclusive and binding on the Borrower as to the extent of any such losses.
5. REPAYMENT, PREPAYMENT AND REDUCTION OF FACILITIES.
5.1 Repayment of Term Loan. The Borrower shall repay the principal of the Term
Loan in twenty (20) quarterly installments in Dollars in freely available-same
day funds on the Term Loan Payment Dates, the first four (4) installments shall
each be in the principal amount of Two Hundred Fifty Thousand Dollars
($250,000), the next fifteen (15) of which shall be in the principal amount of
Four Hundred Ninety-Two Thousand Nine Hundred Thirty-Seven and 50/100 Dollars
($492,937.50) and twentieth such installment shall be in the amount necessary to
repay the Term Loan in full.
5.2 Revolving Credit Facility. Subject to the provisions of Section 3.3, any
outstanding Revolving Credit Facility Advances (a) may be repaid (together with
any and all actual costs or expenses incurred by any Lender as the result of any
breaking of funding (as certified by the relevant Lender, which certification
shall, absent any manifest error, be conclusive and binding on the Borrower) on
any Banking Day (in Dollars in freely available-same day funds equal to or
exceeding One Hundred Thousand Dollars ($100,000), each such repayment to be in
an integral multiple of One Hundred Thousand Dollars ($100,000)) and (b) must be
repaid (i) on the last date of then prevailing Interest Period in respect of
such Advance, (ii) as required pursuant to Section 5.7 on the Reduction Date and
(iii) on or before the Revolving Credit Facility Termination Date.
5.3 Voluntary Prepayment of Term Loan. The Borrower may prepay any Term Loan
Advance on any Banking Day, in whole or in part, without penalty or premium (in
Dollars in freely available-same day funds equal to or exceeding One Hundred
Thousand Dollars ($100,000), each such repayment to be in an integral multiple
of One Hundred Thousand Dollars ($100,000)), on any Banking Day upon giving the
Agent not less than five (5) Banking Days prior written notice (which notice
shall be irrevocable and shall specify the amount and date of prepayment).
5.4 Mandatory Prepayment of Term Loan. Upon the sale, disposition or Total Loss
of any Vessel or any other asset (having a fair market value equal or exceeding
One Hundred Thousand Dollars ($100,000) directly or indirectly owned by the
Borrower, the Borrower shall prepay the Term Loan, in part and without penalty,
in an amount equal to the proceeds of the sale, disposition or insurance net of
taxes payable as a result of any such sale or disposition.
5.5 Prepay Term Loans Pro Rata. Any prepayment made hereunder (including,
without limitation, those made pursuant to Sections 5.3 and 5.4, but excluding a
prepayment under Sections 5.7 and 9.3) or under the Related Credit Agreement
shall be applied against the Term Loan and the Related Term Loan, pro rata.
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5.6 Application of Prepayments. Any prepayment of the Term Loan made hereunder
(including, without limitation, those made pursuant to Sections 5.3, 5.4, 5.7
and 9.3), shall be subject to the condition that:
(a) in the case of Term Loan Advances, any partial prepayment made
shall be applied in or towards satisfaction of the repayment installments of the
Term Loan in inverse order of maturity;
(b) in the case of Term Loan Advances and an amount prepaid pursuant
to Section 5.7, any amounts prepaid shall not be available for re-borrowing; and
(c) on the date of prepayment all accrued interest to the date of
such prepayment shall be paid in full with respect to the portion of the
principal being prepaid, together with any and all actual costs or expenses
incurred by any Lender as the result of any breaking of funding (as certified by
the relevant Lender, which certification shall, absent any manifest error, be
conclusive and binding on the Borrower).
5.7 Mandatory Reduction of Revolving Credit Facility. On the Reduction Date: (a)
the maximum principal amount of Advances which may be outstanding shall be
reduced to One Million Dollars ($1,000,000); and (b) the Borrower shall
immediately repay the Revolving Credit Facility Advances to the extent the
aggregate Revolving Credit Facility Advances outstanding on the Reduction Date
exceeds One Million Dollars ($1,000,000). Upon the reduction of the Revolving
Credit Facility as provided in this Section, each Lender's Commitment to make
Revolving Credit Facility Advances shall be reduced pro rata.
5.8 Voluntary Reduction of Revolving Credit Facility. The Borrower shall have
the right, at any time and from time to time, upon giving to the Agent not less
than five (5) Banking Days prior written notice (which notice shall be
irrevocable) to terminate in whole, or reduce the available unused portion of,
the Revolving Credit Facility; provided, however, that each partial reduction
shall be equal to or shall exceed One Hundred Thousand Dollars ($100,000) and
shall be an integral multiple of One Hundred Thousand Dollars ($100,000). Upon
any reduction of the Revolving Credit Facility as provided in this Section, each
Lender's Commitment to make Revolving Credit Facility Advances shall be reduced
pro rata.
6. INTEREST AND RATE
6.1 Term Loan Applicable Rate and Default Rate. The Term Loan Balance shall bear
interest at the Term Loan Applicable Rate which shall be the rate per annum
which is equal to the aggregate of (a) LIBOR for the applicable Interest Period
(determined in accordance with Section 6.5) plus (b) the then prevailing Margin.
Any principal payment with respect to the Term Loan not paid when due, whether
on a Term Loan Payment Date or by acceleration, shall bear interest thereafter
at a rate per annum of two percent (2.0%)
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over the Term Loan Applicable Rate in effect with respect to such payment at the
time of such default (the "Term Loan Default Rate").
6.2 Revolving Credit Facility Applicable Rate and Default Rate. The Revolving
Credit Facility Balance shall bear interest at the Revolving Credit Facility
Applicable Rate which shall be equal to the aggregate of (a) LIBOR for the
applicable Interest Period (determined in accordance with Section 6.5) plus (b)
the then prevailing Margin plus (c) one quarter of one percent (0.25%) per
annum. Any principal payment with respect to the Revolving Credit Facility not
paid when due, whether by acceleration or otherwise, shall bear interest
thereafter at a rate per annum of two percent (2.0%) over the Revolving Credit
Facility Applicable Rate in effect with respect to such payment at the time of
such default (the "Revolving Credit Facility Default Rate").
6.3 Determination of Applicable Margin. The Margin shall be determined by the
Agent two (2) Banking Days prior to the first day of the relevant Interest
Period. Prior to the day falling two (2) Banking Days after the date on which
the Borrower delivers its first quarterly financial report to the Agent in
accordance with Section 9.1(A)(iv), the Margin shall be equal to one and three
quarters of one percent (1.75--%) per annum. Thereafter, the Margin shall be
based upon the then prevailing ratio of the Borrower's Total Debt to EBITDA, as
determined in accordance with Section 9.1(A)(xvii) as follows:
Applicable Margin Total Debt to EBITDA
2.25% > 3.0x
2.00% <=3.0x but >2.5x
1.75% <=2.5x but >2.0x
1.50% <=2.0x but >=1.0x
1.25% <1.0x
6.4 Determination of LIBOR. LIBOR shall be determined by the Agent two (2)
Banking Days prior to the first day of the relevant Interest Period and together
with any and all actual costs or expenses incurred by any Lender as the result
of any breaking of funding (as certified by the relevant Lender, which
certification shall, absent any manifest error, be conclusive and binding on the
Borrower). The Borrower shall be promptly notified in writing of such
determination of the Term Loan Applicable Rate and the Revolving Credit Facility
Applicable Rate, as the case may be. Absent manifest error, such determination
shall be conclusive and binding upon the Borrower.
6.5 Interest Periods. For purposes of funding any Advance, the Borrower may
select Interest Periods of one (1), two (2), three (3) or six (6) months (or for
such longer periods as the Lenders may, in their sole discretion agree),
provided, however, that (a) at all times the Borrower must select an Interest
Period for a portion of each Advance so that sufficient deposits shall mature on
each Payment Date (and, in the case of Revolving
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Credit Facility Advances, on the Reduction Date so as to comply with the
provisions of Section 5.7) to cover the principal installments due on such dates
and (b) no more than two (2) Interest Periods may be running simultaneously for
the entire Term Loan Balance and no more than three (3) Interest Periods may be
running simultaneously for the entire Revolving Credit Facility Balance. No
Interest Period may extend beyond, in the case of Revolving Credit Facility
Advances, the Revolving Credit Facility Termination Date and, to the extent
necessary to comply with Section 5.7, the Reduction Date and, in the case of
Term Loan Advances, the Final Payment Date. The Borrower shall give the Agent an
Interest Notice specifying the Interest Period selected at least three (3)
Banking Days prior to the end of any then existing Interest Period. If at the
end of any then existing Interest Period the Borrower fails to give an Interest
Notice, the relevant Interest Period shall be three (3) months. The Borrower's
right to select an Interest Period shall be subject to the restriction that no
selection of an Interest Period shall be effective unless the Lenders are
satisfied that the necessary funds will be available to the Lenders for such
period and that no Event of Default or event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default shall have occurred
and be continuing.
6.6 Interest Payments. The Borrower agrees to pay interest on each Advance on
the last day of each Interest Period applicable to such Advance and at such
other times as interest is required to be paid by each Lender on the deposits
acquired thereby to fund the relevant Advance, or any portion thereof, as the
case may be, and, in the event any Interest Period shall extend beyond three (3)
months, three (3) months after the commencement of such Interest Period and each
three (3) month anniversary thereafter until the end of the Interest Period; and
6.7 Payment on Banking Day. If interest would, under Section 6.6, be payable on
a day which is not a Banking Day, it shall then be payable on the next following
Banking Day, unless such next following Banking Day falls in the following month
in which case it shall be payable on the Banking Day immediately preceding the
day on which such interest would otherwise be payable.
6.8 Calculation of Interest. All interest shall accrue and be calculated on the
actual number of days elapsed and on the basis of a three hundred sixty (360)
day year.
7. PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made to the Agent, not later than 11 a.m. New York time (any
payment received after 11 a.m. New York time shall be deemed to have been paid
on the next Banking Day) on the due date of such payment, at its office located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or to such other office of the
Agent as the Agent may direct, without set-off or counterclaim and free from,
clear of, and without deduction for, any Taxes, provided, however, that if the
Borrower shall at any time be compelled by law to withhold or deduct any Taxes
from any amounts payable to the Agent or the Lenders hereunder, then the
Borrower shall pay such additional amounts in Dollars as may be
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necessary in order that the net amounts received after any such withholding or
deduction shall equal the amounts which would have been received if such
withholding or deduction were not required and, in the event any withholding or
deduction is made, whether for Taxes or otherwise, the Borrower shall promptly
send to the Agent and the Lenders such documentary evidence for such withholding
or deduction as may be required from time to time by the Agent or the relevant
Lender, as the case may be.
7.2 Tax Credits. If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrower has paid additional amounts as
aforesaid (and such Lender agrees to use its best efforts to obtain the benefit
of any such credit which may be available to it, provided it has knowledge that
such credit is in fact available to it), then such Lender shall reimburse the
Borrower for the amount of the credit so obtained. Each Lender agrees that in
the event that Taxes are imposed on account of the situs of its loans hereunder,
such Lender, upon acquiring knowledge of such event, shall, if commercially
reasonable, shift such loans on its books to another office of such Lender so as
to avoid the imposition of such Taxes.
8. EVENTS OF DEFAULT
8.1 In the event that any of the following events shall occur and be continuing:
(a) Non-Payment of Principal. Any principal of the Term Loan or the
Revolving Credit Facility is not paid on the due date; or
(b) Non-Payment of Interest or Other Amounts. Any interest on the
Term Loan, the Revolving Credit Facility or any other amount becoming payable to
the Agent or the Lenders under any Financing Document is not paid on the due
date or date of demand (as the case may be), and such default continues
unremedied for a period of five (5) Banking Days; or
(c) Representations. Any representation, warranty or other statement
made by any Security Party in any Financing Document or in any other instrument,
document or other agreement delivered in connection with any thereof proves to
have been untrue or misleading in any material respect as of the date when made
or confirmed; or
(d) Covenants. Any Security Party defaults in the due and punctual
observance or performance of any other term, covenant or agreement contained in
any Financing Document or in any other instrument, document or other agreement
delivered in connection herewith or therewith, or it becomes impossible or
unlawful for any Security Party to fulfill any such term, covenant or agreement
or there occurs any other event which constitutes a default under any Financing
Document, in each case other than an Event of Default referred to elsewhere in
this Section 8.1, and such default, impossibility and/or unlawfulness, in the
reasonable opinion of the Majority Lenders, would be likely to have a material
adverse effect on the rights of the Lenders or the Agent
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under any Financing Document or on the rights of the Lenders or the Agent to
enforce any Financing Document, and continues unremedied or unchanged, as the
case may be, for a period of thirty (30) days; or
(e) Indebtedness. Any Security Party, Marine Car Carriers (MI) or
any wholly owned subsidiary of any such party shall default in the payment when
due (subject to any applicable grace period) of any Indebtedness in an amount in
excess of Two Hundred Fifty Thousand Dollars ($250,000) or such Indebtedness is,
or by reason of such default is subject to being, accelerated or any party
becomes entitled to enforce the security for any such Indebtedness and such
party takes steps to enforce the same, unless such default or enforcement is
being contested in good faith and by appropriate proceedings or other acts and
the Security Party, Marine Car Carriers (MI) or subsidiary, as the case may be,
shall set side on its books adequate reserves with respect thereto; or
(f) Change of Control; Ownership or Management of Other Security
Parties. There is a change of control of any Security Party and the Lenders have
not prior thereto consented in writing to such change. As used herein, "change
of control" means (i) with respect to the Borrower, (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(the "Exchange Act")) is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 promulgated pursuant to the Exchange Act), directly or
indirectly, of more than fifty percent (50%) of the total voting power of the
voting stock of the Borrower or (B) the Board of Directors of the Borrower
ceases to consist of a majority of the existing directors or directors elected
by the existing directors (as used herein, "existing director" means each of the
Directors of the Borrower as of the date immediately following consummation of
the transactions contemplated by the Acquisition Agreement) or (ii), with
respect to any other Security Party, any material change in the beneficial stock
ownership, voting control or senior management of any of the Security Parties;
or
(g) US Citizenship. Any Security Party owning a United States flag
Vessel ceases to be a United States of America citizen within the meaning of
Section 2 of the United States Shipping Act of 1916, as amended, qualified to
operate vessels in the coastwise trade; or
(h) Bankruptcy. Any Security Party or Marine Car Carriers (MI)
commences any proceeding under any reorganization, arrangement or readjustment
of debt, dissolution, winding up, adjustment, composition, bankruptcy or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect ("Proceeding"), or there is commenced against any thereof any Proceeding
and such Proceeding remains undismissed or unstayed for a period of thirty (30)
days or any receiver, trustee, liquidator or sequestrator of, or for, any
thereof or any substantial portion of the property of any thereof is appointed
and is not discharged within a period of thirty (30) days or any thereof by any
act indicates consent to or approval of or acquiescence in any Proceeding or the
appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or of, or for, any substantial portion of its property; or
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(i) Termination of Operations; Sale of Assets. Without the Agent's
prior written consent, any Security Party ceases its operations or sells or
otherwise disposes of all or substantially all of its assets or all or
substantially all of the assets of the any Security Party are seized or
otherwise appropriated; or
(j) Judgments. Any judgment or order is made which would render
ineffective or invalid any Financing Documents; or
(k) Inability to Pay Debts. Any Security Party or Marine Car
Carriers (MI) is unable to pay or admits its inability to pay its debts as they
fall due or a moratorium shall be declared in respect of any material
indebtedness of any Security Party or Marine Car Carriers (MI); or
(l) Change in Financial Position. Any change in the financial
position of the Security Parties (taken as a whole) which, in the reasonable
opinion of the Majority Lenders, shall have a material adverse effect on the
ability of any Security Parties to perform its respective material obligations
under any Financing Document; or
(m) Relevant Contracts. Any of the Relevant Contracts or the MCCMI
Shareholders Agreement is terminated or is materially amended or modified
without the prior written consent of the Majority Lenders, or any party to a
Relevant Contract defaults or ceases to perform under such agreement for any
reason whatsoever and, with regard to any such termination, default or
nonperformance of a Relevant Contract, the relevant Vessel shall not be engaged
in an alternative employment, acceptable to the Lenders, under a contract,
acceptable to the Lenders, within ninety (90) days of such termination, default
or nonperformance; or
(n) Key Management Agreements. Any of the Key Management Agreements
(including any extensions or renewals thereof) is terminated prior to its stated
termination date or is materially amended or modified without the prior written
consent of the Majority Lenders, or any party to a Key Management Agreement
defaults or ceases to perform under such agreement for any reason whatsoever
and, as a result of such default or non-performance, the obligor under such
agreement ceases to pay or be obligated to pay to the relevant Security Party,
as the case may be, amounts payable by such obligor under such agreement; or
(o) Related Credit Agreement; OMI COLUMBIA Loan Documents and
Mortgage Securing OMI Debt. An "Event of Default" (as defined in any of the
Related Credit Agreement, the OMI COLUMBIA Loan Documents or the Mortgage
Securing the OMI Debt) shall have occurred and be continuing
then the Lenders' obligation to make any Advances available shall cease and the
Lenders may, by notice to the Borrower, declare the entire unpaid balance of the
Term Loan, accrued interest, the entire Revolving Credit Facility Balance,
accrued interest, and any other sums payable by the Borrower hereunder and under
any other Financing Document due and payable, whereupon, the same shall
forthwith be due and payable without
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presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; provided that upon the occurrence of an event specified in
subsections (h) or (k) of this Section 8.1, the Notes shall be immediately due
and payable without declaration or other notice to the Borrower. In such event,
the Lenders may proceed to protect and enforce their rights by action at law,
suit in equity or in admiralty or other appropriate proceeding, whether for
specific performance of any covenant contained in any Financing Document, or in
aid of the exercise of any power granted in any thereof, or the Lenders may
proceed to enforce the payment of the Notes or to enforce any other legal or
equitable right of the Lenders, or proceed to take any action authorized or
permitted under the terms of any of the Security Documents or by applicable law
for the collection of all sums due, or so declared due, on the Notes, including,
without limitation, the right to appropriate and hold, or apply (directly, by
way of set-off or otherwise) to the payment of the obligations of the Borrower
to the Lenders or the Agent under any Financing Document (whether or not then
due) all moneys and other amounts of the Borrower then or thereafter in
possession of any Lender or the Agent, the balance of any deposit account
(demand or time, matured or unmatured) of the Borrower then or thereafter with
any Lender or the Agent and every other claim of the Borrower then or thereafter
against any Lender or the Agent.
8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold the
Lenders and the Agent harmless against any loss (excluding any consequential
damages), as well as against any reasonable costs or expenses (including
reasonable legal fees and expenses), which the Lenders or the Agent sustains or
incurs as a consequence of any default in payment of the principal amount of the
Term Loan, the Revolving Credit Facility, interest accrued thereon or any other
amount payable under any Financing Document, including, but not limited to, all
actual losses incurred in liquidating or re-employing fixed deposits made by
third parties or funds acquired to effect or maintain the Term Loan and/or the
Revolving Credit Facility and/or any portion of either thereof. The
certification of each Lender or the Agent of such costs and expenses shall,
absent any manifest error, be conclusive and binding on the Borrower.
8.3 Application of Moneys. Except as otherwise provided in any Security
Document, all moneys received by the Lenders or the Agent under or pursuant to
this Agreement, any Notes, any Guaranty or any of the Security Documents after
the occurrence and continuation of any Event of Default (unless cured to the
satisfaction of the Lenders) shall be applied by the Lenders in the following
manner:
(a) first, in or towards the payment or reimbursement of any
expenses or liabilities incurred by the Lenders or the Agent in connection with
the ascertainment, protection or enforcement of its rights and remedies under
any Financing Documents,
(b) second, in or towards payment of any interest owing on the Term
Loan and the Revolving Credit Facility,
(c) third, in or towards repayment of principal owing in respect of
the Term Loan and the Revolving Credit Facility,
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(d) fourth, in or towards payment of all other sums which may be
owing to the Lenders or the Agent under any Financing Document, and
(e) fifth, the surplus (if any) shall be paid to the Borrower or to
whosoever else may be entitled thereto.
9. COVENANTS
9.1 The Borrower and, by their execution of the consent and agreement and
assignment of account provided below, each of the Guarantors hereby covenants
and undertakes with the Lenders and the Agent that, from the date hereof and so
long as any principal, interest or other moneys are owing in respect of the Term
Loan, the Revolving Credit Facility or are otherwise owing under any Financing
Document:
(A) it will, and will procure that each other Security Party will:
(i) Performance of Agreements. Duly perform and observe, and
procure the observance and performance by all other parties thereto (other than
the Lenders and the Agent) of, the terms of the Financing Documents;
(ii) Notice of Default, Litigation and Adverse Change.
Promptly upon obtaining knowledge thereof, inform the Lenders of the occurrence
of any (a) Event of Default or of any event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default, (b) their
respective litigation or governmental proceeding pending or threatened against
it or against any of the Security Parties or Marine Car Carriers (MI) which
could reasonably be expected to have a material adverse effect on the business,
assets, operations, property or financial condition of any thereof, and (c)
other event or condition which is reasonably likely to have a material adverse
effect on its ability, or the ability of the Security Parties as a group, to
perform their respective obligations under any Financing Document;
(iii) Obtain Consents. Without prejudice to Section 2.1(b) and
this Section 9.1, obtain every consent and do all other acts and things which
may from time to time be necessary or advisable for the continued due
performance of all its and the other Security Parties' respective obligations
under the Financing Documents;
(iv) Financial Information. At the expense of the Borrower,
deliver to the Agent:
(a) as soon as available but not later than ninety (90) days
after the end of each fiscal year of the Borrower, a
complete copy of the 10K report of the Borrower filed
with the United States Securities and Exchange
Commission (including audited annual financial
statements of the Borrower together with a report
thereon by an Acceptable
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Accounting Firm), which shall be prepared by the
Borrower and certified by the chief financial officer of
the Borrower together with a Compliance Certificate;
(b) as soon as available but not later than forty-five (45)
days after the end of each quarter of each fiscal year
of the Borrower, a copy of the 10Q report of the
Borrower filed with the United States Securities and
Exchange Commission which shall be prepared by the
Borrower and certified by the chief financial officer of
the Borrower, together, in each instance, with a
Compliance Certificate of such chief financial officer
in such form as the Lender may reasonably require;
(c) as soon as available, copies of all 8K reports filed by
the Borrower with the United States Securities and
Exchange Commission;
(d) as soon as available but not later than thirty (30) days
after the end of each month of each fiscal year of the
Borrower, unaudited monthly operating statements showing
actual versus budgeted cash flow (itemized for each
Vessel, Management Agreement and Vessel Agreement),
accounts receivable and accounts payable balances and
cash position for the Borrower and its Subsidiaries,
certified to be true and complete by the Chief Financial
Officer of the Borrower; and
(e) such other statements, lists of assets and accounts,
budgets, forecasts, reports and other financial
information with respect to its business as the Agent
may from time to time reasonably request, certified to
be true and complete by the Chief Financial Officer of
the Borrower;
(v) U.S. Citizenship; Qualification to Own Foreign Flag
Vessels. Continue to be, and cause each other Security Party or other Affiliate
of the Borrower owning a United States flag Vessel to continue to be, a United
States citizen within the meaning of Section 2 of the United States Shipping
Act, 1916, as amended (46 U.S.C. ss.802), qualified to own and operate vessels
in the coastwise trade of the United States of America and to cause each other
Security Party or other Affiliate of the Borrower which is the registered owner
of a Vessel registered under a flag other than the United States of America to
continue to be duly qualified under the laws of such flag to be the registered
owner and operator of a Vessel registered under such flag;
(vi) Corporate Existence. Do or cause to be done, and procure
that each Security Party shall do or cause to be done, all things necessary to
preserve and
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keep in full force and effect its corporate existence, and all licenses,
franchises, permits and assets necessary to the conduct of its business;
(vii) Books and Records. Keep, and cause each other Security
Party to keep, proper books of record and account into which full and correct
entries shall be made in accordance with GAAP throughout the Security Period;
(viii) Taxes and Assessments. Pay and discharge, and cause
each other Security Party to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or property
prior to the date upon which penalties attach thereto; provided, however, that
it shall not be required to pay and discharge, or cause to be paid and
discharged, any such tax, assessment, charge or levy so long as (a) the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and it shall set aside on its books adequate reserves with respect thereto
or (b) where such failure to pay or discharge is not reasonably likely to,
individually or in the aggregate, have a material adverse effect on the
business, prospects or financial condition of the Borrower and its Subsidiaries
taken as a whole;
(ix) Inspection. Allow, and cause each other Security Party to
allow, any representative or representatives designated by any Lender, subject
to applicable laws and regulations, to visit and inspect any of its properties,
and, on request, to examine its books of account, records, reports and other
papers and to discuss its affairs, finances and accounts with its officers, all
at such reasonable times and as often as any Lender may reasonably request;
(x) Compliance with Statutes, etc. Do or cause to be done, and
cause each other Security Party to do and cause to be done, all things necessary
to comply with all material laws, and the rules and regulations thereunder,
applicable to the Borrower or such other Security Party, including, without
limitation, those laws, rules and regulations relating to employee benefit plans
and environmental matters;
(xi) Environmental Matters. Promptly upon the occurrence of
any of the following conditions, provide to the Agent a certificate of the chief
executive officer thereof, specifying in detail the nature of such condition and
its proposed response or the response of its Environmental Affiliate: (a) its
receipt or the receipt by any other Security Party or any Environmental
Affiliate of the Borrower or any other Security Party of any written
communication whatsoever that alleges that such person is not in compliance with
any applicable environmental law or environmental approval, if such
noncompliance could reasonably be expected to have a material adverse effect on
the business, assets, operations, property or financial condition of the
Borrower or any other Security Party, (b) knowledge by it, or by any other
Security Party or any Environmental Affiliate of the Borrower or any other
Security Party that there exists any Environmental Claim pending or threatened
against any such person, which could reasonably be expected to have a material
adverse effect on the business, assets or operations, property or financial
condition of the Borrower or any other Security Party, or (c) any release,
emission, discharge or disposal of any material that could form the basis of any
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Environmental Claim against it, any other Security Party or against any
Environmental Affiliate of the Borrower or any other Security Party, if such
Environmental Claim could reasonably be expected to have a material adverse
effect on the business, assets or operations, property or financial condition of
the Borrower or any other Security Party. Upon the written request by the Agent,
it will submit to the Agent at reasonable intervals, a report providing an
update of the status of any issue or claim identified in any notice or
certificate required pursuant to this subsection;
(xii) ERISA. Forthwith upon learning of the occurrence of any
material liability of the any Security Party or any ERISA Affiliate pursuant to
ERISA in connection with the termination of any Plan or withdrawal or partial
withdrawal of any multi-employer plan (as defined in ERISA) or of a failure to
satisfy the minimum funding standards of Section 412 of the Code or Part 3 of
Title I of ERISA by any Plan for which any Security Party or any ERISA Affiliate
is plan administrator (as defined in ERISA), furnish or cause to be furnished to
the Agent written notice thereof;
(xiii) Vessel Management. Cause each of the Vessels to be
managed by the Borrower, by a wholly-owned subsidiary thereof or by third party
manager reasonably acceptable to the Agent and procure that no agreements
providing or governing the management of such vessels shall be amended or
modified without the prior written consent of the Agent unless (in the case of
management agreements other than Key Management Agreements) such amendment or
modification would not, in the reasonable opinion of the Agent, adversely affect
the economic interests of the Borrower or any other Security Party thereunder;
(xiv) Cash. Maintain at all times on a consolidated basis,
readily available Unrestricted Cash or Cash Equivalents of not less than the
greater of (a) Two Million Dollars ($2,000,000) and (b) ten percent (10%) of the
Total Debt of the Borrower (for purposes of determining compliance with this
covenant, Unrestricted Cash or Cash Equivalents held by Marine Car Carriers (MI)
for the benefit of Marine Car Carriers (Del) shall be calculated on the basis of
the Borrower's share of such sums after deduction of any taxes that would be
payable (as of the time of determination) consequent upon the distribution and
repatriation of such sums by Marine Car Carriers (MI) to Marine Car Carriers
(Del));
(xv) Working Capital. Maintain at all times on a consolidated
basis, a positive working capital position (for purposes of determining
compliance with this covenant, Unrestricted Cash or Cash Equivalents held by
Marine Car Carriers (MI) shall be calculated on the basis of the Borrower's
share of such sums after deduction of any taxes that would be payable (as of the
time of determination) consequent upon the distribution and repatriation of such
sums by Marine Car Carriers (MI) to Marine Car Carriers (Del));
(xvi) Debt Service Coverage Ratio. Maintain on a consolidated
basis, a ratio of EBITDA to scheduled payments of principal and interest in
respect of consolidated Indebtedness of not less than, during the period
commencing from the date
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hereof and ending on the second anniversary of the date hereof, 1.25 to 1.0,
and, thereafter, 1.5 to 1.0, such ratio to be determined quarterly based on the
scheduled principal and interest (assuming the then prevailing interest rates
shall remain in effect for the next twelve (12) months) payments payable over
the next twelve (12) month period;
(xvii) Total Debt to EBITDA. Maintain on a consolidated basis,
a ratio of Total Debt to EBITDA of not greater than, (x) during the period
commencing from the date hereof and ending on the first anniversary of the date
hereof, 3.25 to 1.0, (y) during the period commencing from the first anniversary
of the date hereof and ending on the second anniversary of the date hereof, 3.0
to 1.0 and (z) thereafter, 2.5 to1.0;
(xviii) Brokerage Commissions, etc. Indemnify and hold the
Lenders and the Agent harmless from any claim for any brokerage commission, fee,
or compensation from any broker or third party resulting from the transactions
contemplated hereby;
(xix) Deposit Accounts; Assignment. Throughout the Security
Period, maintain, and procure that each Security Party shall maintain its
primary collection and revenue accounts with the Agent and shall procure, and
shall cause each Security Party to procure that, all earnings of any Vessels
shall be paid (without set-off or counterclaim) into such collection accounts.
As security for the obligations of the Borrower hereunder, the Borrower hereby
pledges, assigns and grants the Agent, on behalf of the Lenders, a security
interest in all the Borrowers' right, title and interest in and to the aforesaid
collection and disbursement accounts and consents that if an Event of Default
shall occur and so long as the same shall be continuing, all moneys held in the
said accounts and all moneys thereafter received by the Agent may be applied as
provided in Section 8.3;
(xx) MARINE ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and SAVONETTA. Promptly
upon termination of the respective charter over the MARINE ▇▇▇▇▇, ▇▇▇▇▇▇▇,
CALINA or SAVONETTA, procure that the Guarantor owning such Vessel shall, unless
otherwise agreed by the Agent in writing, grant a United States or Liberian
Mortgage, as the case may be, together with the appropriate Earnings Assignment
and Insurances Assignment over such Vessel in favor of the Agent;
(xxi) Proceeds of Marine Car Carriers (MI). Promptly upon the
direct or indirect acquisition, in the aggregate, by the Borrower, the
Guarantors or any affiliate of any thereof of one hundred percent (100%) of the
equity of Marine Car Carriers (MI) or one hundred percent (100%) of the assets
thereof, grant, or procure the grant, to the Agent of a security interest in the
assets of Marine Car Carriers (MI) in form and substance satisfactory to the
Agent, it being hereby agreed by the Agent and the Lenders that, simultaneous
with the investment of the assets of Marine Car Carriers (MI) into a new joint
venture with a third party not affiliated with the Borrower or the
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Guarantors, such security interest shall be released and replaced with a
negative pledge in form and substance satisfactory to the Agent];
(xxii) Year 2000 Issue. The Borrower shall take, and shall
cause each of the Guarantors to take, all necessary action to complete in all
materials respects by September, 1999, the reprogramming of computer software,
hardware and firmware systems and equipment containing embedded microchips owned
or operated by or for the Borrower and the Guarantors or used or relied upon in
the conduct of their business (including systems and equipment supplied by
others or with which such systems of the Borrower or any of the Guarantors
interface) required as a result of the Year 2000 Issue to permit the proper
functioning of such computer systems and other equipment and the testing of such
systems and equipment, as so reprogrammed. At the request of the Agent, the
Borrower shall provide, and shall cause each of the Guarantors to provide, to
the Agent reasonable assurance of its compliance with the preceding sentence;
(xxiii) ISM Code Matters. (a) Procure that the relevant
Operator will, comply with, and ensure that (i) each Vessel will comply with the
requirements of the ISM Code by not later than July 1, 1998, and (ii) any
newly-acquired Vessel will comply with the requirements of the ISM Code within
three months of its acquisition, including (but not limited to) the maintenance
and renewal of valid certificates pursuant thereto throughout the Security
Period;
(b) Procure that any Operator will, immediately inform the
agent if there is any threatened or actual withdrawal of
its, DOC or the SMC for any Vessel; and
(c) Procure that the relevant Operator will, promptly inform
the Agent upon the issuance (i) to such Operator of a
DOC and (ii) to the relevant Vessel of an SMC; and
(xxiv) OMI COLUMBIA. Procure that promptly upon the
acquisition of ownership of OMI COLUMBIA by OMI Challenger Transport (or any
other Affiliate of the Borrower), such Guarantor shall execute and deliver a
second preferred mortgage and assignments of earnings and insurance in respect
of such Vessel in form and substance satisfactory to the Agent.
(B) The Borrower will not, and will procure that no other Security
Party will, without the prior written consent of the Agent:
(i) Liens. Create, assume or permit to exist, any mortgage,
pledge, lien, charge, encumbrance or any security interest whatsoever upon any
of such party's property or other assets, real or personal, tangible or
intangible, whether now owned or hereafter acquired except:
(a) liens for taxes not yet payable for which adequate
reserves have been maintained;
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(b) the Financing Documents and other liens granted in
connection herewith in favor of the Lenders or the
Agent, as the case may be;
(c) liens, charges and encumbrances against their
respective Vessels except those of the type and amounts
permitted to exist under the terms of the Mortgages;
(d) pledges of certificates of deposit or other cash
collateral securing any Security Party's reimbursement
obligations in connection with letters of credit now or
hereafter issued for the account of such Security Party
in connection with the establishment of the financial
responsibility of the Security Parties under 33 C.F.R.
Part 130 or 46 C.F.R. Part 540, as the case may be, as
the same may be amended or replaced;
(e) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation,
deposits to secure public or statutory obligations,
warehousemen's or other like liens, or deposits to
obtain the release of such liens and deposits to secure
surety, appeal or customs bonds on which any of the
Security Parties is the principal, as to all of the
foregoing, only to the extent arising and continuing in
the ordinary course of business;
(f) liens on assets acquired with Permitted Third Party
Debt and securing only the Permitted Third Party Debt
incurred to acquire such assets;
(g) the Mortgages securing the OMI Debt (and related
assignments of marine insurances for the Vessels subject
to such mortgages);
(h) other liens, charges and encumbrances incidental to
the conduct of the business of each such party, the
ownership of any such party's property and assets and
which do not in the aggregate materially detract from
the value of each such party's property or assets or
materially impair the use thereof in the operation of
its business
(items (a) through (h) are hereinafter collectively referred to as "Permitted
Liens");
(ii) Loans, Advances and Investments. Make any loans or
advances to, or any investments in any Person, firm, corporation, joint venture
or other
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entity (including, without limitation, any loan or advance to any officer,
director, stockholder, employee or customer of any company affiliated with any
Security Party) except for advances and investments in the ordinary course of
its business and loans or advances to any Security Party;
(iii) Indebtedness. Incur any Indebtedness except Permitted
Indebtedness;
(iv) Permitted Third Party Debt. Incur any Permitted Third
Party Debt, unless, in the case of any such Indebtedness other than that
supporting MARAD vessel management contracts:
(a) the Borrower and the Security Parties are in
compliance with their covenants set forth in this
Agreement,
(b) no Event of Default (or any event or condition
which, with the giving of notice or passage of time or
both, would constitute an Event of Default) shall have
occurred or will occur and be continuing before or after
the incurrence of such Permitted Third Party Debt,
(c) the Borrower demonstrates to the satisfaction of the
Agent, in its sole discretion, that the ratio of (1)
projected EBITDA to be generated by the particular asset
to be acquired with such Permitted Third Party Debt to
(2) projected scheduled payments of interest and
principal for such Permitted Third Party Debt shall be
at least 1.0 to 1.0 over the entire term of such
Permitted Third Party Debt and
(d) the Borrower demonstrates to the satisfaction of the
Agent, in its sole discretion, that following the
incurrence of such Permitted Third Party Debt, the
Borrower and the Guarantors shall be in compliance with
the financial covenants set forth in Sections
9.1(A)(xiv), (xv), (xvi) and (xvii) (for purposes of the
calculations required by this clause (z), (1) EBITDA
shall include the projected EBITDA to be generated by
the particular asset to be acquired with such Permitted
Third Party Debt, (2) Total Debt shall include the
Permitted Third Party Debt to be incurred and (3)
scheduled payments of interest and principal on Total
Debt shall include projected scheduled payments of
interest and principal in respect of such Permitted
Third Party Debt;
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(v) Guarantees, etc. Assume, guarantee or (other than in the
ordinary course of its business) endorse or otherwise become or remain liable,
in connection with any obligation of any person, firm, company or other entity
except for guarantees, in connection herewith, in favor of the Lenders or the
Agent or guarantees of Permitted Indebtedness;
(vi) Changes in Business. Change the nature of its business or
engage in any businesses other than domestic and international marine
transportation;
(vii) Use of Corporate Funds. Pay out any funds to any company
or Person except (a) as contemplated by the Acquisition Agreement; (b) in the
ordinary course of business in connection with the management of the business of
the Security Parties, including the operation and/or repair of the Vessels and
other vessels owned, managed or operated by such parties and (c) the servicing
of Permitted Indebtedness provided, however, it shall not prepay any such
Permitted Indebtedness (excluding the Indebtedness hereunder and under the
Related Credit Agreement);
(viii) Issuance of Shares. Permit any subsidiaries to issue or
dispose of any shares of its own capital stock to any Person;
(ix) Sale of Shares. Sell, assign, transfer, pledge or
otherwise convey or dispose of any of the shares of the capital stock of any
Security Parties or Marine Car Carriers (MI);
(x) Sale of Assets. Sell, or otherwise dispose of, any Vessel,
any shares in any subsidiary corporation or any other asset which represents all
or a substantial portion of its assets taken as a whole;
(xi) Capital Expenditures. Make or commit to make any capital
expenditures provided, however, that in no event shall this subsection (xi)
preclude the Borrower or any other Security Party from undertaking necessary
repairs and improvements to any Vessel the cost of which, for accounting
purposes, is treated by the Borrower as a capital expenditure;
(xii) Changes in Offices or Names. Change the location of the
chief executive office of any Security Party, the office of the chief place of
business of any such parties, the office of the Security Parties in which the
records relating to the earnings or insurances of the Vessels are kept unless
the Agent shall have received thirty (30) days prior written notice of such
change;
(xiii) Changes in Management. Make any material changes in the
existing management of any Security Party;
(xiv) Consolidation and Merger. Consolidate with, or merge
into, any corporation or other entity, or merge any corporation or other entity
into it
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unless, in the case of the relevant Security Party, such company shall be the
surviving entity;
(xv) Chartering-in of Vessels. Except for the chartering-in of
oil tankers by OMI Petrolink Corp., a Delaware corporation, in connection with
the operation of its lightering business, charter-in any vessel under a charter
having a term (inclusive of all extensions and renewals) of twelve (12) months
or more;
(xvi) Dividends. (x) Declare or make, and procure that no
other Security Party shall declare or make to any party other than another
Security Party, any distributions to its shareholders, by dividend or otherwise,
or otherwise dispose of any assets to its shareholders- in cash or in any other
manner or (y) enter into, and procure that no other Security Party shall enter
into, any agreement or arrangement (other than this Agreement and the Related
Credit Agreement) which restricts or limits it or such other Security Party from
making any such distributions to its immediate parent; and
(xvii) Loans From Marine Car Carriers (MI). Procure that
Marine Car Carriers (MI) shall not make any loans or advances to the Borrower,
or any subsidiary, officer, director, shareholder or Affiliate thereof.
9.2 Vessel Valuations. At least every twelve (12) months commencing on the day
falling twelve (12) months from the date hereof and in any event upon the
request of the Agent, the Borrower shall obtain, at the Borrower's cost,
valuations of the Vessels, charter-free, in Dollars from two independent
shipbrokers satisfactory to the Agent. In the event the Borrower fails or
refuses to obtain the valuations requested pursuant to this Section 9.2 within
ten (10) days of the Agent's request therefor, the Agent shall be authorized to
obtain such valuations, at the Borrower's cost, from two independent shipbrokers
selected by the Agent, which valuations shall be deemed the equivalent of
valuations duly obtained by the Borrower pursuant to this Section 9.2, but the
Agent's actions in doing so shall not excuse any default of the Borrower under
this Section 9.2. The average of such two (2) valuations shall be the FMV of
each Vessel.
9.3 Asset Maintenance. If at any time the Collateral Vessel Value (together with
the value of any additional collateral theretofore provided under this Section)
falls below one hundred fifty percent (150%) (the "Required Percentage") of an
amount (the "Principal Exposure") equal to the aggregate of (a) the Term Loan
Balance, (b) any Revolving Credit Facility Advances then outstanding, (c) any
undrawn amounts then available under the Revolving Credit Facility, (d) the
Related Indebtedness then outstanding and (e) any amounts then available to be
drawn down pursuant to the Related Credit Agreement, the Borrower shall, within
a period of thirty (30) days following receipt by the Borrower of written notice
from the Agent notifying the Borrower of such shortfall and specifying the
amount thereof (which amount shall, in the absence of manifest error, be deemed
to be conclusive and binding on the Borrower), either (a) deliver to the Lenders
or the Agent as the case may be, such additional collateral, as may be
satisfactory to the Agent in its sole discretion, of sufficient value to restore
compliance with the Required Percentage or (b)(i) prepay such part of the Term
Loan (together with interest thereon and other moneys
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payable in respect of such prepayment pursuant to Section 5.6) or (ii) procure
the prepayment of such part of the Related Term Loan in accordance with the
terms of the Related Credit Agreement as shall result in the restoration of
compliance with the Required Percentages. Any such prepayment of the Term Loan
shall be applied as provided in Section 5.6. For purposes of calculating the
Collateral Vessel Value under this Section 9.3, the value of the OMI COLUMBIA
shall be deemed to be equal to the product of (1) the lightweight tonnage of
such Vessel multiplied by (2) (x) One Hundred Twenty-Five Dollars ($125) or (y)
if such Vessel is hereafter subject to legal restrictions as to the geographic
location where such Vessel may be scrapped, a scrap price, reasonably deemed by
the Agent to reflect a conservative average market scrap price for those
jurisdictions which, in the Agent's reasonable opinion, such Vessel may be
scrapped in a commercially reasonable manner.
9.4 Inspection and Survey Reports. If the Agent shall so request, the Borrower
shall provide the Agent with copies of all internally generated inspection or
survey reports on the Vessels.
10. ASSIGNMENT
This Agreement shall be binding upon, and inure to the benefit of, the
Borrower, the Lenders and the Agent and their respective successors and assigns,
except that the Borrower may not assign any of its rights or obligations
hereunder without the prior written consent of the Majority Lenders. In giving
any consent as aforesaid to any assignment by the Borrower, the Lenders shall be
entitled to impose such conditions as they shall deem advisable. Each Lender
shall be entitled to assign the whole or any part of its rights or obligations
under this Agreement or grant participation(s) in the Term Loan and the
Revolving Credit Facility to any subsidiary, holding company or other affiliate
of such Lender, to any subsidiary or other affiliate company of any thereof or
to any other bank or financial institution, and such Lender shall forthwith give
notice of any such assignment or participation to the Borrower provided, that,
the relevant Lender assigns or participates, as the case may be, to its assignee
or participant, (a) equal proportionate shares of such Lender's interest in both
the Term Loan and the Revolving Credit Facility and (b), simultaneously with its
assignment or participation of a share in the Indebtedness provided hereunder,
an equal proportionate share in the Related Indebtedness in accordance with the
provisions of the Related Credit Agreement and, provided, further, that in the
event of any assignment by any Lender, such assignment (but not any
participation) is to be made pursuant to an Assignment and Assumption Agreement.
The Borrower will take all reasonable actions requested by the Agent, on behalf
of such Lender.
11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
11.1 Illegality. In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof (any
such change or interpretation), a Lender has a good faith reasonable basis to
conclude that it has become unlawful for it to maintain or give effect to its
obligations as contemplated by this
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Agreement, such Lender shall inform the Borrower to that effect, whereafter the
liability of such Lender to make its portion of the Term Loan and/or the
Revolving Credit Facility available shall forthwith cease and the Borrower shall
be required either to repay to such Lender that portion of the outstanding
balance of the Term Loan and/or the Revolving Credit Facility funded by such
Lender immediately or, with respect to the Term Loan, if the relevant Lender so
agrees, to repay such portion of the Term Loan to such Lender on the last day of
any then current Interest Period in accordance with and subject to the
provisions of Section 11.5. In any such event, but without prejudice to the
aforesaid obligations of the Borrower to repay the Term Loan and/or the
Revolving Credit Facility, the Borrower and the relevant Lender shall negotiate
in good faith with a view to agreeing on terms for making such portion of the
Term Loan and/or the Revolving Credit Facility available from another
jurisdiction or otherwise restructuring such portion of the Term Loan and/or the
Revolving Credit Facility on a basis which is not unlawful.
11.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental
or other authority, shall:
(i) subject the Agent or any Lender to any Taxes with respect to
its income from the Term Loan and/or the Revolving Credit
Facility, or any part of either thereof, or
(ii) change the basis of taxation to the Agent or any Lender of
payments of principal or interest or any other payment due or
to become due pursuant to this Agreement (other than a change
in the basis effected by the jurisdiction of organization of
the Agent or such Lender, the jurisdiction of the principal
place of business of the Agent or such Lender, the United
States of America, the State or City of New York or any
governmental subdivision or other taxing authority having
jurisdiction over the Agent or Lender (unless such
jurisdiction is asserted by reason of the activities of any of
the Security Parties) or such other jurisdiction where the
Term Loan and/or the Revolving Credit Facility may be
payable), or
(iii) impose, modify or deem applicable any reserve requirements or
require the making of any special deposits against or in
respect of any assets or liabilities of, deposits with or for
the account of, or loans by, the Lender, or
(iv) impose on the Agent or any Lender any other condition
affecting the Term Loan and/or the Revolving Credit Facility
or any part of either thereof,
and the result of the foregoing is either to increase the cost to such Lender of
making available or maintaining its Commitment or any part of either thereof or
to reduce the
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amount of any payment received by the Agent or such Lender, then and in any such
case if such increase or reduction in the opinion of the Agent or such Lender
materially affects the interests of the Agent or such Lender under or in
connection with this Agreement:
(a) the Agent or such Lender, as the case may be, shall notify the
Borrower of the occurrence of such event, and
(b) the Borrower agrees forthwith upon demand to pay to the Agent
or such Lender such amount as the Agent or such Lender
certifies to be necessary to compensate the Agent or such
Lender for such additional cost or such reduction.
11.3 Nonavailability of Funds. If the Agent shall determine that, by reason of
circumstances affecting the London Interbank Market generally, adequate and
reasonable means do not or will not exist for ascertaining the LIBOR for any
Interest Period, the Agent shall give notice of such determination to the
Borrower. The Borrower and the Agent shall then negotiate in good faith in order
to agree upon a mutually satisfactory interest rate and/or Interest Period to be
substituted for LIBOR which would otherwise have applied under this Agreement.
If the Borrower and Agent are unable to agree upon such a substituted interest
rate and/or Interest Period within thirty (30) days of the giving of such
determination notice, the Agent shall set an interest rate and Interest Period
to take effect from the expiration of the Interest Period in effect at the date
of determination, which rate shall be equal to the aggregate of (a) the cost to
each Lender (as certified by such Lender) of funding the relevant Advance, (b)
the then prevailing Margin and (c) in the case of Revolving Credit Facility
Advances, one quarter of one percent (0.25%). In the event the state of affairs
to which this Section 11.3 refers shall extend beyond the end of the Interest
Period, the foregoing procedure shall continue to apply until circumstances are
such that LIBOR may be determined pursuant to Section 6.
11.4 Agent's Certificate Conclusive. A certificate or determination notice of
the Agent or any Lender as to any of the matters referred to in this Section 11
shall, absent manifest error, be conclusive and binding on the Borrower.
11.5 Compensation for Losses. Where the Term Loan and/or the Revolving Credit
Facility or a portion of either thereof is to be repaid by the Borrower pursuant
to this Section 11, the Borrower agrees simultaneously with such repayment to
pay to the relevant Lender all accrued interest to the date of actual payment on
the amount repaid and all other sums then payable by the Borrower to the
relevant Lender pursuant to this Agreement together with such amounts as may be
certified by the relevant Lender to be necessary to compensate the Lender for
any actual loss, premium or penalties incurred or to be incurred thereby on
account of funds borrowed to make, fund or maintain its Commitment or such
portion of either thereof for the remainder (if any) of the then current
Interest Period or Periods, if any, but otherwise without penalty or premium.
12. CURRENCY INDEMNITY
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12.1 Currency Conversion. If for the purpose of obtaining or enforcing a
judgment in any court in any country it becomes necessary to convert into any
other currency (the "Judgment Currency") an amount due in Dollars under any
Financing Document then the conversion shall be made, in the discretion of the
Agent at the rate of exchange prevailing either on the date of default or on the
day before the day on which the judgment is given or the order for enforcement
is made, as the case may be (the "Conversion Date"), provided that the Agent
shall not be entitled to recover under this clause any amount in the Judgment
Currency which exceeds at the Conversion Date the amount in Dollars due under
any Financing Document.
12.2 Change in Exchange Rate. If there is a change in the rate of exchange
prevailing between the Conversion Date and the date of actual payment of the
amount due, the Borrower shall pay such additional amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the Judgment Currency when converted at the rate of exchange prevailing on the
date of payment will produce the amount then due under any Financing Document in
Dollars; any excess over the amount due received or collected by the Lenders
shall be remitted to the Borrower.
12.3 Additional Debt Due. Any amount due from the Borrower under this Section 12
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of the Financing Documents.
12.4. Rate of Exchange. The term "rate of exchange" in this Section 12 means the
rate at which the Agent in accordance with its normal practices is able on the
relevant date to purchase Dollars with the Judgment Currency and includes any
premium and costs of exchange payable in connection with such purchase.
13. FEES AND EXPENSES
13.1 Commitment Fee. The Borrower will pay a Commitment Fee at a rate, per
annum, equal to forty percent (40%) of the aggregate of (a) the then applicable
Margin and (b) one quarter of one percent (0.25%), accruing from the date
hereof, payable quarterly in arrears from the date hereof and on the Revolving
Credit Facility Termination Date, on the available but undrawn amount of the
Revolving Credit Facility. The Commitment Fee shall accrue from day to day and
be calculated on the actual number of days elapsed and a three hundred sixty
(360) day year.
13.2 Facilities Fee. A Facilities Fee payable to the Lenders on the earlier of
(a) the date on which the Term Loans are repaid or prepaid in full or refinanced
and (b) the second anniversary of the date hereof. The Facilities Fee shall be
equal to the product of (x) Twenty-Four Million Dollars ($24,000,000) and (y),
if such fee is payable on or before the day falling (i) six (6) months after the
date hereof, one quarter of one percent (0.25%), (ii) twelve (12) months after
the date hereof, one half of one percent (0.50%) or (iii) twelve (12) months and
one (1) day after the date hereof, three-quarters of one percent (0.75%).
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13.3 Other Fees. The Borrower shall pay the fees set forth in the fee letter
between the Borrower and the Agent dated the date hereof.
13.4 Expenses. The Borrower agrees, whether or not the transactions hereby
contemplated are consummated, on demand to pay, or reimburse the Lenders and the
Agent for their payment of, the reasonable expenses of the Lenders and the Agent
incident to said transactions (and in connection with any supplements,
amendments, waivers or consents relating thereto or incurred in connection with
the enforcement or defense of any of the rights and remedies of any Lender or
the Agent with respect thereto or in the preservation of the priorities of the
Lenders or the Agent under the documentation executed and delivered in
connection therewith) including, without limitation, all reasonable costs and
expenses of preparation, negotiation, execution and administration of this
Agreement and the documents referred to herein, the reasonable fees and
disbursements of the counsel of the Lenders and the Agent in connection
therewith, as well as the reasonable fees and expenses of any independent
appraisers, surveyors, engineers and other consultants retained by the Lenders
or the Agent for this transaction, all reasonable costs and expenses, if any,
for the enforcement of the Financing Documents and stamp and other similar
taxes, if any, incident to the execution and delivery of the documents
(including, without limitation, the Notes) herein contemplated and to hold the
Lenders and the Agent free and harmless in connection with any liability arising
from the nonpayment of any such stamp or other similar taxes. Such taxes and, if
any, interest and penalties related thereto as may become payable after the date
hereof shall be paid immediately by the Borrower to the relevant Lender or the
Agent, as the case may be, when liability therefor is no longer contested by the
Lenders or the Agent, as the case may be, or reimbursed immediately by the
Borrower to such Lender or the Agent, as the case may be.
14. APPLICABLE LAW, JURISDICTION AND WAIVER
14.1 Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without any reference to the
conflicts of laws principles of such State.
14.2 Jurisdiction. The Borrower hereby irrevocably submits to the jurisdiction
of the courts of the State of New York and of the United States District Court
for the Southern District of New York in any action or proceeding brought
against it by the Agent or any Lender under this Agreement or under any document
delivered hereunder and hereby irrevocably agrees that valid service of summons
or other legal process on it may be effected by serving a copy of the summons
and other legal process in any such action or proceeding on the Borrower by
mailing or delivering the same by hand to the Borrower at the address indicated
for notices in Section 16.2. The service, as herein provided, of such summons or
other legal process in any such action or proceeding shall be deemed personal
service and accepted by the Borrower as such, and shall be legal and binding
upon the Borrower for all the purposes of any such action or proceeding. Final
judgment (a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of any indebtedness of the Borrower to the Lenders
or the Agent) against the
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Borrower in any such legal action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment. The Borrower will
advise the Agent promptly of any change of address for the purpose of service of
process. Notwithstanding anything herein to the contrary, the Lenders or the
Agent may bring any legal action or proceeding in any other appropriate
jurisdiction.
14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
OTHER SECURITY PARTIES, THE AGENT AND THE LENDERS THAT EACH OF THEM HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY TO ANY FINANCING DOCUMENT AGAINST ANY OTHER PARTY TO ANY FINANCING
DOCUMENT ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
ANY FINANCING DOCUMENT.
15. THE AGENT
15.1 (a) Appointment of Agent. Each of the Lenders hereby irrevocably appoints
and authorizes the Agent (which for purposes of this Section 15 shall be deemed
to include the Agent acting in its capacity as security trustee pursuant to
Section 15.1(b)) to take such action as agent on its behalf and to exercise such
powers under the Financing Documents as are delegated to the Agent by the terms
hereof and thereof. Neither the Agent nor any of its directors, officers,
employees or agents shall be liable for any action taken or omitted to be taken
by it or them under the Financing Documents or in connection therewith, except
for its or their own gross negligence or willful misconduct.
(b) Appointment of Security Trustee. Each of the Lenders irrevocably
appoints the Agent as security trustee on their respective behalf with regard to
the (i) security, powers, rights, titles, benefits and interests (both present
and future) constituted by and conferred on the Lenders or any of them or for
the benefit thereof under or pursuant to the Financing Documents (including,
without limitation, the benefit of all covenants, undertakings, representations,
warranties and obligations given, made or undertaken to any Lender in any
Financing Document), (ii) all moneys, property and other assets paid or
transferred to or vested in any Lender or any agent of any Lender or received or
recovered by any Lender or any agent of any Lender pursuant to, or in connection
with, the Financing Documents whether from any Security Party or any other
person and (iii) all money, investments, property and other assets at any time
representing or deriving from any of the foregoing, including all interest,
income and other sums at any time received or receivable by any Lender or any
agent of any Lender in respect of the same (or any part thereof). The Agent
hereby accepts such appointment.
15.2 Distribution of Payments. Whenever any payment is received by the Agent
from any Security Party for the account of the Lenders, or any of them, whether
of principal or interest on the Notes, commissions, fees under Sections 13.1 or
13.2and expenses under Section 13.4, or otherwise, it will thereafter cause to
be distributed on the same day if received before 11 a.m. New York time, or on
the next day if received thereafter, like
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funds relating to such payment ratably to the Lenders according to their
respective Commitments, in each case to be applied according to the terms of
this Agreement.
15.3 Holder of Interest in Note. The Agent may treat each Lender as the holder
of all of the interest of such Lender in the Note, until, in the case of an
assignment, the Agent has received an original Assignment and Assumption
Agreement executed by such Lender and its assignee.
15.4 No Duty to Examine, Etc. The Agent shall not be under a duty to examine or
pass upon the validity, effectiveness or genuineness of any of the Financing
Documents or any instrument, document or communication furnished pursuant to or
in connection with any Financing Document, and the Agent shall, in the absence
of gross negligence, be entitled to assume that the same are valid, effective
and genuine, have been signed or sent by the proper parties and are what they
purport to be.
15.5 Agent as Lender. With respect to that portion of the Term Loan and the
Revolving Credit Facility made available by it, the Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders" shall include
the Agent in its capacity as a Lender. The Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with,
the Security Parties as if it were not the Agent.
15.6 (a) Obligations of Agent. The obligations of the Agent under the Financing
Documents are only those expressly set forth herein and therein.
(b) No Duty to Investigate. The Agent shall not at any time be under any
duty to investigate whether an Event of Default, or an event which with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, has occurred or to investigate the performance of any Financing
Document by any Security Party.
15.7 (a) Discretion of Agent. The Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may be
vested in it by, and with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, the Financing
Documents, unless the Agent shall have been instructed by the Majority Lenders
to exercise such rights or to take or refrain from taking such action; provided,
however, that the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement or
applicable law.
(b) Instructions of Majority Lenders. The Agent shall in all cases be
fully protected in acting or refraining from acting under any Financing Document
in accordance with the instructions of the Majority Lenders, and any action
taken or failure to act pursuant to such instructions shall be binding on all of
the Lenders.
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15.8 Assumption re Event of Default. Unless the Agent has been notified by any
Security Party that an Event of Default, or event which with the giving of
notice or lapse of time, or both, would constitute an Event of Default, has
occurred and is continuing, or has been notified by a Lender that such Lender
considers that an Event of Default or such an event (specifying in detail the
nature thereof) has occurred and is continuing, except as otherwise provided in
Section 15.14 hereof, the Agent shall be entitled to assume that no Event of
Default, or event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred and is continuing. In the
event that the Agent shall have been notified by any Security Party or any
Lender in the manner set forth in the preceding sentence of any Event of Default
or of an event which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, the Agent shall notify the Lenders and shall
take action and assert such rights under the Financing Documents as the Majority
Lenders shall request in writing.
15.9 No Liability of Agent or Lenders. Neither the Agent nor any of the Lenders
shall be under any liability or responsibility whatsoever:
(a) to any Security Party or any other person or entity as a consequence
of any failure or delay in performance by, or any breach by, any other Lenders
or any other person of any of its or their obligations under any Financing
Document;
(b) to any Lender or Lenders, as a consequence of any failure or delay in
performance by, or any breach by, any Security Party of any of its respective
obligations under the Financing Documents; or
(c) to any Lender or Lenders, for any statements, representations or
warranties contained in any Financing Document or any document or instrument
delivered in connection with the transaction hereby contemplated; or for the
validity, effectiveness, enforceability or sufficiency of any Financing Document
or any document or instrument delivered in connection with the transactions
hereby contemplated.
15.10 Indemnification of Agent. The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the Security Parties or any thereof), pro rata
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and expenses incurred in investigating claims
and defending itself against such liabilities) which may be imposed on, incurred
by or asserted against, the Agent in any way relating to or arising out of any
Financing Document, any action taken or omitted by the Agent thereunder or the
preparation, administration, amendment or enforcement of, or waiver of any
provision of, any Financing Document, except that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
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15.11 Consultation with Counsel. The Agent may consult with legal counsel
selected by the Agent and shall not be liable for any action taken, permitted or
omitted by it in good faith in accordance with the advice or opinion of such
counsel.
15.12 Resignation. The Agent may resign at any time by giving sixty (60) days'
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Lenders shall have the right to appoint a successor Agent. If
no successor Agent shall have been so appointed by the Lenders and shall have
accepted such appointment within sixty (60) days after the retiring Agent's
giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank or trust company of
recognized standing. The appointment of any successor Agent shall be subject to
the prior written consent of the Borrower, such consent not be unreasonably
withheld. After any retiring Agent's resignation as Agent hereunder, the
provisions of this Section 15 shall continue in effect for its benefit with
respect to any actions taken or omitted by it while acting as Agent.
15.13 Representations of Lenders. Each Lender represents and warrants to each
other Lender and the Agent that:
(i) In making its decision to enter into this Agreement and to make its
Commitment available hereunder, it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Security Parties, that it has made an independent credit judgment and that it
has not relied upon any statement, representation or warranty by any other
Lender or the Agent; and
(ii) So long as any portion of its Commitment remain outstanding, it will
continue to make its own independent evaluation of the financial condition and
affairs of the Security Parties.
15.14 Notification of Event of Default. The Agent hereby undertakes to notify
promptly the Lenders, and the Lenders hereby undertake to notify promptly the
Agent and the other Lenders, of the existence of any Event of Default which
shall have occurred and be continuing of which the Agent or any Lender has
actual knowledge.
16. NOTICES AND DEMANDS
16.1 Notices in Writing. Every notice or demand under this Agreement shall be in
writing and may be given or made by facsimile.
16.2 Addresses for Notice. Every notice or demand shall be sent as follows:
If to the Borrower:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
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Attn: General Counsel, ▇.▇. ▇▇▇▇▇
If to the Agent (with copies to the Lenders):
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to the Lenders, to such Lender's address and fax number as set forth in
Schedule 1 (with a copy to the Agent).
Any notice sent by facsimile shall be confirmed by letter dispatched as soon as
practicable thereafter.
16.3 Notices Deemed Received. Every notice or demand shall, except so far as
otherwise expressly provided by this Agreement, be deemed to have been received
(provided that it is received prior to 2 p.m. New York time; otherwise it shall
be deemed to have been received on the next following Banking Day), in the case
of a facsimile at the time of dispatch thereof (provided further that if the
date of dispatch is not a Banking Day in the locality of the party to whom such
notice or demand is sent it shall be deemed to have been received on the next
following Banking Day in such locality) and, in the case of a letter, at the
time of receipt thereof.
17. MISCELLANEOUS
17.1 Time of Essence. Time is of the essence of this Agreement but no failure or
delay on the part of the Lenders or the Agent to exercise any power or right
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Lenders or the Agent of any power or right hereunder
preclude any other or further exercise thereof or the exercise of any other
power or right. The remedies provided herein are cumulative and are not
exclusive of any remedies provided by law.
17.2 Unenforceable, etc., Provisions - Effect. In case any one or more of the
provisions contained in any Financing Document would, if given effect, be
invalid, illegal or unenforceable in any respect under any law applicable in any
relevant jurisdiction, said provision shall not be enforceable against the
relevant Security Party, but the validity, legality and enforceability of the
remaining provisions herein or therein contained shall not in any way be
affected or impaired thereby.
17.3 Indemnification. The Borrower and, by its execution and delivery of the
Consent and Agreement set forth below, each of the other Security Parties
jointly and severally agree to indemnify the Lenders, the Agent, their
respective successors and assigns, and their respective officers, directors,
employees, representatives and agents (each an "Indemnitee") from, and hold each
of them harmless against, any and all losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits,
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costs or disbursements of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitee in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party thereto) that may at any time (including, without limitation, at any time
following the repayment of the Term Loan and the Revolving Credit Facility
Advances) be imposed on, asserted against or incurred by, any Indemnitee as a
result of, or arising out of or in any way related to or by reason of, (a) any
violation by any Security Party (or any charterer or other operator of any
Vessel) of any applicable Environmental Law, (b) any Environmental Claim arising
out of the management, use, control, ownership or operation of property or
assets by any Security Party (or, after foreclosure, by the Lenders, the Agent
or their respective successors or assigns after any such foreclosure) and (3)
the breach of any representation, warranty or covenant set forth in Sections 2.1
(p) or (q) or 9.1(A)(xi). If and to the extent that the obligations of the
Security Parties under this Section are unenforceable for any reason, the
Borrower and, by its execution and delivery of the Consent and Agreement set
forth below, each of the other Security Parties jointly and severally agree to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The obligations of the
Security Parties under this Section 17.3 shall survive the termination of this
Agreement and the repayment to the Lender and the Agent of all amounts owing to
each thereof under or in connection herewith.
17.4 References. References herein to Sections and Schedules are to be construed
as references to sections of, and schedules to, this Agreement.
17.5 Further Assurances. The Borrower agrees that if any Financing Document
shall, in the reasonable opinion of the Agent, at any time be deemed by the
Agent for any reason insufficient in whole or in part to carry out the true
intent and spirit hereof or thereof, it will execute or cause to be executed
such other and further assurances and documents as in the opinion of the Agent
may be required in order more effectively to accomplish the purposes of such
Financing Document.
17.6 Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Lenders or the Agent, on the other part, whether written or oral, are superseded
by and merged into this Agreement and the other agreements (the forms of which
are exhibited hereto) to be executed and delivered in connection herewith to
which any Security Party and/or the Lenders or the Agent are parties, which
alone fully and completely express the agreements between the Security Parties,
the Lenders and the Agent.
17.7 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to
an Assignment and Assumption Agreement and cannot be amended other than by
written agreement signed by all such parties.
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17.8 Headings. In this Agreement, Section headings are inserted for convenience
of reference only and shall not be taken into account in the interpretation of
this Agreement.
IN WITNESS whereof, each party hereto has caused this Agreement to
be duly executed by its duly authorized representative on the day and year first
above written.
MARINE TRANSPORT CORPORATION
By:____________________________
Name:
Title:
By Special Authority for
DEN NORSKE BANK ASA
By:____________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
New York Branch
By:____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
New York Branch
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CONSENT AND AGREEMENT
AND ACCOUNT ASSIGNMENT
Each of the undersigned, referred to in the foregoing Term Loan and
Revolving Credit Facility Agreement as the "Guarantors", hereby consents and
agrees to said Agreement and to the documents contemplated thereby and to the
provisions contained therein relating to conditions to be fulfilled and
obligations to be performed by the undersigned pursuant to or in connection with
said Agreement and particularly agree to be bound by the representations,
warranties and covenants relating to the undersigned contained in Sections 2 and
9 of said Agreement to the same extent as if the undersigned were a party to
said Agreement.
In particular, but without limitation of the foregoing, each of the
undersigned hereby covenants and agrees to maintain its primary collection and
revenue accounts with the Agent and shall procure that all earnings of any
Vessels shall be paid into such collection accounts. As security for its
obligations under the Financing Documents, each of the undersigned hereby
pledges, assigns and grants the Agent, on behalf of the Lenders, a security
interest in all the undersigned's right, title and interest in and to the
aforesaid collection and disbursement accounts and consents that if an Event of
Default shall occur and so long as the same shall be continuing, all moneys held
in the said accounts and all moneys thereafter received by the Agent may be
applied as provided in Section 8.3 of the Agreement.
MARINE TRANSPORT OSWEGO CORPORATION
MANAGEMENT, INC.
By:_________________________ By:___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
OSWEGO CHEMICAL CARRIERS MARINE BARGE COMPANY
CORPORATION
By:_________________________ By:___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
MARINE CHEMICAL NAVIGATION MARINE NAVIGATION SULPHUR
CORPORATION CARRIERS, INC.
By:_________________________ By:___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
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MARINE SULPHUR SHIPPING MARINE ALASKA, INC.
CORPORATION
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
OMI CHALLENGER TRANSPORT, INC. OMI PETROLINK, CORP.
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
COURIER TRANSPORT, INC. INTREPID SHIP MANAGEMENT INC.
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
PATRIOT TRANSPORT, INC. ROVER TRANSPORT, INC.
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
HARLINK CORP. OMIP, INC.
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
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NUELINK CORP. OMI OFFSHORE MARINE SERVICES
INC.
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary
MARINE TRANSPORT LINES, INC. MARINE CAR CARRIERS, INC. a
Delaware corporation
By:_________________________ By:_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Secretary