EXHIBIT 10.1
The portion of this Exhibit 10.1 marked "******" has been omitted and
confidentially filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.
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LOAN AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN FACILITY
OF UP TO $32,000,000
CENTRAL GULF LINES, INC.
as Borrower,
AND
The Banks and Financial Institutions listed on Schedule I hereto,
as Lenders,
AND
DNB NOR BANK ASA,
as Facility Agent and Arranger,
DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
as Security Trustee and Arranger
AND
INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor
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September 26, 2005
CONTENTS
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1. DEFINITIONS.................................................................................................1
1.1 Specific Definitions...............................................................................1
1.2 Computation of Time Periods; Other Definitional Provisions........................................12
1.3 Accounting Terms..................................................................................12
1.4 Certain Matters Regarding Materiality.............................................................12
2. REPRESENTATIONS AND WARRANTIES.............................................................................12
2.1 Representations and Warranties....................................................................12
(a) Due Organization and Power........................................................................13
(b) Authorization and Consents........................................................................13
(c) Binding Obligations...............................................................................13
(d) No Violation......................................................................................13
(e) Filings; Stamp Taxes..............................................................................13
(f) Litigation........................................................................................13
(g) No Default........................................................................................13
(h) Vessel............................................................................................14
(i) Insurance.........................................................................................14
(j) Financial Information.............................................................................14
(k) Tax Returns.......................................................................................14
(l) ERISA.............................................................................................14
(m) Chief Executive Office............................................................................15
(n) Foreign Trade Control Regulations.................................................................15
(o) Equity Ownership..................................................................................15
(p) Environmental Matters and Claims..................................................................15
(q) Compliance with ISM Code, ISPS Code and MTSA......................................................16
(r) Threatened Withdrawal of DOC or SMC...............................................................16
(s) Liens.............................................................................................16
(t) Indebtedness......................................................................................16
(u) Payment Free of Taxes.............................................................................16
(v) No Proceedings to Dissolve........................................................................16
(w) Solvency..........................................................................................16
(x) Compliance with Laws..............................................................................16
(y) Survival..........................................................................................16
3. THE LOAN...................................................................................................17
3.1(a) Purposes..........................................................................................17
(b) Making of the Loan................................................................................17
3.2 Drawdown Notice...................................................................................17
3.3 Effect of Drawdown Notice.........................................................................17
4. CONDITIONS.................................................................................................17
4.1 Conditions Precedent to the Effectiveness of this Agreement.......................................17
(a) Corporate Authority...............................................................................17
(b) The Agreement.....................................................................................18
(c) The Note..........................................................................................18
(d) The Creditors.....................................................................................18
(e) Fees..............................................................................................18
(f) Environmental Claims..............................................................................18
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(g) Legal Opinions....................................................................................18
(h) Officer's Certificate.............................................................................18
(i) Vessel Documents..................................................................................19
(j) Security Documents................................................................................19
(k) Vessel Appraisals.................................................................................19
(l) ISM DOC...........................................................................................19
(m) Evidence of Current COFR..........................................................................19
(n) Vessel Liens......................................................................................19
(o) NYK Charter.......................................................................................19
(p) Memorandum of Agreement...........................................................................19
(q) Vessel Delivery...................................................................................20
(r) Maritime Administration Approval..................................................................20
4.2 Further Conditions Precedent......................................................................20
(a) Drawdown Notice...................................................................................20
(b) Representations and Warranties True...............................................................20
(c) No Default........................................................................................20
(d) No Material Adverse Effect........................................................................20
4.3 Breakfunding Costs................................................................................20
4.4 Satisfaction after Drawdown.......................................................................20
5. REPAYMENT AND PREPAYMENT...................................................................................20
5.1 Repayment.........................................................................................20
5.2 Voluntary Prepayment; No Re-borrowing.............................................................21
5.3 Mandatory Prepayment; Sale or Loss of Vessel......................................................21
5.4 Interest and Cost With Application of Prepayments.................................................21
5.5 Borrower's Obligation Absolute....................................................................21
6. INTEREST AND RATE..........................................................................................21
6.1 Payment of Interest; Interest Rate................................................................21
6.2 Maximum Interest..................................................................................22
7. PAYMENTS...................................................................................................22
7.1 Place of Payments, No Set Off.....................................................................22
7.2 Tax Credits.......................................................................................22
7.3 Computations; Banking Days........................................................................22
8. EVENTS OF DEFAULT..........................................................................................23
8.1 Events of Default.................................................................................23
(a) Principal Payments................................................................................23
(b) Interest and other Payments.......................................................................23
(c) Representations, etc..............................................................................23
(d) Impossibility, Illegality.........................................................................23
(e) Mortgage..........................................................................................23
(f) Certain Covenants.................................................................................23
(g) Covenants.........................................................................................23
(h) Indebtedness and Other Obligations................................................................23
(i) Bankruptcy........................................................................................24
(j) Judgments.........................................................................................24
(k) Inability to Pay Debts............................................................................24
(l) Termination of Operations; Sale of Assets.........................................................24
(m) Change in Financial Position......................................................................24
(n) Cross-Default.....................................................................................24
(o) ERISA Debt........................................................................................24
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(p) Time Charter......................................................................................25
8.2 Indemnification...................................................................................25
8.3 Application of Moneys.............................................................................25
9. COVENANTS..................................................................................................26
9.1 Affirmative Covenants.............................................................................26
(a) Performance of Agreements.........................................................................26
(b) Notice of Default, etc............................................................................26
(c) Obtain Consents...................................................................................26
(d) Financial Information.............................................................................26
(e) Contingent Liabilities............................................................................27
(f) Vessel Valuations.................................................................................27
(g) Corporate Existence...............................................................................27
(h) Books and Records.................................................................................27
(i) Taxes and Assessments.............................................................................28
(j) Inspection........................................................................................28
(k) Inspection and Survey Reports.....................................................................28
(l) Compliance with Statutes, Agreements, etc.........................................................28
(m) Environmental Matters.............................................................................28
(n) Insurance.........................................................................................28
(o) Vessel Management.................................................................................28
(p) Brokerage Commissions, etc........................................................................29
(q) ISM Code, ISPS Code and MTSA Matters..............................................................29
(r) ERISA.............................................................................................29
(s) Evidence of Current COFR..........................................................................29
9.2 Negative Covenants................................................................................29
(a) Liens.............................................................................................29
(b) Third Party Guaranties............................................................................30
(c) Liens on Shares of Borrower.......................................................................30
(d) Subordination of Inter-Company Indebtedness.......................................................30
(e) Transaction with Affiliates.......................................................................30
(f) Change of Flag, Class, Management or Ownership....................................................30
(g) Chartering........................................................................................30
(h) Change in Business................................................................................30
(i) Sale of Assets....................................................................................31
(j) Changes in Offices or Names.......................................................................31
(k) Consolidation and Merger..........................................................................31
(l) Change Fiscal Year................................................................................31
(m) Indebtedness......................................................................................31
(n) Limitations on Ability to Make Distributions......................................................31
(o) Change of Control.................................................................................31
(p) No Money Laundering...............................................................................31
9.3 Financial Covenants...............................................................................31
(a) Consolidated Indebtedness to Consolidated EBITDA Ratio............................................31
(b) Working Capital...................................................................................32
(c) Consolidated Tangible Net Worth...................................................................32
(d) Consolidated EBITDA to Interest Expense...........................................................32
9.4 Asset Maintenance.................................................................................32
10. GUARANTEE..................................................................................................32
10.1 The Guarantee.....................................................................................32
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10.2 Obligations Unconditional.........................................................................32
10.3 Reinstatement.....................................................................................33
10.4 Subrogation.......................................................................................33
10.5 Remedies..........................................................................................33
10.6 Joint, Several and Solidary Liability.............................................................34
10.7 Continuing Guarantee..............................................................................34
11. ASSIGNMENT.................................................................................................34
12. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC..........................................................34
12.1 Illegality........................................................................................34
12.2 Increased Costs...................................................................................35
12.3 Nonavailability of Funds..........................................................................35
12.4 Lender's Certificate Conclusive...................................................................36
12.5 Compensation for Losses...........................................................................36
13. CURRENCY INDEMNITY.........................................................................................36
13.1 Currency Conversion...............................................................................36
13.2 Change in Exchange Rate...........................................................................36
13.3 Additional Debt Due...............................................................................36
13.4 Rate of Exchange..................................................................................36
14. FEES AND EXPENSES..........................................................................................37
14.1 Fees..............................................................................................37
14.2 Expenses..........................................................................................37
15. APPLICABLE LAW, JURISDICTION AND WAIVER....................................................................37
15.1 Applicable Law....................................................................................37
15.2 Jurisdiction......................................................................................37
15.3 WAIVER OF JURY TRIAL..............................................................................38
16. THE AGENTS.................................................................................................38
16.1 Appointment of Agents.............................................................................38
16.2 Appointment of Security Trustee..................................................................38
16.3 Distribution of Payments..........................................................................38
16.4 Holder of Interest in Note........................................................................39
16.5 No Duty to Examine, Etc...........................................................................39
16.6 Agents as Lenders.................................................................................39
16.7 Acts of the Agents................................................................................39
16.8 Certain Amendments................................................................................40
16.9 Assumption re Event of Default....................................................................40
16.10 Limitations of Liability..........................................................................40
16.11 Indemnification of the Agent and Security Trustee.................................................41
16.12 Consultation with Counsel.........................................................................41
16.13 Resignation.......................................................................................41
16.14 Representations of Lenders........................................................................41
16.15 Notification of Event of Default..................................................................42
17. NOTICES AND DEMANDS........................................................................................42
17.1 Notices...........................................................................................42
18. MISCELLANEOUS..............................................................................................42
18.1 Time of Essence...................................................................................42
18.2 Unenforceable, etc., Provisions - Effect..........................................................42
18.3 References........................................................................................43
18.4 Further Assurances................................................................................43
18.5 Prior Agreements, Merger..........................................................................43
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18.6 Entire Agreement; Amendments......................................................................43
18.7 Indemnification...................................................................................43
18.8 Headings..........................................................................................43
SCHEDULES
I The Lenders and the Commitments
II The Applicable Margin
III Approved Ship Brokers
IV Liens
V Indebtedness
EXHIBITS
A Form of Promissory Note
B Form of Drawdown Notice
C Form of Compliance Certificate
D Form of Assignment and Assumption Agreement
E Form of Earnings Assignment
F Form of Insurances Assignment
G Form of U.S. Preferred Mortgage
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SENIOR SECURED LOAN AGREEMENT
THIS SENIOR SECURED LOAN AGREEMENT (the "Loan Agreement" or "Agreement") is made
as of the 26th day of September 2005, by and among (1) CENTRAL GULF LINES, INC.,
a corporation organized and existing under the laws of the State of Delaware
(the "Borrower"), (2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation
organized and existing under the laws of the State of Delaware (the
"Guarantor"), as guarantor, (3) the banks and financial institutions listed on
Schedule I, as lenders (together with any bank or financial institution which
becomes a Lender pursuant to Article 11, the "Lenders" and each a "Lender"), (4)
DNB NOR BANK ASA ("DnB NOR"), as facility agent (in such capacity including any
successor thereto, the "Facility Agent") and as arranger and (5) DEUTSCHE
SCHIFFSBANK AKTIENGESELLSCHAFT ("DSB"), as security trustee for the Lenders (in
such capacity, the "Security Trustee") and as arranger.
WITNESSETH THAT:
WHEREAS, at the request of the Borrower, each of the Agents
(as defined below) has agreed to serve in such capacity under the terms of this
Agreement and the Lenders have agreed to provide to the Borrower a senior
secured term loan facility in the amount of up to Thirty-Two Million United
States Dollars (US $32,000,000);
NOW, THEREFORE, in consideration of the premises set forth
above, the covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as set forth below:
1. DEFINITIONS
1.1 Specific Definitions. 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" shall mean Ernst & Young LLP, or such other recognized international
accounting firm as shall be approved by the Facility Agent, such
approval not to be unreasonably withheld;
"Affiliate" shall mean with respect to any Person, any other Person directly or
indirectly controlled by or under common control with such Person.
For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common
control with") as applied to any Person means the possession directly
or indirectly of the power to direct or cause the direction of the
management and policies of that Person whether through ownership of
voting securities or by contract or otherwise;
"Agents" shall mean each of the Facility Agent and the Security Trustee;
"Agreement" shall mean this Agreement, as the same shall be amended, modified or
supplemented from time to time;
"Applicable Margin" shall mean a margin which will vary as set forth on Schedule II
attached hereto;
"Applicable Rate" shall mean any rate of interest applicable to the Loan from time to
time pursuant to Section 6.1;
"Arrangers" shall mean each of the Facility Agent and the Security Trustee;
"Assigned Moneys" shall mean sums assigned to or received by the Security Trustee
pursuant to any Security Document;
"Assignment and Assumption Agreement(s)" shall mean any Assignment and Assumption Agreement(s) executed
pursuant to Section 11 substantially in the form set out in Exhibit D;
"Assignment Notices" shall mean (a) the notice with respect to the Earnings Assignment
substantially in the form set out in Exhibit 1 thereto and (b) the
notice with respect to the Insurances Assignment substantially in the
form set out in Exhibit 3 thereto;
"Assignments" shall mean the Earnings Assignment and the Insurances Assignment;
"Banking Day(s)" shall mean any day that is not a Saturday, Sunday or other day on
which (a) banks in New York, New York, Bremen, Germany, and London,
England are authorized or required by law to remain closed, or (b)
banks are not generally open for dealing in dollar deposits in the
London interbank market;
"Borrower" shall have the meaning ascribed thereto in the preamble;
"Change of Control" shall mean (a) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the existing owners, that
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 30% of
the total voting power of the Guarantor or (b) the Guarantor ceases to
own, directly or indirectly, 100% of the Borrower or (c) the Board of
Directors of the Borrower or the Guarantor ceases to consist of a
majority of the directors existing on the date hereof or directors
nominated by at least two-thirds (2/3) of the then existing directors
or (d) the Johnsen Family shall cease to own at least twenty percent
(20%) of the Guarantor;
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"Charterer's Acknowledgment" shall mean the acknowledgment of the Time Charterer to the Assignment
of Earnings in the form of Exhibit 2 thereto;
"Classification Society" shall mean a member of the International Association of Classification
Societies acceptable to the Lenders with whom the Vessel is entered
and who conducted periodic physical surveys and/or inspections of the
Vessel;
"Closing Date" shall mean the day and year first written above;
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute and regulation promulgated thereunder;
"Collateral" shall mean, all property or other assets, real or personal, tangible
or intangible, whether now owned or hereafter acquired in which the
Security Trustee or any Lender has been granted a security interest
pursuant to a Security Document;
"Commitment(s)" shall mean in relation to a Lender, the portion of the Loan set out
opposite its name in Schedule I hereto or, as the case may be, in any
relevant Assignment and Assumption Agreement, as changed from time to
time pursuant to the terms of this Agreement;
"Compliance Certificate" shall mean a certificate certifying the compliance by each of the
Security Parties with all of its covenants contained herein and
showing the calculations thereof in reasonable detail, delivered by
the chief financial officer of the Guarantor to the Facility Agent
from time to time pursuant to Section 9.1(d) in the form set out in
Exhibit C or in such other form as the Facility Agent may agree;
"Consolidated EBITDA" shall mean, for any period, with respect to the Guarantor and the
Subsidiaries, the sum of (without duplication) (a) Consolidated Net
Income; (b) all Interest Expenses of the Guarantor and the
Subsidiaries; (c) income taxes of the Guarantor and the Subsidiaries;
and (d) depreciation and amortization of the Guarantor and the
Subsidiaries determined on a consolidated basis in accordance with
GAAP for such period; provided that if any Subsidiary is not
wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an
amount equal to (i) the amount of Consolidated Net Income
attributable to such Subsidiary multiplied by (ii) the percentage
3
ownership interest in the income of such Subsidiary not owned by the
Guarantor on the last day of such period;
"Consolidated Indebtedness" all Indebtedness of the Guarantor and the Subsidiaries determined on
a consolidated basis in accordance with GAAP;
"Consolidated Net Income" for any period shall mean the consolidated net income of the Guarantor
and the Subsidiaries for such period, as shown on the consolidated
financial statements of the Guarantor and the Subsidiaries delivered
in accordance with Section 9.1 (d);
"Consolidated Tangible Net Worth" shall mean, with respect to the Guarantor and its Subsidiaries, at
any date for which a determination is to be made (determined on a
consolidated basis without duplication in accordance with GAAP) (a)
the amount of capital stock (including its outstanding preferred
stock); plus (b) the amount of surplus and retained earnings (or, in
the case of a surplus or retained earnings deficit, minus the amount
of such deficit); plus (c) deferred charges to the extent amortized
and acquired contract costs net of accumulated amortization as stated
on the then most recent audited balance sheet of the Guarantor; minus
(d) the sum of (i) the cost of treasury shares and (ii) the book
value of all assets that should be classified as intangibles (without
duplication of deductions in respect of items already deducted in
arriving at surplus and retained earnings) but in any event including
goodwill, minority interests, research and development costs,
trademarks, trade names, copyrights, patents and franchises,
unamortized debt discount and expense, all reserves and any write up
in the book value of assets resulting from a revaluation thereof
subsequent to December 31, 1996;
"Creditors" shall mean, together, the Agents and the Lenders, each a "Creditor";
"Default" shall mean any event that would, with the giving of notice or passage
of time, or both, be an Event of Default;
"Default Rate" shall mean a rate per annum equal to two percent (2%) over the
Applicable Rate then in effect;
"DnB NOR" shall have the meaning ascribed thereto in the preamble;
"DOC" shall mean a document of compliance issued to an Operator in
accordance with rule 13 of the ISM Code;
4
"Dollars" and the sign "$" shall mean 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 Facility Agent to be customary for the settlement
in New York City of banking transactions of the type herein involved);
"Drawdown Date" shall mean the date, being a Banking Day, upon which the Borrower has
requested that the Loan be made available to the Borrower, and the
Loan is made, as provided in Section 3;
"Drawdown Notice" shall have the meaning ascribed thereto in Section 3.2;
"DSB" shall have the meaning ascribed thereto in the preamble;
"Earnings Assignment" shall mean the first priority assignment in respect of the earnings of
the Vessel from any and all sources to be executed by the Borrower in
favor of the Security Trustee pursuant to Section 4.1(k),
substantially in the form set out in Exhibit E;
"Environmental Affiliate(s)" shall mean, with respect to a Security Party, any Person or entity,
the liability of which for Environmental Claims any Security Party may
have assumed by contract or operation of law;
"Environmental Approval(s)" shall have the meaning ascribed thereto in Section 2.1(p);
"Environmental Claim(s)" shall have the meaning ascribed thereto in Section 2.1(p);
"Environmental Law(s)" shall have the meaning ascribed thereto in Section 2.1(p);
"ERISA" shall mean the Employment Retirement Income Security Act of 1974, as
amended;
"ERISA Affiliate" shall mean 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;
"ERISA Group" shall mean the Guarantor and its subsidiaries within the meaning of
Section 424(f) of the Code;
"Event(s) of Default" shall mean any of the events set out in Section 8.1;
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as amended;
5
"Facility Agent" shall have the meaning ascribed thereto in the preamble;
"Fair Market Value" shall mean, in respect of the Vessel, the average of two appraisals on
a "willing seller, willing buyer" basis of the Vessel from ship
brokers listed in Schedule III or such other independent ship brokers
approved by the Majority Lenders, no such appraisal to be dated more
than thirty (30) days prior to the date on which a determination of
Fair Market Value is required pursuant to this Agreement;
"Final Payment" shall mean the principal amount of Five Million Nine Hundred Ninety
Nine Thousand Nine Hundred Ninety Nine Dollars and Eighty Seven Cents
($5,999,999.87) plus such other amounts as may be necessary to repay
the Loan in full together with accrued but unpaid interest and any
other amounts owing by any Security Party to any Creditor pursuant to
this Agreement, the Note or any Security Document;
"Final Payment Date" shall mean the date which is ten (10) years from the date hereof,
unless such date is not a Banking Day, in which case the Final Payment
Date shall be the Banking Day immediately preceding such ten (10) year
anniversary of the date hereof;
"GAAP" shall have the meaning ascribed thereto in Section 1.3;
"Guarantor" shall have the meaning ascribed thereto in the preamble;
"Indebtedness" shall mean, with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or other
similar instruments (including reimbursement obligations with respect
thereto), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is
due more than six months after the date of placing such property in
service or taking delivery thereof or the completion of such services,
except trade payables, (v) all obligations on account of principal of
such Person as lessee under capitalized leases, (vi) all indebtedness
of other Persons secured by a lien on any asset of such Person,
whether or not such indebtedness is assumed by such Person; provided
that the amount of such indebtedness shall be the
6
lesser of (a) the fair market value of such asset at such date of
determination and (b) the amount of such indebtedness, and (vii) all
indebtedness of other Persons guaranteed by such Person to the extent
guaranteed; the amount of Indebtedness of any Person at any date shall
be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, provided that the amount
outstanding at any time of any indebtedness issued with original issue
discount is the face amount of such indebtedness less the remaining
unamortized portion of the original issue discount of such
indebtedness at such time as determined in conformity with GAAP; and
provided further that Indebtedness shall not include any liability for
current or deferred federal, state, local or other taxes, or any trade
payables;
"Indemnitee" shall have the meaning ascribed thereto in Section 18.7;
"Insurance Assignment" shall mean the first priority assignment in respect of the insurances
over the Vessel, to be executed by the Borrower in favor of the
Security Trustee pursuant to Section 4.1(j), substantially in the form
set out in Exhibit F;
"Interest Expense" shall mean, with respect to the Guarantor and the Subsidiaries, on a
consolidated basis, for any period (without duplication), interest
expense, whether paid or accrued (including the interest component of
capitalized leases), on all Indebtedness of the Guarantor and the
Subsidiaries for such period, net of interest income, all determined
in accordance with GAAP;
"Interest Rate Agreements" shall mean any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement
or arrangement entered into between the Borrower, the Guarantor or
any Subsidiary of the Borrower with either of the Agents, which is
designed to protect the Borrower, the Guarantor or any of the
Borrower's Subsidiaries against fluctuations in interest rates
applicable under this Agreement, to or under which the Borrower, the
Guarantor or any of the Borrower's Subsidiaries is a party or a
beneficiary on the date of this Agreement or becomes a party or a
beneficiary hereafter;
7
"Initial Payment Date" shall mean the date which is three (3) months after the Drawdown Date;
"Interest Notice" shall mean a notice from the Borrower to the Facility Agent specifying
the duration of any relevant Interest Period;
"Interest Period" shall mean period(s) of three, six or twelve months as selected by
the Borrower, or as otherwise agreed by the Lenders and the Borrower;
"ISM Code" shall mean the International Safety Management Code for the Safe
Operating of Ships and for Pollution Prevention constituted pursuant
to Resolution A.741(18) of the International Maritime Organization
and incorporated into the Safety of Life at Sea Convention and
includes any amendments or extensions thereto and any regulation
issued pursuant thereto;
"ISPS Code" shall mean the International Ship and Port Facility Security Code
adopted by the International Maritime Organization at a conference in
December, 2002 and amending the Safety of Life at Sea Convention and
includes any amendments or extensions thereto and any regulation
issued pursuant thereto;
"ISSC" shall mean the International Ship Security Certificate issued
pursuant to the ISPS Code;
"Johnsen Family" shall mean (i) Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen and
Erik L. Johnsen; (ii) the wives and issue of Niels W. Johnsen, Erik F.
Johnsen, Niels M. Johnsen and Erik L. Johnsen; and (iii) any trust for
the benefit of, or controlled by, any of foregoing;
"LIBOR Rate" shall mean, for each Interest Period, the London Interbank Offered
Rate ("LIBOR") as set and published by the British Banker's
Association ("BBA"), as selected by the Borrower three (3) Banking
Days before the first day of such Interest Period as obtained by the
Facility Agent from a wire that is sent through Bloomberg, L.P. which
rate is based by BBA on an average of the Interbank Offered Rates for
Dollar deposits in the London market based on quotes from designated
banks in the London market. In the event that the three, six or
twelve month LIBOR is no longer available from the BBA or Bloomberg,
L.P., the Facility Agent shall select a comparable service to
determine such rate and shall provide notice thereof to the Borrower;
8
"Loan" shall mean the loan facility to be made available by the Lenders to
the Borrower hereunder in a single advance pursuant to Section 3 in
the maximum aggregate principal amount of Thirty-Two Million Dollars
($32,000,000), or the balance thereof from time to time outstanding;
"Majority Lenders" at any time shall mean Lenders holding an aggregate of more than
66.66% of the Loan then outstanding;
"Material Adverse Effect" shall mean a material adverse effect on the ability of the Borrower
and/or the Guarantor to meet any of their respective obligations with
regard to (i) the Loan and the financing arrangements established in
connection therewith or (ii) any of their respective other
obligations that are material to the Borrower and the Guarantor
considered as a whole;
"Materials Of Environmental Concern" shall have the meaning ascribed thereto in Section 2.1(p);
"Memorandum of Agreement" means that certain contract between the Sellers and the Borrower
dated June 30, 2005 providing for the purchase of the Vessel by the
Borrower.
"Mortgage" shall mean the first preferred United States ship mortgage on the
Vessel, to be executed by the Borrower in favor of the Security
Trustee pursuant to Section 4.1(g), substantially in the form set out
in Exhibit G;
"MTSA" shall mean the Maritime & Transportation Security Act, 2002, as
amended, inter alia, by Public Law 107-295;
"Multiemployer Plan" shall mean, at any time, a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within
any of the three preceding plan years made or accrued an obligation to
make contributions;
"Multiple Employer Plan" shall mean, at any time, an employee benefit plan, other than a
Multiemployer Plan, subject to Title IV or ERISA, to which a Borrower
or ERISA Affiliate, and one or more employers other than a Borrower
or ERISA Affiliate, is making or accruing an obligation to make
contributions or, in the event that any such plan has been
terminated, to which a Borrower or ERISA Affiliate made or accrued an
obligation to make contributions during any of the five plan years
preceding the date of termination of such plan;
9
"Net Worth" shall mean the result of (i) the sum of the Fair Market Value of all
of the vessels owned by a Person minus (ii) the amount of all debt
incurred by such Person related to those vessels;
"Note" shall mean the promissory note to be executed by the Borrower to the
order of the Facility Agent pursuant to Section 4.1(c), to evidence
the Loan substantially in the form set out in Exhibit A;
"Operator" shall mean the Person who is concerned with the operation of the
Vessel and falls within the definition of "Company" set out in rule
1.1.2 of the ISM Code";
"Payment Dates" means the Initial Payment Date and the dates falling at three (3)
month intervals thereafter, the last of which is the Final Payment
Date;
"PBGC" shall mean the Pension Benefit Guaranty Corporation;
"Person" shall mean any individual, sole proprietorship, corporation,
partnership (general or limited), limited liability company, business
trust, bank, trust company, joint venture, association, joint stock
company, trust or other unincorporated organization, whether or not a
legal entity, or any government or agency or political subdivision
thereof;
"Plan" shall mean any employee benefit plan (other than a Multiemployer Plan
or a Multiple Employer Plan) covered by Title IV of ERISA; "Proceeding"
shall have the meaning ascribed thereto in Section 8.1(i);
"Reference Bank(s)" shall mean each of DnB NOR and DSB;
"Required Percentage" means one hundred and twenty percent (120%);
"Security Document(s)" shall mean the Mortgage, the Assignments and any other documents that
may be executed as security for the Loan and the Borrower's
obligations in connection therewith;
"Security Party(ies)" shall mean each of the Borrower and the Guarantor;
"Security Trustee" shall have the meaning ascribed thereto in the preamble;
"Sellers" Canterbury Shipholding S.A., a Panamanian corporation, and Canterbury
Shipholding II S.A., a Panamanian corporation;
10
"SMC" shall mean the safety management certificate issued in respect of a
Vessel in accordance with rule 13 of the ISM code;
"subsidiary" shall mean, with respect to any Person, any business entity of which
more than 50% of the outstanding voting stock or other equity interest
is owned directly or indirectly by such Person and/or one or more
other subsidiaries of such Person;
"Subsidiary(ies)" shall mean all of the subsidiaries of the Guarantor;
"Taxes" shall mean any present or future income or other taxes, levies,
duties, charges, fees, deductions or withholdings of any nature now or
hereafter imposed, levied, collected, withheld or assessed by any
taxing authority whatsoever, except for taxes on or measured by the
overall net income of each Lender imposed by its jurisdiction of
incorporation or applicable lending office, the United States of
America, the State or City of New York or any governmental subdivision
or taxing authority of any thereof or by any other taxing authority
having jurisdiction over such Lender (unless such jurisdiction is
asserted by reason of the activities of the Borrower or any of the
Subsidiaries);
"Termination Event" shall mean (i) a "reportable event," as defined in Section 403 of
ERISA, (ii) the withdrawal of a Borrower or any ERISA Affiliate from
a Multiemployer Plan during a plan year in which it was a
"substantial employer," as defined in Section 4001(a)(2) of ERISA, or
the incurrence of liability by a Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple
Employer Plan, (iii) the filing of a notice of intent to terminate a
Plan under Section 4041 of ERISA or the treatment of a Multiemployer
Plan amendment as a termination under Section 4041A of ERISA, (iv)
the institution of proceedings to terminate a Plan or a Multiemployer
Plan, or (v) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or Multiemployer
Plan;
"Time Charter" means that certain time charter of the Vessel dated June 30, 2005
with the Time Charterer;
"Time Charterer" means Nippon Yusen Kaisha of Japan;
11
"Title XI Agreement" shall mean the Title XI Reserve Fund and Financial Agreement,
Contract No. MA-12901, dated as of October 26, 1994 and made by and
between Sulphur Carriers, Inc. and the United States of America;
"Total Loss" shall have the meaning ascribed thereto in the Mortgage;
"Transaction Documents" shall mean each of this Agreement, the Note and the Security
Documents;
"Vessel" shall mean that certain Panamanian flag Pure Car and Truck Carrier
known as the *****, to be renamed ***** and reflagged under United
States law;
"Withdrawal Liability(ies)" shall have the meaning given to such term under Part 1 of Subtitle E
of Title IV of ERISA.
1.2 Computation of Time Periods; Other Definitional Provisions. In this
Agreement, the Note and the other Security Documents, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding"; words importing either gender include the other gender; references
to "writing" include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words "including," "includes"
and "include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement, the Note or such Security Document,
as applicable; references to agreements and other contractual instruments
(including this Agreement, the Note and the Security Documents) shall be deemed
to include all subsequent amendments, amendments and restatements, supplements,
extensions, replacements and other modifications to such instruments (without,
however, limiting any prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement, the Note or any Security
Document); references to any matter that is "approved" or requires "approval" of
a party shall mean approval given in the sole and absolute discretion of such
party unless otherwise specified.
1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms
used in this Agreement, the Note and in the Security Documents shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Facility Agent or to the
Lenders under this Agreement shall be prepared, in accordance with generally
accepted accounting principles for the United States ("GAAP").
1.4 Certain Matters Regarding Materiality. To the extent that any
representation, warranty, covenant or other undertaking of the Borrower in this
Agreement is qualified by reference to those which are not reasonably expected
to result in a "Material Adverse Effect" or language of similar import, no
inference shall be drawn therefrom that any Agent or Lender has knowledge or
approves of any noncompliance by the Borrower with any governmental rule.
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties. In order to induce the Creditors to enter
into this Agreement and to make the Loan available, each Security Party hereby
represents and warrants to
12
the Creditors (which representations and warranties shall survive the execution
and delivery of this Agreement and the Note and the drawdown of the Loan) that:
(a) Due Organization and Power. Each Security Party is duly formed and
is validly existing in good standing under the laws of its jurisdiction of
incorporation or formation, has full power to carry on its business as now being
conducted and to enter into and perform its obligations under this Agreement,
the Note and the Security Documents to which it is a party, and has complied
with all statutory, regulatory and other requirements relative to such business
and such agreements;
(b) Authorization and Consents. All necessary corporate action has been
taken to authorize, and all necessary consents and authorities have been
obtained and remain in full force and effect to permit, each Security Party to
enter into and perform its obligations under this Agreement, the Note and the
Security Documents and, in the case of the Borrower to borrow, service and repay
the Loan and, as of the date of this Agreement, no further consents or
authorities are necessary for the service and repayment of the Loan or any part
thereof;
(c) Binding Obligations. This Agreement, the Note and the Security
Documents constitute or will, when executed and delivered, constitute the legal,
valid and binding obligations of each Security Party that is a party thereto
enforceable against such Security Party in accordance with their respective
terms, except to the extent that such enforcement may be limited by equitable
principles, principles of public policy or applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting generally the enforcement of
creditors' rights;
(d) No Violation. The execution and delivery of, and the performance of
the provisions of, this Agreement, the Note and those of the Security Documents
to which it is to be a party by each Security Party do not contravene any
applicable law or regulation existing at the date hereof or any contractual
restriction binding on such Security Party or the certificate of incorporation
or by-laws (or equivalent instruments) thereof and that the proceeds of the Loan
shall be used by the Borrower exclusively for its own account or for the account
of a Subsidiary or Affiliate of the Borrower;
(e) Filings; Stamp Taxes. Other than the recording of the Mortgage with
the appropriate authorities for the United States, and the filing of UCC
Financing Statements in the State of Delaware in respect of the Assignments, and
the payment and filing or recording fees consequent thereto, it is not necessary
for the legality, validity, enforceability or admissibility into evidence of
this Agreement, the Note or the Security Documents that any of them or any
document relating thereto be registered, filed, recorded or enrolled with any
court or authority in any relevant jurisdiction or that any stamp, registration
or similar Taxes be paid on or in relation to this Agreement, the Note or any of
the Security Documents;
(f) Litigation. No action, suit or proceeding is pending or threatened
against any Security Party before any court, board of arbitration or
administrative agency which could or might have a Material Adverse Effect;
(g) No Default. No Security Party is in default under any material
agreement by which it is bound, or is in default in respect of any material
financial commitment or obligation;
13
(h) Vessel. Upon delivery of the Vessel to the Borrower; the Vessel:
(i) will be in the sole and absolute ownership of the Borrower
and duly registered in the Borrower's name under United
States flag, unencumbered, save and except for the Mortgage
and as permitted thereby;
(ii) will be classed in the highest classification and rating
for vessels of the same age and type with its
Classification Society without any material outstanding
recommendations;
(iii) will be operationally seaworthy and in every way fit for
its intended service; and
(iv) will be insured in accordance with the provisions of the
Mortgage and the requirements thereof in respect of such
insurances will have been complied with;
(i) Insurance. Each of the Security Parties has insured its properties
and assets against such risks and in such amounts as are customary for companies
engaged in similar businesses;
(j) Financial Information. Except as otherwise disclosed in writing to
the Facility Agent on or prior to the date hereof, all financial statements,
information and other data furnished by any Security Party to the Facility Agent
are complete and correct, such financial statements have been prepared in
accordance with GAAP and accurately and fairly present the financial condition
of the parties covered thereby as of the respective dates thereof and the
results of the operations thereof for the period or respective periods covered
by such financial statements, and since the date of the Guarantor's financial
statements most recently delivered to the Facility Agent there has been no
Material Adverse Effect as to any of such parties and none thereof has any
contingent obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate except as disclosed in such
statements, information and data;
(k) Tax Returns. Each Security Party has filed all material tax returns
required to be filed thereby and has paid all taxes payable thereby which have
become due, other than those not yet delinquent or the nonpayment of which would
not have a Material Adverse Effect and except for those taxes being contested in
good faith and by appropriate proceedings or other acts and for which adequate
reserves shall have been set aside on its books;
(l) ERISA. The execution and delivery of this Agreement and the
consummation of the transactions hereunder will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code and no
condition exists or event or transaction has occurred in connection with any
Plan maintained or contributed to by any member of the ERISA Group or any ERISA
Affiliate resulting from the failure of any thereof to comply with ERISA which
is reasonably likely to result in any member of the ERISA Group or any ERISA
Affiliate incurring any liability, fine or penalty which individually or in the
aggregate could have a Material Adverse Effect. No member of the ERISA Group nor
any ERISA Affiliate, individually or collectively, has incurred, or reasonably
expects to incur, Withdrawal Liabilities or liabilities upon the happening of a
Termination Event the aggregate of which for all such Withdrawal Liabilities and
other liabilities exceeds or would exceed $30,000,000. With respect to any
Multiemployer Plan, Multiple
14
Employer Plan or Plan, no member of the ERISA Group nor any ERISA Affiliate is
aware of or has been notified that any "variance" from the "minimum funding
standard" has been requested (each such term as defined in Part 3, Subtitle B,
of Title 1 of ERISA). No member of the ERISA Group nor any ERISA Affiliate has
received any notice that any Multiemployer Plan is in reorganization, within the
meaning of Title IV of ERISA, which reorganization could have a Material Adverse
Effect;
(m) Chief Executive Office. The chief executive office and chief place
of business of each Security Party and the office in which the records relating
to the earnings and other receivables of each Security Party are kept is, and
will continue to be, located at 650 Poydras Street, Suite 1700, New Orleans, LA
70130, USA;
(n) Foreign Trade Control Regulations. To the best knowledge of each of
the Security Parties, none of the transactions contemplated herein will violate
the provisions of any statute or regulation enacted to prohibit or limit
economic transactions with certain foreign Persons including, without
limitation, 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);
(o) Equity Ownership. The Borrower is owned, directly or indirectly,
one hundred percent (100%) by the Guarantor;
(p) Environmental Matters and Claims. (a) Except as heretofore
disclosed in writing to the Facility Agent (i) the Borrower and its Affiliates
(which for purposes of this Section 2(p) shall be deemed to include the
Guarantor and its respective Affiliates) will, when required to operate their
business as then being conducted, be in compliance with all applicable United
States federal and state, local, foreign and international laws, regulations,
conventions and agreements relating to pollution prevention or protection of
human health or the environment (including, without 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"); (ii) the Borrower and its Affiliates will, when
required, have all permits, licenses, approvals, rulings, variances, exemptions,
clearances, consents or other authorizations required under applicable
Environmental Laws ("Environmental Approvals") and will, when required, be in
compliance with all Environmental Approvals required to operate their business
as then being conducted; (iii) the Borrower has not nor has any Affiliate
thereof has received any notice of any claim, action, cause of action,
investigation or demand by any person, entity, enterprise or government, or any
political subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability for, or a requirement to
incur, material investigator costs, cleanup costs, response and/or remedial
costs (whether incurred by a governmental entity or otherwise), natural
resources damages, property damages, personal injuries, attorneys' fees and
expenses, or fines or penalties, in each case arising out of, based on or
resulting from (1) the presence, or release or threat of release into the
environment, of any Materials of Environmental Concern at any location, whether
or not owned by such person, or (2) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or Environmental
Approval ("Environmental Claim") (other than Environmental Claims that have
15
been fully and finally adjudicated or otherwise determined and all fines,
penalties and other costs, if any, payable by the Security Parties in respect
thereof have been paid in full or which are fully covered by insurance
(including permitted deductibles)); and (iv) there are no circumstances that may
prevent or interfere with such full compliance in the future; and (b) except as
heretofore disclosed in writing to the Facility Agent there is no Environmental
Claim pending or threatened against the Borrower or any Affiliate thereof and
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge or disposal of any Materials of Environmental Concern, that could form
the basis of any Environmental Claim against such persons the adverse
disposition of which may result in a Material Adverse Effect;
(q) Compliance with ISM Code, ISPS Code and MTSA. The Vessel and the
Operator complies with the requirements of the ISM Code, the ISPS Code and the
MTSA including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto;
(r) Threatened Withdrawal of DOC or SMC. There is no threatened or
actual withdrawal of the Operator's DOC or SMC in respect of the Vessel;
(s) Liens. Other than as disclosed in Schedule IV, there are no liens
of any kind on any property owned by any Security Party other than those liens
created pursuant to this Agreement or the Security Documents or permitted
thereby;
(t) Indebtedness. Other than as disclosed in Schedule V, neither of the
Security Parties has any Indebtedness;
(u) Payment Free of Taxes. All payments made or to be made by the
Security Parties under or pursuant to this Agreement, the Note and the Security
Documents shall be made free and clear of, and without deduction or withholding
for an account of, any Taxes;
(v) No Proceedings to Dissolve. There are no proceedings or actions
pending or contemplated by any Security Party or, to the best knowledge of any
Security Party, contemplated by any third party, to dissolve or terminate any
Security Party.
(w) Solvency. On the Closing Date, in the case of each of the Security
Parties, (a) the sum of its assets, at a fair valuation, does and will exceed
its liabilities, including, to the extent they are reportable as such in
accordance with GAAP, contingent liabilities, (b) the present fair market
salable value of its assets is not and shall not be less than the amount that
will be required to pay its probable liability on its then existing debts,
including, to the extent they are reportable as such in accordance with GAAP,
contingent liabilities, as they mature, (c) it does not and will not have
unreasonably small working capital with which to continue its business and (d)
it 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;
(x) Compliance with Laws. Each of the Security Parties is in compliance
with all Applicable Laws, except where any failure to comply with any such
Applicable Laws would not, alone or in the aggregate, have a Material Adverse
Effect; and
(y) Survival. All representations, covenants and warranties made herein
and in any certificate or other document delivered pursuant hereto or in
connection herewith shall survive the making of the Loan and the issuance of the
Note.
16
3. THE LOAN
3.1 (a) Purposes. The Lenders shall make the Loan available to the Borrower for
the purposes of financing the purchase price to be paid for the Vessel.
(b) Making of the Loan. Each of the Lenders, relying upon each of the
representations and warranties set out in Section 2, hereby severally and not
jointly agrees with the Borrower that, subject to and upon the terms of this
Agreement, it will, not later than 11:00 a.m. on the Drawdown Date, make its
portion of the Loan, in Federal or other funds, immediately available in New
York City to the Facility Agent at its address set forth on Schedule I or to
such account of the Facility Agent most recently designated by it for such
purpose by notice to the Lenders. Unless the Facility Agent determines that any
applicable condition specified in Sections 4.1 or 4.2 has not been satisfied,
the Facility Agent will make the funds so received from the Lenders available to
the Borrower at the aforesaid address, subject to the receipt of the funds by
the Facility Agent as provided in the immediately preceding sentence, not later
than 2:30 P.M. (New York City time) on the Drawdown Date, and in any event as
soon as practicable after receipt.
3.2 Drawdown Notice. The Borrower shall, at least three (3) Banking Days before
the Drawdown Date, serve a notice (a "Drawdown Notice"), substantially in the
form of Exhibit B, on the Facility Agent, which notice shall (a) be in writing
addressed to the Facility Agent, (b) be effective on receipt by the Facility
Agent, (c) specify the amount of the Loan to be drawn, (d) specify the Banking
Day on which the Loan is to be drawn, (e) specify the disbursement instructions
(which shall be consistent in all material respects with Section 2 of the
Memorandum of Agreement), (f) specify the initial Interest Period and (g) be
irrevocable.
3.3 Effect of Drawdown Notice. Delivery of a Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
on and as of the date of the Drawdown Notice and will be true and correct on and
as of the Drawdown Date as if made on such date, and (b) 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.
4. CONDITIONS
4.1 Conditions Precedent to the Effectiveness of this Agreement. The
effectiveness of this Agreement and the obligation of the Lenders to make the
Loan available to the Borrower under this Agreement shall be expressly subject
to the following conditions precedent:
(a) Corporate Authority. The Facility Agent shall have received the
following documents in form and substance satisfactory to the Facility Agent and
its legal advisers:
(i) copies, certified as true and complete by an officer of
each of the Security Parties, of the resolutions of its
board of directors and, with respect to the Borrower,
shareholders evidencing approval of the Transaction
Documents to which each is a party and authorizing an
appropriate officer or officers or attorney-in-fact or
attorneys-in-fact to execute the same on its behalf,
including the execution of the Drawdown Notice;
17
(ii) copies, certified as true and complete by an officer of
each of the Security Parties, of the certificate or
articles of incorporation and by-laws or similar
constituent document thereof;
(iii) certificate of the jurisdiction of incorporation of each
Security Party as to the good standing thereof; and
(iv) a certificate signed by the Chairman, President, Executive
Vice President, Treasurer, Comptroller, Controller or chief
financial officer of each of the Security Parties to the
effect that (A) no Default or Event of Default shall have
occurred and be continuing and (B) the representations and
warranties of such Security Party contained in this
Agreement are true and correct as of the date of such
certificate.
(b) The Agreement. Each of the Security Parties shall have duly
executed and delivered this Agreement to the Facility Agent.
(c) The Note. The Borrower shall have duly executed and delivered the
Note to the Facility Agent.
(d) The Creditors. The Facility Agent shall have received executed
counterparts of this Agreement from each of the Lenders (or, in the case of any
Lender as to which an executed counterpart shall not have been received, the
Facility Agent shall have received in form satisfactory to it a telex, facsimile
or other written confirmation from such Lender of the execution of a counterpart
of this Agreement by such Lender).
(e) Fees. The Creditors shall have received payment in full of all fees
and expenses due to each thereof pursuant to the terms hereof on the date when
due including, without limitation, all fees and expenses due under Section 14.
(f) Environmental Claims. The Lenders shall be satisfied that neither
of the Security Parties is subject to any Environmental Claim which could
reasonably be expected to have a Material Adverse Effect.
(g) Legal Opinions. The Facility Agent, on behalf of the Agents and the
Lenders, shall have received opinions addressed to the Facility Agent from (i)
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., special counsel
to the Security Parties, and (ii) Seward & Kissel LLP, special counsel to the
Agents and the Lenders, in each case in such form as the Facility Agent may
require, as well as such other legal opinions as the Lenders shall have required
as to all or any matters under the laws of the State of Delaware, the State of
New York and the United States of America covering certain of the conditions and
representations and warranties which are the subjects of Sections 2 and 4,
respectively.
(h) Officer's Certificate. The Facility Agent shall have received a
certificate signed by the President or other duly authorized executive officer
of the Borrower certifying that under applicable law existing on the date
hereof, the Borrower shall not be compelled by law to withhold or deduct any
Taxes from any amounts to become payable to the Facility Agent for the account
of the Creditors hereunder.
18
(i) Vessel Documents. The Facility Agent shall have received evidence
satisfactory to it and its counsel that the Vessel upon delivery to the Borrower
will be:
(i) in the sole and absolute ownership of the Borrower and is
duly registered in the Borrower's name under United States
flag free of all liens and encumbrances of record other
than its Mortgage;
(ii) insured in accordance with the provisions of the Mortgage
and all requirements of the Mortgage in respect of such
insurance have been fulfilled (including, but not limited
to, letters of undertaking from the insurance brokers,
including confirmation notices of assignment, notices of
cancellation and loss payable clauses acceptable to the
Lenders);
(iii) classed in the highest classification and rating for
vessels of the same age and type with its Classification
Society without any material outstanding recommendations;
and
(iv) operationally seaworthy and in every way fit for its
intended service;
(j) Security Documents. The Borrower shall have executed and delivered
to the Facility Agent:
(i) the Insurances Assignment;
(ii) the Earnings Assignment;
(iii) the Assignment Notices; and
(iv) such Uniform Commercial Code Financing Statements (Forms
UCC-1) as the Facility Agent shall require.
(k) Vessel Appraisals. The Facility Agent shall have received
appraisals, in form and substance satisfactory to the Facility Agent, as to the
Fair Market Value of the Vessel. ******.
(l) ISM DOC. To the extent required to be obtained by the ISM Code the
Security Trustee shall have received a copy of the DOC for the Vessel.
(m) Evidence of Current COFR. The Facility Agent shall have received
copies of the current Certificate of Financial Responsibility pursuant to the
Oil Pollution Act 1990 for the Vessel.
(n) Vessel Liens. The Facility Agent shall have received evidence
satisfactory to it and to its legal advisor that, save for the liens created by
the Mortgage and the Assignments, there are no liens, charges or encumbrances of
any kind whatsoever on the Vessel or on its earnings except as permitted hereby
or by any of the Security Documents.
(o) NYK Charter. The Borrower shall have delivered to the Facility
Agent a true and complete copy of the Time Charter and the Charterer's
Acknowledgment.
(p) Memorandum of Agreement. The Borrower shall have delivered to the
Facility Agent a true and complete copy of Memorandum of Agreement.
19
(q) Vessel Delivery. The Facility Agent shall be satisfied that the
Vessel shall be delivered to the Borrower within two (2) Banking Days of the
Drawdown Date and that satisfactory arrangements have been made for (x) the
registration of the Vessel in the name of the Borrower under United States flag,
(y) the execution of the Mortgage and (z) the recordation of the Mortgage with
the National Vessel Documentation Center of the United States Coast Guard, in
each case on the opening of business on the Banking Day immediately following
the delivery of the Vessel to the Borrower.
(r) Maritime Administration Approval. The Borrower shall have obtained
pre-approval from the United States Maritime Administration, in form and
substance satisfactory to the Lenders, for the possible transfer of the Vessel
upon the exercise of the Security Trustee's rights under the Mortgage to a party
not qualified to own and document a vessel under United States flag and/or the
re-documentation of the Vessel under foreign flag.
4.2 Further Conditions Precedent. The obligation of the Lenders to make the Loan
available to the Borrower shall also be expressly conditional upon:
(a) Drawdown Notice. The Facility Agent having received a Drawdown
Notice in accordance with the terms of Section 3.2.
(b) Representations and Warranties True. The representations stated in
Section 2 being true and correct as if made on that date.
(c) No Default. No Default or Event of Default having occurred and
being continuing or would result from the making of the Loan.
(d) No Material Adverse Effect. There having been no Material Adverse
Effect since June 30, 2005.
4.3 Breakfunding Costs. In the event that, on the date specified for the making
of the Loan in the Drawdown Notice, the Lenders shall not be obliged under this
Agreement to make the Loan available under this Agreement, the Borrower shall
indemnify and hold the Lenders fully harmless against any losses which the
Lenders (or any thereof) may sustain as a result of borrowing or agreeing to
borrow funds to meet the drawdown requirement of such Drawdown Notice and the
certificate of the relevant Lender or Lenders shall, absent manifest error, be
conclusive and binding on the Borrower as to the extent of any such losses.
4.4 Satisfaction after Drawdown. Without prejudice to any of the other terms and
conditions of this Agreement, in the event all of the Lenders elect, in their
sole discretion, to make the Loan prior to the satisfaction of all or any of the
conditions referred to in Sections 4.1 or 4.2, the Borrower hereby covenants and
undertakes to satisfy or procure the satisfaction of such condition or
conditions within seven (7) days after the Drawdown Date (or such longer period
as the Majority Lenders, in their sole discretion, may agree).
5. REPAYMENT AND PREPAYMENT
5.1 Repayment. Subject to the provisions of this Section 5 regarding application
of prepayments, the Borrower shall repay the principal of the Loan in forty (40)
consecutive quarterly installments on the Payment Dates, the first thirty-nine
(39) being in the amount of Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six
Dollars and Sixty-Seven Cents ($666,666.67) and the
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last such installment being in the amount of the Final Payment, such last
installment to be paid on the Final Payment Date.
5.2 Voluntary Prepayment; No Re-borrowing. The Borrower may prepay, upon three
(3) Banking Days written notice, the Loan or any portion thereof, without
penalty, provided that if such prepayment is made on a day other than a Payment
Date, such prepayment shall be made together with the costs and expenses
provided for in Section 5.4. Each prepayment shall be in a minimum amount of
Five Hundred Thousand Dollars ($500,000) plus any Five Hundred Thousand Dollar
($500,000) multiple thereof or the full amount of the Loan then outstanding. No
part of the Loan once repaid or prepaid will be available for re-borrowing.
5.3 Mandatory Prepayment; Sale or Loss of Vessel. Upon (i) the sale of the
Vessel or (ii) the earlier of (x) ninety (90) days after the Total Loss (as such
term is defined in the Mortgage) of the Vessel or (y) the date on which the
insurance proceeds in respect of such loss are received by the Borrower or the
Security Trustee as assignee thereof, the Borrower shall either (I) deliver to
the Security Trustee, such additional collateral, of equal or greater value with
the Vessel, as may be satisfactory to the Lenders in their sole discretion or
(II) repay the Loan in full, or such proceeds shall be applied by the Facility
Agent first, towards prepayment of the Loan and the Borrower's other obligations
hereunder in full and second, to the Borrower.
5.4 Interest and Cost With Application of Prepayments. Any and all prepayments
hereunder, whether mandatory or voluntary, shall be applied in the following
order:
(a) firstly, towards accrued and unpaid interest and for fees
due under this Agreement; and
(b) secondly, towards the installments of the Loan in the
inverse order of their due dates for payment.
5.5 Borrower's Obligation Absolute. The Borrower's obligation to pay each
Creditor hereunder and under the Note shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms hereof and
thereof, under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower may have or may have had
against the Creditors.
6. INTEREST AND RATE
6.1 Payment of Interest; Interest Rate. (a) (a) The Borrower hereby promises to
pay to the Lenders interest on the unpaid principal amount of the Loan for the
period commencing on the Drawdown Date until but not including the stated
maturity thereof (whether by acceleration or otherwise) or the date of
prepayment thereof at the Applicable Rate, which shall be the rate per annum
which is equal to the aggregate of (a) the LIBOR Rate plus (b) the Applicable
Margin. The Applicable Rate with respect to the Loan shall be determined by the
Facility Agent two (2) Banking Days prior to the first (1st) day of the relevant
Interest Period. The Facility Agent shall promptly notify the Borrower and the
Lenders in writing of the Applicable Rate as and when determined. Each such
determination, absent manifest error, shall be conclusive and binding upon the
Borrower.
(b) Notwithstanding the foregoing, the Borrower agrees that after the
occurrence and during the continuance of an Event of Default, the Loan shall
bear interest at a rate per annum equal to the greater of (A) the Default Rate
and (B) two percent (2%) plus the sum of (x) the Applicable
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Margin plus (y) the LIBOR Rate for overnight or weekend deposits. In addition,
the Borrower hereby promises to pay interest (to the extent that the payment of
such interest shall be legally enforceable) on any overdue interest, and on any
other amount payable by the Borrower hereunder which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise), for the
period commencing on the due date thereof until but not including the date the
same is paid in full at the Default Rate.
(c) Except as provided in the next sentence, accrued interest on the
Loan shall be payable on each Payment Date. Interest payable at the Default Rate
shall be payable from time to time on demand of the Facility Agent.
6.2 Maximum Interest. Anything in this Agreement or the Note to the contrary
notwithstanding, the interest rate on the Loan shall in no event be in excess of
the maximum rate permitted by Applicable Law.
7. PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made to the Facility Agent, not later than 3 p.m. New York
time (any payment received after 3 p.m. New York time shall be deemed to have
been paid on the next Banking Day) on the due date of such payment, at its
office located at 200 Park Avenue, New York, New York 10166 or to such other
office of the Facility Agent as the Facility 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 hereunder,
then the Borrower shall pay such additional amounts in Dollars as may be
necessary in order that the net amounts received after withholding or deduction
shall equal the amounts which would have been received if such withholding or
deduction were not required and, in the event any withholding or deduction is
made, whether for Taxes or otherwise, the Borrower shall promptly send to the
Facility Agent such documentary evidence with respect to such withholding or
deduction as may be required from time to time by the Lenders.
7.2 Tax Credits. If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrower has paid additional amounts as
aforesaid (and each Lender agrees to use its best efforts to obtain the benefit
of any such credit which may be available to it, provided it has knowledge that
such credit is in fact available to it), then such Lender shall reimburse the
Borrower for the amount of the credit so obtained. Each Lender agrees that in
the event that Taxes are imposed on account of the situs of its loans hereunder,
such Lender, upon acquiring knowledge of such event, shall, if commercially
reasonable, shift such loans on its books to another office of such Lender so as
to avoid the imposition of such Taxes.
7.3 Computations; Banking Days.
(a) All computations of interest and fees shall be made by the Facility
Agent or the Lenders, as the case may be, on the basis of a 360-day year, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which interest or
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fees are payable. Each determination by the Facility Agent or the Lenders of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(b) Whenever any payment hereunder or under the Note shall be stated to
be due on a day other than a Banking Day, such payment shall be due and payable
on the next succeeding Banking Day unless the next succeeding Banking Day falls
in the following calendar month, in which case it shall be payable on the
immediately preceding Banking Day.
8. EVENTS OF DEFAULT
8.1 Events of Default. In the event that any of the following events shall occur
and be continuing:
(a) Principal Payments. Any principal of the Loan is not paid on the
due date therefor; or
(b) Interest and other Payments. Any interest on the Loan or any other
amount becoming payable under this Agreement and under any Transaction Document
or under any of them, is not paid within three (3) Banking Days from the date
when due; or
(c) Representations, etc. Any representation, warranty or other
statement made by any of the Security Parties in this Agreement or in any other
instrument, document or other agreement delivered in connection herewith proves
to have been untrue or misleading in any material respect as at the date as of
which it was made; or
(d) Impossibility, Illegality. It becomes impossible or unlawful for
any of the Security Parties to fulfill any of the covenants and obligations
contained herein or in any Transaction Document, or for any of the Lenders to
exercise any of the rights vested in any of them hereunder or under the other
Transaction Documents and such impossibility or illegality, in the reasonable
opinion of such Lender, will have a Material Adverse Effect on any of its rights
hereunder or under the other Transaction Documents or on any of its rights to
enforce any thereof; or
(e) Mortgage. The Mortgage is not recorded within three (3) Banking
Days of the Drawdown Date or there is any default under the Mortgage; or
(f) Certain Covenants. Any Security Party defaults in the performance
or observance of any covenant contained in Section 9.1(b), 9.1(m), 9.2(i) and
9.3(a) through (d) inclusive; or
(g) Covenants. One or more of the Security Parties default in the
performance of any term, covenant or agreement contained in this Agreement or in
the other Transaction Documents, or in any other instrument, document or other
agreement delivered in connection herewith or therewith, in each case other than
an Event of Default referred to elsewhere in this Section 8.1, and such default
continues unremedied for a period of fifteen (15) days after written notice
thereof has been given to the relevant Security Party or Parties by the Facility
Agent at the request of any Lender; or
(h) Indebtedness and Other Obligations. Any Security Party defaults in
the payment when due (subject to any applicable grace period) of any
Indebtedness or of any other indebtedness,
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in either case, in an outstanding principal amount equal to or exceeding Two
Million Dollars ($2,000,000) or such Indebtedness or other indebtedness is, or
by reason of such default is subject to being, accelerated or any party becomes
entitled to enforce the security for any such Indebtedness or 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 such Security Party has set aside on its books adequate reserves
with respect thereto; or
(i) Bankruptcy. Any Security Party 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 (a "Proceeding"), or there is commenced against any thereof
any Proceeding and such Proceeding remains undismissed or unstayed for a period
of sixty (60) days; or any receiver, trustee, liquidator or sequestrator of, or
for, any thereof or any substantial portion of the property of any thereof is
appointed and is not discharged within a period of sixty (60) days; or any
thereof by any act indicates consent to or approval of or acquiescence in any
Proceeding or 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 invalid this Agreement or any other Transaction Document or any
material provision thereof or any Security Party asserts that any such agreement
or provision thereof is invalid; or judgments or orders for the payment of money
(not paid or fully covered by insurance, subject to applicable deductibles) in
excess of $2,500,000 in the aggregate for the Guarantor or its Subsidiaries (or
its equivalent in any other currency) shall be rendered against the Guarantor
and/or any of its Subsidiaries and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) Inability to Pay Debts. Any Security Party is unable to pay or
admits its inability to pay its debts as they fall due or a moratorium shall be
declared in respect of any Indebtedness of any thereof; or
(l) Termination of Operations; Sale of Assets. Except as expressly
permitted under this Agreement, any Security Party ceases its operations or
sells or otherwise disposes of all or substantially all of its assets or all or
substantially all of the assets of any Security Party are seized or otherwise
appropriated; or
(m) Change in Financial Position. Any change in the financial position
of any Security Party which, in the reasonable opinion of the Majority Lenders,
shall have a Material Adverse Effect; or
(n) Cross-Default. Any Security Party defaults under any material
contract or agreement to which it is a party or by which it is bound; or
(o) ERISA Debt. Any member of the ERISA Group or any ERISA Affiliate
shall (i) fail to pay when due an amount or amounts aggregating in excess of
$1,000,000 which it or they shall have become liable to pay under Title IV of
ERISA or (ii) any member of the ERISA Group or any ERISA Affiliate, individually
or collectively, shall incur, or shall reasonably expect to incur, any
Withdrawal Liability or liability upon the happening of a Termination Event and
the aggregate of all such Withdrawal Liabilities and such other liabilities
shall be in excess of $10,000,000; or
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(p) Time Charter. The Time Charter is terminated or the Time Charterer
is in material default thereunder, unless the Borrower has provided a substitute
charter and/or charterer acceptable to the Lenders in their sole discretion
within 30 days after such termination;
then, the Lenders' obligation to make the Loan available shall cease
and the Facility Agent on behalf of the Lenders may, with the Majority Lenders'
consent and shall, upon the Majority Lenders' instruction, by notice to the
Borrower, declare the entire Loan, accrued interest and any other sums payable
by the Borrower hereunder, under the Note and under the other Transaction
Documents 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 subclauses (i) or (k) of this Section 8.1, the Loan, accrued interest and any
other sums payable by the Borrower hereunder, under the Note and under the other
Transaction Documents shall be immediately due and payable without declaration,
presentment, demand, protest or other notice to the Borrower all of which are
expressly waived. In such event, the Creditors, or any thereof, may proceed to
protect and enforce their respective 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 any other
Transaction Document or in aid of the exercise of any power granted herein or
therein, or the Lenders or the Facility Agent 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 Law
for the collection of all sums due, or so declared due, including, without
limitation, the right to appropriate and hold or apply (directly, by way of
set-off or otherwise) to the payment of the obligations of the Borrower to any
of the Creditors hereunder, under the Note and/or under the other Transaction
Documents (whether or not then due) all moneys and other amounts of the Borrower
then or thereafter in possession of any Creditor, the balance of any deposit
account (demand or time, matured or unmatured) of the Borrower then or
thereafter with any Creditor and every other claim of the Borrower then or
thereafter against any of the Creditors.
8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold each
of the Creditors harmless against any loss, as well as against any reasonable
costs or expenses (including reasonable legal fees and expenses), which any of
the Creditors sustains or incurs as a consequence of any default in payment of
the principal amount of the Loan, interest accrued thereon or any other amount
payable hereunder, under the Note or under the other Transaction Documents
including, but not limited to, all actual losses incurred in liquidating or
re-employing fixed deposits made by third parties or funds acquired to effect or
maintain the Loan or any portion thereof. Any Creditor's certification of such
costs and expenses shall, absent any manifest error, be conclusive and binding
on the Borrower.
8.3 Application of Moneys. Except as otherwise provided in any Security
Document, all moneys received by the Creditors under or pursuant to this
Agreement, the Note or any of the Security Documents after the happening of any
Event of Default (unless cured to the satisfaction of the Majority Lenders)
shall be applied by the Facility Agent in the following manner:
(a) firstly, in or towards the payment or reimbursement of any expenses
or liabilities incurred by any of the Creditors in connection with the
ascertainment, protection or enforcement of its rights and remedies hereunder,
under the Note and under the other Transaction Documents;
(b) secondly, in or towards payment of any interest owing in respect of
the Loan;
25
(c) thirdly, in or towards repayment of the principal of the Loan;
(d) fourthly, in or towards payment of all other sums which may be
owing to any of the Creditors under this Agreement, under the Note and under the
other Transaction Documents;
(e) fifthly, in or towards payments of any amounts then owed under any
Interest Rate Agreement; and
(f) sixthly, the surplus (if any) shall be paid to the Borrower or to
whomsoever else may be entitled thereto.
9. COVENANTS
9.1 Affirmative Covenants. Each of the Security Parties hereby covenants and
undertakes with the Lenders that, from the date hereof and so long as any
principal, interest or other moneys are owing in respect of this Agreement, the
Note or any of the Security Documents, it will:
(a) Performance of Agreements. Duly perform and observe, and procure
the observance and performance by all other parties thereto (other than the
Lenders) of, the terms of this Agreement, the Note and the Security Documents;
(b) Notice of Default, etc. Promptly upon obtaining knowledge thereof,
inform the Facility Agent of the occurrence of (a) any Event of Default or of
any event which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default, (b) any litigation or governmental proceeding
pending or threatened against any Security Party which could reasonably be
expected to have a Material Adverse Effect, (c) the withdrawal of the Vessel's
rating by its Classification Society or the issuance by the Classification
Society of any material recommendation or notation affecting class and (d) any
other event or condition which is reasonably likely to have a Material Adverse
Effect, in each case promptly, and in any event within three (3) Banking Days
after becoming aware of the occurrence thereof;
(c) Obtain Consents. Without prejudice to Section 2.1 and this Section
9.1, obtain every consent and do all other acts and things which may from time
to time be necessary or advisable for the continued due performance of all its
and the other Security Parties' respective obligations under this Agreement,
under the Note and under the Security Documents;
(d) Financial Information. Deliver to the Facility Agent with
sufficient copies for the Lenders to be distributed to the Lenders by the
Facility Agent promptly upon the receipt thereof:
(i) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of the Guarantor,
complete copies of the consolidated financial reports of
the Guarantor and its Subsidiaries together with a separate
financial report of the Borrower (together with a
Compliance Certificate), all in reasonable detail which
shall include at least the consolidated balance sheet of
the Guarantor and its Subsidiaries and a balance sheet for
the Borrower as of the end of such year and the related
statements of income and sources and uses of funds for such
year, each as prepared in accordance with GAAP, all in
reasonable detail, which shall be audited reports prepared
by an Acceptable Accounting Firm;
26
(ii) as soon as available, but not less than forty-five (45)
days after the end of each of the first three quarters of
each fiscal year of the Guarantor, a quarterly interim
balance sheets and profit and loss statements of the
Guarantor and its Subsidiaries and the related profit and
loss statements and sources and uses of funds (together
with a Compliance Certificate), all in reasonable detail,
unaudited, but certified to be true and complete by the
chief financial officer of the Guarantor;
(iii) promptly upon the mailing thereof to the shareholders of
the Guarantor, copies of all financial statements, reports,
proxy statements and other communications provided to the
Guarantor's shareholders;
(iv) within ten (10) days of the Guarantor's receipt thereof,
copies of all audit letters or other correspondence from
any external auditors including material financial
information in respect of the Guarantor and its
Subsidiaries; and
(v) such other statements (including, without limitation,
monthly consolidated statements of operating revenues and
expenses), lists of assets and accounts, budgets,
forecasts, reports and other financial information with
respect to its business as the Facility Agent may from time
to time reasonably request, certified to be true and
complete by the chief financial officer of the Guarantor;
(e) Contingent Liabilities. For inclusion with each Compliance
Certificate delivered in connection with Sections 9.1(d)(i) and 9.1(d)(ii), and
in any event upon the reasonable request of the Facility Agent, an accounting of
all of the contingent liabilities of each Security Party;
(f) Vessel Valuations. For inclusion with each Compliance Certificate
delivered pursuant to Section 9.1(d)(i), and in any event upon the reasonable
request of the Facility Agent, the Borrower shall obtain appraisals of the Fair
Market Value of the Vessel. One such additional valuation in any year is to be
at the Borrower'scost, provided, that following and during the continuance of
any Event of Default whether or not such Event of Default has been waived by the
Lenders, all such valuations are to be at the Borrower's cost. In the event the
Borrower fails or refuses to obtain the valuations requested pursuant to this
Section 9.1 within ten (10) days of the Facility Agent's request therefor, the
Facility Agent will be authorized to obtain such valuations, at the Borrower's
cost, from one of the approved ship brokers listed on Schedule III, which
valuations shall be deemed the equivalent of valuations duly obtained by the
Borrower pursuant to this Section 9.1(f), but the Facility Agent's actions in
doing so shall not excuse any default of the Borrower under this Section 9.1(f);
(g) Corporate Existence. Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and all
licenses, franchises, permits and assets necessary to the conduct of its
business;
(h) Books and Records. At all times keep proper books of record and
account into which full and correct entries shall be made in accordance with
GAAP;
27
(i) Taxes and Assessments. Pay and discharge all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or property prior to the date upon which penalties attach thereto;
provided, however, that it shall not be required to pay and discharge, or cause
to be paid and discharged, any such tax, assessment, charge or levy so long as
the legality thereof shall be contested in good faith and by appropriate
proceedings or other acts and it shall set aside on its books adequate reserves
with respect thereto;
(j) Inspection. Allow any representative or representatives designated
by the Facility Agent, subject to applicable laws and regulations, to visit and
inspect any of its properties, and, on request, to examine its books of account,
records, reports and other papers and to discuss its affairs, finances and
accounts with its officers, all at such reasonable times and as often as the
Facility Agent reasonably requests;
(k) Inspection and Survey Reports. If the Lenders shall so request, the
Borrower shall provide the Lenders with copies of all internally generated
inspection or survey reports on the Vessel;
(l) Compliance with Statutes, Agreements, etc. Do or cause to be done
all things necessary to comply with all material contracts or agreements to
which any of the Security Parties is a party, and all material laws, and the
rules and regulations thereunder, applicable to such Security Party, including,
without limitation, those laws, rules and regulations relating to employee
benefit plans and environmental matters except where failure to do so would not
be reasonably likely to have a Material Adverse Effect;
(m) Environmental Matters. Promptly upon the occurrence of any of the
following conditions, provide to the Facility Agent a certificate of a chief
executive officer of the Guarantor, specifying in detail the nature of such
condition and its proposed response or the proposed response of any
Environmental Affiliate: (a) its receipt or the receipt by any Environmental
Affiliate of any written communication whatsoever that alleges that such Person
is not in compliance with any applicable Environmental Law or Environmental
Approval, if such noncompliance could reasonably be expected to have a Material
Adverse Effect, (b) knowledge by it or any Environmental Affiliate that there
exists any Environmental Claim pending or threatened against any such Person,
which could reasonably be expected to have a Material Adverse Effect, or (c) any
release, emission, discharge or disposal of any material that could form the
basis of any Environmental Claim against it or against any Environmental
Affiliate, if such Environmental Claim could reasonably be expected to have a
Material Adverse Effect. Upon the written request by the Facility Agent, the
Borrower will submit to the Facility 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;
(n) Insurance. Maintain with financially sound and reputable insurance
companies insurance on all its properties and against all such risks and in at
least such amounts and with such deductibles as are usually insured against by
companies of established reputation engaged in the same or similar business from
time to time;
(o) Vessel Management. Cause the Vessel to be managed both commercially
and technically by the Guarantor, a wholly-owned subsidiary thereof or its
existing manager;
28
(p) Brokerage Commissions, etc. Indemnify and hold each of the Agents
and the Lenders harmless from any claim for any brokerage commission, fee or
compensation from any broker or third party resulting from the transactions
contemplated hereby;
(q) ISM Code, ISPS Code and MTSA Matters. (i) Procure that the Operator
will comply with and ensure that the Vessel will comply with the requirements of
the ISM Code, ISPS Code and MTSA in accordance with the implementation schedules
thereof, including (but not limited to) the maintenance and renewal of valid
certificates, and when required, security plans, pursuant thereto throughout the
term of the Loan; and (ii) will procure that the Operator will immediately
inform the Facility Agent if there is any threatened or actual withdrawal of its
DOC, SMC or the ISSC in respect of the Vessel; and (iii) will procure that the
Operator will promptly inform the Facility Agent upon the issuance to the
Borrower or Operator of a DOC and to the Vessel of an SMC or ISSC;
(r) ERISA. Forthwith upon learning of the occurrence of any material
liability of any member of the ERISA Group or any ERISA Affiliate pursuant to
ERISA in connection with the termination of any Plan or withdrawal or partial
withdrawal of any multi-employer plan (as defined in ERISA) or of a failure to
satisfy the minimum funding standards of Section 412 of the Code or Part 3 of
Title I of ERISA by any Plan for which any member of the ERISA Group or any
ERISA Affiliate is plan administrator (as defined in ERISA), furnish or cause to
be furnished to the Lenders written notice thereof;
(s) Evidence of Current COFR. If the Lenders shall so request, provide
the Lenders with copies of the current Certificate of Financial Responsibility
pursuant to the Oil Pollution Act 1990 for the Vessel; and
9.2 Negative Covenants. Each of the Security Parties hereby covenants and
undertakes with the Lenders that, from the date hereof and so long as any
principal, interest or other moneys are owing in respect of this Agreement, the
Note or any other Transaction Documents, it will not, without the prior written
consent of the Majority Lenders (or all of the Lenders if required pursuant to
Section 16.8):
(a) Liens. Create, assume or permit to exist, any mortgage, pledge,
lien, charge, encumbrance or any security interest whatsoever upon any
Collateral or, in respect of the Borrower and the Guarantor, other property
except:
(i) liens disclosed in Schedule IV;
(ii) liens to secure Indebtedness under Section 9.2(m), such
liens to be limited to the vessels constructed or acquired;
(iii) liens for taxes not yet payable for which adequate reserves
have been maintained;
(iv) the Mortgage, the Assignments and other liens in favor of
the Security Trustee or the Lenders;
(v) liens, charges and encumbrances against the Vessel
permitted to exist under the terms of the Mortgage;
29
(vi) pledges of certificates of deposit or other cash collateral
securing reimbursement obligations in connection with
letters of credit now or hereinafter issued for its account
in connection with the establishment of its financial
responsibility under 33C.F.R. Part 130 or 46 C.F.R. Part
540, as the case may be, as the same may be amended and
replaced;
(vii) 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 is the principal, as to all of the
foregoing, only to the extent arising and continuing in the
ordinary course of business; and
(viii) other liens, charges and encumbrances incidental to the
conduct of its business, the ownership of its property and
assets and which do not in the aggregate materially detract
from the value of its property or assets or materially
impair the use thereof in the operation of its business;
(b) Third Party Guaranties. Guaranty the obligations of any third
party, except a direct or indirect subsidiary of the Guarantor, whether or not
affiliated with such Security Party;
(c) Liens on Shares of Borrower. With respect to the Guarantor, create,
assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance or
any security interest whatsoever upon the shares of the Borrower;
(d) Subordination of Inter-Company Indebtedness. With respect to the
Guarantor, procure that, upon the occurrence and during the continuance of an
Event of Default, no payments are made by any Security Party on any
inter-company Indebtedness until such time as the Loan is paid in full;
(e) Transaction with Affiliates. Enter into any transaction with an
Affiliate, other than on an arms length basis;
(f) Change of Flag, Class, Management or Ownership. Change the flag of
the Vessel other than to a jurisdiction reasonably acceptable to the Lenders,
its Classification Society other than to another member of the International
Association of Classification Societies, the technical management of the Vessel
other than to one or more technical management companies reasonably acceptable
to the Lenders or the immediate or ultimate ownership of the Vessel;
(g) Chartering. Enter into any material amendment of the Time Charter
or any other charter party agreement without the prior consent of the Facility
Agent, which consent shall not be unreasonably withheld;
(h) Change in Business. Materially change the nature of its business or
commence any business materially different from its current business;
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(i) Sale of Assets. Other than as reasonably acceptable to the Majority
Lenders, sell, or otherwise dispose of, the Vessel or any other asset (including
by way of spin-off, installment sale or otherwise) which is substantial in
relation to its assets taken as a whole; provided, however, that the Borrower
may sell the Vessel to a third party in an arm's length transaction provided
that the proceeds of such sale are distributed in accordance with Section 5.3 of
this Agreement;
(j) Changes in Offices or Names. Change the location of its chief
executive office, its chief place of business or the office in which its records
relating to the earnings or insurances of the Vessel are kept or change its name
unless the Lenders shall have received sixty (60) days prior written notice of
such change;
(k) Consolidation and Merger. Consolidate with, or merge into, any
corporation or other entity, or merge any corporation or other entity into it;
provided, however, that the Guarantor may merge with any Subsidiary or any other
Person if (A) at the time of such transaction and after giving effect thereto,
no Default or Event of Default shall have occurred or be continuing, (B) the
surviving entity of such consolidation or merger shall be the Guarantor and (C)
after giving effect to the transaction, the Guarantor's Consolidated Tangible
Net Worth shall be greater or equal to its Consolidated Tangible Net Worth prior
to the merger;
(l) Change Fiscal Year. In the case of the Guarantor, change its fiscal
year;
(m) Indebtedness. In the case of the Security Parties, incur any new
Indebtedness (which, for the sake of clarity, shall exclude any Indebtedness
pursuant to this Agreement) other than Indebtedness incurred to finance the
acquisition and/or construction of any vessels, provided that the principal
amount of such Indebtedness shall not exceed eighty percent (80%) of such
acquisition and/or construction price, unless such Indebtedness is subordinated
to all existing Indebtedness and this Loan; and
(n) Limitations on Ability to Make Distributions. Except as provided in
Section 13(c)(1) of the Title XI Agreement, create or otherwise cause or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to pay dividends or make any other distributions on
its capital stock or limited liability company interests, as the case may be, to
the Borrower or the Guarantor.
(o) Change of Control. Cause or permit a Change of Control.
(p) No Money Laundering. Contravene any law, official requirement or
other regulatory measure or procedure implemented to combat "money laundering"
(as defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities) and comparable United States Federal and state laws.
9.3 Financial Covenants. The Guarantor hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of this Agreement, the Note or any of the
Security Documents, it will:
(a) Consolidated Indebtedness to Consolidated EBITDA Ratio. Maintain,
on a consolidated basis, a ratio of Consolidated Indebtedness to Consolidated
EBITDA of not more than 4.25 to 1.00, as measured at the end of each fiscal
quarter based on the four most recent fiscal quarters for which financial
information is available;
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(b) Working Capital. Maintain on a consolidated basis a ratio of
current assets to current liabilities of not less than 1.00 to 1.00, as measured
at the end of each fiscal quarter;
(c) Consolidated Tangible Net Worth. Maintain a Consolidated Tangible
Net Worth, as measured at the end of each fiscal quarter, in an amount of not
less than the sum of One Hundred Sixty Million Dollars ($160,000,000) and the
sum of fifty percent (50%) of (i) all net income of the Guarantor (on a
consolidated basis) earned after June 30, 2005 and (ii) the proceeds from the
issuance of any common and/or preferred stock of the Guarantor on or after the
date hereof;
(d) Consolidated EBITDA to Interest Expense. Maintain a ratio of
Consolidated EBITDA to Interest Expense of not less than 2.50 to 1.00, measured
at the end of each fiscal quarter based on the four most recent fiscal quarters
for which financial information is available;
9.4 Asset Maintenance. If at any time during the term of this Agreement, the
Fair Market Value of the Vessel is less than the Required Percentage of the
outstanding amount of the Loan, the Borrower shall, within a period of thirty
(30) days following receipt by the Borrower of written notice from the Facility
Agent notifying the Borrower of such shortfall and specifying the amount thereof
(which amount shall, in the absence of manifest error, be deemed to be
conclusive and binding on the Borrower), either (i) deliver to the Security
Trustee such additional collateral as may be satisfactory to the Lenders in
their sole discretion of sufficient value to make the Fair Market Value of the
Vessel plus the additional collateral, equal to the Required Percentage of the
outstanding amount of the Loan or (ii) the Borrower shall prepay such amount of
the Loan (together with interest thereon and any other monies payable in respect
of such prepayment pursuant to Section 5.4) as shall result in the Fair Market
Value of the Vessel being not less than the Required Percentage of the
outstanding amount of the Loan.
10. GUARANTEE
10.1 The Guarantee. The Guarantor hereby irrevocably and unconditionally
guarantees to each of the Creditors and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Loan made by the Lenders
to the Borrower and evidenced by the Note and all other amounts from time to
time owing to the Creditors by the Borrower under this Agreement, under the Note
and under any of the Security Documents, in each case strictly in accordance
with the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Guarantor hereby further agrees that if the
Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
10.2 Obligations Unconditional. The obligations of the Guarantor under Section
10.1 are absolute, unconditional and irrevocable, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Borrower under this Agreement, the Note or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of, or security for, any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise
32
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 10.2 that the obligations of the Guarantor
hereunder shall be absolute, unconditional and irrevocable, under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantor hereunder, which shall remain absolute,
unconditional and irrevocable as described above:
a) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended,
or such performance or compliance shall be waived;
b) any of the acts mentioned in any of the provisions of this
Agreement or the Note or any other agreement or instrument
referred to herein or therein shall be done or omitted;
c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any
right under this Agreement or the Note or any other
agreement or instrument referred to herein or therein shall
be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or
exchanged, in whole or in part, or otherwise dealt with; or
d) any lien or security interest granted to, or in favor of,
the Security Trustee or any Lender or Lenders as security
for any of the Guaranteed Obligations shall fail to be
perfected.
The Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that any Agent or any
Lender exhaust any right, power or remedy or proceed against the Borrower under
this Agreement or the Note or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
10.3 Reinstatement. The obligations of the Guarantor under this Section 10 shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any Proceedings and the Guarantor agrees
that it will indemnify each Creditor on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by such
Creditor in connection with such recission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
10.4 Subrogation. The Guarantor hereby irrevocably waives, but only until all
amounts payable hereunder by the Guarantor to the Creditors (or any of them)
have been paid in full, any and all rights to which any of them may be entitled
by operation of law or otherwise, upon making any payment hereunder to be
subrogated to the rights of the payee against the Borrower with respect to such
payment or to be reimbursed, indemnified or exonerated by or to seek
contribution from the Borrower in respect thereof.
10.5 Remedies. The Guarantor agrees that, as between the Guarantor and the
Lenders, the obligations of the Borrower under this Agreement and the Note may
be declared to be forthwith due and payable as provided in Section 8 (and shall
be deemed to have become automatically due and
33
payable in the circumstances provided in said Section 8) for purposes of Section
10.1 notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantor for purposes of Section 10.1.
10.6 Joint, Several and Solidary Liability. The Guarantor's obligations and
liability under this Agreement shall be on a "solidary" or "joint and several"
basis along with Borrower to the same degree and extent as if the Guarantor had
been and/or will be a co-borrower, co-principal obligor and/or co-maker of the
Guaranteed Obligations. In the event that there is more than one Guarantor under
this Agreement, or in the event that there are other guarantors, endorsers or
sureties of all or any portion of the Guaranteed Obligations, the Guarantor's
obligations and liability hereunder shall further be on a "solidary" or "joint
and several" basis along with such other guarantors, endorsers and/or sureties.
10.7 Continuing Guarantee. The guarantee in this Section 10 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.
11. ASSIGNMENT.
This Agreement shall be binding upon, and inure to the benefit of, each
of the Security Parties and each of the Creditors and their respective
successors and assigns, except that none of the Security Parties may assign any
of its rights or obligations hereunder without the written consent of the
Lenders. Each Lender shall be entitled to assign its rights and obligations
under this Agreement or grant participation(s) in the Loan to any subsidiary,
holding company or other affiliate of such Lender, to any subsidiary or other
affiliate company of any thereof or, with the consent of the Borrower (except
upon the occurrence and during the continuation of an Event of Default, in which
case the Borrower's consent shall not be required) and the Agents, in the case
of the Borrower such consent not to be unreasonably withheld, to any other bank
or financial institution (in a minimum amount of not less than $1,000,000), and
such Lender shall forthwith give notice of any such assignment or participation
to the Borrower and pay the other Lender an assignment fee of $3,000 for each
such assignment or participation; provided, however, that any such assignment
must be made pursuant to an Assignment and Assumption Agreement. The Borrower
will take all reasonable actions requested by the Agents or any Lender to effect
such assignment, including, without limitation, the execution of a written
consent to any 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 any
Lender to maintain or give effect to its obligations as contemplated by this
Agreement, such Lender shall inform the Facility Agent and the Borrower to that
effect, whereafter the liability of such Lender to make its Commitment available
shall forthwith cease and the Borrower shall be required either to repay to such
Lender that portion of the Loan advanced by such Lender immediately or, if such
Lender so agrees, to repay such portion of the Loan to the Lender on the last
day of the calendar month in accordance with and subject to the provisions of
Section 12.5. In any such event, but without prejudice to the aforesaid
obligations of
34
the Borrower to repay such portion of the Loan, the Borrower and the relevant
Lender shall negotiate in good faith with a view to agreeing on terms for making
such portion of the Loan available from another jurisdiction or otherwise
restructuring such portion of the Loan on a basis which is not unlawful.
12.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental
or other authority, shall:
(i) subject any Lender to any Taxes with respect to its income
from the Loan, or any part thereof, or
(ii) change the basis of taxation to any Lender of payments of
principal or interest or any other payment due or to become
due pursuant to this Agreement (other than a change in the
basis effected by the jurisdiction of organization of such
Lender, the jurisdiction of the principal place of business
of such Lender, the United States of America, the State or
City of New York or any governmental subdivision or other
taxing authority having jurisdiction over such Lender
(unless such jurisdiction is asserted by reason of the
activities of any Security Party) or such other
jurisdiction where the Loan may be payable), or
(iii) impose, modify or deem applicable any reserve requirements
or require the making of any special deposits against or in
respect of any assets or liabilities of, deposits with or
for the account of, or loans by, a Lender, or
(iv) impose on any Lender any other condition affecting the Loan
or any part thereof,
and the result of the foregoing is either to increase the cost to such
Lender of making available or maintaining its Commitment or any part thereof or
to reduce the amount of any payment received by such Lender, then and in any
such case if such increase or reduction in the opinion of such Lender materially
affects the interests of such Lender under or in connection with this Agreement:
(a) such Lender shall notify the Facility Agent and the Borrower of the
happening of such event, and
(b) the Borrower agrees forthwith upon demand to pay to such Lender
such amount as such Lender certifies to be necessary to compensate such Lender
for such additional cost or such reduction; provided however, that the foregoing
provisions shall not be applicable in the event that increased costs to the
Lender result from the exercise by the Lender of its right to assign its rights
or obligations under Section 11.
12.3 Nonavailability of Funds. If the Facility Agent shall determine that, by
reason of circumstances affecting the London Interbank Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate, the Facility Agent shall give notice of such determination to
the Borrower and the Lenders. The Borrower, the Facility Agent and the Majority
Lenders shall then negotiate in good faith in order to agree upon a mutually
satisfactory
35
interest rate to be substituted for that which would otherwise have
applied under this Agreement. If the Borrower, the Facility Agent and the
Majority Lenders are unable to agree upon such a substituted interest rate
within thirty (30) days of the giving of such determination notice, the Facility
Agent shall set an interest rate to take effect at the Facility Agent's
direction, which rate shall be equal to the Applicable Margin plus the cost to
the Lenders (as certified by each Lender) of funding the Loan.
12.4 Lender's Certificate Conclusive. A certificate or determination notice of
the Facility Agent or any Lender, as the case may be, as to any of the matters
referred to in this Section 12 shall, absent manifest error, be conclusive and
binding on the Borrower.
12.5 Compensation for Losses. Where any portion of the Loan is to be repaid by
the Borrower pursuant to this Section 12, the Borrower agrees simultaneously
with such repayment to pay to the relevant Lender all accrued interest to the
date of actual payment on the amount repaid and all other sums then payable by
the Borrower to the relevant Lender pursuant to this Agreement, together with
such amounts as may be certified by the relevant Lender to be necessary to
compensate such Lender for any actual loss, premium or penalties incurred or to
be incurred thereby on account of funds borrowed to make, fund or maintain its
Commitment or such portion thereof for the remainder (if any) of the then
current calendar month, 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 under this
Agreement or the other Transaction Documents then the conversion shall be made,
in the discretion of the Facility 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 Facility Agent shall not be entitled to
recover under this section any amount in the judgment currency which exceeds at
the conversion date the amount in Dollars due under this Agreement, the Note
and/or the other Transaction Documents.
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, the Note
and/or the other Transaction Documents in Dollars; 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 this Section 13
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement, the Note
and/or any of the Security Documents.
13.4 Rate of Exchange. The term "rate of exchange" in this Section 13 means the
rate at which the Facility Agent in accordance with its normal practices is able
on the relevant date to purchase Dollars with the judgment currency and includes
any premium and costs of exchange payable in connection with such purchase.
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14. FEES AND EXPENSES
14.1 Fees. The Borrower shall pay to the Facility Agent (for the account of the
Lenders) a fee equal to five-tenths of one percent (0.5%) of the Loan, such fee
to be payable on the Closing Date. The Borrower shall pay to the Arrangers an
arrangement fee of Fifty Thousand Dollars ($50,000), such fee to be payable on
the Closing Date. The Borrower shall also pay to the Facility Agent an agency
fee of Seven Thousand Five Hundred Dollars ($7,500) per annum, per lender.
14.2 Expenses. The Borrower agrees, whether or not the transactions hereby
contemplated are consummated, on demand to pay, or reimburse the Agents for
their payment of, the reasonable expenses of the Agents and (after the
occurrence and during the continuance of an Event of Default) the Lenders
incident to said transactions (and in connection with any supplements,
amendments, waivers or consents relating thereto or incurred in connection with
the enforcement or defense of any of the Agents' and the Lenders' rights or
remedies with respect thereto or in the preservation of the Agents' and the
Lenders' priorities under the documentation executed and delivered in connection
therewith) including, without limitation, all reasonable costs and expenses of
preparation, negotiation, execution and administration of this Agreement and the
documents referred to herein, the reasonable fees and disbursements of the
Agents' counsel in connection therewith, as well as the reasonable fees and
expenses of any independent appraisers, surveyors, engineers and other
consultants retained by the Agents in connection with this transaction, all
reasonable costs and expenses, if any, in connection with the enforcement of
this Agreement and the other Transaction Documents and stamp and other similar
taxes, if any, incident to the execution and delivery of the documents
(including, without limitation, the other Transaction Documents) herein
contemplated and to hold the Agents and the Lenders free and harmless in
connection with any liability arising from the nonpayment of any such stamp or
other similar taxes. Such taxes and, if any, interest and penalties related
thereto as may become payable after the date hereof shall be paid immediately by
the Borrower to the Agents or the Lenders, as the case may be, when liability
therefor is no longer contested by such party or parties or reimbursed
immediately by the Borrower to such party or parties after payment thereof (if
the Agents or the Lenders, at their sole discretion, chooses to make such
payment).
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.
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 any of the Lenders or the Agents under this Loan Agreement or
under any document delivered hereunder and hereby irrevocably agrees that valid
service of summons or other legal process on it may be effected by serving a
copy of the summons and other legal process in any such action or proceeding on
the Borrower by mailing or delivering the same by hand to the Borrower at the
address indicated for notices in Section 17.1. The service, as herein provided,
of such summons or other legal process in any such action or proceeding shall be
deemed personal service and accepted by the Borrower as such, and shall be legal
and binding upon the Borrower for all the purposes of any such action or
proceeding. Final judgment (a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of any indebtedness of the
Borrower to the Lenders 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
37
the judgment. The Borrower will advise the Facility Agent promptly of any change
of address for the purpose of service of process. Notwithstanding anything
herein to the contrary, 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 EACH OF THE
SECURITY PARTIES AND EACH OF THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
16. THE AGENTS
16.1 Appointment of Agents. Each of the Lenders irrevocably appoints and
authorizes the Facility Agent to take such action as facility agent on its
behalf and to exercise such powers under this Agreement, the Note and the other
Transaction Documents as are delegated to the Facility Agent by the terms hereof
and thereof. The Facility Agent nor any of its directors, officers, employees or
agents shall be liable for any action taken or omitted to be taken by it or them
under this Agreement, the Note or the other Transaction Documents or in
connection therewith, except for its or their own gross negligence or willful
misconduct.
16.2 Appointment of Security Trustee. Each of the Lenders irrevocably appoints,
designates and authorizes the Security Trustee to act as security trustee on its
behalf with regard to (i) the security, powers, rights, titles, benefits and
interests (both present and future) constituted by and conferred on the Lenders
or any of them or for the benefit thereof under or pursuant to this Agreement or
any of the other Transaction Documents (including, without limitation, the
benefit of all covenants, undertakings, representations, warranties and
obligations given, made or undertaken to any Lender in the Agreement or the
other Transaction Documents), (ii) all moneys, property and other assets paid or
transferred to or vested in any Lender or any agent of any Lender or received or
recovered by any Lender or any agent of any Lender pursuant to, or in connection
with, this Agreement or the other Transaction Documents whether from any
Security Party or any other person and (iii) all money, investments, property
and other assets at any time representing or deriving from any of the foregoing,
including all interest, income and other sums at any time received or receivable
by any Lender or any agent of any Lender in respect of the same (or any part
thereof). The Security Trustee hereby accepts such appointment but shall have no
obligations under this Agreement, under the Note or under any of the Security
Documents except those expressly set forth herein and therein.
16.3 Distribution of Payments. Whenever any payment is received by the Facility
Agent or the Security Trustee from the Borrower or the Guarantor for the account
of the Lenders, or any of them, whether of principal or interest on the Note,
commissions, fees under Section 14 or otherwise, it will thereafter cause to be
distributed on the same day if received before 10 a.m. New York time, or on the
next day if received thereafter, like funds relating to such payment ratably to
the Lenders according to their respective Commitments, in each case to be
applied according to the terms of this Agreement. Unless the Facility Agent or
the Security Trustee, as the case may be, shall have received notice from the
Borrower prior to the date when any payment is due hereunder that the Borrower
will not make any payment on such date, the Facility Agent or the Security
Trustee may assume that the Borrower have made such payment to the Facility
Agent or the Security Trustee, as the case may be, on the relevant date and the
Facility Agent or the Security Trustee may, in reliance upon such assumption,
make available to the Lenders on such date a corresponding amount relating
38
to such payment ratably to the Lenders according to their respective
Commitments. If and to the extent that the Borrower shall not have so made such
payment available to the Facility Agent or the Security Trustee, as the case may
be, the Lenders and the Borrower (but without duplication) severally agree to
repay to the Facility Agent or the Security Trustee, as the case may be,
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Lenders until
the date such amount is repaid to the Facility Agent or the Security Trustee, as
the case may be, as calculated by the Facility Agent or Security Trustee to
reflect its cost of funds.
16.4 Holder of Interest in Note. The Agents may treat each Lender as the holder
of all of the interest of such Lender in the Note.
16.5 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or
pass upon the validity, effectiveness or genuineness of any of this Agreement,
the other Transaction Documents or any instrument, document or communication
furnished pursuant to this Agreement or in connection therewith or in connection
with any other Transaction Document, and the Agents shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.
16.6 Agents as Lenders. With respect to that portion of the Loan made available
by it, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not an Agent, and the term
"Lender" or "Lenders" shall include the Agent in its capacity as a Lender. Each
Agent and its affiliates may accept deposits from, lend money to and generally
engage in any kind of business with, the Borrower and the Guarantor as if it
were not an Agent.
16.7 Acts of the Agents. Each Agent shall have duties and discretion, and shall
act as follows:
(a) Obligations of the Agents. The obligations of each Agent
under this Agreement, the Note and the other Transaction
Documents are only those expressly set forth herein and
therein;
(b) No Duty to Investigate. No Agent shall at any time, unless
requested to do so by a Lender or Lenders, be under any
duty to enquire whether an Event of Default, or an event
which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred or to
investigate the performance of this Agreement, the Note or
any Security Document by any Security Party; and
(c) Discretion of the Agents. Each Agent shall be entitled to
use its discretion with respect to exercising or refraining
from exercising any rights which may be vested in it by,
and with respect to taking or refraining from taking any
action or actions which it may be able to take under or in
respect of, this Agreement and the other Transaction
Documents, unless the Facility Agent shall have been
instructed by the Majority Lenders to exercise such rights
or to take or refrain from taking such action; provided,
however, that no Agent shall be required to take any action
which exposes it to personal liability or which is contrary
to this Agreement or applicable law;
39
(d) Instructions of Majority Lenders. Each Agent shall in all
cases be fully protected in acting or refraining from
acting under this Agreement or under any other Transaction
Document in accordance with the instructions of the
Majority Lenders, and any action taken or failure to act
pursuant to such instructions shall be binding on all of
the Lenders.
16.8 Certain Amendments. Neither this Agreement, the Note nor any of the
Security Documents nor any terms hereof or thereof may be amended unless such
amendment is approved by the Borrower and the Majority Lenders, provided that no
such amendment shall, without the consent of each Lender affected thereby, (i)
reduce the interest rate or extend the time of payment of scheduled principal
payments or interest or fees on the Loan, or reduce the principal amount of the
Loan or any fees hereunder, (ii) increase or decrease the Commitment of any
Lender or subject any Lender to any additional obligation (it being understood
that a waiver of any Event of Default or any mandatory repayment of the Loan
shall not constitute a change in the terms of any Commitment of any Lender),
(iii) amend, modify or waive any provision of this Section 16.8, (iv) amend the
definition of Majority Lenders or any other definition referred to in this
Section 16.8, (v) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement, (vi) release any Security
Party from any of its obligations under any Security Document except as
expressly provided herein or in such Security Document, (vii) amend any
provision relating to the maintenance of collateral under Section 9.4 or (viii)
amend the definition of Available Amount. All amendments approved by the
Majority Lenders under this Section 16.8 must be in writing and signed by the
Borrower and each of the Lenders. In the event that any Lender is unable to or
refuses to sign an amendment approved by the Majority Lenders hereunder, such
Lender hereby appoints the Agent as its Attorney-In-Fact for the purposes of
signing such amendment. No provision of this Section 16 or any other provisions
relating to the Agent may be modified without the consent of the Agent.
16.9 Assumption re Event of Default. Except as otherwise provided in Section
16.15, the Facility Agent and the Security Trustee 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 it has been notified by any Security Party of such fact, or
has been notified by a Lender that such Lender considers that an Event of
Default or such an event (specifying in detail the nature thereof) has occurred
and is continuing. In the event that either thereof shall have been notified by
any Security Party or any Lender in the manner set forth in the preceding
sentence of any Event of Default or of an event which with the giving of notice
or lapse of time, or both, would constitute an Event of Default, the Facility
Agent shall notify the Lenders and shall take action and assert such rights
under this Agreement, under the Note and under Security Documents as the
Majority Lenders shall request in writing.
16.10 Limitations of Liability. No Agent or Lender shall be under any liability
or responsibility whatsoever:
(a) to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or
any breach by, any other Lenders or any other person of any
of its or their obligations under this Agreement or under
any Security Document;
(b) to any Lender or Lenders as a consequence of any failure or
delay in performance by, or any breach by, any Security
Party of any of its respective obligations under this
Agreement or under the other Transaction Documents; or
40
(c) to any Lender or Lenders for any statements,
representations or warranties contained in this Agreement,
in any Security Document or in any document or instrument
delivered in connection with the transaction hereby
contemplated; or for the validity, effectiveness,
enforceability or sufficiency of this Agreement, any other
Transaction Document or any document or instrument
delivered in connection with the transactions hereby
contemplated.
16.11 Indemnification of the Agent and Security Trustee. The Lenders agree to
indemnify each Agent (to the extent not reimbursed by the Security Parties or
any thereof), pro rata according to the respective amounts of their Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including legal fees and expenses incurred in
investigating claims and defending itself against such liabilities) which may be
imposed on, incurred by or asserted against, such Agent in any way relating to
or arising out of this Agreement or any other Transaction Document, any action
taken or omitted by such Agent thereunder or the preparation, administration,
amendment or enforcement of, or waiver of any provision of, this Agreement or
any other Transaction Document, except that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of either such Agent.
16.12 Consultation with Counsel. Each of the Facility Agent and the Security
Trustee may consult with legal counsel selected by such Agent and shall not be
liable for any action taken, permitted or omitted by it in good faith in
accordance with the advice or opinion of such counsel.
16.13 Resignation. Any Agent may resign at any time by giving sixty (60) days'
written notice thereof to the other Agents, 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 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.
16.14 Representations of Lenders. Each Lender represents and warrants to each
other Lender and the Agent that:
(a) in making its decision to enter into this Agreement and to
make its Commitment available hereunder, it has
independently taken whatever steps it considers necessary
to evaluate the financial condition and affairs of the
Security Parties, that it has made an independent credit
judgment and that it has not relied upon any statement,
representation or warranty by any other Lender or any
Agent; and
41
(b) so long as any portion of its Commitment remains
outstanding, it will continue to make its own independent
evaluation of the financial condition and affairs of the
Security Parties.
16.15 Notification of Event of Default. The Facility Agent hereby undertakes to
promptly notify the Lenders, and the Lenders hereby promptly undertake to notify
the Facility Agent and the other Lenders, of the existence of any Event of
Default which shall have occurred and be continuing of which such party has
actual knowledge.
17. NOTICES AND DEMANDS
17.1 Notices. All notices, requests, demands and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to the Borrower or
the Guarantor at the address or facsimile number set forth below and to the
Lenders and the Agents at their address and facsimile numbers set forth in
Schedule I or at such other address or facsimile numbers as such party may
hereafter specify for the purpose by notice to each other party hereto. Each
such notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section and telephonic confirmation of receipt thereof is obtained or
(ii) if given by mail, prepaid overnight courier or any other means, when
received at the address specified in this Section or when delivery at such
address is refused.
If to the Borrower or the Guarantor:
650 Poydras Street
New Orleans, LA 70130
Facsimile No.: (504) 529-2078
Attention: Chief Financial Officer
With a copy to
One Whitehall Street
New York, NY 10004
Facsimile No.: (212) 514-5692
Attention: Mr. Niels M. Johnsen
18. MISCELLANEOUS
18.1 Time of Essence. Time is of the essence of this Agreement but no failure or
delay on the part of any Creditor to exercise any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise by any Creditor of any power or right hereunder preclude any other or
further exercise thereof or the exercise of any other power or right. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
18.2 Unenforceable, etc., Provisions - Effect. In case any one or more of the
provisions contained in this Agreement or in the other Transaction Documents
would, if given effect, be invalid, illegal or unenforceable in any respect
under any law applicable in any relevant jurisdiction, said provision shall not
be enforceable against the relevant Security Party, but the validity, legality
and enforceability of the remaining provisions herein or therein contained shall
not in any way be affected or impaired thereby.
42
18.3 References. References herein to Articles, Sections, Exhibits and Schedules
are to be construed as references to articles, sections of, exhibits to, and
schedules to, this Agreement or the other Transaction Documents as applicable,
unless the context otherwise requires.
18.4 Further Assurances. Each of the Security Parties hereby agrees that if this
Agreement or any of the other Transaction Documents shall, in the reasonable
opinion of the Lenders, at any time be deemed by the Lenders for any reason
insufficient in whole or in part to carry out the true intent and spirit hereof
or thereof, it will execute or cause to be executed such other and further
assurances and documents as in the opinion of the Lenders may be required in
order to more effectively accomplish the purposes of this Agreement and/or the
other Transaction Documents.
18.5 Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Creditors, on the other part, whether written or oral, are superseded by and
merged into this Agreement and the other agreements (the forms of which are
exhibited hereto) to be executed and delivered in connection herewith to which
the Security Parties, the Agent, the Security Trustee and/or the Lenders are
parties, which alone fully and completely express the agreements between the
Security Parties, the Agents, and the Lenders.
18.6 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to
an Assignment and Assumption Agreement. Subject to Section 16.8, any provision
of this Agreement or any other Transaction Document may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower, the Agents, and the Majority Lenders. 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.
18.7 Indemnification. Neither any Creditor nor any of its directors, officers,
agents or employees shall be liable to any of the Security Parties for any
action taken or not taken thereby in connection herewith in the absence of its
own gross negligence or willful misconduct. The Borrower and the Guarantor
hereby jointly and severally agree to indemnify the Creditors, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement, any actual or proposed use of proceeds of
the Loan hereunder, or any related transaction or claim; provided that (i) no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction and (ii) to the extent permitted by law, the
Indemnitee shall provide the Security Parties with prompt notice of any such
investigative, administrative or judicial proceeding after the Indemnitee
becomes aware of such proceeding; provided, however, that the Indemnitee's
failure to provide such notice in a timely manner shall not relieve the Security
Parties of their obligations hereunder.
18.8 Headings. In this Agreement, Section headings are inserted for convenience
of reference only and shall not be taken into account in the interpretation of
this Agreement.
[Remainder of Page Intentionally Left Blank]
43
IN WITNESS whereof the parties hereto have caused
this Agreement to be duly executed by their duly
authorized representatives as of the day and year first above written.
CENTRAL GULF LINES, INC.,
as Borrower
By: /s/ NIELS M. JOHNSEN
-----------------------------------------
Name: Niels M. Johnsen
Title: Chairman
INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor
By: /s/ NIELS M. JOHNSEN
-----------------------------------------
Name: Niels M. Johnsen
Title: President
DNB NOR BANK ASA,
as Facility Agent, Arranger and Lender
By: /s/ SANJIV NAYAR
------------------------------------
Name: Sanjiv Nayar
Title: Senior Vice President
By: /s/ NIKOLAI NACHAMKIN
------------------------------------
Name: Nikolai Nachamkin
Title: Senior Vice President
DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT,
as Security Trustee, Arranger and Lender
By: /s/ LARS BOHLIG
------------------------------------
Name: Lars Bohlig
Title: Assistant General Manager
By: /s/ TANJA LAUERER
------------------------------------
Name: Tanja Lauerer
Title: Assistant General Manager
SCHEDULE I
LENDERS COMMITMENT
Deutsche Schiffsbank Aktiengesellschaft $16,000,000
Domshof 17
P.O. Box 106269
28195 Bremen
Germany
Facsimile No.: +49 421 360 9329
Telephone No.: +49 421 360 9249
Email: malte.schulte-trux@schiffsbank.com
Attention: Malte Schulte-Trux
DnB NOR Bank ASA $16,000,000
New York Branch
200 Park Avenue
31st Floor
New York, New York 10166-0396
Facsimile No.: 212 681 3900
Telephone No.: 212 681 3858
Email: erlend.bryn@dnbnor.no
Attention: Mr. Erlend Bryn
SCHEDULE II
APPLICABLE MARGIN
The Applicable Margin will vary as set forth hereunder based upon the
Guarantor's Consolidated Indebtedness to Consolidated EBITDA ratio:
<Table>
<Caption>
Consolidated Indebtedness/ Applicable Margin
Consolidated EBITDA
- ----------------------------------- ---------------------------------------
greater than or equal to 4.00 One and one-quarter percent (1.25%)
per annum
less than 4.00 One percent (1.0%) per annum
</Table>
Commencing on the eight year anniversary of this Agreement, the Applicable
Margin shall be increased by one-quarter of one percent (.25%) per annum.
The Applicable Margin for the Loan shall be determined by the Facility Agent
based on the information set out in the most recent Compliance Certificate
delivered to the Facility Agent in accordance with Section 9.1(d) hereof and
such determination of the Applicable Margin, absent manifest error, shall be
conclusive and binding upon the Borrower. In the event of a failure by the
Borrower to deliver a Compliance Certificate in a timely manner, the Guarantor's
Consolidated Indebtedness to Consolidated EBITDA ratio shall be deemed to be
equal to or greater than 4.00 until such Compliance Certificate is delivered.
Each change in Applicable Margin, if any, shall be effective as of the start of
the next calendar month.
SCHEDULE III
Approved Shipbrokers
R.S. Platou Shipbrokers a.s. Faber Shipping
Haakon VII's gate 10 Olgasvej 39
Oslo, Norway DK-2950 Vedbek
Telephone No.: +47 23 11 20 00 Copenhagen, Denmark
Facsimile No.: +47 23 11 23 11 Telephone No.: +45 4566 0450
Facsimile No.: +45 4566 0547
Fearnleys A/S
Grev Wedels plass 9
Oslo, Norway
Telephone No.: +47 22 93 60 00
Facsimile No.: +47 22 93 61 50
H. Clarkson & Company
12 Camomile Street
London EC3A 7BP
England
Telephone No.: +44 207 334 0000
Facsimile No.: +44 207 283 5260
Braemar Shipbrokers Ltd.
35 Cosway Street
London NW1 5BT
England
Telephone No.: +44 207 535 2600
Facsimile No.: +44 207 535 2601
Jacq. Pierot Jr. & Sons, Inc. (USA)
29 Broadway
New York, NY 10006
Telephone No.: (212) 344 3840
Facsimile No.: (212) 943 6598
Henses Shipping AS
Rosanes
0rsnesallen 20
P.O. Box 40, Teie
3106 T0nsberg
Norway
Telephone No.: +47 33 30 44 44
Facsimile No.: +47 33 32 30 30
SCHEDULE IV
Security Party Liens as of 9/30/05
Central Gulf Lines, Inc.
1. Mortgage, Earnings Assignment and Insurance Assignment on 419 LASH
Barges in favor of DnB Nor Bank ASA (fka Den norske Bank ASA).
2. Mortgage, Earnings Assignment and Insurance Assignment on vessels GREEN
LAKE and GREEN COVE in favor of HSBC Bank PLC as Facility Agent.
The foregoing does not reflect Liens to be discharged as a result of
Indebtedness paid off with the proceeds of the Loan.
SCHEDULE V
Security Party Indebtedness as of 9/30/05
International Shipholding Corporation
1. $54,033,000 outstanding on ISC's 7.75% Senior Notes, with The Bank of
New York, as trustee, due October 15, 2007.
2. Guarantee of indebtedness in the amount of $28,541,000 to HSH Nordbank
AG and others, which indebtedness is due on November 24, 2011.
3. Guarantee of indebtedness in the amount of $0 to Whitney National Bank
and others, which indebtedness has a maturity date of December 6, 2009.
Central Gulf Lines, Inc.
1. $76,064,000 outstanding on LCI's and Central Gulf Lines, Inc.'s, as
joint and several borrowers, credit facility dated September 30, 2003
with HSBC Bank Plc and others, which indebtedness has a maturity date
of September 30, 2013.
2. $0 outstanding on Central Gulf Lines, Inc.'s and LCI Shipholdings,
Inc.'s, as joint and several borrowers, credit facility dated December
6, 2004 with Whitney National Bank and others, which indebtedness has a
maturity date of December 6, 2009.