EXHIBIT 10.33
LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered this 15th day of July, 2004, by and between
Seabulk Angola, Inc., a company registered under the laws of the ▇▇▇▇▇▇▇▇
Islands, with its registered office located at Trust Company Complex, Ajeltake
Island, ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Borrower") and Caterpillar Financial Services Corporation, a company
registered under the laws of the State of Delaware, United States of America
("U.S.A."), with its principal place of business located at ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, U.S.A. ("Lender").
WHEREAS, Borrower is engaged in the business of, among other things, the owning
and operating of terminal support vessels; and
WHEREAS, Borrower has executed that certain Construction Contract (as defined
herein), pursuant to which Builder, subject to the terms and conditions of the
Construction Contract, has agreed to construct and Borrower has agreed to
purchase the Vessel (as defined herein); and
WHEREAS, Borrower has requested Lender to establish a construction loan facility
for Borrower, in the amount set forth herein, in connection with the
construction for Borrower of one certain vessel, in the amount hereinafter; and
WHEREAS, Lender has agreed to establish a construction loan facility, on the
terms hereinafter provided, and to provide for a permanent financing commitment
with respect to the Construction Loan, on the terms hereinafter provided,
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Borrower and Lender hereby agree as follows:
SECTION 1. GENERAL DEFINITIONS
SECTION 1.1. DEFINED TERMS. When used herein, the following terms shall have the
following meanings (terms defined in the singular to have the same meaning when
used in the plural and vice versa):
"ADJUSTED EBITDA" shall have the meaning provided for in the Amended
and Restated Credit Agreement between Fortis Capital Corp., NIB Capital Bank
N.V., The Governor & Company of the Bank of Scotland and Seabulk International,
Inc., dated August 5, 2003, as such meaning may be modified thereunder, provided
that the incorporation of any such modified meaning into this Agreement shall be
with Lender's prior written consent (which shall not be unreasonably withheld).
"ADJUSTED FUNDED DEBT" shall have the meaning provided for in the
Amended and Restated Credit Agreement between Fortis Capital Corp., NIB Capital
Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"ADJUSTED FUNDED DEBT RATIO" shall have the meaning provided for in
Amended and Restated Credit Agreement between Fortis Capital Corp., NIB Capital
Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"ADJUSTED TANGIBLE NET WORTH" shall have the meaning provided for in
Amended and Restated Credit Agreement between Fortis Capital Corp., NIB Capital
Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"ADVANCES" shall mean loan advances made or to be made to Borrower or
on Borrower's behalf on a multiple advance basis subject to verification
acceptable to Lender and further subject to the terms and conditions of this
Agreement.
"ADVANCE REQUEST" shall mean a request for an Advance substantially in
the form of EXHIBIT N.
"AFFILIATE" shall mean any Person which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Borrower; or (i) which beneficially owns or holds 51% or more
of any class of the voting stock of the Borrower; or (ii) 51% or more of the
voting stock (or in the case of a Person which is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held by the Borrower
or a Subsidiary of the Borrower. For purposes hereof, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract or otherwise.
"AGREEMENT" shall mean this Loan Agreement, as this Loan Agreement may
be amended or modified from time to time, together with all exhibits and
schedules attached or to be attached to this Loan Agreement from time to time.
"APPLICABLE LAW(S)" shall mean all laws, rules and regulations
applicable to the Person, conduct, transaction, covenant or Loan Documents in
question, including, but not limited to, all applicable common law and equitable
principles; all provisions of all applicable state and federal constitutions,
statutes, rules, regulations and orders of governmental bodies; and orders,
judgments and decrees of all courts and arbitrators.
"APPLICABLE PERIOD" shall mean, (i) with respect to the Construction
Loan, a successive series of one month periods. The first Applicable Period
shall begin on the date the first Advance is disbursed under the Construction
Note, and continue until the last day of the month in which such disbursement
occurs. Thereafter, each successive Applicable Period shall be a one month
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period commencing on the first day of each successive calendar month, and ending
on the last day of each such calendar month, and (ii) with respect to the
Permanent Loan, a successive series of one month periods. The first Applicable
Period shall begin on the Conversion Date, and continue until the last day of
the month in which such Conversion Date occurs. Thereafter, each successive
Applicable Period shall be a one month period commencing on the first day of
each successive calendar month, and ending on the last day of each such calendar
month
"APPROVAL" shall mean, in the context of Lender, not to be unreasonably
withheld or delayed.
"ASSIGNMENT OF CONSTRUCTION CONTRACT" means that certain assignment of
Project Documents, all in form and substance satisfactory to Lender, between
Borrower and Lender whereby (i) Borrower assigns to Lender its rights, title and
interest in the Construction Contract, the other Project Documents and the
related schedule(s) attached thereto, (ii) Borrower gives notice to Builder of
the assignment to Lender; and (iii) Builder acknowledges and consents to the
collateral assignment of the Construction Contract and other Project Documents
by Borrower to Lender as detailed in the Assignment of the Construction
Contract.
"BANK" shall mean any financial institution with which the Borrower
may, from time to time, maintain credit lines for financing its or its
Subsidiaries acquisition of Property.
"BANK GUARANTEE(S)" shall mean the bank guarantees provided by DBS Bank
in accordance with clause 5.4 of the Construction Contract in a form acceptable
to Lender.
"BUILDER" shall mean Labroy Shipbuilding and Engineering PTE LTD, a
company formed under the laws of Singapore.
"BUSINESS DAY" shall mean a day other than (i) a Saturday or Sunday, or
(ii) a day on which banks are authorized by law to be closed in Nashville,
Tennessee, USA.
"CATERPILLAR" shall mean Caterpillar Inc., a Delaware corporation.
"CATERPILLAR DEALER" shall refer to an official dealer of goods
manufactured by Caterpillar(R).
"CHARTER AGREEMENT(S)" means any charter of the Vessel consented to by
Lender in accordance with this Agreement.
"COLLATERAL" means the Vessel (to the extent title has passed from
Builder to Borrower) and also includes individually, collectively,
interchangeably and without limitation all property and assets granted as
collateral security for the Obligations, whether granted directly or indirectly,
whether granted now or in the future, and whether granted in the form of a
security interest, mortgage, collateral mortgage, assignment, pledge, chattel
mortgage, lien, lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law, contract, or
otherwise.
"COLLECTION EXPENSES" shall mean all reasonable costs and expenses at
any time or times incurred by the Lender after the occurrence of an Event of
Default in connection with efforts to collect or recover any of the Obligations
from the Borrower and Guarantors, including, without limitation, reasonable
legal fees, court costs, transfer fees or taxes, accountants' fees, all fees and
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expenses payable or reimbursable by the Borrower under SECTION 8.3 hereof, and
all other costs and expenses associated with seeking to enforce any of the Loan
Documents.
"COMMITMENT" shall mean Lender's commitment to lend the Construction
Loan Limit and the Permanent Loan Limit.
"COMMITMENT LETTER" means that certain Commitment Letter dated May 3,
2004 accepted by Borrower and Guarantors on May 4, 2004, and acknowledged by
Lender on May 6, 2004.
"CONSOLIDATED FUNDED DEBT" shall have the meaning provided for in
Amended and Restated Credit Agreement between Fortis Capital Corp., NIB Capital
Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"CONSOLIDATED TANGIBLE NET WORTH" shall have the meaning provided for
in Amended and Restated Credit Agreement between Fortis Capital Corp., NIB
Capital Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"CONSTRUCTION CONTRACT" shall mean that certain Vessel Construction
Agreement, dated January 15, 2004, by and between Borrower and Builder with
respect to construction of the Vessel, and any subcontracts with subcontractors,
materialmen, laborers, or any other person or entity for performance of work on
the Project or the delivery of materials to the Project, together with any
amendments thereto and each of which is assigned to Borrower by Seabulk Arizona,
Inc., a Liberian company.
"CONSTRUCTION LOAN" means, in the case of the Vessel for which
financing is sought hereunder, the Advances made in connection with the
construction loan extended to Borrower by Lender in connection with such Vessel.
"CONSTRUCTION LOAN LIMIT" means, with respect to the Construction Loan,
the lesser of the following: (i) Fourteen Million Three Hundred Eighty Four
Thousand and 00/100ths (S$14,384,000.00) Singapore Dollars, or (ii) Eighty
percent (80%) of the Total Construction Costs.
"CONSTRUCTION LOAN MATURITY DATE" shall mean, with regard to the
Construction Loan, made to build the Vessel, the earlier to occur of (i) the
Conversion Date of the Construction Loan, (ii) June 15, 2005, or (iii) the
Vessel Acceptance Date.
"CONSTRUCTION LOAN RATE" shall mean a variable rate equal to the One
Month LIBOR, PLUS four percent (4%) (400 basis points) per annum.
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"CONSTRUCTION NOTE" means the promissory note(s) of even date herewith
payable to the order of Lender and executed by Borrower to evidence the
Construction Loan.
"CONSTRUCTION TERM" shall mean with regard to the Vessel, the period
commencing from the date of the initial Advance under the Construction Loan and
continuing until the Construction Loan Maturity Date.
"CONTRACT PURCHASE PRICE" means Seventeen Million Nine Hundred Eighty
Thousand and no/100ths (S$17,980,000.00) Singapore Dollars as specified in the
Construction Contract.
"CONTRIBUTED COSTS" means with respect to the Vessel, the costs (if
any) of Borrower's direct purchases that increases the market value of the
Vessel, to the extent approved by Lender, but excluding Soft Costs.
"CONVERSION DATE" means, with respect to the Construction Loan, the
date on which all conditions to the conversion of the Construction Loan to a
Permanent Loan have been satisfied as provided in this Agreement, and Borrower
delivers and Lender accepts the Permanent Note evidencing Borrower's term loan
obligations with respect to the Permanent Loan made pursuant to this Agreement.
"DEBT SUBORDINATION AGREEMENT" shall mean that agreement referred to
in Sections 3.04 and 5.1 in form and substance satisfactory to Lender.
"DEFAULT" shall mean an event or condition the occurrence of which
would, with notice or lapse of time or both, become an Event of Default.
"DISTRIBUTION" in respect of any corporation shall mean and include:
(i) the payment of any dividends or other distributions on capital stock of the
corporation (except distributions in such stock) and (ii) the redemption or
acquisition by the corporation of its capital stock unless made
contemporaneously from the net proceeds of the sale of its capital stock.
"DOWNPAYMENT" means Borrower's payment to Builder of twenty percent
(20%) of the Vessel's Contract Purchase Price in accordance with Section 3.01(G)
and EXHIBIT C hereto.
"EBITDA" shall have the meaning provided for in Amended and Restated
Credit Agreement between Fortis Capital Corp., NIB Capital Bank N.V., The
Governor & Company of the Bank of Scotland and Seabulk International, Inc.,
dated August 5, 2003, as such meaning may be modified thereunder, provided that
the incorporation of any such modified meaning into this Agreement shall be with
Lender's prior written consent (which shall not be unreasonably withheld).
"ESCROW AGREEMENT" shall mean that agreement among Lender, Borrower
Builder and Lender's counsel regarding the delivery of Bank Guarantees and
payment of milestones provided for in the Construction Contract.
"EVENT OF DEFAULT" shall have the meaning ascribed thereto in SECTION
6.1.
"FINAL FUNDING DEADLINE" means June 15, 2005.
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"FISCAL YEAR" shall mean the taxable year of the Borrower commencing on
January 1st and ending December 31st.
"FORFEITURE LAW" shall mean any state or federal law, rule or
regulation under which any Property of a Person may be seized by a governmental
agency or title thereto forfeited by reason of such Person's commission of a
crime.
"GAAP" shall mean generally accepted accounting principles as in effect
in the United States of America, or the equivalent.
"GUARANTOR(S)" shall mean Seabulk International, Inc. and Seabulk
Offshore Holdings, Inc. who hereafter guarantee payment or performance of the
whole or any part of the Obligations.
"INDEBTEDNESS" as applied to a Person shall mean, without duplication:
(i) all items which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined, including,
without limitation, (ii) all obligations of other Persons which such Person has
guaranteed; and (iii) in the case of the Borrower (without duplication), the
Obligations.
"LENDER'S BANK ACCOUNT" shall mean Lender's account at; Chase Manhattan
Bank, New York, NY, account number ▇▇▇-▇-▇▇▇▇▇▇, ABA Code ▇▇▇-▇▇▇-▇▇▇, or as
otherwise confirmed by Lender in writing at the time of Loan disbursement or
from time to time.
"LIEN" shall mean any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangements, encumbrance, lien
(statutory or other), or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever.
"LIGHTSHIP TANKER ENTITIES" shall have the meaning provided for in
Amended and Restated Credit Agreement between Fortis Capital Corp., NIB Capital
Bank N.V., The Governor & Company of the Bank of Scotland and Seabulk
International, Inc., dated August 5, 2003, as such meaning may be modified
thereunder, provided that the incorporation of any such modified meaning into
this Agreement shall be with Lender's prior written consent (which shall not be
unreasonably withheld).
"LOAN" means the Construction Loan, and any Permanent Loan extended
pursuant to this Agreement in connection with any Construction Loan.
"LOAN DOCUMENTS" shall mean this Agreement and the Other Agreements.
"LONDON BANKING DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in London are authorized to close.
"MATERIAL ADVERSE EFFECT" shall mean any event or condition which,
alone or when taken together with other events or conditions occurring or
existing concurrently therewith: (i) has or may be reasonably expected to have a
material adverse effect upon the business, operations, Properties, financial
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condition or business prospects of Borrower or any Subsidiary; (ii) has or may
be reasonably expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or any of the other Loan Documents;
or (iii) materially impairs the ability of Borrower or any Guarantor to perform
its obligations under this Agreement, any guaranty agreement or any of the other
Loan Documents or of Lender to enforce or collect the Obligations in accordance
with the Loan Documents and Applicable Law.
"MATERIALS" means the inventory, equipment, engines, outfitting, raw
material, metal, supplies and other goods used in connection with the
construction and outfitting of the Vessel.
"MAXIMUM RATE" shall mean the maximum non-usurious rate of interest
permitted by Applicable Law that at any time, or from time to time, may be
contracted for, taken, reserved, charged or received on the Indebtedness in
question or, to the extent permitted by Applicable Law, under such Applicable
Laws that may hereafter be in effect and which allow a higher maximum
non-usurious interest rate than Applicable Laws now allow. Notwithstanding any
other provision hereof, the Maximum Rate shall be calculated on a daily basis
(computed on the actual number of days elapsed over a year of 360 days).
"MILESTONE ADVANCE LIMIT" means the limit on the amount of the Advance
that may be obtained with respect to any Milestone, as set forth in the
Milestone Schedule.
"MILESTONE PAYMENT" means, in the case of the Vessel and with respect
to each Milestone, the amount of payment due to a builder under the Construction
Contract with respect to the Vessel upon Lender's determination that the
conditions precedent to the achievement of such Milestone have been obtained.
"MILESTONES" means, with respect to the Vessel, the series of discrete,
incremental achievements to be accomplished under the Plans and Specifications
for the Vessel, as such achievements are more fully described in the Milestone
Schedule attached hereto as EXHIBIT C.
"MILESTONE SCHEDULE" shall mean the list of the Milestones together
with the detailed disbursement schedule of the estimated amount and time of
disbursements of each Advance, including a breakdown of the payments due in
connection with each Milestone and itemization of the Milestone Advance Limits,
as shown on EXHIBIT C attached hereto.
"MORTGAGE" shall mean that certain first preferred ship mortgage, in
form and substance satisfactory to Lender, to be executed and delivered by
Borrower in favor of Lender and recorded in the office of the Deputy
Commissioner of Maritime Affairs of the Republic of the ▇▇▇▇▇▇▇▇ Islands
official vessel registry by which Borrower grants to Lender a first priority
mortgage position in the Vessel (which shall be substantially in the form of
EXHIBIT P.
"MORTGAGE DOCUMENTS" shall mean the Mortgage and all other documents
related thereto to be executed by Borrower to effect the grant to Lender of a
first preferred ship mortgage.
"NET WORTH" shall mean the aggregate of capital stock, earned surplus,
and additional paid in capital of the Borrower, less the Borrower's treasury
stock, and less contingent liabilities, all as determined in accordance with
GAAP applied on a basis consistent with the accounting principles applied in the
preparation of the financial statements referred to in SECTION 4.4.
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"NOTES" means collectively the Construction Note and the Permanent Note
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for such promissory notes or this
Agreement.
"OBLIGATIONS" shall mean all Indebtedness, liabilities and obligations
owing, arising, due or payable from the Borrower to, or on behalf of, the Lender
of every kind or nature, whether absolute or contingent, due or to become due,
joint or several, liquidated or unliquidated, matured or unmatured, primary or
secondary, now existing or hereafter incurred arising under any of the Loan
Documents, and regardless of the form or purpose of such Indebtedness,
liabilities or obligations, including, without limitation, all of the Loan, all
liabilities of the Borrower to the Lender under any indemnity, reimbursement,
letter of credit, guaranty, deposit or other agreement heretofore or hereafter
executed by the Borrower with or in favor of the Lender. The term includes,
without limitation, all interest, charges, expenses, attorneys' fees and other
sums chargeable to the Borrower under any of the Loan Documents.
"ONE MONTH LIBOR" means the one (1) month London Interbank Offered Rate
(LIBOR) on the basis of the offered rates for deposits in United States Dollars
as published by the BBA and reported by REUTERS (Screen LIBO Page) (or, in the
absence of the availability of REUTERS (Screen LIBO Page) as determined by
Lender) which shall appear on the REUTERS (Screen LIBO Page) as of 11:00 a.m.,
London Time, on the day that is two London Banking Days preceding (i) the
disbursement date, and (ii) the date of each payment installment period
thereafter. If at least two rates appear on the REUTERS (Screen LIBO Page), the
rate for that period will be the arithmetic mean of such rates.
"OTHER AGREEMENTS" shall mean any and all agreements, instruments,
documents and certificates (other than this Agreement), heretofore, now or
hereafter executed by the Borrower or any Guarantor and delivered to the Lender
in respect to the transactions contemplated by this Agreement, including,
without limitation, the Construction Note, the Permanent Note, any guaranty
agreement, the Mortgage Documents, the Security Documents, and any other
security or Lien agreement now existing, concurrently or hereafter executed by
the Borrower to secure the Obligations.
"PERMANENT LOAN" means the term loan extended in connection with the
refinancing and extension of the maturity of the Construction Loan.
"PERMANENT LOAN LIMIT" means, with respect to the Permanent Loan, the
lesser of the following: (i) Fourteen Million Three Hundred Eighty Four Thousand
and no/100ths (S$14,384,000.00) Singapore Dollars or (ii) Eighty percent (80%)
of the survey value of the vessel which has been approved by Lender.
"PERMANENT LOAN RATE" means a variable rate of interest equal to the
One Month LIBOR PLUS 3.68% (368 basis points) per annum.
"PERMANENT NOTE" means the promissory note dated as of the Conversion
Date, payable to the order of Lender, substantially in the from of EXHIBIT B
hereto, executed in connection with the Permanent Loan.
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"PERMANENT NOTE MATURITY DATE" means the date that is one hundred
twenty (120) months from the date that is one month prior to the first principal
payment date.
"PERMITTED CHANGES" means changes in the Plans and Specifications which
are either (i) minor changes involving a cost increase, in connection with a
specific vessel, not exceeding Two Hundred Fifty Thousand United States Dollars
($250,000.00) in any one instance or a total aggregate of Two Hundred Fifty
Thousand United States Dollars ($250,000.00) throughout the term of this
Agreement, or (ii) changes approved by Lender.
"PERMITTED LIENS" shall mean any Lien permitted under SECTION 5.12 (D)
of this Agreement.
"PERSON" shall mean an individual, partnership, corporation, joint
venture, association, joint stock company, trust, business trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"PLANS AND SPECIFICATIONS" means individually, collectively, and
interchangeably, in the case of the Vessel, the plans and specifications for the
Project related to the Vessel which have been, and/or which may be, approved by
Lender, together with such changes and additions as may be Permitted Changes or
changes and additions that are further approved by Lender in writing.
"PROJECT" means the planning, construction and completion, outfitting
and testing of the Vessel to be constructed as set forth in the Plans and
Specifications.
"PROJECT DOCUMENTS" means individually, collectively, and
interchangeably the Plans and Specifications for the Vessel, all studies, data
and drawings relating to the Project related to such Vessel, whether prepared by
or for Borrower, the Construction Contract for such Vessel, the Assignment of
Construction Contract, and all other contracts and agreements relating to the
Project or the construction of the Vessel, in each case, as the same have been,
or may be, approved by Lender.
"PROJECTIONS" shall mean Borrower's forecasted (a) balance sheets, (b)
profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Borrower's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, including without
limitation, the Collateral and Vessel.
"SATISFACTION" shall mean, in the context of Lender, reasonable
satisfaction.
"SECURITY DOCUMENTS" means individually, collectively, interchangeably
and without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security Interest,
or otherwise securing payment of the Obligations; including without limitation,
Borrower's Assignment of Construction Contract, and all Mortgage Documents, as
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the same may be amended, renewed, replaced, refinanced, consolidated or
substituted from time to time. Lender will require that all Security Documents
contain cross-collateralization and cross-default features.
"SECURITY INTEREST" means individually, collectively, interchangeably
and without limitation any and all present and future mortgages, preferred ship
mortgages, pledges, assignments, security interests and other encumbrances
directly or indirectly securing the repayment of the Obligations, whether
created by law, contract, or otherwise.
"SINGAPORE DOLLARS" and the symbol "S$" shall mean the lawful currency
of the Republic of Singapore.
"SOFT COSTS" means any portion of the Contributed Costs not
representing the costs of Materials or other personal property incorporated into
the Vessel, including but not limited to insurance, fuel, travel expenses,
governmental subsidies or rebates, and interest expense during construction.
"SOLVENT" shall mean, as to any Person, such Person: (i) owns Property
the fair value of which is greater than the amount required to pay all of such
Person's Indebtedness (including contingent liabilities); (ii) is able to pay
all of its Indebtedness as such Indebtedness matures; and (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"SUBSEQUENT MILESTONE" means with respect to the Vessel, the Milestone
occurring subsequent to the first Milestone (i) to be certified by Borrower and
(ii) for which Borrower has received an Advance.
"SUBSIDIARY" shall mean any corporation of which the Borrower owns more
than 50% of its securities, provided the ownership of such securities, in the
absence of contingencies, entitles the Borrower to elect a majority of the
directors of such corporation.
"TAXES" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of
whatsoever nature, that may now or hereafter be imposed or asserted by any
jurisdiction or any political subdivision thereof or any taxing authority
therein and all interest, penalties or similar liabilities with respect thereto.
"TOTAL CONSTRUCTION COSTS" means the total of the Contract Purchase
Price, PLUS Contributed Costs.
"UNITED STATES DOLLARS" and the sign "US$" shall mean the currency of
the United States of America.
"VESSEL" means one (1) 162' Terminal Support Vessel (Hull No. T130),
powered by two (2) new MAK model 9M25 main propulsion engines, to be registered
under the flag of the ▇▇▇▇▇▇▇▇ Islands as described with particularity in the
Plans and Specifications.
"VESSEL ACCEPTANCE DATE" means the earliest of: (i) the date of the
funding of the final Advance under the Construction Loan, or (ii) the Final
Funding Deadline.
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"VESSEL CONSTRUCTION SECURITY AGREEMENT" means that certain agreement,
in form and substance satisfactory to Lender, whereby Borrower grants to Lender,
among other things, a continuing security interest in the Collateral as security
for the Obligations.
"VESSEL EQUIPMENT" means any and all present and future materials,
components, engines, boilers, machinery, masts, boats, anchors, cables, chains,
rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, gear,
furnishings, appliances, fittings, spare and replacement parts and any and all
manuals, Materials, supplies and components in any way related to the
construction of the Vessel and any and all other appurtenances thereto,
appertaining or belonging to the Vessel to be constructed, whether now or
hereafter acquired, and whether onboard or not onboard, together with any and
all present and future additions, improvements and replacements therefor, made
in or to said vessel, or any part or parts thereof.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with that applied
in preparation of the financial statements referred to in SECTION 4.4 AND
5.1(A), and all financial data pursuant to this Agreement shall be prepared in
accordance with such principles consistently applied.
SECTION 1.3. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of this Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any instruments or agreements, including, without
limitation, references to this Agreement and any of the other Loan Documents,
shall include any and all modifications or amendments thereto and any and all
extensions or renewals thereof.
SECTION 2. CREDIT COMMITMENT.
SECTION 2.01. CONSTRUCTION LOANS; PERMANENT LOANS. In connection with the
construction of the Vessel, Lender shall make available to Borrower a
non-revolving construction loan facility up to the Construction Loan Limit
(subject to Lender's right at its sole option and discretion to extend
additional protective Advances as herein provided, which may result in total
Advances in excess of the loan limits), on the terms and conditions set forth
herein. The amount of each Advance of the Construction Loan with respect to each
Milestone shall be subject to the Milestone Advance Limits. Borrower shall use
the proceeds of the Construction Loan solely for the payment of the costs of
constructing and equipping the Vessel in accordance with the applicable Plans
and Specifications.
Lender shall calculate the United States Dollar equivalent (the "United States
Dollar Equivalent") of each Singapore Dollar Milestone in the Milestone Schedule
using the exchange rate (the "Exchange Rate") in effect on the date evidenced to
Lender as the date Borrower funded Builder the applicable Singapore Dollar
milestone amount or, if Lender is making the advance by payment directly to the
Builder on Borrower's behalf, on the date that is two (2) Business Banking Days
(as defined below) prior to such payment. Lender shall advance to Borrower or
pay to the Builder, as the case may be the lesser of such United States Dollar
Equivalent or the United States Dollar Milestone Advance Limit for the
applicable Milestone. Provided however, that should Lender receive an Advance
Request for funding in Singapore Dollars, Lender shall convert sufficient United
11
States Dollars into Singapore Dollars at the Exchange Rate in effect on the date
Lender requests the funds for payment of the applicable Milestone, sufficient to
fund such Milestone, and subject to the applicable Singapore Dollar Milestone
Advance Limit and the Construction Loan Limit. For purposes of this Section
2.01, "Business Banking Day" shall mean any day on which banks in each of the
United States and Singapore are customarily open for business.
Upon the fulfillment of the conditions to the making of a Permanent Loan with
respect to the Vessel (including the absence of any Defaults under this
Agreement), Lender, on the Conversion Date, shall convert the Construction Loan
related to such Vessel to a term loan in an amount not to exceed the Permanent
Loan Limit, which loan shall bear interest and be payable on the terms herein
provided.
Borrower shall not be entitled to re-borrow any amounts that have been repaid by
Borrower in connection with any Loan.
SECTION 2.02. DISBURSEMENT OF CONSTRUCTION LOAN PROCEEDS. If Borrower wishes for
Advances to be paid by wire transfer, it shall provide wire transfer
instructions as part of its certification and request for disbursement. At its
sole option after the Borrower has given the Lender an Advance Request, or as
otherwise provided in this Agreement, Lender may pay directly the Builder and
any subcontractors or other parties the sums due under the Construction Contract
and the authorized Caterpillar(R) dealer for the Vessel engine supply. Borrower
appoints Lender as its attorney-in-fact to make such payments. This power shall
be deemed to be coupled with an interest in the funds advanced by Lender, shall
be irrevocable, and shall survive an Event of Default under this Agreement.
SECTION 2.03. THE CONSTRUCTION NOTE OR PERMANENT NOTE. The Construction Loan and
Borrower's obligation to repay the Construction Loan shall be evidenced by and
repayable with interest in accordance with the terms of the Construction Note.
During the Construction Term, interest on each Construction Loan Advance shall
accrue at the Construction Loan Rate from the date of such Advance. Interest
payments under the Construction Note shall be due and payable monthly in
arrears, in accordance with the terms of the Construction Note. The principal
amount of the Construction Note shall be due and payable in full, along with all
accrued and unpaid interest thereon, on the Construction Loan Maturity Date,
unless converted into the Permanent Loan.
Borrower's obligations to repay the Permanent Loan shall be evidenced by and
repayable with interest in accordance with the terms of the Permanent Note
substantially in the form as shown in EXHIBIT B hereto. The Permanent Loan shall
be for a term of one hundred twenty (120) months beginning one month prior to
the First Principal Payment date and shall be repaid as follows:
PRINCIPAL: One Hundred Twenty (120) equal monthly payments of principal (based
upon a one hundred forty-four (144) month amortization schedule), shall be due
on the first (1st) day of the fourth (4th) month following the month of the
Conversion Date ("First Principal Payment Date"), and continuing on the first
(1st) day of each month thereafter until the Permanent Note Maturity Date. A
FINAL BALLOON PAYMENT of all outstanding principal, together with any other
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amounts outstanding hereunder or under the Permanent Note, shall become due on
the Permanent Note Maturity Date.
INTEREST: Beginning on the first day of the second month following the month of
the Conversion Date, and continuing on the first day of each month thereafter,
Borrower shall pay all accrued interest until the Permanent Note Maturity Date.
Principal and interest payable under the Notes shall be repaid in accordance
with the repayment terms set forth therein and as provided in this Agreement.
Nothing herein or in any Note shall limit Borrower's obligation to fully repay
all Obligations due to Lender, including interest thereon, or limit the right of
Lender to make Advances to protect its interests as herein provided in such
amounts as Lender may determine in its sole discretion, and Borrower shall be
fully obligated to pay, any Advances made under this Agreement or any other Loan
Documents, including Advances that may be in excess of the face amount of a
Note, together with interest thereon at the Construction Loan Rate or the
Permanent Loan Rate, as the case may be, subject to increase following an Event
of Default as provided in SECTION 2.14.
SECTION 2.04. LOAN ACCOUNTING. Borrower hereby irrevocably authorizes Lender to
make (or cause to be made) appropriate notations in its records to evidence,
INTER ALIA, the date of, the outstanding principal amount of and the interest
rate applicable to, the Loan evidenced thereby. The notations in such records
indicating the outstanding principal amount of the Loan evidenced thereby shall,
in the absence of manifest error, be PRIMA facie evidence of the principal
amount thereof owing and unpaid, but the failure to record any such amount in
such records or otherwise shall not limit or affect the obligations of Borrower
hereunder or under the Construction Note or Permanent Note to make payment of
principal of or interest on the Loan when due.
SECTION 2.05. INTEREST ON LOANS. The Construction Note evidences any present and
future Construction Loan advances by Lender to Borrower under this Agreement,
granted from time to time, up to the face amount thereof, and shall for all
purposes be considered as a "master note." Interest shall accrue on the
outstanding principal amount of each Construction Loan Advance from the date of
advance until paid in full, at the Construction Loan Rate. Interest shall accrue
on the outstanding principal amount of the Permanent Loan from the date made
until paid in full at the Permanent Loan Rate.
With respect to the Construction Loan, the Construction Loan Rate in effect
hereunder shall be increased or decreased, as the case may be, on a monthly
basis effective as of the date of each monthly installment due date during the
term of this Agreement, by an amount equal to any increase or decrease in the
One Month LIBOR from the date of last change.
With respect to the Permanent Loan, the Permanent Loan Rate in effect hereunder
and under the Permanent Note shall be increased or decreased, as the case may
be, on a monthly basis effective as of the date of each monthly installment due
date during such term by an amount equal to any increase or decrease in the One
Month LIBOR from the date of last change.
SECTION 2.06. COMPUTATION OF INTEREST. Any interest payable hereunder shall be
computed on the basis of the actual number of days elapsed in a year of three
hundred sixty (360) days. Regardless of any provision contained in this
Agreement or any of the other Loan Documents, in no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder or under
this Agreement exceed the highest rate permissible under any Applicable Law.
Nothing contained in any of the Loan Documents or the exercise by Lender of the
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right to accelerate the payment or the maturity of all or any portion of the
Obligations, or the exercise of any option whatsoever contained in any of the
Loan Documents, or the prepayment by Borrower of any of the Obligations, or the
occurrence of any contingency whatsoever, shall entitle Lender to charge or
receive any amounts deemed interest by Applicable Law ("Interest") exceeding the
Maximum Rate (the "Excess"). In no event shall Borrower be obligated to pay any
Excess and all agreements, conditions or stipulations, if any, which may in any
event or contingency whatsoever operate to bind, obligate or compel Borrower to
pay any shall be without binding force or effect, at law or in equity, to the
extent only as to the Excess. The right to accelerate maturity of any of the
Obligations does not include the right to accelerate any interest that has not
otherwise accrued on the date of such acceleration, and Lender does not intend
to collect any unearned interest in the event of any such acceleration. All
monies paid to Lender under any of the Loan Documents, whether at maturity or by
prepayment, shall be subject to any rebate of unearned interest as and to the
extent required by Applicable Law. By the execution of this Agreement, Borrower
covenants that (i) the credit or return of any Excess shall constitute the
acceptance by Borrower of such Excess, and (ii) Borrower shall not seek or
pursue any other remedy, legal or equitable, against Lender, based in whole or
in part upon contracting for, charging or receiving any Excess. For the purpose
of determining whether or not any Excess has been contracted for, charged or
received by Lender, all interest at any time contracted for, charged or received
from Borrower in connection with this Agreement shall, to the extent permitted
by Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrower and Lender shall, to the
maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof. The provisions of
this Section shall be deemed to be incorporated into every Loan Document. All
such Loan Documents and communications relating to any Interest owed by Borrower
and all figures set forth therein shall, for the sole purpose of computing the
extent of Obligations, be automatically recomputed by Borrower, and by any court
considering the same, to give effect to the adjustments or credits required by
this Section.
Notwithstanding the foregoing, in no event shall the provisions of this Section
allow Lender to charge interest at a rate greater than specified in any Loan
Document.
SECTION 2.07. PAYMENTS. Except as Lender may otherwise direct in writing,
Borrower agrees to make all payments due under this Agreement, or the Notes or
any other Loan Document directly to Lender by wire transfer (net of charges) to
Lender's Bank Account, or such other place as Lender may designate, and
reference: SEABULK ANGOLA - CONTRACT # 9990182, and the applicable invoice
number or promissory note number. Payments shall be deemed received upon the
clearance of good funds deposited to Lender's account in accordance with the
foregoing instructions. All payments shall be made not later than 12:00 Noon
Central Standard Time on the due date thereof without any deduction or offset
whatsoever. Whenever any payment to be made under this Agreement or the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall,
in such case, be included in the computation of interest.
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SECTION 2.08 APPLICATION OF PAYMENTS AND COLLECTIONS.
(A) Subject to the provisions of SECTION 2.08 (B) below, Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Lender from or on
behalf of Borrower, and Borrower does hereby irrevocably agree that Lender shall
have the continuing exclusive right to apply and reapply any and all such
payments and collections received at any time or times hereafter by Lender
against the Obligations, in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records.
(B) Upon or after the occurrence of an Event of Default and Lender's
acceleration of the maturity of the Loan as a consequence thereof, all payments
and collections received by Lender from or on behalf of Borrower for application
to the Loan shall be applied in the following order: (a) to the unpaid balance
of all Collection Expenses; (b) to the amount of any loss, costs, expenses or
damages suffered or incurred by Lender for which Borrower has agreed to
indemnify Lender pursuant to the terms of this Agreement or any of the other
Loan Documents; (c) to any past due interest on the Loan; (d) to accrued but not
past due interest on the Loan, and (e) to the principal amount outstanding of
the Loan (f) to the amount of any other Obligations as are due and payable then
outstanding to Lender. Any excess payments and collections received by Lender
after satisfaction of the above shall be returned to Borrower.
SECTION 2.09. PAYMENT "NET TAXES". The Borrower agrees to pay all amounts owing
by it under this Agreement, or the other Loan Documents free and clear of and
without deduction for any present or future Taxes (excepting any Taxes assessed
on Lender's income by the United States of America), and
(A) that if it is prevented by operation of law from paying any Taxes,
then the interest rate or fees required to be paid under this Agreement, or the
other Loan Documents shall be increased by the amount necessary to yield to the
Lender interest or fees at the rates specified in this Agreement, or the Other
Loan Documents after provision for the payment of all such Taxes and without
taking into account any tax benefits accruing to the Lender from such payment;
(B) that it shall at the request of the Lender execute and deliver to the
Lender such further instruments as may be necessary or desirable to effect the
increase in the interest or fees as provided for in Section (a) immediately
above, including a new Note to be issued in exchange for any Note theretofore
issued;
(C) that it shall hold the Lender harmless from and against any liabilities
with respect to any Taxes (whether or not properly or legally asserted); and
(D) to provide the Lender with the original or a certified copy of evidence
of the payment of any Taxes by it, as the Lender may reasonably request, or, if
no Taxes have been paid to provide to Lender, at the Lender's request, with a
certificate from the appropriate taxing authority or an opinion of counsel
acceptable to the Lender stating that no Taxes are payable.
If Lender shall receive a refund of any Taxes paid by the Borrower pursuant to
this Section by reason of the fact that such Taxes were not correctly or legally
asserted, Lender shall within sixty (60) days after receipt of such refund pay
to the Borrower the amount of such refund, as determined solely by the Lender;
PROVIDED, HOWEVER, that in no event shall the amount paid by Lender to the
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Borrower pursuant to this sentence exceed the amount of Taxes originally paid by
the Borrower; and FURTHER PROVIDED that Lender shall not have any obligation
under this Agreement to claim or otherwise seek to obtain any such refund.
Lender will however, at the request of Borrower, use commercially reasonable
efforts to claim such refund so long as Borrower agrees to bear all documented
Lender internal and external costs related to such efforts.
SECTION 2.10. CURRENCY OF PAYMENTS. All payments required to be made hereunder,
or any of the Loan Documents, shall be payable solely and exclusively in United
States Dollars.
SECTION 2.11. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower under
this Agreement and in respect of the Loan shall be absolute and unconditional
under all circumstances and irrespective of any setoff, counterclaim or defense
to payment (of any type or description, whether as a result of non-compliance
with any of the provisions of Loan Documents which the Borrower may have or have
had against the Lender or any other Person.
SECTION 2.12. VOLUNTARY PREPAYMENT. Should the Borrower fail to refinance the
Construction Loan with Lender, in accordance with Section 2.17 below, Borrower
shall also pay to Lender a termination fee equal to three percent (3%) of the
amount of the Construction Loan Limit.
The Borrower may prepay the Permanent Loan subject to the following conditions:
(i) Borrower shall provide Lender with not less than thirty (30) days advance
written notice of the intended date of prepayment, which date shall be a
periodic payment date and (ii) Borrower shall pay the a prepayment fee equal to
the sum of the applicable "Penalty Percentage" times the amount of the
prepayment. If the Vessel is sold to a Person who is a Subsidiary, Affiliate,
Guarantor, shareholder or manager of the Borrower, the Penalty Percentage shall
be one-half percent (.5%) per year or partial year remaining in the term of the
Permanent Loan. If the Vessel is sold to a Person which is not a Subsidiary, an
Affiliate, Guarantor, shareholder, or manager of the Borrower and is no way
related by way of any shared or common ownership or management or, (for a Person
which is not a corporate entity, any personal relation to any shareholder or
manager of the Borrower) to the Borrower or any Guarantor, the Penalty
Percentage shall be one percent (1%) if prepayment occurs during the first 13
months following the Conversion date and zero percent (0%) thereafter.
Partial prepayments are not permitted.
A notice of prepayment once given by Borrower may only be rescinded if Lender
has not, in relying on such notice, undertaken obligations which might cause
Lender to incur expenses or liabilities should Lender attempt to rescind such
obligations, or should Borrower agree to pay all such expenses or liabilities.
SECTION 2.13. COMMITMENT FEE. Borrower shall pay to Lender a commitment fee
equal to one percent (1%) of the maximum amount of the Construction Loan Limit,
all of which shall be deemed fully earned at the time of payment by Borrower,
and shall not be subject to rebate except as may be noted in the Commitment
Letter or required by Applicable Law. Such fee shall compensate Lender for the
costs associated with the origination, structuring, processing, and approving
16
the transactions contemplated by this Agreement, but not including any expenses
for which Borrower has agreed to reimburse Lender pursuant to any other
provisions of this Agreement or any of the other Loan Documents, such as, by way
of example, documentation fees, recording fees, legal fees and expenses.
SECTION 2.14. DEFAULT RATE, LATE PAYMENT FEE. Should the Borrower fail to pay
any installment of principal or interest or any other Obligation, the Borrower
shall pay default interest on such amount equal to the applicable Construction
Loan Rate or Permanent Loan Rate, as the case may be, PLUS nine percent (9.0%)
per annum; or, if such rate exceeds the Maximum Rate, then at the Maximum Rate.
Additionally, should Borrower fail to pay, within ten (10) days of when due, any
installment of principal and interest, then a five percent (5%) late payment fee
shall become due and payable on such past due installment. Borrower acknowledges
that the cost and expense to Lender attendant upon the occurrence of a late
payment is difficult to ascertain or estimate and that the above rate is a fair
and reasonable estimate to compensate Lender for such added cost and expense.
SECTION 2.15. USE OF PROCEEDS. The proceeds of the Construction Loan shall be
used exclusively for purposes of completion of the Project and may not be used
for any other purpose. The proceeds of the Permanent Loan shall be used solely
to refinance with Lender the Construction Loan.
SECTION 2.16. PREPAYMENT RESULTING FROM ACCELERATION. If the Lender shall elect
acceleration of a Note as one of its remedies pursuant to SECTION 6, Borrower
shall pay all amounts determined in accordance with the computation set forth in
SECTION 2.12, above, as to all amounts then payable hereunder and under such
Note.
SECTION 2.17. FAILURE TO BORROW UNDER THE PERMANENT LOAN. In the event the
Vessel has been accepted by Borrower, or that Lender, in its reasonable
discretion determines that the Vessel should have been or could have been
accepted but for the unreasonable actions of Borrower, and Borrower does not pay
the Construction Note with proceeds of a Permanent Note with Lender, Borrower
shall pay liquidated damages in the amount of three percent (3%) of the
Construction Loan Limit on the Construction Loan Maturity Date.
SECTION 2.18. TERM. This Agreement shall remain in effect so long as any sums
are owing or any duties or obligations remain to be performed by Borrower to or
for the benefit of Lender under the Loan Documents.
SECTION 3. CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO THE CONSTRUCTION LOAN. Lender's obligation
to make the initial Advance and each subsequent Advance on the Construction
Loan, and Lender's obligation to convert the Construction Loan to a Permanent
Loan, shall be subject to the fulfillment to Lender's satisfaction of all of the
following conditions as well as the additional conditions set forth in this
Agreement and the Loan Documents.
(A) PLANS, SPECIFICATIONS, AND PERMITS. Lender shall have received and
approved a complete set of Plans and Specifications for the Vessel, and Borrower
shall have furnished to Lender copies of all permits and requisite approvals of
any governmental body necessary for the construction and use of the Vessel.
17
(B) LICENSES, PERMITS AND CONSENT. Borrower shall have obtained all
licenses, permits and consents required in connection with the construction of
the Vessel.
(C) CONSTRUCTION CONTRACT. Borrower shall have furnished in form and
substance satisfactory to Lender an executed copy of the Construction Contract
for the Vessel, signed in certified form by the parties thereto, (including any
amendments thereto required by Lender).
(D) ASSIGNMENT OF CONSTRUCTION CONTRACT, PLANS AND SPECIFICATIONS. Borrower
shall have assigned all of its rights under the Project Documents for the
Vessel, as additional Collateral for the Loan, by executing and delivering to
Lender the Assignment of Construction Contract.
(E) GUARANTY AGREEMENT. Delivery of guaranty agreements from Guarantors in
favor of Lender in a form and substance satisfactory to Lender.
(F) SECURITY INTEREST FROM BORROWER. Prior to funding any Milestone
Payments, Lender shall have received the Bank Guaranties provided for in the
Construction Contract as well as an Assignment of Refund Guarantee executed by
Borrower.
(G) DOWNPAYMENT TO BUILDER. Borrower shall have provided Lender proof of
Downpayment in form and substance satisfactory to Lender.
(H) BUDGET AND MILESTONE SCHEDULE. Lender shall have approved the Milestone
Schedule.
(I) EVIDENCE OF INSURANCE/ASSIGNMENT OF INSURANCE. Evidence of all
insurance required under the Security Documents and this Agreement, along with
the appropriate assignment of the same to Lender.
(J) SURVEY. Borrower shall have furnished to Lender a survey prior to each
Advance, prepared and certified by Bureau Veritas or a qualified marine surveyor
hired by Lender at Borrower's expense, and providing that the Improvements,
constructed in accordance with the Plans and Specifications, have been
incorporated into the Vessel in accordance with Borrower's representations
concerning the status of Milestone completion, and certifying the fair market
value of the Vessel as and when completed and outfitted in accordance with the
Plans and Specifications.
(K) SATISFACTORY CONSTRUCTION. All work usually done at the stage of
construction for which an Advance is requested shall have been done in a good
and workmanlike manner and all materials and fixtures usually furnished and
installed at that stage of construction shall have been furnished and installed,
all in compliance with the Plans and Specifications. Borrower shall also have
furnished to Lender such proof as Lender may require to establish the progress
of the work, compliance with applicable laws, freedom of the Collateral from
liens, and the basis for the requested disbursement.
(L) PROOF OF ACHIEVEMENT OF MILESTONES. Prior to the initial Advance,
Lender must receive appropriate evidence that the initial Milestone with respect
to the Vessel has been successfully achieved. For each subsequent Advance
requested by Borrower following the initial Advance, Borrower shall have
furnished to Lender appropriate evidence that the Subsequent Milestone to which
the Advance relates has been successfully achieved. Appropriate evidence of the
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achievement of any Subsequent Milestone shall consist of (i) written
certification by Borrower that it has determined that the Milestone has been
successfully achieved, that there does not exist at the time of any Advance a
condition that would constitute an Event of Default under this Agreement and
that all conditions precedent to the Advance have been satisfied in full; (ii)
with respect to Milestones that concern the completion of established stages of
construction, completion and outfitting, a certificate from such engineer,
architect, or other qualified marine inspector acceptable to Lender that the
construction of the Improvements and the Vessel has complied and will continue
to comply with all applicable statutes, ordinances, codes, regulations, and
similar requirements, and specifying that the stage of completion required under
the Milestone has been achieved in accordance with the Plans and Specifications;
and (iii) such additional proof as Lender may require. Such additional proof may
include additional confirming evidence of the accomplishment of all Milestones
preceding the Subsequent Milestone for which the Advance is requested.
(M) MILESTONE ADVANCE LIMITS. The maximum amount of any Advance that may be
requested in connection with any respective Milestone shall be the Milestone
Advance Limit.
(N) LOAN TO VALUE. Unless waived by Lender in writing, the ratio of the
amount of the Construction Loan to the fair market value of the Vessel as
completed shall not exceed eighty percent (80%).
(O) CHARTER UNDERTAKING. Borrower shall have provided Lender with a written
undertaking that Borrower will obtain an assignment of any charter (in
accordance with Section 5.1(R) hereof) on the Vessel at the time of Conversion.
(P) Intentionally Omitted.
(Q) LOAN DOCUMENTS. Borrower shall have duly executed and delivered to
Lender the Construction Note, Security Documents, purchase contracts for engine
propulsion, and any other Loan Documents or other documents to which Borrower is
a party.
(R) ORGANIZATIONAL DOCUMENTS. Lender shall have received copies of the
articles of incorporation, bylaws, resolutions, organizational documents,
certificates (as applicable) of Borrower, certified by an authorized officer,
partner, member or manager (as applicable) of Borrower , as being true and
correct copies thereof.
(S) BORROWER'S AND GUARANTORS' AUTHORIZATION. Borrower shall have provided
in form and substance satisfactory to Lender properly certified resolutions of
Borrower's board of directors, duly authorizing the execution and delivery of
this Agreement, and the other Loan Documents to which it is a party, and the
consummation of the Project, and such other authorizations and other documents
as Lender in its sole discretion may require.
(T) CERTIFICATIONS. Lender shall have received from the Secretary for the
Borrower, certification of the names of the officers, partners, members or
managers of Borrower, authorized to obtain advances under this Agreement, to
execute and deliver this Agreement, the Construction Note and Permanent Note,
the Mortgage Documents and other Security Documents, and other documents or
certificates to be delivered pursuant to the Loan Documents by Borrower or any
19
of Borrower's officers, together with the true signatures of such officers.
Lender may conclusively rely on such certificate until Lender shall receive a
further certificate of an authorized officer of Borrower canceling or amending
the prior certificate and submitting the signatures of the officers named in
such further certificate. A good standing certificate with respect to Borrower
issued as of a recent date by the Secretary of State or other appropriate and
authorized official of Borrower's jurisdiction of organization.
(U) OPINIONS OF COUNSEL. Borrower and each Guarantor shall have provided
to Lender an opinion of counsel acceptable to Lender advising Lender: (i) that
the mortgage granted by Borrower to Lender in the Vessel is first in priority
and valid and enforceable against Borrower (ii) that this Agreement and the Loan
Documents are enforceable in accordance with their terms, (iii) that this
Agreement and the Loan Documents to which Borrower or each Guarantor is a party
have been duly authorized by Borrower or Guarantor, as applicable, and executed
by Borrower's, or Guarantor's, as the case may be, duly authorized
representative, (iv) that any and all laws of the ▇▇▇▇▇▇▇▇ Islands with respect
to the availability and transfer of currency required to make payments under
this Agreement and the Construction Note and Permanent Note have been and will
be met, and (v) as to such other matters as Lender may require.
(V) LACK OF DEFAULT. There shall not exist at the time of any Advance a
condition which would constitute a Default under this Agreement.
(W) FINANCIAL STATEMENTS. Lender shall have the current financial
statements of all Guarantors required under this Agreement, together with all
other financial statements required hereunder.
(X) WARRANTIES AND REPRESENTATIONS. The representations and warranties
contained in SECTION 4 hereof are true and correct, except to the extent such
representations and warranties relate solely to an earlier date.
(Y) NO MATERIAL ADVERSE CHANGE. There shall not have occurred any change in
events or conditions as existing on the date of execution of this Agreement
having a Material Adverse Effect.
(Z) PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
fees and expenses specified in this Agreement or the Commitment Letter as may
then be due and payable, including the commitment fee due in connection with the
Construction Loan.
(AA) ESCROW AGREEMENT. All conditions of the Escrow Agreement among
Builder, Borrower, Lender, and Lender's counsel have been satisfied.
(AB) CONDITIONS IN OTHER DOCUMENTS. Borrower shall have satisfied all other
conditions to funding the Construction Loan contained in any of the Loan
Documents.
SECTION 3.02. FUNDING DEADLINES FOR ALL CONSTRUCTION LOANS. Lender will be under
no obligation to fund any Advance under the Construction Loan (regardless of the
stage of completion of the Vessel) later than the Final Funding Deadline.
SECTION 3.03. DISBURSEMENT OF CONSTRUCTION LOAN PROCEEDS. The following
provisions relate to the disbursement of funds for an Advance under the
Construction Loan.
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ADVANCE REQUEST. Each application shall be stated on a payment request form,
substantially in the form of EXHIBIT N hereto, approved by Lender, executed by a
representative of Borrower duly authorized to request advances under this
Agreement, and supported by such evidence as Lender shall reasonably require.
Borrower verifies that any person listed on EXHIBIT O of this Agreement is
authorized to request Advances. Each such application shall be sent by Borrower
to the office of Lender as provided in Section 8.2. of this Agreement. Borrower
shall apply only for Advances for Total Construction Costs actually or to be
incurred and for Materials (including owner furnished equipment) incorporated or
to be incorporated into the Project for the Vessel and actually or to be
delivered to the Builder's shipyard. Each Advance Request shall include a
certificate by Borrower certifying that the Subsequent Milestone has been
achieved (or in the case of the initial Advance, that the initial Milestone has
been achieved). All such certificates shall be accompanied by appropriate
evidence of the achievement of such Milestone. The amount of the requested
Advance shall not exceed the amount of the Milestone Advance Limit which
corresponds to the particular Milestone for which Borrower has requested the
Advance and as to which Lender has received appropriate proof of achievement.
Each Advance Request shall be deemed a certification of Borrower that, as of the
date of such application, all representations and warranties contained in this
Agreement are true and correct, and that Borrower is in compliance with all of
the provisions hereof.
SECTION 3.04. FINAL PAYMENT TO BUILDER; CONDITIONS TO FINAL CONSTRUCTION LOAN
ADVANCE. Upon completion of the Project for the Vessel and fulfillment of the
Construction Contract for the Vessel to the satisfaction of Lender and provided
that all conditions precedent are met and that the Construction Loan Limit and
Milestone Advance Limit limitations are not exceeded, Lender shall make an
Advance to cover the final payment due to the builder upon delivery to Lender of
appropriate proof that the claims of any person with a potential or existing
lien or privilege arising in connection with the Project (other than the claims
of Lender) have been satisfied in full as provided under applicable law.
Construction shall not be deemed complete for purposes of final disbursement
with respect to any Construction Loan, and the final Advance and final Milestone
Payment under such loan will not be made, unless and until Lender shall have
received or verified all of the following:
(A) Borrower's continued compliance with all requirements under SECTION
3.01 of this Agreement;
(B) Evidence satisfactory to Lender that all work under the Project with
respect to the Vessel requiring inspection by any governmental authority with
jurisdiction has been duly inspected and approved by such authority, and that
all parties performing work have been paid, or will be paid, for such work,
including receipt of a Certificate of No Liens from Builder;
(C) A certification by Bureau Veritas ("BV") or another qualified inspector
acceptable to Lender that the Project with respect to the Vessel has been
completed substantially in accordance with the Plans and Specifications and the
Construction Contract, that the final Milestone has been satisfied, and that the
Vessel is seaworthy and ready for use and occupancy;
(D) A survey following construction completion, prepared and certified by
BV or another qualified marine surveyor hired by Lender at Borrower's expense
21
certifying the fair market value of the Vessel as completed, sufficient to
result in a Permanent Loan amount of not more than eighty percent (80%) of the
fair market value of the Vessel.
(E) Acceptance of the completed Vessel by Borrower, as reflected in a
Delivery and Acceptance Certificate;
(F) All documents required by the Escrow Agreement have been deposited with
the escrow agent and the documents needed to document the Vessel as a ▇▇▇▇▇▇▇▇
Islands Vessel, to title the Vessel in Borrower, and to secure Lender's mortgage
on the Vessel have been approved by the ▇▇▇▇▇▇▇▇ Islands registry;
(G) A minimum equity contribution of twenty (20%) of the Contract Purchase
Price of the Vessel has been made by the Borrower in a form acceptable to
Lender;
(H) Borrower shall have executed, duly authenticated and delivered the
Preferred Ship Mortgage with respect to the Vessel which shall have been
registered in the Shipping Registry of the ▇▇▇▇▇▇▇▇ Islands;
(I) Evidence that Borrower has obtained all insurance and protection and
indemnity coverages as are required under the Mortgage Documents affecting the
Vessel;
(J) If requested by Lender, Borrower shall have delivered to Lender an
opinion letter of counsel with respect to the due execution and delivery of the
Preferred Ship Mortgage on the Vessel and the first lien priority of the
mortgage;
(K) Evidence satisfactory to Lender that all licenses have been obtained by
Borrower and are in full force and effect to operate the Vessel according to its
intended use, and that all advisable certifications have been obtained;
(L) A successful operational trial of the Vessel for its intended use shall
have been completed to the satisfaction of Lender, as reflected in a Report of
Satisfactory Sea Trial and Engine Trial delivered to Lender;
(M) Evidence of satisfactory completion of applicable certification
inspections, and certification of no liens in connection with the Construction
Contract;
(N) Lender shall have received from the Borrower satisfactory evidence that
it has received the appropriate governmental exchange control authorization for
the transactions contemplated hereby if applicable;
(O) Confirmation that the Loan amount does not exceed the Permanent Loan
Limit;
(P) Any of the conditions specified in the Commitment Letter which are not
expressly listed herein (so long as such conditions are not specifically
inconsistent with the requirements of this Agreement, in which case this
Agreement shall prevail);
(Q) Intentionally Omitted;
22
(R) Confirmation that Borrower has assigned Lender all charters (in
accordance with Section 5.1(R) hereof) relating to the Vessel at the time of
Coversion and that the assignment has been confirmed by charterer;
(S) If applicable, debt subordination agreements properly executed and in
form and substance satisfactory to Lender;
(T) Confirmation that the Vessel meets all statutory and legal guidelines,
as defined and confirmed by Lender, for entry into applicable waters and
Borrower has secured all necessary permits required to operate the Vessel;
(U) Intentionally omitted;
(V) New Caterpillar(R) diesel propulsion engines together with new
Caterpillar(R) generator sets for auxiliary power have been purchased from a
seller approved by Lender and installed in the Vessel;
(W) The Vessel has been built to international standards acceptable to
Lender and has been certified under survey of the BV with a class rating
acceptable to Lender;
(X) Each of the conditions precedent set forth in the other Loan Documents
shall have been satisfied;
(Y) Since the date of the financial statements, attached hereto as EXHIBIT
E, there shall not have occurred any material adverse change in the business,
financial condition or results of operations of Borrower, or the existence or
value of any collateral, or any event, condition or state of facts which would
reasonably be expected to have a Material Adverse Effect;
(Z) No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
from any Person in respect of, the consummation of the transactions contemplated
hereby in which, in Lender's reasonable discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement or any of the other
Loan Documents;
(aa) Intentionally omitted;
(ab) certificate of no rebate from suppliers, government agencies, and
other parties deemed necessary by Lender;
(ac) The representations and warranties of Borrower set forth herein and
other Loan Documents are and shall remain true, correct and complete in all
material respects; and
(ad) Such other documents, certification, acknowledgments or opinions of
counsel or other experts respecting the Loan Documents, the Mortgage Documents
or any other related Documents as Lender shall reasonably request, including
certificates of ownership reflecting Borrower's 100% ownership of the Vessel and
the filing of the Mortgage Documents.
23
(ae) certifications of Borrower disclosing all rebates, commissions,
investments, etc. related to the Construction Contract
If Lender elects to make the Loan hereunder prior to the fulfillment of any of
the conditions precedent set forth in this Section, the making of such Loan
shall constitute only an extension of time for the fulfillment of such condition
and not a waiver thereof, and Borrower shall use its best efforts to fulfill
each such condition promptly.
SECTION 3.05. DOCUMENTATION OF THE VESSEL, DURABLE IRREVOCABLE POWER OF ATTORNEY
TO EXECUTE PREFERRED SHIP MORTGAGE AND OTHER SECURITY DOCUMENTS. Upon completion
of the Vessel, Borrower agrees that it will document the Vessel as a ▇▇▇▇▇▇▇▇
Islands vessel with the ▇▇▇▇▇▇▇▇ Islands registry of ships pursuant to the
provisions of applicable regulations. Borrower will execute the Preferred Ship
Mortgage, in the form of mortgage attached hereto, immediately upon applying to
document the Vessel, and shall submit such mortgage to the office of the Deputy
Commissioner of Maritime Affairs of the Republic of the ▇▇▇▇▇▇▇▇ Islands for
registration in conjunction with the application for documentation. In
conjunction with the execution of such mortgage and the documentation of the
Vessel, Borrower will obtain an official number for the Vessel, which shall be
included in the blank spaces for such information contained in the form mortgage
attached hereto. Borrower shall further execute such documents as may be
necessary in Lender's sole opinion to perfect or preserve the first priority
lien of Lender's interests in the Collateral. Borrower hereby appoints Lender as
its irrevocable mandate and agent, coupled with an interest for the duration of
this Agreement to execute such documents, including without limitation
documentation papers with the registry of ships and the preferred ship mortgage
on the Vessel, as may be necessary or advisable in Lender's sole discretion to
perfect or preserve Lender's first priority interests in the Collateral, but
only after an Event of Default under this Agreement. This power shall be deemed
coupled with an interest and shall be irrevocable while any sum or performance
remains due and owing under this Agreement or any of the Loan Documents.
SECTION 3.06. CONDITIONS TO PERMANENT LOAN. Lender's agreement to convert the
Construction Loan to a Permanent Loan is conditioned upon the successful funding
of the final Advance under the Construction Loan pursuant to SECTION 3.04 on or
before the Vessel Acceptance Date, and the continuing satisfaction of all
conditions set forth in SECTIONS 3.01 AND 3.04. On the Vessel Acceptance Date,
Lender agrees to convert the Construction Loan to a Permanent Loan, up to the
Permanent Loan Limit, upon Borrower's satisfaction of the following conditions:
(A) all conditions to the funding of the final Advance to the Construction
Loan have been satisfied; including, without limitation, the filing of a
Preferred Ship Mortgage with respect to the Vessel in conformance with the laws
of the ▇▇▇▇▇▇▇▇ Islands;
(B) Borrower shall deliver to Lender on the Conversion Date a Permanent
Note with respect to such Permanent Loan;
(C) there shall be no Default under this Agreement;
(D) Borrower shall have paid to Lender the difference, as of the Conversion
Date, between the balance of the Construction Loan and the Permanent Loan Limit,
should the Construction Loan exceed the Permanent Loan Limit; and
24
SECTION 4. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants the following to the Lender as of the
date hereof and for the entire term of this Agreement:
SECTION 4.1. CORPORATE EXISTENCE. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly licensed or qualified to transact
business in all jurisdictions where the character of the property owned or
leased or the nature of the business transacted by it makes such licensing or
qualification necessary.
SECTION 4.2. AUTHORIZATION OF BORROWING; NO CONFLICT AS TO APPLICABLE LAW OR
AGREEMENTS. The Borrower has the right and power and is duly authorized and
empowered to enter into, execute, deliver and perform all of its obligations
under this Agreement and each of the other Loan Documents to which it is a
party, to conduct its business as presently conducted and to own and operate its
Property. The execution, delivery and performance by the Borrower of this
Agreement and each of the other Loan Documents and the borrowing hereunder, have
been duly authorized by all necessary corporate action and shareholders'
approval and do not and will not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (except those set forth in EXHIBIT D, each
of which has been given or obtained and is in full force and effect on the date
hereof), (ii) violate any provision of any Applicable Law, rule or regulation or
of any order, writ, injunction or decree presently in effect having
applicability to the Borrower or of the charter or bylaws of the Borrower, (iii)
result in a breach of or constitute a default under any indenture or loan or
credit agreement (including, without limitation, any such agreements in effect
as of the date hereof between the Borrower and any Bank) or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
Property may be bound or affected (except for those with Persons who have
consented thereto), and (iv) result in, or require, the creation or imposition
of any Lien (other than Permitted Liens) upon or with respect to any of the
Properties now owned or hereafter acquired by the Borrower.
SECTION 4.3. LEGAL AGREEMENTS. This Agreement is, and each of the other Loan
Documents when delivered under this Agreement will be, a legal, valid and
binding obligation of the Borrower enforceable against it in accordance with
their respective terms. Each of the Loan Documents to which the Guarantors are a
party, when delivered will be a legal, valid and binding obligation of
Guarantors enforceable against him in accordance with its respective terms.
SECTION 4.4. FINANCIAL CONDITION. The Borrower and Guarantors have heretofore
furnished the following financial statements to Lender: The annual audited
consolidated financial statements of the Borrower as of the close of the Fiscal
Years set forth on EXHIBIT E. Such financial statements present fairly in all
material respects the financial condition of the Borrower on the dates thereof
and the results of its operations for the periods then ended, and were prepared
in accordance with GAAP. There are no liabilities of the Borrower or any
Subsidiary of Borrower, or Guarantor, fixed or contingent, which are material
and are not reflected in the financial statements or the notes thereto, other
than liabilities arising in the ordinary course of business since the date of
the last financial statement referred to hereinabove.
25
SECTION 4.5. ACCURACY OF INFORMATION. The financial statements referred to in
SECTION 4.4 do not, nor does any other written statement furnished by the
Borrower or any Guarantor in connection with this Agreement, contain any untrue
statement of a material fact or omit a material fact necessary to make the
statements contained herein or therein not misleading. All information supplied
to Lender by or on behalf of the Borrower with respect to the assets or any
other Property of the Borrower, any Guarantor or any Subsidiary of Borrower
(whether prior to the date of this Agreement, as part of this Agreement, or
after the date of this Agreement) is and shall be true and correct in all
material respects.
SECTION 4.6. ADVERSE CHANGE. Except as otherwise disclosed to Lender in writing
in connection with this Agreement, there has been no change in the business,
assets, liabilities, business prospects, Property or condition (financial or
otherwise) of the Borrower which would have a Material Adverse Effect on the
business, Property or financial condition of the Borrower since the date of the
latest financial statement referred to in SECTION 4.4.
SECTION 4.7. ADVERSE FACT. Other than general economic conditions, no fact is
known to the Borrower, as of the date hereof, which has had or can reasonably be
expected in the future to have a Material Adverse Effect which has not been
previously disclosed to Lender by the Borrower in writing.
SECTION 4.8. SOLVENT FINANCIAL CONDITION. The Borrower is now, and after giving
effect to the Loan to be made under this Agreement will be at all times,
Solvent.
SECTION 4.9. OPERATION OF BUSINESS. The Borrower and each Subsidiary and
Affiliate of the Borrower possesses all licenses, permits, franchises, patents,
copyrights, trademarks, and trade names, or rights thereto, free from unduly
burdensome restrictions and adequate for the conduct in all material respects of
their respective businesses substantially as now conducted and as presently
proposed to be conducted, and the Borrower and each Subsidiary is not in
violation of any valid rights of others with respect to any of the foregoing.
During the five (5) year period immediately preceding the date of this
Agreement, Borrower has had no office or place of business located in any state
or county other than as set forth in EXHIBIT F.
SECTION 4.10. TITLE TO PROPERTY The Borrower has good, valid and marketable
title to all its material Property and assets, both real and personal (except
for such material property as has been sold or otherwise disposed of in the
ordinary course of business since the date hereof).
SECTION 4.11. ABSENCE OF LIENS OTHER THAN PERMITTED LIENS The Collateral will
not be subject to any Lien or the terms of any security agreement during the
term hereof, other than the Permitted Liens.
SECTION 4.12. SUBSIDIARIES, AFFILIATES, AND OWNERSHIP OF STOCK Set forth in
EXHIBIT G hereto is a complete and accurate list of the Subsidiaries and
Affiliates of the Borrower, showing (i) the correct name of each of the
Subsidiaries and Affiliates of the Borrower, the jurisdiction of incorporation
and the percentage of its voting stock owned by the Borrower; (ii) the name of
each of the Borrower's corporate or joint venture Affiliates and the nature of
the affiliation; (iii) the number, nature and holder of all outstanding
26
securities of the Borrower and each Subsidiary and Affiliate of the Borrower;
and (iv) the number of authorized, issued and treasury shares of the Borrower
and each Subsidiary and Affiliate of the Borrower. All of the outstanding
capital stock of each Subsidiary and Affiliate has been validly issued, is fully
paid and nonassessable. The Borrower has good title to all of the shares it
purports to own of the stock of each Subsidiary, free and clear in each case of
any Lien other than Permitted Liens.
SECTION 4.13. STAMP, DUTY, DOCUMENTARY AND WITHHOLDING TAXES. No stamp, duty or
documentary taxes or charges imposed by the government of the ▇▇▇▇▇▇▇▇ Islands
or any taxing authority thereof or therein are payable on or in connection with
the Agreement, the Construction Note or Permanent Note, the Loan Documents or
any related documents. Borrower has paid or shall pay when due all applicable
deductions or withholdings for or on account of any Taxes, levies, duties, fees,
deductions or withholding, restrictions or conditions of any nature imposed by
or on behalf of the ▇▇▇▇▇▇▇▇ Islands or any taxing authority whatsoever on the
payments by Borrower to Lender of the Loan hereunder.
SECTION 4.14. CORPORATE NAMES. During the preceding five (5) years, Borrower has
not been known as or used any corporate, fictitious or trade names except as
disclosed on EXHIBIT M hereto. Except as set forth on EXHIBIT M, Borrower has
not, during the preceding five (5) years, been the surviving corporation of a
merger or consolidation or acquired all or substantially all of the assets of
any Person.
SECTION 4.15. BUSINESS LOCATIONS. The principal place of business and main
executive office of the Borrower and other current business locations (including
leased locations) are set forth on EXHIBIT F hereto.
SECTION 4.16. DEBT Set forth in EXHIBIT H hereto is a complete, accurate and
correct list of all credit agreements, indentures, purchase agreements,
guarantees, surety agreements, capitalized leases, and other investments,
agreements, and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing) in respect of which the Borrower,
Guarantors or any Subsidiary is in any manner directly or contingently obligated
for an amount greater than One Million United States Dollars ($1,000,000.00).
The maximum principal or face amounts of the credit in question which are
outstanding and which can be outstanding are correctly stated, and all
mortgages, deeds of trust, pledges, Liens, security interests, or other charges
or encumbrances of any nature given or agreed to be given as security therefor
are correctly described or indicated in such exhibit.
SECTION 4.17. COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS; GOVERNMENTAL
CONSENTS. The Borrower, in the conduct of all of its business affairs, has
complied in all material respects with the requirements of all Applicable Laws
and regulations noncompliance with which would have a Material Adverse Effect.
Except as set forth in EXHIBIT D, there have been no citations, notices or
orders of noncompliance (that have not been complied with or withdrawn), issued
to the Borrower under any Applicable Law which would have a Material Adverse
Effect.
Except as set forth in EXHIBIT D, the Borrower has, and is in good
standing with respect to, all governmental consents, approvals, authorizations,
permits, certificates, inspections, and franchises necessary to continue and to
conduct in all material respects its business as heretofore conducted (or
proposed to be conducted) by it and to own or lease and operate in all material
respects its Properties as now owned or leased by it.
27
SECTION 4.18. TAXES. The Borrower, each Guarantor and such Subsidiaries of each,
as applicable, have filed all federal, state and local tax returns and other
reports it is required by law to file and has paid, or made provision for the
payment of, all taxes, assessments, fees and other governmental charges that are
reflected on such returns except and to the extent only that such taxes,
assessments, fees and charges are being actively contested in good faith and by
appropriate proceedings and the Borrower, each Guarantor or Subsidiary has
established adequate reserves on its books therefor. The provision for taxes on
the books of the Borrower, each Guarantor and each of such entities'
Subsidiaries are, insofar as known to the Borrower, adequate for all years not
closed by applicable statutes and for its current fiscal year. Except as
disclosed in the financial statements furnished to Lender in accordance with
SECTION 4.4, the Borrower knows of no proposed material tax assessment against
it or any Guarantor or any of Borrower's or such Guarantor's Subsidiaries and no
extension of time for the assessment of federal, state or local taxes of any
Guarantor or any of such Guarantor's Subsidiaries is in effect or has been
required.
SECTION 4.19. LITIGATION. Except as set forth in EXHIBIT I, there are no
actions, suits or proceedings pending or, to the knowledge of the Borrower,
threatened against or affecting any Guarantor, Borrower or any Subsidiary of
either of them, or the Property of any Guarantor, Borrower or any Subsidiary of
Borrower, before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which, if determined
adversely to such Guarantor, Borrower or any such Subsidiary of either (as the
case may be), would have a Material Adverse Effect.
SECTION 4.20. NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The Borrower has
satisfied all judgments, and is not in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board,
bureau, agency, or instrumentality, domestic or foreign, unless the failure to
cure such default would not have a Material Adverse Effect.
SECTION 4.21. LABOR DISPUTES; ACTS OF GOD. Except as set forth in EXHIBIT J,
neither Borrower, any Guarantor, nor any of their respective Subsidiaries is a
party to any collective bargaining agreement and there are no material
grievances, disputes or controversies with any union or any other organization
of Borrower's or any Guarantor's employees, or threats of strikes, work
stoppages or any asserted pending demands for collective bargaining by any union
or organization. Neither the business nor the Property of Borrower, any
Guarantor or any of their respective Subsidiaries are affected by any fire,
explosion, accident, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy, or other casualty (whether or not covered by insurance) which
would have a Material Adverse Effect.
SECTION 4.22. SURETY OBLIGATIONS. Except as set forth in EXHIBIT H, the Borrower
is not obligated as surety or indemnitor under any surety or similar bond or
other contract and has not issued or entered into any agreement to assure
payment, performance or completion of performance of any undertaking or
obligation of any other Person.
SECTION 4.23. OTHER AGREEMENTS. Neither Borrower, nor Guarantors, nor any
Subsidiary of Borrower is a party to any indenture, loan, or credit agreement,
or to any lease or other agreement or instrument, or subject to any charter or
corporate restriction which could reasonably be expected to have a Material
28
Adverse Effect. Guarantors, Borrower and each Subsidiary of Borrower is not in
default in any material respect of any term of its charter or bylaws or in the
performance, observance, or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument material to its business to
which it is a party. No event has occurred and no condition exists which, upon
consummation of the transactions contemplated by this Agreement, would
constitute a default under the Construction Note or Permanent Note or other
evidence of indebtedness of Borrower or a Default or an Event of Default.
SECTION 4.24. NO EXCHANGE APPROVALS. There are no exchange approvals required
for the execution of the Agreement, the Construction Note or Permanent Note, or
the Loan Documents and the Borrower will be permitted to purchase sufficient
freely transferable United States Dollars for the payment of all amounts due
under such agreements and documents if applicable.
SECTION 4.25. CIVIL ACTS; NO IMMUNITY. Borrower is subject to civil and
commercial law with respect to its obligations under this Agreement. Guarantors
are subject to civil and commercial law with respect to their obligations under
the Guaranties to which they are a party. Each of the execution, delivery and
performance of this Agreement by Borrower and the execution, delivery and
performance of the Guaranties by Guarantors constitutes a commercial act as
opposed to a governmental act. Neither Borrower nor Guarantors (nor the Property
of each) enjoy, in the courts or under the laws of the ▇▇▇▇▇▇▇▇ Islands any
right of immunity from suit, setoff or attachment or execution on a judgment in
respect of the obligations of Borrower or Guarantors under this Agreement or any
other Loan Document.
SECTION 4.26. NO PRESENCE OR REGISTRATION REQUIRED OF LENDER. The Lender will
not be deemed to be a resident of the ▇▇▇▇▇▇▇▇ Islands as a result of the Loan
made to the Borrower hereunder, and the Lender will not be required to be
licensed or in any way qualified to do business in the ▇▇▇▇▇▇▇▇ Islands in order
to enforce its rights under the Agreement or any Loan Document.
SECTION 4.27. LEGAL EFFECT. Except for registration of the Preferred Ship
Mortgage at the Office of the Deputy Commissioner of Maritime Affairs of the
Republic of the ▇▇▇▇▇▇▇▇ Islands, to ensure the validity of the obligations of
the Borrower and the admissibility in evidence of the Loan Documents it is not
necessary that any of the Loan Documents be filed or recorded with any court or
any other authority in the ▇▇▇▇▇▇▇▇ Islands.
SECTION 4.28. PLANS AND SPECIFICATIONS. The Plans and Specifications for the
Vessel are accurate and complete. The Vessel will be completed in accordance
with the Plans and Specifications (subject to Permitted Changes).
SECTION 4.29. OWNERSHIP OF VESSEL AND MATERIALS. Under the Construction
Contract, Borrower shall be the immediate owner of the Vessel and the
improvements for such Vessel as and when constructed and paid for, and title to
work comprising such Vessel and Improvements shall immediately vest in Borrower
as and when constructed, and paid for , without any further act by Builder, to
the fullest extent permitted under applicable law. Similarly, title to all
Materials shall vest in Borrower immediately upon their delivery to Builder's
shipyard to the extent paid for by Borrower, without any further act of Builder,
to the fullest extent permitted under applicable law.
29
SECTION 5. COVENANTS AND CONTINUING AGREEMENTS
SECTION 5.1. AFFIRMATIVE COVENANTS. The Borrower covenants that from the date
hereof so long as this Agreement shall be in effect or the Loan shall be
outstanding or any amounts owed by the Borrower to the Lender shall remain
unpaid and unless otherwise consented to by Lender in writing, with such consent
not to be unreasonably withheld or delayed:
(A) FINANCIAL STATEMENTS; OTHER INFORMATION. The Borrower and Guarantors
will deliver to Lender:
(i) As soon as available but not later than ninety (90) days
after the end of each fiscal year of the Seabulk
International, Inc., complete copies of the consolidated
financial reports of Seabulk International, Inc. and its
Subsidiaries, all in reasonable detail, which shall include
at least the consolidated balance sheet of Seabulk
International, Inc. 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 independent chartered
accountants of international standing;
(ii) As soon as available but no later than ninety (90) days
after the end of each fiscal year of the Seabulk
International, Inc., complete copies of the consolidated
financial reports of the Seabulk International, Inc. and its
Subsidiaries, all in reasonable detail, which shall include
at least the consolidated balance sheet of Seabulk
International, Inc. and its Subsidiaries, excluding the
Lightship Tanker Entities, 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 unaudited,
but certified to be true and complete by the chief financial
officer of Seabulk International, Inc.;
(iii) 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 Seabulk International, Inc., a quarterly
interim consolidated balance sheet of the Seabulk
International, Inc. and its Subsidiaries and the related
consolidated profit and loss statements and sources and use
of funds, all in reasonable detail, unaudited by certified
to be true and complete by the chief financial officer of
the Seabulk International, Inc.;
(iv) 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
Seabulk International, Inc. shall have filled with the SEC
or any similar governmental authority; and
(v) Promptly upon the mailing thereof to the shareholders of the
Seabulk International, Inc., copies of all financial
statements, reports, proxy statements, notices or other
communications transmitted to all of the Seabulk
International, Inc.'s shareholders;
(vi) At such time as the financial statements described in
Section 5.1 (A) are delivered, a certificate of Seabulk
International Inc.'s Chief Financial Officer (1) certifying
30
Seabulk International Inc.'s compliance with each of its
covenants contained herein and showing the calculations
thereof in reasonable detail and (2) stating that the
financial statements delivered in accordance with Section
5.1(A) are complete and correct in all material respects and
present fairly the financial condition and results of
operations of the Seabulk International Inc. and its
Subsidiaries as of the dates and for the periods indicated,
in accordance with generally accepted accounting principles
consistently applied (subject as to interim statements to
normal year-end adjustments); and
(vii) Any other information regarding Seabulk International, Inc.
that is material to the Loan Documents or as Lender may
reasonably request.
(viii) NOTICE OF LITIGATION. Immediately after the commencement
thereof, notice in writing of all litigation and of all
administrative proceedings before any state or federal court
or any governmental or regulatory agency, bureau or
commission affecting the Borrower or any Subsidiary or any
of its Properties or the Property of any Subsidiary, whether
or not the claim is considered by the Borrower to be covered
by insurance, which may have a Material Adverse Effect or
which seek a monetary recovery against the Borrower in
excess of Two Hundred Fifty Thousand United States Dollars
($250,000.00), along with, if requested in writing by
Lender, an opinion of the Borrower's counsel regarding the
circumstances underlying and merit of such litigation or
proceedings;
(ix) STATEMENTS OR REPORTS TO OTHER PARTIES. Promptly after the
furnishing thereof, copies of any material statements or
reports furnished to any other party (including, but not
limited to, any reports prepared pursuant to the terms of
any credit agreement or any indenture, loan, credit or
similar agreement and not otherwise required to be furnished
to Lender pursuant to any other paragraph of this SECTION
5.1(A).
(x) NOTICE OF CHANGE IN OWNERSHIP. Promptly upon the occurrence
thereof, a written notice of the retirement of any Principal
of the Borrower or a change in ownership of any Subsidiary.
For the purposes of this Section, the term "Principal" shall
mean an individual who: owns the entire interest in an
unincorporated trade or business; in the case of a
partnership, is a general or limited partner who owns,
directly or indirectly, ten percent (10%) or more of either
the capital interest or the profits interest in such
partnership; or, in the case of a corporation, owns,
directly or indirectly, ten percent (10%) or more of the
fair market value of the stock of that corporation, whether
voting or non-voting, common or preferred.
(xi) NOTICE OF CLAIMED DEFAULT UNDER OTHER AGREEMENTS. Promptly
after learning of any material default by Borrower under any
note, indenture, loan agreement, mortgage, lease, deed,
guaranty or other similar agreement relating to any
Indebtedness of the Borrower with an outstanding principal
balance in excess of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Dollars ($100,000.00), a written notice specifying the
notice given or action taken by the holder of such
Indebtedness, as the case may be, and the nature of the
claimed default and what action the Borrower is taking or
proposes to take with respect thereto;
31
(xii) STATEMENTS OR REPORTS TO OTHER PARTIES. Promptly after the
furnishing thereof, copies of any material statements or
reports furnished to any other lender or governmental
authority, in the ▇▇▇▇▇▇▇▇ Islands or elsewhere (including,
but not limited to, any reports prepared pursuant to the
terms of any credit agreement or indenture, loan, credit or
similar agreement and not otherwise required to be furnished
to Lender pursuant to any other paragraph of this SECTION
5.1(A).
(xiii) NOTICE OF REGULATORY ACTION. Immediately upon becoming aware
of any action or proceeding instituted by any federal, state
or other regulatory agency which might materially and
adversely affect the ability of the Borrower to perform its
obligations under this Agreement or otherwise with respect
to the Loan, a written notice describing such action or
proceeding and the status thereof.
(xiv) NOTICE OF LABOR DISPUTE. Promptly after Borrower's learning
of any labor dispute to which the Borrower may become a
party, any strikes or walkouts relating to any of its plants
or their facilities, or the expiration of any labor contract
to which it is a party or by which it is bound, a written
notice describing such strike, walkout or condition and the
status thereof.
(xv) REQUESTED INFORMATION. From time to time and promptly upon
the request of Lender, such data, certificates, reports,
statements, opinions of counsel and other experts, documents
or further information or assurances bearing upon or related
to this Agreement, or the business, assets, liabilities,
financial condition, results of operations, or business
prospects of the Borrower as Lender may reasonably request
(including, without limitation, federal income tax returns
of the Borrower, accounts payable ledgers, and bank
statements), in each case in form and substance, and
certified in a manner, satisfactory to Lender.
(xvi) ANNUAL STATEMENTS OF BORROWER. The internal year end
financial statements of the Borrower within one hundred
eighty (180) days of each year end. The statements shall be
prepared in a manner that reflects all relevant facts in
reasonable detail to evidence, and the computation as to,
whether the Borrower is in compliance with the requirements
set forth in this Agreement.
(B) COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS; PAYMENT OF TAXES AND
CLAIMS. The Borrower shall comply and cause each Subsidiary to comply with all
Applicable Laws, rules, regulations and orders including, without limitation,
all laws, statutes, regulations and ordinances regarding the collection, payment
and deposit of employees' income, unemployment, social security, sales and
excise taxes, other Taxes, which failure to comply with might have a Material
Adverse Effect, and shall also comply with, perform and observe and cause each
Subsidiary to comply with, perform and observe, all material covenants,
provisions and conditions in connection with all other loan or credit agreements
to which it or any such Subsidiary is a party. The Borrower shall timely file,
and cause each Subsidiary to file, all federal, state and local tax returns or
extensions and other reports the Borrower or such Subsidiary is required by law
32
to file, and maintain, and cause each Subsidiary to maintain, adequate reserves
for the payment of all taxes, assessments, governmental charges, and levies
imposed upon it, its income, or its profits, or upon any Property belonging to
it. The Borrower shall pay and discharge, and cause each Subsidiary to pay and
discharge, all taxes, assessments and governmental charges upon it, its income
and Properties as and when such taxes, assessments and charges are due and
payable, except and to the extent only that such taxes, assessments and charges
are being actively contested in good faith and by appropriate proceedings, the
Borrower promptly notifies Lender in writing of such contest, the Borrower (or
such Subsidiary) maintains adequate reserves on its books therefor and the
nonpayment of such taxes, assessments and charges does not result in a Lien upon
any Properties of the Borrower (or such Subsidiary) other than a Permitted Lien.
The Borrower shall also pay and discharge any lawful claims which, if unpaid,
might become a Lien against any of the Borrower's Properties except for
Permitted Liens.
(C) INSURANCE. Borrower shall obtain and maintain insurance at its expense
on the Vessel in accordance with the terms of this Agreement and the Mortgage
Documents. As to other business properties owned by Borrower and its
Subsidiaries, Borrower and each Subsidiary of Borrower shall obtain and maintain
insurance, with insurers believed by Borrower and each such Subsidiary to be
responsible and reputable and reasonably acceptable to Lender, in such amounts
and against such risks in which Borrower and each Subsidiary operates or as may
be required by any Applicable Laws, orders ore regulations or as may reasonably
be requested by Lender. Upon the written request of Lender, Borrower and each
Subsidiary shall promptly, and in all events within ten (10) days of the date on
which Borrower receives such request, provide Lender with evidence of the
insurance coverage required under this Section. Additionally, Borrower and each
Subsidiary of Borrower shall provide not less than thirty(30) days (fifteen (15)
for P&I) advance written notification to Lender in the event of cancellation or
material change in the terms of such coverage.
During the term of the Construction Loan, Borrower shall cause the Builder
to maintain at Builder's expense, the following insurance in forms and amounts
acceptable to Lender:
(i) Broad form Builder's Risk Insurance, listing Lender and
Borrower as additional assureds, and property damage
insurance with respect to all Materials and Vessel Equipment
delivered to Builder's yard, naming Lender and Borrower as
co-loss payees for all physical damage insurance, containing
a union or standard mortgage clause in such amounts and with
such deductibles as may be required by Lender.
Borrower must also purchase pre-delivery P&I insurance
(covering crew risks only) on forms and in amounts
acceptable to Lender, naming Lender as loss payee.
Insurance requirements during the term of the Permanent Loan
shall be as follows:
(ii) Marine hull and machinery insurance in an amount equal to
120% of the original Loan amount (including without
limitation, navigation and port risk) under the most current
form acceptable to Lender as determined at the time of the
issuance of the policies in question issuing against the
usual risks covered by such forms. The hull and machinery
33
policy must be written on an Insured/Agreed Value basis.
Lender shall be named as an additional assured on this
policy as well as loss payee.
(iii) Protection and Indemnity Insurance and Pollution insurance
shall be obtained for the Vessel through enrollment in one
of the International Group P&I Clubs. The Vessel shall be
insured on a full mutual rules basis for "protection and
indemnity" in an International Group P&I club on terms not
less wide than the cover provided under the current rules of
the West of England. In addition, Lender's interest in the
Vessel shall be noted by any Protection and Indemnity Club
in which such Vessels are enrolled.
(iv) Mortgagee's interest insurance coverage in an amount not
less than 120% of the original Loan amount in favor of
Lender,
(v) To the extent not covered by the coverage obtained in
accordance with subclause (i) above, marine general
liability insurance, covering all operations of Borrower
with respect to the Vessel in all areas in which it is
operated. Such insurance shall contain no exclusion,
restriction or limitation relating to explosion, collapse
and underground property damage hazards, and shall contain a
deletion of any watercraft exclusion. Such insurance shall
contain marine products hazard coverage, completed
operations hazard coverage, and if required by Lender,
contractual liability insurance specifically covering the
liabilities assumed under the Security Documents. Such
insurance shall name Lender as additional assured and loss
payee.
(vi) If applicable, such worker's compensation, employer's
liability or other similar or related insurance coverage
relating to Borrower's employees as may be required by the
laws of the jurisdiction(s) in which Borrower conducts
operations, or as may be reasonably required by Lender.
(vii) War risk coverage as deemed necessary by Lender and naming
Lender as additional assured and loss payee.
(viii) Any additional insurance as deemed necessary by Lender,
consistent with what a prudent owner of a similar vessel
would maintain.
All insurance required under this Section 5.1(C) shall be taken out in the name
of Borrower and in the name of Lender as assured, if Lender shall so request at
any time. If applicable, Lender shall also be named loss payee under all such
policies. Disposition of the proceeds of insurance shall be subject to the
provisions of the Security Documents. All policies for such insurance so taken
out shall, unless otherwise consented to by Lender, provide that (A) there shall
be no recourse against Lender for the payment of premiums or commissions, (B) if
such policies provide for the payment of club calls, assessments or advances,
there shall be no recourse against Lender for the payment thereof and (C) at
least thirty (30) days (fifteen (15) days for P&I) prior written notice of any
cancellation or modification of any element of insurance coverage provided for
herein shall be given to Lender by the insurance underwriters. All policies of
insurance required hereunder shall contain a waiver of subrogation with respect
34
to Lender and its assigns and shall contain deductible limits acceptable to
Lender. All such policies shall provide that they are primary insurance with
respect to any insurance carried by Lender or its assigns, and that any "Other
Insurance Clause" contained in Borrower's insurance shall be inoperative as to
Lender and its assigns. In addition, any policy shall not contain any provision
under which Borrower is a co-insurer. Borrower shall not, without the prior
written consent of Lender, do any act, or voluntarily suffer or permit any act
to be done, whereby any insurance required by this Section 5.1(C) shall or may
be suspended, impaired or defeated, or suffer or permit the Vessel to engage in
any voyage or to carry any cargo not permitted under the policies of insurance
then in effect without procuring insurance satisfactory to Lender covering the
Vessel in all respects for such voyage or the carriage of such cargo.
Underwriters on all insurance's must be acceptable to Lender and must maintain a
Best Rating (or equivalent) of B+, 10 or better. Borrower shall deliver to
Lender certificates of insurance and a broker's confirmation letter from a firm
of marine insurance brokers acceptable to Lender confirming that the insurance
maintained by Borrower complies in all respects with the applicable requirements
of this Section Section 5.1(C).
(D) PRESERVATION OF CORPORATE EXISTENCE. The Borrower and each Subsidiary
shall preserve and maintain its corporate existence and obtain and keep in force
any and all rights, privileges, licenses, permits, patents, franchises, or other
governmental authorizations necessary to the ownership of its Properties or to
the conduct of its business; provided, however, that the Borrower or any
Subsidiary shall not be required to preserve any such rights, privileges,
licenses, permits, patents, and franchises or, in the case of any Subsidiary,
its corporate existence, if (i) its Board of Directors shall determine that the
preservation thereof is no longer desirable or necessary in the conduct of the
current business of the Borrower or such Subsidiary and (ii) the loss thereof is
not disadvantageous in any material respect to the Lender or any subsequent
holder of any Loan and would not have a Material Adverse Effect.
(E) INSPECTION. At any reasonable time or normally when necessary, upon one
week's prior notice to the Borrower, the Lender or any agents or representatives
thereof (at its own expense) shall be allowed to examine and make and prepare
copies of and abstracts from the records and books of account of, and visit and
inspect the Property of, the Borrower and each Subsidiary and to discuss the
affairs, finances and accounts of the Borrower with any officer of the Borrower.
PROVIDED HOWEVER, Borrower agrees that any failure by Lender to provide such
prior notice shall not be an event of default by Lender.
(F) MAINTENANCE OF PROPERTY, ETC. The Borrower and each Subsidiary shall
maintain and preserve all of its Property necessary in the proper conduct of its
current business in good working order and condition, ordinary wear and tear
excepted.
(G) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. The Borrower shall keep
and cause each Subsidiary to keep accurate records and books of account, in
accordance with GAAP consistently applied reflecting all its financial
transactions.
(H) MAINTENANCE OF THE VESSEL. Borrower, at its sole expense, will be
required to maintain the Vessel in good operating order, repair, and condition,
and in particular will be required to maintain it's Caterpillar(R) manufactured
equipment according to published guidelines from Caterpillar, concerning
specifically engines in this type of application. For the purposes of this
section, "maintenance" shall include, but not be limited to, fuel and oil
35
analysis, cooling system maintenance, minor and major overhauls, and care of
auxiliary equipment which may affect the operation or function of the main
propulsion engines.
(I) MINIMUM ADJUSTED EBITDA TO ADJUSTED INTEREST EXPENSE. Seabulk
International, Inc. shall maintain a ratio determined as of the last day of each
of Seabulk International Inc.'s fiscal quarters commencing June 30, 2004 of
adjusted EBITDA to Adjusted Interest Expense as follows:
(i) Through the fiscal quarter ending December 31, 2004, not
less than 2.75 to 1.00;
(ii) Through the fiscal quarter ending December 31, 2005, not
less than 3.00 to 1.00; and
(iii) Thereafter , not less than 3.25 to 1.0
(J) MINIMUM ADJUSTED TANGIBLE NET WORTH. Seabulk International, Inc. must
maintain an Adjusted Tangible Net Worth of not less than ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars ($100,000,000.00) plus fifty percent (50%) of Seabulk's
cumulative positive annual net income (on a consolidated basis) for each fiscal
quarter from March 31, 2004 onwards, plus seventy-five percent (75%) of the net
proceeds received by Seabulk International, Inc. (or any of its subsidiaries)
from the issuance of Equity Interests issued after the Effective Date.
(K) MAXIMUM ADJUSTED FUNDED DEBT RATIO. Seabulk International, Inc. must
maintain an Adjusted Funded Debt Ration determined as of the last day of each of
the Borrower's quarters commencing June 30, 2004 as follows:
(i) not more than 4.5 to 1.00
(L) DISCHARGE OF INDEBTEDNESS. The Borrower and each Subsidiary of the
Borrower shall promptly pay and discharge any and all Indebtedness and lawful
claims which, if unpaid, might become a Lien or charge upon the Collateral,
except such as may be contested or disputed in good faith or for which
arrangements for deferred payment have been made, provided appropriate reserves
are maintained, to the satisfaction of the Lender, for the eventual payment
thereof.
(M) APPLICATION OF PROCEEDS OF THE LOAN. The Borrower shall use the
proceeds of the Loan solely for the purposes of acquisition of the Vessel and
work actually done for the Vessel, in accordance with the terms of the
Construction Contract.
(N) UNINSURED LOSS. Borrower shall give Lender written notice of any
uninsured loss suffered by the Borrower or any Subsidiary through fire, theft,
judgment, liability or property damage in excess of Two Hundred Fifty Thousand
United States Dollars ($250,000.00) as it relates to the Collateral.
(O) FURTHER ASSURANCES. At Lender's request, promptly execute or cause to
be executed and deliver to Lender any and all documents, instruments and
agreements prepared at Lender's expense and reasonably deemed necessary by
Lender to give effect to or carry out the terms or intent of this Agreement or
any of the other Loan Documents.
36
(P) COMMUNICATIONS TO AND WITH LENDER. The Borrower shall permit Lender to
communicate directly with, and to receive communications directly from, any of
the following Persons concerning Borrower, its business, and the Loan (and
Lender is irrevocably authorized to communicate with and receive communications
from each such Persons): (i) any service bureau, warehousing service, freight
forwarder, trade creditor, consignee, bailee, customer or landlord; (ii) any
Person employed by Borrower; and (iii) Borrower's present and future independent
public accountants; each of which Persons is authorized by Borrower to
communicate with Lender and to disclose to Lender any and all matters relating
to Borrower, its financial condition and prospects.
(Q) SUBORDINATION OF INTERCOMPANY DEBT. Borrower shall cause all debt of
Borrower to Guarantors and Subsidiaries, Affiliates or related companies and/or
officers, directors, shareholders and all spouses of such, to be subordinate to
and the payment thereof postponed until the Loan and all obligations in
connection therewith are paid in full to Lender as set forth in the Debt
Subordination Agreement.
(R) ASSIGNMENT OF CHARTERS. Borrower agrees to assign to Lender all
charters of the Vessel that are twelve (12) (inclusive of all renewal periods)
or more months in duration during the term of the Loan. Borrower shall cause any
such charterer to execute a subordination in favor of Lender with respect to any
rights such charterer may have in or to the Vessel. Borrower shall execute an
assignment of charter agreement in form and substance satisfactory to Lender
with respect to the foregoing.
(S) CROSS-COLLATERAL AND CROSS-DEFAULT. Borrower agrees that the Collateral
in which Lender has or shall have a security interest shall secure the payment
and performance of all of Borrower's liabilities and obligations to Lender of
every kind and character, whether joint or several, direct or indirect, absolute
or contingent, due or to become due hereunder or under any other loan document
between Borrower and Lender. Borrower agrees that Lender's security interest in
the Collateral shall not be terminated in whole or in part until and unless all
indebtedness of every kind, due or to become due, owed by Borrower to Lender is
paid in full, notwithstanding the fact that one or more of such obligations may
become fully paid. This provision is intended to create cross-default and
cross-security between and among any existing obligations and any new
obligations and, as such, a default under any existing loan document or new loan
document shall be deemed to be a default under the other existing loan documents
and new loan documents. Borrower shall execute and deliver to Lender such
documents as Lender shall require in order to effectuate and perfect the
aforesaid cross-collateral and cross-default Loan requirements.
SECTION 5.2. CHANGES TO PLANS AND SPECIFICATIONS. Borrower will not make or
permit to be made any modification of the Construction Contract for the Project
or the Plans and Specifications, other than changes in the Plans and
Specifications constituting Permitted Changes.
SECTION 5.3. CONSTRUCTION REMEDIES. Following the date on which Lender makes an
initial Advance under the Construction Loan, should any one or more Events of
Default occur or exist under this Agreement, including without limitation, a
default by any person under any construction, architectural or engineering
contract or agreement relating to the construction of the Vessel that is the
subject of such loan, or should construction on the Project cease or terminate
37
for in excess of ten (10) days or should when any event occurs that Lender
determines may endanger completion of the Project pertaining to such loan or the
fulfillment of any condition or covenant in this Agreement, Lender may require
Borrower to furnish, within ten (10) days after delivery of a written request,
adequate security to eliminate, reduce, or indemnify Lender against, such danger
or default.
In such event, Lender shall have the further right to (A) cancel, terminate,
renegotiate, amend, modify, compromise, or settle and/or adjudicate any existing
construction, architectural or engineering contracts or agreements in connection
therewith; (B) engage the services of additional or substitute shipbuilders,
contractors, subcontractors, architects or engineers of Lender's selection; and
(C) perform such other actions as Lender may deem to be necessary and proper to
protect the security interest and rights of Lender with regard to the Vessel as
provided herein. To the further extent permitted under applicable law, Borrower
agrees and consents to all such actions on the part of Lender following any
Event of Default hereunder, with Borrower further releasing Lender, its
officers, directors, employees from any and all liability to Borrower, as well
as to Borrower's officers, directors and shareholders, in connection therewith.
Borrower further agrees not to interfere with the exercise of such rights and
remedies, and to provide Lender with such assistance, documentation and
information as Lender may request.
In addition, upon such occurrence, Lender may, in its sole discretion, advance
additional funds or agree to undertake to advance additional funds to any party
to complete the Project or to eliminate, reduce, or indemnify Lender against,
such danger. Lender shall have no obligation make any such Advance. All sums
paid by Lender pursuant to such agreements or undertakings shall be for
Borrower's account and shall be without prejudice to Borrower's rights, if any,
to receive such funds from the party to whom paid. All sums expended by Lender
in the exercise of its option to complete the Project or protect Lender's
interests shall be payable to Lender on demand together with interest from the
date of the advance at the rate or rates applicable to amounts due under the
Construction Note. The lending limits established herein are for Lender's
protection only, and nothing herein shall be deemed to limit Lender's rights to
make any Advances as provided in this Agreement above any loan limit established
herein, in such amounts as Lender may elect in its sole discretion. In addition,
any Advance of funds under this Agreement, including without limitation direct
disbursements to any builder or other parties in payment of sums due under the
Construction Contract and the Caterpillar dealer engine supply, shall be deemed
to have been expended by or on behalf of Borrower and to have been secured by
the Collateral.
SECTION 5.4. PROJECTED COST OVERRUNS. If Lender at any time determines in its
sole judgment and determination that the Unfunded Balance under a Construction
Loan is insufficient, or will be insufficient, to complete fully and to pay for
the Project relating to such Construction Loan, then within ten (10) days after
receipt of a written request and supporting documentation from Lender, Borrower
shall deposit with Lender an amount equal to the deficiency as determined by
Lender. The judgment and determination of Lender under this section shall be
final and conclusive. As used in this paragraph, "UNFUNDED BALANCE" means, in
the case of each Construction Loan, on the date of determination, the difference
between (a) the Construction Loan Limit for such loan and (b) the balance of
that Construction Loan.
SECTION 5.5. LENDER APPROVALS. The making of any Advance by Lender shall not
constitute or be interpreted as (a) an approval or acceptance by Lender of the
38
work done with respect to the Project that is the subject of the Advance through
the date of the Advance, (b) a certification that any Milestone has been
achieved, or (c) a representation or indemnity by Lender to any party against
any deficiency or defect in the work or against any breach of any contract.
Inspections and approvals of Plans and Specifications, any Vessel, the
workmanship and materials used in completion of a Project, the certificates and
other evidence adduced to prove the achievement of any condition to funding, and
the exercise of any other right of inspection, approval, or inquiry granted to
Lender in this Agreement are acknowledged to be solely for the protection of
Lender's security interests, and under no circumstances shall they be construed
to impose any responsibility or liability of any nature whatsoever on Lender to
any person. Neither Borrower, any charterer, nor any contractor, subcontractor,
materialman, laborer, or any other person or entity may rely, or have any right
to rely, upon Lender's determination of the appropriateness of any advance. No
disbursement or approval by Lender shall constitute a representation by Lender
as to the nature of any Project, its construction, the achievement of any
condition to funding or the Vessel(s)'s intended use for Borrower or for any
other person, nor shall it constitute an indemnity by Lender to Borrower or to
any other person against any deficiency or defects in the Vessel or against any
breach of any contract.
SECTION 5.6. CHANGE ORDERS. All requests for changes in the Plans and
Specifications, other than Permitted Changes must be in writing, signed by
Borrower, and delivered to Lender for its approval. Other than Permitted
Changes, Borrower will not permit the performance of any work pursuant to any
change order or modification or any subcontract without the written approval of
Lender. Borrower will obtain any required permits or authorizations from
governmental authorities having jurisdiction before approving or requesting a
new change order.
SECTION 5.7. PURCHASE OF MATERIALS AND COMPONENTS; CONDITIONAL SALES CONTRACTS.
No materials, components, equipment, fixtures, or articles of personal property
placed in or incorporated into the Project shall be purchased or installed under
any security agreement or other agreement whereby the seller reserves or
purports to reserve title or the right of removal or repossession, or the right
to consider such items as personal property after their incorporation into the
Project, unless otherwise authorized by Lender in writing.
SECTION 5.8. LENDER'S RIGHT OF ENTRY AND INSPECTION. Lender and its agents shall
have, to the extent allowable under the Construction Contract and any assignment
thereof to Lender, at all times the right of entry and free access to the
shipyard and the Vessel and the right to inspect all work done, labor performed,
and materials furnished with respect to the Project, it being understood that,
under normal circumstances, Lender will give one week's prior notice of any
visit, as provided for in SECTION 5.1 (E). Lender shall have unrestricted access
to and the right to copy all records, accounting books, contracts, subcontracts,
bills, statements, vouchers, and supporting documents of Borrower relating in
any way to the Project.
SECTION 5.9. LENDER'S RIGHT TO STOP WORK. If Lender in good faith determines
that any work or materials do not conform to the approved Plans and
Specifications or sound construction practices, or otherwise depart from any of
the requirements of this Agreement, Lender may require the work to be stopped to
the extent allowable under the Construction Contract and any assignment thereof
to Lender, and withhold any Advances until the matter is corrected. In such
event, Borrower will promptly correct the work to Lender's satisfaction.
39
SECTION 5.10. DAMAGE OR DESTRUCTION. If the Vessel is damaged or destroyed by
casualty of any nature, within ninety (90) days thereafter (or longer period so
long as all reasonable and practical work is diligently pursued) Borrower shall,
if practical, restore the Vessel or cause the Vessel to be restored to the
condition in which it was before such damage or destruction. Lender shall not be
obligated to make further Advances under this Agreement until such restoration
has been accomplished.
SECTION 5.11. CATERPILLAR(R) BUILD CONTENT. The Vessel shall be powered with
Caterpillar(R) propulsion systems purchased from a Caterpillar Dealer. The Plans
and Specification shall reflect such build content requirements.
SECTION 5.12 NEGATIVE COVENANTS. The Borrower covenants that from the date
hereof so long as this Agreement shall be in effect or the Loan shall be
outstanding or any amounts owed by the Borrower to the Lender shall remain
unpaid, unless otherwise consented to by Lender in writing, with such consent
not to be unreasonably withheld or delayed, the Borrower shall not:
(A) SALE OR DISPOSITION OF ASSETS. Sell, lease or otherwise dispose of any
of its Properties or permit any of its Subsidiaries or Affiliates to sell, lease
or otherwise dispose of any of their Properties, including any disposition of
Property as part of a sale and leaseback transaction, to or in favor of any
Person if the sale, lease or disposal of such Properties would have a material
adverse effect on the ability of Borrower or Guarantors to repay the Loan,
except for the following (EXCLUDING any Property which is included in the
Collateral or Mortgage Documents): (i) sales of inventory and leases of
inventory in the ordinary course of the Borrower's business for so long as no
Event of Default exists hereunder with written notice thereof to the Borrower;
(ii) a transfer of Property to the Borrower by a Subsidiary; (iii) dispositions
expressly authorized elsewhere in this Agreement; and (iv) any disposition of
any assets or retired Property not used or useful in the Borrower's business.
(B) MERGERS; CONSOLIDATIONS; ACQUISITIONS. Merge or consolidate, or permit
any Subsidiary to merge or consolidate, with any Person, or acquire all or any
substantial part of the Properties of any Person.
(C) RESTRICTIONS ON NATURE OF BUSINESS. Engage in any line of business
materially different from that presently engaged in by the Borrower.
(D) LIENS AND ENCUMBRANCES. Create, incur or suffer to exist, or permit any
Subsidiary to create, incur or suffer to exist, any Lien upon any of its
Property, income or profits, whether now owned or hereafter acquired, except the
following Permitted Liens:
(i) Liens at any time granted in favor of the Lender;
(ii) such other Liens as appear on EXHIBIT L as additional
Permitted Liens; and
(iii) such other Liens as the Lender may hereafter approve in
writing.
(E) LOANS. Make any loans or other advances of money (other than in the
ordinary course of business) to any Person, including, without limitation, any
of the Borrower's Affiliates, officers or employees.
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(F) AFFILIATE TRANSACTIONS. Enter into, or be a party to any transaction
with any Affiliate or stockholder, except in the ordinary course of and pursuant
to the reasonable requirements of the Borrower's business and upon fair and
reasonable terms which are no less favorable to the Borrower than the Borrower
could obtain in a comparable arm's length transaction with a Person not an
Affiliate or stockholder of the Borrower.
(G) PARTNERSHIPS OR JOINT VENTURES. Become or agree to become a general or
limited partner in any general or limited partnership or a joint venturer in any
joint venture.
(H) ADVERSE TRANSACTIONS. Enter into any transaction, which has or may have
a Material Adverse Effect or permit or agree to any material extension,
compromise or settlement of any Account.
(I) GUARANTIES. Guarantee, assume, endorse or otherwise, in any way, become
directly or contingently liable with respect to the Indebtedness of any Person
except (i) by endorsement of instruments or items of payment for deposit or
collection, (ii) agreements to repurchase accounts or chattel paper that have
been discounted, sold or otherwise assigned in the ordinary course of the
Borrower's business,(iii) guaranties of debt and obligations of Affiliates which
debt and obligations are in existence on the date of this Agreement, or (iv)as
otherwise approved by Lender.
(J) DISTRIBUTIONS. Declare or make any Distributions after an Event of
Default.
(K) SUBSIDIARIES. Hereafter acquire or create any Subsidiary or divest
itself of any material assets by transferring them to any Subsidiary.
(L) CAPITAL EXPENDITURES. Make capital expenditures which, in the aggregate
during any fiscal year of the Borrower, exceed ten (10) percent of Net Worth,
plus annual depreciation.
(M) BUSINESS LOCATIONS. Transfer its principal place of business or chief
executive office, or open new business locations or manufacturing plants, or
transfer existing manufacturing plants to or at any locations other than the
business locations set forth in EXHIBIT F, except upon at least sixty (60) days
prior written notice to Lender.
(N) NAME OF BORROWER. Use any corporate name (other than its own) or any
fictitious name or "d/b/a" except for the names disclosed in EXHIBIT M.
(O) FISCAL YEAR. Change its Fiscal Year.
(P) TAX CONSOLIDATION. File or consent to the filing of any consolidated
income tax return with any Person.
(Q) VESSEL FLAG. Change the flag of the Vessel to another country from the
flag of the ▇▇▇▇▇▇▇▇ Islands without the prior written consent of Lender.
41
(R) CHARTER. Charter the Vessel without the prior written Consent of Lender
for charters over twelve (12) months inclusive of all renewal periods, or fail
to execute any assignment agreement in favor of Lender with respect to such
charter or its proceeds as required by Lender.
(S) CONSTRUCTION CONTRACT. Enter into any construction contract with any
purchaser with respect to construction of the Vessel, and any subcontracts with
subcontractors, materialmen, laborers, or any other person or entity for
performance of work on the Project or the delivery of materials to the Project,
together with any amendments thereto, without the written consent of Lender.
(T) OWNERSHIP. Allow any change in ownership (including stock transfer) in
the Vessel without the prior written consent of Lender.
(U) CHANGE IN CLASS CERTIFICATION. Allow the Vessel to fall out of the
class rating initially certified by DNV on the Conversion Date.
(V) PROHIBITED WATERS. Enter into any charter agreement or other
arrangement relating to the use, operation or employment of the Vessel which may
involve the Vessel entering the territorial waters of any jurisdiction which is
or may during the term of the Loan be subject to a trade or other embargo
instituted by the government of the United States of America, or the United
Nations.
SECTION 6. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the
following shall occur and be continuing, whatever the reason for such event or
condition and whether it shall be voluntary or involuntary, or within or without
the control of the Borrower or any Subsidiary, or be effected by operation of
law or pursuant to any order or judgment of a court or otherwise:
(A) Borrower shall fail to pay any portion of the principal or interest
with respect to the Construction Note or Permanent Note or of any amount under
the Loan Documents within three (3) Business Days of when due;
(B) Any material representation, warranty or other statement made by or on
behalf of Borrower in this Agreement, or by or on behalf of Borrower or the
Guarantors in any other Loan Document shall prove false or misleading in any
material respect, and any such representation is not cured within ten (Business
Days) of notice by Lender;
(C) the Vessel Acceptance Date has occurred and the Permanent Loan has not
been made;
(D) Borrower or any Guarantor shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement, the Mortgage Documents or
other Loan Document (other than a covenant a default the performance or
observance of which is dealt with specifically elsewhere in this SECTION 6.1)
and the breach of such other covenant is not cured to Lender's satisfaction
within fourteen (14) days after the sooner to occur of the Borrower's receipt of
notice of such breach from Lender or the date on which such failure or neglect
first becomes known to any officer of Borrower, (such period shall also apply to
sections (E) through (T) below; or
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(E) there shall occur any material default on the part of Borrower
(including specifically, but without limitation, due to nonpayment) under any
other Loan Document, agreement, document, or instrument to which Borrower and
Lender are parties; or
(F) Borrower shall fail to make any payment due on any Indebtedness or
other security with a principal amount of Two Hundred Fifty Thousand United
States Dollars ($250,000.00) or more or any event shall occur (other than the
mere passage of time) or any condition shall exist in respect of any such
Indebtedness or other security of the Borrower, or under any agreement securing
or relating to such Indebtedness or other security, the effect of which is (i)
to cause (or permit any holder of such Indebtedness or other Security or a
trustee to cause) such Indebtedness or other Security, or a portion thereof, to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or (ii) to permit a trustee or the holder of any security
(other than common stock of the Borrower) to elect a majority of the directors
on the Board of Directors of the Borrower; or
(G) a custodian, receiver, liquidator or trustee of the Borrower, or of any
of its Property, shall be appointed by court order and such order shall remain
in effect for more than sixty (60) days; or an order for relief in respect of
the Borrower shall be entered under any bankruptcy laws, as now or hereafter
constituted; or any of its Property shall be sequestered by court order and such
order shall remain in effect for more than sixty (60) days; or a petition shall
be filed against the Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and shall not be dismissed
within sixty (60) days after such filing; or
(H) Borrower shall file a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or shall consent to the filing
of any petition against it under any such law; or
(I) Borrower shall make a general assignment for the benefit of its
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall consent to the appointment of a custodian, receiver,
trustee or liquidator of Borrower or of all or a substantial part of its
Property; or
(J) a material adverse change with respect to the financial condition of
Borrower or any Guarantor which results, in the good faith credit judgment of
Lender, in a material impairment of the prospect of repayment of the Loan; or
(K) Borrower or any Subsidiary of Borrower suffers a final judgment against
it which, within sixty (60) days from the date such judgment is entered, shall
not have been discharged or execution thereof stayed pending appeal unless (i)
such judgment in the reasonable opinion of Lender is adequately covered by
insurance; or (ii) adequate accruals with respect to such judgment have been
established in accordance with GAAP and the aggregate amount of all such
judgments at any time during the term hereof, not adequately covered by
insurance is not at any time in excess of Two Hundred Fifty Thousand United
States Dollars ($250,000.00); or
43
(L) a sale, hypothecation or other disposition of a cumulative amount of
ten percent (10%) or more of the beneficial interest in any class of voting
stock of Borrower owned by any Guarantor without the prior written consent of
Lender, which shall not be unreasonably withheld; or
(M) there shall occur a cessation of a substantial part of the business of
Borrower for a period which significantly affects Borrower's capacity to
continue its business on a profitable basis; or Borrower shall suffer the loss
or revocation of any license or permit now held or hereafter acquired by
Borrower which is necessary to the continued lawful operation of its business
and such loss or revocation shall have a Material Adverse Effect; or Borrower
shall be enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of its business
affairs; or any lease or agreement pursuant to which Borrower leases, uses or
occupies any Property shall be canceled or terminated prior to the expiration of
its stated term and such termination shall have a Material Adverse Effect; or
any material part of the Collateral shall be taken through condemnation or the
value of such Property shall be impaired through condemnation; or
(N) Borrower or any Affiliate of either, shall challenge or contest in any
action, suit or proceeding the validity or enforceability of any of the Loan
Documents, the legality or enforceability of any of the Obligations or the
perfection or priority of any Lien granted for the benefit of the Lender, if
any; or
(O) Borrower shall be criminally indicted or convicted under any Forfeiture
Law that results in or could lead to a forfeiture of any Property of the
Borrower that is material to its financial condition or business operations; or
(P) Any Guarantor shall revoke or attempt to revoke its guaranty agreement
signed by such Guarantor, or shall repudiate such Guarantor's liability
thereunder or shall be in default (after giving effect to any applicable period
of grace) under the terms thereof or the guaranty agreement shall for any reason
cease to remain in full force and effect;
(Q) The Borrower shall be nationalized or any government or any agency
thereof exercises management control of the Borrower's day-to-day business
operations and affairs; or
(R) The current government of the ▇▇▇▇▇▇▇▇ Islands shall be changed by
reason of war (whether or not declared), revolution, riots, insurrections, acts
of terrorism, acts of the public enemy, and/or any other event which may
materially adversely affect the Borrower's performance under this Agreement as
determined by the Lender in its absolute and sole discretion;
(S) Any Charter Agreements are terminated for any reason whatsoever;
(T) There shall be any breach of obligations contained in any Other
Agreement; or
(U) There shall be any change in ownership in the Subsidiaries and
Affiliates of Borrower without the prior written consent of Lender.
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SECTION 6.2. ACCELERATION OF THE OBLIGATIONS. Upon or at any time after the
occurrence of an Event of Default, and during the continuance thereof, all or
any portion of the Obligations due or to become due, shall, at the option of
Lender and with notice to or demand upon Borrower, become at once due and
payable and Borrower shall forthwith pay to Lender, in addition to any and all
sums and charges due, the entire principal of and accrued and unpaid interest on
the Obligations plus reasonable attorneys' fees.
SECTION 6.3. REMEDIES. Upon or at any time after the occurrence of an Event of
Default and during the continuance thereof, Lender may exercise from time to
time all of the rights and remedies under Applicable Law, and all other legal
and equitable rights to which Lender may be entitled, all of which rights and
remedies shall be cumulative, and none of which shall be exclusive, and shall be
in addition to any other rights or remedies contained in this Agreement, the
Mortgage Documents, or any of the other Loan Documents.
SECTION 6.4 REMEDIES CUMULATIVE; NO WAIVER. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrower contained in this Agreement and the other Loan Documents, or in any
document referred to herein or contained in any agreement supplementary hereto
or in any schedule or in any guaranty agreement given to Lender by any Guarantor
or contained in any other agreement among Lender and Borrower, heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of Borrower herein contained. The failure or delay of Lender to
exercise or enforce any rights, Liens, powers, or remedies hereunder or under
any of the other Loan Documents shall not operate as a waiver of any of such
Liens, rights, powers or remedies, but all such Liens, rights, powers, and
remedies shall continue in full force and effect until the Loan and all other
Obligations owing or to become owing from Borrower to Lender shall have been
indefeasibly paid in full, and all Liens, rights, powers, and remedies provided
herein and the other Loan Documents are cumulative and none are exclusive.
SECTION 7. BENEFIT OF AGREEMENT
SECTION 7.1. SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights or obligations under this Agreement or any of the other
Loan Documents. Lender shall give written notice to the Borrower within fifteen
(15) Business Days of such assignment, provided however, such notice shall be
given on a "best efforts" basis and Lender shall not be liable to Borrower for
the failure to give such notice, and any such failure shall not affect the
validity or effectiveness of such assignment.
SECTION 8. GENERAL
SECTION 8.1. AMENDMENTS. The terms of this Agreement may not be amended, waived,
modified or terminated except by written instrument signed by the parties
hereto. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon. In the event
an amendment to any of the Loan Documents is required, in Lender's sole
discretion, due to any request, action, or inaction of Borrower, including but
not limited to any voluntary or mandatory prepayment of the Obligations,
45
redocumentation or reflagging of the Vessel (including but not limited to other
vessels included in the Collateral) Borrower shall reimburse Lender for all
costs and expenses associated with such amendment, including but not limited to
the reasonable fees and out-of-pocket expenses of outside counsel for the
Lender, the reasonable time of Lender's in house counsel departmental activity
billed at Lender's outside counsel rate (not to exceed Two Hundred and Fifty
Dollars ($250.00) per hour), and the reasonable travel costs of Lender's
in-house counsel with respect thereto. In addition, for any amendment, the
Borrower shall pay an administrative fee in an amount the greater of (i) one
half percent (.5%) of the financial value of the increase or decrease in
principal value of the Obligations associated with the amendment, or (ii) Five
Thousand United States Dollars ($5,000.00).
SECTION 8.2. NOTICES.
(A) All communications under this Agreement shall be in writing and shall
be sent by registered courier service, or delivered by hand or transmitted by
telex or other telecommunications device capable of transmitting or creating a
written record:
(i) if to Lender, at its address at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇. Attention: Customer Services Manager, Marine
Division, Telephone No. ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ or Facsimile ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ or
at such other address as it may have furnished in writing to the Borrower;
or
(ii) if to Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ P.O. Box
13038, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. Attention: CFO, Telephone +1 (954)
524-4200 ext. 400, or Facsimile ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address
as it may have furnished in writing to Lender;
(B) Any notice so addressed and sent shall be deemed to be given when
received, and any notice delivered by hand or transmitted by telecommunications
device shall be deemed to be given when received by the Borrower or the Lender,
as the case may be.
SECTION 8.3. COSTS, EXPENSES AND INDEMNIFICATION. Borrower agrees to pay all
reasonable costs and expenses in connection with the preparation, execution,
delivery and enforcement of this Agreement and any other Loan Documents,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for Lender and the travel costs of Lender's in-house counsel (excluding
any internal allocated charges of the Lender's in-house counsel) with respect
thereto and with respect to advising the Lender as to its respective rights and
responsibilities under the Loan Documents. Borrower also agrees to pay on demand
all reasonable losses, costs and expenses, if any (including reasonable counsel
fees and expenses except for any internal allocated charge of Lender's in-house
counsel), incurred in connection with the preservation of, or the enforcement
of, or legal advice in respect of, the rights or responsibilities of the Lender
under the Loan Documents, including, without limitation, losses, costs and
Collection Expenses sustained by the Lender as a result of any failure by the
Borrower to perform or observe its obligations contained herein or in any other
Loan Document. The Borrower further agrees to indemnify and hold harmless the
Lender from and against any and all (i) Taxes or assessments, governmental
charges or levies, duties, fees, deductions or withholding, restrictions or
conditions of any nature or other amounts imposed by, or behalf of, any
government or any taxing authority thereof or therein, including but not limited
to the ▇▇▇▇▇▇▇▇ Islands or any subdivision thereof, (ii) stamp, duty or
documentary taxes or charges imposed by any government or any taxing authority
46
thereof or therein, including but not limited to the ▇▇▇▇▇▇▇▇ Islands and its
subdivisions and (iii) reasonable damages, losses, liabilities, costs and
expenses resulting from, related to or connected with this Agreement, the Loan
or the other Loan Documents or the transactions contemplated hereby, except to
the extent resulting from the gross negligence or willful misconduct of the
Lender.
SECTION 8.4. PARTICIPATIONS. Borrower agrees and consents to Lender's sale or
transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to any one or more purchasers,
or potential purchasers, any information or knowledge Lender may have about
Borrower or Guarantors or about any other matter relating to the Loan, and
Borrower and Guarantors each hereby waives any right to privacy it may have with
respect to such matters, including any rights under any applicable law.
Borrower and Guarantors each additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such
participation interests. Borrower and Guarantors each further waives all rights
of offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest relating to the sale of
the participation interest.
SECTION 8.5. SURVIVAL. All warranties, representations, agreements and covenants
made by the Borrower herein or in any other Loan Document shall be considered to
have been relied upon by the Lender and shall survive the making of the Loan
regardless of any investigation made by or on behalf of the Lender. All
statements in any other Loan Document shall constitute warranties and
representations by the Borrower hereunder.
SECTION 8.6. SUBMISSION TO JURISDICTION AND SERVICE OF PROCESS. The Borrower
irrevocably agrees that any legal action or proceeding brought against Borrower
rising out of or relating to any Loan Document may be instituted at the election
of Lender: (i) in any courts of the ▇▇▇▇▇▇▇▇ Islands (ii) where the Vessel or
any Collateral is located or registered, or (iii) in any state or federal court
of competent jurisdiction located in the State of Tennessee, the United States
of America, and by execution and delivery of this Agreement and the other Loan
Documents, Borrower accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any judgment
rendered thereby in any such action or proceeding. Any judicial proceeding by
Borrower against Lender involving, directly or indirectly, any matter in any way
arising out of, related to, or connected with any Loan Document shall be brought
only in a state or federal court located in the State of Tennessee, the United
States of America. The Borrower irrevocably consents to service upon it by the
mailing of copies thereof by U.S. air mail or courier to the Borrower at its
address set forth in this Agreement. Nothing in this SECTION 8.6 shall affect
the right of the Lender to serve process in any other manner permitted by law or
limit the right of the Lender to take proceedings with respect to the Loan
Documents against the Borrower and/or Guarantors in any jurisdiction nor shall
the taking of proceedings with respect to any of the Loan Documents in any
jurisdiction preclude the Lender from taking proceedings with respect to the
Loan Documents in any other jurisdiction whether concurrently or not. The
Borrower agrees that final judgment against it in any legal action or proceeding
arising out of or relating to the Loan Documents shall be conclusive and may be
enforced in any other jurisdiction within or outside the United States of
47
America by suit on the judgment, a certified or exemplified copy of which
judgment shall be conclusive evidence thereof and of the amount of its
indebtedness, or by such other means provided by law.
SECTION 8.7. JUDGMENT. If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due under a Loan Document, Construction Note or
Permanent Note in United States Dollars into another currency, the parties
hereto agree, to the fullest extent that they effectively do so, that the rate
of exchange used shall be that at which in accordance with normal banking
procedures Lender could purchase United States Dollars with such other currency
at London, England, on the Business Day preceding that on which final judgment
is given. The obligation of the Borrower in respect of any sum due to Lender
under the Loan Documents shall, notwithstanding any judgment in a currency other
than United States Dollars, be discharged only to the extent that on the
Business Day following receipt by Lender of any sum adjudged to be so due in
such other currency Lender may in accordance with normal banking procedures
purchase United States Dollars with such other currency; if the United States
Dollars so purchased are less than the sum originally due to Lender in United
States Dollars, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify Lender against such loss, and if
the United States Dollars so purchased exceed the sum originally due Lender in
United States Dollars, Lender agrees to remit to the Borrower such excess.
SECTION 8.8. WAIVER OF SOVEREIGN IMMUNITY. The Borrower acknowledges and agrees
that the activities contemplated by the provisions of this Agreement, the
Construction Note or Permanent Note and the other Loan Documents are commercial
in nature rather than governmental or public, and therefore acknowledges and
agrees that it is not entitled to any right of immunity on the grounds of
sovereignty or otherwise with respect to such activities or in any legal action
or proceeding arising out of or relating to this Agreement, the Construction
Note or Permanent Note or the other Loan Documents, and in respect of itself and
its properties and revenues, expressly and irrevocably waives any such right of
immunity which may now or hereafter exist (including any immunity from any legal
process, from the jurisdiction of any court or from any execution or attachment
in aid of execution prior to judgment or otherwise) or claim thereto which may
now or hereafter exist, and agrees not to assert any such right or claim in any
such action or proceeding, whether in the United States of America, or
otherwise.
SECTION 8.9. GOVERNING LAW. THE PARTIES HERETO HAVE EXPRESSLY AGREED THAT THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TENNESSEE, UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF, PROVIDED, HOWEVER, THAT FOR ANY LEGAL
ACTION OR PROCEEDING BROUGHT WITH RESPECT TO THE LOAN AGREEMENT OR ANY LOAN
DOCUMENT IN THE COURTS OF THE ▇▇▇▇▇▇▇▇ ISLANDS OR ANY POLITICAL SUBDIVISION
THEREOF, THE LOAN AGREEMENT, OR ANY LOAN DOCUMENT SHALL BE DEEMED TO BE MADE
UNDER THE LAWS OF THE ▇▇▇▇▇▇▇▇ ISLANDS AND FOR SUCH PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE ▇▇▇▇▇▇▇▇ ISLANDS.
SECTION 8.10. RIGHT OF SETOFF. As collateral security for the repayment of the
Borrower's obligations and liabilities under this Agreement, the Borrower hereby
grants the Lender and the Lender's successors and assigns (including any
affiliate or subsidiary of Lender or Caterpillar(R) sellers) the right to apply,
at any time and from time to time should an Event of Default exist hereunder,
48
any and all obligations owing from the Lender (or its assignees) to the Borrower
toward repayment of any sums owing from the Borrower to the Lender hereunder.
SECTION 8.11. SEVERABILITY OF PROVISIONS. Any provision of this Agreement which
is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
SECTION 8.12. CONSEQUENTIAL DAMAGES. Notwithstanding any other provision of this
agreement, Borrower hereby fully waives any claim or right now or hereafter
existing against Lender for any incidental, special, or consequential damages
whether based on contract, warranty, tort (including negligence and strict
liability), or otherwise.
SECTION 8.13 USE OF ENGLISH LANGUAGE. All documents, financial or other
information or notices to be delivered pursuant to or in connection with this
Agreement shall be in the English language. English shall be the official
language for construction and interpretation of this Agreement, the Construction
Note or Permanent Note, and all Loan Documents and notices, unless specifically
designated otherwise in such Loan Document. If the original of any such document
or notice is not in the English language, an English translation thereof shall
be delivered.
SECTION 8.14. JURY TRIAL WAIVER. THE BORROWER AND THE LENDER EACH WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CONSTRUCTION NOTE OR
PERMANENT NOTE, ANY OF THE LOAN DOCUMENTS, OR THE OBLIGATIONS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO LENDER
ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING UPON THE FOREGOING
WAIVER IN ITS FUTURE DEALINGS WITH THE BORROWER. THE BORROWER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
BORROWER: LENDER:
SEABULK ANGOLA, INC. CATERPILLAR FINANCIAL SERVICES CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------------------
Name (Print): ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name (Print): ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Credit Manager, Marine Division
and Secretary
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EACH OF THE UNDERSIGNED GUARANTORS ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS
THIS AGREEMENT AND AGREES TO COMPLY WITH THE TERMS AND CONDITIONS CONTAINED
HEREIN TO THE EXTENT APPLICABLE TO SUCH GUARANTOR.
GUARANTOR:
SEABULK INTERNATIONAL, INC.
By: /s/ ▇.▇. ▇▇▇▇▇
-------------------------------
Name (Print): ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Attorney-in-Fact
GUARANTOR:
SEABULK OFFSHORE HOLDINGS, INC.
By: /s/ ▇.▇. ▇▇▇▇▇
-------------------------------
Name (Print): ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
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List of Exhibits
Exhibit A Intentionally Omitted
Exhibit B Form of Permanent Note
Exhibit C Milestone Schedule
Exhibit D Consents/Approvals/Noncompliance
Exhibit E Financial Statements
Exhibit F Business Locations
Exhibit G Subsidiaries/Affiliates/Stock Ownership
Exhibit H Debt, Borrower
Exhibit I Litigation
Exhibit J Labor Relations
Exhibit K Intentionally Omitted
Exhibit L Permitted Liens
Exhibit M Corporate Names
Exhibit N Form of Advance Request
Exhibit O Authorized Signatories for Advance Requests
Exhibit P Form of Preferred Ship Mortgage
51