EXHIBIT 10.32
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AGREEMENT FOR
A
U.S. $100,000,000
REVOLVING CREDIT FACILITY
TO BE MADE AVAILABLE TO
SEACOR SMIT INC.
BY
THE FINANCIAL INSTITUTIONS
IDENTIFIED ON SCHEDULE A
AND
DEN NORSKE BANK ASA, AS AGENT
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November 17, 1998
INDEX
PAGE
SECTION 1 DEFINITIONS...................................................................................................1
1.1 Defined Terms..................................................................................1
1.2 Construction..................................................................................11
1.3 Accounting Terms..............................................................................11
1.4 Headings......................................................................................11
SECTION 2 REPRESENTATIONS AND WARRANTIES..............................................................................11
2.1(a) Due Organization and Power....................................................................11
2.1(b) Authorization and Consents....................................................................11
2.1(c) Binding Obligations...........................................................................11
2.1(d) No Violation..................................................................................12
2.1(e) Litigation....................................................................................12
2.1(f) No Default....................................................................................12
2.1(g) Vessel Ownership, Classification, and Insurance...............................................12
2.1(h) Citizenship...................................................................................12
2.1(i) Financial Statements..........................................................................13
2.1(j) Tax Returns and Payments......................................................................13
2.1(k) Insurance.....................................................................................13
2.1(l) Solvency......................................................................................13
2.1(m) Environmental Matters.........................................................................13
2.1(n) Foreign Trade Control Regulations.............................................................14
SECTION 3 ADVANCES OF THE FACILITY/LETTERS OF CREDIT..................................................................14
3.1 Advances......................................................................................14
3.2 Use of Proceeds...............................................................................15
3.3 Drawdown Notice...............................................................................15
3.4 Drawdown Notice a Warranty....................................................................15
3.5 Notation of Advance on Note...................................................................15
3.6 Foreign Currency Advances.....................................................................15
3.7 Letters of Credit.............................................................................16
3.8 Letter of Credit Requests; Request for
Issuance of Letter of Credit..................................................................16
3.9 Letter of Credit Payments Deemed Advances.....................................................17
3.10 Letter of Credit Participation................................................................18
SECTION 4 CONDITIONS..................................................................................................19
4.1 Conditions Precedent to Drawdown of the
Initial Advance under the Credit Facility....................................................19
i
4.2 Further Conditions Precedent..................................................................21
4.3 Break Funding Costs...........................................................................22
4.4 Satisfaction after Drawdown...................................................................22
SECTION 5 REPAYMENT, PREPAYMENT AND REDUCTION.........................................................................22
5.1 Repayment.....................................................................................22
5.2 Scheduled Reductions of the Committed Amount..................................................22
5.3 Prepayment....................................................................................22
5.4 Permanent Reduction of the Committed
Amount of the Credit Facility.................................................................23
5.5 Reduction of Commitment.......................................................................23
SECTION 6 INTEREST AND RATE...........................................................................................23
6.1 Applicable Rate...............................................................................23
6.2 The Margin....................................................................................23
6.3 LIBOR; Interest Periods.......................................................................24
6.4 Interest Payments.............................................................................24
6.5 Interest due only on Banking Day..............................................................25
6.6 Calculation of Interest.......................................................................25
SECTION 7 PAYMENTS 25
7.1 Place of Payments, No Set Off.................................................................25
7.2 Proof of no Withholding.......................................................................25
7.3 Federal Income Tax Credits....................................................................26
SECTION 8 ACCOUNTS 26
8.1 The Operating Accounts........................................................................26
SECTION 9 EVENTS OF DEFAULT............................................................................................26
9.1(a) Principal Payments............................................................................26
9.1(b) Interest and Other Payments...................................................................26
9.1(c) Representations, etc..........................................................................26
9.1(d) Impossibility, Illegality.....................................................................26
9.1(e) Citizenship...................................................................................27
9.1(f) Financial Covenants...........................................................................27
9.1(g) Other Covenants...............................................................................27
9.1(h) Debt..........................................................................................27
9.1(i) Bankruptcy....................................................................................27
9.1(j) Judgments.....................................................................................27
9.1(k) Inability to Pay Debts........................................................................28
9.1(l) Vessels Value/Commitment......................................................................28
9.1(m) Change of Control of the Borrower.............................................................28
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9.2 Indemnification...............................................................................28
9.3 Application of Moneys.........................................................................29
SECTION 10 COVENANTS 29
10.1 ..........................................................................................29
10.1A(i) Performance of Agreements.................................................................30
10.1A(ii) Compliance with Covenants.................................................................30
10.1A(iii) Notice of Default.........................................................................30
10.1A(iv) Obtain Consents...........................................................................30
10.1A(v) Financial Statements......................................................................30
10.1A(vi) Qualification to Own U.S. Flag Vessels....................................................31
10.1A(vii) Corporate Existence.......................................................................31
10.1A(viii) Books, Records, etc.......................................................................31
10.1A(ix) Inspection................................................................................32
10.1A(x) Taxes.....................................................................................32
10.1A(xi) Compliance with Statutes, etc.............................................................32
10.1A(xii) Environmental Matters.....................................................................32
10.1A(xiii) Evidence of Insurance.....................................................................33
10.1A(xiv) Maintenance of Assets.....................................................................33
10.1A(xv) Funded Debt/Total Capitalization..........................................................33
10.1A(xvi) Senior Debt/Total Capitalization..........................................................33
10.1A(xvii) Permitted Secured Senior Debt.............................................................33
10.1A(xviii) Cash, Cash Equivalents....................................................................33
10.1A(xix) Interest Coverage Ratio...................................................................33
10.1A(xx) Consolidated Net Worth....................................................................33
10.1A(xxi) ERISA Matters.............................................................................34
10.1A(xxii) Delivery of Share Certificates............................................................34
10.1B(i) Liens.....................................................................................34
10.1B(ii) Sale of Assets............................................................................35
10.1B(iii) Dividends.................................................................................35
10.1B(iv) Changes in Business.......................................................................35
10.1B(v) Consolidation, Merger.....................................................................35
10.1B(vi) Use of Proceeds...........................................................................35
10.1(B)(vii) Redemption/Repurchase of Securities.......................................................35
10.1(B)(viii) Negative Pledge...........................................................................36
10.2 Vessel Valuations.........................................................................36
10.3 Inspection and Survey Reports.............................................................36
iii
SECTION 11 ASSIGNMENT AND PARTICIPATIONS..............................................................................36
SECTION 12 ILLEGALITY, INCREASED COST,
NON-AVAILABILITY, ETC.............................................................................37
12.1 Illegality....................................................................................37
12.2 Increased Cost................................................................................37
12.3 Non-availability of Funds.....................................................................38
12.4 Determination of Losses.......................................................................39
12.5 Compensation for Losses.......................................................................39
SECTION 13 CURRENCY INDEMNITY.........................................................................................39
13.1 Currency Conversion...........................................................................39
13.2 Change in Exchange Rate.......................................................................39
13.3 Additional Debt Due...........................................................................40
13.4 Rate of Exchange..............................................................................40
SECTION 14 FEES AND EXPENSES..........................................................................................40
14.1 Commitment Fee................................................................................40
14.2 Letter of Credit and Facing Fees and
Related Charges...............................................................................41
14.3 Agency Fee....................................................................................41
14.4 Agent's Other Fees............................................................................41
14.5 Costs, Charges and Expenses...................................................................41
SECTION 15 APPLICABLE LAW, JURISDICTION AND WAIVER....................................................................42
15.1 Applicable Law................................................................................42
15.2 Jurisdiction..................................................................................42
15.3 Waiver of Jury Trial..........................................................................42
SECTION 16 THE AGENT.........................................................................................43
16.1 Appointment of Agent..........................................................................43
16.2 Distribution of Payments......................................................................43
16.3 Holder of Interest in Note....................................................................43
16.4 No Duty to Examine, Etc.......................................................................43
16.5 Agent as Lender...............................................................................43
16.6(a) Obligations of Agent..........................................................................43
16.6(b) No Duty to Investigate........................................................................43
16.7(a) Discretion of Agent...........................................................................44
16.7(b) Instructions of Majority Lenders..............................................................44
16.8 Assumption re Event of Default................................................................44
16.9 No Liability of Agent or Lenders..............................................................44
iv
16.10 Indemnification of Agent......................................................................45
16.11 Consultation with Counsel.....................................................................45
16.12 Resignation...................................................................................45
16.13 Representations of Lenders....................................................................45
16.14 Notification of Event of Default..............................................................46
16.15 No Agency until Syndication...................................................................46
SECTION 17 NOTICES AND DEMANDS........................................................................................46
17.1 Notices in Writing............................................................................46
17.2 Addresses for Notice..........................................................................46
17.3 Notices Deemed Received.......................................................................46
SECTION 18 MISCELLANEOUS..............................................................................................47
18.1 Time of Essence...............................................................................47
18.2 Unenforceable, etc., Provisions - Effect......................................................47
18.3 References....................................................................................47
18.4 Further Assurances............................................................................47
18.5 Entire Agreement, Amendments..................................................................47
SCHEDULES
A THE LENDERS AND THEIR COMMITMENTS
B THE VESSEL OWNING/OPERATING SUBSIDIARIES AND OTHER SUBSIDIARIES
C THE VESSELS
D COMPANY CHART
E EXISTING NEWBUILDINGS
F EXISTING LETTERS OF CREDIT
EXHIBITS
1 NOTE
2 FORM OF DRAWDOWN NOTICE
3 FORM OF LETTER OF CREDIT REQUEST
4 FORM OF COMPLIANCE CERTIFICATE
5 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
v
REVOLVING CREDIT FACILITY AGREEMENT
THIS REVOLVING CREDIT FACILITY AGREEMENT made this 17th day
of November, 1998, by and among (1) SEACOR SMIT INC., a corporation incorporated
under the laws of the State of Delaware with offices at 11200 Westheimer, Suite
850, Houston, Texas (hereinafter called the "Borrower"), (2) the banks and
financial institutions whose names and addresses are set out in Schedule A
hereto (together with any assignee pursuant to Section 11, collectively, the
"Lenders", each a "Lender"); and (3) DEN NORSKE BANK ASA, a bank incorporated
under the laws of the Kingdom of Norway, acting through its New York branch,
with offices at 200 Park Avenue, New York, New York, as arranger and
administrative agent (hereinafter called the "Agent")
WITNESSETH THAT:
1 DEFINITIONS
1.1. Defined Terms. In this Agreement the words and expressions specified below
shall, except where the context otherwise requires, have the meanings attributed
to them below:
"Acceptable Accounting Firm" means Arthur Anderson & Co., L.L.P. or any
other firm of independent certified public
or chartered accountants of international
reputation selected by the Borrower and
acceptable to the Agent;
"Advance" means any Dollar Advance or Foreign Currency
Advance;
"Agent's Exchange Rate" means the exchange rate offered by the Agent
of Dollars for a particular foreign currency
or vice versa in accordance with its normal
practices on the relevant date, in either
case, including any costs associated with
the relevant exchange contract;
"Agreement" means this revolving credit facility
agreement as the same may be amended,
restated, modified or supplemented from time
to time;
"Applicable Rate" means any rate of interest on any Advance
from time to time applicable pursuant to
Section 6.1;
"Assignment and Assumption
Agreement(s)" shall mean the Assignment and Assumption
Agreement(s) executed pursuant to Section 11
substantially in the form of Exhibit 5;
"Banking Day(s)" means day(s) on which banks are open for the
transaction of business of the nature
required by this Agreement in the place or
places from time to time specified;
"Base Rate" means the higher of (i) the Agent's Prime
Rate and (ii) one-half percent (1/2%) above
the Federal Funds Effective Rate;
"Basis Point" or the symbol "bp" means one one-hundredth of one percent
(0.01%).
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United
States of America or any agency or
instrumentality thereof (provided that the
full faith and credit of the United States
of America is pledged in support thereof)
having maturities of not more than ninety
(90) days from the date of acquisition, (ii)
time deposits and certificates of deposit of
any Lender or any commercial bank of
recognized standing having capital and
surplus in excess of Five Hundred Million
Dollars ($500,000,000), (iii) repurchase
obligations with a term of not more than
seven (7) days for underlying securities of
the types described in (i) above entered
into with any Lender or any bank meeting the
qualifications specified in (ii) above, and
(iv) commercial paper issued by any Lender
or the parent corporation of any commercial
bank of recognized standing organized under
the laws of the United States of America or
any state thereof having capital and surplus
in excess of Five Hundred Million Dollars
($500,000,000), and commercial paper rated
at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent
thereof by Moody's, and in each case
maturing within ninety (90) days after the
date of acquisition;
"Change of Control" means either (i) any "person" (as such term
is defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as
amended) is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under
the Securities Exchange Act of 1934, as
amended), directly or indirectly, of more
than fifty percent (50%) of the total voting
power of the voting stock of any company or
(ii) the Board of Directors of any company
ceases to consist of a majority of the
existing directors or directors elected by
the existing directors of such company;
2
"Chiles" means, collectively, Chiles Offshore L.L.C.,
a limited liability company organized and
existing under the laws of the State of
Delaware, together with its consolidated
subsidiaries;
"Chiles Consolidated Debt" any indebtedness of Chiles which (a), in
accordance with GAAP, is included in the
consolidated indebtedness of the Borrower
and (b) is without recourse to the Borrower,
the Subsidiaries (other than Chiles) or the
assets of the Borrower or such Subsidiaries;
"Chiles Consolidated EBITDA" means, the aggregate, to be measured on a
trailing twelve (12) month basis, of
operating income (before deductions for
interest, taxes, depreciation and
amortization) of Chiles which ), in
accordance with GAAP, is consolidated into
the Borrower;
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute and the
regulations promulgated thereunder;
"Committed Amount" means One Hundred Million Dollars
($100,000,000), as reduced from time to time
pursuant to Sections 5.2 and 5.4, being the
maximum aggregate principal amount in
Dollars of the Advances and Letters of
Credit which may be outstanding at any time
under the Credit Facility;
"Commitment" shall mean in relation to a Lender, the
portion of the Credit Facility set out
opposite its name in Schedule A hereto or,
as the case may be, in any relevant
Assignment and Assumption Agreement, as the
same may be reduced from time to time as
provided by Section 5.5;
"Compliance Certificate" means a certificate of the chief financial
officer of the Borrower in the form set out
in Exhibit 4 or in such other form as the
Agent may reasonably require and which
shall, include, among other things, notice
of any events specified Section 10.1B(viii)
"Consolidated Net Worth" for any period, shall mean, for any company,
the sum of such company's common and
preferred stock (excluding any capital stock
subject to mandatory redemption) and
additional paid-in-capital, plus retained
earnings (minus accumulated deficit) and
currency translation adjustments, all as
3
shown on the consolidated balance sheet of
such company and its subsidiaries as
determined in accordance with GAAP;
"Credit Facility" means the sums advanced or to be advanced by
the Lenders to the Borrower and the Letters
of Credit to be issued by the Letter of
Credit Issuer for the account of the
Borrower, all pursuant to, and subject to
the terms of, this Agreement;
"Credit Facility Balance" means the sum of (i) the amount of the
Dollar Advances, (ii) the amount of the then
Dollar Equivalent of the Foreign Currency
Advances and (iii) the amount of the Letter
of Credit Outstandings at any relevant time,
all as reduced by payments and increased by
Advances and Letters of Credit pursuant to
the terms of this Agreement;
"Credit Period" means the period from the Drawdown Date of
the initial Advance made hereunder to the
date upon which the Advances and all other
amounts due to the Lenders and the Agent
pursuant to this Agreement and the Note are
repaid or prepaid in full;
"CRN Group" means CRN Holdings, Inc., a corporation
organized under the laws of the State of
Delaware, and any of its direct and indirect
subsidiaries now or hereafter acquired;
"Default Rate" shall have the meaning ascribed thereto in
Section 6.1;
"Dollars" and the sign "$" means the legal currency, at any relevant
time hereunder, of the United States of
America and, in relation to all payments
hereunder, in same day funds settled through
the New York Clearing House Interbank
Payments System (or such other Dollar funds
as may be determined by the Agent to be
customary for the settlement in New York
City of banking transactions of the type
herein involved);
"Dollar Advance" means any amount advanced in Dollars to the
Borrower on any Drawdown Date; "Dollar
Equivalent" means any amount of a Foreign
Currency converted to Dollars at the Agent's
Exchange Rate;
"Drawdown Dates" means the dates, each being a Banking Day
falling prior to the Termination Date, upon
which the Borrower has requested that an
Advance be made available to the Borrower or
4
an Advance is deemed to have been made due
to a drawing under any Letter of Credit;
"Drawdown Notice" shall have the meaning ascribed thereto in
Section 3.3;
"Dutch Guilders" and the
symbol "Dfl" means the legal currency, at any relevant
time hereunder, of The Netherlands;
"EBITDA" means on a consolidated basis, the
aggregate, to be measured on a trailing
twelve (12) month basis, of (i) operating
income (before deductions for interest,
taxes, depreciation and amortization), (ii)
interest income and (iii) "Equity in Net
Earnings of Fifty Percent (50%) or Less
Owned Companies" (as such term is used in
the Borrower's published financial reports).
For purposes of determining the EBITDA of
the Borrower, Chiles Consolidated EBITDA for
the corresponding period shall be excluded;
"Environmental Affiliate" means any person or entity the liability of
which for Environmental Claims the Borrower
may have assumed by contract or operation of
law;
"Environmental Claim" shall have the meaning ascribed thereto in
Section 2.1(n);
"ERISA" means the Employment Retirement Income
Security Act of 1974, as amended;
"ERISA Affiliate" means a trade or business (whether or not
incorporated) which is under common control
with the Borrower within the meaning of
Sections 414(b),(c),(m) or (o) of the Code;
"Events of Default" means any of the events set out in Section
9.1;
"Existing Credit Facility" the credit facility provided under that
certain credit agreement, dated June 30,
1997, among the Borrower, the financial
institutions named therein as Lenders, and
the Agent;
"Existing Letters of Credit" shall have the meaning ascribed thereto in
Section 3.7;
"Facing Fee" shall have the meaning ascribed thereto in
Section 14.2;
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such
period to the weighted average of the rates
on overnight Federal Funds transactions with
members of the Federal Reserve System
arranged by Federal Funds brokers, as
5
published for such day (or, if such day is
not a Banking Day, for the next preceding
Banking Day) by the Federal Reserve Bank of
New York, or, if such rate is not so
published for any day which is a Banking
Day, the average of the quotations for such
day on such transactions received by the
Agent from three (3) Federal Funds brokers
of recognized standing selected by the
Agent;
"Foreign Currency" means any of Pounds Sterling, Dutch Guilders
or French Francs;
"Foreign Currency Advance" means an Advance denominated in a Foreign
Currency;
"French Francs" and the symbol "FF" means the legal currency, at any relevant
time hereunder, of France;
"Funded Debt" means, on a consolidated basis, the sum of
(i) indebtedness for borrowed money, all
obligations evidenced by bonds, debentures,
notes or similar instruments, and purchase
money obligations which, in accordance with
GAAP, would be shown on the consolidated
balance sheet as a liability, (ii) all
obligations arising under letters of credit,
(iii) all obligations as lessee under leases
which have been, in accordance with GAAP,
recorded as capitalized lease obligations
and (iv) guaranties of non-consolidated
entity obligations less (v) the Chiles
Consolidated Debt and (vi) indebtedness
which is consolidated in the Borrower's
published financial statements in accordance
with GAAP but which represents a minority
interest holders' share of such indebtedness
unless such minority holders' share has been
guaranteed by the Borrower or a Subsidiary;
"GAAP" shall have the meaning ascribed thereto in
Section 1.3;
"Interest Coverage Ratio" means, on a consolidated basis, (a) EBITDA
divided by (b) an amount equal to interest
payments projected for the following twelve
(12) months (the foregoing calculation shall
assume that (i) all committed revolving
credit facilities are fully drawn and (ii)
interest during the following twelve (12)
months shall accrue at the rates prevailing
at the time of calculation) less (x)
interest on indebtedness which is
consolidated in the Borrower's published
financial statements in accordance with GAAP
but which represents a minority interest
holders' share of such indebtedness and (y)
6
interest on the Chiles Consolidated Debt;
"Interest Notice" means a notice to the Agent specifying the
duration of the relevant Interest Period;
"Interest Period(s)" means period(s) of one (1), three (3) or six
(6) months selected by the Borrower or such
longer period(s) as the Lenders may agree;
"L/C Supportable Obligation" means such obligations of the Borrower as
are not inconsistent with the issuance
policies of the Letter of Credit Issuer;
"Letter of Credit" shall have the meaning ascribed thereto in
Section 3.7;
"Letter of Credit Fee" shall have the meaning ascribed thereto in
Section 14.2;
"Letter of Credit Issuer" means Den norske Bank ASA;
"Letter of Credit Outstandings" means, at any time, the aggregate Stated
Amount of all outstanding Letters of Credit,
less any drawings previously made
thereunder;
"Letter of Credit Participant" shall have the meaning ascribed thereto in
Section 3.10;
"Letter of Credit Participant
Percentage" means, in relation to a Lender, the
percentage of the Credit Facility set out
opposite its name in Schedule A hereto;
"Letter of Credit Request" shall have the meaning ascribed thereto in
Section 3.8;
"LIBOR" means the rate of interest for deposits, in
Dollars or the relevant Foreign Currency, as
the case may be, of an amount equivalent to
the relevant Advance (or portion thereof),
for periods equivalent to the applicable
Interest Period, which appear at or about
11:00 A.M. (London Time) on the day falling
two (2) Banking Days prior to the first day
of the relevant Interest Period as displayed
on Telerate page 3750 (British Bankers'
Association Interest Settlement Rates), in
the case of Dollars or Pounds Sterling, or
Telerate page 3740 (British Bankers'
Association Interest Settlement Rates), in
the case of Dutch Guilders or French Francs
(or such other page as may replace such page
3750 or such page 3740, as the case may be,
on such system or on any other system of the
information vendor for the time being
designated by the British Bankers'
7
Association to calculate the BBA Interest
Settlement Rate (as defined in the British
Bankers' Association's Recommended Terms and
Conditions ("BBAIRS" terms) dated August
1985)), provided, however, that, if on any
date of determination of the Applicable
Rate, no rate is so displayed for amounts
equivalent to the relevant Advance (or
portion thereof) and for periods equivalent
to the applicable Interest Period, LIBOR
shall be equal to the arithmetic mean
(rounded upward if necessary to four decimal
places) of the rates respectively quoted to
the Agent by each of the Reference Banks as
the offered rate for deposits of Dollars or
the relevant Foreign Currency, as the case
may be, in an amount approximately equal to
the amount in relation to which LIBOR is to
be determined for a period equivalent to
such period to prime banks in the London
Interbank Market at or about 11:00 a.m.
(London time) on the second Banking Day
before the first day of such period;
"Majority Lenders" shall mean (x) at any time that there is
only a single Lender, the Lender; (y) at any
time that there are only two (2) Lenders,
both Lenders and (z) at any time that there
are three (3) or more Lenders, two (2) or
more Lenders whose aggregate Commitments
exceed two-thirds of the total Commitments;
"Margin" shall have the meaning ascribed thereto in
Section 6.1;
"Material Adverse Change" shall mean the occurrence of an event or
condition which (a) materially impairs the
ability of (1) the Borrower to meet any of
its obligations with regard to the Credit
Facility and the financing arrangements
established in connection therewith or (2)
the Borrower and the Subsidiaries to meet
any of their respective other obligations
that are material to the Borrower and the
Subsidiaries considered as a whole or (b)
have a material adverse effect on the
business, assets, operations, property or
financial condition of the Borrower and the
Subsidiaries considered as a whole;
"Moody's" shall mean Moody's Investors Service, Inc.,
a credit rating agency;
"Note" means the promissory note to be executed by
the Borrower to the order of the Agent to
evidence the Advances of the Credit Facility
8
substantially in the form of Exhibit 1 or in
such other form as the Agent may agree;
"Operating Accounts" shall have the meaning ascribed thereto in
Section 8.1;
"Permitted Liens" means any of the liens permitted under
Section 10.1B(i);
"Plan" means any employee benefit plan covered by
Title IV of ERISA;
"Pounds Sterling" and the
sign "(pound)" means the legal currency, at any relevant
time hereunder, of England;
"Prime Rate" means the rate which the Agent announces
from time to time as its prime lending rate,
the Prime Rate to change when and as such
prime lending rate changes;
"Reduction Dates" means the day falling twelve (12) months
after the date hereof and the dates which
fall respectively at six (6) month intervals
thereafter and ending on the Termination
Date or, if any such date is not a Banking
Day, the next following Banking Day, unless
such next following Banking Day falls in the
following month, in which case the relevant
Reduction Date shall be the immediately
preceding Banking Day;
"Reference Banks" means the banks chosen from time to time by
the British Bankers' Association for the
purpose of establishing Interest Settlement
Rates;
"S&P" shall mean Standard & Poor's Rating
Services, a credit rating agency;
"Senior Debt" means, for the Borrower, on a consolidated
basis, the aggregate of (i) any secured
indebtedness (excluding any Chiles
Consolidated Debt), (ii) the committed
amount of all other indebtedness for
borrowed money (other than (x) undrawn
portions of the Committed Amount and (y) any
undrawn committed amount for indebtedness of
Chiles) and (iii) Funded Debt ranking pari
passu with drawn amounts outstanding under
the Credit Facility;
"Stated Amount" means with respect to each Letter of Credit
the maximum amount available to be drawn
thereunder (regardless of whether any
conditions for drawing could then be met);
9
"Subsidiaries" means the corporations or other entities
listed on Schedule B (including, without
limitation, the Vessel Owning/Operating
Subsidiaries) of which the Borrower owns
legally or beneficially greater than fifty
percent (50%) of the issued and outstanding
stock or other interest in such entity and
has more than fifty percent (50%) of the
total voting power of the voting stock or
other interest in such corporation or other
entity, together with any other corporations
or other entities now or hereafter in
existence of which the Borrower owns legally
or beneficially greater than fifty percent
(50%) of the issued and outstanding stock or
other interest in such entity and has more
than fifty percent (50%) of the total voting
power of the voting stock or other interest
in such corporation or other entity,
provided, however, that, so long as the
obligations of Chiles remain without
recourse to the Borrower and its
subsidiaries (other than Chiles), Chiles
shall not be included as a Subsidiary;
"Taxes" means any present or future income or other
taxes, levies, duties, charges, fees,
deductions or withholdings of any nature now
or hereafter imposed, levied, collected,
withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured
by the overall net income of the Lenders
imposed by their respective jurisdiction of
incorporation or domicile of the lending
office making the Advances or any
governmental subdivision or taxing authority
of any thereof or by any other taxing
authority having jurisdiction over any
Lender or the Agent (unless such
jurisdiction is asserted solely by reason of
the activities of the Borrower or any
Subsidiary);
"Termination Date" means the day falling six (6) years after
the date hereof or, if such day is not a
Banking Day, the next following Banking Day,
unless such next following Banking Day falls
in the following month, in which case the
Termination Date shall be the immediately
preceding Banking Day;
"Total Capitalization" for any company, means, on a consolidated
basis, the aggregate of Funded Debt and
Consolidated Net Worth;
"Vessel Owning/Operating
Subsidiaries" those Subsidiaries designated as Vessel
Owning/Operating Subsidiaries on Schedule B,
together with any future subsidiaries now or
hereafter acquired which either own or
operate Vessels, provided, however, that
10
neither the CRN Group nor Chiles shall be
deemed to be Vessel Owning/Operating
Subsidiaries;
"Vessels" means (i) each of the vessels listed on
Schedule C, so long as such vessel remains
more than fifty percent (50%) owned,
directly or indirectly, by a Vessel
Owning/Operating Subsidiary, (ii) the
existing newbuildings described in Schedule
E and (iii) and any other vessels now or
hereafter more than fifty percent (50%)
owned, directly or indirectly, by a Vessel
Owning/Operating Subsidiary.
1.2. Construction. Words importing the singular number only shall include the
plural and vice versa. Words importing persons shall include companies, firms,
corporations, partnerships, unincorporated associations and their respective
successors and assigns.
1.3. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
as in effect from time to time in the United States of America consistently
applied ("GAAP") and all financial statements submitted pursuant to this
Agreement shall be prepared in accordance with, and all financial data submitted
pursuant hereto shall be derived from financial statements prepared in
accordance with, GAAP.
1.4. Headings. In this Agreement, section headings are inserted for convenience
of reference only and shall not be taken into account in the interpretation
hereof.
2 REPRESENTATIONS AND WARRANTIES
2.1. In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Advances and to issue and/or participate in Letters of Credit as
provided for herein, the Borrower hereby represents and warrants to the Agent
and the Lenders (which representations and warranties shall survive the
execution and delivery of this Agreement and the Note and the making of the
Advances and the issuance of Letters of Credit) that:
(a) Due Organization and Power. the Borrower and each of
the Subsidiaries are duly formed and are validly existing in good standing under
the laws of their respective jurisdictions of incorporation, have duly qualified
and are authorized to do business as a foreign corporation in each jurisdiction
wherein the nature of the business transacted thereby makes such qualification
necessary, have full power to carry on their respective businesses as now being
conducted and, in the case of the Borrower, to enter into and perform the
Borrower's obligations under each of this Agreement and the Note and have
complied with all statutory, regulatory and other requirements relative to such
businesses and such agreements the noncompliance with which could reasonably be
expected to give rise to a Material Adverse Change;
11
(b) Authorization and Consents. all necessary corporate
action has been taken to authorize, and all necessary consents and
authorizations have been obtained and remain in full force and effect to permit,
the Borrower to enter into and perform its obligations under each of this
Agreement and the Note and to permit the Borrower to borrow, service and repay
the Advances and, as of the date of this Agreement, no further consents or
authorizations are necessary for the service and repayment of the Advances or
any part of any thereof;
(c) Binding Obligations. each of this Agreement and the
Note constitutes legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with its terms, except to the
extent that such enforcement may be limited by equitable principles, principles
of public policy or applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting generally the enforcement of creditors'
rights;
(d) No Violation. the execution and delivery of, and the
performance of the provisions of, this Agreement and the Note do not, and will
not during the Credit Period, contravene any applicable law or regulation
existing at the date hereof or any contractual restriction binding on the
Borrower or its certificate of incorporation or by-laws;
(e) Litigation. except as otherwise disclosed in the 1997
annual report of the Borrower or the 10Q report of the Borrower for the period
ending June 30, 1998, no action, suit or proceeding is pending or overtly
threatened against the Borrower or any of the Subsidiaries before any court,
board of arbitration or administrative agency which could result in any Material
Adverse Change;
(f) No Default. except as otherwise disclosed in writing to
the Agent on or prior to the date hereof, neither the Borrower nor any of the
Subsidiaries are in default under any agreement by which any thereof is bound,
nor are any thereof in default in respect of any financial commitment or
obligation, where such default could result in any Material Adverse Change;
(g) Vessel Ownership, Classification, and Insurance. as of
the date hereof:
(i) each of the Vessels is owned as listed on
Schedule C, free and clear of all liens of record except as
otherwise set forth on Schedule C and duly registered in
the name of its owner under the flag as listed on Schedule
C;
(ii) except as otherwise set forth on Schedule C,
each of the Vessels is classed in the highest
classification and rating for vessels of the same age and
type with the American Bureau of Shipping, Lloyd's Register
of Shipping, Det norske Veritas, Bureau Veritas,
Germanischer Lloyd or other classification society
acceptable to the Agent without any material outstanding
recommendations; and
(iii) each of the Vessels is insured in accordance
with standard industry practice, including, without
limitation, coverage for hull and machinery, war risk and
protection & indemnity (evidence of which shall include,
without limitation, cover notes, certificates of entry or
12
such other evidence as shall be reasonably satisfactory to
the Agent);
(h) Citizenship. each of the Vessel Owning/Operating
Subsidiaries which owns a Vessel registered under the laws and flag of the
United States of America is eligible to document a United States flag vessel
within the meaning of 46 App. U.S.C.ss.12102(a) and, if any such Vessel is
operating in the coastwise trade, within the meaning of Section 2 of the United
States Shipping Act, 1916, as amended (46 App. U.S.C.ss. 802), the Vessel
Owning/Operating Subsidiary owning or operating same is qualified to own and
operate vessels in the coastwise trade;
(i) Financial Statements. except as otherwise disclosed in
writing to the Lenders on or prior to the date hereof, all financial statements,
information and other data furnished by the Borrower to the Lenders are complete
and correct, and such financial statements have been prepared in accordance with
GAAP and accurately and fairly present the financial condition of the parties
covered thereby as of the respective dates thereof and the results of the
operations thereof for the period or respective periods covered by such
financial statements. Since such date or dates there has been no Material
Adverse Change and neither the Borrower nor any of the Subsidiaries have any
contingent obligations, liabilities for taxes or other outstanding financial
obligations which on a consolidated basis are material in the aggregate, except
as disclosed in such statements, information and data;
(j) Tax Returns and Payments. since March 31, 1998, the
Borrower and each of the Subsidiaries have filed all tax returns required to be
filed thereby and have paid all taxes payable thereby which have become due,
other than those not yet delinquent or the non-payment of which would not give
rise to a Material Adverse Change and except for those taxes being contested in
good faith and by appropriate proceedings or other acts and for which adequate
reserves have been set aside on the books thereof;
(k) Insurance. each of the Borrower and the Subsidiaries
have insured their respective properties, assets and businesses against such
risks and in such amounts as are required by law and as are customary for
comparable companies engaged in similar businesses;
(l) Solvency. on the date of the making of the initial
Advance and both immediately before and immediately after giving effect to all
the transactions contemplated by this Agreement and the other documents referred
to herein to occur on the date of the making of the initial Advance and as of
the date hereof, (i) the sum of the Borrower's property (on a consolidated
basis), at a fair valuation, does and will exceed its liabilities (on a
consolidated basis), including contingent liabilities, (ii) the present fair
salable value of the Borrower's assets (on a consolidated basis) is not and
shall not be less than the amount that will be required to pay the Borrower's
probable liability on its then existing debts (on a consolidated basis),
including contingent liability, as they mature, (iii) the Borrower (on a
consolidated basis) does not and will not have unreasonably small capital with
which to continue its business, and (iv) the Borrower (on a consolidated basis)
has not incurred, does not intend to incur and does not believe it will incur
debts beyond its ability to pay such debts as they mature;
13
(m) Environmental Matters. except as heretofore disclosed
in writing to the Lenders (i) the Borrower and each of the Subsidiaries are now
and will continue to be, to the extent required, in compliance with all
applicable United States federal and state, local, foreign and international
laws, regulations, conventions and agreements relating to pollution prevention
or protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, navigable waters, waters of the
contiguous zone, ocean waters and international waters), including, without
limitation, laws, regulations, conventions and agreements relating to (1)
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous materials, oil, hazardous
substances, petroleum and petroleum products and by-products ("Materials of
Environmental Concern"), or (2) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern ("Environmental Laws") (except, as to all of the above,
where the failure to do so would not be reasonably likely to result in a
Material Adverse Change); (ii) the Borrower and each of the Subsidiaries now
have and will continue to have, to the extent required, all permits, licenses,
approvals, rulings, variances, exemptions, clearances, consents or other
authorizations required under applicable Environmental Laws ("Environmental
Approvals") and are now and will continue to be, to the extent required, in
compliance with all Environmental Approvals required to operate their respective
businesses as then being conducted (except where the failure to comply with,
obtain or renew such permits, licenses, rulings, variances, exemptions,
clearances, consents or other authorizations would not be reasonably likely to
result in a Material Adverse Change); and (iii) neither the Borrower nor any of
the Subsidiaries have received any notice of any claim, action, cause of action,
investigation or demand by any Person, entity, enterprise or government, or any
political subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability which would reasonably be
likely to result in a Material Adverse Change, or a requirement to incur, any
investigatory costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources, property
and/or personal injury damages, attorneys' fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by the Borrower
or any of the Subsidiaries, or (2) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or Environmental
Approval ("Environmental Claim") (other than Environmental Claims that have been
fully and finally adjudicated or otherwise determined and all fines, penalties
and other costs, if any, payable by the Borrower or any of the Subsidiaries in
respect thereof have been paid in full or which are fully covered by insurance
(including permitted deductibles)), if such costs, damages, fees, expenses,
fines and/or penalties on a consolidated basis are material in the aggregate;
and
(n) Foreign Trade Control Regulations. none of the
transactions contemplated herein will violate any of the provisions of the
Foreign Assets Control Regulations of the United States of America (Title 31,
Code of Federal Regulations, Chapter V, Part 500, as amended), any of the
provisions of the Cuban Assets Control Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as
14
amended), any of the provisions of the Libyan Sanctions Regulations of the
United States of America (Title 31, Code of Federal Regulations, Chapter V, Part
550, as amended), any of the provisions of the Iranian Transactions Regulations
of the United States of America (Title 31, Code of Federal Regulations, Chapter
V, Part 560, as amended), any of the provisions of the Iraqi Sanctions
Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 575, as
amended), any of the provisions of the Federal Republic of Yugoslavia (Serbia
and Montenegro) Sanctions Regulations (Title 31, Code of Federal Regulations,
Chapter V, Part 585 as amended) or any of the provisions of the Regulations of
the United States of America Governing Transactions in Foreign Shipping of
Merchandise (Title 31, Code of Federal Regulations, Chapter V, Part 505, as
amended).
3 ADVANCES OF THE FACILITY/LETTERS OF CREDIT
3.1. Advances. Each of the Lenders, relying upon each of the representations and
warranties set out in Section 2, hereby agrees with the Borrower that, subject
to the terms of this Agreement, it will on the Drawdown Dates make its portion
of each Advance (pro rata in proportion to its Commitment) in Dollars or a
Foreign Currency, as requested by the Borrower, available through the Agent to
the Borrower in an aggregate amount not to exceed at any one time outstanding
the then available Committed Amount, provided, however, that no further Advances
shall be made after the Banking Day immediately preceding the Termination Date.
Each such Dollar Advance shall be in an amount (in an integral multiple of One
Million Dollars ($1,000,000)) equal to or exceeding One Million Dollars
($1,000,000). Each Foreign Currency Advance shall be in an amount (in an
integral multiple of one hundred (100) units of account of the relevant
currency) equal to or exceeding the then Dollar Equivalent of One Million
Dollars (US$1,000,000). Each Advance may only be denominated in a single
currency. Each Advance shall be repaid in full, as more fully set forth
hereinafter, not later than the Termination Date. Not more than fifteen (15)
Advances may be made in each consecutive twelve (12) month period. Within the
limits of this Section 3.1 and upon the conditions herein provided, the Borrower
may from time to time borrow pursuant to this Section 3.1, repay Advances
pursuant to Section 5 and reborrow pursuant to this Section 3.1.
3.2. Use of Proceeds. The proceeds of the Advances shall be utilized (a) to
repay any outstanding advances under the Existing Credit Facility and (b) for
general corporate purposes.
3.3. Drawdown Notice. The Borrower shall not less than three (3) Banking Days
before each Drawdown Date (other than a Drawdown Date occurring by reason of a
drawing under any Letter of Credit) serve a notice (a "Drawdown Notice") on the
Agent (which shall promptly furnish a copy to each Lender), substantially in the
form set out in Exhibit 2, which notice shall (a) be in writing addressed to the
Agent, (b) be effective on receipt by the Lender, provided it is received before
11 a.m. New York time (otherwise it shall be deemed to have been received on the
next Banking Day), (c) specify the currency, amount and purpose of the Advance
to be drawn, (d) specify the Banking Day on which the Advance is to be drawn and
the initial Interest Period, (e) specify the disbursement instructions and (f)
be irrevocable.
3.4. Drawdown Notice a Warranty. Each Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
15
on the date of such Drawdown Notice and will be true and correct on the Drawdown
Date as if made on such date, (b) that after giving effect to the borrowing made
pursuant to such Drawdown Notice, the Credit Facility Balance shall not exceed
the Committed Amount then available hereunder pursuant to Section 3.1 and (c)
that no Event of Default nor any event which, with the giving of notice or lapse
of time, or both, would constitute an Event of Default has occurred and is
continuing.
3.5. Notation of Advance on Note. Each Advance made by the Lenders to the
Borrower may be evidenced by a notation of the same made by the Agent on the
grid attached to the Note, which notation, absent manifest error, shall be prima
facie evidence of the amount of the relevant Advance.
3.6. Foreign Currency Advances. The Dollar Equivalent (calculated at the
applicable Agent's Exchange Rate from time to time prevailing) of the aggregate
principal amount of Foreign Currency Advances at any time outstanding under the
Credit Facility (together with the Dollar Equivalent of the aggregate Stated
Amount of Letters of Credit then outstanding and denominated in currencies other
than Dollars) shall not exceed thirty percent (30%) of the then available
Committed Amount. To the extent provisions of this Agreement require the
calculation of amounts advanced or available under the Credit Facility in
Dollars, any such amounts (if denominated in a Foreign Currency) which are
subject to such calculation shall, for purposes of such calculations, be
notionally converted to Dollars at the relevant Agent's Exchange Rate then
prevailing. The calculation of such currency conversion shall be certified by
the Agent, which certification, absent any manifest error, shall be conclusive
and binding on the Borrower. If exchange rate fluctuations (a) cause the Credit
Facility Balance to exceed the Committed Amount at any time or (b) cause the
Foreign Currency Advances to exceed thirty percent (30%) of the then available
Committed Amount at any time, then the Borrower shall, within seven (7) days of
written demand of the Agent, repay Advances in an amount equal to the excess of
the Credit Facility Balance over the Committed Amount or repay Foreign Currency
Advances in an amount sufficient to reduce Foreign Currency Advances to not more
than thirty percent (30%) of the then available Committed Amount, as the case
may be.
3.7. Letters of Credit. (a) Subject to and upon the terms and conditions herein
set forth, the Borrower may request that the Letter of Credit Issuer at any time
and from time to time prior to the Banking Day immediately preceding the
Termination Date issue, for the account of the Borrower and in support of L/C
Supportable Obligations, and subject to and upon the terms and conditions herein
set forth, the Letter of Credit Issuer agrees to issue from time to time,
irrevocable standby letters of credit denominated in Dollars (or in such other
currency as the Borrower and the Letter of Credit Issuer may agree) and in such
form as may be approved by the Letter of Credit Issuer (singly, a "Letter of
Credit" and collectively, the "Letters of Credit"). Schedule F contains a
description of all letters of credit issued for the account of the Borrower
pursuant to the Existing Credit Agreement which will remain outstanding on the
date hereof. Each such letter of credit, including any extension thereof (each
an "Existing Letter of Credit"), shall constitute a "Letter of Credit", for all
purposes of this Agreement and shall be deemed issued for the purposes of
Sections 3.10 and 14.2 on the date hereof.
16
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued, the Stated Amount of which, (x) when added to the Letter of
Credit Outstandings at such time, would exceed the greater of Fifteen Million
Dollars ($15,000,000) and fifteen percent (15%) of the Committed Amount at such
time or (y) when added to the Letter of Credit Outstandings at such time plus
the aggregate principal amount of all Advances made by Lenders then outstanding
would exceed the Committed Amount at such time; and (ii) each Letter of Credit
shall have an expiry date occurring not later than the earlier of (x) the date
which occurs thirty (30) months after the date of issuance thereof and (y) the
Banking Day immediately preceding the Termination Date; provided that the
Borrower may request, and the Agent may consent, in its sole absolute
discretion, to extend the expiry dates of certain Letters of Credit beyond the
Termination Date. For purposes of determining compliance with limitations set
forth in this Agreement, the Dollar Equivalent of the Stated Amount of any
Letter Credit denominated in a currency other than Dollars shall be converted at
the Agents Exchange Rate in effect at the time of determination.
3.8. Letter of Credit Requests; Request for Issuance of Letter of Credit. (a)
Whenever the Borrower wishes that a Letter of Credit be issued, the Borrower
shall give the Letter of Credit Issuer written notice (a "Letter of Credit
Request"), substantially in the form of Exhibit 3 prior to 11:00 a.m., New York
time, at least seven (7) Banking Days (or three (3) Banking Days if the issuance
of the Letter of Credit has been approved in advance by the Letter of Credit
Issuer) prior to the proposed date of issuance (which shall be a Banking Day),
which Letter of Credit Request shall include any documents that the Letter of
Credit Issuer may reasonably require in connection therewith. The Letter of
Credit Request shall after three (3) Banking Days (or one (1) Banking Day if the
issuance of the Letter of Credit has been approved in advance by the Letter of
Credit Issuer) be irrevocable. The Letter of Credit Issuer shall promptly notify
each Lender of each Letter of Credit Request.
(b) The Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give each Lender and the Borrower written
notice of the issuance of such Letter of Credit.
3.9. Letter of Credit Payments Deemed Advances. (a) The Borrower hereby agrees
that any payment or disbursement made by the Letter of Credit Issuer under any
Letter of Credit shall be deemed an Advance under this Agreement and shall bear
interest for each day from the date of such payment or disbursement at the Base
Rate as in effect on each day until the date falling three (3) Banking Days
after receipt by the Agent of an Interest Notice with respect to such Advance
and shall thereafter bear interest at the Applicable Rate. The Letter of Credit
Issuer shall give prompt notice to the Borrower and the Lenders of each payment
or disbursement under a Letter of Credit.
(b)(i) The Letter of Credit Issuer shall not concern
itself with the regularity or propriety of any
demand made under any Letter of Credit beyond the
face thereof, provided that such demand strictly
complies with the terms of such Letter of Credit
and (subject to the above proviso) it shall not
be a defense to a claim of the Letter of Credit
17
Issuer that the Letter of Credit Issuer could
have resisted the payment in respect of which
such claim is made.
(ii) The Borrower's obligation to repay any
Advance deemed made under this Section 3.9
(including, in each case, interest thereon)
shall be absolute and unconditional under
any and all circumstances and irrespective
of any setoff, counterclaim or defense to
payment which the Borrower may have or have
had against the Letter of Credit Issuer or
any Lender, including, without limitation,
any defense based upon the failure of any
drawing under a Letter of Credit to conform
to the terms of the Letter of Credit (other
than the failure of the Letter of Credit
Issuer to determine that any documents
required to be delivered under such Letter
of Credit have been delivered and that they
comply on their face with the requirements
of such Letter of Credit) or any
non-application or misapplication by the
beneficiary of the proceeds of such drawing;
provided, however, that the Borrower shall
not be obligated to reimburse the
Letter of Credit Issuer for any wrongful
payment made by the Letter of Credit Issuer
under a Letter of Credit as a result of acts
or omissions constituting willful misconduct
or gross negligence on the part of the
Letter of Credit Issuer.
3.10. Letter of Credit Participation. (a) Immediately upon the issuance by the
Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer
shall be deemed to have sold and transferred to each Lender, and each Lender
(each a "Letter of Credit Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from the Letter of Credit Issuer,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender's Commitment, in such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the obligation of the
Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Agent for the account of the Letter
of Credit Participants as provided in Section 14.2) and any security therefor or
guaranty pertaining thereto.
(b) In determining whether to pay under any Letter of
Credit, the Letter of Credit Issuer shall not have any obligation relative to
the respective Letter of Credit Participants other than to determine that any
documents required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Letter of
Credit Issuer under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability to the respective
Letter of Credit Participants.
(c) In the event that the Letter of Credit Issuer makes any
payment under any Letter of Credit, upon receipt of notice thereof as provided
in Section 3.9(a), each Letter of Credit Participant shall promptly and
unconditionally pay to the Letter of Credit Issuer, the amount of such Letter of
Credit Participant's Percentage of such payment in Dollars (or in the currency
of issuance if issued in a currency other than Dollars) and in same day funds;
provided, however, that no Letter of Credit Participant shall be obligated to
18
pay to the Letter of Credit Issuer its percentage of such payment for any
wrongful payment made by the Letter of Credit Issuer under a Letter of Credit as
a result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Letter of Credit Issuer. If the Letter of Credit
Issuer so notifies any Letter of Credit Participant required to fund a Drawing
under a Letter of Credit prior to 11:00 a.m., New York time, on any Banking Day,
such Letter of Credit Participant shall make available to the Letter of Credit
Issuer such Letter of Credit Participant's Percentage of the amount of such
payment on such Banking Day in same day funds. If and to the extent such Letter
of Credit Participant shall not have so made its percentage of the amount of
such drawing available to the Letter of Credit Issuer, such Letter of Credit
Participant agrees to pay to the Letter of Credit Issuer, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Letter of Credit Issuer at the overnight
Federal Funds Effective Rate. The failure of any Letter of Credit Participant to
make available to the Letter of Credit Issuer its percentage of any drawing
under any Letter of Credit shall not relieve any other Letter of Credit
Participant of its obligation hereunder to make available to the Letter of
Credit Issuer its percentage of any payment under any Letter of Credit on the
date required, as specified above, but no Letter of Credit Participant shall be
responsible for the failure of any other Letter of Credit Participant to make
available to the Letter of Credit Issuer such other Letter of Credit
Participant's Percentage of any such payment.
(d) The obligation of the respective Letter of Credit
Participants to make payments to the Letter of Credit Issuer with respect to
Letters of Credit shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever (provided
that no Letter of Credit Participant shall be required to make payments
resulting from the Letter of Credit Issuer's gross negligence or willful
misconduct) and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this
Agreement.
(ii) the existence of any claim, set-off, defense or
other right which the Borrower may have at any
time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit
(or any person for whom any such transferee may
be acting), the Agent, any Lender or other
person, whether in connection with this
Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions
(including any underlying transaction between the
Borrower and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or other document
presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate
in any respect; or
(iv) the occurrence of any Event of Default.
19
4 CONDITIONS
4.1. Conditions Precedent to Drawdown of the Initial Advance under the Credit
Facility. The obligation of the Lenders to make the initial Advance available to
the Borrower under this Agreement shall be expressly subject to the following
conditions precedent:
(a) the Agent shall have received the following documents
in form and substance satisfactory to the Agent and its legal advisers:
(i) copies, certified as true and complete by an
officer of the Borrower of the resolutions of its
board of directors evidencing approval of this
transaction and authorizing an appropriate
officer or officers or attorney-in-fact or
attorneys-in-fact to execute this Agreement and
the Note on its behalf;
(ii) copies, certified as true and complete by an
officer of the Borrower or other applicable
party, of all documents evidencing any other
necessary actions (including actions by such
parties thereto other than the Borrower as may be
required by the Lenders), approvals or consents
with respect to this Agreement and the Note and
the transactions contemplated hereby and thereby;
(iii) copies, certified as true and complete by an
officer of the Borrower of its certificate of
incorporation and by-laws;
(iv) certificate of the Secretary or Assistant
Secretary of the Borrower certifying as to (x)
the incumbency of the signatories of the
Borrower, (y) the present directors of the
Borrower and (z) the authorized, issued and
outstanding capital stock of each of the Vessel
Owning/Operating Subsidiaries legally and
beneficially owned by the Borrower; and
(v) good standing certificate of the Borrower;
(b) the Borrower shall have duly executed and
delivered:
(i) this Agreement,
(ii) the Note, and
(iii) the fee letter referred to in Section 14.4;
(c) the Operating Accounts referred to in Section 8.1 shall
have been duly established with the Agent;
(d) the Agent shall have received an itemized written
valuation in form and substance satisfactory to the Agent, from an independent
shipbroker selected by the Borrower and acceptable to the Agent as to the then
20
current fair market value (charter free), in Dollars, of the Vessels and, such
valuation shall be dated no earlier than sixty (60) days prior to the initial
Drawdown Date;
(e) the Agent shall have received a certificate of the
chief financial officer of the Borrower confirming the representations and
warranties set forth in Section 2.1(l) and containing conclusions as to the
solvency of the Borrower (on a consolidated basis);
(f) the Lenders and the Agent shall have received payment
in full of all fees and expenses due to them on the date hereof including,
without limitation, all fees and expenses due under Section 14;
(g) the Agent shall be satisfied that neither the Borrower
nor any of the Subsidiaries is subject to any Environmental Claim which could
give rise to a Material Adverse Change;
(h) the Agent shall have received true and complete copies
of (i) the 10K report of the Borrower for the year ending December 31, 1997
filed with the United States Securities and Exchange Commission and (ii) all 10Q
and 8K reports filed by the Borrower with the United States Securities and
Exchange Commission since December 31, 1997;
(i) no Material Adverse Change having occurred since June
30, 1998;
(j) the Agent having received such evidence as it may
require that the Borrower and each of the Subsidiaries have insured their
respective properties and other assets with underwriters and agents acceptable
to the Agent in the manner required under Section 2.1(k);
(k) all sums owing by the Borrower under or in connection
with the Existing Credit Facility (excluding the Existing Letters of Credit),
shall have been repaid in full and the Existing Credit Facility provided under
such agreement shall have been terminated;
(l) certificates and other evidences of ownership, if any,
representing all of the present issued and outstanding shares of, or other
interests in, the Vessel Owning/Operating Subsidiaries owned, directly or
indirectly, by the Borrower shall have been delivered to the Agent;
(m) the Agent shall have received a certificate of an
officer of the Borrower certifying that the company chart attached as Schedule D
to this Agreement lists all of the ownership interests of the Borrower and the
Subsidiaries in any corporation, partnership or other entity; and
(n) the Agent shall have received opinions from Seward &
Kissel, counsel to the Lenders and the Agent, and Alice Gran, Esq., general
counsel for the Borrower, in such form as the Agent and counsel to the Lenders
may agree, as well as such other legal opinions as the Agent shall have required
as to all or any matters under the laws of the United States of America, the
21
State of New York and the State of Delaware covering the representations and
conditions which are the subjects of Sections 2 and 4 or in such other form as
the Agent may agree.
4.2. Further Conditions Precedent. The obligation of the Lenders to make any
Advance (other than an Advance which occurs by reason of a drawing under any
Letter of Credit) available to the Borrower shall be expressly and separately
from the foregoing conditional upon, on the relevant Drawdown Date:
(a) the Agent having received a Drawdown Notice in
accordance with the terms of Section 3.3;
(b) the representations stated in Section 2 (updated
mutatis mutandis) being true and correct as if made on that date;
(c) no Event of Default having occurred and being
continuing and no event having occurred and being continuing which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default; and
(d) the Agent being satisfied that no Event of Default will
arise following the drawdown of the Advance in question by reason of the
drawdown of the Advance and that no event or state of affairs exists which
constitutes, in the reasonable opinion of the Agent, a material risk that it
will be unlawful or impossible for the Borrower to make any payment or perform
any material obligation as required under the terms of this Agreement and the
Note.
4.3. Break Funding Costs. In the event that, on any date specified for the
making of an Advance in any Drawdown Notice, the Lenders shall not be obliged
under this Agreement to make such Advance available under this Agreement, the
Borrower shall indemnify and hold the Lenders or any of them, fully harmless
against any losses which they may sustain as a result of borrowing or agreeing
to borrow funds to meet the drawdown requirement in respect thereof and the
certificate of such Lender, absent manifest error, shall be conclusive and
binding on the Borrower as to the extent of any such losses.
4.4. Satisfaction after Drawdown. Without prejudice to any of the other terms
and conditions of this Agreement, in the event the Lenders, in their sole
discretion, make an Advance prior to the satisfaction of all or any of the
conditions referred to elsewhere in Sections 4.1 and 4.2, the Borrower hereby
covenants and undertakes to satisfy or procure the satisfaction of such
condition or conditions within fourteen (14) days after the relevant Drawdown
Date (or such longer period as the Lenders, in their sole discretion, may
agree).
5 REPAYMENT, PREPAYMENT AND REDUCTION.
5.1. Repayment. The Borrower shall repay all outstanding Advances (subject to
reductions and prepayments as hereinafter set forth) on the Termination Date and
shall also repay outstanding Advances, to the extent required to comply with (a)
the scheduled reductions required pursuant to Section 5.2 below on each
Reduction Date, (b) Section 3.6, (c) a reduction of the Credit Facility pursuant
to Section 5.4 or (d) as may be otherwise provided in this Agreement. Each
22
Advance (together with interest accrued thereon and any costs or other sums
associated therewith payable by the Borrower hereunder) shall be repaid in the
currency in which such Advance was drawn down or, in the case of such costs or
sums, the currency in which such cost or sum was incurred or booked by the Agent
and the Lenders.
5.2. Scheduled Reductions of the Committed Amount. Subject to the provisions of
Section 5.4, (a) on each Reduction Date (other than that corresponding to the
Termination Date) the Committed Amount shall be reduced by Four Million Five
Hundred Forty-Five Thousand Dollars ($4,545,000) (or such lesser amount as may
be required pursuant to the last sentence of this Section 5.2) and (b) on the
Termination Date, the Committed Amount shall be reduced to zero. Upon the
effectiveness of each reduction of the Committed Amount whether pursuant to
Sections 5.4 or 12.1 or otherwise pursuant to this Agreement, the amount of each
scheduled reduction of the Committed Amount required pursuant to this Section
5.2 for each Reduction Date falling thereafter shall be adjusted pro rata to
reflect such reduction of the Committed Amount.
5.3. Prepayment. The Borrower may prepay, upon five (5) days' written notice,
any outstanding Advance or any portion thereof, without penalty, provided that
such prepayment is made on the last day of the Interest Period covering such
Advance. Each prepayment shall be (a) in a minimum amount of: (x) if made in
Dollars, One Million Dollars ($1,000,000) or (y) if made in a Foreign Currency,
the then Dollar Equivalent (rounded upward to the nearest multiple of one
hundred (100) units of account of the relevant currency) of One Million Dollars
($1,000,000), (b) in an amount equal to an integral multiple of such minimum
amount or (c) in the full amount of the Advance. On the date of prepayment all
accrued interest to the date of such prepayment shall be paid in full with
respect to Advances or portion thereof being prepaid, together with any and all
actual costs or expenses incurred by the Agent or any Lender in connection with
any breaking of funding or with the unwinding of any such interest rate swap or
other hedging arrangements entered into by the Lenders (in each case, as
certified by the relevant Lenders, which certification, absent any manifest
error, shall be conclusive and binding on the Borrower).
5.4. Permanent Reduction of the Committed Amount of the Credit Facility. (i) The
Borrower shall have the right, at any time and from time to time, to request,
without penalty, a permanent partial or whole reduction of the Committed Amount,
provided that (a) the Agent receives three (3) Banking Days' prior written
notice of such request and (b) if the then outstanding Credit Facility Balance
exceeds the Committed Amount as so reduced, such requested reduction occurs on
the last day of the applicable Interest Period(s) for Advances (or portions
thereof) outstanding under this Agreement at least equal to the excess of the
Credit Facility Balance over the reduced Committed Amount. Each such partial
permanent reduction shall be equal to or shall exceed One Million Dollars
($1,000,000) and shall be an integral multiple of One Million Dollars
($1,000,000).
5.5. Reduction of Commitment. Simultaneously with each reduction of the
Committed Amount (whether pursuant to Sections 5.2, 5.4 or otherwise), each
23
Lender's Commitment in respect of the Credit Facility shall be reduced pro rata
in proportion to their respective interests in the Credit Facility.
6 INTEREST AND RATE
6.1. Applicable Rate. Except as otherwise provided in Section 3.9, each Advance
shall bear interest at a rate per annum (the "Applicable Rate") equal to the
aggregate of (a) LIBOR for the applicable Interest Period, plus (b) the then
applicable margin (the "Margin") determined in accordance with Section 6.2. Upon
the occurrence of an Event of Default or an event or condition which, with the
giving of notice or passage of time or both, would constitute an Event of
Default, the Credit Facility Balance or any other amount payable hereunder or
under the Note shall bear interest thereafter at a rate (the "Default Rate") of
two hundred basis points (200 bp) over the Applicable Rate then in effect.
6.2. The Margin. The Margin, as determined from time to time by the Agent as
provided herein, shall be equal to the lower of the margins corresponding to (a)
the percentage that the Borrower's consolidated Funded Debt (excluding any
Funded Debt subordinated to the indebtedness of the Borrower under the Credit
Facility and in respect of which no payments of principal are scheduled to be
paid on or before the Termination Date) bears to the consolidated EBITDA for the
Borrower and (b) the Borrower's credit rating as determined by S & P and
Moody's, as follows:
- -------------------------------- --------------------------------------------- --------------------------------------------
Applicable Margin Funded Debt/EBITDA Credit Rating
- -------------------------------- --------------------------------------------- --------------------------------------------
45 bp less than or equal to 75% BBB+/Baa1
- -------------------------------- --------------------------------------------- --------------------------------------------
55 bp greater than 75%, but BBB/Baa2
less than or equal to 150%
- -------------------------------- --------------------------------------------- --------------------------------------------
65 bp greater than 150%, but BBB-/Baa3
less than or equal to 225%
- -------------------------------- --------------------------------------------- --------------------------------------------
85 bp greater than 225%, but BB+/Ba1
less than or equal to 300%
- -------------------------------- --------------------------------------------- --------------------------------------------
110 bp greater than 300% BB/Ba2
- -------------------------------- --------------------------------------------- --------------------------------------------
For purposes of determining the Applicable Margin, if the respective credit
ratings of the Borrower by Moody's and S&P for any period correspond to two
different margins, the Applicable Margin shall be the lowest of the margins
corresponding to (x) the aforesaid ratio of Funded Debt to EBITDA,(y) the
Borrower's credit rating as determined by S&P and (z) the Borrower's credit
rating as determined by Moody's. The applicable Margin shall be determined by
the Agent quarterly (based upon the latest 10Q or 10K report and Compliance
Certificate delivered by the Borrower to the Agent from time to time pursuant to
this Agreement). The newly determined Margin shall be effective on the last day
of the month following the month during which such report and certificate were
delivered to the Agent.
24
6.3. LIBOR; Interest Periods. With respect to each Advance, the Borrower may
select Interest Periods of one (1), three (3) or six (6) months (or such longer
period as the Lenders may, in their sole discretion, agree), provided, however,
that at all times the Borrower must select an Interest Period for a portion of
the outstanding Advances so that sufficient deposits shall mature on each
Reduction Date to cover the principal amount of the Advances required to be
repaid on such Reduction Date, and provided further, that in no event may the
Borrower select an Interest Period of one (1) month more than six (6) times in
any calendar year. The Borrower shall give an Interest Notice to the Agent
(which shall promptly forward same to the Lenders) at least three (3) Banking
Days prior to the end of any then existing Interest Period, which Interest
Notice shall set forth the Interest Period selected. If at the end of any then
existing Interest Period, the Borrower fails to give an Interest Notice as
provided herein, the following Interest Period shall have a duration of three
(3) months. LIBOR and the Applicable Rate shall be determined by the Agent two
(2) Banking Days prior to the first day of the relevant Interest Period and
shall be promptly notified in writing to the Borrower. The Borrower's right to
select an Interest Period shall be further subject to the restriction that no
selection of an Interest Period shall be effective unless the Lenders are
satisfied that the necessary funds will be available to the Lenders for such
period and the Agent is satisfied that no Event of Default or event which with
notice or the passage of time, or both, would constitute an Event of Default
shall have occurred. No Interest Period may extend beyond the Termination Date.
6.4. Interest Payments. Interest on each Advance or portion thereof, shall be
payable quarterly in arrears and on the last day of each Interest Period.
6.5. Interest Due Only on Banking Day. If interest would, under Section 6.4, be
payable on a day which is not a Banking Day, it shall then be payable on the
next following Banking Day, unless such next following Banking Day falls in the
following month in which case it shall be payable on the Banking Day immediately
preceding the day on which such interest would otherwise be payable.
6.6. Calculation of Interest. All interest shall accrue from day to day and be
calculated on the actual number of days elapsed and on the basis of a three
hundred sixty (360) day year.
7 PAYMENTS
7.1. Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made on the due dates of such payments to the Agent at its
office located at 200 Park Avenue, New York, New York or to such other branch of
the Agent as the Agent may direct, without set-off or counterclaim and free
from, clear of and without deduction for, any Taxes, provided, however, that if
the Borrower shall at any time be compelled by law to withhold or deduct any
Taxes from any amounts payable to the Lenders or the Agent hereunder, then,
subject to Section 7.2, the Borrower shall pay such additional amounts in
Dollars as may be necessary in order that the net amounts received after
withholding or deduction shall equal the amounts which would have been received
if such withholding or deduction were not required and, in the event any
withholding or deduction is made, whether for Taxes or otherwise, the Borrower
25
shall promptly send to the Agent such documentary evidence with respect to such
withholding or deduction as may be required from time to time by the Agent, the
Lenders or any thereof.
7.2. Proof of no Withholding. Any Lender and any transferee, assignee or
participation holder (a "Transferee") that is not incorporated under the laws of
the United States of America or a State thereof agrees that, on the initial
Drawdown Date and prior to the first date on which any payment is due to such
Lender hereunder, such Lender will deliver to the Borrower (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying in each case that such
Lender or Transferee is entitled to receive payments under this Agreement and
the Note without deduction or withholding of any United States Federal income
taxes and (ii) a United States Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each Lender or Transferee which delivers
to the Borrower a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the
preceding sentence further undertakes to deliver to the Borrower two (2) further
copies of said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable
forms, or other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form previously delivered by it
to the Borrower and such extensions or renewals thereof as may reasonably be
requested by the Borrower certifying in the case of a Form 1001 or 4224 that
such Lender or such Transferee is entitled to receive payments under this
Agreement and the Note without deduction or withholding of any United States
Federal income taxes, unless in any such case an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender or such Transferee
from duly completing and delivering any such letter or form with respect to it,
and such Lender or such Transferee advises the Borrower that it is not capable
of (i) receiving payments without any deduction or withholding of United States
Federal income tax, and (ii) in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax.
7.3. Federal Income Tax Credits. In connection with the foregoing, each Lender
may consult with its legal advisers, all fees and expenses of which shall be for
the account of the Borrower. If a Lender obtains the benefit of a credit against
its liability for federal income taxes imposed by the United States of America
for all or part of the Taxes as to which the Borrower has paid additional
amounts as aforesaid then such Lender shall reimburse the Borrower for the
amount of the credit so obtained.
8 ACCOUNTS
8.1. The Operating Accounts. Except as otherwise agreed by the Agent, the
Borrower and the Vessel Owning/Operating Subsidiaries shall maintain with the
Agent at the office of the Agent located at 200 Park Avenue, New York, New York
or at other branches of the Agent the principal operating accounts of the
Borrower and the Vessel Owning/Operating Subsidiaries if the Agent has full
commercial banking capability as of the date of this Agreement in the geographic
areas in which the Borrower or any of the Vessel Owning/Operating Subsidiaries
26
operate. The Lenders expressly acknowledge that such operating accounts are not
pledged or otherwise hypothecated to the Lenders in connection with the Credit
Facility. The Lenders further acknowledge that any moneys deposited in such
accounts may be utilized for any business purpose whatsoever consistent with the
terms of this Agreement. Amounts accumulated in each Operating Account shall
bear interest for the account of the party maintaining such account in
accordance with the Agent's normal practice.
9 EVENTS OF DEFAULT
9.1. In the event that any of the following events shall occur and be
continuing:
(a) Principal Payments. any payment of principal due on the
Termination Date or any Reduction Date or otherwise due hereunder or under the
Note is not paid on the due date; or
(b) Interest and other Payments. any interest on any of the
Advances or any other amount becoming payable to the Agent or the Lenders under
this Agreement or under the Note is not paid on the due date or date of demand
(as the case may be), and such default continues unremedied for a period of five
(5) Banking Days; or
(c) Representations, etc. any representation, warranty or
other statement made by the Borrower in this Agreement or in any other
instrument, document or other agreement delivered in connection herewith or
therewith proves to have been untrue or misleading in any material respect as at
the date as of which made; or
(d) Impossibility, Illegality. it becomes impossible or
unlawful for the Borrower to fulfill any of the covenants and obligations
contained herein or in the Note or for the Agent or the Lenders to exercise any
of the rights vested in them hereunder or under the Note and such impossibility
or illegality in the reasonable opinion of the Majority Lenders will give rise
to a Material Adverse Change; or
(e) Citizenship. the Borrower or any of the Subsidiaries
owning Vessels registered under the laws and flag of the United States of
America defaults in the performance of Section 10.1.A(vi) and, provided such
default does not render any such Vessel liable to forfeiture, such default is
not cured within thirty (30) days of its occurrence; or
(f) Financial Covenants. the Borrower defaults in the
performance of Sections 10.1.A (xv), (xvi), (xvii), (xviii), (xix) or (xx) and
such default is not cured within thirty (30) days; or
(g) Other Covenants. the Borrower defaults in the
performance of any other term, covenant or agreement contained in this
Agreement, in the Note or in any other instrument, document or other agreement
delivered in connection herewith or therewith, or there occurs any other event
which constitutes a default under this Agreement or under the Note, in each case
other than an Event of Default referred to elsewhere in this Section 9.1, and
such default in the reasonable opinion of the Majority Lenders will give rise to
27
a Material Adverse Change and such default continues unremedied for a period of
thirty (30) days following notice thereof by the Agent; or
(h) Debt. the Borrower or any of the Subsidiaries shall
default in the payment when due (subject to any applicable grace period),
whether by acceleration or otherwise, of (i) any Funded Debt or (ii)
indebtedness to trade creditors exceeding, in the aggregate, One Million Dollars
($1,000,000) and in connection with such default or in connection with any
non-payment default in respect of such Funded Debt, any party becomes entitled
to enforce the security for any such Funded Debt or other indebtedness and such
party shall take steps to enforce the same, unless such default or enforcement
is being contested in good faith and by appropriate proceedings or other acts
and the Borrower and/or such Subsidiary or Subsidiaries, as the case may be,
shall set aside on its books adequate reserves with respect thereto; or
(i) Bankruptcy. the Borrower or any of the Subsidiaries
commences any proceedings relating to any substantial portion of its property
under any reorganization, arrangement or readjustment of debt, dissolution,
winding up, adjustment, composition, bankruptcy or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect ("Proceeding"), or there is
commenced against any thereof any Proceeding and such Proceeding remains
undismissed or unstayed for a period of thirty (30) days; or any receiver,
trustee, liquidator or sequestrator of, or for, any thereof or any substantial
portion of the property of any thereof is appointed and is not discharged within
a period of thirty (30) days; or any thereof by any act indicates consent to or
approval of or acquiescence in any Proceeding or to the appointment of any
receiver, trustee, liquidator or sequestrator of, or for, itself or any
substantial portion of its property; or
(j) Judgments. any judgment or order is made the effect
whereof would be to render ineffective or invalid this Agreement, the Note or
either thereof; or
(k) Inability to Pay Debts. the Borrower or any of the
Subsidiaries is unable to pay or admits its inability to pay its debts as they
fall due or if a moratorium shall be declared in respect of any Funded Debt of
the Borrower or any of the Subsidiaries; or
(l) Vessels Value/Commitment. the aggregate value of the
Vessels (as determined from time to time in accordance with Section 10.2) (it
being understood that for purposes of this Section 9.1(l), the value of a Vessel
owned by a Vessel Owning/Operating Subsidiary in which the Borrower has less
than a one hundred percent (100%) direct and/or indirect ownership interest
shall be prorated for such ownership interest), shall be less than two hundred
percent (200%) of the Committed Amount; or
(m) Change of Control of the Borrower. the Borrower shall
have suffered a Change of Control,
then the Lenders' obligation to make the Credit Facility available shall cease
and the Agent, on behalf of the Lenders, may (with the consent of the Majority
Lenders) and shall (upon the Majority Lenders' instruction) by notice to the
Borrower, (i) declare the entire balance of the then outstanding Advances,
accrued interest and any other sums payable by the Borrower hereunder and under
28
the Note due and payable whereupon the same shall forthwith be due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived (provided that upon the happening of an event specified
in subsections (i) or (k) of this Section 9.1, the Note shall be immediately due
and payable without declaration or other notice to the Borrower), (ii) terminate
any Letter of Credit which may be terminated in accordance with its terms and
(iii) direct the Borrower to pay (and the Borrower hereby agrees upon receipt of
such notice, or upon the occurrence of an Event of Default specified in
subsection (i) or (k) of this Section 9.1, it will pay) to the Agent at the
office set forth in Section 7.1 such additional amounts, to be held as security
in respect of Letters of Credit then outstanding (if any), equal to the
aggregate of the then Letter of Credit Outstandings, such amounts to be repaid
to the Borrower to the extent not utilized to cover Letter of Credit drawings.
In such event, the Agent and the Lenders may proceed to protect and enforce
their rights by action at law, suit in equity or in admiralty or other
appropriate proceeding, whether for specific performance of any covenant
contained in this Agreement or in the Note or in aid of the exercise of any
power granted herein or therein, or the Agent and the Lenders may proceed to
enforce the payment of the Note when due or to enforce any other legal or
equitable right of the Lenders, or proceed to take any action authorized or
permitted by applicable laws for the collection of all sums due, or so declared
due, on the Note, including, without limitation, the right to appropriate and
hold or apply (directly, by way of set-off or otherwise) to the payment of the
obligations of the Borrower hereunder and/or under the Note (whether or not then
due) all moneys and other amounts of the Borrower , then or thereafter in
possession of the Lenders, the balance of any deposit account (demand or time,
matured or unmatured) of the Borrower then or thereafter with the Lenders and
every other claim of the Borrower then or thereafter against the Lenders.
9.2. Indemnification. The Borrower agrees to, and shall, indemnify and hold the
Agent and the Lenders harmless against any loss or reasonable costs or expenses
(including legal fees and expenses) which the Agent or any Lender sustains or
incurs as a consequence of any default in payment of the principal amount of any
Advance or interest accrued thereon or any other amount payable hereunder or
under the Note including, but not limited to, all actual losses incurred in
liquidating or re-employing fixed deposits made by third parties or funds
acquired to effect or maintain the Credit Facility or any part thereof and any
costs incurred by the Agent or any Lender in connection with the unwinding of
any interest rate swap or other hedging arrangements. The Borrower also agrees
to reimburse and indemnify the Letter of Credit Issuer for and against any and
all losses, costs or expenses of whatever nature which may be incurred by the
Letter of Credit Issuer in performing its respective duties in any way relating
to or arising out of its issuance of Letters of Credit; provided that the
Borrower shall not be liable for the portion of such losses, costs or expenses
resulting from the Letter of Credit Issuer's gross negligence or willful
misconduct. To the extent the Letter of Credit Issuer is not so indemnified by
the Borrower, the Letter of Credit Participants will reimburse and indemnify the
Letter of Credit Issuer in proportion to its Letter of Credit Participant
Percentage. The Agent or any such Lender's certification of such loss, costs and
expenses absent any manifest error, shall be conclusive and binding on the
Borrower.
29
9.3. Application of Moneys. All moneys received by the Agent or any Lender under
or pursuant to this Agreement or the Note after the happening of any Event of
Default shall be applied by the Agent in the following manner:
(i) first, in or towards the payment or reimbursement of
any expenses or liabilities incurred by the Agent and
the Lenders in connection with the ascertainment,
protection or enforcement of the Agent's and the
Lenders' rights and remedies hereunder and under the
Note,
(ii) secondly, in or towards payment of any interest owing
in respect of the Advances,
(iii) thirdly, in or towards repayment of the Advances,
(iv) fourthly, as security in respect of Letters of Credit
then outstanding, in the aggregate amount of the then
Letter of Credit Outstandings,
(v) fifthly, in or towards payment of all other sums
which may be owing to the Agent and the Lenders under
this Agreement or under the Note, and
(vi) sixthly, the surplus (if any), as well as any moneys
held as security for Letters of Credit to the extent
not utilized to cover Letters of Credit, shall be
paid to the Borrower or to whomsoever else may be
entitled thereto.
10 COVENANTS
10.1. The Borrower hereby covenants and undertakes with the Agent and the
Lenders that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of the Credit Facility or otherwise owing
under this Agreement or under the Note:
A. The Borrower will:
(i) Performance of Agreements. duly perform and observe
the terms of this Agreement and the Note;
(ii) Compliance with Covenants. comply with each of its
covenants set forth in this Agreement;
(iii) Notice of Default. promptly inform the Agent of the
occurrence of (a) any Event of Default or of any
event which with the giving of notice or lapse of
time, or both, would constitute an Event of Default,
(b) any litigation or governmental proceeding pending
or overtly threatened against it or against any of
the Subsidiaries which could reasonably be expected
to give rise to a Material Adverse Change and (c) any
other event or condition of which it becomes aware
30
which is reasonably likely to give rise to a Material
Adverse Change;
(iv) Obtain Consents. without prejudice to Section 2.1 and
this Section 10.1, obtain every consent and do all
other acts and things which may from time to time be
necessary or advisable for the continued due
performance of all its obligations under this
Agreement and under the Note;
(v) Financial Statements. deliver to the Agent:
(a) as soon as available but not later
than ninety (90) days after the end of each
fiscal year of the Borrower, a complete copy of
the 10K report (or equivalent) of the Borrower
filed with the United States Securities and
Exchange Commission (including audited annual
financial statements of the Borrower, together
with a report thereon by an Acceptable Accounting
Firm), which shall be prepared by the Borrower
and certified by the chief financial officer of
the Borrower, together with a Compliance
Certificate from such chief financial officer;
(b) as soon as available but not later
than sixty (60) days after the end of each
quarter of each fiscal year of the Borrower, a
copy of the 10Q report (or equivalent) of the
Borrower filed with the United States Securities
and Exchange Commission which shall be prepared
by the Borrower and certified by the chief
financial officer of the Borrower, together, in
each instance, with a Compliance Certificate from
such chief financial officer;
(c) within ten (10) days of filing,
notice of the filing of all 8K reports (or
equivalent) filed by the Borrower with the United
States Securities and Exchange Commission (or any
similar governmental authority) and deliver to
the Agent, promptly on its request therefor,
copies of such filings;
(d) promptly upon the mailing thereof
to the shareholders of the Borrower generally,
copies of all financial statements, reports and
proxy statements so mailed;
(e) within ten (10) days of filing,
notice of the filing of all registration
statements (other than the exhibits thereto and
any registration statements on Form S-8 or its
equivalent) which the Borrower shall have filed
with the United States Securities and Exchange
Commission (or similar governmental authority)
and deliver to the Agent, promptly on its request
therefor, copies of such filings; and
31
(f) such other statement or
statements, lists of property and accounts,
budgets, forecasts, reports and financial
information (including a listing of all
outstanding indebtedness of the Borrower and the
Subsidiaries for borrowed monies) with respect to
the business, operations and management of the
Borrower and the Subsidiaries and the employment
of the assets owned or operated directly or
indirectly by the Borrower or any of the
Subsidiaries as the Agent may from time to time
reasonably request in writing and any material
reports received by any thereof from their
independent certified accountants;
(vi) Qualification to Own U.S. Flag Vessels. throughout
the Credit Period, if the Borrower or a Subsidiary
owns a United States flag vessel (a) the Borrower
shall remain eligible, and shall cause such
Subsidiary to continue to be eligible, to document
such United States flag vessel within the meaning of
46 App. U.S.C. ss.12102(a) and (b) if such United
States flag vessel is operated in the coastwise
trade, remain qualified, and cause such Subsidiary to
continue to be qualified, to own and operate vessels
in the coastwise trade, within the meaning of Section
2 of the Shipping Act, 1916, as amended;
(vii) Corporate Existence. do or cause to be done all
things necessary to preserve and keep in full force
and effect its corporate existence, as well as the
corporate existence of its Subsidiaries, and all
licenses, franchises, permits and assets necessary to
the conduct of its business and the business of its
Subsidiaries;
(viii) Books, Records, etc. keep, and cause each of the
Subsidiaries to keep, proper books of record and
account into which full and correct entries shall be
made, in accordance with GAAP throughout the Credit
Period;
(ix) Inspection. allow any representative or
representatives designated by the Agent, subject to
applicable laws and regulations, to visit and inspect
any of its or any of the Subsidiaries' properties,
and, on request, to examine its or any of the
Subsidiaries' books of account, records, reports and
other papers (and to make copies thereof and to take
extracts therefrom) and to discuss the affairs,
finances and accounts of any thereof with its
officers and executive employees all at such
reasonable times and as often as the Agent reasonably
requests;
(x) Taxes. pay and discharge, and cause each of the
Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies
imposed upon it or upon its income or property prior
to the date upon which penalties attach thereof;
provided, however, that neither it nor any such
Subsidiary shall be required to pay and discharge any
such tax, assessment, charge or levy which are being
contested in good faith and by appropriate
32
proceedings or other acts and so long as it or such
Subsidiary shall set aside on its books adequate
reserves with respect thereto;
(xi) Compliance with Statutes, etc. do, or cause to be
done, all things necessary to comply with all
material laws, and the rules and regulations
thereunder, applicable to itself or to any of the
Subsidiaries including, without limitation, those
laws, rules and regulations relating to employee
benefit plans and environmental matters;
(xii) Environmental Matters. promptly upon the occurrence
of any of the following conditions, provide to the
Agent a certificate of a chief executive officer
thereof, specifying in detail the nature of such
condition and its proposed response or the response
of its Environmental Affiliate: (a) its receipt or
the receipt by any Subsidiary or any of their
Environmental Affiliates of any communication
whatsoever that alleges that such person is not in
compliance with any applicable environmental law or
environmental approval, if such noncompliance could
reasonably be expected to give rise to a Material
Adverse Change, (b) knowledge by it, any Subsidiary
or any of their Environmental Affiliates that there
exists any Environmental Claim pending or threatened
against any such person, which could reasonably be
expected to give rise to a Material Adverse Change,
or (c) any release, emission, discharge or disposal
of any material that could form the basis of any
Environmental Claim against it, any Subsidiary or any
of their Environmental Affiliates if such
Environmental Claim could reasonably be expected to
give rise to a Material Adverse Change. Upon the
written request by the Agent, it will submit to the
Agent at reasonable intervals, a report providing an
update of the status of any issue or claim identified
in any notice or certificate required pursuant to
this subsection;
(xiii) Evidence of Insurance. shall, and shall procure that
each of the Subsidiaries shall, maintain the
insurances on its properties as provided under
Section 2.1(g)(iii) and 2.1(k), with underwriters,
brokers and protection and indemnity clubs acceptable
to the Agent, and the Borrower shall provide the
Agent, annually, with copies of insurance policies
and cover notes (together with such other
documentation as the Agent may reasonably require)
evidencing the same;
(xiv) Maintenance of Assets. maintain and keep, and cause
the Subsidiaries to maintain and keep, all properties
used or useful in the conduct of their business in
good condition, repair and working order and supplied
with all necessary equipment and will make, or cause
to be made, all necessary repairs, renewals and
replacements thereof so that the business carried on
in connection therewith and every portion thereof may
be properly and advantageously conducted at all
times;
33
(xv) Funded Debt/Total Capitalization. procure that, on a
consolidated basis, the Funded Debt of the Borrower
shall not exceed fifty percent (50%) of its Total
Capitalization;
(xvi) Senior Debt/Total Capitalization. procure that, on a
consolidated basis, the Senior Debt of the Borrower
shall not exceed thirty-five percent (35%) of its
Total Capitalization;
(xvii) Permitted Secured Senior Debt. procure that, on a
consolidated basis, not more than the greater of (a)
One Hundred Five Million Dollars ($105,000,000) of
the Senior Debt of the Borrower and (b) seventeen and
one-half percent (17 1/2%) of its Total
Capitalization may be secured indebtedness (as used
herein, such secured Senior Debt shall include,
without limitation, all capitalized leases);
(xviii) Cash, Cash Equivalents. at all times maintain, on a
consolidated basis, readily available cash or Cash
Equivalents in an aggregate amount at least equal to
the greater of (a) Thirty Million Dollars
($30,000,000) and (b) an amount equal to twelve and
one-half percent (12 1/2%) of the Funded Debt, on a
consolidated basis, of the Borrower;
(xix) Interest Coverage Ratio. maintain, on a consolidated
basis, an Interest Coverage Ratio of 3.0 to 1.0,
measured quarterly;
(xx) Consolidated Net Worth. at all times maintain a
Consolidated Net Worth equal to (a), during calendar
year 1998, Three Hundred and Nine Million Six Hundred
Thousand Dollars ($309,600,000) and (b), during each
calendar year thereafter, the aggregate of (x) Three
Hundred Nine Million Six Hundred Thousand Dollars
($309,600,000) and (y) an amount equal to fifty
percent (50%) of the Borrower's consolidated annual
net income, if any, for the preceding calendar year
or each of the preceding calendar years, as the case
may be, commencing with calendar year 1998, as
reported from time to time, in the Borrower's
published financial reports;
(xxi) ERISA Matters. forthwith upon learning of the
occurrence of any material liability of the Borrower,
any of the Subsidiaries or any ERISA Affiliate
pursuant to ERISA in connection with the termination
of any Plan or withdrawal or partial withdrawal from
any multiemployer plan (as defined in ERISA) or of a
failure to certify the minimum funding standard of
Section 412 of the Code or Part 3 of Title I of ERISA
by any Plan for which the Borrower, any of the
Subsidiaries or any ERISA Affiliate is plan
administrator (as defined in ERISA), furnish or cause
to be furnished to the Lender written notice thereof;
and
34
(xxii) Delivery of Share Certificates. deliver to the
Agent, promptly upon the Agent's request and, in
any event, annually, simultaneous with the
delivery of the Compliance Certificate delivered
report under Section 10.1A.(v)(a), all share
certificates or other evidences of ownership, if
any, issued to the Borrower or to any Subsidiary
evidencing an ownership interest in any Vessel
Owning/Operating Subsidiary.
B. The Borrower will not, without the prior written
consent of the Lenders:
(i) Liens. create, assume or permit to exist, or
permit any of the Vessel Owning/Operating
Subsidiaries to create, assume or permit to
exist, any lien, charge or encumbrance whatsoever
upon any of the properties or other assets of any
thereof, except:
(a) liens for taxes not yet payable
for which adequate reserves have been maintained;
(b) pledges or deposits to secure
obligations under workmen's compensation laws or
similar legislation, deposits to secure public or
statutory obligations, warehousemen's or other
like liens, or deposits to obtain the release of
such liens and deposits to secure surety, appeal
or customs bonds on which it or any of the Vessel
Owning/Operating Subsidiaries is the principal,
as to all of the foregoing, only to the extent
arising and continuing in the ordinary course of
business;
(c) liens, charges and other
encumbrances over such property or other assets
(other than Vessels) of the Borrower or any of
the Vessel Owning/Operating Subsidiaries, unless
otherwise prohibited by Section 10.1B(viii);
(d) with respect to Vessels, liens for
crew's wages remaining unpaid in accordance with
reasonable commercial practices or for collision
or salvage, liens in favor of suppliers of
necessaries or other similar liens arising in the
ordinary course of the vessel-owning company's
business so long as the suppliers thereof have
not evidenced an intention to enforce any such
lien or liens for loss, damage or expense, which
are fully covered by insurance or, in respect of
which, a bond or other security has been posted
by the company owning such Vessel with the
appropriate court or other tribunal to prevent
the arrest or secure the release of any vessel
from arrest on account of such claim or lien; and
(e) liens securing Senior Debt as set
forth on Schedule C and as otherwise permitted by
the terms of this Agreement;
35
(ii) Sale of Assets. (a) Cease, or threaten to cease, its
operations or (b) viewed on a consolidated basis with
its Subsidiaries, sell or otherwise dispose of, or
threaten to sell or otherwise dispose of, all or
substantially all of the assets thereof, or all or
substantially all of such assets are seized or
otherwise appropriated except for requisition for
hire;
(iii) Dividends. declare or make any distributions to its
shareholders, by dividend or otherwise, or otherwise
dispose of any assets to its shareholders in cash or
in any other manner unless the Borrower and the
Subsidiaries are in full compliance with the
covenants contained in this Agreement and no Event of
Default has occurred and is continuing or will occur
after giving effect to any declaration or
distributions to shareholders;
(iv) Changes in Business. change or permit any of the
Subsidiaries to change, the nature of its business or
commence any other business not reasonably related to
the maritime services, environmental services, energy
services or related businesses;
(v) Consolidation, Merger. consolidate with, or merge
into, any corporation (it being understood that the
Borrower can merge with any corporation so long as
the Borrower is the surviving entity, any Subsidiary
can merge or consolidate with any other Subsidiary
and any Subsidiary can merge into the Borrower);
(vi) Use of Proceeds. use the proceeds of the Credit
Facility in violation of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System,
as in effect from time to time;
(vii) Redemption/Repurchase of Securities. redeem or
repurchase any of its outstanding convertible
subordinated bonds or outstanding shares, unless
after giving effect to any such redemption or
repurchase it is in compliance with its covenants
hereunder and no Event of Default shall have occurred
and be continuing and notification of any such
redemption or repurchase shall be included in the
next quarterly Compliance Certificate delivered to
the Agent; and
(viii) Negative Pledge. sell, encumber or otherwise
transfer, or permit any Vessel Owning/Operating
Subsidiary to sell, encumber or otherwise transfer,
any of its Vessels or any of the right, title or
interest of any thereof therein, assign, pledge or
otherwise encumber any earnings of, insurances
covering or requisition compensation in respect of,
any of its Vessels or sell, assign, pledge or
otherwise transfer or encumber any of the shares of
stock of any of the Vessel Owning/Operating
Subsidiaries directly or indirectly legally or
beneficially owned by the Borrower unless (x) notice
of such sale, assignment, pledge, transfer or other
encumbrance shall be included with and a part of the
36
next following Compliance Certificate delivered by
the Borrower to the Agent pursuant to Section
10.1A.(v) and (y) after giving effect to any such
sale, assignment, pledge, transfer or other
encumbrance, the Borrower is in compliance with its
covenants and no Event of Default shall have occurred
and be continuing.
10.2. Vessel Valuations. Upon the reasonable request of the Agent, the Borrower
shall obtain, at the Borrower's cost, valuations of the Vessels owned by Vessel
Owning/Operating Subsidiaries, charter free, in Dollars from an independent
shipbroker satisfactory to the Agent (it being understood that the initial
valuation for any Vessel acquired in an arm's length transaction with a third
party shall be the purchase price of such Vessel). In the event the Borrower
shall fail or refuse to obtain the valuations requested pursuant to this Section
10.2 within ten (10) days of the Agent's request therefor, the Agent shall be
authorized to obtain such valuations, at the Borrower's cost, from an
independent shipbroker selected by the Agent, which valuations shall be deemed
the equivalent of valuations duly obtained by the Borrower pursuant to this
Section 10.2, but the Agent's actions in doing so shall not excuse any default
of the Borrower under this Section 10.2.
10.3. Inspection and Survey Reports. Upon the reasonable request of the Agent,
the Borrower shall provide the Agent with copies of all internally generated
inspection or survey reports on the Vessels and shall, if the Agent so
reasonably requests, cause the Vessels to be surveyed on an annual basis by a
surveyor appointed by the Agent. All costs arising in connection with any such
survey or surveys (including, but not limited to, the fees of the relevant
surveyor or firm of surveyors appointed by the Agent to make such survey or
surveys) shall be borne by the Borrower.
11 ASSIGNMENT AND PARTICIPATIONS
This Agreement shall be binding upon, and inure to the
benefit of, the Borrower, the Agent, the Lenders and their respective successors
and assigns, except that the Borrower may not assign any of its rights or
obligations hereunder without the prior written consent of the Lenders. In
giving any consent as aforesaid to any assignment by the Borrower, the Lenders
shall be entitled to impose such conditions as they shall deem advisable. Any
Lender shall be entitled to assign the whole or any part of its rights or
obligations under this Agreement or grant participation(s) in the Credit
Facility to any subsidiary or holding company of such Lender, to any subsidiary
company of any thereof or, with the consent of the Borrower and the Agent (in
each case not to be unreasonably withheld) to any other bank or financial
institution whatsoever and such Lender shall forthwith give notice of any such
assignment or participation to the Agent and the Borrower, provided, however,
that (a) except as provided by Section 16, in such event Den norske Bank ASA
shall remain the agent, (b) any such assignment or participation shall be in a
minimum amount of Ten Million Dollars ($10,000,000), (c) any such assignment to
a Lender is to be made pursuant to an Assignment and Assumption Agreement
substantially in the form of Exhibit 5 hereto, (d) Den norske Bank ASA's
Commitment shall be not less than twenty-five percent (25%) of the Committed
37
Amount and (e) except as provided in Sections 14.2 and for such reasonable legal
fees and expenses incurred in connection with the documentation of such an
assignment (but not participation), no such assignment or participation will
result in any additional costs to, or additional material requirements on, the
Borrower. The Borrower will take all reasonable actions requested by the Lenders
to effect such assignment, including, without limitation, the execution of a
written consent to such Assignment and Assumption Agreement.
12 ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
12.1. Illegality. In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof a
Lender has a reasonable basis to conclude that it has become unlawful for such
Lender to maintain or give effect to its obligations as contemplated by this
Agreement, the Lender shall inform the Borrower and the Agent to that effect,
whereafter the liability of such Lender to make its Commitment available shall
forthwith cease and the Borrower shall be required either to prepay to such
Lender any portion of the then outstanding Advances owing to such Lender
immediately or, if such Lender so agrees, to prepay such portion of the
outstanding Advances to such Lender on the last day of the then current Interest
Period or Periods, in accordance with and subject to the provisions of Section
12.5 and to pay to the Agent sufficient amounts of cash to fund any possible
drawings under Letters of Credit then in existence, such amounts to be repaid to
the Borrower to the extent not utilized to cover Letter of Credit drawings. In
any such event, but without prejudice to the aforesaid obligations of the
Borrower to prepay the outstanding Advances or part thereof and fund any
possible drawings under Letters of Credit then in existence, the Borrower and
such Lender shall negotiate in good faith with a view to agreeing on terms for
making the Commitment available from another jurisdiction or otherwise
restructuring the Commitment on a basis which is not unlawful.
12.2. Increased Cost. If any change in applicable law, regulation or regulatory
requirement or in the interpretation or application thereof by any governmental
or other authority, shall:
(i) subject a Lender to any Taxes with respect to its
income from the Credit Facility or any part thereof,
or
(ii) change the basis of taxation to a Lender of payments
of principal or interest or any other payment due or
to become due pursuant to this Agreement (other than
a change in the basis effected by the jurisdiction of
incorporation of such Lender or the domicile of the
Lender's office through which the Lender's Commitment
is made or any governmental subdivision or other
taxing authority having jurisdiction over such Lender
(unless such jurisdiction is asserted solely by
reason of the activities of the Borrower or any of
the Subsidiaries) or such other jurisdiction where
the Credit Facility may be payable), or
38
(iii) impose, modify or deem applicable any reserve
requirements or require the making of any special
deposits against or in respect of any assets or
liabilities of, deposits with or for the account
of, or loans by, any Lender, or
(iv) impose on any Lender any other condition
affecting the Commitment or any portion of any
Advance thereunder, and the result of the
foregoing is either to increase the cost to such
Lender of making available or maintaining its
Commitment or to reduce the amount of any payment
received by such Lender
then and in any such case if such increase or reduction in the opinion of such
Lender materially affects the interests of such Lender under or in connection
with this Agreement:
(a) such Lender shall notify the
Borrower and the Agent of the happening of such
event,
(b) the Borrower agrees forthwith upon
demand to pay to such Lender such amount as such
Lender certifies to be necessary to compensate
such Lender for such additional cost or such
reduction, and
(c) any such demand as is referred to
in sub-section (b) of this Section 12.2 may be
made by such Lender at any time before or after
any repayment of the Advances.
12.3. Non-availability of Funds. If the Agent shall determine that, by reason of
circumstances affecting the London Interbank Eurodollar Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate for any Interest Period, the Agent shall give notice of such
determination to the Borrower. The Borrower and the Lenders shall then negotiate
in good faith in order to agree upon a mutually agreeable basis for funding the
Advance or Advances in question, and/or for determining the interest rate and/or
Interest Period(s) to be substituted for those which would otherwise have
applied under this Agreement. If the Borrower and the Lenders are unable to
agree upon such a substituted funding base, interest rate and/or Interest
Period(s) within thirty (30) days of the giving of such notice, the Borrower
shall repay the Credit Facility, or the relevant portion thereof, as the case
may be, to the Lenders immediately; provided, however, that if the Borrower
fails to make such repayment, the Lenders shall determine a funding basis, set
an interest rate and/or set an Interest Period(s), as the case may be, all to
take effect from the expiration of the relevant Interest Period(s) in effect at
the date of said determination notice, which rate shall be equal to the
aggregate of the Margin and the cost to the Lenders of funding the relevant
Advance or Advances.
39
12.4. Determination of Losses. A certificate or determination notice of the
Lenders or the Agent as to any of the matters referred to in this Section 12,
absent manifest error, shall be conclusive and binding on the Borrower.
12.5. Compensation for Losses. Where the Advances are to be prepaid by the
Borrower pursuant to Section 12.1 the Borrower agrees simultaneously with such
prepayment to pay to the relevant Lender all accrued interest to the date of
actual payment and all other sums payable by the Borrower to such Lender
pursuant to this Agreement, together with such amounts as may be certified by
such Lender to be necessary to compensate such Lender for any actual loss,
premium or penalties incurred or to be incurred by it on account of funds
borrowed to make, fund or maintain its Commitment for the remainder (if any) of
the then current Interest Period or Periods, if any, but otherwise without
penalty or premium.
13 CURRENCY INDEMNITY
13.1. Currency Conversion. If for the purpose of obtaining or enforcing a
judgment in any court in any country it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in Dollars or a
particular Foreign Currency, as the case may be, under this Agreement or under
the Note, then the conversion shall be made, in the discretion of the Agent, at
the rate of exchange prevailing either on the date of default or on the day
before the day on which the judgment is given or the order for enforcement is
made, as the case may be (the "conversion date"), provided that the Agent shall
not be entitled to recover under this section any amount in the judgment
currency which exceeds at the conversion date the amount in Dollars or the
relevant Foreign Currency, as the case may be, due under this Agreement and/or
under the Note.
13.2. Change in Exchange Rate. If there is a change in the rate of exchange
prevailing between the conversion date and the date of actual payment of the
amount due, the Borrower shall pay such additional amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the judgment currency when converted at the rate of exchange prevailing on the
date of payment will produce the amount then due under this Agreement and/or
under the Note in Dollars or the relevant Foreign Currency; any excess over the
amount due received or collected by the Lenders shall be remitted to the
Borrower.
13.3. Additional Debt Due. Any amount due from the Borrower under Section 13.2
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement and/or
under or in respect of the Note.
13.4. Rate of Exchange. The term "rate of exchange" in this Section 13 means the
rate at which the Agent in accordance with its normal practices is able on the
40
relevant date to purchase Dollars or the relevant Foreign Currency with the
judgment currency and includes any premium and costs of exchange payable in
connection with such purchase.
14 FEES AND EXPENSES
14.1. Commitment Fee. (a) The Borrower shall pay to the Agent, for distribution
to the Lenders, a commitment fee in Dollars, payable quarterly in arrears,
computed at the relevant rates per annum applicable pursuant to this Section
14.1 (the "Commitment Fee Rate(s)") on the average unfunded portion of the
Committed Amount (valued in Dollars) during such quarter. The commitment fee
shall accrue from the date hereof and shall terminate on the Termination Date.
(b) The Commitment Fee Rates, as determined from time to
time by the Agent as provided herein, shall be equal to the lower of the rates
corresponding to (a) the percentage that the Borrower's consolidated Funded Debt
(excluding any Funded Debt subordinated to the indebtedness of the Borrower
under the Credit Facility and in respect of which no payments of principal are
scheduled to be paid on or before the Termination Date) bears to the
consolidated EBITDA for the Borrower and (b) the Borrower's credit rating as
determined by S&P and Moody's, as follows:
- ----------------------------------------------- --------------------------------------------- ------------------------------------
Commitment Fee Rate Funded Debt/EBITDA Credit Rating
- ----------------------------------------------- --------------------------------------------- ------------------------------------
17.5 bp less than or equal to 75% BBB+/Baa1
- ----------------------------------------------- --------------------------------------------- ------------------------------------
20.0 bp greater than 75%, but BBB/Baa2
less than or equal to 150%
- ----------------------------------------------- --------------------------------------------- ------------------------------------
22.5 bp greater than 150%, but BBB-/Baa3
less than or equal to 225%
- ----------------------------------------------- --------------------------------------------- ------------------------------------
30.0 bp greater than 225%, but BB+/Ba1
less than or equal to 300%
- ----------------------------------------------- --------------------------------------------- ------------------------------------
40.0 bp greater than 300% BB/Ba2
- ----------------------------------------------- --------------------------------------------- ------------------------------------
For purposes of determining the applicable Commitment Fee Rate(s), if the
respective credit ratings of the Borrower by Moody's and S&P for any period
correspond to two different Commitment Fee Rates, the applicable Commitment Fee
Rate(s) shall be the lowest of the rates corresponding to (x) the aforesaid
ratio of Funded Debt to EBITDA, (y) the Borrower's credit rating as determined
by S&P and (z) the Borrower's credit rating as determined by Moody's. The
applicable Commitment Fee Rate(s) shall be determined by the Agent quarterly
(based upon the latest 10Q report or 10K report and Compliance Certificate
delivered by the Borrower to the Agent from time to time pursuant to this
41
Agreement). The newly determined Commitment Fee Rate(s) shall be effective on
the on the last day of the month following the month during which such report
was delivered to the Agent.
14.2. Letter of Credit and Facing Fees and Related Charges. In addition, the
Borrower shall pay to the Agent, for distribution to the Lenders, a fee in
Dollars in respect of each Letter of Credit (the "Letter of Credit Fee")
computed at a rate per annum equal to the Margin in effect from time to time on
the daily Stated Amount of such Letter of Credit as reduced by any drawings
thereunder. If the Credit Facility is syndicated, the Borrower further agrees to
pay to the Letter of Credit Issuer, commencing at such time, a fee in Dollars in
respect of each Letter of Credit (the "Facing Fee") computed at a rate per annum
equal to one-eighth of one percent (1/8%) on the daily Stated Amount of such
Letter of Credit as reduced by any drawings thereunder. Accrued Letter of Credit
and Facing Fees shall be due and payable quarterly in arrears on the first day
of each October, January, April and July of each year the Credit Facility
remains outstanding and on the Termination Date. The Borrower also agrees to pay
to the Letter of Credit Issuer all customary issuing and handling fees of the
Letter of Credit Issuer in connection with its issuance of Letters of Credit.
14.3. Agency Fee. The Borrower shall also pay to the Agent an annual agency fee
of Five Thousand Dollars ($5,000) for each additional Lender (up to three (3))
which acquires a participation or syndicated interest in the Credit Facility
from Den norske Bank ASA, payable annually in advance, commencing upon the date
on which each such additional Lender acquires such participation or syndicated
interest in the Credit Facility.
14.4. Agent's Other Fees. The Borrower shall pay to the Agent, for its own
account, such fees as shall have been agreed in accordance with the letter
agreement dated September 17, 1998 between the Borrower and the Agent.
14.5. Costs, Charges and Expenses. The Borrower agrees to pay the Agent and the
Lenders upon demand (whether or not the Credit Facility or any part thereof is
made available hereunder) all reasonable costs, charges and expenses (including
legal fees and expenses, as well as travel expenses of the Agent and the
Lenders) incurred by the Agent and the Lenders in connection with the
negotiation, preparation, execution and enforcement or attempted enforcement of
this Agreement, the Note or otherwise in connection with the Credit Facility, as
well as in connection with any supplements, amendments, assignments, waivers or
consents relating thereto.
15 APPLICABLE LAW, JURISDICTION AND WAIVER
15.1. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
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15.2. Jurisdiction. The Borrower hereby irrevocably submits to the jurisdiction
of the courts of the State of New York and of the United States District Court
for the Southern District of New York in any action or proceeding brought
against it by the Agent or the Lenders under this Agreement or under any
document delivered hereunder and the Borrower hereby irrevocably appoints SEACOR
Management Services Inc. with an office at 1370 Avenue of the Americas, New
York, New York, its attorney-in-fact and agent for service of summons or other
legal process thereon, which service may be made by serving a copy of any
summons or other legal process in any such action or proceeding on such agent
and such agent is hereby authorized and directed to accept by and on behalf of
the Borrower service of summons and other legal process of any such action or
proceeding against the Borrower. The service, as herein provided, of such
summons or other legal process in any such action or proceeding shall be deemed
personal service and accepted by the Borrower as such, and shall be legal and
binding upon the Borrower for all the purposes of any such action or proceeding.
Final judgment (a certified or exemplified copy of which shall be conclusive
evidence of the fact and of the amount of any indebtedness of a Borrower to any
Lender or the Agent) against the Borrower in any such legal action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment. The Borrower will advise the Agent promptly of any change of address
of the foregoing agent or of the substitution of another agent therefor. In the
event that the foregoing agent or any other agent appointed by the Borrower
shall not be conveniently available for such service or if the Borrower fails to
maintain an agent as provided herein, the Borrower hereby irrevocably appoints
the person who then is the Secretary of State of the State of New York as such
attorney-in-fact and agent. The Borrower will advise the foregoing agent of the
appointment made hereby, but failure to so advise shall not affect the
appointment made hereby. Notwithstanding anything herein to the contrary, the
Agent or the Lenders may bring any legal action or proceeding in any other
appropriate jurisdiction.
15.3. WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
AGENT AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER
PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT OR THE NOTE.
16 THE AGENT
16.1. Appointment of Agent. Each of the Lenders hereby irrevocably appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and under the Note as are delegated to the
Agent by the terms hereof and thereof. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable for any action taken or
omitted to be taken by it or them under this Agreement and under the Note or in
connection therewith, except for its or their own gross negligence or willful
misconduct.
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16.2. Distribution of Payments. Whenever any payment is received by the Agent
from the Borrower for the account of the Lenders, or any of them, whether of
principal or interest on the Note, commissions, commitment fees under Section
14.1, or otherwise, it will thereafter cause like funds relating to such payment
to be promptly distributed ratably to the Lenders according to their respective
Commitments, in each case to be applied according to the terms of this
Agreement.
16.3. Holder of Interest in Note. The Agent may treat each Lender as the holder
of all of the interest of such Lender in the Note unless and until the Agent has
received a copy of an Assignment and Assumption Agreement evidencing the
transfer of all or any part of such Lender's interest in the Credit Facility.
16.4. No Duty to Examine, Etc. The Agent shall not be under a duty to examine or
pass upon the validity, effectiveness or genuineness of this Agreement, the Note
or any instrument, document or communication furnished pursuant to this
Agreement or the Note or in connection with any thereof and the Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be.
16.5. Agent as Lender. With respect to that portion of the Credit Facility made
available by it, the Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were not the Agent, and
the term "Lender" or "Lenders" shall include the Agent in its capacity as a
Lender. The Agent and its affiliates may accept deposits from, lend money to and
generally engage in any kind of business with, the Borrower as if it were not
the Agent.
16.6. (a) Obligations of Agent. The obligations of the Agent under this
Agreement and under the Note are only those expressly set forth herein and
therein.
(b) No Duty to Investigate. The Agent shall not at any time
be under any duty to investigate whether an Event of Default, or an event which
with the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred or to investigate the performance of this Agreement and
the Note by the Borrower.
16.7. (a) Discretion of Agent. The Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may be
vested in it by, and with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement
and the Note , unless the Agent shall have been instructed by the Majority
Lenders to exercise such rights or to take or refrain from taking such action;
44
provided, however, that the Agent shall not be required to take any action which
exposes the Agent to personal liability or which is contrary to this Agreement
or applicable law.
(b) Instructions of Majority Lenders. The Agent shall in
all cases be fully protected in acting or refraining from acting under this
Agreement and under the Note in accordance with the instructions of the Majority
Lenders (or, where expressly required hereby, all the Lenders), and any action
taken or failure to act pursuant to such instructions shall be binding on all of
the Lenders.
16.8. Assumption re Event of Default. Except as otherwise provided in Section
16.14, the Agent shall be entitled to assume that no Event of Default, or event
which with the giving of notice or lapse of time, or both, would constitute an
Event of Default, has occurred and is continuing, unless the Agent has been
notified by the Borrower of such fact or has been notified by a Lender that such
Lender considers that an Event of Default or such an event (specifying in detail
the nature thereof) has occurred and is continuing. In the event that the Agent
shall have been notified by any party in the manner set forth in the preceding
sentence of any Event of Default or of an event which with the giving of notice
or lapse of time, or both, would constitute an Event of Default, the Agent shall
notify the Lenders and shall take action and assert such rights under this
Agreement or the Note as the Majority Lenders shall request in writing.
16.9. No Liability of Agent or Lenders. Neither the Agent nor any of the Lenders
shall be under any liability or responsibility whatsoever:
(a) to the Borrower or any other person or entity as a
consequence of any failure or delay in performance by, or any breach by, any
other Lender or any other person of any of its or their obligations under this
Agreement or under the Note;
(b) to any Lender or Lenders as a consequence of any
failure or delay in performance by, or any breach by the Borrower of any of its
obligations under this Agreement or under the Note; or
(c) to any Lender or Lenders for any statements,
representations or warranties contained in this Agreement or in the Note or in
any document or instrument delivered in connection with the transaction hereby
contemplated; or for the validity, effectiveness, enforceability or sufficiency
of this Agreement and the Note or any document or instrument delivered in
connection with the transactions hereby contemplated.
16.10. Indemnification of Agent. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), pro rata according to the respective
amounts of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including reasonable
legal fees and expenses incurred in investigating claims and defending itself
45
against such liabilities) which may be imposed on, incurred by or asserted
against, the Agent in any way relating to or arising out of this Agreement and
the Note, any action taken or omitted by the Agent hereunder or thereunder or
the preparation, administration, amendment or enforcement of, or waiver of any
provision of, this Agreement and the Note, except that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
16.11. Consultation with Counsel. The Agent may consult with legal counsel
selected by the Agent and shall not be liable for any action taken, permitted or
omitted by it in good faith in accordance with the advice or opinion of such
counsel.
16.12. Resignation. The Agent may resign at any time by giving sixty (60) days'
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Lenders shall have the right to appoint a successor Agent. If
no successor Agent shall have been so appointed by the Lenders and shall have
accepted such appointment within sixty (60) days after the retiring Agent's
giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank or trust company of
recognized standing. The appointment of any successor Agent shall (unless an
Event of Default has occurred and is continuing) be subject to the prior written
consent of the Borrower, such consent not to be unreasonably withheld. After any
retiring Agent's resignation as Agent hereunder, the provisions of this Section
16 shall continue in effect for its benefit with respect to any actions taken or
omitted by it while acting as Agent.
16.13. Representations of Lenders. Each Lender represents and warrants to each
other Lender and the Agent that:
(i) in making its decision to enter into this Agreement and to make
its Commitment available hereunder, it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Borrower, that it has made an independent credit judgment and that it has not
relied upon any statement, representation or warranty by any other Lender or the
Agent; and
(ii) So long as any portion of its Commitment remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Borrower.
16.14. Notification of Event of Default. The Agent hereby undertakes promptly to
notify the Lenders, and each of the Lenders hereby undertakes promptly to notify
the Agent and the other Lenders, of the existence of any Event of Default which
shall have occurred and be continuing of which the Agent or such Lender has
actual knowledge.
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16.15. No Agency until Syndication. Unless and until the Credit Facility is
syndicated, all references in this Agreement to the term "Agent" shall be deemed
to be references to Den Norske Bank ASA, as a Lender and not as administrative
agent.
17 NOTICES AND DEMANDS
17.1. Notices in Writing. Every notice or demand under this Agreement shall be
in writing and may be given or made by telecopy.
17.2. Addresses for Notice. Every notice or demand shall be sent, if to the
Borrower or the Agent, at the address set forth below and, if to the Lenders at
their address and telecopy numbers set forth in Schedule A or at such other
address or telecopy numbers as such party may hereafter specify for the purpose
by notice to each other party hereto.
Any notices addressed to the Borrower shall be sent as follows:
c/o SEACOR Management Services Inc.
1370 Avenue of the Americas, 25th floor
New York, New York 10019
Telecopy.: (212) 582-8522
Any notices addressed to the Agent shall be sent as follows:
200 Park Avenue
New York, New York 10166-0396
Telecopy No.: (212) 681-3900
Any notice sent by telecopy shall be confirmed by letter dispatched as soon as
practicable thereafter.
17.3. Notices Deemed Received. Every notice or demand shall, except so far as
otherwise expressly provided by this Agreement, be deemed to have been received
(provided that it is received prior to 2 p.m. New York time; otherwise it shall
be deemed to have been received on the next following Banking Day), in the case
of a telecopy at the time of dispatch thereof (provided further that if the date
of dispatch is not a Banking Day in the locality of the party to whom such
notice or demand is sent it shall be deemed to have been received on the next
following Banking Day in such locality) and, in the case of a letter, at the
time of receipt thereof.
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18 MISCELLANEOUS
18.1. Time of Essence. Time is of the essence of this Agreement but no failure
or delay on the part of the Agent or the Lenders to exercise any power or right
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Agent or the Lenders of any power or right hereunder
preclude any other or further exercise thereof or the exercise of any other
power or right. The remedies provided herein are cumulative and are not
exclusive of any remedies provided by law.
18.2. Unenforceable, etc., Provisions - Effect. In case any one or more of the
provisions contained in this Agreement or in the Note would, if given effect,
(i) cause such of the Borrower or any of the Subsidiaries, as the case may be,
which owns United States flag vessels to cease to be a citizen of the United
States within the meaning of Section 2 of the United States Shipping Act 1916,
as amended, or cause a transfer of any of the Vessels registered under the laws
and flag of the United States of America in violation of Section 9 of said Act
or (ii) be otherwise invalid, illegal or unenforceable in any respect under any
law applicable in any relevant jurisdiction, said provision shall not be
enforceable against the Borrower or any of the Subsidiaries, as the case may be,
but the validity, legality and enforceability of the remaining provisions herein
or therein contained shall not in any way be affected or impaired thereby.
18.3. References. References herein to Sections and Schedules are to be
construed as references to sections of, and schedules to, this Agreement.
18.4. Further Assurances. The Borrower agrees that if this Agreement or the Note
shall at any time be deemed by the Agent for any reason insufficient in whole or
in part to carry out the true intent and spirit hereof or thereof, it will
execute or cause to be executed such other and further assurances and documents
as in the opinion of the Agent may be required in order more effectively to
accomplish the purposes of this Agreement and the Note.
18.5. Entire Agreement, Amendments. This Agreement, the Note and the letter
agreement referred to in Section 14.4constitute the entire agreement of the
parties hereto, including all parties added hereto pursuant to an Assignment and
Assumption Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument. Any
provision of this Agreement or the Note may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and the
Majority Lenders (and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no amendment or waiver shall, unless
signed by all the Lenders, (i) increase or decrease the Commitment of any Lender
or subject any Lender to any additional obligation other than those set forth
herein, (ii) reduce the principal of or rate of interest on the Credit Facility
48
or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on the Loan or any fees hereunder, (iv) amend Section
11, (v) waive any condition precedent to the availability of the Credit Facility
or any Advance thereunder, (vi) amend or modify this Section 18.5 or (vii)
change the definition of "Majority Lenders".
IN WITNESS whereof the parties hereto have caused this
Agreement to be duly executed by their duly authorized
representative as of the day and year first above written.
SEACOR SMIT INC.
By /s/ Randall Blank
---------------------------------
Randall Blank
Executive Vice President
By special authority for
DEN NORSKE BANK ASA, New York
Branch, as Agent and Lender
By /s/ George P. Malanga
---------------------------------
George P. Malanga
Senior Vice President
and
By /s/ Nikolai Nachamkin
---------------------------------
Nikolai Nachamkin
Vice President