EXHIBIT 10.21
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SUBSIDIARY GUARANTEE AGREEMENT
Dated as of March 16, 2004
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among
SEABULK INTERNATIONAL, INC.,
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
FORTIS CAPITAL CORP.,
as Agent for the Counterparties to the Swap Agreements
FORTIS CAPITAL CORP., as Counterparty
NIB CAPITAL BANK N.V., as Counterparty
and
HBOS TREASURY SERVICES PLC, as Counterparty
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................................................... 1
Section 1.01. Definitions...................................................................... 1
ARTICLE II AGREEMENT TO GUARANTEE............................................................................... 1
Section 2.01. Obligations Guaranteed........................................................... 1
Section 2.02. Subsidiary Guarantee Obligations of Subsidiary Guarantors Unconditional.......... 2
Section 2.03. Waiver of Notice; Expenses....................................................... 5
Section 2.04. Other Security................................................................... 5
Section 2.05. No Set-off by the Subsidiary Guarantors.......................................... 5
Section 2.06. Joint and Several Obligation..................................................... 5
Section 2.07. Limitation on Liability.......................................................... 7
Section 2.08. Release of Subsidiary Guarantor.................................................. 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SUBSIDIARY GUARANTORS......................................... 7
Section 3.01. Company Status................................................................... 7
Section 3.02. Company Power and Authority...................................................... 8
Section 3.03. No Violation..................................................................... 8
Section 3.04. Governmental Approvals........................................................... 8
Section 3.05. Litigation....................................................................... 8
Section 3.06. No Default....................................................................... 9
Section 3.07. Tax Returns and Payments......................................................... 9
Section 3.08. Compliance with ERISA............................................................ 9
Section 3.09. Compliance with Statutes, etc.................................................... 11
Section 3.10. Investment Company Act........................................................... 11
Section 3.11. Environmental Matters............................................................ 11
Section 3.12. Labor Relations.................................................................. 11
Section 3.13. Patents, Licenses, Franchises and Formulas....................................... 12
Section 3.14. Security Interests............................................................... 12
Section 3.15. Indebtedness..................................................................... 12
Section 3.16. Citizenship...................................................................... 12
Section 3.17. Insurance........................................................................ 12
Section 3.18. Concerning the Vessels........................................................... 13
Section 3.19. Vessel Classification............................................................ 13
ARTICLE IV AFFIRMATIVE COVENANTS OF THE SUBSIDIARY GUARANTORS................................................... 13
Section 4.01. Existence........................................................................ 13
Section 4.02. Payment of Debts................................................................. 13
Section 4.03. Accounts and Records............................................................. 13
Section 4.04. Payment of Taxes and Claims...................................................... 13
Section 4.05. Financing Statements............................................................. 14
Section 4.06. Compliance with Law.............................................................. 14
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.07. Access to Books and Records...................................................... 14
Section 4.08. Notifications.................................................................... 14
Section 4.09. Certificate of No Default........................................................ 14
Section 4.10. Payment of Costs and Expenses.................................................... 15
Section 4.11. Guarantee Collateral Free of Liens............................................... 15
Section 4.12. Notification of Litigation and Adverse Business Development...................... 15
Section 4.13. Performance of Obligations....................................................... 15
Section 4.14. Reimbursement for Expenses....................................................... 15
Section 4.15. Appraisals....................................................................... 15
Section 4.16. Environmental Matters............................................................ 16
Section 4.17. Vessel Operations and Management................................................. 16
Section 4.18. Remittance of Insurance Proceeds................................................. 17
ARTICLE V NEGATIVE COVENANTS OF THE SUBSIDIARY GUARANTORS....................................................... 17
Section 5.01. Liens............................................................................ 17
Section 5.02. Asset Sales...................................................................... 17
Section 5.03. Assignment of Insurances......................................................... 18
Section 5.04. Sale of Notes or Accounts Receivable............................................. 18
Section 5.05. Sale and Leaseback............................................................... 18
Section 5.06. Restricted Payments.............................................................. 18
Section 5.07. Investments...................................................................... 18
Section 5.08. Change in Business............................................................... 19
Section 5.09. Transactions with Affiliates..................................................... 19
Section 5.10. Changes in Offices or Names...................................................... 19
Section 5.11. Changes in Fiscal Year........................................................... 19
Section 5.12. Consolidation, Merger and Sale of Assets......................................... 19
ARTICLE VI EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS................................................. 20
Section 6.01. Events of Default................................................................ 20
Section 6.02. Waiver of Default................................................................ 22
Section 6.03. Remedies......................................................................... 22
Section 6.04. Rights of Set-Off................................................................ 23
Section 6.05. Rights and Remedies Cumulative................................................... 23
Section 6.06. Specific Remedies................................................................ 23
Section 6.07. Restoration of Rights and Remedies............................................... 24
Section 6.08. Cure of Defaults................................................................. 24
ARTICLE VII RELATIONSHIP AMONG THE COUNTERPARTIES............................................................... 25
Section 7.01. Appointment and Authorization.................................................... 25
Section 7.02. Delegation of Duties............................................................. 25
Section 7.03. Liability of Agent............................................................... 25
Section 7.04. Reliance by the Agent............................................................ 25
Section 7.05. Notice of Default................................................................ 26
Section 7.06. Credit Decision.................................................................. 26
Section 7.07. Indemnification.................................................................. 27
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TABLE OF CONTENTS
(continued)
PAGE
Section 7.08. Agent in Individual Capacity..................................................... 27
Section 7.09. Successor Agent.................................................................. 27
Section 7.10. Collateral Matters............................................................... 28
ARTICLE VIII MISCELLANEOUS...................................................................................... 28
Section 8.01. Notices.......................................................................... 28
Section 8.02. Survival of Agreement............................................................ 29
Section 8.03. Governing Law.................................................................... 29
Section 8.04. Modification of Agreement........................................................ 29
Section 8.05. Costs and Expenses............................................................... 30
Section 8.06. Waivers.......................................................................... 30
Section 8.07. Indemnification.................................................................. 30
Section 8.08. Separability of Provisions....................................................... 31
Section 8.09. Counterparts..................................................................... 31
Section 8.10. Entire Agreement................................................................. 32
Section 8.11. Headings......................................................................... 32
Section 8.12. Successors and Assigns........................................................... 32
Section 8.13. Gender and Number................................................................ 32
Section 8.14. Exhibits......................................................................... 32
Section 8.15. Notification of Addresses, Lending Offices, Etc.................................. 32
Section 8.16. No Third Parties Benefited....................................................... 32
Section 8.17. Equitable Relief................................................................. 32
Section 8.18. Notice of Claims; Claims Bar..................................................... 32
Section 8.19. Waiver of Punitive Damages....................................................... 33
Section 8.20. Consent to Jurisdiction.......................................................... 33
Section 8.21. Waiver of Jury Trial............................................................. 33
Section 8.22. Conditions Precedent............................................................. 33
Section 8.23. Borrower......................................................................... 34
Section 8.24. Condition Subsequent............................................................. 34
EXHIBIT A Form of Mortgage
EXHIBIT B Form of Certificate Pursuant to Section 4.11(b)
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SUBSIDIARY GUARANTEE AGREEMENT (this "Guarantee Agreement") dated as of
March __, 2004, among Seabulk International, Inc. (the "Borrower"), from each
Subsidiary Guarantor (each a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"), Fortis Capital Corp. ("Fortis") as Agent for the
Counterparties to the Swap Agreements (the "Agent for the Counterparties"),
Fortis (a "Counterparty"), NIB Capital Bank N.V. (a "Counterparty") and HBOS
Treasury Services plc (a "Counterparty" and collectively with Fortis and NIB,
the "Counterparties").
PRELIMINARY STATEMENT
Pursuant to the terms of the Swap Agreements, each of the Counterparties
agreed to provide the Borrower with an interest rate swap to enable the Borrower
to manage its interest rate exposure. As a condition to providing such Swap
Agreements and any other Swap Agreements from time to time outstanding, each of
the Counterparties has requested that the Subsidiary Guarantors, jointly and
severally, guarantee the Obligations of the Borrower under the Swap Agreements
by entering into this Guarantee Agreement and securing the Subsidiary
Guarantors' obligations hereunder by granting to the Agent, on behalf of the
Counterparties, a lien in, to and under the Guarantee Collateral (as defined
herein). In order to induce the Counterparties to make the Swap Agreements to
the Borrower, the Subsidiary Guarantors have agreed to guarantee the Borrower's
Obligations under the Swap Agreements by entering into this Guarantee Agreement
and by granting to the Agent, on behalf of the Counterparties, a lien in, to and
under the Guarantee Collateral.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in
Appendix A.
ARTICLE II
AGREEMENT TO GUARANTEE
Section 2.01. Obligations Guaranteed.
(a) The Subsidiary Guarantors, jointly and severally, hereby
unconditionally guarantee to each of the Agent and the Counterparties (i)
the full and prompt payment of an amount equal to each and all of the
payments and other sums when and as the same shall become due, required to
be paid by the Borrower under each of the Swap Agreements and (ii) the
full and prompt performance and observance by the Borrower of the
obligations, covenants and agreements required to be performed and
observed by the Borrower under each of the Swap Agreements (items (i) and
(ii), the "Subsidiary Guarantee Obligations"). The Subsidiary Guarantors
hereby irrevocably and unconditionally agree that upon any default by the
Borrower in the payment, when due, of any amounts (including amounts in
respect of fees and indemnification owing to the Agent or the
Counterparties) due under the Swap Agreements, the Subsidiary Guarantors
will promptly pay the same within ten (10) days after receipt of written
demand therefor from the Agent or any Counterparty. The Subsidiary
Guarantors further hereby
irrevocably and unconditionally agree that upon any default by the
Borrower in any of its obligations, covenants and agreements required to
be performed and observed by the Borrower under the Swap Agreements, the
Subsidiary Guarantors will effect the observance of such obligations,
covenants and agreements within ten (10) days after receipt of written
demand therefor from the Agent or any Counterparties.
(b) All payments by the Subsidiary Guarantors shall be paid in
the lawful currency of the United States of America. Each and every
default (i) in the payment of any sum required to be paid by the Borrower
under the terms of the Swap Agreements or (ii) in the prompt performance
and observance by the Borrower of all of the obligations, covenants and
agreements required to be performed and observed by the Borrower under the
terms of the Swap Agreements, shall give rise to a separate cause of
action hereunder, and separate suits may be brought hereunder as each
cause of action arises.
(c) The Subsidiary Guarantors further agree that the
Subsidiary Guarantee Obligations constitute an absolute, unconditional,
present and continuing guarantee of performance and payment and not of
collection, and waive any right to require that any resort be had by the
Agent and the Counterparties to (i) any security held by or for the
benefit of the Agent and the Counterparties for payment of the amounts due
under the Swap Agreements, this Guarantee Agreement or the other
Transaction Documents, (ii) the Agent's and Counterparties' right against
any other Person, or (iii) any other right or remedy available to the
Agent and the Counterparties by contract, applicable law or otherwise. The
Subsidiary Guarantee Obligations are direct, unconditional and completely
independent of the obligations of any other Person or entity, and a
separate cause of action or separate causes of action may be brought and
prosecuted against the Subsidiary Guarantors without the necessity of any
other party or previous proceeding with or exhausting any other remedy
against any other Person who might have become liable for the indebtedness
or of realizing upon any security held by or for the benefit of the Agent
and the Counterparties.
(d) The Subsidiary Guarantors shall pay to the Agent and the
Counterparties all reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by the Agent and the
Counterparties upon the occurrence of an Event of Default under any or all
of the Transaction Agreements.
Section 2.02. Subsidiary Guarantee Obligations of Subsidiary
Guarantors Unconditional. The Subsidiary Guarantee Obligations shall be absolute
and unconditional and shall remain in full force and effect until all sums
payable by the Borrower and the Subsidiary Guarantors under the Swap Agreements,
this Guarantee Agreement and the other Transaction Documents have been paid in
full (including, without limitation, Section 2.01 hereof), and, to the extent
permitted by law, such Subsidiary Guarantee Obligations shall not be affected,
modified, released or impaired by any state of facts or the happening from time
to time of any event, including, without limitation, any of the following,
whether or not with notice to or the consent of the Subsidiary Guarantors:
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(a) the invalidity, irregularity, illegality, frustration or
unenforceability of, or any defect in, (i) the Transaction Documents or
(ii) any Guarantee Collateral security given in connection therewith;
(b) any present or future law or order of any government (de jure or
de facto) or of any agency thereof purporting to reduce, amend or
otherwise affect the Swap Agreements or any other obligation of the
Borrower or any other obligor or to vary any terms of payment;
(c) any claim of immunity on behalf of the Borrower or any other
obligor or with respect to any property of the Borrower or any other
obligor;
(d) the waiver, compromise, settlement, release, extension, change,
modification or termination of any or all of the obligations, covenants or
agreements of (i) the Borrower under the Swap Agreements (except by
payment in full of all its Obligations under the Swap Agreements) or (ii)
the Subsidiary Guarantors with respect to the Subsidiary Guarantee
Obligations (except by payment in full of all the Subsidiary Guarantee
Obligations hereunder);
(e) the failure to give notice to the Subsidiary Guarantors of the
occurrence of a Default or an Event of Default hereunder or under the
Transaction Documents;
(f) the transfer, assignment, sublease or mortgaging, or the
purported or attempted transfer, assignment, sublease or mortgaging, of
all or any part of the interest of the Borrower in any of its properties,
or any failure of or defect in the title with respect to the Borrower's
interest in any of its properties;
(g) the release, sale, exchange, surrender or other change in any
Guarantee Collateral security for payment of the Borrower's Obligations;
(h) the extension of the time for payment of any amounts payable on
the Swap Agreements or any part thereof or of the time for performance of
any other obligations, covenants or agreements under or arising out of the
Transaction Documents or the extension or the renewal of any thereof;
(i) the modification or amendment (whether material or otherwise) of
any Subsidiary Guarantee Obligation, covenant or agreement set forth in
the Transaction Documents;
(j) the taking of, or the omission to take, any of the actions
referred to in this Guarantee Agreement or the Transaction Documents;
(k) any failure, omission, delay, or lack on the part of the Agent
or the Counterparties or any other Person to enforce, assert or exercise
any right, power or remedy conferred on the Agent and the Counterparties
or such other Person in this Guarantee Agreement or in any other
Transaction Document;
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(l) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement or composition
with creditors or readjustment of, or other similar proceedings affecting
the Subsidiary Guarantors or any of their assets, or any allegation or
contest of the validity of this Guarantee Agreement or any other
Transaction Document, or the disaffirmance or attempted disaffirmance of
this Guarantee Agreement or any other Transaction Document, in any such
proceedings;
(m) any event or action that would, in the absence of this Section,
result in the release or discharge of the Subsidiary Guarantors from the
performance or observance of any Subsidiary Guarantee Obligation, covenant
or agreement contained in this Guarantee Agreement, other than the
performance thereof;
(n) the default or failure of any Subsidiary Guarantor to fully
perform any of its Subsidiary Guarantee Obligations;
(o) any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of a surety or a guarantor;
(p) the actual or purported assignment of any of the Subsidiary
Guarantee Obligations;
(q) the receipt and acceptance by the Agent or the Counterparties of
notes, checks or other instruments for the payment of money made by the
Subsidiary Guarantors and any extensions and renewals thereof (other than
the payment in full of the entire amount due under the Swap Agreements and
all other sums payable by the Borrower and the Subsidiary Guarantors under
this Guarantee Agreement and the Swap Agreements);
(r) to the extent permitted by law, the release or discharge of the
Subsidiary Guarantors from the performance or observance of any guaranteed
obligation, covenant or agreement contained herein by operation of law;
(s) any release or impairment of the Guarantee Collateral pledged
under this Guarantee Agreement or the Transaction Documents;
(t) the release, substitution or replacement in accordance with the
terms of the Transaction Documents of any property subject thereto or any
redelivery, repossession, surrender or destruction of any such property,
in whole or in part;
(u) any limitation on the liability or obligations of the Borrower
under the Swap Agreements or any other Transaction Document or any
termination, cancellation, frustration, invalidity or unenforceability, in
whole or in part, of the Swap Agreements or any other Transaction
Document, or any term thereof;
(v) the merger or consolidation or any sale, lease or transfer of
any or all of the assets of the Borrower or any Subsidiary Guarantor to
any Person; or
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(w) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing.
Section 2.03. Waiver of Notice; Expenses. The Subsidiary Guarantors
each hereby expressly waive notice from the Agent and the Counterparties of its
acceptance and reliance on the Subsidiary Guarantor's Guarantee or of any action
taken or omitted in reliance hereon. The Subsidiary Guarantors further expressly
waive diligence, presentment, demand for payment, protest, any requirement that
any right or power be exhausted or any action be taken against the Borrower or
against any other obligor under any of the Transaction Documents or against the
Guarantee Collateral or any other collateral security for the Obligations. The
Subsidiary Guarantors jointly and severally agree to pay all costs, fees,
commissions and expenses (including, without limitation, all court costs and
reasonable attorneys' fees) which may be incurred by the Agent or the
Counterparties in enforcing or attempting to enforce the Subsidiary Guarantee
Obligations following any default on the part of any or all of the Subsidiary
Guarantors hereunder, whether the same shall be enforced by suit or otherwise.
Section 2.04. Other Security. The Agent and Counterparties may
pursue their rights and remedies against the Subsidiary Guarantors
notwithstanding (a) any other Guarantee of or security for the Subsidiary
Guarantee Obligations and (b) any action taken or omitted to be taken by the
Agent, the Counterparties or any other Person to enforce any of the rights or
remedies under such other guarantee or with respect to any other security.
Section 2.05. No Set-off by the Subsidiary Guarantors. No set-off,
abatement, recoupment, counterclaim, reduction or diminution of an obligation,
or any defense of any kind or nature (other than performance by the Subsidiary
Guarantors of the Subsidiary Guarantee Obligations hereunder) which the
Subsidiary Guarantors have or may have with respect to a claim hereunder, shall
be available hereunder to the Subsidiary Guarantors against the Agent or the
Counterparties.
Section 2.06. Joint and Several Obligation. Each of the Subsidiary
Guarantors hereby agrees that it is jointly and severally liable for each of the
Subsidiary Guarantee Obligations. Each of the Subsidiary Guarantors accepts
joint and several liability for all Subsidiary Guarantee Obligations hereunder
in consideration of the financial accommodation to be provided by the
Counterparties to the Borrower under the Swap Agreements, and in turn, the
Borrower to the Subsidiary Guarantors, for the mutual benefit, directly and
indirectly, of each of the Subsidiary Guarantors and in consideration of the
undertakings by each of the Subsidiary Guarantors to accept joint and several
liability for each of their Subsidiary Guarantee Obligations.
Each of the Subsidiary Guarantors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Subsidiary Guarantors with respect to
the payment and performance of all of the Subsidiary Guarantee Obligations, it
being the intention of the parties hereto that all the Subsidiary Guarantee
Obligations shall be the joint and several obligations of each of the Subsidiary
Guarantors without preferences or distinction among them.
If and to the extent that any Subsidiary Guarantor shall fail to make any
payment with respect to any of the Subsidiary Guarantee Obligations as and when
due or to perform any of the Subsidiary Guarantee Obligations in accordance with
the terms thereof, then in each such event,
5
the other Subsidiary Guarantors will make such payment with respect to, or
perform, such Subsidiary Guarantee Obligations.
The obligations of each Subsidiary Guarantor under the provisions of this
Section 2.06 constitute full recourse obligations of such Subsidiary Guarantor,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Guarantee
Agreement or any other Transaction Document against another Subsidiary Guarantor
or any other circumstances whatsoever that under applicable law might constitute
a defense to the joint and several Subsidiary Guarantee Obligations of such
other Subsidiary Guarantor.
Except as otherwise expressly provided herein, each Subsidiary Guarantor
hereby waives notice of acceptance of its joint and several liability, notice of
any and all Subsidiary Guarantee Obligations incurred hereunder or under any
other Transaction Document, notice of the occurrence of any Default or Event of
Default, or of any demand for any payment hereunder or any other Transaction
Document, notice of any action at any time taken or omitted by the Agent or any
Counterparty under or in respect of any of the Subsidiary Guarantee Obligations,
any requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with the Subsidiary Guarantee
Obligations, this Guarantee Agreement or any other Transaction Document. Each
Subsidiary Guarantor hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Subsidiary Guarantee
Obligations, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by the Agent or any Counterparty at any time or
times in respect of any default by any Subsidiary Guarantor in the performance
or satisfaction of any term, covenant, condition or provision hereunder or under
this Guarantee Agreement or any other Transaction Document, any and all other
indulgences whatsoever by the Agent or any Counterparty in respect of any of the
Subsidiary Guarantee Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Subsidiary Guarantee Obligations or the addition, substitution or release,
in whole or in part, of any Subsidiary Guarantor. Without limiting the
generality of the foregoing, each Subsidiary Guarantor assents to any other
action or delay in acting or failure to act on the part of the Agent or any
Counterparty, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder which might, but for the provisions of this
Section 2.06, afford grounds for terminating, discharging or relieving such
Subsidiary Guarantor, in whole or in part, from any of its obligations under
this Section 2.06, it being the intention of each Subsidiary Guarantor that, so
long as any of the Subsidiary Guarantee Obligations remain unsatisfied, the
obligations of such Subsidiary Guarantor shall not be discharged except by
performance and then only to the extent of such performance. The Subsidiary
Guarantee Obligations of each Subsidiary Guarantor shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to the Borrower
or the other Subsidiary Guarantors or any Counterparty. The joint and several
liability of the Subsidiary Guarantors hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of formation of
the Borrower, any Subsidiary Guarantor or any Counterparty.
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The provisions of this Section 2.06 are made for the benefit of the Agent
and each Counterparty and their successors and assigns, and may be enforced by
such party from time to time against any of the Subsidiary Guarantors as often
as occasion therefore may arise and without requirement on the part of the Agent
or any Counterparty first to marshal any of its claims or to exercise any of its
rights against any Subsidiary Guarantor or to exhaust any remedies available to
it against any Subsidiary Guarantor or to resort to any other source or means of
obtaining payment of any of the Subsidiary Guarantee Obligations or to elect any
other remedy. The provisions of this Section 2.06 shall remain in effect until
all the Subsidiary Guarantee Obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Subsidiary Guarantee Obligations, is rescinded or
must otherwise be restored or returned by the Agent or any Counterparty upon the
insolvency, bankruptcy or reorganization of either of the Subsidiary Guarantors,
or otherwise, the provisions of this Section 2.06 will forthwith be reinstated
in effect, as though such payment had not been made.
Section 2.07. Limitation on Liability. Any term or provision of this
Guarantee Agreement or any other Transaction Document to the contrary
notwithstanding, the maximum, aggregate amount of the Obligations guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that
can be hereby guaranteed without rendering this Guarantee Agreement or any other
Transaction Document, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
Section 2.08. Release of Subsidiary Guarantor. So long as no Default
or Event of Default has occurred and is continuing, upon the sale or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor in compliance with the terms of this Guarantee
Agreement, such Subsidiary Guarantor shall be deemed released from all
obligations under this Article II without any further action required on the
part of the Agent or any Counterparty. At the request and sole cost and expense
of such Subsidiary Guarantor, the Agent shall execute and deliver an appropriate
instrument evidencing such release.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SUBSIDIARY GUARANTORS
In order to induce the Agent and the Counterparties to enter into this
Guarantee Agreement and to induce the Counterparties to make the Swap Agreements
available, each Subsidiary Guarantor hereby represents and warrants as of the
date hereof to the Agent and the Counterparties (which representations and
warranties shall survive the execution and delivery of this Guarantee Agreement
and the Transaction Documents) that:
Section 3.01. Company Status. Each Subsidiary Guarantor (i) is duly
organized and validly existing in good standing under the laws of the
jurisdiction of its incorporation or formation, (ii) has the organizational
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualifications,
except where the failure to be so qualified is not reasonably expected to result
in a Material Adverse Change.
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Section 3.02. Company Power and Authority. Each Subsidiary Guarantor
has the requisite power and authority to execute, deliver and perform the terms
and provisions of each of the Transaction Documents to which it is party and has
taken all necessary action to authorize the execution, delivery and performance
by it of each of such Transaction Documents. Each Subsidiary Guarantor has duly
executed and delivered each of the Transaction Documents to which it is party,
and each of such Transaction Documents constitutes the legal, valid and binding
obligation of such Subsidiary Guarantor enforceable in accordance with its
terms, except to the extent that such enforceability may be limited by any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditor's rights and by general principles of equity.
Section 3.03. No Violation. Neither the execution, delivery or
performance by any Subsidiary Guarantor of the Transaction Documents to which it
is a party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any applicable order, writ, injunction or decree of any court or governmental
instrumentality, other than any such contravention that could not reasonably be
expected to result in a Material Adverse Change, (ii) will conflict with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the material properties or assets of the
Subsidiary Guarantors pursuant to the terms of, any indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which any Subsidiary Guarantor is a party or by which
it or any of its property or assets is bound or to which it may be subject, or
(iii) will violate any provision of the Certificate of Incorporation or other
documents of any Subsidiary Guarantor.
Section 3.04. Governmental Approvals. Except (a) as otherwise
disclosed in writing to the Counterparties on or prior to the date hereof, (b)
for filings and recordings in connection with the Security Documents (which
filings shall be made on or before the date hereof with respect to the Guarantee
Collateral delivered as of the Date hereof) and (c) as have been obtained and
are in effect, no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the consummation and
performance by any Subsidiary Guarantor of any Transaction Document to which it
is a party or (ii) the legality, validity, binding effect or enforceability of
any Transaction Document to which it is a party.
Section 3.05. Litigation. Except as disclosed in Schedule 3.05
hereto, there is no action, suit, proceeding or investigation pending or, to the
best knowledge of each Subsidiary Guarantor, threatened, before any court or
administrative agency that might: (i) adversely affect its ability to perform
its obligations under this Guarantee Agreement or any other Transaction Document
to which it is a party, (ii) reasonably be expected to result in any judgment or
liability which would result in a Material Adverse Change or (iii) adversely
affect the enforceability of this Guarantee Agreement or any Transaction
Document.
8
Section 3.06. No Default. No Subsidiary Guarantor is in default (in
any respect that could reasonably be expected to result in a Material Adverse
Change) under any agreement by which it is bound, or is in default in respect of
any financial commitment or obligation.
Section 3.07. Tax Returns and Payments. Each Subsidiary Guarantor
has filed or caused to be filed, with the appropriate taxing authority, all
federal, state, provincial and other returns, statements, forms and reports for
Taxes (the "Returns") required to be filed by or with respect to the income,
properties or operations of the Subsidiary Guarantors except where the failure
to so file or cause to be filed could not reasonably be expected to result in a
Material Adverse Change. The Subsidiary Guarantors have paid all Taxes payable
by them other than (a) Taxes which are not delinquent, (b) Taxes contested in
good faith for which adequate reserves have been established in accordance with
GAAP and (c) foreign Taxes as to which the failure to pay such foreign Taxes
could not reasonably be expected to result in a Material Adverse Change.
Section 3.08. Compliance with ERISA.
(a) Except, in each case, as could not reasonably be expected
to result in a Material Adverse Change or except as disclosed on Schedule
3.08 hereto, (i) each Plan (and each related trust, insurance contract or
fund) is in compliance in all material respects with its terms and with
all applicable laws, including without limitation ERISA and the Code; (ii)
each Plan (and each related trust, if any) which is intended to be
qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it is
qualified and meets the requirements of Sections 401(a) and 501(a) of the
Code and nothing has occurred since the date of such determination letter
that could adversely affect the qualification of such Plan; (iii) the most
recent annual report (Form 5500 Series) with respect to each Plan,
including Schedule B (Actuarial Information) thereto, copies of which have
been filed with the Internal Revenue Service, is complete and correct and
fairly presents the funding status of each such Plan, and since the date
of such report there has been no Material Adverse Change in such funding
status; (iv) no Reportable Event has occurred or is reasonably likely to
occur; (v) no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; (vi) no Plan which
is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the
Code or ERISA, or has applied for or received a waiver of a funding
deficiency or an extension of any amortization period, within the meaning
of Section 412 of the Code or Section 303 or 304 of ERISA; (vii) all
contributions required to be made with respect to a Plan have been or will
be timely made; (viii) none of the Subsidiary Guarantors nor any ERISA
Affiliate have committed any violation or incurred any liability
(including any indirect, contingent or secondary liability) pursuant to
Section 406, 409, 502(i), 502(l), 515 or Title IV of ERISA (other than the
payment of premiums, none of which are overdue) or Section 401(a)(29),
4971 or 4975 of the Code or reasonably expects to incur any such liability
under any of the foregoing sections; (ix) no condition exists which
presents a risk to any of the Subsidiary Guarantors or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; (x) no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan which
is subject to Title IV of ERISA; (xi) none of the Subsidiary Guarantors
nor any ERISA Affiliate have
9
incurred any liability under the Worker Adjustment and Retraining
Notification Act (29 U.S.C. Sections 201-2109) (which remains unpaid);
(xii) no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of
any Plan (other than routine claims for benefits) is pending, expected or
threatened; (xiii) the Subsidiary Guarantors have not received notice that
indicates the existence of potential withdrawal liability under a
Multiemployer Plan (as defined In Section 4001(a)(3) of ERISA); (xiv) each
group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) which covers or has covered employees or former
employees of any Subsidiary Guarantor or any ERISA Affiliate has at all
times been operated in compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code; (xv) no lien
or security interest encumbrance on the assets of any Subsidiary Guarantor
or any ERISA Affiliate that is imposed under the Code or ERISA or is
likely to arise in connection with any Plan; (xvi) the Subsidiary
Guarantors do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as required by
Section 601 of ERISA) or any Plan; (xvii) no Plan has an Unfunded Current
Liability in excess of $1,000,000; (xviii) the accumulated post retirement
benefit obligation (as determined in accordance with Financial Accounting
Standard 106) of any Subsidiary Guarantor and any ERISA Affiliate, to the
extent it could subject any Subsidiary Guarantor to liability, shall not
as of the end of the fiscal year preceding the Date hereof exceed
$1,000,000, and there is no other post-termination benefit obligation for
which any Subsidiary Guarantor could reasonably be expected to incur
liability or be obligated in excess of $1,000,000, and the Subsidiary
Guarantor shall not take any action not required by applicable law that
could reasonably be expected to cause such obligation to increase above
$1,000,000; and (xix) using actuarial assumptions and computation methods
consistent with Part 1 of Subtitle E of Title IV of ERISA, the aggregate
liabilities of the subsidiary Guarantors and their ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of
the most recent fiscal year of such Plan ended prior to the date of this
Guarantee Agreement, would not exceed $100,000.
(b) Except, in each case, as could not reasonably be expected
to result in a Material Adverse Change, (i) each Foreign Pension Plan has
been maintained in compliance in all material respects with its terms and
with the requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities; (ii) all contributions
required to be made with respect to a Foreign Pension Plan have been
timely made; (iii) none the Subsidiary Guarantors have incurred any
obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan; and (iv) the present value of the accrued benefit
liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of any Subsidiary Guarantor's most recently ended
fiscal year on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
10
Section 3.09. Compliance with Statutes, etc. The Subsidiary
Guarantors are in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its businesses and the
ownership of its property, except such noncompliance as could not (in the event
such noncompliance were asserted by any Person through appropriate action),
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change.
Section 3.10. Investment Company Act. None of the Subsidiary
Guarantors are an "investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 3.11. Environmental Matters.
(a) To the actual knowledge of each Responsible Officer of
each Subsidiary Guarantor who executes any Transaction Document on behalf
of any Subsidiary Guarantor and without independent investigation: (i)
except as disclosed in Schedule 3.11(a), the Subsidiary Guarantors have
complied with, and on the date this Guarantee Agreement will be in
compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws, (ii) there are no
pending or threatened Environmental Claims against any of the Subsidiary
Guarantors or any Real Property owned or operated by the Subsidiary
Guarantors in excess of $150,000, (iii) there are no facts, circumstances,
conditions or occurrences with respect to the business or operations of
the Subsidiary Guarantors or any Real Property at any time owned or
operated by any Subsidiary Guarantor that could reasonably be expected to
form the basis of an Environmental Claim against any Subsidiary Guarantor
any such Real Property in excess of $150,000, or to cause any such
currently owned Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property by any
Subsidiary Guarantor under any applicable Environmental Law.
(b) To the actual knowledge of each Responsible Officer of
each Subsidiary Guarantor who executes any Transaction Document on behalf
of any Subsidiary Guarantor and without independent investigation: (i)
except as disclosed in Schedule 3.11(b), Hazardous Materials have not at
any time been generated, used, treated or stored on, or transported to or
from, any Real Property owned or operated by any Subsidiary Guarantor
where such generation, use, treatment or storage has violated or could
reasonably be expected to violate any Environmental Law in such a manner
so as to cause this representation to be untrue; or (ii) Hazardous
Materials have not at any time been Released on or from any Real Property
owned or operated by the any Subsidiary Guarantor where such Release has
violated or could reasonably be expected to violate any applicable
Environmental Law in such a manner so as to cause this representation to
be untrue.
Section 3.12. Labor Relations. (a) Except as could not reasonably be
expected to result in a Material Adverse Change, none of the Subsidiary
Guarantors are engaged in any unfair labor practice; (b) except (in each case)
as could not reasonably be expected to result in a Material Adverse Change,
there is (i) no unfair labor practice complaint pending against any Subsidiary
Guarantor, or, to the knowledge of any Subsidiary Guarantor, threatened against
any
11
of them, before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against any Subsidiary Guarantor or threatened against
any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against
any Subsidiary Guarantor or threatened against them and (iii) no union
representation proceeding pending with respect to the employees of any
Subsidiary Guarantor; and (c) except (in each case) as could not reasonably be
expected to result in a Material Adverse Change, hours worked by and payments
made to any employee of any Subsidiary Guarantor or any ERISA Affiliate have not
been in violation of the Fair Labor Standards Act or any other applicable law
dealing with such matters.
Section 3.13. Patents, Licenses, Franchises and Formulas. Each of
the Subsidiary Guarantors owns or is licensed to use all material patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all material leases and other rights of whatever nature,
reasonably necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain or so own
which, as the case may be, has had, or could reasonably be expected to result
in, a Material Adverse Change.
Section 3.14. Security Interests. On and after the date hereof, each
of the Security Documents creates (or after the execution and delivery thereof,
will create), as security for the Subsidiary Guarantor Obligations purported to
be secured thereby, a valid and enforceable security interest in and Lien on all
of the Guarantee Collateral subject thereto, which shall be perfected upon the
taking of possession thereof or completion of filings with respect thereto, in
each case as required by this Guarantee Agreement or the other Transaction
Documents, superior to and prior to the rights of all third Persons and subject
to no other Liens (except for Permitted Encumbrances with respect to the Vessels
and Customary Permitted Liens with respect to other assets). No filings or
recordings are required in order to perfect the security interests created under
any Security Document except for filings or recordings required in connection
with any such Security Document which shall have been made substantially
contemporaneously with the execution and delivery thereof.
Section 3.15. Indebtedness. Schedule 3.15 sets forth a true and
complete list of all (i) Indebtedness for borrowed money of the Subsidiary
Guarantors outstanding as of the Date hereof and (ii) agreements existing on the
Date hereof pursuant to which the Subsidiary Guarantors are entitled to incur
Indebtedness, in each case showing the aggregate principal amount thereof and
the name of the borrower and any other entity which directly or indirectly
guaranteed such debt.
Section 3.16. Citizenship. Each Subsidiary Guarantor which owns or
operates one or more Vessels is qualified to own and operate such Vessels under
the laws of the Approved Jurisdiction.
Section 3.17. Insurance. Each Subsidiary Guarantor has insured its
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses.
12
Section 3.18. Concerning the Vessels. The name, official number,
registered owner, and jurisdiction of registration of each Vessel is set forth
on Schedule 3.18 hereto. Except as set forth on Schedule 3.18 (which includes a
list of vessels designated as laid-up), each Vessel is operated in material
compliance with all applicable maritime rules and regulations, including,
without limitation, with respect to each Vessel operated in the coastwise trade
of the United States of America, the Shipping Act of 1916, as amended and in
effect, and the regulations promulgated thereunder. Each Vessel not designated
as laid-up on Schedule 3.18 is maintained and operated in material compliance
with all applicable Environmental Laws.
Section 3.19. Vessel Classification. Except (a) as permitted by the
laws and/or regulations of the relevant flag state or (b) with respect to a
Vessel that has been laid-up in accordance with Section 4.17 of this Guarantee,
each Vessel is classified in the highest classification and rating for vessels
of the same age and type with the respective classification society set forth in
Schedule 3.18, without any conditions or recommendations affecting class other
than those for which the time prescribed for curing the condition or
recommendation has not passed.
ARTICLE IV
AFFIRMATIVE COVENANTS OF THE SUBSIDIARY GUARANTORS
Each Subsidiary Guarantor covenants and agrees that, so long as this
Guarantee Agreement shall remain in effect or any of the Subsidiary Guarantee
Obligations shall be outstanding, it shall:
Section 4.01. Existence. Do or cause to be done all things necessary
to preserve and keep in full force and effect its existence, rights and
franchises and comply with all laws applicable to it and at all times be
qualified to do business in the jurisdictions where failure to qualify could
reasonable be expected to result in a Material Adverse Change.
Section 4.02. Payment of Debts. Pay its debts, liabilities and
obligations when due, except (a) any such debts, liabilities and obligations
that are being contested in good faith by appropriate proceedings, (b) any
single debt, liability or obligation, which does not exceed $2,5000,000 and (c)
any debts, liabilities and obligations, which in the aggregate do not exceed
$5,000,000.
Section 4.03. Accounts and Records. Keep and maintain full and
accurate accounts and records in accordance with GAAP consistently applied.
Section 4.04. Payment of Taxes and Claims. Prepare and timely file
all federal and provincial tax returns required to be filed by it and pay and
discharge all taxes, assessments and other governmental charges or levies
imposed upon it or in respect of any of its property and assets before the same
shall become in default, as well as all lawful claims (including, without
limitation, claims for labor, materials and supplies) which, if unpaid, might
become a lien or charge upon its property and assets or any part thereof, except
(a) in each case, for any such Taxes as are being contested in good faith by
appropriate proceedings or (b) with respect to foreign Taxes, the failure of
which to pay or discharge could not reasonably be expected to result in a
Material Adverse Change.
13
Section 4.05. Financing Statements. Execute financing statements or
other documents deemed necessary or desirable by the Agent to perfect, maintain
or preserve any security interest granted herein and pursuant to the Transaction
Documents and pay the filing costs pursuant to law. Without limiting the
generality of the foregoing, each Subsidiary Guarantor will execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be reasonably necessary or desirable, or that the
Agent may reasonably request, to protect and preserve the Liens granted or
purported to be granted hereby and by the other Transaction Documents. Each of
the Subsidiary Guarantors hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Guarantee Collateral without the signature of such Subsidiary
Guarantor, where permitted by law.
Section 4.06. Compliance with Law. Comply in all material respects
with all applicable federal and provincial laws, ordinances, rules, orders and
regulations now in force or hereafter enacted, including, without limitation all
laws and regulations relating to environmental laws and employee benefit plans,
failure to comply with which could reasonably be expected to result in a
Material Adverse Change.
Section 4.07. Access to Books and Records. Permit the Agent and each
Counterparty, and their respective duly authorized agents and officers, during
normal business hours and upon reasonable notice to (a) examine the books and
records of the Subsidiary Guarantors and to make copies and extracts therefrom,
and (b) discuss the affairs, finances and accounts of the Subsidiary Guarantors,
and be advised as to the same by, the officers of the Subsidiary Guarantors as
shall be relevant to the performance or observance of the terms, covenants or
conditions of this Guarantee Agreement or the financial condition of the
Subsidiary Guarantors.
Section 4.08. Notifications. Give prompt written notice to the Agent
of (a) any Default of which any Subsidiary Guarantor has actual knowledge or an
Event of Default specifying the same and the steps being taken to remedy the
same, (b) any litigation or governmental proceeding pending or, to the best
knowledge of any Subsidiary Guarantor, threatened against such Subsidiary
Guarantor which could reasonably be expected to result in a Material Adverse
Change, (c) the withdrawal of any Vessel's rating by its classification society
or the issuance by such classification society of any material recommendation or
notation affecting class and (d) any other event or condition which could
reasonably be expected to result in a Material Adverse Change.
Section 4.09. Certificate of No Default. Deliver to the Agent (a)
within 120 days after the close of each fiscal year, a certificate of an
Executive Officer either stating that such individual is not aware of any
condition, event or act which constitutes an Event of Default or Potential Event
of Default or, if any such condition, event or act exists, specifying the same
and the steps being taken to remedy the same and (b) within 45 days after the
close of each fiscal quarter, (i) a certificate of an Executive Officer either
stating that such individual is not aware of any condition, event or act which
constitutes an Event of Default or, if any such condition, event or act exists,
specifying the same and the steps being taken to remedy the same and (ii) a
certificate substantially in the form of Exhibit B. In addition, upon twenty
(20) days' prior request by the Agent, an Executive Officer shall execute,
acknowledge and deliver to the Agent a
14
certificate stating that to such individual's knowledge no Event of Default or
Potential Event of Default exists hereunder or under any other Transaction
Documents to which any Subsidiary Guarantor is a party, or specifying each such
default or breach of which such individual has knowledge and the steps being
taken to remedy the same.
Section 4.10. Payment of Costs and Expenses. To the extent not paid
by the Borrower, to pay promptly the costs and expenses of the Agent, including,
without limitation, the fees of its counsel, reasonably incurred from time to
time in connection with the transactions contemplated by the Transaction
Documents.
Section 4.11. Guarantee Collateral Free of Liens. Keep all of the
Guarantee Collateral free of all liens, encumbrances, attachments, levies,
distraints, other judicial process and burdens of every nature except for
Permitted Encumbrances with respect to the Vessels and Customary Permitted Liens
with respect to other assets.
Section 4.12. Notification of Litigation and Adverse Business
Development. Give prompt written notice to the Agent of any action, proceeding
or investigation pending or threatened against any of the Subsidiary Guarantors
before any court or governmental instrumentality or other administrative agency
which involves the reasonable possibility of any judgment or liability which
would result in a Material Adverse Change.
Section 4.13. Performance of Obligations. Not take, or fail to take,
any action, or fail to use commercially reasonable efforts to prevent any action
to be taken by others, which would release any Person from any of such Person's
covenants or obligations under any agreement or instrument included in the
Security Documents, or which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such agreement or instrument in a manner materially
adverse to the Agent or the Counterparties.
Section 4.14. Reimbursement for Expenses. The Subsidiary Guarantors
each hereby agree, on a joint and several basis, to reimburse the Agent
promptly, with interest at the rate of 8% per annum, for any and all
expenditures which the Agent may from time to time make in providing protection
in respect of insurance, discharge or purchase of liens, taxes, dues,
assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorneys' fees, necessary translation fees for documents made in a
language other than English and other matters, in each case in respect of which
the Subsidiary Guarantors has defaulted in its obligation hereunder to provide.
Such obligation of the Subsidiary Guarantors to reimburse the Agent shall be an
additional indebtedness due from the Subsidiary Guarantors, secured by the
Guarantee Collateral, and shall be payable by the Subsidiary Guarantors on
demand. The Agent, though privileged to do so, shall be under no obligation to
the Subsidiary Guarantors to make any such expenditures, nor shall the making
thereof relieve the Subsidiary Guarantors of any default in that respect.
Section 4.15. Appraisals. Upon the request of the Agent and at the
Subsidiary Guarantor's expense, furnish the Agent with appraisals from an
Appraiser for each of the Vessels; provided, however, such request shall not be
made more than once in any twelve-month period.
15
Section 4.16. Environmental Matters. Promptly, and in any event
within five (5) Business Days after an officer of the Borrower or any of its
Subsidiaries obtains actual knowledge thereof, give written notice to the Agent
of any pending or threatened in writing Environmental Claim against any of the
Subsidiaries, unless, in each case, such environmental matters could not,
individually or when aggregated with all other such environmental matters, be
reasonably expected to result in a Material Adverse Change.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Borrower or such Subsidiary's response thereto. In addition, upon the
request of the Agent, the Borrower will provide the Counterparties with copies
of all material communications with any Governmental Authority relating to
Environmental Laws, all material communications with any Person (other than
their attorneys) relating to any Environmental Claim of which notice is required
to be given pursuant to this Section 4.16, and such detailed reports of any such
Environmental Claim as may reasonably be requested by the Agent on behalf of the
Counterparties.
Section 4.17. Vessel Operations and Management. (a) Procure that
each of the Vessels not laid-up in accordance with Section 4.17(c) hereof, shall
at all times be (i) managed by the technical and commercial managers managing
the Vessels as of the Date hereof, or by Seabulk Tankers, Inc., or by a
technical and commercial manager that was a Subsidiary Guarantor as of the date
hereof, or such other managers acceptable to the Requisite Counterparties in
accordance with vessel management agreements acceptable to the Requisite
Counterparties, (ii) flagged under the laws of an Approved Jurisdiction and
(iii) classed in the highest classification and rating for vessels of the same
age and type without any outstanding conditions or recommendations affecting
class (other than those for which the time prescribed for curing the condition
or recommendation has not passed) with Lloyds Registry of Shipping, Det norske
Veritas, Bureau Veritas, American Bureau of Shipping or such other
classification society classing the Vessels as of the Date hereof or with such
other classification society acceptable to the Agent; provided, however, if a
Vessel is reflagged under the laws of an Approved Jurisdiction, it shall be a
condition to such reflagging that the Subsidiary Guarantors deliver to the Agent
(A) evidence (including an opinion of counsel) that such Vessel has been
registered in the name of the related Subsidiary Guarantor under the laws of
such jurisdiction; (B) evidence (including an opinion of counsel) that the
related Mortgage has been properly recorded under the laws of such jurisdiction
and constitutes a priority mortgage subject only to Permitted Encumbrances; (C)
evidence that all necessary governmental or regulatory approvals, licenses and
authorities which are necessary to the operation of the Vessel have been
obtained; (D) evidence that insurances in compliance with the requirements of
the Mortgage have been obtained; and (E) such other items as the Agent may
reasonably require.
(a) Except with respect to any Vessel that has been laid-up in
accordance with Section 4.17(c) hereof, comply in all material respects or
to procure that the operator of each of the Vessels will comply in all
material respects within the requisite applicable time limits for vessels
of the same type, size, age and flag of the Vessels with the International
Management Code for the Safe Operation of Ships and for Pollution
Prevention (as the same may be amended from time to time, the "ISM Code")
adopted by the International Maritime Organization or any replacement of
the ISM Code and in particular, without prejudice to the generality of the
foregoing, as and when required to do so by the ISM Code and at all times
thereafter, (i) to hold or to procure that
16
the operator of each of the Vessels holds, a valid Document of Compliance
(being a document issued to a vessel operator as evidence of its
compliance with the requirements of the ISM Code) duly issued to the
Subsidiary Guarantor or the operator (as the case may be) pursuant to the
ISM Code and a valid Safety Management Certificate (being a document
issued to a vessel as evidence that the vessel operator and its shipboard
management operate in accordance with an approved structured and
documented system enabling the personnel of that vessel operator to
implement effectively the safety and environmental protection policy of
that vessel operator) duly issued to each of the Vessels pursuant to the
ISM Code, (ii) to provide the Agent with copies of any such Document of
Compliance and Safety Management Certificate promptly following the issue
thereof and after every renewal and (iii) to keep or to procure that there
is kept, on board each of the Vessels a copy of any such Document of
Compliance and the original of any such Safety Management Certificate.
(b) Ensure that the laying-up of any Vessel is commercially
reasonable; that each laid-up Vessel is maintained in accordance with
ordinary and reasonable commercial standards for laid-up vessels, and that
the Agent is notified of each lay-up within thirty (30) days after the
commencement thereof.
Section 4.18. Remittance of Insurance Proceeds. Immediately upon the
receipt of any and all insurance proceeds in respect of a Third Lien Vessel that
are not used to repair or replace the relevant Third Lien Vessel in accordance
with the provisions of the MARAD first mortgage, cause the applicable Subsidiary
Guarantor to pay to the Agent, any insurance proceeds received by the Borrower
or a Subsidiary Guarantor after payment of such insurance proceeds to MARAD, as
first mortgagee thereon, to the extent of the outstanding amount of the
indebtedness owing to MARAD with respect to such Third Lien Vessel. Such
proceeds shall be used to repay the Swap Obligations outstanding at such time.
Upon the discharge of the first mortgage in favor of the United States of
America, represented by the Secretary of Transportation, acting by and through
the Maritime Administrator on any Third Lien Vessel owned by the Borrower, the
Borrower shall deliver to the Agent an Assignment of Earnings and Insurances
with respect to such Third Lien Vessels, together with such other documents as
may be required to perfect the security interest of the Agent, on behalf of the
Counterparties, in such Guarantee Collateral.
ARTICLE V
NEGATIVE COVENANTS OF THE SUBSIDIARY GUARANTORS
Each Subsidiary Guarantor covenants and agrees that, so long as this
Guarantee Agreement shall remain in effect or any of the Subsidiary Guarantee
Obligations shall be outstanding, it shall not, without the prior written
consent of the Agent:
Section 5.01. Liens. Create, assume, permit or suffer to exist any
mortgage, pledge, encumbrance, security interest or other Lien securing an
obligation on all or any part of the Guarantee Collateral, except Permitted
Encumbrances with respect to the Vessels and Customary Permitted Liens with
respect to the Guarantee Collateral other than the Vessels.
Section 5.02. Asset Sales. Sell, lease, transfer, assign or
otherwise dispose of any Vessel unless (a) after giving effect to such sale,
lease, transfer, assignment or disposition, the Subsidiary Guarantor is in
compliance with Section 6.17 of the Amended and Restated Credit
17
Agreement or (b) the Subsidiary Guarantor delivers to the Agent a Qualified
Substitute Vessel and the documents described in Section 6.19 of the Amended and
Restated Credit Agreement with respect thereto in order to remain in compliance
with Section 6.17.
Section 5.03. Assignment of Insurances. Grant an assignment or
permit or suffer to exist any mortgage, pledge, encumbrance, security interest
or other Lien on the Insurances relating to a Third Lien Vessel other than Liens
in favor of MARAD.
Section 5.04. Sale of Notes or Accounts Receivable. Sell, lease,
transfer, assign or otherwise dispose of any notes, accounts receivable or other
obligations owed to by any Person, except (a) for the purpose of collection in
the ordinary course of its business and (b) to the extent that, both before and
after giving effect to any such sale, lease, transfer, assignment or disposition
(taking into account any prepayment to be made to the Counterparties under this
Guarantee Agreement from the net proceeds of any such sale, lease, transfer,
assignment or disposition), no Default or Event of Default would exist
hereunder.
Section 5.05. Sale and Leaseback. Enter into any arrangements,
directly or indirectly, with any Person whereby it shall sell or transfer any
property, whether real or personal, and used and useful in its business, whether
now owned or hereafter acquired, if it, at the time of such sale or disposition,
intends to lease or otherwise acquire the right to use or possess (except by
purchase) such property or like property for a substantially similar purpose.
Section 5.06. Restricted Payments. Declare or pay any dividend or
make any distribution on its capital stock or purchase, redeem, acquire or
otherwise retire any capital stock for value (in each case, a "Restricted
Payment"); provided, however, that the Subsidiary Guarantor may make a
Restricted Payment so long as, at the time of, and after giving effect to, the
proposed Restricted Payment: (a) no Default or Event of Default shall have
occurred and be continuing and (b) the aggregate amount expended for all
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors) would not exceed fifty
percent (50%) of the aggregate amount of the consolidated net income of the
Borrower and its consolidated Subsidiaries excluding the Lightship Tanker
Entities for the fiscal year ended immediately prior to the fiscal year in which
such proposed Restricted Payment is to be made determined in accordance with
GAAP.
Section 5.07. Investments. Make any Investment unless at the time
of, and after giving effect to, the making of any proposed Investment, no
Default or Event of Default has occurred and is continuing or would occur as a
consequence of the making of such Investment. Notwithstanding the foregoing
sentence, the Subsidiary Guarantors may make the following Investments at any
time: (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof, and (b) investments in certificates of
deposit, banker's acceptances and time deposits maturing within 180 days from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000.
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Section 5.08. Change in Business. Engage (directly or indirectly) in
any business other than the business of the Subsidiary Guarantors as of the Date
hereof and other businesses reasonably related thereto.
Section 5.09. Transactions with Affiliates. Enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate, other than on terms and conditions
substantially as favorable to such Person as would be obtainable by such Person
at the time in a comparable arm's-length transaction with a Person other than an
Affiliate. Notwithstanding the foregoing, the restrictions set forth in this
Section 5.09 shall not apply to (a) the payment of reasonable and customary fees
to directors of the Subsidiary Guarantors who are not employees of the
Subsidiary Guarantors, (b) any other transaction with any employee, officer or
director of the Subsidiary Guarantors pursuant to employee benefit plans and
compensation arrangements in amounts customary for corporations similarly
situated to the Subsidiary Guarantors and entered into the ordinary course of
business and approved by the Board of Directors of the Subsidiary Guarantors or
any committee thereof or the Board of Directors of such Subsidiary Guarantors,
(c) transactions between or among the Subsidiary Guarantors and the Borrower and
not involving any other Affiliate and (d) any Restricted Payment permitted by
the Amended and Restated Credit Agreement.
Section 5.10. Changes in Offices or Names. Change the location of
the chief executive office of any Subsidiary Guarantor, the office of the chief
place of business any such parties, the office of the Subsidiary Guarantor 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.
Section 5.11. Changes in Fiscal Year. Change its fiscal year.
Section 5.12. Consolidation, Merger and Sale of Assets. Consolidate
with, or merge with or into, any other Person or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time)
all or substantially all of its property or assets, unless each of the following
conditions is satisfied:
(a) The entity formed by such consolidation or into which such
Subsidiary Guarantor is merged or the Person which acquires by conveyance
or transfer substantially all of the assets of such Subsidiary Guarantor
as an entirety shall expressly assume all of the obligations of such
Subsidiary Guarantor under this Guarantee Agreement and the other
Transaction Documents pursuant to a written supplement to this Guarantee
Agreement executed in accordance with Article VIII.
(b) Immediately prior to and after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing and the Agent shall have received a certificate from an
Executive Officer to such effect.
(c) The Agent shall have received an opinion of counsel regarding
the merged or consolidated entity, the legality, validity and
enforceability of this Guarantee Agreement and the other Transaction
Documents, the title to the related Vessels and the priority of the
Mortgages, as applicable.
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(d) Upon any consolidation or merger, or any conveyance or transfer
of substantially all of the assets of such Subsidiary Guarantor as an
entirety in accordance with this Section 5.12, the successor entity formed
by such consolidation or into which such Subsidiary Guarantor is merged or
to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, such
Subsidiary Guarantor under this Guarantee Agreement and the other
Transaction Documents with the same effect as if such successor entity had
been named as a Subsidiary Guarantor herein. No such conveyance or
transfer of substantially all of the assets of such Subsidiary Guarantor
as an entirety shall have the effect of releasing such Subsidiary
Guarantor or any successor entity which shall theretofore have become such
in the manner prescribed in this Section 5.12 from its liability
hereunder. Nothing in this Section 5.12 shall restrict the Subsidiary
Guarantors from chartering the Vessels so long as such charters are not
bareboat charters for a period in excess of ten (10) years, except with
respect to bareboat charters of the Third Lien Vessels so long as MARAD is
the first mortgagee thereon, which shall not be subject to any such
restriction.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES; APPLICATION OF PROCEEDS
Section 6.01. Events of Default. Any one or more of the following
events shall constitute an Event of Default:
(a) if an Event of Default shall have occurred and be continuing
under the Swap Agreements, and so long as the Revolving Loan Notes are
outstanding, an Event of Default under the Amended and Restated Credit
Agreement;
(b) if any payment of any Swap Obligation or any other amounts due
to the Agent or the Counterparties under this Guarantee Agreement or any
other Transaction Document, whether at the stated maturity thereof or at
any date fixed for payment by acceleration, by notice of prepayment or
otherwise, shall not be made on the due date thereof and if such failure
to pay shall remain unremedied for two (2) Business Days
(c) if any Subsidiary Guarantor shall default in the performance or
observance of any covenant contained in Sections 4.01 and 4.02 of the
Assignment(s) of Earnings and Insurances, Sections 4.01 and 4.02 of the
Assignment(s) of Insurances and Article I, Sections 4, 5(a)(ii), 7, 9, 10,
12(a), 13(b), 14 and 19 of the Mortgages and Deeds of Covenant;
(d) if any Subsidiary Guarantor shall default in any material
respect in the performance or observance of any covenant contained in
Article IV of this Guarantee Agreement or any other covenant, agreement or
condition (other than those specified in (a)-(d) above) contained in this
Guarantee Agreement or any other Transaction Document and such default
shall not be cured by the earlier of (i) twenty (20) days after an
Executive Officer of such Subsidiary Guarantor had actual knowledge of
such default and (ii) twenty (20) days after receipt by such Subsidiary
Guarantor of notice thereof from the Agent;
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(e) if any representation or warranty made by a Subsidiary Guarantor
herein or in any other Transaction Document shall prove to have been
false, incorrect or misleading in any material respect on the date as of
which made and uncured at the time discovered and shall not have been
cured by the earlier of (i) 30 days after such discovery by an executive
officer of a Credit Party and (ii) 30 days after receipt by a Subsidiary
Guarantor of notice thereof from the Agent;
(f) if a Subsidiary Guarantor shall (i) generally not be paying its
debts as they come due, (ii) file a petition in bankruptcy or a petition
to take advantage of any insolvency act, (iii) become insolvent or make an
assignment for the benefit of its creditors, (iv) consent to the
appointment of a custodian or receiver of itself or of the whole or any
substantial part of its property, (v) on a petition in bankruptcy filed
against it, have an order for relief entered against it or (vi) file a
petition or answer seeking reorganization or arrangement under the federal
bankruptcy laws or any other applicable law;
(g) if a petition in bankruptcy shall be filed against a Subsidiary
Guarantor or any of its subsidiaries and not dismissed within 60 days from
the date of the filing;
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing, without the consent of an affected entity,
a custodian or receiver of a Subsidiary Guarantor, or of the whole or any
substantial part of its property, or approving a petition filed against
such entity seeking reorganization or arrangement of such entity under
applicable law, and such order, judgment or decree shall not be set aside
or stayed within 60 days from the date of its entry;
(i) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume custody or
control of a Subsidiary Guarantor or of the whole or any substantial part
of such entity's property and such custody or control shall not be
terminated or stayed within 60 days from the date of assumption of custody
or control;
(j) if a final judgment, a fine or other order for the payment of
money in excess of $2,000,000 or the equivalent thereof in another
currency shall be rendered by a court or administrative agency against a
Subsidiary Guarantor and such entity shall not discharge the same or
provide for its discharge in accordance with its terms, or procure a stay
of execution thereof within 30 days from the date of its entry and within
the 30-day period, or any longer period during which execution of such
judgment, fine or other order shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during the appeal;
(k) if an Event of Default has occurred and is continuing under a
Security Document or if any of the Transaction Documents shall for any
reason other than the satisfaction in full of the Subsidiary Guarantee
Obligations, cease to be, or be asserted by a Subsidiary Guarantor not to
be, a legal, valid and binding obligation of such Subsidiary Guarantor,
enforceable in accordance with its terms, except to the extent that such
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enforceability may be limited by any applicable bankruptcy, insolvency or
similar laws generally affecting the enforcement of creditor's rights or
by general principles of equity;
(l) if a Subsidiary Guarantor shall default (as principal or
guarantor or other surety) in any payment on any obligation for money
borrowed, beyond any period of grace provided with respect thereto, or if
any other default under any agreement under which any such obligation is
created or under any instrument securing or evidencing such obligation,
shall have occurred, if the effect of such other default is to cause, or
permit the holder of such obligation to cause, such obligation to become
due prior to its stated maturity;
(m) if a Subsidiary Guarantor ceases to be a direct or indirect
wholly-owned subsidiary of the Borrower or one of their wholly-owned
Affiliates without the prior written consent of the Requisite
Counterparties which consent shall not be unreasonably withheld;
(n) a Material Adverse Change described in clauses (a), (c) or (d)
of the definition thereof shall have occurred with respect to a Subsidiary
Guarantor that represents a reasonably foreseeable likelihood of the
nonpayment of the Subsidiary Guarantee Obligations.
Section 6.02. Waiver of Default. Any Event of Default may be waived
only with the written consent of the Requisite Counterparties. Any Event of
Default so waived shall be deemed to have been cured and not to be continuing;
but no such waiver shall be deemed a continuing waiver or shall extend to or
affect any subsequent like default or impair any rights arising therefrom.
Section 6.03. Remedies. Upon the occurrence and continuance of any
Event of Default, the Requisite Counterparties or the Agent, on behalf and for
the ratable benefit of the Counterparties, may, at the option of Requisite
Counterparties, without first proceeding against or exhausting any other
remedies which such party may have and without resorting to any other security
held by the Subsidiary Guarantors under the Transaction Documents, do any one or
more of the following, all of which are hereby authorized by the Subsidiary
Guarantors:
(a) Declare all or any of the Subsidiary Guarantee Obligations of
the Subsidiary Guarantors under this Guarantee Agreement and any other
instrument executed by the Subsidiary Guarantors pursuant to the
Transaction Documents to be immediately due and payable, and upon such
declaration such obligations so declared due and payable shall immediately
become due and payable; provided, however, that if such Event of Default
is under either Sections 6.01(e), (f), (g) or (h), then all of the
Subsidiary Guarantee Obligations shall become immediately due and payable
forthwith without the requirement of any notice or other action by the
Counterparties or the Agent;
(b) Exercise any or all of the rights and powers and pursue any and
all of the remedies pursuant to this Article and any of the other
Transaction Documents, to the extent permitted by applicable law; and
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(c) Bring suit at law or in equity, to recover judgment for the
Subsidiary Guarantee Obligations hereby secured, and collect the same out
of any and all of any or all of the Subsidiary Guarantors' property and
the Guarantee Collateral.
Section 6.04. Rights of Set-Off. Regardless of the adequacy of any
Guarantee Collateral, during the continuance of an Event of Default, any
deposits or other sums credited by or due from any Counterparty to the Borrower
may be set-off against the Subsidiary Guarantor Obligations and any and all
other liabilities, direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of the Subsidiary Guarantors to the
Counterparties. Any Counterparty that exercises any such set-off right shall use
reasonable diligence to notify the Subsidiary Guarantors of any such exercise,
provided that the failure of such Counterparty to provide any such notice shall
not affect the validity of such Counterparty's exercise of such set-off right.
Section 6.05. Rights and Remedies Cumulative. The Counterparties'
and the Agent's rights and remedies under this Guarantee Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in admiralty, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Agent or
the Counterparties, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. The
Counterparties and the Agent shall have all other rights and remedies not
inconsistent herewith as provided by law or in equity. No exercise by any
Counterparty or the Agent of one right or remedy shall be deemed an election. No
delay or omission by any Counterparty or the Agent shall constitute a waiver,
election or acquiescence by such party.
Section 6.06. Specific Remedies. Upon the occurrence and during the
continuance of an Event of Default:
(a) At the request of the Agent, each Subsidiary Guarantor shall
promptly execute and deliver such instruments and other documents as the
Agent may deem necessary or advisable to enable the Agent to obtain
possession of all or any part of the Guarantee Collateral to which
possession the Counterparties shall at the time be entitled hereunder. If
a Subsidiary Guarantor shall for any reason fail to execute and deliver
such instruments and documents after such request by the Agent, the Agent
may obtain a judgment conferring on the Agent the right to such possession
on behalf of the Counterparties immediately and requiring such Subsidiary
Guarantor to deliver such instruments and documents to the Agent, to the
entry of which judgment such Subsidiary Guarantor hereby specifically
consents.
(b) The Agent, on behalf of the Counterparties, may proceed to
enforce the rights of the Counterparties by directing payment to it of all
monies payable under any agreement or undertaking constituting a part of
the Guarantee Collateral, by proceedings in any court of competent
jurisdiction for the appointment of a receiver or for the sale of all or
any part of the Guarantee Collateral, possession to which the
Counterparties shall at the time be entitled hereunder, or for foreclosure
of such Guarantee Collateral, and by
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any other action, suit, remedy or proceeding authorized or permitted by
this Guarantee Agreement or by law or by equity, and may file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Counterparties asserted or upheld in any
bankruptcy, receivership or other judicial proceedings.
(c) The Agent shall be entitled to set-off against and withdraw all
amounts constituting a part of the Collateral and to apply the same as
follows:
First: To the payment of all reasonable expenses and charges,
including the expenses of any taking, operating, attorney's fees,
court costs and other expenses or advances made or incurred by the
Agent in connection with the ascertainment or protection of its
rights and the pursuance of its remedies hereunder or under any of
the other Transaction Documents (including, without limitation, the
reasonable fees and disbursements of counsel);
Second: To the payment of the Swap Obligations;
Third: To the payment of all amounts due to the Agent and the
Counterparties in respect of taxes, indemnities, fees, expenses,
premiums, purchase of liens or otherwise under the provisions hereof
or under any of the other Transaction Documents;
Fourth: To the payment of the Guarantee Obligations, other than
those referred to in First through Third above; and
Fifth: To the payment of any surplus thereafter remaining to the
Borrower or whomever may be lawfully entitled thereto.
(d) Without limiting the foregoing, the Agent and the
Counterparties, their respective assigns and legal representatives shall
have all the remedies of a secured party under applicable law and such
further remedies as from time to time may hereafter be provided pursuant
to such law for a secured party.
Section 6.07. Restoration of Rights and Remedies. In case the Agent
or a Counterparty shall have proceeded to enforce any right, power or remedy
under this Guarantee Agreement by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Agent or such Counterparty, then and in
every such case the Subsidiary Guarantors, the Agent and the Counterparties
shall be restored to their former positions and rights hereunder with respect to
the Guarantee Collateral, and all rights, remedies and powers of the Agent and
the Counterparties shall continue as if no such proceedings had been taken.
Section 6.08. Cure of Defaults. Subject to the terms of this
Guarantee Agreement, if at any time after an Event of Default, the Subsidiary
Guarantors offer completely to cure all Events of Default and to pay all
expenses, advances and damages to the Agent and the Counterparties consequent on
such Events of Default, with interest with respect to such Subsidiary
Guarantor's obligations as provided herein, then the Agent may, but shall not be
24
required to, accept such offer and payment and restore the Subsidiary Guarantors
to its former position, but such action, if taken, shall not affect any
subsequent Event of Default or impair any rights consequent thereon.
ARTICLE VII
RELATIONSHIP AMONG THE COUNTERPARTIES
Section 7.01. Appointment and Authorization. Each Counterparty
hereby irrevocably appoints, designates and authorizes Fortis as the Agent under
this Guarantee Agreement and under each of the other Transaction Documents and
irrevocably authorizes the Agent to take such action on its behalf under the
provisions of this Guarantee Agreement and each other Transaction Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Guarantee Agreement or any other Transaction Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Guarantee Agreement or
in any other Transaction Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Counterparty, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Guarantee Agreement or any other Transaction
Document or otherwise exist against the Agent.
Section 7.02. Delegation of Duties. The Agent may execute any of its
duties under this Guarantee Agreement or any other Transaction Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. The Agent shall not
be responsible for the gross negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care or for any action it takes
on the advice of counsel.
Section 7.03. Liability of Agent. None of the Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Guarantee Agreement or any other Transaction
Document (except for its own gross negligence or willful misconduct), (b) be
liable as a consequence of any failure or delay in performance by, or any breach
by, any other Counterparty or any other Person, of its obligations under this
Guarantee Agreement or any other Transaction Document or (c) be responsible in
any manner to any Counterparty for any recital, statement, representation or
warranty made by a Transaction Party, or any officer thereof, contained in this
Guarantee Agreement or in any other Transaction Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Guarantee Agreement or any other
Transaction Document, or for the value of any Guarantee Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Guarantee Agreement or any other Transaction Document, or for any failure of a
Transaction Party or any other party to this Guarantee Agreement or any other
Transaction Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Counterparty to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Guarantee Agreement or any other
Transaction Document, or to inspect the properties, books or records of any
Transaction Party.
Section 7.04. Reliance by the Agent. (a) The Agent shall be entitled
to rely, and shall be fully protected in relying, upon (i) any writing,
resolution, notice, consent,
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certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and (ii) any advice or statements of legal counsel (including counsel to the
Subsidiary Guarantors), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Guarantee Agreement or any other Transaction Document unless
it shall first receive such advice or concurrence of the Requisite
Counterparties as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Counterparties against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Guarantee
Agreement or any other Transaction Document in accordance with a request or
consent of the Requisite Counterparties and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Counterparties.
(b) For purposes of determining compliance with the conditions
precedent specified in Section 8.22, each Counterparty that has executed
this Guarantee Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter either sent
by the Agent to such Counterparty for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Counterparty.
Section 7.05. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
unless the Agent shall have received written notice from a Counterparty or a
Subsidiary Guarantor referring to this Guarantee Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the Agent shall
give notice thereof to the Counterparties. The Agent shall take such action with
respect to such Default or Event of Default as shall be requested by the
Requisite Counterparties in accordance with this Guarantee Agreement; provided,
however, that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best commercial interest of the Counterparties.
Section 7.06. Credit Decision. Each Counterparty expressly
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it and that no act by the Agent hereinafter taken, including any
review of the affairs of a Transaction Party, shall be deemed to constitute any
representation or warranty by the Agent to any Counterparty. Each Counterparty
represents to the Agent that it has, independently and without reliance upon the
Agent and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Transaction Parties, and all applicable Counterparty regulatory laws relating to
the transactions contemplated thereby, and made its own decision to enter into
this Guarantee Agreement and extend credit to the Borrower under and pursuant to
this Swap Agreements. Each Counterparty also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Guarantee Agreement and the other Transaction Documents, and to make
such investigations as it deems necessary to inform itself as to the
26
business, prospects, operations, property, financial and other condition and
creditworthiness of the Subsidiary Guarantors. Except for notices, reports and
other documents expressly herein required to be furnished to the Counterparties
by the Agent, the Agent shall not have any duty or responsibility to provide any
Counterparty with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Subsidiary Guarantors, which may come into the
possession of any of the Agent-Related Persons.
Section 7.07. Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Counterparties shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Subsidiary Guarantors and without limiting the obligation of the
Subsidiary Guarantors to do so), ratably from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Swap Agreements and the
termination or resignation of the related Agent) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Guarantee Agreement, the Transaction Documents or any document contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any such Person under or in connection
with any of the foregoing; provided, however, that no Counterparty shall be
liable for the payment to the Agent-Related Persons of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent-Related Person's
gross negligence or willful misconduct. Without limiting the foregoing, each
Counterparty shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including reasonable attorney fees) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under this Guarantee Agreement, any other Transaction
Document, or any document contemplated by or referred to herein to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Subsidiary Guarantors. The obligation of the Counterparties in this Section 7.07
shall survive the payment of the Subsidiary Guarantee Obligations.
Section 7.08. Agent in Individual Capacity. Fortis and its
affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with the Subsidiary
Guarantors and any of its affiliates as though Fortis were not the Agent
hereunder and without notice to or consent of the Counterparties. Fortis shall
have the same rights and powers under this Guarantee Agreement as any other
Counterparty and may exercise the same as though it were not the Agent, and the
terms "Counterparty" and "Counterparties" shall include Fortis in its individual
capacity.
Section 7.09. Successor Agent. The Agent may resign as Agent upon
thirty (30) days' notice to the Counterparties. If the Agent shall resign as
Agent under this Guarantee Agreement, the Requisite Counterparties shall appoint
from among the Counterparties a successor agent for the Counterparties. If no
successor agent is appointed prior to the effective date of the resignation of
the Agent, the Agent may appoint, after consulting with the Counterparties and
the Subsidiary Guarantors, a successor agent from among the Counterparties.
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Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Guarantee Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and the
Counterparties shall perform all of the duties of the Agent hereunder until such
time, if any, as the Requisite Counterparties appoint a successor agent as
provided for above. Any successor Agent appointed under this Section 7.09 shall
be reasonably acceptable to the Subsidiary Guarantors.
Section 7.10. Collateral Matters. (a) The Agent is authorized on
behalf of all the Counterparties, without the necessity of any notice to or
further consent from the Counterparties, from time to time to take any action
with respect to the Guarantee Collateral which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Guarantee
Collateral granted pursuant thereto.
(b) The Counterparties irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by
the Agent upon any Guarantee Collateral (i) upon payment in full of all of
Subsidiary Guarantee Obligations then payable under this Guarantee
Agreement and under any other Transaction Document; (ii) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the
indebtedness evidenced thereby has been paid in full; (iii) if approved,
authorized or ratified in writing by all of the Counterparties or (iv)
upon any sale, transfer, assignment or other disposition of any Guarantee
Collateral, to the extent that the same is expressly permitted by the
terms of this Guarantee Agreement and the other Transaction Documents.
Upon request by the Agent at any time, the Counterparties will confirm in
writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 7.10(b).
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. (a) All notices, requests, approvals and
other communications provided for hereunder shall be in writing (including,
unless the context expressly otherwise provides, by facsimile transmission,
provided that any matter transmitted by a Subsidiary Guarantor by facsimile (i)
shall be immediately confirmed by a telephone call to the recipient at the
number specified on the applicable signature page hereof, and (ii) shall be
followed promptly by a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on the
applicable signature page hereof or, as directed to a Subsidiary Guarantor or
the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to each other party, at
such other address as shall be designated by such party in a written notice to a
Subsidiary Guarantor and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next day)
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delivery, or transmitted by facsimile machine, respectively, or if
delivered, upon delivery, except that notices pursuant to Article VIII
shall not be effective until actually received by the Agent.
(c) Each Subsidiary Guarantor acknowledges and agrees that any
agreement of the Agent and the Counterparties to receive certain notices
by telephone and facsimile is solely for the convenience and at the
request of such Subsidiary Guarantor. The Agent and the Counterparties
shall be entitled to rely on the authority of any Person purporting to be
a Person authorized by such Subsidiary Guarantor to give such notice and
the Agent and the Counterparties shall not have any liability to the
Subsidiary Guarantors or other Person on account of any action taken or
not taken by the Agent or the Counterparties in reliance upon such
telephonic or facsimile notice. The obligation of Subsidiary Guarantors to
pay the Subsidiary Guarantee Obligations shall not be affected in any way
or to any extent by any failure by the Agent and the Counterparties to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Counterparties of a confirmation which is at
variance with the terms understood by the Agent and the Counterparties to
be contained in the telephonic or facsimile notice.
Section 8.02. Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making and delivery of this Guarantee
Agreement to the Agent and the Counterparties, and shall continue in full force
and effect so long as the Subsidiary Guarantee Obligations remain outstanding.
Section 8.03. Governing Law. This Guarantee Agreement shall be
governed by and interpreted in accordance with the laws of the State of New
York, without giving effect to the principles of conflicts of law.
Section 8.04. Modification of Agreement. No amendment, modification
or waiver of any provision of this Guarantee Agreement or any other Transaction
Document, and no consent with respect to any departure by a Subsidiary Guarantor
therefrom, shall be effective unless the same shall be in writing and signed by
the Requisite Counterparties and acknowledged by the Agent, and then such waiver
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by each Counterparty affected thereby and
acknowledged by the Agent, do any of the following:
(a) postpone or delay any date fixed for the payment of any
Subsidiary Guarantee Obligations;
(b) amend this Section 7.04; or
(c) release all or any part of the Guarantee Collateral or release
any Subsidiary Guarantor from its liabilities as a joint and several
obligor for the other Subsidiary Guarantors' Subsidiary Guarantee
Obligations as described in Section 2.06, hereof;
29
and, provided further that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Requisite
Counterparties or all the Counterparties, as the case may be, affect the rights
or duties of the Agent under this Guarantee Agreement or any other Transaction
Document.
Section 8.05. Costs and Expenses. Each Subsidiary Guarantor agrees
whether or not the transactions contemplated hereby shall be consummated, to:
(a) pay or reimburse the Agent within five (5) Business Days after
demand for all costs and expenses incurred by the Agent in connection with
the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case,
whether or not consummated), this Guarantee Agreement, any other
Transaction Document and any other documents prepared in connection
herewith (including any commitment letter and related documents preceding
this Guarantee Agreement) or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the attorney costs
incurred by the Agent with respect hereto and thereto;
(b) pay or reimburse the Agent and each Counterparty within five (5)
Business Days after demand for all costs and expenses incurred by them in
connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies (including in connection with any insolvency
proceedings or appellate proceeding) under this Guarantee Agreement, any
other Transaction Document, and any such other documents, including
attorney costs incurred by the Agent and any Counterparty; and
(c) pay or reimburse the Agent within five (5) Business Days after
demand for all reasonable audit, environmental inspection and review,
search and filing, registration and recording costs, fees and expenses,
incurred or sustained in connection with the matters referred to under
Section 7.05(a) and Section 7.05(b).
Section 8.06. Waivers Section 1.01 . No waiver of any of the
provisions of this Guarantee Agreement (a) shall be valid unless evidenced by a
writing executed by each party to be bound thereby, (b) shall be deemed or shall
constitute a waiver of any other provision of this Guarantee Agreement or any
other provisions hereof (whether or not similar), or (c) shall constitute a
continuing waiver unless otherwise expressly provided. No delay on the part of
the Agent or any Counterparty in exercising any right or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any
power or right or remedy preclude other or further exercise thereof or the
exercise of any other right or remedy. No notice to or demand on a Subsidiary
Guarantor in any case shall entitle it to any other or further notice or demand
in the same or similar circumstances.
Section 8.07. Indemnification. To the fullest extent permitted by
law, the Subsidiary Guarantors agree, jointly and severally, to protect,
indemnify, defend and hold harmless the Agent, each Counterparty and each of
their respective directors, officers, employees and agents and any Person who
controls any of them within the meaning of the federal, provincial, state and
foreign securities laws (each an "Indemnitee") from and against any liabilities,
losses, obligations, damages, penalties, expenses or costs of any kind or nature
and from any suits, judgments, claims or demands (including in respect of or for
attorney costs and other reasonable fees and other disbursements of counsel for
and consultants of any Indemnitees
30
in connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto) based on
any federal, provincial, state, local or foreign law or other statutory
regulation, including securities, environmental and commercial law or other
statutory regulation, which arises under common law or at equitable cause or on
contract or otherwise on account of or in connection with any matter or thing or
any action or failure to act by the Indemnitees, or any of them, arising out of
or relating to the Transaction Documents or any agreement or instrument
contemplated by the Transaction Documents, but excluding those arising (x) by
reason of gross negligence or willful misconduct of the Agent or any Indemnitee,
or (y) in respect of Taxes (as to which indemnification shall be applicable only
as and to the extent set forth in the Swap Agreements). Upon receiving knowledge
of any suit, claim or demand asserted by any Person that an Indemnitee believes
is covered by this indemnity, such Indemnitee shall give the Subsidiary
Guarantors notice thereof and an opportunity to defend it, at the Subsidiary
Guarantors' sole cost and expense, with legal counsel reasonably satisfactory to
such Indemnitee. Such Indemnitee may also require the Subsidiary Guarantors to
defend the matter. The obligations of the Subsidiary Guarantors under this
Section 8.07 shall survive the payment and performance of the Subsidiary
Guarantee Obligations and the termination of this Guaranty. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in this Section
8.07 may be unenforceable because it violates any law or public policy, each of
the Subsidiary Guarantors shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of its obligations set forth in this Section 8.07.
Section 8.08. Separability of Provisions. (a) If any provision of
this Guarantee Agreement or any Mortgage or other Transaction Document should be
deemed invalid or shall be deemed to affect adversely the preferred status of
any Mortgage under any applicable law, such provision shall be void and of no
effect and shall cease to be a part of this Guarantee Agreement and such
Mortgage or other Transaction Document without affecting the remaining
provisions, which shall remain in full force and effect.
(a) In the event that this Guarantee Agreement, any Transaction
Document, any Mortgage or any of the documents or instruments which may
from time to time be delivered hereunder or thereunder or any provision
hereof or thereof shall be deemed invalidated by present or future law of
any nation or by decision of any court, or if any third party shall fail
or refuse to recognize any of the powers granted to the Agent hereunder
when it is sought to exercise them, this shall not affect the validity
and/or enforceability of all or any other parts of this Guarantee
Agreement, any Transaction Document, any Mortgage or such documents or
instruments and, in any such case, the Subsidiary Guarantors covenant and
agree that, on demand, they will execute and deliver such other and
further agreements and/or documents and/or instruments and do such things
as the Agent in its sole discretion may deem to be necessary to carry out
the true intent of this Guarantee Agreement and any Mortgage and of the
obligations secured hereby.
Section 8.09. Counterparts. This Guarantee Agreement and any
amendment, waivers, consents or supplements hereto may be executed in two or
more counterparts, any by different parties hereto in different counterparts,
each of which when so executed shall constitute an original, but all of which,
when taken together, shall constitute but one Guarantee Agreement.
31
Section 8.10. Entire Agreement. This Guarantee Agreement constitutes
the entire agreement between the parties hereto pertaining to the subject matter
hereof and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth or
incorporated herein.
Section 8.11. Headings. Section and paragraph headings and the table
of contents are not to be considered part of this Guarantee Agreement, are
included solely for convenience and are not intended to be full or accurate
descriptions of the contents thereof. Sections and paragraphs mentioned by
number only are the respective sections and paragraphs of this Guarantee
Agreement. The use of the terms "herein", "hereunder", "hereof', and like terms
shall be deemed to refer to this entire Agreement and not merely to the
particular provision in which the term is contained, unless the context clearly
indicates otherwise.
Section 8.12. Successors and Assigns. All Persons shall be deemed to
include the successors or assigns thereof. All of the terms and provisions of
this Guarantee Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective transferees, legal representatives,
heirs, successors and assigns; provided, however, that no Subsidiary Guarantor
may assign its rights or obligations hereunder without the prior written consent
of the Agent and each Counterparty.
Section 8.13. Gender and Number. Words importing a particular gender
mean and include every other gender and words importing the singular number mean
and include the plural number and vice-versa.
Section 8.14. Exhibits. Exhibits to this Guarantee Agreement are an
integral part of this Guarantee Agreement.
Section 8.15. Notification of Addresses, Lending Offices, Etc. Each
Counterparty shall notify the Agent in writing of any changes in the address to
which notices to the Counterparty should be directed, of addresses of its
Lending Office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as the Agent shall
reasonably request.
Section 8.16. No Third Parties Benefited. This Guarantee Agreement
is made and entered into for the sole protection and legal benefit of the
Counterparties and the Agent, and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Guarantee
Agreement.
Section 8.17. Equitable Relief. Each Subsidiary Guarantor recognizes
that, in the event it fails to perform, observe or discharge any of its
obligations or liabilities under this Guarantee Agreement or any of the other
Transaction Documents, any remedy at law may prove to be inadequate relief to
the Counterparties or the Agent; therefore, each Subsidiary Guarantor agrees
that the Counterparties or the Agent, if the Counterparties so request, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages
Section 8.18. Notice of Claims; Claims Bar. EACH SUBSIDIARY
GUARANTOR HEREBY AGREES THAT IT SHALL GIVE PROMPT NOTICE OF ANY
32
CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE
AGAINST ANY COUNTERPARTY OR THE AGENT, WHICH SUCH CLAIM IS BASED IN LAW OR
EQUITY OR ADMIRALTY, ARISING UNDER OR RELATED TO THIS GUARANTEE AGREEMENT, ANY
OF THE TRANSACTION DOCUMENTS OR SUBSIDIARY GUARANTOR OBLIGATIONS (OR THE
GUARANTEE COLLATERAL THEREFOR) CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR
OMISSION TO ACT BY ANY COUNTERPARTY OR THE AGENT WITH RESPECT HERETO OR THERETO,
AND THAT IF IT SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO THE AGENT WITH REGARD TO
ANY SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL
BE FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN
ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
Section 8.19. Waiver of Punitive Damages. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS GUARANTEE AGREEMENT, EACH PARTY HERETO HEREBY
AGREES THAT IT SHALL NOT SEEK FROM ANY OTHER PARTY HERETO, UNDER ANY THEORY OF
LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.
Section 8.20. Consent to Jurisdiction. (a) Any legal suit, action or
proceeding against a Credit Party arising out of or relating to this Guarantee
Agreement or any other Transaction Document, or any transaction contemplated
hereby or thereby, may be instituted in any federal or state court of competent
jurisdiction in The City of New York, State of New York, and each Credit Party
hereby irrevocably submits to the jurisdiction of any such court in any such
suit, action or proceeding. Each Credit Party hereby waives, to the fullest
extent permitted by applicable law, any defense which it may now or hereafter
have based upon lack of personal jurisdiction or venue or forum non conveniens.
Each Credit Party hereby irrevocably appoints and designates Corporate Creations
Network, Inc., having an address at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, as its true and lawful attorney-in-fact and duly authorized agent for the
limited purpose of accepting service of legal process and each Credit Party
agrees that service of process upon such party shall constitute personal service
of such process such Credit Party. Each Credit Party shall maintain the
designation and appointment of such authorized agent until all Obligations shall
have been paid in full. If such agent shall cease to so act, the Credit Parties
shall immediately designate and appoint another such agent satisfactory to the
Agent and shall promptly deliver to the Agent evidence in writing of such other
agent's acceptance of such appointment.
Section 8.21. Waiver of Jury Trial. EACH SUBSIDIARY GUARANTOR, THE
AGENT AND EACH Counterparty HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS.
Section 8.22. Conditions Precedent. The obligation of the
Counterparties to make the Swap Agreements with the Borrower shall be expressly
subject to the following conditions precedent:
33
(a) The Agent shall have received the following documents in
form and substance satisfactory to the Counterparties:
(i) copies, certified as true and complete by an officer of the
Borrower and each Subsidiary Guarantor, of the resolutions of
the Borrower and such Subsidiary Guarantor evidencing approval
of this Agreement, the Swap Agreements and the other
Transaction Documents to which it 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, or other
evidence of such approvals and authorizations;
(ii) copies, certified as true and complete by an officer of each
Transaction Party, of all documents evidencing any other
necessary action (including actions by such parties thereto
other than the Transaction Parties as may be required by the
Counterparties), approvals or consents with respect to the
Transaction Documents;
(iii) the Vessels are in the sole and absolute ownership of the
relevant Subsidiary Guarantor and duly registered in such
Subsidiary Guarantor's name under the flag of an Approved
Jurisdiction, unencumbered, save and except for the Mortgage
recorded against it and Permitted Encumbrances;
(iv) The Borrower and each Subsidiary Guarantor shall have duly
executed and delivered all of the Transaction Documents to
which they are a party; together with Uniform Commercial Code
Financing Statements for filing with the appropriate
jurisdictions necessary to perfect the security interest of
the Agent for the benefit of the Lenders in and to its
Collateral;
(v) such other documents as may be required to perfect the
security interest of the Agent, on behalf of the Lenders, in
the Collateral;
(vi) The Agent shall have received payment in full of all fees and
expenses due on or before the Effective Date to the Agents and
the Counterparties;
(vii) The Agent shall have received the favorable written opinions
of counsel to the Borrower and the Subsidiary Guarantors
addressed to each of the Counterparties, dated the Effective
Date and in form and substance satisfactory to the
Counterparties and their legal advisors; and
(viii) The Agent shall have received any additional documents,
affidavits or certificates of the Borrower, the Subsidiary
Guarantors or any other Person as it may reasonably require.
Section 8.23. Borrower. The Borrower agrees to be bound by the terms
and conditions of Article III through VIII hereof, as if such terms and
conditions were applicable to it as a Subsidiary Guarantor.
Section 8.24. Condition Subsequent. The Borrower and the Subsidiary
Guarantors agree to file the Mortgage relating to the Third Lien Vessels no
later than May 11, 2004.
34
IN WITNESS WHEREOF, each the Subsidiary Guarantor has duly
executed this Guarantee Agreement and the Agent and each of the Counterparties
has caused this Guarantee Agreement to be duly executed and delivered on their
behalf.
FORTIS CAPITAL CORP. as Agent and Counterparty
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Vice President
Address: Three Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
NIB CAPITAL BANK N.V., as Counterparty
By: /s/ Signature Illegible
-------------------------------------------
By: /s/ Signature Illegible
-------------------------------------------
Address: ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇ The HAGUE
Phone: ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
HBOS TREASURY SERVICES PLC, as Counterparty
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Head of Legal
Address: ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
SEABULK INTERNATIONAL, INC.,
the Borrower,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SEABULK ARIES II, INC.
SEABULK ▇▇▇▇▇, INC.
SEABULK ▇▇▇▇▇, INC.
SEABULK CORMORANT, INC.
SEABULK DEFENDER, INC.
SEABULK EMERALD, INC.
SEABULK HORIZON, INC.
SEABULK KESTREL, INC.
SEABULK MERLIN, INC.
SEABULK OSPREY, INC.
SEABULK OFFSHORE, LTD.
By its general partner Seabulk Tankers, Ltd
By its general partner Seabulk Transport, Inc.
SEABULK RAVEN, INC.
SEABULK TOUCAN, INC.
SEABULK TOWING, INC.
SEABULK ALKATAR, INC.
SEABULK SAPPHIRE, INC.
SEABULK TOWING SERVICES, INC.
OFFSHORE MARINE MANAGEMENT
INTERNATIONAL, INC.,
SEABULK TANKERS, LTD.,
By its general partner Seabulk Transport, Inc.,
SEABULK OFFSHORE GLOBAL HOLDINGS, INC.
SEABULK OFFSHORE HOLDINGS, INC.
SEABULK OFFSHORE OPERATORS, INC.
SEABULK MARINE INTERNATIONAL, INC.
SEABULK TRANSPORT, INC.
each a Subsidiary Guarantor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇