EXHIBIT ▇▇.▇▇
LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT (this "Agreement" or "Security
Agreement") dated effective as of December 4, 1998, is made by and between AZURE
INVESTMENTS, INC., a Panama corporation, having its registered office at ▇/▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Ave., ▇▇. ▇▇ & ▇▇ ▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇, Rep. of Panama, and its notice address at c/o New
Commodore Cruise Lines Limited, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and KEYCORP LEASING, A
DIVISION OF KEY CORPORATE CAPITAL INC. and assigns, having an office at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("KCL" or "Lender").
W I T N E S S E T H
1. DEFINITIONS. Unless the context otherwise requires, as used in this
Agreement, the following terms shall have the respective meanings indicated
below and shall be equally applicable to both the singular and the plural forms
thereof. Capitalized terms not otherwise defined herein shall have the meaning
given in the Loan Documents.
(a) "ALTERATION" shall have the meaning specified in Section 8
hereof.
(b) "APPLICABLE LAW" shall mean all applicable federal, state,
local and foreign laws, ordinances, judgments, decrees, injunctions, writs,
rules, regulations, orders, licenses and permits of any Governmental Authority.
(c) "AUTHORIZED SIGNER" shall mean any officer of Borrower,
set forth on an incumbency certificate (in form and substance satisfactory to
KCL) delivered by Borrower to KCL, who is authorized and empowered to execute
the Loan Documents.
(d) "BAREBOAT CHARTER" shall mean the Bareboat Charter dated
July 14, 1995 between Borrower and Bareboat Charterer.
(e) "BAREBOAT CHARTERER" shall mean New Commodore Cruise Lines
Limited.
(f) "COLLATERAL SCHEDULE" shall mean each collateral schedule
now or hereto and made a part hereof, in substantially the form of Schedule
1 hereto.
(g) "COLLATERAL" shall mean the Vessel and any and all
substitutions, replacements or exchanges therefor, and any and all proceeds
(both cash and non-cash) receivable or received from the sale, lease, license,
collection, use, exchange or other disposition of the Collateral, including
insurance proceeds, thereof (including, without limitation, claims of the
Borrower against third parties for Loss or Damage to any such collateral) and
any additional items set forth in the Collateral Schedule.
(h) "CURRENT ASSETS" shall mean the gross book value of all
assets that are expected to be realized in cash or sold or consumed during a
normal operating cycle or within one year, including, without limitation, cash,
cash equivalents, accounts and notes receivable, and inventories, but excluding
prepaid expenses.
(i) "CURRENT LIABILITIES" shall mean all debt and other
obligations that are to be paid by use of Current Assets during a normal
operating cycle or within one year, including, without limitation, deposits
received, advance payments, trade acceptances, accrued expenses, notes payable,
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LOAN AND SECURITY AGREEMENT
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short-term bank loans, current maturities of long term debt and capital leases,
accrued and deferred income taxes, and any reserves against assets.
(j) "DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (1)
the sum of net income before taxes, interest expense, depreciation, amortization
and other non-cash expenses, excluding any extraordinary gains or losses, to (2)
the sum of interest expense, current maturities of long term debt and capital
lease obligations.
(k) "DEFAULT RATE" shall mean an annual interest rate equal to
the lesser of the Prime Rate plus five percent (5%) per annum or the maximum
interest rate permitted by Applicable Law.
(l) "DEFAULT" shall mean any event or condition that, with the
passage of time or the giving of notice, or both, would constitute an Event of
Default.
(m) "EVENT OF DEFAULT" shall have the meaning specified in
Section 18 hereof.
(n) "FEE" shall mean a loan fee equal to one and one-half
percent (1.5%) of the amount advanced by KCL to Borrower.
(o) "FIRST PREFERRED MARINE MORTGAGE" shall mean a preferred
marine mortgage executed by Borrower covering the Vessel, in form and substance
satisfactory to KCL.
(p) "GAAP" shall have the meaning specified in Section 24
hereof.
(q) "GOVERNMENTAL ACTION" shall mean all authorizations,
consents, approvals, waivers, filings and declarations of any Governmental
Authority, including, without limitation, those environmental and operating
permits required for the ownership, lease, use and operation of the Vessel.
(r) "GOVERNMENTAL AUTHORITY" shall mean any foreign, federal,
state, county, municipal or other governmental authority, agency, board or
court.
(s) "GUARANTOR" shall mean Commodore Holdings Limited and any
guarantor of the Secured Obligations.
(t) "GUARANTY" shall mean a guaranty agreement in favor of KCL
executed by Guarantor, in form and substance satisfactory to KCL.
(u) "INSTALLMENT(S)" shall mean the periodic payments due to
repay the Note, and, where the context hereof requires, all such additional
amounts as may from time to time be payable under any provision of the Loan
Documents.
(v) "LEVERAGE RATIO" shall mean the ratio of Total Liabilities
to Tangible Net Worth.
(w) "LIABILITY" shall have the meaning set forth in Section 20
hereof.
(x) "LIEN" shall mean all mortgages, pledges, security
interests, liens, encumbrances, claims or other charges of any kind whatsoever,
except the security interest of KCL created by this Agreement and Permitted
Maritime Liens.
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(y) "LOAN DOCUMENTS" shall mean, collectively, this Agreement,
the Note, the First Preferred Marine Mortgage, and all other documents prepared
by KCL and now or hereafter executed in connection herewith or therewith.
(z) "LOSS OR DAMAGE" shall mean any loss, theft, destruction,
disappearance or any condemnation, EXPROPRIATION or requisition of or damage to
the Vessel or any material part of the Vessel.
(aa) "MATERIAL ADVERSE EFFECT" shall mean a material adverse
effect on the condition, financial or otherwise, or the earnings, position,
properties, business or results of operations of Borrower, Guarantor, and
affiliates of the Guarantor on a consolidated basis, taken as a whole.
(bb) "NOTE" shall mean that certain Promissory Note in the
original principal amount of Ten Million Dollars ($10,000,000) executed in
connection herewith, together with any extensions, modifications, renewals,
refinancings or other restructurings thereof.
(cc) "PERMITTED MARITIME LIENS" shall mean any ▇▇▇▇▇▇'▇ wage
liens (including those of masters) for wages, maintenance and cure, salvage and
general average liens, stevedore's wages, tort liens (including personal injury
and death) and liens for necessaries, all of the foregoing liens which are
either unclaimed or covered by insurance (other than, and after giving effect
to, any deductibles that the Borrower may have on such insurance); PROVIDED,
THAT, once any such lien is claimed, the Borrower shall be permitted to contest
any such lien in good faith by appropriate action promptly initiated and
diligently conducted, if (i) such reserve as shall be required by GAAP shall be
made therefore, or (ii) the Borrower shall have arranged for a bond or insurance
(other than, and after giving effect to, any deductibles that the Borrower may
have on such insurance) related to such lien in a manner that is satisfactory to
KCL in accordance with law and it does not involve any risk of the sale of the
Vessel.
(dd) "PRIME RATE" shall mean as of the date of determination
the prime rate announced in THE WALL STREET JOURNAL, published on such date.
(ee) "SECURED OBLIGATIONS" means all of the following
obligations of Borrower, whether direct or indirect, absolute or contingent,
matured or unmatured, originally contracted with KCL or another party, and now
or hereafter owing to or acquired in any manner partially or totally by KCL or
in which KCL may have acquired a participation, contracted by Borrower alone or
jointly or severally: (1) any and all indebtedness, obligations, liabilities,
contracts, indentures, agreements, warranties, covenants, guaranties,
representations, provisions, terms, and conditions of whatever kind, now
existing or hereafter arising, and however evidenced, that are now or hereafter
owed, incurred or executed by Borrower to, in favor of, or with KCL (including,
without limitation, those as are set forth or contained in, referred to,
evidenced by, or executed with reference to the Loan Documents, any letter of
credit agreements, advance agreements, indemnity agreements, guaranties, lines
of credit, mortgage deeds, security agreements, assignments, pledge agreements,
hypothecation agreements, instruments, and acceptance financing agreements), and
including any partial or total extension, restatement, renewal, amendment, and
substitution thereof or therefor; (2) any and all claims of whatever kind of KCL
against Borrower, now existing of hereafter arising, including, without
limitation, any arising out of or in any way connected with warranties made by
Borrower to KCL in connection with any instrument purchased by KCL; (3) any and
all indebtedness of Borrower under the SWAP Agreement; and (4) any and all of
KCL's fees, costs and expenses related to the foregoing.
(ff) "SPACE CHARTER" shall mean the Space Charter dated
October 30, 1995 between Bareboat Charterer and Space Charterer.
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(gg) "SPACE CHARTERER" shall mean Seawise Foundation, Inc.
(hh) "SUBORDINATION AGREEMENT" shall mean the Subordination
and Non-Disturbance Agreement of even date herewith among KCL, Borrower,
Bareboat Charterer, Time Charterer and Space Charterer.
(ii) "SWAP AGREEMENT" shall mean that certain ISDA Master
Agreement dated as of December 4,1998 (as amended, renewed or otherwise modified
from time to time), in which Borrower and KCL have agreed, among other things,
to provide Borrower with interest rate swap contracts in connection with
interest rate fluctuations in the Note.
(jj) "TANGIBLE NET WORTH" shall mean (1) the gross book value
of all assets, excluding goodwill, patents, trademarks, licenses, trade names,
organizational expenses, treasury stock, unamortized debt discount and expense,
deferred research and developmental costs, and other like intangibles, less (2)
Total Liabilities.
(kk) "TERM" shall mean the term of the Note.
(ll) "TIME CHARTER" shall mean the Time Charter dated October
30, 1995 between Bareboat Charterer and Time Charterer.
(mm) "TIME CHARTERER" shall mean Sea-Comm, Ltd.
(nn) "TOTAL LIABILITIES" shall mean all debt and other
obligations, including, without limitation, Current Liabilities and long term
debt (including, without limitation, term loans, bond issuances, debentures or
notes, capital leases and deferred credit).
(oo) "UCC" shall have the meaning set forth in Section 18
hereof. Where applicable and except as otherwise defined herein, terms used in
this Agreement shall have the meaning assigned to them in the UCC.
(pp) "UPGRADE" shall have the meaning specified in Section 10
hereof.
(qq) "VESSEL" shall mean the vessel UNIVERSE EXPLORER,
Registration No. 14064-84-G registered under the laws of the Republic of Panama.
2. LOAN. Subject to the terms and conditions hereof and in reliance
upon each of Borrower's representations and warranties contained herein, KCL
agrees to lend to Borrower an amount not to exceed $10,000,000 U.S. Time is of
the essence.
(a) Subject to the terms and conditions hereof, KCL shall
advance the Loan to the Borrower on the Funding Date by paying the proceeds
thereof as follows:
(i) To KCL in payment of the Fee;
(ii) To holders of existing liens against the Vessel in
satisfaction of such liens and claims of lien;
(iii) The balance to Borrower; and
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LOAN AND SECURITY AGREEMENT
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(iv) Borrower unconditionally and irrevocably authorized
KCL to make such payments on its behalf.
(b) NOTE. The Loan shall be evidenced by the Note. Each
installment of principal and interest shall be due and payable in accordance
with the terms of the Note.
3. CONDITIONS TO BORROWING. In addition to any other requirements set
forth herein, the obligation of KCL to fund the Loan is subject to the prior
fulfillment (or waiver, in KCL's sole discretion) of each of the following
conditions precedent:
(a) KCL shall have received this Agreement executed by
Borrower;
(b) Borrower shall have executed and delivered to KCL the
Note in the original principal amount of $10,000,000;
(c) Borrower shall have executed and delivered to KCL the
First Preferred Marine Mortgage;
(d) KCL shall have received, in recordable form, an executed
satisfaction of the mortgage on the Vessel held by ▇▇▇▇▇▇ Bank, PLC.
(e) The First Preferred Marine Mortgage shall have been
provisionally registered with the Panama Public Registry and shall be a first
priority maritime lien on the Vessel;
(f) KCL shall have received the Guaranty executed by
Guarantor;
(g) KCL shall have received the Subordination Agreement duly
executed by Bareboat Charterer, Time Charterer and Space Charterer in form and
substance acceptable to KCL;
(h) KCL shall have received the Fee;
(i) Borrower shall have paid KCL's fees and disbursements
("Costs") limited in the aggregate to $50,000;
(j) KCL shall have received the legal opinions of counsel of
Borrower and the Guarantor, in each case in form and substance satisfactory to
KCL; and
(k) KCL shall have received satisfactory evidence with respect
to insurances required to be maintained by Borrower with respect to the Vessel.
4. GRANT OF SECURITY INTEREST IN THE VESSEL. In consideration of one or
more loans, advances, interest rate swap agreements or other financial
accommodations at any time before, at or after the date hereof, made or extended
by KCL to or for the account of the Borrower, directly or indirectly, as
principal, guarantor or otherwise and to secure the prompt payment and
performance in full when due, whether by lapse of time, acceleration or
otherwise, of the Secured Obligations, the Borrower hereby pledges, assigns,
transfers, hypothecates to KCL and grants to KCL a security interest in, and
acknowledges and agrees that this Agreement shall create a continuing security
interest in, all of Borrower's right, title and interest in and to the
Collateral.
The Secured Obligations of the Borrower are absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject to any right of set-off, counterclaim, deduction,
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defense or other right which the Borrower may have for any reason against any
vendor, supplier, manufacturer, KCL or any other party. All obligations of
Borrower hereunder shall survive the expiration, cancellation or other
termination of this Agreement.
5. RESERVED.
6. PAYMENTS. Borrower shall pay the Note on the terms set forth
therein. All Installments shall be payable when due whether or not Borrower has
received any additional notice that such Installments are due. All Installments
shall be paid to KCL at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or as
otherwise directed by KCL in writing.
7. INSPECTION. Borrower shall maintain possession and control of the
Vessel at all times, subject to the Bareboat Charter, the Time Charter and the
Space Charter. KCL shall have the right to inspect the Vessel at any reasonable
time. Borrower will promptly give written notice to KCL of any change in the
identity or flag the Vessel which might require new filings or other action to
assure continued perfection of the security interest of KCL granted hereby.
8. USE: ALTERATIONS. Borrower shall use the Vessel only in the course
of its business for commercial purposes (and shall not permanently discontinue
use of the Vessel), and in compliance with Applicable Law and the requirements
of any applicable insurance policies, and only in the manner for which it was
designed and intended and so as to subject it only to ordinary wear and tear.
Borrower shall comply with all Applicable Law with respect to the Vessel.
Borrower shall immediately notify KCL in writing of any existing, pending or
threatened investigation, inquiry, claim or action by any Governmental Authority
in connection with any Applicable Law or Governmental Action which could
adversely affect the value of the Vessel or the perfection or priority of the
security interest of KCL in the Collateral. Borrower shall not make any material
alterations, additions, modifications or improvements (each, an "Alteration") to
the Vessel without KCL's prior written consent, provided that Borrower, at its
own expense, shall make Alterations as may be required from time to time to meet
the requirements of Applicable Law or Governmental Action. All such Alterations
immediately, and without further act, shall be deemed to constitute the
Collateral and fully be subject to the security interest granted to KCL
hereunder.
9. REPAIRS AND MAINTENANCE. Borrower, at Borrower's own cost and
expense, shall (a) keep the Vessel in good repair, operating condition and
working order and in compliance with the Vessel's classification society's
requirements for a vessel of its class. Any replacement part shall be free and
clear of all Liens except Permitted Maritime Liens and upon installation,
attachment or incorporation in, on or into such Vessel, such replacement part
immediately, and without further act, shall be deemed to constitute the
Collateral and fully be subject to the security interest granted to KCL
hereunder. If KCL repossesses the Vessel pursuant to its rights under this
Agreement and/or the First Preferred Marine Mortgage and at that time, in the
opinion of KCL, the Vessel fails to meet the standards set forth above, Borrower
agrees to pay on demand all costs and expenses incurred in connection with
repairing or restoring the Vessel so as to meet such standards.
10. VESSEL UPGRADES/ATTACHMENTS. In addition to the requirements of
Section 9 hereof, Borrower, at its own expense, may from time to time add or
install upgrades or attachments (each, an "Upgrade") to the Vessel; provided,
that such Upgrades are readily removable without causing material damage to the
Vessel, and do not materially adversely affect the fair market value of the
Vessel. Any such Upgrades shall be owned by Borrower, shall become subject to
the security interest created by this Agreement and shall be kept free and clear
of all Liens so long as attached to the Vessel.
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11. CHARTER AND ASSIGNMENT.
(A) WITHOUT KCL'S PRIOR WRITTEN CONSENT, BORROWER SHALL NOT
(i) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF, THE VESSEL OR
ANY INTEREST THEREIN, OR ASSIGN OR DELEGATE ITS RIGHTS OR OBLIGATIONS UNDER THE
LOAN DOCUMENTS, OR (ii) CHARTER, EXCEPT IN THE ORDINARY COURSE OF BUSINESS, OR
LEND THE VESSEL TO, OR PERMIT THE VESSEL TO BE USED BY, ANYONE OTHER THAN
BORROWER; PROVIDED, HOWEVER, THAT KCL CONSENTS TO USE BY, AND CHARTER TO, THE
BAREBOAT CHARTERER UNDER THE BAREBOAT CHARTER, AND THE TIME CHARTERER UNDER THE
TIME CHARTER, AND THE SPACE CHARTERER UNDER THE SPACE CHARTER.
(B) KCL, at any time with or without notice to Borrower, may
sell, transfer, grant participations in, assign and/or grant a security interest
in any or all of KCL's right, title and interest in and to the Loan Documents,
or in KCL's security interest in the Vessel. In any such event, any such
purchaser, transferee, assignee or secured party shall have and may exercise all
of KCL's rights hereunder or thereunder and BORROWER SHALL NOT ASSERT AGAINST
ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR SECURED PARTY ANY DEFENSE,
COUNTERCLAIM OR OFFSET THAT BORROWER MAY HAVE AGAINST KCL. Borrower agrees that
upon written notice to Borrower of any such sale, transfer, assignment and/or
security interest, Borrower shall acknowledge receipt thereof in writing and
shall comply with the reasonable directions and demands of such purchaser,
transferee, assignee or secured party.
(C) Subject to the foregoing, all covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, KCL and its
successors and assigns and Borrower and its successors and permitted assigns.
12. LOSS OF OR DAMAGE TO VESSEL. In the event of Loss of the Vessel or
loss or material Damage to a material part of the Vessel, Borrower shall
immediately notify KCL of same and, at the option of KCL, as specified in a
notice from KCL to Borrower, Borrower shall within thirty (30) days following
such Loss or Damage: (1) place the Vessel in good condition and repair, in
accordance with the terms hereof; (2) replace such part of the Vessel with a
replacement part in as good condition and repair, and remaining useful life as
the replacement part and with the same or better fair market value as such
replaced part immediately preceding the Loss or Damage (assuming that such
replaced part was in the condition required by this Agreement), which
replacement part shall immediately, and without further act, be deemed to
constitute Collateral and be fully subject to this Agreement as if originally
pledged as Collateral hereunder and shall be free and clear of all Liens except
for Permitted Maritime Liens; or (3) in the event of a loss of the Vessel or
damage to such an extent that makes repair uneconomical, or makes the Vessel
unfit for normal use without repairs that, in the reasonable judgement of KCL,
would not be commercially reasonable to make, pay to KCL all unpaid Installments
and other charges due, together with accrued interest on such amount.
Upon KCL's receipt of the payment required under clause (3) above, KCL
shall release its security interest in the Collateral. If Borrower replaces a
part of the Vessel pursuant to clause (2) above, such replacement shall be
deemed to constitute the Collateral and be fully subject to this Agreement and
the security interest granted to KCL hereunder, as if originally pledged
hereunder. If Borrower fails to either restore or replace the Vessel pursuant to
clauses (1) or (2) above, respectively, Borrower shall make the payment under
clause (3) above.
13. INSURANCE.
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(a) Borrower, at Borrower's own cost and expense, shall
maintain (1) hull and machinery and increased value insurance against all risks
of physical loss or damage to the Vessel in a combined amount not less than 120%
of the outstanding amount due under the Note and (2) protection and indemnity
insurance coverage with an insurer or club reasonably acceptable to KCL.
(b) All insurance policies required hereunder shall (1)
require 30 days' prior written notice to KCL of cancellation or material change
in coverage (any such cancellation or change, as applicable, not being effective
until the thirtieth (30th) day after the giving of such notice); (2) name
"KeyCorp and its subsidiaries and affiliated companies, including KeyCorp
Leasing, a Division of Key Corporate Capital Inc." as loss payee under the hull
and machinery and increased value insurance policies; (3) not require
contributions from other policies held by KCL; (4) waive any right of
subrogation against KCL; (5) in respect of any liability of KCL, except for the
insurers' salvage rights in the event of a Loss or Damage, waive the right of
such insurers to set-off, to counterclaim or to any other deduction, whether by
attachment or otherwise, to the extent of any monies due KCL under such
policies; (6) not require that KCL pay or be liable for any premiums with
respect to such insurance covered thereby; (7) be in full force and effect
throughout any geographical areas at any time traversed by the Vessel; and (8)
contain breach of warranty provisions providing that, in respect of the
interests of KCL in such policies, the insurance shall not be invalidated by any
action or inaction of Borrower or any other person (other than KCL) and shall
insure KCL regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Borrower or by any other person (other
than KCL). Prior to funding the Note, and thereafter not less than 15 days prior
to the expiration dates of the expiring policies theretofore delivered pursuant
to this Section, Borrower shall deliver to KCL duplicate originals of all
policies (or in the case of blanket policies, certificates thereof issued by the
insurers thereunder) for the insurance maintained pursuant to this Section.
(c) Proceeds of insurance in excess of $500,000 with respect
to physical loss or damage to the Vessel shall be applied, at the option of KCL,
to repair or replace the Vessel or to reduce or satisfy (as applicable) the
Secured Obligations.
14. TAXES. Borrower shall pay when due any and all taxes, fees, levies,
imposts, duties, assessments and public and private charges levied or assessed
on or with respect to the Vessel, on the use thereof, or on this Agreement or
any of the other Loan Documents.
15. KCL'S RIGHT TO PERFORM FOR BORROWER. If Borrower fails to perform
any of its obligations contained in the Loan Documents, KCL may (but shall not
be obligated to) itself perform such obligations, and the amount of the
reasonable costs and expenses of KCL incurred in connection with such
performance, together with interest on such amount from the date paid by KCL
until the date repaid by Borrower to KCL, at the Default Rate, shall be payable
by Borrower to KCL upon demand. No such performance by KCL shall be deemed a
waiver of any rights or remedies of KCL, or be deemed to cure the default of
Borrower hereunder. All such sums and amounts so expended by KCL shall be
repayable by the Borrower immediately without notice or demand, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the Default Rate.
16. DELINQUENT PAYMENTS; INTEREST. If Borrower fails to pay any of the
Installments within five (5) business days after the date when the same becomes
due, Borrower shall pay to KCL a late charge equal to five percent (5%) of such
delinquent amount. Such late charge shall be payable by Borrower upon demand by
KCL and shall be deemed part of the Secured Obligations. In no event shall such
late charge exceed the maximum amounts permitted under Applicable Law.
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17. PERSONAL PROPERTY; LIENS; WARRANTY OF TITLE. The Borrower is, and
will continue to be, the sole owner of the Vessel, free from any Lien except
Permitted Maritime Liens, but subject to the rights of the Bareboat Charterer
pursuant to the Bareboat Charter, the Time Charterer pursuant to the Time
Charter and the Space Charterer pursuant to the Space Charter. Borrower shall at
all times keep the Vessel free and clear from all Liens except Permitted
Maritime Liens. Borrower shall (i) give KCL immediate written notice of any Lien
on the Collateral except Permitted Maritime Liens, (ii) promptly, at Borrower's
sole cost and expense, take such action as may be necessary to discharge any
such Lien except Permitted Maritime Liens, and (iii) indemnify and hold KCL, on
an after-tax basis, harmless from and against any loss or damage caused by any
such Lien except Permitted Maritime Liens. Borrower warrants that it has good,
valid and marketable title to the Vessel, and that (i) the security interest in
the Vessel granted to KCL hereunder, when properly perfected by filing, shall
constitute a valid and perfected first priority security interest in the Vessel
and, (ii) the Vessel is not subject to, and Borrower will not grant or permit to
exist, any Liens except Permitted Maritime Liens or claims on or against the
Collateral, whether senior, superior, junior, subordinate or equal to the
security interest granted to KCL hereby, or otherwise.
18. EVENTS OF DEFAULT; REMEDIES
(a) As used herein, the term "Event of Default" shall mean any
of the following events: (1) Borrower fails to pay any Installment within ten
(10) business days after the same becomes due and payable; (2) Borrower breaches
any of its other obligations under any of the Loan Documents and fails to cure
the same within thirty (30) days after written notice thereof, or fails to
diligently undertake to cure any such breach that cannot be cured within 30
days; (3) any dissolution, termination of existence, merger, consolidation,
change in controlling ownership of Borrower or Guarantor where Borrower or
Guarantor, as the case may be, is not the surviving entity, or if Borrower or
Guarantor is a natural person, the death or incompetence of Borrower or
Guarantor; (4) Borrower or any Guarantor fails to pay its debts generally as
they become due or becomes insolvent or makes an assignment for the benefit of
its creditors; (5) a receiver, trustee, conservator or liquidator of Borrower or
any Guarantor or of all or a substantial part of Borrower's or such Guarantor's
assets is appointed with or without the application or consent of Borrower or
such Guarantor, respectively; (6) a petition is filed by or against Borrower or
any Guarantor under any bankruptcy, insolvency or similar legislation, and in
the case of an involuntary petition, such petition is not dismissed within 60
days thereafter; (7) Borrower or any Guarantor materially violates or fails to
perform any provision of either the Loan Documents or any other material loan,
lease or credit agreement or any acquisition or purchase agreement with KCL or
any other party, which violation or failure results in a Material Adverse
Effect; (8) Borrower violates or fails to perform in any material respect any
covenant or representation made by Borrower in the Loan Documents; (9) any
representation or warranty made herein or in any of the Loan Documents,
certificates, financial statements or other statements furnished to KCL (or
KCL's parent, subsidiaries or affiliates) shall prove to be false or misleading
in any material respect as of the date on which the same was made; (10) there is
a Material Adverse Effect; (11) Borrower shall fail to satisfy any final
judgment rendered against the Borrower by any court of competent jurisdiction
where such failure results in a Material Adverse Effect; (12) the liens on the
Vessel created or granted hereby, or intended to be granted or created hereby,
to KCL shall fail to be valid, first priority perfected liens subject to no
prior or equal lien, except Permitted Maritime Liens; (13) Borrower shall be in
default of the Swap Agreement, or (14) an additional Lien other than a Permitted
Maritime Lien attaches to the Vessel or the Vessel becomes subject to imminent
risk of seizure or forfeiture.
(b) (i) Upon the occurrence of an Event of Default, KCL, at
its option, may declare any or all of the Secured Obligations, including,
without limitation, the Note, to be immediately due and payable, without demand
or notice to Borrower or any Guarantor. The obligations and liabilities
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LOAN AND SECURITY AGREEMENT
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accelerated thereby shall bear interest (both before and after any judgment)
until paid in full at the Default Rate. Should there occur a Default and if a
voluntary or involuntary petition (which has not been dismissed within 60 days
after filing) under the United States Bankruptcy Code is filed by or against
Borrower while such Default remains uncured, the Secured Obligations
automatically shall be accelerated and due and payable and interest thereon at
the Default Rate automatically shall apply as of the date of the first
occurrence of the Default, without any notice, demand or action of any type on
the part of KCL (including any action evidencing the acceleration or imposition
of the Default Rate). The fact that KCL has, prior to the filing of the
voluntary or involuntary petition under the United States Bankruptcy Code, acted
in a manner which is inconsistent with the acceleration and imposition of the
Default Rate shall not constitute a waiver of this provision or estop KCL from
asserting or enforcing KCL's rights hereunder.
(ii) Furthermore, upon the occurrence of an Event of Default,
KCL shall have the rights and remedies provided herein, in the other Loan
Documents and by law, the rights and remedies of a secured party under the
Uniform Commercial Code under the laws of the State of New York (the "UCC")
(regardless of whether the UCC is the law of the jurisdiction where the rights
and remedies are asserted and regardless of whether the UCC applies to the
affected Collateral), and further KCL may do any one or more of the following as
KCL in its sole discretion may elect, with or without judicial process or the
aid and assistance of others: (i) prepare for sale and sell or otherwise dispose
of the Vessel, (ii) require the Borrower to make available to KCL at Borrower's
expense the Vessel at any place and time reasonably designated by KCL, (iii)
arrest the Vessel at any port for the purpose of effecting sale or other
disposition thereof, (iv) without demand and without advertisement, notice,
hearing or process of law, all of which the Borrower hereby waives, at any place
and time or times, sell and deliver the Vessel and any of the Collateral held by
or for it at public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon such terms
as KCL deems advisable, in its sole discretion, or (v) charter all or any
portion of the Vessel on such terms and conditions as KCL in its sole discretion
may determine. In addition to all other sums due KCL hereunder, the Borrower
shall pay KCL all reasonable costs and expenses incurred by KCL, including
reasonable attorneys' fees and court costs, in obtaining or liquidating the
Collateral, in enforcing payment of Secured Obligations, or in the prosecution
or defense of any action or proceeding by or against KCL or the Borrower
concerning any matter arising out of or connected with the Loan Documents, the
Collateral or the Secured Obligations, including without limitation any of the
foregoing arising in, arising under or related to a case under the United States
Bankruptcy Code.
(iii) BORROWER'S WAIVERS REGARDING DISPOSITION OF THE VESSEL.
IF AN EVENT OF DEFAULT OCCURS, BORROWER HEREBY WAIVES ANY DEFENSES, RIGHTS,
OFFSETS OR CLAIMS AGAINST KCL ARISING OUT OF THE REPOSSESSION, RETENTION, SALE,
MANNER OR METHOD OF SALE OR DISPOSITION OF ANY COLLATERAL. THE BORROWER AGREES
THAT ANY REQUIREMENT OF REASONABLE NOTICE SHALL BE MET IF SUCH NOTICE IS
PERSONALLY SERVED ON OR MAILED, POSTAGE PREPAID, TO THE BORROWER IN ACCORDANCE
WITH THE NOTICE PROVISIONS HEREOF AT LEAST 10 BUSINESS DAYS BEFORE THE TIME OF
SALE OR OTHER EVENT GIVING RISE TO THE REQUIREMENT OF SUCH NOTICE. KCL SHALL NOT
BE OBLIGATED TO MAKE ANY SALE OR OTHER DISPOSITION OF THE VESSEL REGARDLESS OF
NOTICE HAVING BEEN GIVEN. KCL MAY BE THE PURCHASER AT ANY SUCH SALE. THE
BORROWER HEREBY WAIVES ALL OF ITS RIGHTS OF REDEMPTION FROM ANY SUCH SALE. KCL
MAY POSTPONE OR CAUSE THE POSTPONEMENT OF THE SALE OF ALL OR ANY PORTION OF THE
COLLATERAL BY ANNOUNCEMENT AT THE TIME AND PLACE OF SUCH SALE, AND SUCH SALE
MAY, WITHOUT FURTHER NOTICE, BE MADE AT THE TIME AND PLACE TO WHICH THE SALE WAS
POSTPONED. NONE OF KCL'S RIGHTS OR REMEDIES HEREUNDER ARE INTENDED TO BE
EXCLUSIVE OF, BUT EACH SHALL BE CUMULATIVE AND IN ADDITION TO, ANY
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OTHER RIGHT OR REMEDY REFERRED TO HEREUNDER OR OTHERWISE AVAILABLE TO KCL OR ITS
ASSIGNS AT LAW OR IN EQUITY, AND MAY BE PURSUED SINGLY, SUCCESSIVELY OR
CONCURRENTLY AT THE SOLE DISCRETION OF KCL AND MAY BE EXERCISED AS OFTEN AS
OCCASION THEREFOR SHALL OCCUR. THE FAILURE TO EXERCISE, OR ANY DELAY IN THE
EXERCISE OF, ANY RIGHT OR REMEDY SHALL IN NO EVENT BE CONSTRUED AS A WAIVER,
RELEASE OR EXHAUSTION OF ANY SUCH REMEDIES. NO EXPRESS OR IMPLIED WAIVER BY KCL
OF ANY EVENT OF DEFAULT SHALL CONSTITUTE A WAIVER OF ANY OTHER EVENT OF DEFAULT
OR A WAIVER OF ANY OF KCL'S RIGHTS UPON THE REOCCURRENCE OF ANY SUCH EVENT OF
DEFAULT.
(c) The Borrower hereby authorizes KCL, upon the occurrence
and during the continuation of any Event of Default hereunder, at KCL's option
to adjust, compromise and settle any losses under any insurance afforded, and
the Borrower does hereby irrevocably constitute KCL and each of its designees,
as its attorneys-in-fact, with full power and authority, upon the occurrence and
during the continuation of any Event of Default hereunder, to effect such
adjustment, compromise and/or settlement and to endorse any drafts drawn by an
insurer of the Vessel or any part thereof and to do everything necessary to
carry out such purposes and to receive and receipt for any unearned premiums due
under policies of such insurance; but unless or until KCL elects to adjust,
compromise or settle losses as aforesaid, such insurance proceeds shall be
subject to the lien and security interest of KCL hereunder.
(d) Upon the occurrence, and during the continuance, of an
Event of Default hereunder, any payments in respect of the Secured Obligations
and any proceeds of the Collateral, when received by KCL in cash or its
equivalent, will be applied first to costs of collection and, thereafter, in
reduction of the Secured Obligations in such order and manner as KCL may direct
in its sole discretion, and the Borrower irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
KCL shall have the continuing and exclusive right to apply any and all such
payments and proceeds in KCL's sole discretion, notwithstanding any entry to the
contrary upon any of its books and records. The Borrower shall remain liable to
KCL for any deficiency. Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the Borrower or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.
(e) To the extent that any of the Secured Obligations are now
or hereafter secured by property other than the Collateral, or by a guarantee,
endorsement or property of any other person, then KCL also shall have the right
to proceed against such other property, guarantee or endorsement upon the
occurrence of an Event of Default hereunder, and KCL shall have the right, in
its sole discretion, to determine which rights, liens, security interests or
remedies KCL shall at any time pursue, relinquish, subordinate or modify,
without in any way affecting the Secured Obligations or any of KCL's rights
under this Agreement.
19. NOTICES. All notices and other communications hereunder shall be in
writing and shall be transmitted by hand, overnight courier or certified mail
(return receipt requested), postage prepaid. Such notices and other
communications shall be addressed to the respective party at the address set
forth above or at such other address as any party may from time to time
designate by notice duly given in accordance with this Section. All such notices
and other communications shall be deemed to have been duly given if delivered by
hand, overnight courier or if sent by certified mail, return receipt requested,
to the party to whom such notice is intended to be given, and shall be effective
upon receipt.
20. GENERAL INDEMNIFICATION. Borrower shall pay, and shall indemnify
and hold KCL and its directors, officers, employees, counsel, agents and
advisors harmless on an after-tax basis from and against, any and all
liabilities, causes of action, claims, suits, penalties, damages, losses, costs
or expenses
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LOAN AND SECURITY AGREEMENT
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(including attorneys' fees), obligations, liabilities, demands and judgments,
and Liens, of any nature whatsoever (collectively, a "Liability") arising out of
or in any way related to: (a) the Loan Documents (b) a failure to comply fully
with Applicable Law and (c) Borrower's failure to perform any covenant, or
breach of any representation or warranty under the Loan Documents; provided,
that the foregoing indemnity shall not extend to the Liabilities to the extent
resulting solely from the gross negligence or willful misconduct of KCL.
Borrower shall promptly deliver to KCL (i) copies of any documents received from
the United States Coast Guard or health agency concerning the Vessel or its
operation and (ii) copies of any documents submitted by Borrower or any of its
subsidiaries to the United States Coast Guard or health agency concerning the
Vessel or its operation. Borrower further agrees to indemnify KCL against and
hold it harmless from all present and future stamp, transfer, documentary and
other such taxes, levies, fees, assessments or other charges made by any
jurisdiction by reason of the execution, delivery, performance and enforcement
of the Loan Documents.
21. SEVERABILITY; CAPTIONS. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law. If, however, any provision of this Agreement or any of the Loan
Documents shall be prohibited or unenforceable in any jurisdiction, it shall, as
to such jurisdiction, be deemed modified to conform to the minimum requirements
of such law, or if for any reason it is not deemed so modified, it shall be
ineffective only to the extent of such prohibition or unenforceability without
affecting the remaining provisions hereof, and any such prohibition or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction. Captions are intended for convenience of reference only,
and shall not be construed to define, limit or describe the scope or intent of
any provisions hereof.
22. FINANCIAL AND OTHER DATA. During the Term hereof, Borrower shall
furnish KCL, as soon as available and in any event within 120 days after the
last day of each fiscal year, financial statements of Guarantor (on a
consolidated basis), in each case compiled, reviewed or audited by an
independent certified public accountant of national standing. Borrower shall
also furnish such other financial reports, information or data (including
federal and state income tax returns and quarterly or interim financial
statements compiled or reviewed by an independent certified public accountant of
national standing if required by KCL) as KCL may reasonably request from time to
time.
23. FINANCIAL COVENANTS. On a continuing basis, from the date of this
Agreement until the date on which Borrower's obligations hereunder are fully
paid and performed, Borrower shall cause Guarantor to comply with the following
financial covenants:
(a) TANGIBLE NET WORTH: its Tangible Net Worth shall not be
less than $20,000,000 as of September 30, 1998, $25,000,000 as of September 30,
1999 and thereafter, as measured on a quarterly basis.
(b) LEVERAGE RATIO: its Leverage Ratio shall not exceed 2.35
to 1.00, as of September 30,1998, 1.60 to 1.00 as of September 30, 1999 and
thereafter, as measured on a quarterly basis.
(c) DEBT SERVICE COVERAGE RATIO: its Debt Service Coverage
Ratio shall not be less than 1.50 to 1.00, at September 30, 1998, and 2.00 to
1.00 at September 30, 1999 and thereafter, as measured on a quarterly basis.
(d) Neither Guarantor nor Borrower shall borrow any money or
directly or indirectly, create, incur, assume, guarantee or otherwise become or
remain liable with respect to any indebtedness for borrowed money or advances in
excess of $1,000,000 without the prior written consent
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LOAN AND SECURITY AGREEMENT
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of KCL, other than (1) Borrower's or Guarantor's obligations to KCL and its
affiliates, (2) any indebtedness of Borrower and Guarantor existing on the date
hereof and not required by KCL to be repaid as a condition to the funding of
this Loan, and (3) secured and unsecured debt not to exceed an aggregate
principal amount of $25,000,000, where such debt is not secured by the Vessel.
(e) Any request by the Borrower or Guarantor to KCL for
consent to exceed the $1,000,000 debt restriction described in (d) above, shall
be in writing and delivered to KCL by certified mail, return receipt requested,
addressed to the attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Lender, KCL shall
respond to the request of the Borrower or Guarantor within five (5) business
days and shall not withhold consent to such request provided the Borrower and
Guarantor are in compliance with all loan terms and conditions. KCL's consent or
denial shall be conveyed to the Borrower or Guarantor in writing.
24. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants that: (a) Borrower is a corporation duly organized and validly existing
in good standing under the laws of the state and country of its incorporation;
(b) the execution, delivery and performance of this Agreement and all related
instruments and documents: (1) have been duly authorized by all necessary
corporate action on the part of Borrower, (2) do not require the approval of any
stockholder, partner, trustee, or holder of any obligations of Borrower except
such as have been duly obtained, and (3) do not and will not contravene any law,
governmental rule, regulation or order now binding on Borrower, or the charter
or by-laws of Borrower, or contravene the provisions of, or constitute a default
under, or result in the creation of any lien or encumbrance upon the property of
Borrower under, any indenture, mortgage, contract or other agreement to which
Borrower is a party or by which it or its property is bound; (c) the Loan
Documents, when entered into, will constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with the
terms thereof, (d) there are no pending actions or proceedings to which Borrower
is a party, and there are no other pending or threatened actions or proceedings
of which Borrower has knowledge, before any court, arbitrator or administrative
agency, which, either individually or in the aggregate, would have a Material
Adverse Effect on the financial condition of Borrower or Guarantor, taken as a
whole, or the ability of Borrower to perform its obligations under the Loan
Documents; (e) Borrower is not in default under any obligation for the payment
of borrowed money, for the deferred purchase price of property or for the
payment of any installments under any lease agreement which, either individually
or in the aggregate, would have the same such effect, (f) [reserved]; (g) the
financial statements of Guarantor on a consolidated basis (copies of which have
been furnished to KCL) have been prepared in accordance with generally accepted
accounting principles consistently applied ("GAAP"), and fairly present
Guarantor's financial condition and the results of its operations on a
consolidated basis as of the date of and for the period covered by such
statements, and since the date of such statements there has been no Material
Adverse Effect, (h) [reserved], (i) Borrower does not conduct business under a
trade, assumed or fictitious name; this Agreement creates a valid first
priority security interest in the Vessel securing payment and performance of the
Secured Obligations and all filings and other action necessary to perfect such
security interest have been taken or shall be promptly taken; (k) Borrower has
filed or has caused to have been filed all federal, state and local tax returns
which, to the knowledge of Borrower, are required to be filed, and has paid or
caused to have been paid all taxes as shown on such returns or on any assessment
received by it, to the extent that such taxes have become due, unless and to the
extent only that such taxes, assessments and governmental charges are currently
contested in good faith and by appropriate proceedings by Borrower and adequate
reserves therefor have been established as required under GAAP and, to the
extent Borrower believes it advisable to do so, Borrower has set up reserves
which are believed by Borrower to be adequate for the payment of additional
taxes for years which have not been audited by the respective tax authorities;
(1) [reserved]; and (m) Borrower has conducted a comprehensive review and
assessment of the Borrower's computer applications and made inquiry of the
Borrower's key suppliers, vendors and customers with respect to the "year 2000
problem" (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and based on
that review and inquiry, the Borrower
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LOAN AND SECURITY AGREEMENT
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does not believe the year 2000 problem will result in a Material Adverse Effect,
(n) Borrower is not in violation of any Applicable Law, the violation of which
would have a Material Adverse Effect, and Borrower has obtained any and all
licenses, permits, franchises or other governmental authorizations necessary for
the ownership of its properties and the conduct of its business; (o) Borrower
shall assure that not less than seventy-five percent (75%) of the outstanding
principal balance of the Note shall, at all times, be subject to an interest
rate swap agreement or other interest rate fluctuation protection program, in
either case, reasonably acceptable to KCL; and (p) none of the proceeds of the
loan made by KCL will be used, directly or indirectly, by Borrower for the
purpose of purchasing or carrying, or for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any "margin
stock" within the meaning of Regulation U (12 CFR Part 221), of the Board of
Governors of the Federal Reserve System (herein called "margin stock") or for
any other purpose which might make the transactions contemplated herein a
"purpose credit" within the meaning of Regulation U, or cause this Agreement to
violate any other regulation of the Board of Governors of the Federal Reserve
System or the Securities Exchange Act of 1934 or the Small Business Investment
Act of 1958, as amended, or any rules or regulations promulgated under any of
such statutes.
25. UCC FILINGS. BORROWER SHALL EXECUTE AND DELIVER TO KCL CONCURRENTLY
WITH THE EXECUTION OF THIS AGREEMENT, AND AT ANY TIME FROM TIME TO TIME
THEREAFTER, ALL FINANCING STATEMENTS, AMENDMENTS TO FINANCING STATEMENTS,
CHATTEL MORTGAGES, ASSIGNMENTS, AND ALL OTHER INSTRUMENTS, IN FORM SATISFACTORY
TO KCL, AND TAKE ALL OTHER ACTION AS KCL MAY REASONABLY REQUIRE, TO PERFECT AND
CONTINUE PERFECTED, MAINTAIN THE PRIORITY OF OR PROVIDE NOTICE OF KCL'S SECURITY
IN THE COLLATERAL. BORROWER HEREBY APPOINTS KCL, OR ITS ASSIGNEE, AND ANY OF
KCL'S OR ASSIGNEE'S OFFICERS OR EMPLOYEES AS ITS TRUE AND LAWFUL ATTORNEY IN
FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE AND FILE ON BEHALF OF
BORROWER ALL UCC FINANCING STATEMENTS WHICH IN KCUS SOLE DISCRETION ARE
NECESSARY OR PROPER TO SECURE KCL'S INTEREST IN THE COLLATERAL IN ALL APPLICABLE
JURISDICTIONS. Borrower hereby ratifies, to the extent permitted by law, all
that KCL shall lawfully and in good faith do or cause to be done by reason of
and in compliance with this paragraph. The Borrower further covenants and agrees
that it will not change its legal name, be a party to a merger, consolidation or
other change in structure (in which it is not the surviving entity) or use a
trade name in its business without at least 30 days' prior written notice to
KCL; and shall execute and deliver to KCL (to be filed at Borrower's expense)
all UCC statements as may be required by KCL in connection with such event.
26. MISCELLANEOUS. Time is of the essence with respect to this
Agreement. ANY FAILURE OF KCL TO REQUIRE STRICT PERFORMANCE BY BORROWER OR ANY
WAIVER BY KCL OF ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A CONSENT OR
WAIVER OF ANY PROVISION OF THIS AGREEMENT. None of the Loan Documents may be
amended except by a writing signed by KCL and Borrower. This Agreement will be
binding upon KCL only if executed by a duly authorized officer or representative
of KCL at KCL's principal place of business as set forth above. This Agreement
and all other Loan Documents shall be executed on Borrower's behalf by
Authorized Signers of Borrower. The Borrower hereby waives presentment, notice
of dishonor and protest of all instruments included in or evidencing any Secured
Obligations, and all other notices and demands whatsoever (except as expressly
provided herein). THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK AND
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISION OR RULE
(WHETHER OF THE
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LOAN AND SECURITY AGREEMENT
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STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
27. JURY TRIAL WAIVER. KCL AND BORROWER HEREBY EACH WAIVE THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION OR PROCEEDING TO
WHICH KCL OR BORROWER MAY BE PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY, OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND
VOLUNTARILY BY KCL AND THE BORROWER WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN
ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
28. MORE THAN ONE BORROWER. If more than one person or entity executes
this Agreement, each of the other Loan Documents, and all addenda or other
documents executed in connection herewith or therewith, as "Borrower," the
obligations of "Borrower" contained herein and therein shall be deemed joint and
several and all references to "Borrower" shall apply both individually and
jointly.
29. ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, collectively constitute the entire understanding or agreement between
KCL and Borrower with respect to the financing of the Vessel, and there is no
understanding or agreement, oral or written, which is not set forth herein or
therein. This Agreement shall not be modified except by the written agreement of
KCL and Borrower.
30. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument.
31. JURISDICTION/ACTIONS AND PROCEEDINGS. The provisions of this
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns. Any legal action or
proceeding against Borrower with respect to this Agreement may be brought in
such of the courts of competent jurisdiction of the State of New York in the
City of Albany or in the United States District Court for the Northern District
of New York, as KCL or its successors and assigns may elect, and by execution
and delivery of this Agreement, Borrower irrevocably submits to the nonexclusive
jurisdiction of such courts, and to appellate courts therefrom, and, in the case
of any such legal action or proceeding brought in the above-named New York
courts, Borrower hereby irrevocably consents to the services of process by the
mailing of copies thereof by registered mail, postage prepaid, to Borrower at
its address as provided on the first page hereof, or by any other means
permitted by Applicable Law. If it becomes necessary for the purpose of service
of process out of any such courts, Borrower shall take all such action as may be
required to authorize a special agent to receive, for and on behalf of it,
service of process in any such legal action or proceeding, and shall take all
such action as may be necessary to continue said appointment in full force and
effect so that Borrower will at all times
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LOAN AND SECURITY AGREEMENT
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have an agent for service of process for the above purposes in New York, New
York. To the extent permitted by Applicable Law, a final, unappealable judgment
(a certified copy of which shall be conclusive evidence of the fact and of the
amount of any indebtedness of Borrower to KCL) against Borrower in any such
legal action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on an unsatisfied judgment. To the extent that Borrower
has or hereafter may acquire any immunity from jurisdiction of any of the
above-named courts or from any Panama court or from any legal process therein,
Borrower hereby irrevocably waives such immunity, and Borrower hereby
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, in any legal action or proceeding brought hereunder in any of the
above-named courts or in any Panama court: (i) the defense of sovereign
immunity; (ii) any claim that it is not personally subject to the jurisdiction
of the above-named courts or any Panama court by reason of sovereign immunity or
otherwise; (iii) that it or any of its property is immune from the
above-described legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, or otherwise); (iv) that such
action or proceeding is brought in an inconvenient forum, that venue for the
action or proceeding is improper or that this Agreement or any other document
evidencing the Loan may not be enforced in or by such courts; or (v) any defense
that would hinder or delay the levy, execution or collection of any amount to
which any party hereto is entitled pursuant to a final, unappealable judgment of
any court having jurisdiction. Nothing in these provisions shall limit any right
of KCL to bring actions, suits or proceedings in the courts of any other
jurisdiction.
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LOAN AND SECURITY AGREEMENT
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IN WITNESS WHEREOF, Borrower and Lender have executed this Security
Agreement the date first above written.
LENDER BORROWER:
KEYCORP LEASING, A DIVISION OF KEY AZURE INVESTMENTS, INC.
CORPORATE CAPITAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- -----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Team Leader Title: Attorney-in-fact
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 4th day of December, 1998, before me, a Notary Public in and
for the State of New York, personally appeared ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed this instrument, on oath stated that s/he was authorized to
execute the instrument, and acknowledged it as the Attorney-in-fact of AZURE
INVESTMENTS, INC., a Panama corporation, to be the free and voluntary act and
deed of said corporation for the uses and purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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NOTARY PUBLIC in and for the State of New York,
My appointment expires October 31, 1999
Print Name ▇▇▇▇▇▇ ▇▇▇▇▇
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 4th day of December, 1998, before me, a Notary Public in and
for the State of New York, personally appeared ▇▇▇▇▇ ▇▇▇▇▇, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument, on oath stated that s/he was authorized to execute the
instrument, and acknowledged it as the Assistant Team Leader of KEYCORP LEASING,
A DIVISION OF KEY CORPORATE CAPITAL INC., to be the free and voluntary act and
deed of said corporation for the uses and purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
NOTARY PUBLIC in and for the State of New York,
My appointment expires October 31, 1999
Print Name ▇▇▇▇▇▇ ▇▇▇▇▇
17
COLLATERAL SCHEDULE
Schedule 1
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DESCRIPTION OF COLLATERAL.
FLAG OF VESSEL: Republic of Panama
VESSEL DESCRIPTION
Marine Vessel described as:
NAME UNIVERSE EXPLORE
LENGTH 173.74 meters
BREADTH 25.60 meters
DEPTH 33.94 meters
GROSS TONS Approximately 22,162
NET TONS Approximately (6,648)
NUMBER OF ENGINES TWO
BUILDER INGALS SHIPBUILDING CORPORATION (1958)
REGISTRATION NUMBER ▇▇▇▇▇-▇▇-▇
RADIO CALL LETTERS 3FMF2
and all equipment attached to the Vessel, parts, spare parts,
furnishings, supplies, fixtures, and replacements and proceeds thereof, and all
proceeds of the foregoing, except such items owned by Space Charterer.
18