Exhibit 10.1
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CREDIT AGREEMENT PROVIDING FOR
A
U.S. $25,000,000
REVOLVING CREDIT FACILITY
TO BE MADE AVAILABLE TO
▇▇▇▇▇▇ OFFSHORE LLC
ARRANGED BY
NEDERLANDSE SCHEEPSHYPOTHEEK BANK N.V.
and
MEESPIERSON CAPITAL CORP.
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April 29, 1998
INDEX
PAGE
SECTION 1 DEFINITIONS ........................................................................ 1
1.1 Defined Terms........................................................... 1
1.2 ........................................................................ 13
1.3 ........................................................................ 13
SECTION 2 REPRESENTATIONS AND WARRANTIES...................................................... 13
2.1 ........................................................................ 13
2.1(a) Due Organization and Power.............................................. 13
2.1(b) Authorization and Consents.............................................. 14
2.1(c) Binding Obligations..................................................... 14
2.1(d) No Violation............................................................ 14
2.1(e) Litigation.............................................................. 14
2.1(f) No Default.............................................................. 14
2.1(g) Units................................................................... 14
2.1(h) Insurance............................................................... 15
2.1(i) Financial Information................................................... 15
2.1(j) Tax Returns............................................................. 15
2.1(k) ERISA................................................................... 15
2.1(l) Chief Executive Office.................................................. 16
2.1(m) Foreign Trade Control Regulations....................................... 16
2.1(n) Equity Ownership........................................................ 16
2.1(o) Environmental Matters and Claims........................................ 16
2.1(p) Indenture............................................................... 18
2.1(q) Survival................................................................ 18
SECTION 3 ADVANCES ........................................................................ 18
3.1(a) Purposes................................................................ 18
3.1(b) Making of the Advances.................................................. 18
3.1(c) Maximum Number of Advances.............................................. 18
i
3.2 Drawdown Notice......................................................... 18
3.3 Effect of Drawdown Notices.............................................. 19
3.4 Notation of Advances.................................................... 19
SECTION 4 CONDITIONS ........................................................................ 19
4.1 Conditions Precedent to Drawdown
of the Initial Advance................................................ 19
4.2 Further Conditions Precedent............................................ 23
4.3 Breakfunding Costs...................................................... 23
4.4 Satisfaction After Drawdown............................................. 23
SECTION 5 REPAYMENT, REDUCTION AND PREPAYMENT................................................. 24
5.1 Repayment............................................................... 24
5.2 Prepayments; Reborrowing................................................ 24
5.3 Optional Permanent Reduction of
Credit Facility....................................................... 24
5.4 Interest and Costs with Prepayments..................................... 24
SECTION 6 INTEREST AND RATE................................................................... 24
6.1 Applicable Rate; Default Rate........................................... 24
6.2 Interest Periods........................................................ 25
6.3 Interest Payments....................................................... 25
6.4 Payment on Banking Day.................................................. 25
6.5 Calculation of Interest................................................. 25
SECTION 7 PAYMENTS ........................................................................ 25
7.1 Place of Payments, No Set Off........................................... 25
7.2 Proof of Withholding.................................................... 26
7.3 Tax Credits............................................................. 26
SECTION 8 EVENTS OF DEFAULT.................................................................... 27
8.1(a) Non-Payment of Principal................................................ 27
8.1(b) Non-Payment of Interest or Other Amounts................................ 27
8.1(c) Representations......................................................... 27
8.1(d) Mortgage................................................................ 27
8.1(e) Covenants............................................................... 27
ii
8.1(f) Indebtedness............................................................ 27
8.1(g) Indenture Default....................................................... 28
8.1(h) Equity Ownership........................................................ 28
8.1(i) Bankruptcy.............................................................. 28
8.1(j) Termination of Operations;
Sale of Assets........................................................ 28
8.1(k) Judgments............................................................... 28
8.1(l) Inability to Pay Debts.................................................. 29
8.1(m) Change in Control....................................................... 29
8.2 Indemnification......................................................... 30
8.3 Application of Moneys................................................... 30
SECTION 9 COVENANTS ........................................................................ 31
9.1 ........................................................................ 31
9.1(A)(i) Performance of Agreements............................................... 31
9.1(A)(ii) Notice of Default, Etc.................................................. 31
9.1(A)(iii) Obtain Consents......................................................... 31
9.1(A)(iv) Financial Information................................................... 31
9.1(A)(v) Existence............................................................... 32
9.1(A)(vi) Books and Records....................................................... 33
9.1(A)(vii) Taxes and Assessments................................................... 33
9.1(A)(viii) Inspection.............................................................. 33
9.1(A)(ix) Compliance with Statutes, etc........................................... 33
9.1(A)(x) Environmental Matters................................................... 33
9.1(A)(xi) ERISA................................................................... 34
9.1(A)(xii) Delivery of Second Unit................................................. 34
9.1(A)(xiii) Permanent Registration.................................................. 34
9.1(A)(xiv) Brokerage Commissions, etc.............................................. 35
9.1(B)(i) Liens................................................................... 35
9.1(B)(ii) Change in Business...................................................... 36
9.1(B)(iii) Sale or Pledge of Membership
Interests.............................................................. 36
9.1(B)(iv) Sale of Assets.......................................................... 36
9.1(B)(v) Changes in Offices or Names............................................. 36
9.1(B)(vi) Consolidation and Merger................................................ 36
9.1(B)(vii) Limitation on Restricted
Payments............................................................... 36
9.1(B)(viii) Limitation on Call of Notes............................................. 37
9.1(B)(ix) Amendment of Indenture.................................................. 37
iii
9.1(C)(i) Loans and Advances...................................................... 37
9.1(C)(ii) Guarantees, etc......................................................... 37
9.1(C)(iii) Use of Corporate Funds.................................................. 37
9.1(C)(iv) Issuance of Membership Interests........................................ 37
9.2 Unit Valuation.......................................................... 37
9.3 Asset Maintenance....................................................... 38
9.4 Reduction of Collateral................................................. 38
9.5 Inspection and Survey Reports........................................... 39
SECTION 10 ASSIGNMENT......................................................................... 39
SECTION 11 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.................................. 39
11.1 Illegality.............................................................. 39
11.2 Increased Costs......................................................... 40
11.3 Nonavailability of Funds................................................ 41
11.4 Lender's Certificate Conclusive......................................... 41
11.5 Compensation for Losses................................................. 41
SECTION 12 CURRENCY INDEMNITY................................................................. 42
12.1 Currency Conversion..................................................... 42
12.2 Change in Exchange Rate................................................. 42
12.3 Additional Debt Due..................................................... 42
12.4 Rate of Exchange........................................................ 42
SECTION 13 FEES AND EXPENSES.................................................................. 42
13.1 Commitment Fee.......................................................... 42
13.2 Agency Fee.............................................................. 43
13.3 Arrangement Fee......................................................... 43
13.4 Other Fees.............................................................. 43
13.5 Expenses................................................................ 43
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SECTION 14 APPLICABLE LAW, JURISDICTION AND WAIVER............................................ 44
14.1 Applicable Law.......................................................... 44
14.2 Jurisdiction ........................................................... 44
14.3 WAIVER OF JURY TRIAL.................................................... 44
SECTION 15 THE AGENTS......................................................................... 45
15.1(a) Appointment of Agents................................................... 45
15.1(b) Appointment of Security Trustee......................................... 45
15.2 Distribution of Payments................................................ 45
15.3 Holder of Interest in Note.............................................. 46
15.4 No Duty to Examine, Etc................................................. 46
15.5 Agents as Lenders....................................................... 46
15.6(a) Obligations of Agents................................................... 46
15.6(b) No Duty to Investigate.................................................. 46
15.7(a) Discretion of Agents.................................................... 46
15.7(b) Instructions of Majority Lenders........................................ 46
15.8 Assumption re Event of Default.......................................... 47
15.9 No Liability of Agents or Lenders....................................... 47
15.10 Indemnification of Agents............................................... 48
15.11 Consultation with Counsel............................................... 48
15.12 Resignation of Administrative Agent..................................... 48
15.13 Representations of Lenders.............................................. 49
15.14 Notification of Event of Default........................................ 49
SECTION 16 NOTICES AND DEMANDS................................................................ 49
16.1 Notices................................................................. 49
SECTION 17 MISCELLANEOUS...................................................................... 50
17.1 Time of Essence......................................................... 50
17.2 Unenforceable, etc., Provisions - Effect................................ 50
17.3 References.............................................................. 50
17.4 Further Assurances...................................................... 50
17.5 Prior Agreements, Merger................................................ 50
17.6 Entire Agreement, Amendments............................................ 51
17.7 Indemnification......................................................... 51
17.8 Headings................................................................ 51
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SCHEDULE
1 The Lenders and the Commitments
2 The Guarantors
EXHIBITS CONTENTS
1 Form of Promissory Note
2 Form of Guaranty
3 Form of Mortgage
4 Form of Earnings Assignment
5 Form of Insurances Assignment
6 Form of Drawdown Notice
7 Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of the 29th day of April,
1998, by and among (1) ▇▇▇▇▇▇ OFFSHORE LLC, a limited liability company
organized under the laws of the State of Delaware with offices at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Borrower"), (2) NEDERLANDSE
SCHEEPSHYPOTHEEK BANK N.V. ("Nedship") and MEESPIERSON CAPITAL CORP.
("MeesPierson"), as co-arrangers (the "Arrangers"), (3) the banks and financial
institutions whose names and addresses are set out in Schedule 1 (together, the
"Lenders", each a "Lender"); (4) Nedship, as documentation agent (the
"Documentation Agent") and security trustee (the "Security Trustee") for the
Lenders, and (5) MeesPierson, as administrative and paying agent (the
"Administrative Agent", and, together with the Documentation Agent, the
"Agents") for the Lenders.
WITNESSETH THAT:
1. DEFINITIONS
1.1 In this Agreement the words and expressions specified below shall, except
where the context otherwise requires, have the meanings attributed to them
below:
"Acceptable Accounting Firm" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. L.L.P., or such other recognized
international accounting firm selected by the Borrower
and approved by the Agent, such approval not to be unreasonably
withheld;
"Advance(s)" means any amount advanced to the Borrower hereunder or (as the
context may require) the aggregate amount of all such advances for
the time being outstanding;
"Affiliate" means with respect to any Person, any other Person directly or
indirectly controlled by or under common control with such
Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms
"controlled by" and "under common control with") as applied to any
Person means the possession directly or indirectly of the power to
direct or cause the direction of the management and policies of that
Person whether through ownership of voting securities or by contract
or otherwise;
"Agreement" means this Agreement, as the same shall be amended, modified or
supplemented from time to time;
"Applicable Rate" means any rate of interest on the Advances from time to time
applicable pursuant to Section 6.1;
"Assignment and Assumption
Agreement(s)" means the Assignment and Assumption Agreement(s) executed
pursuant to Section 10 substantially in the form set out in
Exhibit 7;
"Assignment Notices" means (i) notices with respect to the Earnings Assignments
substantially in the form set out in Exhibit 1 thereto; and
(ii) notices with respect to the Insurances Assignments
substantially in the form set out in Exhibit 3 thereto;
"Assignments" means the Earnings Assignments and the Insurances Assignments;
"Banking Day(s)" means day(s) on which banks are open for the
transaction of business in London, England, New York, New
York and Rotterdam, The Netherlands;
"Builder" AMFELS, Inc., a Texas corporation;
2
"Change of Control" means (a) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) (other than SEACOR Offshore Rigs
Inc. or its Affiliates) becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 45% of the total voting power of the
Borrower or (b) the Management Committee of the Borrower ceases
to consist of a majority of the existing managers as of the date
of this Agreement or managers elected by such existing managers;
"▇▇▇▇▇▇ Finance" means ▇▇▇▇▇▇ Offshore Finance Corp., a Delaware corporation;
"Classification Society" shall mean a member of the International Association of
Classification Societies with whom the Units are entered and
who conducted periodic physical surveys and/or inspections of
the Units;
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute and regulation promulgated thereunder;
"Collateral" means all property or other assets, real or personal,
tangible or intangible, whether now owned or hereafter acquired
in which the Security Trustee for the benefit of the Creditors
have been granted a security interest pursuant to a Security
Document;
"Commitment(s)" means in relation to a Lender, the portion of the Credit
Facility set out opposite its name on Schedule 1 or, as the
case may be, in any relevant Assignment and
3
Assumption Agreement, as reduced from time to time pursuant to
the terms of this Agreement;
"Compliance Certificate" means a certificate certifying the compliance by the Borrower
with all of its covenants contained herein and showing the
calculations thereof in reasonable detail, delivered by the Chief
Financial Officer of the Borrower to the Agents from time to time
pursuant to Section 9.1(A)(iv) in such form as the Administrative
Agent may agree;
"Credit Facility" means the sums to be advanced by the Lenders to the
Borrower pursuant to this Agreement in an aggregate amount
not to exceed at any one time outstanding Twenty-Five Million
Dollars ($25,000,000), as such amount shall be reduced from
time to time pursuant to this Agreement;
"Credit Facility Balance" means the Dollar amount of the Advances at
any relevant time then outstanding as reduced by
payments pursuant to the terms of this Agreement;
"Credit Facility Period" means the period from the date of this
Agreement to the date on which all amounts owing under the
Credit Facility and all other amounts owing to the Creditors
pursuant to this Agreement, the Note and the Security Documents
become repayable and are repaid in full;
"Creditors" means the Arrangers, the Agents, the Security Trustee and the
Lenders;
"Default Rate" shall have the meaning ascribed thereto in Section 6.1;
4
"Dollars" and the means the legal currency, at any relevant time
sign "$" hereunder, of the United States of America and, in relation to
all payments hereunder, in same day funds settled through the New
York Clearing House Interbank Payments System (or such other
Dollar funds as may be determined by the Agent to be customary
for the settlement in New York City of banking transactions of
the type herein involved);
"Drawdown Dates" means the dates, each being a Banking Day falling not
later than the day immediately preceding the Maturity Date,
upon which the Borrower has requested that an Advance be
made available to the Borrower as provided in Section 3;
"Drawdown Notice" shall have the meaning ascribed thereto in Section 3.2;
"Earnings Assignments" means assignments in respect of the earnings of
each Unit from any and all sources to be executed by the
relevant Guarantor in favor of the Security Trustee pursuant to
Section 4.1(d) substantially in the form set out in Exhibit 4;
"Environmental Affiliate" means any person or entity, the liability of which
for Environmental Claims any Security Party or Subsidiary of
any Security Party may have assumed by contract or operation
of law;
"Environmental Approvals" shall have the meaning ascribed thereto in Section 2.1(o);
"Environmental Claim(s)" shall have the meaning ascribed thereto in Section 2.1(o);
5
"Environmental Laws" shall have the meaning ascribed thereto in Section 2.1(o);
"ERISA" means the Employment Retirement Income Security Act of 1974,
as amended;
"ERISA Affiliate" means a trade or business (whether or not incorporated) which
is under common control with the Borrower within the meaning
of Sections 414(b), (c), (m) or (o) of the Code;
"Events of Default" means any of the events set out in Section 8.1;
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as amended;
"Fee Letter" means the letter dated of even date herewith and
entered into by and among the Borrower and the Arrangers in
respect of the fees referred to therein;
"First Unit" means the "▇▇▇▇▇▇ Columbus", a ▇▇▇▇▇▇▇▇▇▇ designed
Enhanced 116 class jackup rig with 350 foot water depth, to be
built at the Builder's Brownsville, Texas yard, and
anticipated to be delivered in April, 1999 and to be registered
in the name of the relevant Guarantor under Panamanian flag;
"FMV" with respect to a Unit, means fair market value as determined in
accordance with Section 9.2;
"GAAP" shall have the meaning ascribed thereto in Section 1.3;
6
"Guarantor(s)" means each of the companies listed in Schedule 2 as Guarantors;
"Guaranty" means the guaranty to be executed by each Guarantor in
respect of the obligations of the Borrower under this
Agreement and under the Note in favor of the Security Trustee
pursuant to Section 4.l(d) substantially in the form set
out in Exhibit 2;
"Indebtedness" means, with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations
with respect thereto), (iv) all obligations of such Person to pay
the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date
of placing such property in service or taking delivery thereof or
the completion of such services, except trade payables, (v) all
obligations on account of principal of such Person as lessee
under capitalized leases, (vi) all indebtedness of other Persons
secured by a lien on any asset of such Person, whether or not
such indebtedness is assumed by such Person; provided that the
amount of such indebtedness shall be the lesser of (a) the fair
market value of such asset at such date of determination and
(b) the amount of such indebtedness, and (vii) all indebtedness of
other Persons guaranteed
7
by such Person to the extent such indebtedness is guaranteed by
such Person. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect
to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation,
provided that the amount outstanding at any time of any
indebtedness issued with original issue discount is the face
amount of such indebtedness less the remaining unamortized
portion of the original issue discount of such indebtedness at
such time as determined in conformity with GAAP; and provided
further that Indebtedness shall not include any liability for
current or deferred federal, state, local or other taxes, or
any trade payables;
"Indenture" means the Indenture executed or to be executed by and among the
Borrower, ▇▇▇▇▇▇ Finance, certain subsidiary guarantors
therein described and the Trustee as trustee for certain
noteholders in respect of the issuance by the Borrower of
$110,000,000 of 10% Senior Notes due 2008;
"Insurances Assignments" means assignments in respect of the insurances of
the Units to be executed by the respective Guarantor owning same
in favor of the Security Trustee pursuant to Section 4.1(d)
substantially in the form set out in Exhibit 5;
8
"Interest Notice" a notice to the Administrative Agent specifying the duration of
any relevant Interest Period;
"Interest Period(s)" period(s) of one, three or six months selected by
the Borrower or, at the Lenders' option, such other period(s) as
may be agreed; provided, however, that an Interest Period
of one month may not be selected by the Borrower more than three
times in any calendar year;
"Interest Rate Agreements" means any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar
agreement or arrangement designed to protect the Borrower or any
of its Subsidiaries against fluctuations in interest rates to or
under which the Borrower or any of its Subsidiaries is a party or
a beneficiary on the date of this Agreement or becomes a party or
a beneficiary hereafter;
"LIBOR" means the rate (rounded upward to the nearest 1/16th of one
percent) for deposits of Dollars for a period equivalent to the
relevant Interest Period at or about 11:00 a.m. (London time)
on the second London Banking Day before the first day of such
period as displayed on Telerate page 3750 (British Bankers'
Association Interest Settlement Rates) (or such other page as
may replace such page 3750 on such system or on any other
system of the information vendor for the time being designated
by the British Bankers' Association to calculate the
9
BBA Interest Settlement Rate (as defined in the British Bankers'
Association's Recommended Terms and Conditions ("BBAIRS" terms)
dated August 1985)), provided that if on such date no such rate
is so displayed for the relevant Interest Period, LIBOR for such
period shall be the arithmetic mean (rounded upward if necessary
to four decimal places) of the rates respectively quoted to the
Administrative Agent by each of the Reference Banks at the
request of the Administrative Agent as the offered rate for
deposits of Dollars in an amount approximately equal to the
amount in relation to which LIBOR is to be determined for a
period equivalent to the relevant Interest Period to prime banks
in the London Interbank Market at or about 11:00 a.m. (London
time) on the second Banking Day before the first day of such
period;
"Majority Lenders" means any two or more Lenders whose Commitments exceed fifty
percent of the total Commitments;
"Management Committee" means the board of managers, management committee
or such other governing body charged with the management of
the Borrower under its certificate of formation and/or
operating agreement;
"Margin" 1.25% per annum;
"Material Adverse Effect" shall mean a material adverse effect on (i) the ability of any
Security Party to perform its obligations to the Creditors under
any Security Documents or (ii) the business, property, assets,
liabilities,
10
operations, condition (financial or otherwise) or prospects of the
Borrower and other Security Parties taken as a whole;
"Materials of Environmental shall have the meaning ascribed thereto in Section 2.1(o);
Concern"
"Maturity Date" means December 31, 2004;
"Mortgages" the first preferred naval Panamanian mortgages on each
Unit to be executed by the respective Guarantor which is
the registered owner of such Unit in favor of the Security
Trustee pursuant to Section 4.1(d) substantially in the form
set out in Exhibit 3;
"Note" means that certain promissory note to be executed by the
Borrower to the order of the Administrative Agent pursuant to
Section 4.1(c), to evidence the Advances substantially in the
form set out Exhibit 1;
"Person" means any individual, sole proprietorship, corporation,
partnership (general or limited), limited liability
company, business trust, bank, trust company, joint venture,
association, joint stock company, trust or other
unincorporated organization, whether or not a legal entity,
or any government or agency or political subdivision thereof;
"Plan" means any employee benefit plan covered by Title IV of ERISA;
"Reference Banks" Nederlandse Scheepshypotheek Bank N.V. and MeesPierson N.V.;
11
"Required Percentage" shall have the meaning set forth for such term in Section 9.3;
"Second Unit" the "▇▇▇▇▇▇ Magellan", a ▇▇▇▇▇▇▇▇▇▇ designed Super 116
class jackup rig with 350 foot water depth, to be built at the
Builder's Brownsville, Texas yard, and anticipated to be
delivered in October 1999 and registered in the name of the
relevant Guarantor under Panamanian flag;
"Security Documents" means the Mortgages, the Assignments and any other documents that
may be executed as security for the Credit Facility and the
Borrower's obligations in connection therewith;
"Security Party(ies)" means the Borrower and each of the Guarantors;
"Subsidiaries" is defined to mean, with respect to any Person, any business
entity of which more than 50% of the outstanding voting stock,
membership interests or other equity interests are owned
directly or indirectly by such Person and one or more other
Subsidiaries of such Person;
"Taxes" means any present or future income or other taxes, levies,
duties, charges, fees, deductions or withholdings of any nature
now or hereafter imposed, levied, collected, withheld or
assessed by any taxing authority whatsoever, except for taxes
on or measured by the overall net income of each Lender imposed
by its jurisdiction of incorporation or applicable lending
office, the United States of America, the State or City of New
York or any governmental subdivision or
12
taxing authority of any thereof or by any other
taxing authority having jurisdiction over such Lender (unless
such jurisdiction is asserted by reason of the activities of the
Borrower or any of the Subsidiaries);
"Total Loss" shall have the meaning ascribed thereto in the Mortgages;
"Trustee" means U.S. Bank Trust National Association; and
"Units" means the First Unit and the Second Unit.
1.2 Words importing the singular number only shall include the plural and vice
versa. Words importing persons shall include companies, firms, corporations,
partnerships, unincorporated associations and their respective successors and
assigns.
1.3 All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles as in effect from time
to time in the United States of America consistently applied ("GAAP") and all
financial statements submitted pursuant to this Agreement shall be prepared in
accordance with, and all financial data submitted pursuant hereto shall be
derived from financial statements prepared in accordance with, GAAP.
2. REPRESENTATIONS AND WARRANTIES
2.1 In order to induce Creditors to enter into this Agreement and to induce the
Lenders to make the Credit Facility available, the Borrower hereby represents
and warrants to the Creditors (which representations and warranties shall
survive the execution and delivery of this Agreement and the Note and the
drawdown of the Advances hereunder) that:
(a) Due Organization and Power. Each Security Party is duly
formed and is validly existing in good standing under the laws of its
jurisdiction of formation, has full power to carry on its business as now being
conducted and to enter into and perform its obligations under this Agreement,
the Note, the Guaranty and the Security Documents, and has complied with all
statutory, regulatory and other requirements applicable to such business and
such agreements;
13
(b) Authorization and Consents. All necessary limited
liability company action has been taken to authorize, and all necessary consents
and authorities have been obtained and remain in full force and effect to
permit, each Security Party to enter into and perform its obligations under this
Agreement, the Note, the Guaranty and the Security Documents and, in the case of
the Borrower, to borrow, service and repay the Advances and, as of the date of
this Agreement, no further consents or authorities are necessary for the service
and repayment of the Advances or any part thereof;
(c) Binding Obligations. This Agreement, the Note, the
Guaranty and the Security Documents constitute or will, when executed and
delivered, constitute the legal, valid and binding obligations of each Security
Party as is a party thereto enforceable against such Security Party in
accordance with their respective terms, except to the extent that such
enforcement may be limited by equitable principles, principles of public policy
or applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting generally the enforcement of creditors' rights;
(d) No Violation. The execution and delivery of, and the
performance of the provisions of, this Agreement, the Note, the Guaranty and
those of the Security Documents to which it is to be a party by each Security
Party do not contravene any applicable law or regulation existing at the date
hereof or any contractual restriction binding on such Security Party or the
certificate of formation or operating agreement (or equivalent instruments)
thereof;
(e) Litigation. No action, suit or proceeding is currently
pending or threatened against any Security Party before any court, board of
arbitration or administrative agency;
(f) No Default. No Security Party is in default under any
material agreement by which it is bound, or is in default in respect of any
material financial commitment or obligation;
(g) Units. Upon delivery of the Units to the Guarantors:
(i) each of the Units will be in the sole and
absolute ownership of the respective
Guarantor as set forth in Schedule 3 and
duly registered in such Guarantor's name
under Panamanian flag, unencumbered, save
and except for the Mortgage recorded
against her and as permitted by such
Mortgage;
14
(ii) each Unit will be classed in the highest
classification and rating for rigs of the
same age and type with the respective
classification society as set forth in
Schedule 3 without any material outstanding
recommendations affecting class;
(iii) each Unit will be operationally seaworthy
and in every way fit for its intended
service; and
(iv) each Unit will be insured in accordance
with the provisions of the Mortgage
thereagainst and the requirements thereof
in respect of such insurances will have
been complied with;
(h) Insurance. Each of the Security Parties has insured its
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses;
(i) Financial Information. Except as otherwise disclosed in
writing to the Lenders on or prior to the date hereof, all financial statements,
information and other data furnished by the Borrower to the Lenders are complete
and correct, such financial statements have been prepared in accordance with
GAAP and accurately and fairly present the financial condition of the parties
covered thereby as of the respective dates thereof and the results of the
operations thereof for the period or respective periods covered by such
financial statements and since the date of the most recent of such statements,
there has been no Material Adverse Effect as to any of such parties and none
thereof has any contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material in the aggregate except as
disclosed in such statements, information and data;
(j) Tax Returns. Each Security Party has filed all material
tax returns required to be filed thereby and has paid all taxes payable thereby
which have become due, other than those not yet delinquent or the nonpayment of
which would not have a Material Adverse Effect on such Security Party and except
for those taxes being contested in good faith and by appropriate proceedings or
other acts and for which adequate reserves shall have been set aside on its
books;
(k) ERISA. The execution and delivery of this Agreement and
the consummation of the transactions hereunder will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code and no
condition exists or event or transaction has occurred in connection with any
Plan maintained or contributed to by any Security Party or any ERISA Affiliate
resulting from the failure of any thereof to comply with ERISA insofar as ERISA
applies thereto which is reasonably likely to
15
result in such Security Party or any ERISA Affiliate incurring any liability,
fine or penalty which individually or in the aggregate would have a Material
Adverse Effect. Prior to the date hereof, the Borrower has delivered to the
Agent a list of all the employee benefit plans to which each Security Party or
any ERISA Affiliate is a "party in interest" (within the meaning of Section
3(14) of ERISA) or a "disqualified person" (within the meaning of Section
4975(e)(2) of the Code);
(l) Chief Executive Office. The Borrower's chief executive
office and chief place of business and the office in which the records relating
to the earnings and other receivables of each Security Party are kept is, and
will continue to be, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇;
(m) Foreign Trade Control Regulations. None of the
transactions contemplated herein will violate any of the provisions of the
Foreign Assets Control Regulations of the United States of America (Title 31,
Code of Federal Regulations, Chapter V, Part 500, as amended), any of the
provisions of the Cuban Assets Control Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as
amended), any of the provisions of the Libyan Assets Control Regulations of the
United States of America (Title 31, Code of Federal Regulations, Chapter V, Part
550, as amended), any of the provisions of the Iranian Transaction Regulations
of the United States of America (Title 31, Code of Federal Regulations, Chapter
V, Part 560, as amended), any of the provisions of the Iraqi Sanctions
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 575, as
amended), any of the provisions of the Federal Republic of Yugoslavia (Serbia
and Montenegro) Assets Control Regulations (Title 31, Code of Federal
Regulations, Chapter V, Part 585 as amended) or any of the provisions of the
Regulations of the United States of America Governing Transactions in Foreign
Shipping of Merchandise (Title 31, Code of Federal Regulations, Chapter V, Part
505, as amended);
(n) Equity Ownership. Each of the Guarantors is a wholly owned
direct or indirect Subsidiary of the Borrower. On the first Drawdown Date, the
Borrower will not own any shares of capital stock, partnership interest or any
other direct or indirect equity interest in any corporation, partnership or
other entity except the Guarantors and ▇▇▇▇▇▇ Finance;
(o) Environmental Matters and Claims. (a) Except as heretofore
disclosed in writing to the Lenders (i) the Borrower, each of its Subsidiaries
and their Affiliates will, when required to operate their business as then being
conducted, be in compliance with all applicable United States federal and state,
local, foreign and international laws, regulations, conventions and agreements
relating to pollution prevention or protection of human health or the
environment (including, without
16
limitation, ambient air, surface water, ground water, navigable waters, waters
of the contiguous zone, ocean waters and international waters), including,
without limitation, laws, regulations, conventions and agreements relating to
(1) emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous materials, oil,
hazardous substances, petroleum and petroleum products and by-products
("Materials of Environmental Concern"), or (2) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern ("Environmental Laws") where the failure to
so comply could reasonably be expected to have a Material Adverse Effect; (ii)
the Borrower, each of its Subsidiaries and their Affiliates will, when required,
have all permits, licenses, approvals, rulings, variances, exemptions,
clearances, consents or other authorizations required under applicable
Environmental Laws ("Environmental Approvals") and will, when required, be in
compliance with all Environmental Approvals required to operate their business
as then being conducted if the failure to so hold or be in compliance could
reasonably be expected to have a Material Adverse Effect ; (iii) none of the
Borrower, any Subsidiary nor any Affiliate thereof has received any notice of
any claim, action, cause of action, investigation or demand by any person,
entity, enterprise or government, or any political subdivision,
intergovernmental body or agency, department or instrumentality thereof,
alleging potential liability for, or a requirement to incur, material
investigatory costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, personal injuries, attorneys' fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by such person,
or (2) circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law or Environmental Approval ("Environmental Claim")
(other than Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any, payable
by the Security Parties in respect thereof have been paid in full or which are
fully covered by insurance (including permitted deductibles)) which, if
adversely determined to the Borrower or any Environmental Affiliate, could
reasonably be expected to have a Material Adverse Effect; and (iv) there are no
circumstances that may prevent or interfere with such full compliance in the
future; and (b) except as heretofore disclosed in writing to the Agent there is
no Environmental Claim pending or threatened against the Borrower, any
Subsidiary or any Affiliate thereof and there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal of any Materials of
Environmental Concern, that could form the basis of any Environmental Claim
against such persons the adverse disposition of which may result in a Material
Adverse Effect; and
17
(p) Indenture. On or before the date hereof, the Borrower has
delivered to each of the Arrangers a true, correct and complete copy of the
Indenture and the Indenture has not been amended or modified in any respect
since the date of delivery of such copy thereof to the Arrangers.
(q) Survival. All representations, covenants and warranties
made herein and in any certificate or other document delivered pursuant hereto
or in connection herewith shall survive the making of the Advances and the
issuance of the Note to be issued by the Borrower hereunder.
3. ADVANCES
3.1 (a) Purposes. The Lenders shall make the Advances available to the Borrower
for the purpose of (i) partial financing of the construction and acquisition of
the Units and (ii) for general working capital purposes.
(b) Making of the Advances. Each of the Lenders, relying upon
each of the representations and warranties set out in Section 2, hereby
severally and not jointly agrees with the Borrower that, subject to and upon the
terms of this Agreement, it will on the Drawdown Dates, make the Advances
available through the Administrative Agent to the Borrower in an aggregate
amount not to exceed its Commitment ratably with the other Lenders according to
their respective Commitments. The maximum aggregate amount of all Advances which
may be outstanding at any time under this Agreement is the aggregate amount of
the Credit Facility, as may be reduced pursuant to Sections 5.3, 9.3 and 9.4.
All Advances shall be in a minimum amount of One Million Dollars ($1,000,000)
and in multiples thereof until the delivery of the Second Unit and in a minimum
amount of Two Million Five Hundred Thousand Dollars ($2,500,000) and in
multiples thereof thereafter.
(c) Maximum Number of Advances. The maximum number of Advances
that may be outstanding at any time under this Agreement shall be six (6).
3.2 Drawdown Notice. The Borrower shall, at least three (3) Banking Days before
a Drawdown Date, serve a notice (a "Drawdown Notice") substantially in the form
of Exhibit 6 on the Administrative Agent which notice shall (a) be in writing
addressed to the Administrative Agent, (b) be effective on receipt by the
Administrative Agent, (c) specify the amount of the Advance to be drawn, (d)
specify the Banking Day on which the Advance is to be drawn and the initial
Interest Period for such Advance, (e) specify the purpose(s) of each Advance,
(f) specify the disbursement instructions and (g) be irrevocable.
18
3.3 Effect of Drawdown Notices. Each Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
on and as of the date of such Drawdown Notice and will be true and correct on
and as of the relevant Drawdown Date as if made on such date, (b) that after
giving effect to the borrowing made pursuant to such Drawdown Notice, the Credit
Facility Balance shall not exceed the maximum amount then available hereunder
pursuant to the terms hereof and (c) that no Event of Default nor any event
which with the giving of notice or lapse of time or both would constitute an
Event of Default has occurred and is continuing.
3.4 Notation of Advances. Each Advance made by the Lenders to the Borrower may
be evidenced by a notation of the same made by the Administrative Agent on the
grid attached to the Note, which notation, absent manifest error, shall be prima
facie evidence of the amount of the relevant Advance.
4. CONDITIONS
4.1 Conditions Precedent to Drawdown of the Initial Advance. The obligation of
the Lenders to make the initial Advance available to the Borrower under this
Agreement shall be expressly subject to the following conditions precedent:
(a) the Administrative Agent shall have received the following
documents in form and substance satisfactory to the Arrangers and their legal
advisor:
(i) copies, certified as true and complete by
an officer of the Borrower, of the
resolutions of the Management Committee
of the Borrower evidencing approval of
this Agreement and the Note and
authorizing an appropriate officer or
officers or attorney-in-fact or
attorneys-in-fact to execute the same on
its behalf, or other evidence of such
approvals and authorizations;
(ii) copies, certified as true and complete by
an officer of each Security Party (other
than the Borrower), of the resolutions of
the Management Committee and member(s)
thereof evidencing approval of the
Guaranty and those Security Documents to
which it is to be a party and authorizing
an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to
execute the same on its behalf, or other
evidence of such approvals and
authorizations;
19
(iii) copies, certified as true and complete by
an officer of the Borrower, of all
documents evidencing any other necessary
action (including actions by such parties
thereto other than the Borrower as may be
required by the Arrangers), approvals or
consents with respect to this Agreement,
the Note, the Guaranty and the Security
Documents;
(iv) copies, certified as true and complete by
an officer of the respective Security
Party of the certificate of formation and
operating agreement (or equivalent
instruments) thereof;
(v) certificate of the Secretary of the
Borrower certifying that it legally and
beneficially owns, directly or
indirectly, all of the issued and
outstanding membership interests of each
of the other Security Parties and that
such membership interests are free and
clear of any liens, claims, pledges or
other encumbrances whatsoever;
(vi) certificate of the Secretary of each
Security Party (other than the Borrower)
certifying as to the record ownership of
all of its issued and outstanding
membership interests; and
(vii) certificates of the jurisdiction of
formation of each Security Party as to
the good standing thereof.
(b) the Administrative Agent shall have received evidence
satisfactory to the Arrangers and their legal advisor that:
(i) the First Unit is in the sole and
absolute ownership of the relevant
Guarantor as set forth in Schedule 3 and
duly provisionally registered in such
Guarantor's name under Panamanian flag,
unencumbered, save and except for the
Mortgage recorded against it and as
permitted by such Mortgage;
(ii) the First Unit is classed in the highest
classification and rating for rigs of the
same age and type with the
20
respective classification society as set
forth in Schedule 3 without any
outstanding recommendations affecting
class;
(iii) the First Unit shall have been delivered
(or due provision reasonably acceptable
to the Arrangers shall have been made
therefor) to the respective Guarantor set
forth on Schedule 2 and such Unit is
operationally seaworthy and in every way
fit for its intended service; and
(iv) the First Unit is insured in accordance
with the provisions of the Mortgage on it
and the requirements thereof in respect
of such insurances have been complied
with;
(c) the Borrower shall have duly executed and delivered this
Agreement and the Note;
(d) the Guarantor owning the First Unit shall have duly
executed and delivered:
(i) its Guaranty;
(ii) the Mortgage over its Unit;
(iii) an Insurances Assignment with respect to
its Unit;
(iv) an Earnings Assignment with respect to
its Unit;
(v) its Assignment Notices (provided that
neither the Security Trustee nor any
Lender shall deliver an Assignment Notice
to any operator of the Unit or any
charterer thereof for a period of twelve
(12) months or less unless an Event of
Default has occurred and is continuing
hereunder); and
(vi) Uniform Commercial Code Financing
Statements for filing with the State of
Texas and ▇▇▇▇▇▇ County, Texas and in
such other jurisdictions as the Agent may
reasonably require;
(e) the Administrative Agent shall have received an appraisal,
in form and substance satisfactory to the Arrangers, from an independent
shipbroker acceptable to the Arrangers as to the current market value (charter
free) of the First Unit, which
21
appraisal shall be dated no earlier than two months prior to the date of the
initial Advance hereunder;
(f) the Administrative Agent shall have received a certificate
of an officer of each Guarantor confirming the representations and warranties
with respect to solvency set forth in its Guaranty and containing conclusions as
to the solvency of such Guarantor;
(g) the Arrangers shall be satisfied that neither the Borrower
nor any of its Subsidiaries is subject to any Environmental Claim which could
have a Material Adverse Effect;
(h) the Administrative Agent shall have received payment in
full of all fees and expenses due to the Agents, the Arranger and the Lenders
under Section 13 and the Fee Letter;
(i) each Security Party shall have established an operating
account with the Security Trustee into which assigned moneys are to be paid;
(j) the Administrative Agent shall have received evidence
satisfactory to the Arrangers and to their legal advisor that, save for the
liens created by the Mortgages and the Assignments, there are no liens, charges
or encumbrances of any kind whatsoever on any of the Units or on their
respective earnings except as permitted hereby or by any of the Security
Documents;
(k) the Administrative Agent shall have received legal
opinions addressed to the Creditors from (i) Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., counsel for the Security Parties, and (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel to the Creditors, in each case in such form as the Arrangers may
require, as well as such other legal opinions as the Arrangers shall have
required as to all or any matters under the laws of the United States of
America, the State of Delaware, the State of New York, the State of Texas and
the Republic of Panama covering the representations and conditions which are the
subjects of Sections 2 and 4.1;
(l) the Borrower and/or the Guarantor with respect to the
Second Unit shall have executed and delivered an assignment to the Security
Trustee of the construction contract and the "builder's risk" insurances in
respect of the Second Unit;
(m) there having been no Material Adverse Effect since the
date hereof.
22
4.2 Further Conditions Precedent. The obligation of the Lenders to make any
Advance available to the Borrower under this Agreement shall be expressly and
separately subject to the following further conditions precedent on the relevant
Drawdown Date:
(a) the Administrative Agent having received a Drawdown
Notice in accordance with the terms of Section 3.2;
(b) the representations stated in Section 2 (updated mutatis
mutandis to such date) being true and correct as if made on and as of that date;
(c) no Event of Default having occurred and being continuing
and no event having occurred and being continuing which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default; and
(d) the Arrangers being satisfied that no change in any
applicable laws, regulations, rules or in the interpretation thereof shall have
occurred which make it unlawful for any Security Party to make any payment as
required under the terms of this Agreement, the Note, the Guaranty, the Security
Documents or any of them.
4.3 Breakfunding Costs. In the event that, on any date specified for the making
of an Advance in any Drawdown Notice, the Lenders shall not be obliged under
this Agreement to make such Advance available under this Agreement, the Borrower
shall indemnify and hold the Lenders fully harmless against any losses which the
Lenders (or any thereof) may sustain as a result of borrowing or agreeing to
borrow funds to meet the drawdown requirement of such Drawdown Notice and the
certificate of the relevant Lender or Lenders shall, absent manifest error, be
conclusive and binding on the Borrower as to the extent of any such losses.
4.4 Satisfaction after Drawdown. Without prejudice to any of the other terms and
conditions of this Agreement, in the event the Lenders, in their sole
discretion, advance any Advance prior to the satisfaction of all or any of the
conditions referred to elsewhere in Sections 4.1 or 4.2, the Borrower hereby
covenants and undertakes to satisfy or procure the satisfaction of such
condition or conditions within fourteen (14) days after the relevant Drawdown
Date (or such longer period as the Lenders, in their sole discretion, may
agree).
23
5 REPAYMENT, REDUCTION AND PREPAYMENT
5.1 Repayment. The Borrower shall repay all outstanding Advances (subject to
such reduction and prepayments as hereinafter set forth) on the Maturity Date.
5.2 Prepayment; Reborrowing. The Borrower may prepay, upon five (5) Banking Days
written notice, any outstanding Advance or any portion thereof, without penalty,
provided that such prepayment is made on the last day of the Interest Period of
such Advance. Each prepayment shall be in a minimum amount of One Million
Dollars ($1,000,000) plus any One Million Dollar ($1,000,000) multiples thereof
or the full amount of the Advance. Subject to the limits and upon the conditions
herein provided, the Borrower may from time to time prepay the Advances and
thereafter re-borrow such Advances or a portion thereof.
5.3 Optional Permanent Reduction of Credit Facility. The Borrower shall have the
right, at any time and from time to time, to request, without penalty, a
permanent reduction in the Credit Facility, provided (a) that the Administrative
Agent receives five (5) Banking Days prior written notice of such request and
(b), in the case of drawn amounts under the Credit Facility, that such requested
reduction occurs on the last day of the applicable Interest Period(s). Each such
partial permanent reduction shall be equal to or shall exceed Two Million Five
Hundred Thousand Dollars ($2,500,000) and multiples thereof.
5.4 Interest and Costs with Prepayments. Any prepayment of the Advances made
hereunder shall be subject to the condition that on the date of prepayment all
accrued interest to the date of such prepayment shall be paid in full with
respect to the Advances or portions thereof being prepaid, together with any and
all actual costs or expenses incurred by any Lender in connection with any
breaking of funding (as certified by such Lender, which certification shall,
absent any manifest error, be conclusive and binding on the Borrower).
6. INTEREST AND RATE
6.1 Applicable Rate; Default Rate. Each Advance shall bear interest at the
Applicable Rate which shall be the rate per annum which is equal to the
aggregate of (a) LIBOR for the relevant Interest Period plus (b) the Margin. The
Applicable Rate with respect to each Advance shall be determined by the
Administrative Agent two Banking Days prior to the first day of the relevant
Interest Period and the Borrower shall be promptly notified in writing thereof,
such determination of each such Applicable Rate, absent manifest error, to be
conclusive and binding upon the Borrower. Any amounts due under this Agreement
not paid when due, whether by acceleration or otherwise, shall bear
24
interest thereafter until paid at a rate per annum of two percent (2%) over the
Applicable Rate in effect with respect to such payment at the time of such
default (the "Default Rate").
6.2 Interest Periods. With respect to each Advance, the Borrower may select
Interest Periods of one, three or six months. The Borrower shall give the
Administrative Agent an Interest Notice specifying the Interest Period selected
at least three (3) Banking Days prior to the end of any then existing Interest
Period. If at the end of any then existing Interest Period the Borrower fails to
give an Interest Notice the relevant Interest Period shall be three (3) months.
The Borrower's right to select an Interest Period shall be subject to the
restriction that no selection of an Interest Period shall be effective unless
the Administrative Agent is satisfied that the necessary funds will be available
to the Lenders for such period and that no Event of Default or event which, with
the giving of notice or lapse of time, or both, would constitute an Event of
Default shall have occurred and be continuing.
6.3 Interest Payments. Accrued interest on each Advance shall be payable in
arrears on the last day of each Interest Period, except that if the Borrower
shall select an Interest Period in excess of three (3) months, accrued interest
shall be payable during such Interest Period on each three (3) month anniversary
of the commencement of such Interest Period and upon the end of such Interest
Period.
6.4 Payment on Banking Day. If interest would, under Section 6.3, be payable on
a day which is not Banking Day, it shall then be payable on the next following
Banking Day unless such next following Banking Day falls in the following
calendar month, in which case interest shall be payable on the immediately
preceding Banking Day.
6.5 Calculation of Interest. All interest shall accrue and be calculated on the
actual number of days lapsed and on the basis of a three hundred sixty (360) day
year.
7. PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made to the Administrative Agent, not later than 11 a.m. New
York time (any payment received after 11 a.m. New York time shall be deemed to
have been paid on the next Banking Day) on the due date of such payment, at its
office located at ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
or to such other office of the Administrative Agent as the Administrative Agent
may direct, without set-off or counterclaim and free from, clear of, and without
deduction for, any Taxes, provided, however, that if the Borrower shall at any
time be compelled by law to withhold or
25
deduct any Taxes from any amounts payable to the Lenders hereunder, then the
Borrower shall pay such additional amounts in Dollars as may be necessary in
order that the net amounts received after withholding or deduction shall equal
the amounts which would have been received if such withholding or deduction were
not required and, in the event any withholding or deduction is made, whether for
Taxes or otherwise, the Borrower shall promptly send to the Administrative Agent
such documentary evidence with respect to such withholding or deduction as may
be required from time to time by the Lenders.
7.2 Proof of Withholding. Each Lender and any transferee, assignee or
participation holder (a "Transferee") that is not incorporated under the laws of
the United States of America or a State thereof agrees that, on the initial
Drawdown Date and prior to the first date on which any payment is due to such
Lenders hereunder, such Lenders will deliver to the Borrower (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying in each case that the
Lender or Transferee is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States Federal income
taxes and (ii) a United States Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Such Lender or Transferee which delivers
to the Borrower a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the
preceding sentence further undertakes to deliver to the Borrower two further
copies of said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable
forms, or other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form previously delivered
thereby to the Borrower and such extensions or renewals thereof as may
reasonably be requested by the Borrower certifying in the case of a Form 1001 or
4224 that such Lender or such Transferee is entitled to receive payments under
this Agreement and the Note without deduction or withholding of any United
States Federal income taxes, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender or such
Transferee from duly completing and delivering any such letter or form with
respect to it, and such Lender or such Transferee advised the Borrower that it
is not capable of (i) receiving payments without any deduction or withholding of
United States Federal income tax, and (ii) in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
7.3 Tax Credits. If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrower has paid additional amounts as
aforesaid, then such Lender shall reimburse the Borrower for the amount of the
credit so obtained.
26
8. EVENTS OF DEFAULT
8.1 In the event that any of the following events shall occur and be continuing:
(a) Non-Payment of Principal. Any payment of principal due on
the Maturity Date is not paid on the Maturity Date or is not prepaid in
connection with any reduction of the Credit Facility pursuant to Sections 5.3,
9.3 or 9.4 when required thereby; or
(b) Non-Payment of Interest or Other Amounts. Any interest on
any Advance or any other amount becoming payable to any Creditor under this
Agreement, under the Note, under the Guaranty or under any of the Security
Documents is not paid within three (3) Banking Days of the due date or date of
demand (as the case may be); or
(c) Representations. Any representation, warranty or other
statement made by the Borrower in this Agreement or by any Security Party in the
Guaranty or in any of the Security Documents or in any other instrument,
document or other agreement delivered in connection herewith or therewith proves
to have been untrue or misleading in any material respect as at the date as of
which made or confirmed; or
(d) Mortgage. There is an event of default under either
Mortgage; or
(e) Covenants. Any Security Party defaults in the due and
punctual observance or performance of any other term, covenant or agreement
contained in the Indenture, this Agreement, in the Note, in the Guaranty, in any
of the Security Documents or in any other instrument, document or other
agreement delivered in connection herewith or therewith, or it becomes
impossible or unlawful for any Security Party to fulfill any such term, covenant
or agreement or there occurs any other event which constitutes a default under
this Agreement, under the Note, under the Guaranty or under any of the Security
Documents, in each case other than an Event of Default referred to elsewhere in
this Section 8.1, and such default, impossibility and/or unlawfulness, in the
reasonable opinion of the Majority Lenders, could have a material adverse effect
on the Lenders' rights hereunder, under the Note, under the Guaranty and/or
under the Security Documents or on the Lenders' right to enforce this Agreement,
the Note, the Guaranty and/or the Security Documents and such default is not
cured by the Borrower within thirty (30) days of the occurrence of such default;
or
(f) Indebtedness. Any Security Party, any Subsidiary or any
Affiliate shall default in the payment when due (subject to any applicable grace
period) of any Indebtedness or of any other indebtedness, in either case, in the
outstanding principal
27
amount equal to or exceeding One Million Dollars ($1,000,000) or such
Indebtedness or indebtedness is, or by reason of such default is subject to
being, accelerated or any party becomes entitled to enforce the security for any
such Indebtedness or indebtedness and such party shall take steps to enforce the
same, unless such default or enforcement is being contested in good faith and by
appropriate proceedings or other acts and the Security Party, Subsidiary or
Affiliate, as the case may be, shall set aside on its books adequate reserves
with respect thereto; provided, however, that the provisions of this paragraph
(f) shall not apply to any indebtedness of the Borrower which is non-recourse to
the Borrower, any Security Party or any Unit; or
(g) Indenture Default. An event of default under the
Indenture shall have occurred and be continuing;
(h) Equity Ownership. The Borrower shall cease to own (except
as otherwise expressly permitted by this Agreement), directly or indirectly, one
hundred percent (100%) of any of the other Security Parties, and in any such
case the Majority Lenders have not prior thereto consented in writing to such
change; or
(i) Bankruptcy. The Borrower or any Affiliate commences any
proceeding under any reorganization, arrangement or readjustment of debt,
dissolution, winding up, adjustment, composition, bankruptcy or liquidation law
or statute of any jurisdiction, whether now or hereafter in effect
("Proceeding"), or there is commenced against any thereof any Proceeding and
such Proceeding remains undismissed or unstayed for a period of sixty (60) days
or any receiver, trustee, liquidator or sequestrator of, or for, any thereof or
any substantial portion of the property of any thereof is appointed and is not
discharged within a period of sixty (60) days or any thereof by any act
indicates consent to or approval of or acquiescence in any Proceeding or the
appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or of, or for, any substantial portion of its property; or
(j) Termination of Operations; Sale of Assets. Except as
expressly permitted under this Agreement, any Security Party ceases its
operations or sells or otherwise disposes of all or substantially all of its
assets or all or substantially all of the assets of any Security Party are
seized or otherwise appropriated (subject to the provisions hereof and of the
Security Documents respecting in rem proceedings); or
(k) Judgments. Any judgment or order is made the effect
whereof would be to render ineffective or invalid this Agreement, the Note, the
Guaranty or any of the Security Documents; or
28
(l) Inability to Pay Debts. Any Security Party is unable to
pay or admits its inability to pay its debts as they fall due or a moratorium
shall be declared in respect of any material indebtedness of any Security Party;
or
(m) Change in Control. A Change of Control shall occur with
respect to the Borrower;
then the Lenders' obligation to make any Advance available shall cease and the
Administrative Agent on the instructions of the Majority Lenders may, by notice
to the Borrower, declare the entire unpaid balance of the then outstanding
Advances, accrued interest and any other sums payable by the Borrower hereunder
or under the Note due and payable, whereupon the same shall forthwith be due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived; provided that upon the happening of an event
specified in subsections (i) or (l) of this Section 8.1 with respect to the
Borrower, the Note shall be immediately due and payable without declaration or
other notice to the Borrower. In such event, the Lenders (or the Security
Trustee acting at the direction of the Lenders) may proceed to protect and
enforce their rights by action at law, suit in equity or in admiralty or other
appropriate proceeding, whether for specific performance of any covenant
contained in this Agreement, in the Note, in the Guaranty or in any Security
Document, or in aid of the exercise of any power granted herein or therein, or
the Lenders may proceed to enforce the payment of the Note or to enforce any
other legal or equitable right of the Lenders, or proceed to take any action
authorized or permitted under the terms of the Guaranty or any Security Document
or by applicable law for the collection of all sums due, or so declared due, on
the Note, including, without limitation, the right to appropriate and hold or
apply (directly, by way of set-off or otherwise) to the payment of the
obligations of the Borrower to the Lenders hereunder and/or under the Note
(whether or not then due) all moneys and other amounts of the Borrower then or
thereafter in possession of any Lender, the balance of any deposit account
(demand or time, mature or unmatured) of the Borrower then or thereafter with
any Lender and every other claim of the Borrower then or thereafter against any
of the Lenders. Notwithstanding anything herein to the contrary, upon the
occurrence of an event which with the giving of notice or the passage of time or
both would constitute an Event of Default, the Lenders will grant the note
holders under the Indenture and/or the Borrower a one time only opportunity to
cure such default expiring on the earlier of (i) the date which is 60 days from
and after the date on which the Administrative Agent shall give the Trustee and
the Borrower written notice of such default, and (ii) the Administrative Agent's
receipt of written notice from the Trustee indicating that such note holders do
not wish to exercise such cure right; provided, however, that such cure period
shall not be applicable if (i) the Borrower defaults under any other
Indebtedness and the holder thereof takes steps to enforce same, (ii) any party
seeks to enforce any in rem claim against either Unit which is not released
within five (5) days by posting of
29
appropriate security or otherwise, or (iii) the Borrower or either Guarantor
becomes the subject of a bankruptcy proceeding.
8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold the
Creditors harmless against any loss, as well as against any costs or expenses
(including legal fees and expenses), which any of the Creditors sustains or
incurs as a consequence of any default in payment of the principal amount of the
Advances, interest accrued thereon or any other amount payable hereunder, under
the Note, under the Guaranty or under any Security Documents including, but not
limited to, all actual losses incurred in liquidating or re-employing fixed
deposits made by third parties or funds acquired to effect or maintain the
Advances or any portion thereof. Any Lenders' certification of such costs and
expenses shall, absent any manifest error, be conclusive and binding on the
Borrower.
8.3 Application of Moneys. Except as otherwise provided in any Security
Document, all moneys received by the Creditors under or pursuant to this
Agreement, the Note, the Guaranty or any of the Security Documents after the
happening of any Event of Default (unless cured to the satisfaction of the
Majority Lenders) shall be applied by the Administrative Agent in the following
manner:
(a) first, in or towards the payment or reimbursement of any
expenses or liabilities incurred by the Creditors in connection with the
ascertainment, protection or enforcement of its rights and remedies hereunder,
under the Note, under the Guaranty and under any of the Security Documents,
(b) secondly, in or towards payment of any interest owing in
respect of the Advances,
(c) thirdly, in or towards repayment of principal owing in
respect of the Advances,
(d) fourthly, in or towards payment of all other sums which
may be owing to the Creditors under this Agreement, under the Note, under the
Fee Letter, under the Guaranty or under any of the Security Documents, and
(e) fifthly, the surplus (if any) shall be paid to the
Borrower or to whosoever else may be entitled thereto.
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9. COVENANTS
9.1 The Borrower hereby covenants and undertakes with the Creditors that, from
and after the date of the initial Advance hereunder (except with respect to
clause A.(iv) which shall be effective from the date hereof) and as a
precondition thereto and so long as any principal, interest or other moneys are
owing in respect of this Agreement, under the Note, under the Guaranty or under
any of the Security Documents:
A. The Borrower will, and will procure that each other
Security Party will:
(i) Performance of Agreements. Duly perform and
observe, and procure the observance and performance by all other parties thereto
(other than the Creditors) of, the terms of this Agreement, the Note, the
Guaranty and the Security Documents;
(ii) Notice of Default, Etc. Promptly upon
obtaining knowledge thereof, inform the Administrative Agent of the occurrence
of (a) any Event of Default or of any event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default, (b) any litigation
or governmental proceeding pending or threatened against it or against any of
the Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, (c) the withdrawal of any Unit's rating by its Classification Society or
the issuance by the Classification Society of any material recommendation or
notation affecting class and (d) any other event or condition which is
reasonably likely to have a Material Adverse Effect on its ability, or the
ability of any of the Security Parties, to perform its obligations under this
Agreement, under the Note, under the Guaranty and/or under any of the Security
Documents;
(iii) Obtain Consents. Without prejudice to
Section 2.1 and this Section 9.1, obtain every consent and do all other acts and
things which may from time to time be required for the continued due performance
of all its and the other Security Parties' respective obligations under this
Agreement, under the Note, under the Guaranty and under the Security Documents;
(iv) Financial Information. At the expense of
the Borrower, deliver to the Administrative Agent in a sufficient number of
copies for distribution by the Administrative Agent to the Lenders:
(a) as soon as available but not later than
ninety (90) days after the end of each
fiscal year of the Borrower, complete copies
of the consolidated financial reports of the
Borrower and its
31
Subsidiaries (together with a Compliance
Certificate), all in reasonable detail,
which shall include at least the
consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of such
year and the related consolidated statements
of income and sources and uses of funds for
such year, which shall be audited reports
prepared by an Acceptable Accounting Firm;
(b) as soon as available but not less than
forty-five (45) days after the end of each
of the first three quarters of each fiscal
year of the Borrower, a quarterly interim
consolidated balance sheet of the Borrower
and its Subsidiaries and the related
consolidated profit and loss statements and
sources and uses of funds (together with a
Compliance Certificate), all in reasonable
detail, unaudited, but certified to be true
and complete by the chief financial officer
of the Borrower;
(c) within ten (10) days of the filing thereof,
copies of all registration statements and
reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) and other material
filings which the Borrower shall have filed
with the Securities and Exchange Commission
or any similar governmental authority;
(d) promptly upon the mailing thereof to the
Trustee, copies of all financial statements,
reports, notices and other communications
provided thereto; and
(e) such other statements (including, without
limitation, monthly consolidated statements
of operating revenues and expenses), lists
of assets and accounts, budgets, forecasts,
reports and other financial information with
respect to its business as the
Administrative Agent may from time to time
reasonably request;
(v) Existence. Do or cause to be done, and procure that
each other Security Party shall do or cause to be done, all things necessary to
preserve and keep in full force and effect its limited liability company
existence, and all licenses, franchises, permits and assets necessary to the
conduct of its business;
32
(vi) Books and Records. Keep, and cause each other
Security Party to keep, proper books of record and account into which full and
correct entries shall be made in accordance with GAAP throughout the Credit
Facility Period;
(vii) Taxes and Assessments. Pay and discharge, and cause
each other Security Party to pay and discharge, all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
property prior to the date upon which penalties attach thereto; provided,
however, that it shall not be required to pay and discharge, or cause to be paid
and discharged, any such tax, assessment, charge or levy so long as the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and it shall set aside on its books adequate reserves with respect thereto;
(viii) Inspection. Allow, and cause each other Security
Party to allow, any representative or representatives designated by any Lender,
subject to applicable laws and regulations, to visit and inspect any of its
properties, and, on request, to examine its books of account, records, reports
and other papers and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times and as often as the Lenders reasonably
request;
(ix) Compliance with Statutes, etc. Do or cause to be
done, and cause each other Security Party to do and cause to be done, all things
necessary to comply with all material laws, and the rules and regulations
thereunder, applicable to the Borrower or such other Security Party, including,
without limitation, those laws, rules and regulations relating to employee
benefit plans and environmental matters;
(x) Environmental Matters. Promptly upon the occurrence
of any of the following conditions, provide to the Administrative Agent a
certificate of a chief executive officer thereof, specifying in detail the
nature of such condition and its proposed response or the response of its
Environmental Affiliates: (a) its receipt or the receipt by any other Security
Party or any Environmental Affiliates of the Borrower or any other Security
Party of any written communication whatsoever that alleges that such person is
not in compliance with any applicable environmental law or environmental
approval, if such noncompliance could reasonably be expected to have a Material
Adverse Effect, (b) knowledge by it, or by any other Security Party or any
Environmental Affiliates of the Borrower or any other Security Party that there
exists any Environmental Claim pending or threatened against any such person,
which could reasonably be expected to have a Material Adverse Effect, or (c) any
release, emission, discharge or disposal of any material that could form the
basis of any Environmental Claim against it, any other Security Party or against
any Environmental Affiliates of the Borrower or any other Security Party, if
such Environmental Claim could reasonably be expected to have a
33
Material Adverse Effect. Upon the written request by the Administrative Agent,
it will submit to the Administrative Agent at reasonable intervals, a report
providing an update of the status of any issue or claim identified in any notice
or certificate required pursuant to this subsection;
(xi) ERISA. Forthwith upon learning of the
occurrence of any material liability of the any Security Party or any ERISA
Affiliate pursuant to ERISA in connection with the termination of any Plan or
withdrawal or partial withdrawal of any multi-employer plan (as defined in
ERISA) or of a failure to satisfy the minimum funding standards of Section 412
of the Code or Part 3 of Title I of ERISA by any Plan for which any Security
Party or any ERISA Affiliate is plan administrator (as defined in ERISA),
furnish or cause to be furnished to the Administrative Agent written notice
thereof;
(xii) Delivery of Second Unit. Contemporaneous
with the delivery of the Second Unit by the Builder, cause the owner thereof to
register the same under Panamanian flag in its name and cause such owner, as a
Guarantor, to execute and deliver:
(a) its Guaranty;
(b) the Mortgage over its Unit;
(c) an Insurances Assignment with respect to its
Unit;
(d) an Earnings Assignment with respect to its
Unit;
(e) its Assignment Notices; and
(f) Uniform Commercial Code Financing Statements
for filing with the State of Texas and
▇▇▇▇▇▇ County, Texas and in such other
jurisdictions as the Arrangers may
reasonably require; and
(xiii) Permanent Registration. Within ninety (90)
days of the date of delivery of each Unit to a Guarantor and its provisional
registration under Panamanian flag, cause the same to be permanently registered
under such flag and the Mortgage thereon to be permanently recorded and deliver
to the Administrative Agent a favorable opinion, in form and substance
satisfactory to the Arrangers, of Panamanian counsel satisfactory to the
Arrangers with respect thereto; and
34
(xiv) Brokerage Commissions, etc. The Borrower agrees to
indemnify and hold the Creditors harmless from any claim for any brokerage
commission, fee, or compensation from any broker or third party resulting from
the transactions contemplated hereby.
B. The Borrower will not, and will procure that each Security
Party will not, without the prior written consent of the Arrangers (or the
Majority Lenders or all of the Lenders if required by Section 15.7 hereof):
(i) Liens. Create, assume or permit to exist,
any mortgage, pledge, lien, charge, encumbrance or any security interest
whatsoever upon any Collateral except:
(a) liens for taxes not yet payable for
which adequate reserves have been
maintained;
(b) the Mortgages, the Assignments and
other liens in favor of the Security
Trustee;
(c) liens, charges and encumbrances against
their respective Units permitted to exist
under the terms of the Mortgages;
(d) pledges of certificates of deposit or
other cash collateral securing any Security
Party's reimbursement obligations in
connection with letters of credit now or
hereafter issued for the account of such
Security Party in connection with the
establishment of the financial
responsibility of the Security Parties under
33 C.F.R. Part 130 or 46 C.F.R. Part 540, as
the case may be, as the same may be amended
or replaced;
(e) pledges or deposits to secure
obligations under workmen's compensation
laws or similar legislation, deposits to
secure public or statutory obligations,
warehousemen's or other like liens, or
deposits to obtain the release of such liens
and deposits to secure surety, appeal or
customs bonds on which the Borrower or any
of the Guarantors is the principal, as to
all of the foregoing, only to the extent
arising and continuing in the ordinary
course of business; and
35
(f) other liens, charges and encumbrances
incidental to the conduct of the business of
each such party, the ownership of any such
party's property and assets and which do not
in the aggregate materially detract from the
value of each such party's property or
assets or materially impair the use thereof
in the operation of its business;
(ii) Change in Business. Materially change the
nature of its business or commence any business materially different from its
current business;
(iii) Sale or Pledge of Membership Interests.
Sell, assign, transfer, pledge or otherwise convey or dispose of any of the
direct or indirect membership interests (including by way of spin-off,
installment sale or otherwise) of any Guarantor;
(iv) Sale of Assets. Sell, or otherwise dispose
of, any Unit or any other asset (including way of spin-off, installment sale or
otherwise) which is substantial in relation to its assets taken as a whole
including without limitation, any material foreign Subsidiary or foreign assets
or interest in an Affiliate;
(v) Changes in Offices or Names. Change the
location of the chief executive office of any Security Party, the office of the
chief place of business any such parties, the office of the Security Parties in
which the records relating to the earnings or insurances of the Units are kept
unless the Administrative Agent shall have received sixty (60) days prior
written notice of such change;
(vi) Consolidation and Merger. Consolidate with,
or merge into, any corporation or other entity, or merge any corporation or
other entity into it; and
(vii) Limitation on Restricted Payments. In the
case of the Borrower, directly or indirectly declare or pay any dividend or make
any distribution on its membership interests (such payments being defined as
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment: (A) an Event of Default shall have occurred and be
continuing or (B) the aggregate amount expended for all Restricted Payments (the
amount so expended, if other than in cash, to be determined in good faith by the
Board of Directors) would exceed fifty percent (50%) of the aggregate amount of
the consolidated net income of the Borrower and its consolidated Subsidiaries
for the fiscal year ended immediately prior to the fiscal year in which such
proposed Restricted Payment is to be made determined in accordance with GAAP;
provided, however, that the provisions of this clause (vii) shall not prohibit
any
36
distributions to the members of the Borrower in respect of taxes in accordance
with and subject to the provisions of the Indenture.
(viii) Limitation on Call of Notes. Exercise its
right to call the notes issued pursuant to the Indenture.
(ix) Amendment of Indenture. Make or consent to
any material amendment, change or modification of the Indenture.
C. The Borrower will procure that no Guarantor will:
(i) Loans and Advances. Make any loans or
advances to, or any investments in, any person, firm, corporation, joint venture
or other entity (including, without limitation, any loan or advance to any
officer, director, member, stockholder, employee or customer of any company
affiliated with any Security Party) except for advances and investments in the
normal course of its business and loans or advances to any Security Party and
any directly or indirectly wholly owned Subsidiary of the Borrower;
(ii) Guarantees, etc. Assume, guarantee or (other
than in the ordinary course of its business) endorse or otherwise become liable,
in connection with any obligation of any person, firm, company or other entity
except for (A) guaranties in favor of the Lenders or the Security Trustee on
behalf of the Lenders, (B) guaranties in favor of the note holders under the
Indenture, and (C) any guaranties existing on or before the date hereof and
reflected in the financial reports of the Borrower and its Subsidiaries
previously delivered to the Agent, the Security Trustee and the Lenders;
(iii) Use of Corporate Funds. Pay out any funds
to any company or person except (a) in the ordinary course of business in
connection with the management of the business of the Borrower and its
Subsidiaries, including the operation and/or repair of the Units and other
vessels owned or operated by such parties and (b) the servicing of the
Indebtedness permitted hereunder (but excluding, any prepayments of any
Indebtedness other than the Advances);
(iv) Issuance of Membership Interests. Issue or
dispose of any shares of its own membership interests to any person other than
the Borrower; or
9.2 Unit Valuation. In the event that the Arrangers shall have determined in
their sole discretion that the value of the Units shall have materially
decreased, the Borrower shall obtain, at the Borrower's cost, a valuation of the
Units, charter-free, in Dollars from an independent shipbroker selected by the
Arrangers. In the event the
37
Borrower fails or refuses to obtain the valuation requested pursuant to this
Section 9.2 within ten (10) days of the Arrangers' request therefor, the
Arrangers shall be authorized to obtain such valuation, at the Borrower's cost,
from an independent shipbroker selected by the Arrangers, which valuation shall
be deemed the equivalent of valuation duly obtained by the Borrower pursuant to
this Section 9.2, but the Arrangers' actions in doing so shall not excuse any
default of the Borrower under this Section 9.2.
9.3 Asset Maintenance. If at any time following the Drawdown Date of the initial
Advance, the aggregate FMV of the Units then mortgaged to the Security Trustee
(based upon the valuations obtained pursuant to Section 9.2) (together with the
value of any additional collateral theretofore provided under this Section) is
less than one hundred thirty percent (130%) of the Credit Facility Balance (such
percentage herein called the "Required Percentage"), the Borrower shall, within
a period of thirty (30) days following receipt by the Borrower of written notice
from the Administrative Agent notifying the Borrower of such shortfall and
specifying the amount thereof (which amount shall, in the absence of manifest
error, be deemed to be conclusive and binding on the Borrower), either (a)
deliver to the Security Trustee, upon the Administrative Agent's request, such
additional collateral as may be satisfactory to the Lenders in their sole
discretion of sufficient value to restore compliance with the Required
Percentage or (b) the Lenders shall reduce their Commitments hereunder and the
Borrower shall, if necessary, prepay such Advances or part thereof (together
with interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as shall result in the FMV of the Units then mortgaged
to the Security Trustee being not less than the Required Percentage.
9.4 Reduction of Collateral. (a) In the event of the Total Loss of a Unit or the
sale by a Guarantor of its Unit, upon such Total Loss or prior to or
simultaneously with such sale the Credit Facility shall, on the date of the
Total Loss or sale, be reduced by $12,500,000, provided, however, that, if the
FMV of the remaining Unit then mortgaged to the Security Trustee is less than
200% of the maximum amount then available under the Credit Facility, after
giving effect to the reduction as aforesaid, the Credit Facility shall be
reduced by the amount of such shortfall divided by two (2), and, the Borrower
shall, if necessary, prepay such Advances or part thereof (together with
interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as required so that the principal amount thereof does
not exceed the reduced available Commitments.
(b) Unless otherwise agreed by the Lenders, any sale of a Unit
shall be for cash and shall not be subject to any contingencies.
38
(c) In the event of a sale or Total Loss of Unit as
contemplated by this Section 9.4, the Creditors agree to release the relevant
Guarantor from its obligations under the Guaranty and the Security Documents in
respect of its Unit upon the reduction of Commitment provided for in Section
9.4(a) or the substitution of a Unit as provided for in Section 9.4(b).
9.5 Inspection and Survey Reports. If the Lenders shall so request, the
Borrowers shall provide the Lenders with copies of all internally generated
inspection or survey reports on the Units.
10. ASSIGNMENT.
This Agreement shall be binding upon, and inure to the benefit
of, the Borrower and the Creditors and their respective successors and assigns,
except that the Borrower may not assign any of its rights or obligations
hereunder. Each Lender shall be entitled to assign its rights and obligations
under this Agreement or grant participation(s) in the Credit Facility to any
subsidiary, holding company or other affiliate of such Lender, to any subsidiary
or other affiliate company of any thereof or, with the consent of the Borrower
and the Arrangers, not to be unreasonably withheld, to any other bank or
financial institution, and such Lender shall forthwith give notice of any such
assignment or participation to the Borrower; provided, however, that any such
assignment must be made pursuant to an Assignment and Assumption Agreement. The
Borrower will take all reasonable actions requested by the Administrative Agent
or any Lender to effect such assignment, including, without limitation, the
execution of a written consent to such Assignment and Assumption Agreement.
11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
11.1 Illegality. In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof, a
Lender has a reasonable basis to conclude that it has become unlawful for any
Lender to maintain or give effect to its obligations as contemplated by this
Agreement, such Lender shall inform the Administrative Agent and the Borrower to
that effect, whereafter the liability of such Lender to make its Commitment
available shall forthwith cease and the Borrower shall be required either to
repay to such Lender that portion of the Advances advanced by such Lender
immediately or, if such Lender so agrees, to repay such portion of the Advances
to the Lender on the last day of any then current Interest Period in accordance
with and subject to the provisions of Section 11.5. In any such event, but
without prejudice to the aforesaid obligations of the Borrower to repay such
portion of the Advances, the Borrower and the relevant Lender shall negotiate in
good faith with a view to agreeing on terms for making such portion of the
Advances available from another jurisdiction or
39
otherwise restructuring such portion of the Credit Facility on a basis which is
not unlawful.
11.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental
or other authority, shall:
(i) subject any Lender to any Taxes with respect to its
income from the Credit Facility, or any part thereof,
or
(ii) change the basis of taxation to any Lender of
payments of principal or interest or any other
payment due or to become due pursuant to this
Agreement (other than a change in the basis effected
by the jurisdiction of organization of such Lender,
the jurisdiction of the principal place of business
of such Lender, the United States of America, the
State or City of New York or any governmental
subdivision or other taxing authority having
jurisdiction over such Lender (unless such
jurisdiction is asserted by reason of the activities
of the Borrower or any of the other Security Parties)
or such other jurisdiction where the Credit Facility
may be payable), or
(iii) impose, modify or deem applicable any reserve
requirements or require the making of any special
deposits against or in respect of any assets or
liabilities of, deposits with or for the account of,
or loans by, a Lender, or
(iv) impose on any Lender any other condition affecting
the Credit Facility or any part thereof,
and the result of the foregoing is either to increase the cost to such Lender of
making available or maintaining its Commitment or any part thereof or to reduce
the amount of any payment received by such Lender, then and in any such case if
such increase or reduction in the opinion of such Lender materially affects the
interests of such Lender under or in connection with this Agreement:
(a) the Lender shall notify the Administrative Agent and
the Borrower of the happening of such event, and
(b) the Borrower agrees forthwith upon demand to pay to
such Lender such amount as such Lender certifies to
be necessary to compensate such Lender for such
additional cost or such reduction, provided,
40
however, that the foregoing provisions shall not be
applicable in the event that increased costs to the
Lender result from the exercise by the Lender of its
right to assign its rights or obligations under
Section 10.
11.3 Nonavailability of Funds. If the Administrative Agent shall determine that,
by reason of circumstances affecting the London Interbank Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate for any Advance for any Interest Period, the Administrative
Agent shall give notice of such determination to the Borrower. The Borrower and
the Agents shall then negotiate in good faith in order to agree upon a mutually
satisfactory interest rate and/or Interest Period to be substituted for those
which would otherwise have applied under this Agreement. If the Borrower and the
Agents are unable to agree upon such a substituted interest rate and/or Interest
Period within thirty (30) days of the giving of such determination notice, the
Agents shall set an interest rate and Interest Period to take effect from the
expiration of the Interest Period in effect at the date of determination, which
rate shall be equal to the Margin plus the cost to the Lenders (as certified by
each Lender) of funding such Advance. In the event the state of affairs referred
to in this Section 11.3 shall extend beyond the end of the Interest Period, the
foregoing procedure shall continue to apply until circumstances are such that
the Applicable Rate may be determined pursuant to Section 6.
11.4 Lender's Certificate Conclusive. A certificate or determination notice of
any Lender as to any of the matters referred to in this Section 11 shall, absent
manifest error, be conclusive and binding on the Borrower.
11.5 Compensation for Losses. Where any Advance or a portion thereof is to be
repaid by the Borrower pursuant to this Section 11, the Borrower agrees
simultaneously with such repayment to pay to the relevant Lender all accrued
interest to the date of actual payment on the amount repaid and all other sums
then payable by the Borrower to the relevant Lender pursuant to this Agreement,
together with such amounts as may be certified by the relevant Lender to be
necessary to compensate such Lender for any actual loss, premium or penalties
incurred or to be incurred thereby on account of funds borrowed to make, fund or
maintain its Commitment or such portion thereof for the remainder (if any) of
the then current Interest Period or Periods, if any, but otherwise without
penalty or premium.
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12. CURRENCY INDEMNITY
12.1 Currency Conversion. If for the purpose of obtaining or enforcing a
judgment in any court in any country it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in Dollars under this
Agreement, the Note, the Guaranty or any of the Security Documents then the
conversion shall be made, in the discretion of the Administrative Agent, at the
rate of exchange prevailing either on the date of default or on the day before
the day on which the judgment is given or the order for enforcement is made, as
the case may be (the "conversion date"), provided that the Administrative Agent
shall not be entitled to recover under this section any amount in the judgment
currency which exceeds at the conversion date the amount in Dollars due under
this Agreement, the Note, the Guaranty and/or any of the Security Documents.
12.2 Change in Exchange Rate. If there is a change in the rate of exchange
prevailing between the conversion date and the date of actual payment of the
amount due, the Borrower shall pay such additional amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the judgment currency when converted at the rate of exchange prevailing on the
date of payment will produce the amount then due under this Agreement, the Note,
the Guaranty and/or any of the Security Documents in Dollars; any excess over
the amount due received or collected by the Lenders shall be remitted to the
Borrower.
12.3 Additional Debt Due. Any amount due from the Borrower under Section 12
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement, the Note,
the Guaranty and/or any of the Security Documents.
12.4. Rate of Exchange. The term "rate of exchange" in this Section 12 means the
rate at which the Administrative Agent in accordance with its normal practices
is able on the relevant date to purchase Dollars with the judgment currency and
includes any premium and costs of exchange payable in connection with such
purchase.
13 FEES AND EXPENSES
13.1 Commitment Fee. The Borrower shall pay to the Administrative Agent on
behalf of the Lenders a fee in the amount of (i) .25% per annum on the available
but undrawn amount of the Credit Facility from the date hereof through the
initial Drawdown Date and (ii) .50% per annum thereafter, in each case quarterly
in arrears from the date hereof. Such fee shall accrue from day-to-day and be
calculated on the actual number of days elapsed and a three hundred sixty (360)
day year.
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13.2 Agency Fee. The Borrower shall pay to the Agents an annual agency fee of
$10,000 payable upon the signing of this Agreement and annually thereafter,
which agency fee shall be shared equally by the Agents.
13.3 Arrangement Fee. The Borrower shall pay to the Arrangers an arrangement fee
equal to .50% of the Facility, such arrangement fee to be divided evenly between
the Arrangers and payable upon signing of this Agreement.
13.4 Other Fees. The Borrower shall pay such other fees to the Agents as the
parties have agreed pursuant to the Fee Letter.
13.5 Expenses. The Borrower agrees, whether or not the transactions hereby
contemplated are consummated, on demand to pay, or reimburse the Creditors for
their payment of, the reasonable expenses of the Agents, the Security Trustee,
the Arrangers and (after the occurrence and during the continuance of an Event
of Default) the Lenders incident to said transactions (and in connection with
any supplements, amendments, waivers or consents relating thereto or incurred in
connection with the enforcement or defense of any of the Agents' (the Security
Trustee's, the Arrangers' and the Lenders' rights or remedies with respect
thereto or in the preservation of the Agents', the Security Trustee's, the
Arrangers' and the Lenders' priorities under the documentation executed and
delivered in connection therewith), including, without limitation, all
reasonable costs and expenses of preparation, negotiation, execution and
administration of this Agreement and the documents referred to herein, the
reasonable fees and disbursements of the Agent's counsel in connection
therewith, as well as the reasonable fees and expenses of any independent
appraisers, surveyors, engineers and other consultants retained by the Agents,
the Security Trustee or the Arrangers in connection with this transaction, all
reasonable costs and expenses, if any, in connection with the enforcement of
this Agreement, the Note, the Guaranty and the Security Documents and stamp and
other similar taxes, if any, incident to the execution and delivery of the
documents (including, without limitation, the Note) herein contemplated and to
hold the Agents, the Security Trustee, the Arrangers and the Lenders free and
harmless in connection with any liability arising from the nonpayment of any
such stamp or other similar taxes. Such taxes and, if any, interest and
penalties related thereto as may become payable after the date hereof shall be
paid immediately by the Borrower to the Agents, the Security Trustee, the
Arrangers or the Lenders, as the case may be, when liability therefor is no
longer contested by such party or parties or reimbursed immediately by the
Borrower to such party or parties after payment thereof (if the Agents, the
Security Trustee, the Arrangers or the Lenders, at their sole discretion,
chooses to make such payment).
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14 APPLICABLE LAW, JURISDICTION AND WAIVER
14.1 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
14.2 JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK IN ANY ACTION OR PROCEEDING BROUGHT
AGAINST IT BY ANY OF THE LENDERS, THE AGENTS, THE SECURITY TRUSTEE OR THE
ARRANGERS UNDER THIS AGREEMENT OR UNDER ANY DOCUMENT DELIVERED HEREUNDER AND
HEREBY IRREVOCABLY AGREES THAT VALID SERVICE OF SUMMONS OR OTHER LEGAL PROCESS
ON IT MAY BE EFFECTED BY SERVING A COPY OF THE SUMMONS AND OTHER LEGAL PROCESS
IN ANY SUCH ACTION OR PROCEEDING ON THE BORROWER BY MAILING OR DELIVERING THE
SAME BY HAND TO THE BORROWER AT THE ADDRESS INDICATED FOR NOTICES IN SECTION
16.1. THE SERVICE, AS HEREIN PROVIDED, OF SUCH SUMMONS OR OTHER LEGAL PROCESS IN
ANY SUCH ACTION OR PROCEEDING SHALL BE DEEMED PERSONAL SERVICE AND ACCEPTED BY
THE BORROWER AS SUCH, AND SHALL BE LEGAL AND BINDING UPON THE BORROWER FOR ALL
THE PURPOSES OF ANY SUCH ACTION OR PROCEEDING. FINAL JUDGMENT (A CERTIFIED OR
EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE
AMOUNT OF ANY INDEBTEDNESS OF THE BORROWER TO THE CREDITORS) AGAINST THE
BORROWER IN ANY SUCH LEGAL ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT. THE BORROWER WILL
ADVISE THE ADMINISTRATIVE AGENT PROMPTLY OF ANY CHANGE OF ADDRESS FOR THE
PURPOSE OF SERVICE OF PROCESS. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
THE CREDITORS MAY BRING ANY LEGAL ACTION OR PROCEEDING IN ANY OTHER APPROPRIATE
JURISDICTION.
14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
OTHER SECURITY PARTIES AND THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED
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WITH THIS AGREEMENT, THE NOTE, THE GUARANTY OR THE SECURITY DOCUMENTS.
15. THE AGENTS
15.1 (a) Appointment of Agents. Each of the Lenders hereby irrevocably appoints
and authorizes each Agent (which for purposes of this Section 15 shall be deemed
to include the Security Trustee pursuant to Section 15.1(b)) to take such action
as agent on its behalf and to exercise such powers under this Agreement, the
Note, the Guaranty and the Security Documents as are delegated to such Agent by
the terms hereof and thereof. No Agent nor any of its directors, officers,
employees or agents shall be liable for any action taken or omitted to be taken
by it or them under this Agreement, the Note, the Guaranty or the Security
Documents or in connection therewith, except for its or their own gross
negligence or willful misconduct.
(b) Appointment of Security Trustee. Each of the Creditors
irrevocably appoints the Security Trustee as security trustee on its behalf with
regard to (i) the security, powers, rights, titles, benefits and interests (both
present and future) constituted by and conferred on the Creditors or any of them
or for the benefit thereof under or pursuant to this Agreement, the Note, the
Guaranty or any of the Security Documents (including, without limitation, the
benefit of all covenants, undertakings, representations, warranties and
obligations given, made or undertaken to any Creditor in the Agreement, the
Note, the Guaranty or any Security Document), (ii) all moneys, property and
other assets paid or transferred to or vested in any Creditor or any agent of
any Creditor or received or recovered by any Creditor or any agent of any
Creditor pursuant to, or in connection with, this Agreement, the Note, the
Guaranty or the Security Documents whether from any Security Party or any other
person and (iii) all money, investments, property and other assets at any time
representing or deriving from any of the foregoing, including all interest,
income and other sums at any time received or receivable by any Creditor or any
agent of any Creditor in respect of the same (or any part thereof). The Security
Trustee hereby accepts such appointment.
15.2 Distribution of Payments. Whenever any payment is received by the
Administrative Agent from the Borrower or any other Security Party for the
account of the Creditors, or any of them, whether of principal or interest on
the Note, commissions, fee under Section 13.1 or otherwise, it will thereafter
cause to be distributed on the same day if received before 11 a.m. New York
time, or on the next day if received thereafter, like funds relating to such
payment to the Creditors according to their respective interest therein, in each
case to be applied according to the terms of this Agreement.
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15.3 Holder of Interest in Note. The Administrative Agent may treat each Lender
as the holder of all of the interest of such Lender in the Note.
15.4 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or
pass upon the validity, effectiveness or genuineness of any of this Agreement,
the Guaranty, the Note, the Security Documents or any instrument, document or
communication furnished pursuant to this Agreement or in connection therewith or
in connection with the Note, the Guaranty or any Security Document, and the
Agents shall be entitled to assume that the same are valid, effective and
genuine, have been signed or sent by the proper parties and are what they
purport to be.
15.5 Agents as Lenders. With respect to that portion of the Advances made
available by it, each Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were not an Agent, and
the term "Lender" or "Lenders" shall include such Agent in its capacity as a
Lender. Each Agent and its affiliates may accept deposits from, lend money to
and generally engage in any kind of business with, the Borrower and the other
Security Parties as if it were not an Agent.
15.6 (a) Obligations of Agents. The obligations of each Agent under this
Agreement, under the Note, under the Guaranty and under the Security Documents
are only those expressly set forth herein and therein.
(b) No Duty to Investigate. No Agent shall at any time be under any
duty to investigate whether an Event of Default, or an event which with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, has occurred or to investigate the performance of this Agreement, the
Note, the Guaranty or any Security Document by any Security Party.
15.7 (a) Discretion of Agents. Each Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, the Note, the Guaranty and the Security Documents, unless
such Agent shall have been instructed by the Majority Lenders to exercise such
rights or to take or refrain from taking such action; provided, however, that
such Agent shall not be required to take any action which exposes such Agent to
personal liability or which is contrary to this Agreement or applicable law.
(b) Instructions of Majority Lenders. Each Agent shall in all cases be
fully protected in acting or refraining from acting under this Agreement, under
the Note, under the Guaranty or under any Security Document in accordance with
the instructions of the Majority Lenders, and any action taken or failure to act
pursuant to such instructions shall
46
be binding on all of the Lenders. Neither this Agreement nor any of the Security
Documents nor any terms hereof or thereof may be amended unless such amendment
is approved by the Borrower and the Majority Lenders, provided that no such
amendment shall, without the consent of each Lender affected hereby, (i) extend
the Credit Facility Period, or reduce the rate or extend the time of payment of
principal or interest or fees thereon, or reduce the principal amount of the
Advances, (ii) increase the Commitment of any Lender over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or any mandatory repayment of Advances shall not constitute a change in
the terms of any Commitment of any Lender), (iii) amend, modify or waive any
provision of this Section 15.7, (iv) amend the definition of Majority Lenders,
(v) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement, (vi) release any Security Party from any
of its obligations under any Security Document except as expressly provided
herein or in such Security Document or (vii) amend any provision relating to the
maintenance of collateral under Section 9.3. All amendments approved by the
Majority Lenders under this Section 15.7 must be in writing and signed by the
Borrower and each of the Lenders. In the event that any Lender is unable to or
refuses to sign an amendment approved by the Majority Lenders hereunder, such
Lender hereby appoints the Administrative Agent as its Attorney-In-Fact for the
purposes of signing such amendment. No provision of this Section 15 or any other
provisions relating to the Agents may be modified without the consent of the
Agents.
15.8 Assumption re Event of Default. Except as otherwise provided in Section
15.14, the Administrative Agent shall be entitled to assume that no Event of
Default, or event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred and is continuing, unless the
Administrative Agent has been notified by any Security Party of such fact, or
has been notified by a Lender that such Lender considers that an Event of
Default or such an event (specifying in detail the nature thereof) has occurred
and is continuing. In the event that the Administrative Agent shall have been
notified by any Security Party or any Lender in the manner set forth in the
preceding sentence of any Event of Default or of an event which with the giving
of notice or lapse of time, or both, would constitute an Event of Default, the
Administrative Agent shall notify the Lenders and shall take action and assert
such rights under this Agreement, under the Note, under the Guaranty and under
Security Documents as the Majority Lenders shall request in writing.
15.9 No Liability of Agents or Lenders. Neither the Agents nor any of the
Lenders shall be under any liability or responsibility whatsoever:
(A) to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or any breach by, any
other Lenders or any other
47
person of any of its or their obligations under this Agreement or under any
Security Document;
(B) to any Lender or Lenders as a consequence of any failure or delay
in performance by, or any breach by, any Security Party of any of its respective
obligations under this Agreement, under the Note, under the Guaranty or under
the Security Documents; or
(C) to any Lender or Lenders for any statements, representations or
warranties contained in this Agreement, in the Guaranty, in any Security
Document or in any document or instrument delivered in connection with the
transaction hereby contemplated; or for the validity, effectiveness,
enforceability or sufficiency of this Agreement, the Note, the Guaranty, any
Security Document or any document or instrument delivered in connection with the
transactions hereby contemplated.
15.10 Indemnification of Agents. The Lenders agree to indemnify each Agent (to
the extent not reimbursed by the the Security Parties or any thereof), pro rata
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and expenses incurred in investigating claims
and defending itself against such liabilities) which may be imposed on, incurred
by or asserted against, such Agent in any way relating to or arising out of this
Agreement, the Note, the Guaranty or any Security Document, any action taken or
omitted by such Agent thereunder or the preparation, administration, amendment
or enforcement of, or waiver of any provision of, this Agreement, the Note, the
Guaranty or any Security Document, except that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct.
15.11 Consultation with Counsel. Each Agent may consult with legal counsel
selected by such Agent and shall not be liable for any action taken, permitted
or omitted by it in good faith in accordance with the advice or opinion of such
counsel.
15.12 Resignation of Administrative Agent. The Administrative Agent may resign
at any time by giving sixty (60) days' written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Lenders and shall have accepted such
appointment within sixty (60) days after the retiring Administrative Agent's
giving notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor
48
Administrative Agent which shall be a bank or trust company of recognized
standing. The appointment of any successor Administrative Agent shall be subject
to the prior written consent of the Borrower, such consent not to be
unreasonably withheld. After any retiring Administrative Agent's resignation as
Administrative Agent hereunder, the provisions of this Section 15 shall continue
in effect for its benefit with respect to any actions taken or omitted by it
while acting as Administrative Agent.
15.13 Representations of Lenders. Each Lender represents and warrants to each
other Lender and the Agents that:
(i) In making its decision to enter into this Agreement and to make its
Commitment available hereunder, it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Security Parties, that it has made an independent credit judgment and that it
has not relied upon any statement, representation or warranty by any other
Lender or the Agents; and
(ii) So long as any portion of its Commitment remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Security Parties.
15.14 Notification of Event of Default. The Administrative Agent hereby
undertakes to promptly notify the Lenders, and each Lender hereby promptly
undertakes to notify the Administrative Agent and the other Lenders, of the
existence of any Event of Default which shall have occurred and be continuing of
which the Administrative Agent or any Lender has actual knowledge.
16. NOTICES AND DEMANDS
16.1 Notices. All notices, requests, demands and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to the Borrower at
the address or telecopy number set forth below and to the Lenders, the Agents
and the Security Trustee at their address and telecopy number set forth in
Schedule 1 or at such other address or telecopy number as such party may
hereafter specify for the purpose by notice to each other party hereto. Each
such notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and telephonic confirmation of receipt thereof is obtained or (ii)
if given by mail, prepaid overnight courier or any other means, when received at
the address specified in this Section or when delivery at such address is
refused.
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If to the Borrower:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
17. MISCELLANEOUS
17.1 Time of Essence. Time is of the essence of this Agreement but no failure or
delay on the part of any Creditor to exercise any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise by any Creditor of any power or right hereunder preclude any other or
further exercise thereof or the exercise of any other power or right. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
17.2 Unenforceable, etc., Provisions - Effect. In case any one or more of the
provisions contained in this Agreement, the Note, the Guaranty or in any
Security Document would, if given effect, be invalid, illegal or unenforceable
in any respect under any law applicable in any relevant jurisdiction, said
provision shall not be enforceable against the relevant Security Party, but the
validity, legality and enforceability of the remaining provisions herein or
therein contained shall not in any way be affected or impaired thereby.
17.3 References. References herein to Sections and Schedules are to be construed
as references to sections of, and schedules to, this Agreement.
17.4 Further Assurances. The Borrower agrees that if this Agreement, the Note,
the Guaranty or any Security Document shall, in the reasonable opinion of the
Lenders, at any time be deemed by the Lenders for any reason insufficient in
whole or in part to carry out the true intent and spirit hereof or thereof, it
will execute or cause to be executed such other and further assurances and
documents as in the opinion of the Lenders may be required in order more
effectively to accomplish the purposes of this Agreement, the Note, the Guaranty
or any Security Document.
17.5 Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Creditors, on the other part, whether written or oral, are superseded by and
merged into this Agreement and the other agreements (the forms of which are
exhibited hereto) to be executed and delivered in connection herewith to which
the Security Parties and/or the Creditors are parties, which alone fully and
completely express the agreements between the Security Parties and the
Creditors.
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17.6 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to
an Assignment and Assumption Agreement and cannot be amended other than by
written agreement signed by all such parties.
17.7 Indemnification. The Borrower and, by its execution and delivery of the
Consent and Agreement set forth below, each of the other Security Parties
jointly and severally agree to indemnify each Creditor, their respective
successors and assigns, and their respective officers, directors, employees,
representatives and agents (each an "Indemnitee") from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitee in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may at
any time (including, without limitation, at any time following the payment of
the obligations of the Borrower hereunder) be imposed on, asserted against or
incurred by, any Indemnitee as a result of, or arising out of or in any way
related to or by reason of, (a) any violation by any Security Party (or any
charterer or other operator of any Unit) of any applicable Environmental Law,
(b) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by any Security Party (or, after
foreclosure, by any Creditor or any of their respective successors or assigns)
and (3) the breach of any representation, warranty or covenant set forth in
Sections 2.1 (o) or 9.1A.(x). The foregoing indemnity shall not apply to any
claim, including, without limitation, Environmental Claims, arising out of the
operation of the Unit by any Creditor or any agent or contractor thereof. If and
to the extent that the obligations of the Security Parties under this Section
are unenforceable for any reason, the Borrower and, by its execution and
delivery of the Consent and Agreement set forth below, each of the other
Security Parties jointly and severally agree to make the maximum contribution to
the payment and satisfaction of such obligations which is permissible under
applicable law. The obligations of the Security Parties under this Section 17.7
shall survive the termination of this Agreement and the repayment to the
Creditors of all amounts owing thereto under or in connection herewith.
17.8 Headings. In this Agreement, Section headings are inserted for convenience
of reference only and shall not be taken into account in the interpretation of
this Agreement.
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IN WITNESS whereof the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives as of the
day and year first above written.
▇▇▇▇▇▇ OFFSHORE LLC
By: [Illegible]
-----------------------------------
Name: [Illegible]
Title:
NEDERLANDSE SCHEEPSHYPOTHEEK BANK N.V.,
Arranger, Documentation Agent, Security
Trustee and Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-fact
MEESPIERSON CAPITAL CORP.,
Arranger, Administrative Agent and Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-fact
By: [Illegible]
-----------------------------------
Name: [Illegible]
Title:
52