EXHIBIT 10D
CONSTRUCTION AND TERM LOAN AGREEMENT
dated as of October 13, 1995
among
KADAMPANATTU CORP.,
TRAILER BRIDGE, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
and the other lending institutions listed on Schedule 1 hereto (the
"Banks"),
and
The First National Bank of Boston,
as agent for the Banks
TABLE OF CONTENTS
Schedules
Schedule 1 Commitments; Commitment Percentages
Schedule 1.1(b) Maximum Cumulative Advance Amounts
Schedule 1.1(c) Project Budgets
Schedule 7.2 Governmental Approvals
Schedule 7.3 Title to Properties; Leases
Schedule 7.5(a) Material Changes
Schedule 7.18 Environmental Matters
Schedule 7.19 Joint Ventures
Schedule 7.20 Real Property
Schedule 7.24 Insurance
Schedule 9.1 Permitted Indebtedness
Schedule 9.2 Permitted Liens
Schedule 9.3 Permitted Investments
Exhibits
Exhibit A Form of Construction Loan Note
Exhibit B Form of Term Note
Exhibit C Form of Construction Advance Request
Exhibit D Charter
Exhibit E Plans and Specifications
Exhibit F Form of Security Agreement
Exhibit G Form of Guaranty
Exhibit H Form of Assignment of Contract
Exhibit I Form of Assignment of Insurance
Exhibit J Form of Charter Assignment
Exhibit K Form of Contract Collateral Assignment
Exhibit L Form of First Preferred Ship Mortgage
Exhibit M Principal Financial Officer Certificate
Exhibit N Form of Assignment and Acceptance
CONSTRUCTION AND TERM LOAN AGREEMENT
This CONSTRUCTION AND TERM LOAN AGREEMENT is made as of October 13,
1995, by and among KADAMPANATTU CORP. (the "Borrower") a Delaware
corporation having its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, TRAILER BRIDGE, INC. (the "Guarantor"), a Delaware
corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and THE FIRST NATIONAL
BANK OF BOSTON, a national banking association and the other lending
institutions listed on Schedule 1 and THE FIRST NATIONAL BANK OF BOSTON as
agent for itself and such other lending institutions.
DEFINITIONS AND RULES OF INTERPRETATION.
Definitions.
The following terms shall have the meanings set forth in this
Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:
Adjustment Date. The first day of the month immediately following
the month in which a Compliance Certificate is to be delivered by the
Borrower pursuant to Section 8.4(d) hereof.
Advance(s). Any advances of the Construction Loan or the Term
Loan.
Affiliate. Any Person that would be considered to be an affiliate
of the Borrower under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if
the Borrower were issuing securities.
Agent. The First National Bank of Boston acting as agent for the
Banks.
Agent's Head Office. The Agent's head office located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as
the Agent may designate from time to time.
Agent's Special Counsel. ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ or such other
counsel as may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment
Date through the date immediately preceding the next Adjustment Date (each
a "Rate Adjustment Period"), the Applicable Margin shall be the applicable
margin set forth below with respect to the Borrower's Interest Coverage
Ratio as determined for the fiscal period of the Borrower ending on the
fiscal quarter ended immediately preceding the applicable Rate Adjustment
Period.
Eurodollar
Base Rate
Interest Coverage Rate Advances
Ratio Advances
Less than or equal to 1.75% 3.00%
3.00:1.00
Greater than 1.00% 2.00%
3.00:1.00, but
less than or equal to
4.00:1.00
Greater than 0.50% 1.50%
4.00:1.00
Notwithstanding the foregoing, (a) for Advances outstanding during the
period commencing on the Closing Date through the date immediately
preceding the first Adjustment Date to occur after the Conversion Date,
the Applicable Margin shall be three percent (3%) per annum for Eurodollar
Rate Advances and one and three- quarters percent (1 3/4%) per annum for
Base Rate Advances, and (b) if at any time after the Conversion Date the
Borrower fails to deliver any Compliance Certificate when required by
Section 8.4(d) hereof then, for the period commencing on the next
Adjustment Date to occur subsequent to such failure through the date
immediately following the date on which such Compliance Certificate is
delivered, the Applicable Margin shall be the highest Applicable Margin
set forth in the table above.
Appraisals. The appraisals of the value of each Vessel, determined
on a market value basis and performed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. & Sons, Inc.
or another qualified independent appraiser approved by the Agent.
Assignment and Acceptance. See Section 19.1 hereof.
Assignment of Contracts. The collateral assignment of contracts,
permits, licenses and approvals executed and delivered by the Borrower to
the Agent and substantially in the form of Exhibit H attached hereto.
Assignment of Insurance. The collateral assignment of insurance
policies executed and delivered by the Borrower to the Agent and
substantially on the form of Exhibit I attached hereto.
Balance Sheet Date. December 31, 1994.
Banks. FNBB and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of any
rights and obligations of a Bank pursuant to Section 19.
Base Rate. The higher of (a) the annual rate of interest announced
from time to time by FNBB at its head office in Boston, Massachusetts, as
its "base rate" or (b) one-half of one percent (1/2%) above the Federal
Funds Effective Rate. For the purposes of this definition, "Federal Funds
Effective Rate" shall mean, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers,
as published for such day (or if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the
Agent.
Base Rate Advance. Any Construction Advance or portion thereof and
all or any portion of the Term Loan bearing interest calculated by
reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Builder. Trinity Marine Group, Inc., a Nevada corporation, the
owner and operator of the shipyards located in New Orleans, Louisiana and
Port Bieneville, Mississippi, which will perform the construction on the
Vessels pursuant to the Contract.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in
the case of Eurodollar Rate Advances, also a day which is a Eurodollar
Business Day.
Capital Assets. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and good will); provided that
Capital Assets shall not include any item customarily charged directly to
expense or depreciated over a useful life of twelve (12) months or less in
accordance with Generally Accepted Accounting Principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or the Guarantor in connection with the purchase or lease by the
Borrower or the Guarantor of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance
with Generally Accepted Accounting Principles.
Capitalized Leases. Leases under which the Borrower or the
Guarantor is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with Generally Accepted
Accounting Principles.
CERCLA. See Section 7.18 hereof.
Charter. The charter of the Vessels from the Borrower to the
Guarantor to operate the Vessels exclusively in the domestic, or ▇▇▇▇▇
Act, trades between the mainland U.S. and Puerto Rico, substantially in
the form of Exhibit D attached hereto.
Charter Assignment. The collateral assignment of the Charter
executed and delivered by the Borrower to the Agent and in substantially
the form of Exhibit J attached hereto.
Chattel Mortgage. The Chattel Mortgage dated within thirty (30)
days of the Closing Date between the Borrower and the Agent, and in form
and substance satisfactory to the Agent and the Banks.
Closing Date. The first date on which the conditions set forth in
Section 11 have been satisfied and the first Construction Advance is to be
made.
Closing Fee. See Section 5.1.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the
Borrower and the Builder that are or are intended to be subject to the
security interests and mortgages created by the Security Documents.
Combined or combined. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Guarantor and the
Borrower, combined in accordance with Generally Accepted Accounting
Principles.
Combined Financial Obligations. With respect to any period, an
amount equal to the sum of all payments, whether of principal, interest or
other amounts, on Indebtedness that become due or payable or that are to
become due and payable during such period pursuant to any agreement or
instrument to which the Guarantor or the Borrower is a party relating to
the borrowing of money or the obtaining of credit or in respect of
Capitalized Leases. Demand obligations shall be deemed to be due and
payable during any period which such obligations are outstanding.
Combined Net Income. The combined net income (or deficit) of the
Guarantor and the Borrower, after deduction of all expenses, taxes and
other proper charges determined in accordance with Generally Accepted
Accounting Principles.
Combined Operating Cash Flow. For any period, an amount equal to
(a) the sum of (i) Earnings Before Interest and Taxes for such period,
plus (ii) depreciation, amortization and all other non-cash charges for
such period, less (b) the sum of (i) cash payments for all taxes and Tax
Distributions paid during such period, plus (ii) twenty percent (20%) of
Capital Expenditures (other than Capital Expenditures made in connection
with the Project) made during such period.
Combined Tangible Net Worth. Combined Net Worth, less the sum of:
(a) the total book value of all assets of the Guarantor and
the Borrower properly classified as intangible assets under
Generally Accepted Accounting Principles, including such items as
good will, the purchase price of acquired assets in excess of the
fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus
(b) all amounts representing any write-up in the book value
of any assets of the Guarantor and the Borrower resulting from a
revaluation thereof subsequent to the Balance Sheet Date; plus
(c) investments in and advances to non-Combined Affiliates;
plus
(d) to the extent otherwise includable in the computation of
Combined Tangible Net Worth, any subscriptions receivable.
Combined Total Assets. All assets of the Guarantor and the
Borrower determined on a combined basis in accordance with Generally
Accepted Accounting Principles.
Combined Total Liabilities. The sum of (a) all liabilities of the
Guarantor and the Borrower determined on a combined basis in accordance
with Generally Accepted Accounting Principles, plus (b) all Indebtedness
of the Guarantor and the Borrower, whether or not so classified, plus (c)
the net present value (applying a ten percent (10%) discount rate thereto)
of all future payments due under operating leases of revenue equipment
having terms of twelve (12) months or more to which either the Borrower or
the Guarantor is a party.
Commitment. With respect to each Bank, the amount set forth on
Schedule 1 hereto as the amount of such Bank's commitment to make
Construction Advances to the Borrower, as the same may be reduced from
time to time; or if such commitment is terminated pursuant to the
provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage
set forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks, and with respect to the Term Loan, the
percentage amount of each Bank's commitment to make the Term Loan as set
forth on Schedule 1 hereto.
Compliance Certificate. See Section 8.4(d) hereof.
Construction Advance. See Section 2.1 hereof.
Construction Advance Request. See Section 2.6 hereof.
Construction Documents. The Contract and the Intercreditor
Agreement.
Construction Inspector. The consulting architect, engineer or
inspector appointed by the Borrower and approved by the Majority Banks or,
if the Agent or the Majority Banks so elect from time to time, the
consulting architect, engineer or inspector appointed by the Agent with
the approval of the Majority Banks.
Construction Loan. See Section 2.1 hereof.
Construction Loan Advance Date. Each of the dates on which a
Milestone has been achieved, as set forth on Schedule 1.1(b) hereto,
entitling the Borrower to make a Construction Advance Request under
Section 2.1.
Construction Loan Notes. See Section 2.4 hereof.
Construction Loan Note Record. A Record with respect to the
Construction Loan Notes.
Contract. The Vessel Repair and Refurbishment Contract dated
October 13, 1995, between the Borrower and the Builder, as amended from
time to time, providing for the construction to be performed on each
Vessel, copies of which have been furnished to the Agent and the Banks.
Contract Collateral Assignment. The assignment of the Borrower's
right, title and interest in and to (including without limitation, rights
to enforce the Shipbuilding Guaranty) the Contract collateral,
substantially in the form of Exhibit K attached hereto.
Contract Price. The total construction price payable for the work
performed on each of the Vessels pursuant to the Contract, provided,
however, that in no event shall the Contract Price for either Vessel
exceed $10,300,000 without the prior written consent of the Banks.
Conversion Date. The earlier of (a) the Project Completion Date
and (b) September 30, 1996.
Conversion Request. A notice given by the Borrower to the Agent of
the Borrower's election to convert or continue an Advance in accordance
with Section 2.7.
Credit Agreement. This Construction and Term Loan Agreement,
including the Schedules and Exhibits hereto.
Default. See Section 13 hereof.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower or the
Guarantor, other than dividends payable solely in shares of common stock
of the Borrower or the Guarantor; the purchase, redemption, or other
retirement of any shares of any class of capital stock of the Borrower or
the Guarantor, directly or indirectly; the return of capital by the
Borrower or the Guarantor to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock
of the Borrower or the Guarantor.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of
such Bank, if any, located within the United States that will be making or
maintaining Base Rate Advances.
Drawdown Date. The date on which any Construction Advance or the
Term Loan is made or is to be made, and the date on which any Construction
Advance or the Term Loan is converted or continued in accordance with
Section Section 2.7 and 4.5.
Earnings Before Interest and Taxes. The Combined Net Income of the
Guarantor and the Borrower for any period, after all expenses and other
proper charges but before payment or provision for any income taxes, tax
distributions or interest expense for such period, determined in
accordance with Generally Accepted Accounting Principles, and after
eliminating therefrom all extraordinary nonrecurring items of income (or
deficit).
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000;
(b) a savings and loan association or savings bank organized under the
laws of the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with Generally Accepted Accounting Principles; (c) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"), or
a political subdivision of any such country, and having total assets in
excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank
of any country which is a member of the OECD; and (e) if, but only if, an
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.18(a) hereof.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer
with the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and
the regulations promulgated thereunder as to which the requirement of
notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
Eurodollar Rate Advance, the maximum rate (expressed as a decimal) at
which any lender subject thereto would be required to maintain reserves
under Regulation D of the Board of Governors of the Federal Reserve System
(or any successor or similar regulations relating to such reserve
requirements) against "Eurocurrency Liabilities" (as that term is used in
Regulation D), if such liabilities were outstanding. The Eurocurrency
Reserve Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are
open for international business (including dealings in Dollar deposits) in
London or such other eurodollar interbank market as may be selected by the
Agent in its sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of
such Bank, if any, that shall be making or maintaining Eurodollar Rate
Advances.
Eurodollar Rate. For any Interest Period with respect to a
Eurodollar Rate Advance, the rate of interest equal to (a) the rate per
annum (rounded upwards to the nearest 1/16 of one percent) at which the
Reference Bank's Eurodollar Lending Office is offered Dollar deposits
two (2) Eurodollar Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations of such Eurodollar Lending Office are
customarily conducted at or about 10:00 a.m., Boston time, for delivery on
the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of the Eurodollar Rate
Advance of the Reference Bank to which such Interest Period applies,
divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate,
if applicable.
Eurodollar Rate Advances. Any Construction Advance or portion
thereof or all or any portion of the Term Loan bearing interest calculated
by reference to the Eurodollar Rate.
Event of Default. See Section 13 hereof.
Fee Letter. See Section 5.2 hereof.
First Preferred Fleet Mortgage. The First Preferred Fleet Mortgage
dated as of the date hereof from the Borrower to the Agent and
substantially in the form of Exhibit L attached hereto.
FNBB. The First National Bank of Boston in its individual
capacity.
Generally Accepted Accounting Principles. (a) When used in Section
10, whether directly or indirectly through reference to a capitalized term
used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the
accounting practice of the Borrower and the Guarantor reflected in their
financial statements for the year ended on the Balance Sheet Date, and (b)
when used in general, other than as provided above, means principles that
are (i) consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, as in effect
from time to time and (ii) consistently applied with past financial
statements of the Borrower and the Guarantor adopting the same principles,
provided that in each case referred to in this definition of "Generally
Accepted Accounting Principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification
regarding changes in Generally Accepted Accounting Principles) as to
financial statements in which such principles have been properly applied.
Governmental Authority. The United States of America, any State
thereof, any political subdivision thereof, and any agency, authority,
department, commission, board, bureau, or instrumentality of any of them
(including without limitation the Federal Maritime Commission, the
Maritime Administration of the United States Department of Transportation
and the United States Coast Guard).
Guaranteed Pension Plan. Any employee pension benefit plan within
the meaning of Section 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
Guarantor. As defined in the preamble hereto.
Guaranty. The Guaranty dated as of the date hereof made by the
Guarantor in favor of the Banks and the Agent pursuant to which the
Guarantor guaranties to the Banks and the Agent the payment and
performance of the Obligations and in substantially the form of Exhibit G
attached hereto.
Hazardous Substances. See Section 7.18(b) hereof.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with Generally Accepted Accounting Principles should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by
any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; and
(c) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner
of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise, and the
obligations to reimburse the issuer in respect of any letters of credit.
Intercreditor Agreement. The Intercreditor Agreement, dated as of
the date hereof among the Banks, the Agent, the Builder, the Shipbuilding
Guarantor, the Guarantor and the Borrower and in form and substance
satisfactory to the Banks and the Agent.
Interest Coverage Ratio. As at any date of determination, the
ratio of (a) Earnings Before Interest and Taxes for the period of four (4)
consecutive fiscal quarters then ended to (b) the aggregate amount of all
interest expense for such period.
Interest Payment Date. (a) As to any Base Rate Advance, the last
day of the calendar quarter which includes the Drawdown Date thereof; and
(b) as to any Eurodollar Rate Advance in respect of which the Interest
Period is (i) three (3) months or less, the last day of such Interest
Period and (ii) more than three (3) months, the date that is three (3)
months from the first day of such Interest Period and, in addition, the
last day of such Interest Period.
Interest Period. With respect to each Construction Advance or all
or any relevant portion of the Term Loan, (a) initially, the period
commencing on the Drawdown Date of such Advance and ending on the last day
of one of the periods set forth below, as selected by the Borrower in a
Construction Advance Request (i) for any Base Rate Advance, the last day
of the calendar quarter; and (ii) for any Eurodollar Rate Advance, 1, 2,
3, or 6 months; and (ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such and ending on
the last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Advance would otherwise end on a day that is not a Eurodollar
Business Day, that Interest Period shall be extended to the next
succeeding Eurodollar Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on
the immediately preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate
Advance would end on a day that is not a Business Day, that
Interest Period shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Advance to a Base Rate
Advance and the continuance of all Base Rate Advances as Base Rate
Advances on the last day of the then current Interest Period with
respect thereto;
(d) any Interest Period that begins on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Eurodollar Business Day
of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate
Advance that would otherwise extend beyond the Term Loan Maturity
Date (if comprising the Term Loan or a portion thereof) shall end
on the Term Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness
of, or for loans, advances, capital contributions or transfers of property
to, or in respect of any guaranties (or other commitments as described
under Indebtedness), or obligations of, any Person. In determining the
aggregate amount of Investments outstanding at any particular time: (a)
the amount of any Investment represented by a guaranty shall be taken at
not less than the principal amount of the obligations guaranteed and still
outstanding; (b) there shall be included as an Investment all interest
accrued with respect to Indebtedness constituting an Investment unless and
until such interest is paid; (c) there shall be deducted in respect of
each such Investment any amount received as a return of capital (but only
by repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of
any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise, except that accrued interest
included as provided in the foregoing clause (b) may be deducted when
paid; and (e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Loan Documents. This Credit Agreement, the Notes, the Fee Letter,
the Intercreditor Agreement and the Security Documents.
Majority Banks. As of any date, the Banks holding at least
sixty-six and two thirds percent (66 2/3%) of the outstanding principal
amount of the Notes on such date; and if no such principal is outstanding,
the Banks whose aggregate Commitments constitutes at least sixty-six and
two thirds percent (66 2/3%) of the Total Commitment.
Maximum Cumulative Advance Amount. With respect to any
Construction Loan Advance Date, the amount set forth in Schedule 1.1(b)
opposite a Milestone as the maximum aggregate amount of the Total
Commitment available to have been and to be utilized as of such
Construction Loan Advance Date to fund the Project Costs associated with
the achievement of such Milestone (including without limitation progress
payments under the Contract and such increases in the scheduled progress
payments as arise from change orders or other adjustments strictly in
accordance with the provisions of the Contract and approved by the Banks).
Milestone Amount. At each Construction Loan Advance Date, an
amount equal to (a) the Maximum Cumulative Advance Amount for such
Construction Loan Advance Date less (b) the Construction Loan outstanding,
provided, however, the Milestone Amount for any Construction Advance shall
never exceed the amount set forth in Schedule 1.1(b) opposite a Milestone
as the maximum aggregate amount needed to fund the Project Costs
associated with achieving such Milestone.
Milestones. Those stages in the construction and fitting of each
of the Vessels set forth on Schedule 1.1(b) hereto, the achievement of
which shall entitle the Borrower to make a Construction Advance Request
pursuant to Section 2.1.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
Net Worth. The excess of (a) all assets of a Person determined on
a consolidated basis in accordance with Generally Accepted Accounting
Principles less (b) all liabilities of a Person determined on a
consolidated basis in accordance with generally accepted account
principles and all Indebtedness of such Person, whether or not so
classified.
Notes. The Term Notes and the Construction Loan Notes.
Obligations. All indebtedness, obligations and liabilities of any
of the Borrower, the Guarantor and/or their affiliates to any of the Banks
and the Agent, individually or collectively, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law
or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents or in respect of any of the Advances or any of
the Notes or other instruments at any time evidencing any thereof.
Outstanding. With respect to the Advances, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section
4002 of ERISA and any successor entity or entities having similar
responsibilities.
Perfection Certificate. The Perfection Certificate as defined in
the Security Agreement.
Performance Bond. The dual-obligee payment and performance bond
relating to the Builder, naming the Borrower and the Agent (for the
benefit of the Agent and the Banks) as co-obligees, issued by a licensed
surety company or companies acceptable to the Agent and the Banks in an
amount of not less than the Contract Price, such performance bond to
specify that the interest of the Agent (for the benefit of the Agent and
the Banks) shall be in preference to and have priority over the Borrower
and any other Person claiming under, from or through the Borrower and that
any and all payments thereunder shall be made directly to the Agent (for
the benefit of the Agent and the Banks) so long as any Obligations remain
Outstanding and unpaid and the Banks have any commitment to make advances
under the Credit Agreement.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Plans and Specifications. All plans and specifications in
connection with the construction and design of the expansion to be
performed on each Vessel, a copy of which are attached hereto as
Exhibit E.
Project. As the context may require, the design, construction and
finish of the expansion of the Vessels and decorative work and
installation of fixtures, furniture and equipment of and on each Vessel
and of all of the property represented by each such Vessel prior to the
Project Completion Date.
Project Approvals. All approvals, consents, waivers, orders,
agreements, acknowledgment, authorizations, permits and licenses required
under applicable Requirements, or otherwise necessary or appropriate, for
the construction and equipping of each Vessel, and the use, occupancy and
operation of each such Vessel following completion of its construction,
whether obtained from a Governmental Authority or any other Person.
Project Budget. The estimated Project Costs as set forth on
Schedule 1.1(c) hereto.
Project Completion Date. The date on which all work (other than
warranty and other post completion obligations) under the Contract for
both Vessels has been performed in all material respects, and both Vessels
have resumed commercial operation or are in all material respects ready to
resume commercial operation.
Project Costs. The total cost to complete the Project, including
the Contract Price, costs and expenses under and associated with the
Contract, architects' fees and miscellaneous fees and expenses as set
forth in the Project Budget; provided, however, that in no event shall the
aggregate amount of such Project Costs for each Vessel exceed $10,550,000.
Ramp. That portion of the Borrower's personal property located
Puerto Rico which constitutes the ramps for the Vessels, all as more fully
described in the Chattel Mortgage.
Rate Adjustment Period. As defined in the definition of
"Applicable Margin".
Real Estate. All real property at any time owned or leased (as
lessee or sublessee) by the Borrower or the Guarantor.
Record. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records, maintained
by any Bank with respect to any Advance referred to in such Note.
Reference Bank. FNBB.
Rental Obligations. All present or future obligations of the
Borrower or the Guarantor under any rental agreements or leases of real or
personal property, other than (a) obligations that can be terminated by
the giving of notice without liability to the Guarantor or the Borrower in
excess of the liability for rent due as of the date on which such notice
is given and under which no penalty or premium is paid as a result of any
such termination, and (b) obligations in respect of Capitalized Leases.
Requirements. Any law, ordinance, code, order, rule or regulation
of any Governmental Authority relating in any way to the construction and
ownership of either Vessel, or the use, occupancy and operation of such
Vessel following the completion of its construction.
Security Agreement. The Security Agreement dated as of the date
hereof between the Borrower and the Agent and substantially in the form of
Exhibit F attached hereto.
Security Documents. The Guaranty, the Assignment of Insurance, the
Contract Collateral Assignment, the Assignment of Contracts, the Chattel
Mortgage, the Charter Assignment, the Louisianna Security Agreement, the
First Preferred Fleet Mortgage, and the Shipbuilding Guaranty.
Shipbuilding Guarantor. Trinity Industries, Inc., a Delaware
corporation.
Shipbuilding Guaranty. See Section 6 hereof.
Strong/American. The integrated tug/barge vessels owned by the
Borrower know as the Strong/American, official Nos. 598665 and 678752,
respectively, operated as a U.S. flag vessels.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Stock.
Tax Distributions. For any Person, the lesser of (a) total
Distributions made in each fiscal year (other than those Distributions set
forth on Schedule 7.5(a) and (b) thirty-eight percent (38%) of Combined
Net Income for each fiscal year.
Term Loan. The Term Loan made or to be made by the Banks to the
Borrower on the Conversion Date as contemplated by Section 4 hereof.
Term Loan Maturity Date. June 30, 2003.
Term Notes. See Section 4.1 hereof.
Term Note Record. A Record with respect to a Term Note.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time.
Type. As to any Advance its nature as a Base Rate Advance or a
Eurodollar Rate Advance.
Vessels. The two roll-on roll-off barges known as the ▇▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ and the San ▇▇▇▇-Jax Bridge, Official No.
667317, each configured to carry 267 48-foot over-the-road trailers, which
barges are to be reconstructed with mid-bodies to be designed, engineered
and built in accordance with the Plans and Specifications and which will
continue to operated as U.S. flag barges, each to be home ported in New
York, New York.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
trust or other business entity involved, whether or not the right so to
vote exists by reason of the happening of a contingency.
Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the terms of
this Credit Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by Generally Accepted Accounting
Principles applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by Generally
Accepted Accounting Principles, which terms are defined in the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, have the meanings assigned to them therein, with the
term "instrument" being that defined under Article 9 of the Uniform
Commercial Code.
(h) Reference to a particular "Section " refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not
to any particular section or subdivision of this Credit Agreement.
THE CONSTRUCTION LOAN.
Agreement to Make Construction Advances.
Subject to the terms and conditions set forth in this Credit
Agreement, each of the Banks severally agrees to advance to the Borrower
(a) on each Construction Loan Advance Date, upon notice by the Borrower to
the Agent given in accordance with Section 2.6 hereof, an amount equal to
such Bank's Commitment Percentage multiplied by the lesser of (i) the
Construction Advance requested in such notice or (ii) the Milestone
Amount, provided that the sum of the Outstanding amount of all
Construction Advances made by all Banks to the Borrower pursuant to this
Section 2.1 (after giving effect to all amounts requested) shall not at
any time exceed the Total Commitment and, provided further, the proceeds
of such Construction Advance shall be used to finance the Project Costs
associated with achieving such Milestone, and (b) on the Closing Date,
upon notice by the Borrower to the Agent given in accordance with Section
2.6 hereof, an amount equal to such Bank's Commitment Percentage of the
Construction Advance requested in such notice, provided that the sum of
the Outstanding amount of all Construction Advances made by all Banks to
the Borrower pursuant to this Section 2.1 (after giving effect to all
amounts requested) shall not at any time exceed the Total Commitment and,
provided further, the proceeds of such Construction Advance requested
pursuant to this Section 2.1(b) shall be used to refinance existing
Indebtedness of the Borrower owing to Greyrock Financial in an aggregate
amount not to exceed $5,000,000, provided that the sum of the Outstanding
amount of all Construction Advances made by all Banks to the Borrower
pursuant to this Section 2.1 (after giving effect to all amounts
requested) shall not at any time exceed the Total Commitment. The
aggregate principal amount requested pursuant to Section 2.6 hereof to be
advanced by the Banks to the Borrower on any given Construction Loan
Advance Date is referred to herein, in each instance, as a "Construction
Advance", and the aggregate cumulative principal amount of all sums
advanced by the Banks to the Borrower from time to time pursuant to this
Section 2.1 is referred to herein as the "Construction Loan". Each
Construction Advance shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Construction Advance hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 11 and Section 12 hereof, in the case of
the initial Construction Advance to be made on the Closing Date, and
Section 12 hereof, in the case of all other Construction Advances, have
been satisfied on the date of such request.
Commitment Fee.
The Borrower agrees to pay to the Agent for the accounts of the
Banks in accordance with their respective Commitment Percentages a
commitment fee calculated at the rate of one-half of one percent (1/2%)
per annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Conversion Date by which the
Total Commitment exceeds the Outstanding amount of the Construction Loan
during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Conversion Date or
any earlier date on which the Commitments shall terminate.
Reduction of Total Commitment.
The Borrower shall have the right at any time and from time to time
upon three (3) Business Days prior written notice to the Agent to reduce
by $5,000,000 or an integral multiple thereof or terminate entirely the
unborrowed portion of the Total Commitment, whereupon the Commitments of
the Banks shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the
case may be, terminated. In the case of a reduction of the Total
Commitment, the Maximum Cumulative Advance Amount for each of the
remaining Construction Loan Advance Dates shall be reduced pro rata as a
result of such reduction of the Total Commitment. Promptly after
receiving any notice of the Borrower delivered pursuant to this Section
2.3, the Agent will notify the Banks of the substance thereof. Upon the
effective date of any such reduction or termination, the Borrower shall
pay to the Agent for the respective accounts of the Banks the full amount
of any commitment fee then accrued on the amount of the reduction. No
reduction of the Commitments may be reinstated.
The Notes.
The Construction Loan shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit A attached
hereto (each a "Construction Loan Note"), dated as of the Closing Date and
completed with appropriate insertions. One Construction Loan Note shall
be payable to the order of each Bank in a principal amount equal to such
Bank's Commitment or, if less, the Outstanding amount of all Construction
Loan Advances made by such Bank, plus interest accrued thereon, as set
forth below. The Borrower irrevocably authorizes each Bank to make or
cause to be made, at or about the time of the Drawdown Date of any
Construction Advance or at the time of receipt of any payment of principal
on such Bank's Construction Loan Note, an appropriate notation on such
Bank's Construction Loan Note Record reflecting the making of such
Construction Advance or (as the case may be) the receipt of such payment.
The Outstanding amount of the Construction Advances set forth on such
Bank's Construction Loan Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's
Construction Loan Note Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Construction Loan Note
to make payments of principal of or interest on any Construction Loan Note
when due.
Interest on Construction Advances.
Except as otherwise provided in Section 5.10,
(a) Each Base Rate Advance shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per
annum equal to the Base Rate plus the Applicable Margin.
(b) Each Eurodollar Rate Advance shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the
last day of the Interest Period with respect thereto at the rate
per annum equal to the Eurodollar Rate for such Interest Period
plus the Applicable Margin.
(c) The Borrower promises to pay interest on each
Construction Advance in arrears on each Interest Payment Date with
respect thereto.
Requests for Construction Advances.
The Borrower shall give to the Agent written notice in the form of
Exhibit C attached hereto (or telephonic notice confirmed in a writing in
the form of Exhibit C attached hereto) of each Construction Advance
requested hereunder (a "Construction Advance Request") no less than (a)
two (2) Business Days prior to any Drawdown Date of any Base Rate Advance
or (b) three (3) Eurodollar Business Days prior to any Drawdown Date of
any Eurodollar Rate Advance. Each such notice shall specify (i) the
principal amount of the Construction Advance; (ii) the amount of the
Project Costs associated with the achievement of the Milestone to be
funded by the requested Construction Advance (with reference to the
Builder's, subcontractor's or supplier's invoices relating to such Project
Costs and/or other supporting documentation, a copy of which shall have
been delivered to the Agent prior to or together with the Construction
Advance Request) or, if such Construction Advance is to fund the repayment
of Indebtedness owing to Greyrock Financial existing on the Closing Date,
the amount of such Indebtedness; (iii) the aggregate principal amount of
the Construction Loan Outstanding after giving effect to the Construction
Advance requested; (iv) for Construction Advances requested to pay Project
Costs, the Maximum Cumulative Advance Amount pursuant to Schedule 1.1(b)
as at the proposed Construction Loan Advance Date, the Milestone Amount as
of such Construction Loan Advance Date, and the amount set forth on
Schedule 1.1(b) necessary to achieve such Milestone, (v) the Interest
Period for such Construction Advance, and (vi) the Type of such
Construction Advance. Promptly upon receipt of any such notice, the Agent
shall notify the Banks thereof. Each such notice, in the case of a
Construction Advance Request requested to pay Project Costs shall be
accompanied by a certificate of the Construction Inspector stating that
the Milestone relating to the Construction Loan Advance Date has been
achieved in compliance with applicable requirements of the Contract, other
Vessel contracts, the Construction Documents and this Credit Agreement.
Each such notice shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept from the Banks on the applicable
Construction Loan Advance Date the requested Construction Advance provided
in such notice. The amount of each Construction Advance requested
pursuant to each Construction Loan Request shall be in a minimum aggregate
amount of $500,000.
Conversion Options.
Conversion to Different Type of Construction Advance.
The Borrower may elect from time to time to convert any
Outstanding Construction Advance to a Construction Advance of
another Type, provided that (a) with respect to any such conversion
of a Construction Advance to a Base Rate Advance, the Borrower
shall give the Agent at least three (3) Business Days prior written
notice of such election; (b) with respect to any such conversion of
a Eurodollar Rate Advance into a Construction Advance of another
Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto; (c) with respect to any such
conversion of a Base Rate Advance to a Eurodollar Rate Advance, the
Borrower shall give the Agent at least three (3) Eurodollar
Business Days prior written notice of such election and (d) no
Construction Advance may be converted into a Eurodollar Rate
Advance when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made
each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Construction Advances to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of Outstanding Construction Advances of any
Type may be converted as provided herein, provided that partial
conversions shall be in an aggregate principal amount of $1,000,000
or a whole multiple of $500,000 in excess thereof. Each Conversion
Request relating to the conversion of a Construction Advance to a
Eurodollar Rate Advance shall be irrevocable by the Borrower.
Continuation of Type of Construction Advance.
Any Construction Advances of any Type may be continued as such
upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
Section 2.7.1; provided that no Eurodollar Rate Advance may be
continued as such when any Default or Event of Default has occurred
and is continuing, but shall be automatically converted to a Base
Rate Advance on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default of which the officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the
continuation of any Eurodollar Rate Advance as such, then such
Eurodollar Rate Advance shall be automatically converted to a Base
Rate Advance on the last day of the first Interest Period relating
thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this Section 2.7 is scheduled
to occur.
Eurodollar Rate Advances.
Any conversion to or from Eurodollar Rate Advances shall be in
such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Advances having the same Interest Period shall not
be less than $1,000,000 or a whole multiple of $100,000 in excess
thereof.
Funds for Construction Advances.
Funding Procedures.
Not later than 11 o'clock a.m. (Boston time) on the proposed
Drawdown Date of any Construction Advance, each of the Banks will
make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Construction Advance. Upon receipt
from each Bank of such amount, and upon receipt of the documents
required by Section Section 11 and 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the
Agent will make available to the Borrower the aggregate amount of
such Advances made available to the Agent by the Banks in the
manner provided in Section Section 2.8.3 and 2.8.4. The failure or
refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment
Percentage of the requested Construction Advance shall not relieve
any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Construction Advance.
Advances by Agent.
The Agent may, unless notified to the contrary by any Bank
prior to a Drawdown Date, assume that such Bank has made available
to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Construction Advance to be made on
such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to
the Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of
(a) the average computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in
such period, times (b) the amount of such Bank's Commitment
Percentage of such Construction Advance, times (c) a fraction, the
numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of
such Bank's Commitment Percentage of such Construction Advance
shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to
such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Construction Advance is not made available to
the Agent by such Bank within three (3) Business Days following
such Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Construction Advance made on such
Drawdown Date.
Construction Advances to Borrower or Builder.
All Construction Advances made pursuant to this Section 2.8
shall be made, at the sole and absolute discretion of the Agent,
either directly to the Borrower or directly to the Builder for
deposit in an appropriately designated special bank account, and
the execution of this Credit Agreement by the Borrower shall, and
hereby does, constitute an irrevocable authorization to disburse
the proceeds of the Construction Advances to fund progress payments
to the Builder when due, in accordance with Schedule 1.1(b) and the
provisions of the Contract. No further authorization from the
Borrower shall be necessary to warrant such direct disbursements of
the proceeds of the Construction Advances to the Builder and all
such disbursements shall satisfy pro tanto the obligations of the
Agent and the Banks hereunder and shall be secured by the Security
Documents as fully as if made directly to the Borrower.
Construction Advances to Others.
Upon the occurrence and during the continuance of any Default
or Event of Default and following five (5) days prior written
notice to the Borrower (provided that such prior notice is not
required if in the reasonable opinion of the Agent such prior
notice would adversely affect the Collateral or the rights and
benefits of the Banks in respect of the Collateral), at the
direction of the Majority Banks in their sole discretion, the Agent
may disburse all or any portion of the proceeds of any Construction
Advance to any Person to whom the Agent in good faith determines
payment is due for goods delivered, services rendered or
expenditures incurred in connection with the Project, or in order
to preserve and protect the Collateral in relation to the Project,
and any portion of a Construction Advance so disbursed by the Agent
shall be deemed disbursed as of the date on which the Agent makes
such disbursement. Subject to the provisions of this paragraph,
the execution of this Credit Agreement by the Borrower shall, and
hereby does, constitute an irrevocable authorization so to disburse
the proceeds of any Construction Advance and no further
authorization from the Borrower shall be necessary to warrant such
direct disbursements and all such disbursements shall satisfy pro
tanto the obligations of the Agent and the Banks hereunder and
shall be secured by the Security Documents as fully as if made
directly to the Borrower.
Advances Pursuant to Contract.
Upon the occurrence and during the continuance of any Default
or Event of Default and following five (5) days prior written
notice to the Borrower (provided that such notice is not required
if in the reasonable opinion of the Agent such prior notice would
adversely affect the Collateral or the rights and benefits of the
Banks in respect of the Collateral), at the direction of the
Majority Banks in their sole discretion, the Banks may fund
additional Construction Advances to the Builder or any other Person
the Banks deem necessary to continue and complete all or a portion
of the construction on the Vessels. The execution of this Credit
Agreement by the Borrower shall, and hereby does, constitute an
irrevocable authorization to make such Construction Advances and
disburse the proceeds in accordance with this Section 2.8.5, and
such Advances shall be Construction Advances and shall be secured
by the Security Documents as fully as if requested directly by the
Borrower and made directly to the Borrower.
Construction Advances Do Not Constitute a Waiver.
No Construction Advance made by the Banks shall constitute a
waiver of any of the conditions to the obligation of the Banks to
make further Construction Advances nor, in the event the Borrower
or the Guarantor fails to satisfy any such condition, shall any
such Construction Advance have the effect of precluding the Agent
or the Majority Banks from thereafter declaring such failure to
satisfy a condition to be an Event of Default (unless the
satisfaction of such condition has been waived pursuant to Section
26 hereof).
REPAYMENT OF THE CONSTRUCTION LOAN.
Maturity.
In the event the Construction Loan is not converted into the Term
Loan on the Conversion Date, the Borrower promises to pay on the
Conversion Date, and there shall become absolutely due and payable on the
Conversion Date, the entire unpaid principal balance Outstanding of the
Construction Loan on such date, together with any and all accrued and
unpaid interest thereon.
Mandatory Repayments of Construction Loan.
If at any time the Outstanding amount of the Construction Loan
exceeds the Total Commitment, then the Borrower shall immediately pay the
amount of such excess to the Agent for application to the Construction
Loan.
Optional Repayments of Construction Loan.
The Borrower shall have the right, at its election, to repay the
Outstanding amount of the Construction Loan, as a whole or in part, at any
time without penalty or premium, provided that the full or partial
prepayment of the Outstanding amount of any Eurodollar Rate Advance
pursuant to this Section 3.3 may be made only on the last day of the
Interest Period relating thereto. The Borrower shall give the Agent, no
later than 10:00 a.m., Boston time, at least three (3) Business Days prior
written notice, of any proposed repayment pursuant to this Section 3.3 of
Base Rate Advances, and four (4) Eurodollar Business Days notice of any
proposed repayment pursuant to this Section 3.3 of Eurodollar Rate
Advances, in each case, specifying the proposed date of payment of
Construction Advances and the principal amount to be paid. Each such
partial prepayment of the Construction Loan shall be in an integral
multiple of $1,000,000, shall be accompanied by the payment of accrued
interest on the principal repaid to the date of payment and shall be
applied first to the principal of Base Rate Advances and then to the
principal of Eurodollar Rate Advances. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Note, with adjustments
to the extent practicable to equalize any prior repayments not exactly in
proportion.
THE TERM LOAN.
Conversion of Construction Loans; the Term Loan.
Subject to the terms and conditions hereinafter set forth,
including, without limitation, the satisfaction of the conditions set
forth in Section 12 hereof, on the Conversion Date the aggregate amount of
the Outstanding Construction Loan shall be converted into a Term Loan in
an aggregate principal amount equal to the aggregate Outstanding principal
balance of the Construction Loan on that date, held severally by the Banks
in accordance with their Commitment Percentages. The Term Loan
Outstanding after conversion shall be evidenced by the separate promissory
notes of the Borrower in substantially the form of Exhibit B attached
hereto (each a "Term Note"), dated as of the Conversion Date and completed
with appropriate insertions. One Term Note shall be payable to the order
of each Bank in a principal amount equal to such Bank's Commitment
Percentage of the Term Loan, plus interest accrued thereon. On the
Conversion Date the Borrowers shall pay to the Agent for the pro rata
accounts of the Banks all commitment fees and other fees payable to the
Agent and the Banks hereunder (if any), and, as soon as reasonably
practicable after such payment, each Bank shall surrender to the Borrower
its Construction Loan Note against receipt of its Term Note evidencing the
amount of the Outstanding Construction Loan so converted.
The Term Notes.
Each Term Note shall represent the obligation of the Borrower to
pay to such Bank such principal amount or, if less, the Outstanding amount
of such Bank's Commitment Percentage of the Term Loan, plus interest
accrued thereon, as set forth below. The Borrower irrevocably authorizes
the Agent to make or cause to be made a notation on the Agent's Term Note
Record reflecting the original principal amount of each Bank's Commitment
Percentage of the Term Loan and, at or about the time of the Agent's
receipt of any principal payment on any Term Note, an appropriate notation
on the Term Note Record reflecting such payment. The aggregate unpaid
amount set forth on each Term Note Record shall be prima facie evidence of
the principal amount thereof owing and unpaid to each Bank, but the
failure to record, or any error in so recording, any such amount on the
Term Note Record shall not affect the obligations of the Borrower
hereunder or under any Term Note to make payments of principal of and
interest on any Term Note when due.
Schedule of Installment Payments of Principal of Term Loan.
The Borrower promises to pay to the Agent for the account of the
Banks the principal amount of the Term Loan in (a) twenty (20) consecutive
quarterly installments of $750,000, such installments to be due and
payable on the last day of each fiscal quarter of the Borrower commencing
with the fiscal quarter ending September 30, 1996, and (b) seven (7)
consecutive quarterly installments of $1,250,000, such installments to be
due and payable on the last day of each fiscal quarter of the Borrower
commencing with the fiscal quarter ending September 30, 2001, with a final
payment of all remaining Outstanding principal amounts of the Term Loan,
together with all accrued and unpaid interest thereon, due and payable on
the Term Loan Maturity Date. In addition, the Borrower promises to pay to
the Agent for the respective accounts of the Banks those amounts as are
required to be paid pursuant to any asset disposition consummated in
connection with Section 9.5.2. after the Conversion Date, in the manner
and at the times set forth in Section 9.5.2, which amounts shall be
applied to the Outstanding Term Loan in the inverse order of maturity.
Optional Prepayment of Term Loan.
The Borrower shall have the right at any time to prepay the Term
Notes on or before the Term Loan Maturity Date, as a whole, or in part,
upon not less than three (3) Business Days' prior written notice to the
Agent, without premium or penalty, provided that (a) each partial
prepayment shall be in a principal amount equal to $3,000,000 or an
integral multiple of $1,000,000 in excess thereof, (b) no portion of the
Term Loan bearing interest at the Eurodollar Rate may be prepaid pursuant
to this Section 4.4 except on the last day of the Interest Period relating
thereto and (c) each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective
Outstanding amount of each Bank's Term Note, with adjustments to the
extent practicable to equalize any prior prepayments not exactly in
proportion. Any prepayment of principal of the Term Loan shall include
all interest accrued to the date of prepayment and shall be applied pro
rata against the remaining scheduled installments of principal due on the
Term Loan. No amount repaid with respect to the Term Loan may be
reborrowed.
Interest on Term Loan.
Interest Rates.
Except as otherwise provided in Section 5.10, the Term Loan
shall bear interest during each Interest Period relating to all or
any portion of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Base Rate, the
Term Loan or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Base Rate plus the
Applicable Margin.
(b) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Eurodollar Rate,
the Term Loan or such portion shall bear interest during such
Interest Period at the rate per annum equal to the Eurodollar Rate
then in effect plus the Applicable Margin.
(c) The Borrower promises to pay interest on the Term Loan or
any portion thereof Outstanding during each Interest Period in
arrears on each Interest Payment Date applicable to such Interest
Period.
Notification by Borrower.
The Borrower shall notify the Agent, such notice to be
irrevocable, at least two (2) Business Days prior to the Conversion
Date if all or any portion of the Term Loan is to bear interest at
the Base Rate and at least three (3) Business Days prior to the
Conversion Date if all or any portion of the Term Loan is to bear
interest at the Eurodollar Rate. After the Term Loan has been
made, the provisions of Section 2.7 shall apply mutatis mutandis
with respect to all or any portion of the Term Loan so that the
Borrower may have the same interest rate options with respect to
all or any portion of the Term Loan as it would be entitled to with
respect to the Construction Loan, subject to the same limitations
as applied to Construction Advances.
Amounts, etc.
Any portion of the Term Loan bearing interest at the
Eurodollar Rate relating to any Interest Period shall be in the
amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof. No Interest Period relating to the Term Loan or any
portion thereof bearing interest at the Eurodollar Rate shall
extend beyond the date on which a regularly scheduled installment
payment of the principal of the Term Loan is to be made unless a
portion of the Term Loan at least equal to such installment payment
has an Interest Period ending on such date or is then bearing
interest at the Base Rate.
CERTAIN GENERAL PROVISIONS.
Closing Fee.
The Borrower agrees to pay to the Agent on the Closing Date a
closing fee (the "Closing Fee") in the amount set forth in the Fee Letter.
Funds for Payments.
Payments to Agent.
All payments of principal, interest, commitment fees and any
other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts
of the Banks and the Agent, at the Agent's Head Office or at such
other location in the Boston, Massachusetts, area that the Agent
may from time to time designate, in each case in immediately
available funds.
No Offset, etc.
All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding.
If any such obligation is imposed upon the Borrower with respect to
any amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which
such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary
to enable the Banks or the Agent to receive the same net amount
which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Agent certificates or other
valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under
such other Loan Document.
Computations.
All computations of interest on the Base Rate Advances and of
commitment or other fees shall be based on a 365-day year and paid for the
actual number of days elapsed. All computations of interest on the
Eurodollar Rate Advances shall be based on a 360-day year and paid for the
actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to Eurodollar Rate
Advances, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date
for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The Outstanding amount
of the Advances as reflected on the Records from time to time shall be
prima facie evidence of the amounts so Outstanding.
Inability to Determine Eurodollar Rate.
In the event, prior to the commencement of any Interest Period
relating to any Eurodollar Rate Advance, the Agent shall determine or be
notified by the Majority Banks that adequate and reasonable methods do not
exist for ascertaining the Eurodollar Rate that would otherwise determine
the rate of interest to be applicable to any Eurodollar Rate Advance
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and
the Banks) to the Borrower and the Banks. In such event (a) any
Construction Advance Request or Conversion Request with respect to
Eurodollar Rate Advances shall be automatically withdrawn and shall be
deemed a request for Base Rate Advances, (b) each Eurodollar Rate Advance
will automatically, on the last day of the then current Interest Period
thereof, become a Base Rate Advance, and (c) the obligations of the Banks
to make Eurodollar Rate Advances shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent or, as the case may be,
the Agent upon the instruction of the Majority Banks, shall so notify the
Borrower and the Banks.
Illegality.
Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or in the interpretation or
application thereof shall make it unlawful for any Bank to make or
maintain Eurodollar Rate Advances, such Bank shall forthwith give notice
of such circumstances to the Borrower and the other Banks and thereupon
(a) the commitment of such Bank to make Eurodollar Rate Advances or
convert Advances of another Type to Eurodollar Rate Advances shall
forthwith be suspended and (b) such Bank's Advances then Outstanding as
Eurodollar Rate Advances, if any, shall be converted automatically to Base
Rate Advances on the last day of each Interest Period applicable to such
Eurodollar Rate Advances or within such earlier period as may be required
by law. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this Section 5.5, including any
interest or fees payable by such Bank to lenders of funds obtained by it
in order to make or maintain its Eurodollar Rate Advances hereunder.
Additional Costs, etc.
If any present or future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices
at any time or from time to time hereafter made upon or otherwise issued
to any Bank or the Agent by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with
respect to this Credit Agreement, the other Loan Documents, such
Bank's Commitment or the Advances (other than taxes based upon or
measured by the revenue, income or profits of such Bank or the
Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on revenue, income or profits) of payments to any
Bank of the principal of or the interest on the Advances or any
other amounts payable to any Bank or the Agent under this Credit
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity,
capital adequacy or other similar requirements (whether or not
having the force of law) against assets held by, or deposits in or
for the account of, or loans by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Advances, such Bank's Commitment, or any class of
loans or commitments of which the Advances or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining the Advances or such
Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of
such Bank's Commitment or the Advances, or
(iii) to require such Bank or the Agent to make any payment
or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is
calculated by reference to the gross amount of any sum receivable
or deemed received by such Bank or the Agent from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by such
Bank or (as the case may be) the Agent at any time and from time to time
and as often as the occasion therefor may arise, pay to such Bank or the
Agent such additional amounts as will be sufficient to compensate such
Bank or the Agent for such additional cost, reduction, payment or foregone
interest or other sum.
Capital Adequacy.
If after the date hereof any Bank or the Agent determines that (a)
the adoption of or change in any law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law)
regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by
such Bank or the Agent or any corporation controlling such Bank or the
Agent with any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) of any such entity
regarding capital adequacy, has the effect of reducing the return on such
Bank's or the Agent's commitment or Advances to a level below that which
such Bank or the Agent could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or the Agent's then
existing policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by such Bank or
(as the case may be) the Agent to be material, then such Bank or the Agent
may notify the Borrower of such fact. To the extent that the amount of
such reduction in the return on capital is not reflected in the Base Rate,
the Borrower agrees to pay such Bank or (as the case may be) the Agent for
the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the case may
be) the Agent of a certificate in accordance with Section 5.9 hereof.
Each Bank shall allocate such cost increases among its customers in good
faith and on an equitable basis.
Certificate.
A certificate setting forth any additional amounts payable pursuant
to Section 5.6 or 5.7 and a complete explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrower, shall be prima
facie evidence that such amounts are due and owing.
Indemnity.
The Borrower agrees to indemnify each Bank and to hold each Bank
harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence
of (a) default by the Borrower in payment of the principal amount of or
any interest on any Eurodollar Rate Advances as and when due and payable,
including any such loss or expense arising from interest or fees payable
by such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Advances, (b) default by the Borrower in making a
borrowing after the Borrower has given (or is deemed to have given) a
Construction Advance Request or a Conversion Request relating thereto in
accordance with Section 2.6 or Section 2.7 or (c) the making of any
payment of a Eurodollar Rate Advance or the making of any conversion of
any such Advance to a Base Rate Advance on a day that is not the last day
of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order
to maintain any such Advances.
Interest After Default.
Overdue Amounts.
Overdue principal and (to the extent permitted by applicable
law) interest on the Advances and all other overdue amounts payable
hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per
annum equal to two and one-half percent (2 1/2%) above the rate
applicable to Base Rate Advances until such amount shall be paid in
full (after as well as before judgment).
Amounts Not Overdue.
During the continuance of a Default or an Event of Default the
principal of the Advances not overdue shall, until such Default or
Event of Default has been cured or remedied or such Default or
Event of Default has been waived by the Majority Banks pursuant to
Section 26, bear interest at a rate per annum equal to the greater
of (i) two and one-half percent (2 1/2%) above the rate of interest
otherwise applicable to the Advances pursuant to Section 2.5 and
Section 4.5 and (ii) the rate of interest applicable to overdue
principal pursuant to Section 5.10.1.
Certain Rights of the Agent and Banks.
Right to Retain the Construction Inspector.
The Agent shall have the right to retain, at the Borrower's
cost and expense (to the extent of reasonable market rates for such
professional services and which are estimated on the Closing Date
not to exceed $15,000), the Construction Inspector to perform the
following services on behalf of the Agent and the Banks:
(a) to make periodic inspections (i) for the purpose of
providing the Agent and the Banks with an opinion to satisfy the
conditions set forth in Section 12.5 hereof, and (ii) otherwise for
the purpose of assuring that construction of the Vessels to the
date thereof is in accordance with the Plans and Specifications,
and to advise the Agent and the Banks of the anticipated cost of
and time for completion of construction on the Vessels; and
(b) to review and advise the Agent and the Banks on any
proposed change orders or construction change directives.
Any such review and inspection for the purposes of Section
11.15 or Section 12.5 hereof shall be performed in a timely manner.
The fees of the Construction Inspector shall be paid by the
Borrower forthwith upon billing therefor and expenses incurred by
the Agent and the Banks on account thereof shall be reimbursed to
the Agent and the Banks forthwith upon request therefor, but
neither the Agent nor the Banks shall have any liability to the
Borrower on account of (i) the services performed by the
Construction Inspector, (ii) any neglect or failure on the part of
the Construction Inspector to properly perform its services, or
(iii) any approval by the Construction Inspector of construction on
the Vessels. Neither the Agent, the Banks nor the Construction
Inspector assumes any obligation to the Borrower or any other
Person concerning the quality of construction on the Vessels or the
absence therefrom of defects.
Right to Obtain Appraisals.
The Agent and the Banks shall have the right to obtain from
time to time, at the Borrower's cost and expense, updated
Appraisals of the Collateral, and an Appraisal of each of the
Vessels, provided that so long as no Default or Event of Default
shall have occurred and be continuing, the Borrower shall only be
obligated to pay for the costs and expenses associated with one
such Appraisal per Vessel during any calendar year or the number of
Appraisals as otherwise required by a Governmental Authority or by
law. The reasonable costs and expenses incurred by the Agent and
the Banks in obtaining such Appraisals shall be paid by the
Borrower forthwith upon billing or request by the Agent and the
Banks for reimbursement therefor.
SECURITY AND GUARANTIES.
Security of Borrower.
The Obligations shall be secured by a perfected first priority
security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security
Documents to which the Borrower is a party. Without limiting the
generality of the foregoing, the Obligations shall be secured by the
following:
(a) a perfected first priority lien and security interest in
all assets of the Borrower pursuant to the terms of the Security
Agreement;
(b) a perfected first priority security interest in all of
the Borrower's rights (but not its obligations) under the Contract
(including without limitation rights to enforce the Shipbuilding
Guaranty), such security interests to be granted pursuant to the
Contract Collateral Assignment;
(c) a perfected first priority security interest in and
assignment of all the Borrower's right, title, and interest in and
to any insurance and/or insurance policies with respect to each of
the Vessels and the Strong/American such security interest to be
granted pursuant to the Assignment of Insurance;
(d) a perfected first priority security interest in an
assignment of all of the Borrower's right, title and interest in
and to the irrevocable guaranty (the "Shipbuilding Guaranty") by
the Shipbuilding Guarantor to the Borrower, guarantying the
performance and payment of Builder of its obligations under the
Contract and naming the Borrower and the Agent (for the benefit of
the Agent and the Banks) as co-beneficiaries and specifying that
the interest of the Agent (for the benefit of the Agent and the
Banks) shall be in preference to and have priority over the
Borrower and any Person claiming under, from or through the
Borrower, in a form acceptable to the Agent and the Banks provided,
however, if at any time the Net Worth of the Shipbuilding Guarantor
is less than $500,000,000, such Shipbuilding Guaranty shall be
secured by collateral acceptable to the Agent, or replaced with the
Performance Bond pursuant to the requirements set forth in the
Intercreditor Agreement;
(e) a perfected first priority security interest in and
assignment of all the Borrower's right, title and interest in and
to all contracts, permits and licenses relating to each Vessel and
the Strong/American, such security interest to be granted pursuant
to the Assignment of Contracts;
(f) a perfected first priority security interest in and
assignment to all of the Borrower's right, title and interest in
and to the Charter (including but not limited to dominion over cash
payments due under the Charter), such security interest to be
granted pursuant to the Assignment of Charter; and
(g) a perfected first preferred mortgage lien and security
interest in each Vessel and the Strong/American pursuant to the
terms of the First Preferred Fleet Mortgage.
Guaranties of the Guarantor.
The Obligations shall also be guaranteed pursuant to the terms of
the Guaranty.
REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and the Guarantor represents and warrants to
the Banks and the Agent as follows:
Corporate Authority.
Incorporation; Good Standing.
Each of the Borrower and the Guarantor (a) is a corporation
duly organized, validly existing and in good standing under the
laws of its state of incorporation, (b) has all requisite corporate
power to own its property and conduct its business as now conducted
and as presently contemplated, and (c) is in good standing as a
foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse
effect on the business, assets or financial condition of the
Borrower or the Guarantor.
Authorization.
The execution, delivery and performance of this Credit
Agreement and the other Loan Documents to which the Borrower or the
Guarantor is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate
authority of such Person, (b) have been duly authorized by all
necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute,
rule or regulation to which the Borrower or the Guarantor is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or the Guarantor and (d) do not conflict
with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, the Borrower or the
Guarantor.
Enforceability.
The execution and delivery of this Credit Agreement and the
other Loan Documents to which the Borrower or the Guarantor is or
is to become a party will result in valid and legally binding
obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
Governmental Approvals.
The execution, delivery and performance by the Borrower and the
Guarantor of this Credit Agreement and the other Loan Documents to which
the Borrower and the Guarantor is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval
or consent of, or filing with, any Governmental Authority other than those
already obtained and listed on Schedule 7.2 hereto.
Title to Properties; Leases.
Except as indicated on Schedule 7.3 hereto, the Borrower and the
Guarantor own all of the assets reflected in the combined balance sheet of
the Guarantor and the Borrower as at the Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of
in the ordinary course of business since that date), subject to no rights
of others, including any mortgages, leases, conditional sales agreements,
title retention agreements, liens or other encumbrances except Permitted
Liens.
Financial Statements and Projections.
Financial Statements.
There has been furnished to the Agent a combined balance sheet
of the Borrower and the Guarantor as at the Balance Sheet Date, and
a combined statement of income for the fiscal year then ended,
certified by the Borrower's independent certified public
accountants. Such balance sheet and statement of income have been
prepared in accordance with Generally Accepted Accounting
Principles and fairly present the financial condition of the
Borrower and the Guarantor as at the close of business on the date
thereof and the results of operations for the fiscal year then
ended. There are no contingent liabilities of the Borrower or the
Guarantor as of such date involving material amounts, known to the
officers of the Borrower not disclosed in said balance sheet and
the related notes thereto.
Projections.
The projections of the annual operating budgets of each of the
Borrower and the Guarantor on an individual basis, balance sheets
and cash flow statements for the 1995 to 1999 fiscal years, copies
of which have been delivered to each Bank, disclose all assumptions
made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge
of the Borrower and the Guarantor, no facts exist that
(individually or in the aggregate) would result in any material
change in any of such projections. The projections are based upon
reasonable estimates and assumptions, have been prepared on the
basis of the assumptions stated therein and reflect the reasonable
estimates of the Borrower and the Guarantor of the results of
operations and other information projected therein.
No Material Changes, etc.
(a) Since the Balance Sheet Date there has occurred no
materially adverse change in the financial condition or business of
the Borrower and the Guarantor as shown on or reflected in the
combined balance sheet of the Borrower and the Guarantor as at the
Balance Sheet Date, or the combined statement of income for the
fiscal year then ended, other than changes in the ordinary course
of business that have not had any materially adverse effect either
individually or in the aggregate on the business or financial
condition of the Borrower and the Guarantor. Except as set forth
on Schedule 7.5(a), since the Balance Sheet Date, neither the
Guarantor nor the Borrower has made any Distributions.
(b) Each of the Borrower and the Guarantor (before and after
giving effect to the transactions contemplated by this Credit
Agreement the other Loan Documents) (i) is solvent, (ii) has assets
having a fair value in excess of its liabilities, (iii) has assets
having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and
matured, and (iv) has, and expects to continue to have, access to
adequate capital for the conduct of its business and the ability to
pay its debts from time to time incurred in connection with the
operation of its business as such debts mature.
Franchises, Patents, Copyrights, etc.
Each of the Borrower and the Guarantor possesses all franchises,
patents, copyrights, trademarks, trade names, licenses and permits, and
rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any
rights of others.
Litigation.
There are no actions, suits, proceedings or investigations of any
kind pending or threatened against the Borrower or the Guarantor before
any court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business
of the Borrower or the Guarantor or materially impair the right of the
Borrower and the Guarantor considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial
liability not adequately covered by insurance, or for which adequate
reserves are not maintained on the combined balance sheet of the Borrower
and the Guarantor, or which question the validity of this Credit Agreement
or any of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
No Materially Adverse Contracts, etc.
Neither the Borrower nor the Guarantor is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule
or regulation that has or is expected in the future to have a materially
adverse effect on the business, assets or financial condition of the
Borrower or the Guarantor. Neither the Borrower nor the Guarantor is a
party to any contract or agreement that has or is expected, in the
judgment of the Borrower's officers, to have any materially adverse effect
on the business of the Borrower or the Guarantor .
Compliance With Other Instruments, Laws, etc.
Neither the Borrower nor the Guarantor is in violation of any
provision of its charter documents, bylaws, or any agreement or instrument
to which it may be subject or by which it or any of its properties may be
bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Borrower or the
Guarantor.
Tax Status.
Each of the Borrower and the Guarantor (a) have made or filed all
federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings
and (c) have set aside on their books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no basis for any
such claim. Each of the Borrower and the Guarantor is a "S Corporation"
as defined in Section 1361(a)(1) of the Code.
No Event of Default.
No Default or Event of Default has occurred and is continuing.
Holding Company and Investment Company Acts.
Neither the Borrower nor the Guarantor is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is it an "investment company", or an "affiliated
company" or a "principal underwriter" of an "investment company", as such
terms are defined in the Investment Company Act of 1940.
Absence of Financing Statements, etc.
Except with respect to Permitted Liens, there is no financing
statement, security agreement, chattel mortgage, real estate mortgage or
other document filed or recorded with any filing records, registry, or
other public office, that purports to cover, affect or give notice of any
present or possible future lien on, or security interest in, any assets or
property of the Borrower or the Guarantor or rights thereunder.
Perfection of Security Interest.
All filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken that are
necessary, under applicable law, to establish and perfect the Agent's
security interest in the Collateral, other than the Ramp, provided,
however, that all necessary filings, assignments, pledges and deposits of
document or instruments necessary to establish and perfect the Agent's
security interest in the Ramp will have been made within thirty (30) days
of the Closing Date. The Collateral and the Agent's rights with respect
to the Collateral are not subject to any setoff, claims, withholdings or
other defenses. The Borrower is the owner of the Collateral free from any
lien, security interest, encumbrance and any other claim or demand, except
for Permitted Liens. All of the Obligations of the Borrower and the
Guarantor will, at the time from and after the execution and delivery of
each of the Security Documents, be entitled to the benefits of and be
secured by each of the Security Documents.
Certain Transactions.
None of the officers, directors, or employees of the Borrower or
the Guarantor is presently a party to any transaction with Borrower or the
Guarantor (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrower or
the Guarantor, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
Employee Benefit Plans.
In General.
Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting prohibited transactions.
The Borrower has heretofore delivered to the Agent the most
recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
Terminability of Welfare Plans.
Under each Employee Benefit Plan which is an employee welfare
benefit plan within the meaning of Section 3(1) or Section 3(2)(B)
of ERISA, no benefits are due unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). The Borrower or an ERISA
Affiliate, as appropriate, may terminate each such Plan at any time
(or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of the Borrower or such
ERISA Affiliate without liability to any Person.
Guaranteed Pension Plans.
Each contribution required to be made to a Guaranteed Pension
Plan, whether required to be made to avoid the incurrence of an
accumulated funding deficiency, the notice or lien provisions of
Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any
Guaranteed Pension Plan. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has been
incurred by the Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable
Event, or any other event or condition which presents a material
risk of termination of any Guaranteed Pension Plan by the PBGC.
Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of
this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of Section
4001 of ERISA did not exceed the aggregate value of the assets of
all such Guaranteed Pension Plans, disregarding for this purpose
the benefit liabilities and assets of any Guaranteed Pension Plan
with assets in excess of benefit liabilities.
Multiemployer Plans.
Neither the Borrower nor any ERISA Affiliate has incurred any
material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA.
Neither the Borrower nor any ERISA Affiliate has been notified that
any Multiemployer Plan is in reorganization or insolvent under and
within the meaning of Section 4241 or Section 4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated
under Section 4041A of ERISA.
Regulations U and X.
The proceeds of the Construction Loan shall be used to finance the
construction on the Vessels, to pay Project Costs and up to $5,000,000 of
such proceeds may be used to refinance existing Indebtedness owing to
Greyrock Financial, and pay costs and fees associated with such
refinancing. No portion of the Construction Loan or the Term Loan is to
be used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Environmental Compliance.
The Guarantor and Borrower have taken all necessary steps to
investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, have determined that:
(a) none of the Borrower, the Guarantor or any operator of
the Real Estate or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986 ("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the environment
or the business, assets or financial condition of the Borrower or
the Guarantor;
(b) neither the Borrower nor the Guarantor has received
notice from any third party including, without limitation: any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste,
as defined by 42 U.S.C. Section 6903(5), any hazardous substances
as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or
local agency or other third party has conducted or has ordered that
the Borrower or the Guarantor conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law;
or (iii) that it is or shall be a named party to any claim, action,
cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous
Substances;
(c) except as set forth on Schedule 7.18 attached hereto: (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) in
the course of any activities conducted by the Borrower, the
Guarantor or operators of its properties, no Hazardous Substances
have been generated or are being used on the Real Estate except in
accordance with applicable Environmental Laws; (iii) there have
been no releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of
the Borrower or the Guarantor, which releases would have a material
adverse effect on the value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be
located on, and which would have a material adverse effect on the
value of, the Real Estate; and (v) in addition, any Hazardous
Substances that have been generated on any of the Real Estate have
been transported offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment
or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Guarantor's and the
Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) None of the Borrower, the Guarantor or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement
by virtue of the transactions set forth herein and contemplated
hereby.
Subsidiaries, etc.
The Borrower and the Guarantor have no Subsidiaries. Except as set
forth on Schedule 7.19 hereto, neither the Guarantor nor the Borrower is
engaged in any joint venture or partnership with any other person.
Real Property.
Except as set forth on Schedule 7.20, neither of the Guarantor nor
the Borrower owns or leases (as lessee or sublessee) any Real Estate.
Principal Place of Business.
The Borrower's principal place of business is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Guarantor's principal place of business is ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Disclosure.
None of this Credit Agreement, any of the other Loan Documents nor
any of the Construction Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements herein or therein not misleading. There is no fact known
to either the Borrower or the Guarantor which materially adversely
affects, or which is reasonably likely in the future to materially
adversely affect, exclusive of effects resulting from changes in general
economic conditions, the business, assets, financial condition or
prospects of the Borrower or the Guarantor.
Fiscal Year.
The Borrower's fiscal year is the twelve months ending December 31
of each year. The Guarantor's fiscal year is the twelve months ending
December 31 of each year.
Insurance.
Schedule 7.24 attached hereto lists the policies and types and
amounts of coverage (including deductibles) of theft, fire, liability,
life, property and casualty and other insurance owned or held by the
Borrower and the Guarantor on the date hereof. Such policies of insurance
are maintained with financially sound and reputable insurance companies,
funds, underwriters or mutual indemnification associations and are of the
kinds, cover such risks and are in such amounts, with such deductibles and
exclusions, as are required under Section 8.7 hereof and under the
Security Documents. All such policies are in full force and effect; are
sufficient for compliance by the Borrower and the Guarantor with all
requirements of law and all agreements to which the Borrower and the
Guarantor is a party; are valid and enforceable policies and will remain
in full force and effect through the respective dates set forth in such
schedule; and coverage thereunder will not be reduced by, or terminate or
lapse by reason of, the transactions contemplated by this Credit
Agreement.
Construction Contracts.
The Construction Contract is in full force and effect and both the
Borrower and the other party or parties to such contract are in full
compliance with their respective obligations under such contract. The
work to be performed under the Construction Contract is the work called
for by the Plans and Specifications. All work required to complete the
construction in accordance with the Plans and Specifications is provided
for under the Construction Contract.
Concerning the Vessels.
(a) The Borrower's ownership and operation of each Vessel and the
Strong/American complies with all applicable requirements of the Shipping
Act, 1916, as amended and in effect, and all applicable regulations
thereunder. Each of the Borrower and the Guarantor is a citizen of the
United States for purposes of operating each of the Vessels and the
Strong/American in the registry or coastwise trade in accordance with
Section 2 of the Shipping Act of 1916, as amended and in effect, and the
regulations thereunder. Each Vessel and the Strong/American is (a)
covered by hull and machinery, protection and indemnity and excess
liability insurance in accordance by the requirements of the First
Preferred Fleet Mortgage, and (b) operated and maintained as a vessel in
the registry or coastwise trade (subject in the case of the
Strong/American, to certain restrictions resulting from the construction
financing thereof) in accordance with the Shipping Act, 1916, as amended
and in effect, and the regulations thereunder.
(b) None of the Vessels is subject to any charter other than the
Charter.
AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Borrower and the Guarantor covenants and agrees that,
so long as the Construction Loan, Term Loan or any Note is Outstanding or
any Bank has any obligation to make any Construction Advance:
Punctual Payment.
The Borrower will duly and punctually pay or cause to be paid the
principal and interest on the Advances and the commitment fees provided
for in this Credit Agreement, all in accordance with the terms of this
Credit Agreement and the Notes.
Maintenance of Office.
Each of the Guarantor and the Borrower will maintain its chief
executive office of those locations listed in Section 7.21, or at such
other place in the United States of America as the Borrower shall
designate upon written notice to the Agent, where notices, presentations
and demands to or upon the Borrower in respect of the Loan Documents may
be given or made.
Records and Accounts.
Each of the Guarantor and the Borrower will (a) keep true and
accurate records and books of account in which full, true and correct
entries will be made in accordance with Generally Accepted Accounting
Principles and (b) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and
amortization of its properties contingencies, and other reserves.
Financial Statements, Certificates and Information.
The Borrower will deliver to the Agent for delivery to each of the
Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower,
the combined balance sheet of the Guarantor and the Borrower and
the combining balance sheet of the Guarantor and the Borrower, each
as at the end of such year, and the related combined statement of
income and combined statement of cash flow and combining statement
of income and combining statement of cash flow for such year, each
setting forth in comparative form the figures for the previous
fiscal year and all such combined and combining statements to be in
reasonable detail, prepared in accordance with Generally Accepted
Accounting Principles, and certified without qualification by
Deloitte & Touche or by other independent certified public
accountants satisfactory to the Agent, together with a written
statement from such accountants to the effect that they have read a
copy of this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default
they shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters
of the Borrower, copies of the unaudited combined balance sheet of
the Borrower and the Guarantor and the unaudited combining balance
sheet of the Borrower and the Guarantor, each as at the end of such
quarter, and the related combined statement of income and combined
statement of cash flow and combining statement of income and
combining statement of cash flow for the portion of the Borrower's
and the Guarantor's fiscal year then elapsed, all in reasonable
detail and prepared in accordance with Generally Accepted
Accounting Principles, together with a certification by the
principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents
the financial position of the Guarantor and the Borrower on the
date thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event not later than
thirty (30) days after the end of each fiscal year, the annual
budget for each of the Borrower and the Guarantor for the next
succeeding fiscal year, such annual budget to be set forth in
reasonable detail on a month-to-month basis;
(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a
statement certified by the principal financial or accounting
officer of the Borrower (the "Compliance Certificate") in
substantially the form of Exhibit M hereto and setting forth in
reasonable detail computations evidencing compliance with the
covenants contained in Section 10 and (if applicable)
reconciliations to reflect changes in Generally Accepted Accounting
Principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of
the Borrower or the Guarantors;
(f) from time to time upon request of the Agent, projections
of the Borrower and the Guarantor updating those projections
delivered to the Banks and referred to in Section 7.4.2 hereto or,
if applicable, updating any later such projections delivered in
response to a request pursuant to this Section 8.4(f); and
(g) from time to time such other financial data and
information (including accountants' management letters) as the
Agent or any Bank may reasonably request.
Notices.
Defaults.
The Borrower will promptly notify the Agent and each of the
Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting
an Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower or the Guarantor is a party or
obligor, whether as principal or surety, the Borrower shall
forthwith give written notice thereof to each of the Banks,
describing the notice or action and the nature of the claimed
default.
Environmental Events.
The Borrower will promptly give notice to the Agent (a) of any
violation of any Environmental Law that the Borrower or the
Guarantor reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral
report is made) to any federal, state or local environmental agency
and (b) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or
local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or
operations of the Borrower or the Guarantor, or the Agent's
security interests pursuant to the Security Documents.
Notification of Claims Against Collateral.
The Borrower will, immediately upon becoming aware thereof,
notify the Agent in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Collateral, or the Agent's
rights with respect to the Collateral, are subject.
Notice of Litigation and Judgments.
Each of the Guarantor and the Borrower will give notice to the
Agent in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Borrower or the Guarantor
or to which the Borrower or the Guarantor is or becomes a party
involving an uninsured claim against the Borrower or the Guarantor
that could reasonably be expected to have a materially adverse
effect on the Borrower or the Guarantor and stating the nature and
status of such litigation or proceedings. The Guarantor and the
Borrower will give notice to the Agent, in writing, in form and
detail satisfactory to the Agent, within ten (10) days of any
judgment not covered by insurance, final or otherwise, against the
Borrower or the Guarantor in an amount in excess of $500,000.
Notice of Nonpayment.
The Borrower will immediately notify the Bank in writing if
the Borrower receives any written or other formal notice from the
Builder or any laborer, subcontractor or materialman to the effect
that the Builder, such laborer, subcontractor or materialman has
not been paid an amount in excess of $200,000 when due for labor or
materials furnished in connection with the construction on either
Vessel.
Corporate Existence; Maintenance of Properties.
Each of the Guarantor and the Borrower will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, rights and franchises. Each (a) will cause all of
its properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and
supplied with all necessary equipment, (b) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Guarantor or the Borrower, as the
case may be, may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times, and (c) will continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
Section 8.6 shall prevent the Borrower or the Guarantor from discontinuing
the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Borrower or the Guarantor, as
the case may be, desirable in the conduct of its or their business and
that do not in the aggregate materially adversely affect the business of
the Borrower and the Guarantor on a combined basis.
Insurance.
Each of the Guarantor and the Borrower will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies and in
such types and amounts and with such deductibles as in accordance with
Schedule 7.24 and shall be in accordance with the terms of the Security
Documents. In addition, the Borrower will require the Builder and any
other party to the Contract to obtain and maintain at all times during the
construction on the Vessels the insurance required by the Contract and
such other insurance as may be reasonably required by the Banks
(including, without limitation, commercial general liability insurance,
comprehensive automobile liability insurance, builders all risk insurance,
workmen's compensation insurance and employer liability insurance), all
such insurance to be in such amounts and form, to include such coverage
and endorsements, and to be issued by such insurers as shall be approved
by the Banks, and to contain the written agreement of the insurer to give
the Agent thirty (30) days prior written notice of cancellation,
nonrenewal, modification or expiration thereof. The Borrower will provide
or will cause the Builder and any other party to the Contract to provide
the Agent with certificates evidencing such insurance. The Borrower will,
at their expense, cause the Agent to be named as additional insured and
loss payee under each of the policies providing such insurance coverage,
without recourse against the Agent or any of the Banks for payment of
premiums, and with the right to prior notice of any cancellation or
termination of coverage.
Taxes.
Each of the Guarantor and the Borrower will duly pay and discharge,
or cause to be paid and discharged, before the same shall become overdue,
all taxes, assessments and other governmental charges (other than taxes,
assessments and other governmental charges imposed by foreign
jurisdictions that in the aggregate are not material to the business or
assets of the Guarantor or the Borrower on an individual basis or of the
Borrower and the Guarantor on a combined basis) imposed upon it and its
real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials,
or supplies that if unpaid might by law become a lien or charge upon any
of its property; provided that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Guarantor
or the Borrower shall have set aside on its books adequate reserves with
respect thereto; and provided further that the Guarantor and the Borrower
will pay all such taxes, assessments, charges, levies or claims forthwith
upon the commencement of proceedings to foreclose any lien that may have
attached as security therefor.
Inspection of Properties and Books, etc.
General.
Each of the Guarantor and the Borrower shall permit the Banks,
through the Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of the
Borrower or the Guarantor to examine the books of account of the
Borrower or the Guarantor (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of
the Borrower or the Guarantor with, and to be advised as to the
same by, its and their officers, all at such reasonable times and
intervals as the Agent or any Bank may reasonably request.
Communication with Accountants.
After prior written notice to the Borrower, each of the
Guarantor and the Borrower agrees to authorize the Agent and, if
accompanied by the Agent, the Banks to communicate directly with
the Guarantor's and the Borrower's independent certified public
accountants and agrees to authorize such accountants to disclose to
the Agent and the Banks any and all financial statements and other
supporting financial documents and schedules including copies of
any management letter with respect to the business, financial
condition and other affairs of the Borrower or the Guarantor. At
the request of the Agent, the Borrower and the Guarantor shall
deliver a letter addressed to such accountants instructing them to
comply with the provisions of this Section 8.9.2.
Compliance with Laws, Contracts, Licenses, and Permits.
Each of the Guarantor and the Borrower will comply with (a) the
applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (b) the provisions of its charter
documents and by-laws, (c) all agreements and instruments by which it or
any of its properties may be bound and (d) all applicable decrees, orders,
and judgments. If at any time while any Advance or Note is Outstanding or
any Bank has any obligation to make Advances hereunder, any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in
order that the Guarantor or the Borrower may fulfill any of its
obligations hereunder, the Guarantor and the Borrower will immediately
take or cause to be taken all reasonable steps within the power of the
Guarantor or the Borrower to obtain such authorization, consent, approval,
permit or license and furnish the Banks with evidence thereof.
Employee Benefit Plans.
The Borrower will (a) promptly upon filing the same with the
Department of Labor or Internal Revenue Service furnish to the Agent a
copy of the most recent actuarial statement required to be submitted under
Section 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (b) promptly
upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under
Section Section 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA,
or in respect of a Multiemployer Plan, under Section Section 4041A, 4202,
4219, 4242, or 4245 of ERISA.
Use of Proceeds.
The Borrower will use the proceeds of the Construction Loan solely
to finance the construction on the Vessels, to pay Project Costs
associated with the Vessels and to refinance existing Indebtedness owing
to Greyrock Financial, provided, however, the proceeds of the Construction
Loan used to refinance existing Indebtedness (including the payment of any
prepayment penalties) to Greyrock Financial shall be in an amount of not
more than $5,000,000 in the aggregate.
Commencement, Pursuit and Completion of Construction.
Pursuant to the Contract, the Borrower will cause the Builder to do
all work in connection with the Project in a good and workmanlike manner
and without any material defects. The Borrower will pay all such sums and
perform all such acts as may be appropriate to complete the Project (i) in
accordance with the Plans and Specifications, (ii) in compliance in all
material respects with the Requirements and with all terms and conditions
of the Loan Documents, (iii) without material deviation from the Plans and
Specifications unless the Borrower has obtained the prior approval of the
Banks and the Agent, and (iv) free from any liens, claims or assessments
(actual or contingent) asserted against either Vessel for any material,
labor or other items furnished in connection with the Project.
Approvals.
The Borrower will give, or cause the Builder to give, all such
notices to, and take all such other actions with respect to, such
Governmental Authority as may be required in order to comply with all
applicable Requirements in the completion of the construction on the
Vessels and the use and operation of the Vessels.
Laborers, Subcontractors and Materialmen.
The Borrower will cause the Builder to furnish to the Agent, upon
request at any time, and from time to time, affidavits listing all
laborers, subcontractors, materialmen, and any other Persons who might or
could claim statutory or common law liens, and who are furnishing or have
furnished labor or material in connection with the Project, or any part
thereof, in each case in excess of $100,000 and in the aggregate in excess
of $250,000, together with affidavits or other evidence satisfactory to
the Agent, showing that such parties have been paid all amounts then due
for labor and materials furnished in connection with the Project. The
Borrower will cause the Builder to furnish to the Agent, at any time and
from time to time upon demand by the Banks, lien waivers bearing a then
current date and prepared on a form satisfactory to the Agent from the
Builder and any such subcontractors or materialmen to whom amounts equal
to or exceeding $100,000 are owed, in each case, and $250,000 in the
aggregate, as the Banks may request.
Classification.
Each Vessel will be in compliance with the requirements of the
American Bureau of Shipping or any other classification society acceptable
to the Agent, for the highest classification for vessels of like age and
type at all times except when dry docked for the purpose of the
performance of the construction of the Project with respect to such
Vessel.
Recordation of Vessel Mortgage.
On or prior to the Closing Date, each Vessel will be documented
with the United States Coast Guard, and the Borrower will execute and
deliver the First Preferred Fleet Mortgage on the Vessels to the Agent for
the benefit of the Agent and the Banks and cause such First Preferred
Fleet Mortgage to be recorded with the United States Coast Guard in
accordance with the provisions of this Credit Agreement.
Execution and Delivery of Term Note.
The Borrower shall execute and deliver to each Bank, on or before
the Conversion Date, the Term Notes contemplated by Section 4.2 hereof.
S Corporation Status.
Each of the Borrower and the Guarantor shall take all necessary
action to maintain its status as an "S Corporation" as defined in Section
1361(a)(1) of the Code.
Further Assurances.
Each of the Guarantor and the Borrower will cooperate with the
Banks and the Agent and execute such further instruments and documents as
the Banks or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and
the other Loan Documents.
Concerning the Vessels.
The Borrower and the Guarantor shall at all times operate each
Vessel and the Strong/American in compliance in all respect with all
applicable governmental rules, regulations and requirements pertaining to
such vessels (including, without limitation, all requirements of the
Shipping Act of 1916, as amended and in effect, applicable to each such
vessel) and in compliance in all respects with all rules, regulations and
requirements of the American Bureau of Shipping. Each of the Borrower and
the Guarantor shall at all times maintain its citizenship in the United
States for purposes of operating each of the Vessels in the coastwise
trade in accordance with Section 2 of the Shipping Act of 1916, as amended
and in effect, and the regulations thereunder. The Borrower shall furnish
to the Agent and the Bank the certificate of the American Bureau of
Shipping covering each of the Vessels and the Strong/American no later
than thirty (30) days after the end of each fiscal year of the Borrower.
The Borrower shall keep each Vessel registered under the laws of the
United States with a certificate of vessel documentation endorsed to
evidence its ability to engage in the registry or coastwise trade (except
to the extent provided in Section 7.26 with respect to the
Strong/American).
Chattel Mortgage on Ramps.
The Borrower shall, by not later than thirty (30) days after the
Closing Date, deliver to the Agent, for the benefit of the Agent and the
Banks, a chattel mortgage on the property of the Borrower constituting the
ramps located in Puerto Rico granting to the Agent, for the benefit of the
Agent and the Banks, a first priority perfected security interest in such
ramps, which chattel mortgage shall be in form and substance satisfactory
to the Agent and the Banks.
CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR
Each of the Borrower and the Guarantor covenants and agrees that,
so long as any Advance or Note is Outstanding or any Bank has any
obligation to make any Construction Advances:
Restrictions on Indebtedness.
Each Guarantor and the Borrower will not create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect
to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) current liabilities of the Guarantor and the Borrower
incurred in the ordinary course of business not incurred through
(i) the borrowing of money, or (ii) the obtaining of credit except
for credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods and
services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time
be required to be made in accordance with the provisions of Section
8.8;
(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect
of which the Guarantor or the Borrower, as the case may be, shall
at the time in good faith be prosecuting an appeal or proceedings
for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) obligations under Capitalized Leases not exceeding
$2,000,000 in aggregate amount at any time Outstanding;
(g) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the
Guarantor or the Borrower, provided that the aggregate principal
amount of such Indebtedness incurred in connection with the
acquisition after the date hereof of any real or personal property
of the Guarantor and the Borrower shall not exceed the aggregate
amount of $15,000,000 at any one time; and
(h) Indebtedness existing on the date of this Credit
Agreement and listed and described on Schedule 9.1 hereto.
Restrictions on Liens.
Each of the Guarantor and the Borrower will not (a) create or incur
or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any
kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom; (b)
transfer any of such property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or
purchase money security agreement, device or arrangement; (d) suffer to
exist for a period of more than thirty (30) days after the same shall have
been incurred any Indebtedness or claim or demand against it that if
unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; or (e) sell,
assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without
recourse; provided that the Guarantor and the Borrower may create or incur
or suffer to be created or incurred or to exist:
(a) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on
properties to secure claims for labor, material or supplies in
respect of obligations not overdue;
(b) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(c) liens on properties other than the Vessels the
Strong/American and the Pontoons in respect of judgments or awards,
the Indebtedness with respect to which is permitted by Section
9.1(d);
(d) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties other than the
Vessels the Strong/American and the Pontoons in existence less than
120 days from the date of creation thereof in respect of
obligations not overdue;
(e) encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which the Guarantor or the Borrower
is a party, and other minor liens or encumbrances none of which in
the opinion of the Borrower interferes materially with the use of
the property affected in the ordinary conduct of the business of
the Guarantor or the Borrower, which defects do not individually or
in the aggregate have a materially adverse effect on the business
of the Borrower individually or of the Guarantor and the Borrower
on a combined basis;
(f) presently outstanding liens listed on Schedule 9.2
hereto;
(g) purchase money security interests in or purchase money
mortgages on real or personal property other than the Vessels the
Strong/American and the Pontoons acquired after the date hereof to
secure purchase money Indebtedness of the type and amount permitted
by Section 9.1(g), incurred in connection with the acquisition of
such property, which security interests or mortgages cover only the
real or personal property so acquired; and
(h) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents.
Restrictions on Investments.
Each of the Guarantor and the Borrower will not make or permit to
exist or to remain Outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Guarantor or the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1"
if rated by ▇▇▇▇▇'▇ Investors Services, Inc., and not less than "A
1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto; and
(e) Investments consisting of the Guaranty;
provided, however, that, such Investments will be considered Investments
permitted by this Section 9.3 only if all actions have been taken to the
satisfaction of the Agent to provide to the Agent, for the benefit of the
Banks and the Agent, a first priority perfected security interest in all
of such Investments free of all encumbrances other than Permitted
Encumbrances.
Distributions.
Each of the Guarantor and the Borrower will not make any
Distributions if any Default or Event of Default (a) has occurred and is
continuing or (b) would exist as a result of making such Distribution.
Merger, Consolidation.
Mergers and Acquisitions.
Each of the Guarantor and the Borrower will not become a party
to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of
assets in the ordinary course of business consistent with past
practices).
Disposition of Assets.
Each of the Guarantor and the Borrower will not become a party
to or agree to or effect any disposition of assets, other than the
disposition of assets in the ordinary course of business,
consistent with past practices.
Sale and Leaseback.
Each of the Guarantor and the Borrower will not enter into any
arrangement, directly or indirectly, whereby either the Guarantor or the
Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the
Guarantor or the Borrower intends to use for substantially the same
purpose as the property being sold or transferred.
Compliance with Environmental Laws.
Each of the Guarantor and the Borrower will not (a) use any of the
Real Estate or any portion thereof for the handling, processing, storage
or disposal of Hazardous Substances, (b) cause or permit to be located on
any of the Real Estate any underground tank or other underground storage
receptacle for Hazardous Substances, (c) generate any Hazardous Substances
on any of the Real Estate, (d) conduct any activity at any Real Estate or
use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) or
threatened release of Hazardous Substances on, upon or into the Real
Estate or (e) otherwise conduct any activity at any Real Estate or use any
Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
Negative Pledge.
Each of the Guarantor and the Borrower will not enter into any
agreement limiting such Person's right to grant to the Agent and the Banks
a lien or security interest in the unencumbered assets of such Person.
Employee Benefit Plans.
Neither the Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could
result in a material liability for the Borrower or any of its
Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, whether or not such deficiency is or may be
waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on
the assets of the Borrower or any of its Subsidiaries pursuant to
Section 302(f) or Section 4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in
excess of benefit liabilities, by more than the amount set forth in
Section 7.16.3 hereof.
Non-Compete.
Each of the Guarantor and the Borrower will not permit any
affiliate of the Guarantor or the Borrower to engage in the same or any
similar line of business as any of the Borrower or the Guarantor in the
Puerto Rico market.
Change of Principal Place of Business or Corporate Name.
The Borrower will not change its principal place of business or its
corporate name unless it shall have (a) given the Agent at least thirty
(30) days' advance written notice of such change, and (b) filed in all
necessary jurisdictions such documents as may be necessary to continue
without impairment or interruption the perfection and priority of the
liens on the Collateral in favor of the Agent pursuant to the Security
Documents.
Fiscal Year.
Neither the Guarantor nor the Borrower will change its fiscal year
from that set forth in Section 7.23 hereof.
Restriction on Change Orders.
The Borrower will not cause, permit or suffer to exist any
deviations from the Plans and Specifications, nor approve or consent to
any change order or construction change directive, without the prior
approval of the Agent except for deviations or change orders not exceeding
$100,000 individually and $250,000 in the aggregate.
Charter.
The Borrower will not amend, supplement or otherwise modify the
terms of or terminate, the Charter without the prior written consent of
the Agent and the Banks.
Transactions with Affiliates.
Neither the Borrower nor the Guarantor will enter into, or cause,
suffer or permit to exist (a) any arrangement or contract with any of its
other Affiliates of a nature customarily entered into by Persons which are
Affiliates of each other (including management or similar contracts or
arrangements relating to the allocation of revenues, taxes and expenses or
otherwise) requiring any payments to be made by the Borrower or the
Guarantor to any Affiliate unless such arrangement is fair and equitable
to the Borrower and the Guarantor; or (b) any other transaction,
arrangement, contract with any of their other Affiliates which would not
be entered into by a prudent Person in the position of the Borrower or the
Guarantor with, or which is on terms which are less favorable than are
obtainable from, any Person which is not one of its Affiliates, provided,
however, nothing contained in this Section 9.15 shall prohibit the
Borrower or the Guarantor from restricting payments otherwise permitted by
Section 9.4 hereof.
Business Activities.
Neither the Borrower nor the Guarantor will engage in any business
activity it is not otherwise engaged in on the Closing Date, and neither
the Borrower nor the Guarantor will engage in any business activity in any
jurisdiction in which it does not operate as of the Closing Date.
FINANCIAL COVENANTS OF THE BORROWER.
Interest Coverage.
The Borrower will not permit the Interest Coverage Ratio,
calculated as of the end of each fiscal quarter of the Borrower, to be
less than (a) 2.50:1.00 for the period of the Closing Date through the
fiscal quarter ending March 31, 1997, and (b) 3.00:1.00 for each fiscal
quarter ending thereafter.
Debt Service.
The Borrower will not permit the ratio of (a) Combined Operating
Cash Flow to (b) Combined Financial Obligations as of the end of each
fiscal quarter for the period of four (4) consecutive fiscal quarters then
ending to be less than 1.20:1.00 for the period of the Closing Date
through the fiscal quarter ending March 31, 1997 and 1.30:1.00 for each
fiscal quarter ending thereafter.
Liabilities to Worth Ratio.
The Borrower will not permit the ratio of Combined Total
Liabilities to Combined Tangible Net Worth to exceed 1.50:1.00 at any time
from the Closing Date through December 31, 1996, and 1.25:1.00 at any time
thereafter.
Combined Tangible Net Worth.
The Borrower will not permit Combined Tangible Net Worth at any
time to be less than the sum of $20,000,000, plus, on a cumulative basis,
40% of positive Combined Net Income (without deduction for any year in
which there is a net loss) for each fiscal year subsequent to the fiscal
year ended December 31, 1994.
Appraisal Ratio.
The Borrower will not at any time permit the ratio of (a) the
appraised market value of the Vessels (which appraised market value shall
be determined in the Agent's sole discretion, by reference to the
Appraisal or such other appraisals as are satisfactory to the Agent) as at
the date of determination to (b) the Outstanding principal amount of the
Advances as at the date of determination to be less than 1.50:1.00.
CLOSING CONDITIONS.
The obligations of the Banks to make the initial Construction
Advance shall be subject to the satisfaction of the following conditions
precedent on or prior to October 13, 1995:
Loan Documents, etc.
Loan Documents.
Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each
of the Banks. Each Bank shall have received a fully executed copy
of each such document.
Construction Documents.
Each of the Construction Documents shall have been duly
executed and delivered by the respective parties thereto, shall be
in full force and effect and shall be in form and substance
satisfactory to each of the Banks. The Borrower shall have
obtained from the Builder a duly executed consent, in form and
substance satisfactory to the Agent and the Banks, to the
collateral assignment by the Borrower of all of its right, title
and interest in and to the Contract pursuant to the Contract
Collateral Assignment. Each Bank shall have received a fully
executed copy of each such document.
Certified Copies of Charter Documents.
Each of the Banks shall have received from the Guarantor, the
Builder, the Shipbuilding Guarantor and the Borrower, a copy, certified by
a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (a) its charter or other incorporation documents
as in effect on such date of certification, and (b) its by-laws as in
effect on such date.
Corporate Action.
All corporate action necessary for the valid execution, delivery
and performance by the Guarantor, the Builder, the Shipbuilding Guarantor
and the Borrower of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Banks shall have been
provided to each of the Banks.
Incumbency Certificate.
Each of the Banks shall have received from the Guarantor, the
Builder, the Shipbuilding Guarantor and the Borrower an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Guarantor, the Builder, the Shipbuilding Guarantor and the
Borrower and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf
of each of the Guarantor, the Builder, the Shipbuilding Guarantor and the
Borrower each of the Loan Documents to which the Guarantor, the Builder,
the Shipbuilding Guarantor and the Borrower is or is to become a party;
(b) in the case of the Borrower, to make Construction Advance Requests and
Conversion Requests; and (c) to give notices and to take other action on
its behalf under the Loan Documents.
Validity of Liens.
The Security Documents shall be effective to create in favor of the
Agent a legal, valid and enforceable first (except for Permitted Liens
entitled to priority under applicable law) security interest in the
Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to
the Agent.
Perfection Certificates and UCC Search Results.
The Agent shall have received from the Borrower a completed and
fully executed Perfection Certificate and the results of UCC searches with
respect to its Collateral, indicating no liens other than Permitted Liens
and otherwise in form and substance satisfactory to the Agent.
Certificates of Insurance; Consent to Assignment of Insurance.
(a) The Agent shall have received (a) a certificate of
insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security
Agreement, the Contract and the First Preferred Fleet Mortgage and
(b) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized
to bind the insurer).
(b) the Borrower shall have obtained any and all necessary
third party consents to the Assignment of Insurance, such consents
to be in form and substance satisfactory to the Banks, and the
Agent shall have received fully executed originals of such
consents.
Solvency Certificate
Each of the Banks shall have received an officer's certificate of
the Borrower and the Guarantor dated as of the Closing Date as to the
solvency of the Borrower and the Guarantor following the consummation of
the transactions contemplated herein and in form and substance
satisfactory to the Banks.
Permits.
The Agent shall have received evidence that all necessary licenses
and permits required for the commencement of construction on the Vessels
shall have been obtained.
Charter.
The Agent shall have received evidence that the Charter has been
executed and delivered, is in full force and effect and is in form and
substance satisfactory to the Banks and shall have received a certified
copy of the Charter.
Shipbuilding Guaranty.
The Agent shall have received the Contract which evidences that the
Shipbuilding Guaranty has been executed and delivered by the Shipbuilding
Guarantor, and assigned thereof to the Agent for the benefit of the Agent
and the Banks.
Opinions of Counsel.
Each of the Banks and the Agent shall have received a favorable
opinion addressed to the Banks and the Agent, dated as of the Closing
Date, in form and substance satisfactory to the Banks and the Agent, from
(a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq., counsel to the Borrower and the
Guarantor and (b) ▇▇▇▇▇▇▇▇▇, Poster & ▇▇▇▇▇▇, counsel to the Borrower as
to the First Preferred Fleet Mortgage.
Payment of Fees.
The Borrower shall have paid to the Agent the Closing Fee.
Naval Architect Letter
▇.▇. ▇▇▇▇▇▇▇ & Co., Inc. shall have delivered to the Agent and the
Banks a report to the effect that (a) the Plans and Specifications
relating to the construction on the Vessels by the Builder pursuant to the
Contract satisfactorily provide for the construction on the Vessels and
(b) in the opinion of ▇.▇. ▇▇▇▇▇▇▇ & Co., Inc., construction on the
Vessels can be completed on or before the Conversion Date for an amount
not greater than the Contract Price.
CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Advance, including the
Construction Advances and to convert the Construction Loan to the Term
Loan on the Conversion Date, in each case whether on or after the Closing
Date, shall also be subject to the satisfaction of the following
conditions precedent:
Representations True; No Event of Default.
Each of the representations and warranties of each of the Guarantor
and the Borrower contained in this Credit Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement, and each of the representations and
warranties of each of the Builder and the Shipbuilding Guarantor contained
in the Construction Documents shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making
of or conversion of such Advances, with the same effect as if made at and
as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and
to the extent that such representations and warranties relate expressly to
an earlier date) and no Default or Event of Default shall have occurred
and be continuing.
No Legal Impediment.
No change shall have occurred in any law or regulations thereunder
or interpretations thereof that in the reasonable opinion of any Bank
would make it illegal for such Bank to make or convert such Advances.
Governmental Regulation.
Each Bank shall have received such statements in substance and form
reasonably satisfactory to such Bank as such Bank shall require for the
purpose of compliance with any applicable regulations of the Comptroller
of the Currency or the Board of Governors of the Federal Reserve System.
Proceedings and Documents.
All proceedings in connection with the transactions contemplated by
this Credit Agreement, the other Loan Documents and all other documents
incident thereto shall be satisfactory in substance and in form to the
Banks and to the Agent and the Agent's Special Counsel, and the Banks, the
Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as
the Agent may reasonably request.
Events Relating to Construction.
Loan Documents.
The Borrower shall have delivered to the Agent a Construction
Loan Advance Request pursuant to Section 2.6 hereof together with
the required supporting documentation relating to the progress
payment to the Builder to be funded thereby.
Lien Waivers.
The Borrower shall have delivered to the Agent and the Banks
written lien waivers, in form and substance reasonably satisfactory
to the Agent, from the Builder and from laborers, subcontractors
and materialmen for work done or materials supplied by them, in
each case in excess of $250,000, and in the aggregate in excess of
$1,000,000.
Construction Inspector's Letter.
In the case of each Construction Advance Request requesting a
Construction Advance to fund Project Costs, the Construction
Inspector (or, in the case of a Construction Advance Request
requesting a Construction Advance to achieve a Milestone which does
not require review by the Construction Inspector, ▇.▇. ▇▇▇▇▇▇▇ &
Co., Inc.) shall have delivered to the Agent and the Banks a report
to the effect that in its opinion, based on on-site observations
and submissions by the Builder and ▇.▇. ▇▇▇▇▇▇▇ & Co., Inc., the
construction of the Vessels to the date thereof was performed in a
good and workmanlike manner and in accordance in all material
respects with the Plans and Specifications and stating that the
Milestone relating to the Construction Advance has been achieved in
compliance with the Contract and this Credit Agreement.
Effectiveness of Contract, et. al.
Each of the Contract, the Performance Bond (if obtained
pursuant to Section 6 hereof) and the Shipbuilding Guaranty shall
remain in full force and effect, and there shall not be any
default, and no event of default shall have occurred and be
continuing, under the Contract, the Performance Bond, or the
Shipbuilding Guaranty.
EVENTS OF DEFAULT; ACCELERATION; ETC.
Events of Default and Acceleration.
If any of the following events ("Events of Default" or, if the
giving of notice or the lapse of time or both is required, then, prior to
such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on any
Advance, the commitment fee, or other sums due hereunder or under
any of the other Loan Documents, when the same shall become due and
payable, whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(c) the Borrower or the Guarantor shall fail to comply with
any of its covenants contained in Section Section 8.1, 8.3 - 8.7,
8.9-8.10, 8.12 - 8.20, 9 or 10;
(d) the Guarantor, the Shipbuilding Guarantor, the Builder or
the Borrower shall fail to perform any term, covenant or agreement
contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this Section 13) for fifteen (15) days
after written notice of such failure has been given to the Borrower
by the Agent;
(e) any representation or warranty of the Guarantor, the
Builder, the Shipbuilding Guarantor or the Borrower in this Credit
Agreement, any of the other Loan Documents, the Construction
Documents or in any other document or instrument delivered pursuant
to or in connection with this Credit Agreement shall prove to have
been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Guarantor or the Borrower shall fail to pay at
maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any
Capitalized Leases, or fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing borrowed money or credit received
or in respect of any Capitalized Leases for such period of time as
would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) the Guarantor or the Borrower shall make an assignment
for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Guarantor or the
Borrower or of any substantial part of the assets of the Guarantor
or the Borrower or shall commence any case or other proceeding
relating to the Guarantor or the Borrower under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now
or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding
shall be commenced against the Guarantor or the Borrower and the
Guarantor or the Borrower shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45)
days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Guarantor or
the Borrower bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is
entered in respect of the Guarantor or the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not
consecutive, any final judgment against the Guarantor or the
Borrower that, with other outstanding final judgments,
undischarged, against the Guarantor or the Borrower exceeds in the
aggregate $500,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in any material portion of the Collateral shall
cease to be perfected, or shall cease to have the priority
contemplated by the Security Documents, in each case otherwise than
in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any action
at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the loan documents shall be commenced by
or on behalf of the Guarantor, the Shipbuilding Guarantor, the
Builder or the Borrower party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall
have determined in their reasonable discretion that such event
reasonably could be expected to result in liability of the Borrower
to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $500,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such
Guaranteed Pension Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(l) the Guarantor or the Borrower shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for
more than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God
or public enemy, or other casualty, which in any such case causes,
for more than thirty (30) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any
facility of the Guarantor or the Borrower if such event or
circumstance is not covered by business interruption insurance and
would have a material adverse effect on the business or financial
condition of the Guarantor or the Borrower;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Guarantor or the Borrower if such loss, suspension,
revocation or failure to renew would have a material adverse effect
on the business or financial condition of the Guarantor or the
Borrower;
(o) the Guarantor or the Borrower shall be indicted for a
state or federal crime, or any civil or criminal action shall
otherwise have been brought or threatened against the Guarantor or
the Borrower, a punishment for which in any such case could include
the forfeiture of any assets of the Guarantor or the Borrower
having a fair market value in excess of $100,000; or
(p) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or his immediate family or estate shall
at any time, legally or beneficially own less than sixty percent
(60%) of the common stock of each of the Guarantor and the
Borrower, as adjusted pursuant to any stock split, stock dividend
or recapitalization or reclassification of the capital of such
corporation;
(q) the Agent shall have received a report by the American
Bureau of Shipping or any other classification society, or by any
marine engineer or surveyor following an inspection at the request
of the Agent, that either Vessel is not in compliance with the
requirements for the highest classification for vessels of like age
and type or is not in compliance with the requirements of
applicable law for use as intended under this Credit Agreement and
action shall not have been commenced within fifteen (15) days after
written notice thereof shall have been given by the Agent to the
Borrower and such corrective action shall not be diligently
prosecuted or completed in a manner and time schedule consistent
with industry standards;
(r) there shall have occurred any default or any event or
default under the Contract, or any delay by any party in the
performance of its obligations under the Contract shall have
occurred, which in the case of any such default or delay has not
been approved by the Majority Banks and will result in the
termination or cancellation of, or will relieve the performance of
any obligations of any other party, under the Contract;
(s) the Construction Inspector shall, at any time prior to
the Project Completion Date, certify to the Banks that either
Vessel does not conform in any material respect to the Plans and
Specifications; or
(t) the Performance Bond, if obtained, shall be cancelled,
terminated, revoked, rescinded or modified otherwise then in
accordance with the provisions thereof or with the express written
consent of the Banks; or the issuer of the Performance Bond shall
dissolve or terminate its existence, or make an assignment for the
benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or
shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver or shall commence any case or
other proceeding under bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or
shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or
any such case or other proceedings shall be commenced against it
and shall indicate its approval thereof, consent thereto or
acquiescence therein;
then, and in any such event, so long as the same may be continuing, the
Agent may, and upon the request of the Majority Banks shall, by notice in
writing to the Borrower declare all amounts owing with respect to this
Credit Agreement, the Notes and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in Section 13.1(g), 13.1(h) or 13.1(j) hereof,
all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Agent or any Bank.
Termination of Commitments.
If any one or more of the Events of Default specified in Section
13.1(g), Section 13.1(h) or Section 13.1(j) hereof shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all obligations to make Advances to the
Borrower. If any other Event of Default shall have occurred and be
continuing, or if on any Drawdown Date the conditions precedent to the
making of the Advances to be made on such Drawdown Date are not satisfied,
the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the unused portion of the credit
hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the Banks shall
be relieved of all further obligations to make Advances. If any such
notice is given to the Borrower the Agent will forthwith furnish a copy
thereof to each of the Banks. No termination of the credit hereunder
shall relieve the Borrower of any of the Obligations or any of its
existing obligations to any of the Banks arising under other agreements or
instruments.
Remedies.
In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Advances pursuant to Section 13.1 hereof,
each Bank, if owed any amount with respect to the Advances, may, with the
consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the
ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of such Bank. No remedy herein
conferred upon any Bank or the Agent or the holder of any Note is intended
to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute or any
other provision of law.
Distribution of Collateral Proceeds.
In the event that, following the occurrence or during the
continuance of any Default or Event of Default, the Agent or any Bank, as
the case may be, receives any monies in connection with the enforcement of
any the Security Documents, or otherwise with respect to the realization
upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agent in connection with the
collection of such monies by the Agent, for the exercise,
protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent under this Credit
Agreement or any of the other loan documents or in respect of the
collateral and supports the provision of adequate indemnity to the
Agent against all taxes or liens which by law shall have, or may
have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however,
that distributions in respect of such Obligations shall be made
pari passu among Obligations owing to the Banks with respect to
each type of Obligation such as interest, principal, fees and
expenses, shall be made among the Banks pro rata; and provided,
further, that the Agent may in its discretion make proper allowance
to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the
Agent of all of the Obligations, to the payment of any obligations
required to be paid pursuant to Section 9- 504(1)(c) of the Uniform
Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
SETOFF.
Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited
by or due from any of the Banks to the Borrower and any securities or
other property of the Borrower in the possession of such Bank may be
applied to or set off by such Bank against the payment of 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 Borrower to such Bank. Each of the Banks agrees with each other Bank
that (a) if an amount to be set off is to be applied to Indebtedness of
the Borrower to such Bank, other than Indebtedness evidenced by the Notes
held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank, and (b) if such Bank shall receive from the Borrower, whether
by voluntary payment, exercise of the right of setoff, counterclaim, cross
action, enforcement of the claim evidenced by the Notes held by such Bank
by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the
payment of the Note or Notes held by such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect
to the Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect
of the Notes held by its proportionate payment as contemplated by this
Credit Agreement; provided that if all or any part of such excess payment
is thereafter recovered from such Bank, such disposition and arrangements
shall be rescinded and the amount restored to the extent of such recovery,
but without interest.
THE AGENT.
Authorization.
The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of agent
and principal only, and nothing contained in this Credit Agreement or any
of the other Loan Documents shall be construed to constitute the Agent as
a trustee for any Bank.
Employees and Agents.
The Agent may exercise its powers and execute its duties by or
through employees or agents and shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights and
duties under this Credit Agreement and the other Loan Documents.
No Liability.
Neither the Agent nor any of its shareholders, directors, officers
or employees nor any other Person assisting them in their duties nor any
agent or employee thereof, shall be liable for any waiver, consent or
approval given or any action taken, or omitted to be taken, in good faith
by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or
such other Person, as the case may be, may be liable for losses due to its
willful misconduct or gross negligence.
No Representations.
The Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement, the Notes, any of the other Loan
Documents or any instrument at anytime constituting, or intended to
constitute, collateral security for the Notes, or for the value of any
such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for
any recitals or statements, warranties or representations made herein or
in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower, or be bound to
ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral security for
the Notes or to inspect any of the properties, books or records of the
Guarantor or the Borrower. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the
Borrower or any holder of any of the Notes shall have been duly authorized
or is true, accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit worthiness
or financial conditions of the Guarantor or the Borrower. Each Bank
acknowledges that it has, independently and without reliance upon the
Agent or any other Bank, and based upon such information and documents as
it has deemed appropriate, made its own credit analysis and decision to
enter into this Credit Agreement.
Payments.
Payments to Agent.
A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Bank shall constitute a
payment to such Bank. The Agent agrees promptly to distribute to
each Bank such Bank's pro rata share of payments received by the
Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
Distribution by Agent.
If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under
any of the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge
that any amount received and distributed by the Agent is to be
repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
Delinquent Banks.
Notwithstanding anything to the contrary contained in this
Credit Agreement or any of the other Loan Documents, any Bank that
fails (a) to make available to the Agent its pro rata share of any
Advance or (b) to comply with the provisions of Section 14 hereof
with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such
payments due and to payable to all of the Banks, in each case as,
when and to the full extent required by the provisions of this
Credit Agreement, shall be deemed delinquent (a "Delinquent Bank")
and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower,
whether on account of Outstanding Advances, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to,
and reduction of, their respective pro rata shares of all
Outstanding Advances. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all Outstanding
Advances. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all Outstanding Advances of the nondelinquent
Banks, the Banks' respective pro rata shares of all Outstanding
Advances have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing
such delinquency.
Holders of Notes.
The Agent may deem and treat the payee of any Note as the absolute
owner thereof for all purposes hereof until it shall have been furnished
in writing with a different name by such payee or by a subsequent holder.
Indemnity.
The Banks ratably agree hereby to indemnify and hold harmless the
Agent from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses (including any
expenses for which the Agent has not been reimbursed by the Borrower as
required by Section 16 hereof), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the Notes,
or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly
caused by the Agent's willful misconduct or gross negligence.
Agent as Bank.
In its individual capacity, FNBB shall have the same obligations
and the same rights, powers and privileges in respect to its Commitment
and the Advances made by it, and as the holder of any of the Notes, as it
would have were it not also the Agent.
Resignation.
The Agent may resign at any time by giving sixty (60) days prior
written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to
the Borrower. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent,
which shall be a financial institution having a rating of not less than A
or its equivalent by Standard & Poor's Corporation. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the Agent
thereof. The Agent hereby agrees that upon receipt of any notice under
this Section 15.10 it shall promptly notify the other Banks of the
existence of such Default or Event of Default.
EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing
and reproducing this Credit Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) any taxes
(including any interest and penalties in respect thereto) payable by the
Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's revenue, net income) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to
indemnify the Agent and each Bank with respect thereto), (c) the
reasonable fees, expenses and disbursements of the Agent's Special Counsel
and any local counsel to the Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or
hereunder, (d) the fees, expenses and disbursements of the Agent incurred
by the Agent in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned
herein, including all surveyor, engineering and appraisal charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges,
and any fees and costs of marine consultants or the Construction
Inspector) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents
against the Guarantor or the Borrower or the administration thereof after
the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way
related to any Bank's or the Agent's relationship with the Guarantor or
the Borrower and (f) all reasonable fees, expenses and disbursements of
any Bank or the Agent incurred in connection with UCC searches, UCC
filings or mortgage recordings. The covenants of this Section 16 shall
survive payment or satisfaction of payment of amounts owing with respect
to the Notes.
INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and
the Banks from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of
this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any
actual or proposed use by the Borrower of the proceeds of any of the
Advances (b) the Guarantor or the Borrower entering into or performing
this Credit Agreement or any of the other Loan Documents or (c) with
respect to the Guarantor or the Borrower and their respective properties
and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release
or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or
other proceeding. In litigation, or the preparation therefor, the Banks
and the Agent shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrower under this Section 17 are
unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The covenants contained in
this Section 17 shall survive payment of satisfaction in full of all other
obligations.
SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made
herein, in the Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Guarantor or
the Borrower pursuant hereto shall be deemed to have been relied upon by
the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks
of the Advances, as herein contemplated, and shall continue in full force
and effect so long as any amount due under this Credit Agreement or the
Notes or any of the other Loan Documents remains Outstanding or any Bank
has any obligation to make any Advances, and for such further time as may
be otherwise expressly specified in this Credit Agreement. All statements
contained in any certificate or other paper delivered to any Bank or the
Agent at any time by or on behalf of the Guarantor or the Borrower
pursuant hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Borrower or such
Subsidiary hereunder.
ASSIGNMENT AND PARTICIPATION.
Conditions to Assignment by Banks.
Except as provided herein, each Bank may assign to one or more
Eligible Assignees all or a portion of its interests, rights and
obligations under this Credit Agreement (including all or a portion of its
Commitment Percentage and Commitment and the same portion of the Advances
at the time owing to it) and the Notes held by it; provided that (a) each
of the Agent and the Borrower shall have given its prior written consent
to such assignment, which consent, in the case of the Borrower, will not
be unreasonably withheld, (b) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Bank's rights and
obligations under this Credit Agreement, (c) each assignment shall be in
an amount that is a whole multiple of $3,000,000, and (d) the parties to
such assignment shall execute and deliver to the Agent, for recording in
the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit N hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the
execution thereof, (a) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder, and (b) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in Section 19.3 hereof, be
released from its obligations under this Credit Agreement.
Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other
and the other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security
interest or mortgage;
(b) the assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Guarantors, the Borrower and its Subsidiaries or
any other Person primarily or secondarily liable in respect of any
of the Obligations, or the performance or observance by the
Guarantor, the Borrower and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent
financial statements referred to in Section 7.4 and Section 8.4 and
such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers
under this Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
Register.
The Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register or similar list (the "Register") for the
recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Construction Loan owing to the
Banks from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Agent and the
Banks may treat each Person whose name is recorded in the Register as a
Bank hereunder for all purposes of this Credit Agreement. The Register
shall be available for inspection by the Borrower and the Banks at any
reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,000.
New Notes.
Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein
in the Register, and (b) give prompt notice thereof to the Borrower and
the Banks (other than the assigning Bank). Within five (5) Business Days
after receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent, in exchange for each surrendered Note, a
new Note to the order of such Eligible Assignee in an amount equal to the
amount assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Bank in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in
an aggregate principal amount equal to the aggregate principal amount of
the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this Section 19.4, the Borrower shall deliver an opinion of
counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to
the Banks. The surrendered Notes shall be cancelled and returned to the
Borrower.
Participations.
Each Bank may sell participations to one or more banks or other
entities in all or a portion of such Bank's rights and obligations under
this Credit Agreement and the other Loan Documents; provided that (a) each
such participation shall be in an amount of not less than $3,000,000 (b)
any such sale or participation shall not affect the rights and duties of
the selling Bank hereunder to the Borrower and (c) the only rights granted
to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents
shall be the rights to approve waivers, amendments or modifications that
would reduce the principal of or the interest rate on any Construction
Advances, extend the term or increase the amount of the Commitment of such
Bank as it relates to such participant, reduce the amount of any
commitment fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
Disclosure.
Each of the Guarantors and the Borrower agrees that in addition to
disclosures made in accordance with standard and customary banking
practices any Bank may disclose information obtained by such Bank pursuant
to this Credit Agreement to assignees or participants and potential
assignees or participants hereunder; provided that such assignees or
participants or potential assignees or participants shall agree (a) to
treat in confidence such information unless such information otherwise
becomes public knowledge, (b) not to disclose such information to a third
party, except as required by law or legal process and (c) not to make use
of such information for purposes of transactions unrelated to such
contemplated assignment or participation.
Assignee or Participant Affiliated with the Borrower.
If any assignee Bank is an Affiliate of the Borrower, then any such
assignee Bank shall have no right to vote as a Bank hereunder or under any
of the other Loan Documents for purposes of granting consents or waivers
or for purposes of agreeing to amendments or other modifications to any of
the Loan Documents or for purposes of making requests to the Agent
pursuant to Section 13.1 or Section 13.2 hereof, and the determination of
the Majority Banks shall for all purposes of this Agreement and the other
Loan Documents be made without regard to such assignee Bank's interest in
any of the Construction Advances. If any Bank sells a participating
interest in any of the Construction Advances to a participant, and such
participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of
granting consents or waivers or for purposes of agreeing to amendments or
modifications to any of the Loan Documents or for purposes of making
requests to the Agent pursuant to Section 13.1 or Section 13.2 hereof to
the extent that such participation is beneficially owned by the Borrower
or any Affiliate of the Borrower, and the determination of the Majority
Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank
in the Construction Advances to the extent of such participation.
Miscellaneous Assignment Provisions.
Any assigning Bank shall retain its rights to be indemnified
pursuant to Section 16 hereof with respect to any claims or actions
arising prior to the date of such assignment. If any assignee Bank is not
incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrower and the Agent certification as to its
exemption from deduction or withholding of any United States federal
income taxes. If any Reference Bank transfers all of its interest, rights
and obligations under this Credit Agreement, the Agent shall, in
consultation with the Borrower and with the consent of the Borrower and
the Majority Banks, appoint another Bank to act as a Reference Bank
hereunder. Anything contained in this Section 18 hereof to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
such pledge or the enforcement thereof shall release the pledgor Bank from
its obligations hereunder or under any of the other Loan Documents.
Assignment by Borrower.
The Guarantors and the Borrower shall not assign or transfer any of
its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement,
all notices and other communications made or required to be given pursuant
to this Credit Agreement or the Notes shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first
class mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, telefax or telex and confirmed by delivery via
courier or postal service, addressed as follows:
(a) if to the Borrower or the Guarantor, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, or at such
other address for notice as the Borrower shall last have furnished
in writing to the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Director, or
such other address for notice as the Agent shall last have
furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank
shall have last furnished in writing to the Person giving the
notice.
Any such notice or demand shall be deemed to have been duly given
or made and to have become effective (a) if delivered by hand, overnight
courier or facsimile to a responsible officer of the party to which it is
directed, at the time of the receipt thereof by such officer or the
sending of such facsimile and (b) if sent by registered or certified
first-class mail, postage prepaid, on the third Business Day following the
mailing thereof.
GOVERNING LAW.
THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). EACH OF THE GUARANTOR AND THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON
THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN Section 20 HEREOF. EACH
OF THE GUARANTOR AND THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
HEADINGS.
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Credit
Agreement it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is
sought.
ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit
Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in Section 26 hereof.
WAIVER OF JURY TRIAL.
Each of the Guarantor and the Borrower hereby waives its right to a
jury trial with respect to any action or claim arising out of any dispute
in connection with this Credit Agreement, the Notes or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the
performance of such rights and obligations. Except as prohibited by law,
each of the Guarantor and the Borrower hereby waives any right it may have
to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. Each of the
Guarantor and the Borrower (a) certifies that no representative, agent or
attorney of any Bank or the Agent has represented, expressly or otherwise,
that such Bank or the Agent would not, in the event of litigation, seek to
enforce the foregoing waivers and (b) acknowledges that the Agent and the
Banks have been induced to enter into this Credit Agreement, the other
Loan Documents to which it is a party by, among other things, the waivers
and certifications contained herein.
CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement,
any consent or approval required or permitted by this Credit Agreement to
be given by one or more or all of the Banks may be given, and any term of
this Credit Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or the Guarantor of any terms of this Credit Agreement or such
other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent
of the Borrower and the written consent of the Majority Banks.
Notwithstanding the foregoing, the rate of interest on the Notes (other
than interest accruing pursuant to Section 5.11.2 hereof following the
effective date of any waiver by the Majority Banks of the Default or Event
of Default relating thereto), the term of the Notes, the amount of the
Commitments of the Banks, the amount of commitment fee hereunder and the
release of Collateral with a value in excess of $1,000,000, may not be
changed without the written consent of the Borrower and the written
consent of each Bank affected thereby; the definition of Majority Banks
may not be amended without the written consent of all of the Banks; and
Section 15 hereof may not be amended without the written consent of the
Agent. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of either Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon the Borrower shall entitle the Borrower to other
or further notice or demand in similar or other circumstances.
SEVERABILITY.
The provisions of this Credit Agreement are severable and if any
one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part
thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or
provision of this Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
KADAMPANATTU CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
TRAILER BRIDGE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE FIRST NATIONAL
BANK OF BOSTON,
individually and as Agent
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇,
Title: Director