LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement" or "Loan Agreement')
dated as of September 26, 2003, is made by and among MARITRANS INC., a Delaware
corporation, MARITRANS 250 CO., a Nevada corporation and MARITRANS INTREPID CO.,
a Nevada corporation, jointly and severally (individually and collectively,
"Borrowers"), having their respective chief executive offices at Two Harbour
Place, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and FIFTH THIRD
BANK, an Ohio banking corporation having an office at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Lender").
W I T N E S S E T H:
1. Definitions. Unless the context otherwise requires, as used in this
Agreement, the following terms shall have the respective meanings indicated
below and shall be equally applicable to both the singular and the plural forms
thereof. Capitalized terms not otherwise defined herein shall have the meaning
given in the Loan Documents.
(a) "Applicable Law" shall mean all applicable Federal, state,
local and foreign laws (including, without limitation, any Environmental Laws
and any industrial hygiene and occupational safety or similar laws), ordinances,
judgments, decrees, injunctions, writs and orders of any Governmental Authority
and rules, regulations, orders, licenses and permits of any Governmental
Authority.
(b) "Assignments of Demise Charters" means an Assignment of
Charter Parties, Charter Hire and Earnings by Maritrans 250 Co. in favor of
Lender, with respect to the Vessel M-254, O.N. 529918, and an Assignment of
Charter Parties, Charter Hire and Earnings by Maritrans Intrepid Co. with
respect to the vessel M/V INTREPID, O.N. 526565, respectively.
(c) "Assignments of Insurances" means, individually and
collectively, an Assignment of Vessel Insurances in favor of Lender, by
Maritrans 250 Co., on the vessel M-254 and an Assignment of Vessel Insurances in
favor of Lender by Maritrans Intrepid Co. on the vessel INTREPID, respectively.
(d) "Authorized Signer" shall mean those officers of Borrowers
set forth on an incumbency certificate delivered by Borrowers to Lender, who are
authorized and empowered to execute the Loan Documents.
(e) "Casualty Event of Loss" shall mean, with respect to a
Vessel, the actual or constructive total loss of the Vessel due to sinking,
breaking up, theft, destruction, damage beyond or damage from any reason
whatsoever, to an extent which makes repair uneconomical, or rendition thereof
unfit for normal use without repairs that, in the reasonable judgment of
Borrower, would not be commercially reasonable to make.
(f) "Charter Agreements" means, individually and collectively,
the Bareboat Charter Party agreements dated October 25, 2001, between Maritrans
250 Co. and Charterer and between Maritrans Intrepid Co. and Charterer,
respectively, and any replacement bareboat charter accepted by Lender.
(g) "Charterer" means Maritrans Operating Company, L.P., and
any other bareboat charterer of the Vessels approved by Lender.
(h) "Collateral" shall have the meaning given in Section 5.
(i) "Default" shall mean any event or condition which, with
the passage of time or the giving of notice, or both, would constitute an Event
of Default.
(j) "Default Rate" shall mean an annual interest rate equal to
the lesser of the maximum interest rate permitted by Applicable Law and twelve
percent (12%) per annum.
(k) "Documentation Fee" shall mean a documentation fee payable
to Lender in the amount of $500.00.
(l) "Environmental Law" shall mean any Federal, state, or
local statute, law, ordinance, code, rule, regulation, or order or decree
regulating, relating to or imposing liability upon a Person in connection with
the use, release or disposal of any hazardous, toxic or dangerous substance,
waste, or material as same may relate to the Equipment or its operation.
(m) "Equipment" shall mean the Vessels and other item or items
of personal property, together with all replacement parts, additions,
attachments and accessories incorporated therein or affixed thereto, and all
Equipment used in connection with or located on board a Vessel not a part of the
Vessel for purposes of the Shipping Act, 46 U.S. Code, but customarily sold or
transferred with the Vessel.
(n) "Event of Default" shall have the meaning specified in
Section 11 hereof.
(o) "Event of Loss" shall mean a Casualty Event of Loss or a
Requisition Event of Loss.
(p) "Funding Date" shall mean the date on which the Loan is
funded as provided herein.
(q) "GAAP" shall have the meaning specified in Section 17(f)
hereof.
(r) "Governmental Action" shall mean all authorizations,
consents, approvals, waivers, filings and declarations of any Governmental
Authority, including, without limitation, those environmental and operating
permits required for the ownership, lease, use and operation of the Equipment
(s) "Governmental Authority" shall mean any foreign, Federal,
state, county, municipal or other governmental authority, agency, board or
court.
(t) "Item of Equipment" shall mean each item of the Equipment
(u) "Installment(s)" shall mean the periodic payments of
principal and/or interest due to repay the Note, and, where the context hereof
requires, all such additional amounts as may from time to time be payable under
any provision of the Loan Documents.
(v) "Lien" shall mean any mortgage, pledge, security interest,
lien, encumbrance, or other charge of any kind whatsoever.
(w) "Loan" or "Loans" shall mean the advances represented by
the Note.
(x) "Loan Documents" shall mean, collectively, this Agreement,
the Note, the Preferred Marine Mortgages, the Assignments of Insurances, the
Assignments of Demise Charters, and all other documents contemplated hereby and
thereby and to be delivered in connection herewith and therewith.
(y) "Note" shall mean the Promissory Note in the principal
amount of $23,000,000 by Borrowers, together with any extensions, modifications,
renewals, refinancings or other restructurings thereof.
(z) "Obligations" includes, without limitation, all debts,
liabilities, and obligations now or hereafter owing from Borrowers to Lender
under or in connection with this Agreement, the Note and other Loan Documents,
and performance by Borrowers of all agreements, covenants and provisions
contained herein and therein.
(aa) "Permitted Maritime Liens" shall mean any ▇▇▇▇▇▇'▇ liens
(including those of masters) for wages, maintenance and cure, salvage and
general average Liens, stevedore's wages, tort liens (including personal injury
and death) and Liens for necessaries incurred in the ordinary course and not
delinquent, all of the foregoing Liens which are either unclaimed or covered by
insurance (other than, and after giving effect to,
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any deductibles that the Borrowers may have on such insurance); provided, that,
no such Permitted Maritime Lien shall be preferred or have priority over the
lien of the Preferred Marine Mortgage unless it is specifically recognized as a
"preferred maritime lien" under Chapter 13 of Title 46, United States Code, as
amended (the "Code"). Nothing herein shall constitute a waiver or subordination
by the mortgagee of the preferred status of the lien of the Preferred Marine
Mortgage under the Code; and further provided, that, once any such Lien is
claimed, the Borrowers shall be permitted to contest any such Lien in good faith
by appropriate action promptly initiated and diligently conducted, if (i) such
reserve as shall be required by GAAP shall be made therefore, or (ii) the
Borrowers shall have arranged for a bond or insurance (other than, and after
giving effect to, any deductibles that the Borrowers may have on such insurance)
related to such Lien in a manner that is satisfactory to Lender in accordance
with law and it does not involve any material risk of the seizure or sale of the
Vessel.
(bb) "Person" shall mean any individual, partnership,
corporation, business trust, unincorporated organization, joint stock company,
estate, limited liability company, or any Governmental Authority.
(cc) "Preferred Marine Mortgage" shall mean each, and
"Preferred Marine Mortgages" shall mean all, first preferred marine mortgage by
Maritrans 250 Co., as mortgagor of the vessel M-254 and a first preferred marine
mortgage by Maritrans Intrepid Co., as mortgagor of the vessel INTREPID, as
applicable, in favor of Lender as mortgagee, covering 100% of the whole of such
Vessels.
(dd) "Prepayment Premium" shall mean, with respect to the
Loan, the meaning given to it in the Note.
(ee) "Replacement Vessel" has the meaning given in Section
4(c) hereof.
(ff) "Requisition Event of Loss" shall mean, with respect to a
Vessel, the condemnation, confiscation, nationalization or seizure of, or
requisition of title to, such Vessel by any Governmental Authority.
(gg) "Term" shall mean the term of the Note.
(hh) "UCC" shall have the meaning set forth in Section
11(b)(ii) hereof.
(ii) "Vessel" shall mean each, and "Vessels" shall mean all
of: (i) the U.S. documented tug M/V INTREPID, Official No. 526565, and her
machinery, tools, anchors, boats, chairs, tackle, and all appurtenances, and all
freights, hire, accounts, chattel paper and other earnings of said Vessel, and
all proceeds including insurance proceeds relating thereto; and (ii) the U.S.
documented double hulled tank barge M-254, Official No. 529918, and her
machinery, tools, anchors, boats, chairs, tackle, and all appurtenances, and all
freights, hire, accounts, chattel paper and other earnings of said Vessel, and
all proceeds including insurance proceeds relating thereto.
(jj) "Vessel Liens Certificates" means a Certificate of No
Liens by Maritrans 250 Co., and a Certificate of No Liens by Maritrans Intrepid
Co., as applicable, in form and substance acceptable to Lender.
2. Loan. On the terms, and subject to the conditions hereof, Lender
agrees, on the Funding Date, to fund a Loan to Borrowers in an amount not to
exceed $23,000,000. The Loan shall bear interest (subject to the other
provisions hereof relating to late payments and to the rate of interest that
will apply following any acceleration of the principal of such Loan) at an
interest rate equal to the Interest Rate as defined in the Note.
3. Conditions to Borrowing. In addition to any other requirements set
forth herein, the obligation of Lender to fund the Loan is subject to the prior
fulfillment (or waiver, in Lender's sole discretion) of each of the following
conditions precedent:
(a) Lender shall have received the original of this Agreement
executed by Borrowers;
(b) Borrowers shall have executed and delivered to Lender the
Note;
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(c) Maritrans 250 Co. and Maritrans Intrepid Co., as
applicable, shall have executed and delivered to Lender the Assignments of
Insurances;
(d) Maritrans 250 Co. and Maritrans Intrepid Co., as
applicable, shall have executed and delivered to Lender the Preferred Marine
Mortgages covering the Vessels, which Preferred Marine Mortgages shall be filed
with the U.S. Coast Guard National Vessel Documentation Center as a first and
only Lien on the respective Vessels;
(e) Lender shall have received the Vessel Liens Certificates
by Maritrans 250 Co. and Maritrans Intrepid Co., respectively;
(f) Lender shall have received the Assignments of Demise
Charters executed by Maritrans 250 Co. and Maritrans Intrepid Co., respectively,
and acknowledged by Charterer;
(g) Lender shall have approved the Charter Agreements;
(h) Lender shall have received and approved insurance policies
covering the Vessels;
(i) Lender shall have received certificates of insurance
covering the Vessels naming Lender as additional or co-insured and loss payee;
(j) Lender shall have filed UCC Financing Statements naming
Maritrans 250 Co. and Maritrans Intrepid Co., respectively, as debtor, and
describing the Collateral, and such other documents reasonably requested by
Lender in order to assure the perfection and priority of its security interests
in the Collateral;
(k) Lender and its counsel shall have been satisfied with the
organizational documents of Borrowers and the structure of the relationships
among Borrowers, Charterer and affiliates of Borrower;
(l) Lender shall have received certified resolutions of the
Borrowers, and incumbency certificates, and all other documents requested by
Lender hereunder, in form and substance satisfactory to Lender;
(m) There has been no material adverse change in the financial
condition of Maritrans Inc., since June 30, 2003.
(n) Lender shall have received the Documentation Fee, which
shall be fully earned and nonrefundable;
(o) Lender shall have received satisfactions of preferred
mortgages covering a Vessel from any mortgagee of record, and satisfactions or
releases of any claims of Lien of record against the Vessels, and UCC
termination statements of any UCC filings covering any Collateral;
(p) Lender shall have received, in form and substance
reasonably satisfactory to Lender, such other assurances, certificates,
documents or consents related to the Loan as Lender may reasonably require; and
(q) Lender shall have received an opinion of counsel to
Borrower in form and substance acceptable to Lender.
4. Repayment.
(a) Borrowers shall pay the principal of the Loan and interest
thereon on the terms set forth in the Note. All Installments shall be payable
when due whether or not Borrowers have received any additional notice that such
Installments are due. All Installments may be paid to Lender by wire transfer to
the account identified below, or such account as may otherwise be directed by
Lender in writing:
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Bank: Fifth Third Bank, NA
ABA Routing: ▇▇▇▇▇▇▇▇▇
Account Name: The Fifth Third Leasing Company
Account No: 790-56487
Reference: (Maritrans Inc.)
(b) In the event that a Vessel shall suffer an Event of Loss,
Borrowers shall prepay the principal of the Note plus (x) accrued interest on
such amount to the date of prepayment plus (y) the Prepayment Premium applicable
to such amount:
(i) with respect to a Casualty Event of Loss, on the
earlier of (A) the date that is 120 days after the occurrence of such Casualty
Event of Loss, and (B) the date that is ten (10) days after receipt by Borrowers
of all insurance proceeds payable to Borrowers in respect thereof;
(ii) with respect to a Requisition Event of Loss
effected by the government of the United States or any subdivision thereof, on
the earlier of (A) the date that is ten (10) days after receipt by Borrowers of
all compensation payable to any Borrower in respect thereof, and (B) the date
that is ten (10) days after receipt by Borrowers of all insurance proceeds
payable to Borrowers in respect thereof; or
(iii) with respect to a Requisition Event of Loss
effected by any Governmental Authority other than the government of the United
States or a subdivision thereof, on the earlier of (A) the date that is 180 days
after the occurrence thereof, and (B) the date that is ten (10) days after
receipt by Borrowers of all insurance proceeds payable to Borrowers in respect
thereof.
(c) Notwithstanding Section 4(b)(i) above, in the event of a
Casualty Event of Loss, Borrowers may, upon the written acceptance of Lender, in
its sole discretion, substitute as Collateral for the Note, a vessel of equal or
greater value, condition, utility and remaining useful life, acceptable to
Lender in its sole discretion ("Replacement Vessel"), subject to all the terms
and conditions hereof, including recording and perfection of a first preferred
marine mortgage covering such Replacement Vessel, and provided, however, that
Lender's security interests in such Replacement Vessel be perfected within ten
(10) days after the earlier of the dates set forth in Section 4(b)(i), and
further provided that Lender's interest in the insurance proceeds related to
such Casualty Event of Loss shall continue until filing of the first preferred
marine mortgage on such Replacement Vessel. Upon such filing, such Replacement
Vessel will constitute a "Vessel" for purposes of the Loan Documents.
5. Security Agreement. In consideration of the Loan evidenced by the
Note, and to secure the prompt payment and performance when due, whether by
lapse of time, acceleration or otherwise of the Principal and Interest
thereunder, and the performance and observance by Borrowers of the Obligations
and the agreements, covenants and provisions contained herein and in the Loan
Documents, Maritrans 250 Co. and Maritrans Intrepid Co., do hereby grant to
Lender a first priority security interest in, and acknowledge and agree that
Lender has and shall continue to have a continuing security interest in, any and
all right, title and interest of such Borrower in and to the Collateral
consisting of: (i) the Vessels and all Equipment used in connection with or
located on board the Vessels not a part of the Vessels for purposes of the
Shipping Act, 46 U.S. Code but customarily sold or transferred with the Vessels;
(ii) all related inventory, supplies, parts and spares; (iii) all freights,
hire, charters, chattel paper, general intangibles and accounts with respect to
the Vessels; (iv) all accessions, additions, replacements and substitutions
relating to any of the foregoing; (v) all records relating thereto; and (vi)
proceeds of the foregoing including, without limitation, insurance proceeds
(collectively, the "Collateral"). Upon the occurrence of an Event of Default
hereunder, Lender shall have with respect to the Collateral all rights and
remedies available to a secured party under the Uniform Commercial Code, and the
rights and remedies under the Loan Documents and under the Preferred Marine
Mortgages securing the Note.
6. Lease and Assignment.
(a) WITHOUT LENDER'S PRIOR WRITTEN CONSENT, NO BORROWER SHALL
(EXCEPT AS EXPRESSLY PERMITTED UNDER THE PREFERRED MARINE MORTGAGE) (i) ASSIGN,
TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF, THE EQUIPMENT OR ANY
INTEREST THEREIN, OR ASSIGN OR DELEGATE ITS RIGHTS OR OBLIGATIONS UNDER THE LOAN
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DOCUMENTS, OR (ii) LEASE OR LEND THE EQUIPMENT TO, OR PERMIT THE EQUIPMENT TO BE
USED BY, ANYONE OTHER THAN A BORROWER OR A BORROWER'S QUALIFIED EMPLOYEES,
PROVIDED, HOWEVER, THAT LENDER CONSENTS TO USE OF A VESSEL BY CHARTERER SUBJECT
IN EACH CASE TO LENDER'S SECURITY INTEREST UNDER THE LOAN DOCUMENTS.
(b) Lender may sell, transfer, grant participations in, assign
and/or grant a security interest (any such transaction, a "Transfer"), in all or
part of Lender's right, title and interest in the Note, and in the other Loan
Documents as they relate to the Loan evidenced by the Note (including the
security interests in favor of Lender securing such Loan). In the event of any
Transfer, the relevant transferee shall have and may exercise, with respect to
the Loan subject to such Transfer, all of Lender's rights hereunder, and NO
BORROWER SHALL ASSERT AGAINST ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR
SECURED PARTY ANY DEFENSE, COUNTERCLAIM OR OFFSET THAT ANY BORROWER MAY HAVE
AGAINST LENDER. Each Borrower agrees that upon written notice to such Borrower
of any Transfer, such Borrower shall acknowledge receipt thereof in writing and
provide confirmation to the transferee that the Loan Documents remain in full
force and effect and the absence of any Default thereunder, and such other
information as Lender or such transferee may reasonably require.
(c) Subject to the foregoing, all covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, Lender and
its successors and assigns and Borrowers and their successors and permitted
assigns.
7. Taxes. Borrowers shall pay when due any and all taxes, fees, levies,
imposts, duties, assessments and public and private charges levied or assessed
on or with respect to the Collateral, on the use thereof, or on this Agreement
or any of the other Loan Documents (but excluding any (i) franchise taxes
imposed on Lender generally, (ii) taxes imposed on Lender's net or gross income,
and any taxes which are being contested in good faith (and for the payment of
which adequate assurances in Lender's judgment have been provided to Lender) by
appropriate proceedings so long as such proceedings do not involve any material
risk of sale, forfeiture or loss of any Collateral and do not and will not
adversely affect Lender's right, title and interest in the Collateral.
8. Lender's Right to Perform for Borrower. If any Borrower fails to
perform or comply with any Obligations contained in the Loan Documents, Lender
may (but shall not be obligated to do so), on ten (10) days' notice (or such
shorter, or no, notice, as may be reasonable under the circumstances) to
Borrowers, if such failure is not cured by the last day of such period, itself
perform or comply with such Obligations, and the amount of the reasonable costs
and expenses of Lender incurred in connection with such performance or
compliance, together with interest on such amount from the date paid by Lender
until the date repaid by Borrowers to Lender, at the Default Rate, shall be
payable by Borrowers to Lender upon demand. No such performance or compliance by
Lender shall be deemed a waiver of the rights and remedies of Lender or any
successor or assignee of Lender against Borrowers hereunder or be deemed to cure
any Default of Borrowers hereunder. All such sums and amounts so expended by
Lender shall be repayable by Borrowers immediately without notice or demand,
shall be secured by the Vessels and related Collateral, and shall bear interest
from the date said amounts are expended at the Default Rate.
9. Delinquent Payments; Interest; Late Charges. If Borrowers fail to
pay any of the Installments within ten (10) days after receipt of notice from
Lender that the same were not paid when due, Borrowers shall pay to Lender
interest on such overdue Installment, from the date it became due until paid, at
the Default Rate. Such interest shall be payable by Borrowers upon demand by
Lender and shall be deemed part of the Obligations secured by the Vessels and
related Collateral securing the Note. Borrowers shall also pay Lender any late
charges pursuant to the terms of the Note. In no event shall such late charge
exceed the maximum amounts permitted under Applicable Law.
10. Personal Property; Liens; Warranty of Title. Except for Permitted
Maritime Liens, Borrowers shall (i) promptly after becoming aware of the
existence thereof, give Lender written notice of any Lien on the Collateral,
(ii) promptly, at Borrowers' sole cost and expense, take such action as may be
necessary to discharge any such Lien, and (iii) indemnify and hold Lender
harmless from and against any loss or damage caused by any such Lien. Each of
Maritrans 250 Co. and Maritrans Intrepid Co. warrant that it has good, valid and
marketable title to the Equipment, respectively, and that (i) the security
interest in the Collateral granted to Lender under the Loan Documents, when
properly perfected by any required filing, shall constitute a valid and
perfected first priority Lien and security interest in the Collateral and, (ii)
the Collateral is not subject to, and Borrowers will not grant or permit
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to exist, any Liens or claims on or against the Collateral, whether senior,
superior, junior, subordinate or equal to the security interest granted to
Lender under the Loan Documents, or otherwise.
11. Events of Default; Remedies.
(a) As used herein, the term "Event of Default" shall mean any
of the following events: (1) Borrowers fail to pay any Installment within ten
(10) days after the date due; (2) Any Borrower breaches any of its other
Obligations under any of the Loan Documents and fails to cure the same within
thirty (30) days after written notice thereof (except a Default under Article 1
of a Preferred Marine Mortgage to which the thirty (30) day notice shall not
apply); (3) any dissolution, termination of existence, merger (unless the
applicable Borrower is the surviving entity and such merger does not have a
material adverse effect on such Borrower), consolidation (unless the applicable
Borrower is the surviving entity and such consolidation does not have a material
adverse effect on such Borrower); (4) a receiver, trustee, conservator or
liquidator is appointed of any Borrower or of all or a substantial part of any
Borrower's assets, with or without the application or consent of such Borrower
as applicable and, if such appointment is made without the consent of such
Borrower as applicable, such appointment is not terminated or otherwise
dismissed within sixty (60) days thereafter; (5) a petition is filed by or
against any Borrower under any Bankruptcy, insolvency or similar legislation
and, if such petition is filed without the consent of such Borrower as
applicable, such filing is not dismissed within sixty (60) days thereafter; (6)
any representation or warranty made by any Borrower as applicable herein or in
any of the Loan Documents, certificates, financial statements or other
statements furnished to Lender in connection with the Loan shall prove to be
false or misleading in any material respect as of the date on which the same was
made; (7) any Borrower, as applicable, shall fail to satisfy within sixty (60)
days after the later of (i) entry thereof or (ii) the termination of the most
recent stay, any final judgment rendered against such Borrower as applicable, by
any court of competent jurisdiction where the judgment is in excess of $500,000;
(8) (i) any of the Liens created or granted under the Loan Documents, or
intended to be granted or created thereby, to Lender shall fail, with respect to
any material Item of Equipment, to be a valid, first priority, perfected Lien
subject to no prior or equal Lien and the Note secured thereby shall not have
been paid in full within thirty (30) days after any Borrower becomes aware
thereof; or (ii) additional Lien or Liens, except Permitted Maritime Liens,
attach(es) to the Equipment unless the Note shall be paid in full, or any Vessel
(or other Item or Items of Equipment material to the operation of any Vessel in
compliance with the provisions of the Loan Documents) becomes subject to risk of
imminent seizure or forfeiture, unless the Note shall have been paid in full;
(9) any Event of Default, under and as defined in the Note or Preferred Marine
Mortgages, shall occur and be continuing; (10) Maritrans Inc. shall fail to
comply with the financial covenants set forth in Section 16 hereof; (11) if the
Charter Agreements are cancelled or terminated prior to the expiration of the
term thereof or any material event of default shall occur and be continuing
after applicable notice and cure period under the Charter Agreements; or (12) a
Charter Agreement shall expire and not be replaced by a renewal or replacement
charter acceptable to Lender.
(b) (i) Upon the occurrence of an Event of Default, Lender, at
its option, may declare any or all of Borrowers' Obligations under the Loan
Documents, including, without limitation, the Note, to be immediately due and
payable, without demand or notice to Borrowers and Lender shall have the
immediate right to enforce its security interests in Collateral, and under the
Preferred Marine Mortgages; provided, however, that if the Event of Default
results from the arrest or attachment of a Vessel and Borrowers pay the Note in
full within ten (10) days of Lender's demand for payment, such Event of Default
shall be deemed cured. If Borrowers fail to make such a payment within ten (10)
days, the Obligations and liabilities accelerated thereby shall bear interest,
both before and after any judgment, until paid in full at the Default Rate.
(ii) Furthermore, upon the occurrence of an Event of
Default, Lender shall have, in addition to the rights and remedies provided
herein, in the other Loan Documents or by law, the rights and remedies of a
secured party under the Uniform Commercial Code under the laws of the State of
New York (the "UCC") (regardless of whether the UCC is the law of the
jurisdiction where the rights and remedies are asserted and regardless of
whether the UCC applies to the affected Collateral), and further Lender may do
any one or more of the following as Lender in its sole discretion may elect,
with or without judicial process or the aid and assistance of others: (A) enter
and remain on any premises on which any of the Equipment may be located and,
without resistance or interference by Borrowers, and without liability to Lender
by reason of such entry or taking possession, take possession of the Equipment;
(B) prepare for sale and sell or otherwise dispose of any Equipment at its
location; (C) require Borrowers to assemble and make available to Lender, at
Borrowers' expense, any Equipment at
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any place and time designated by Lender; (D) remove any Equipment from any such
premises for the purpose of effecting sale or other disposition thereof; (E)
without demand and without advertisement, notice, hearing or process of law, all
of which Borrowers hereby waive, at any place and time or times, sell and
deliver any or all Collateral held by or for it at public or private sale, by
one or more contracts, in one or more parcels, for cash, upon credit or
otherwise, at such prices and upon such terms as Lender deems advisable, in its
reasonable discretion; (F) lease all or any portion of the Equipment on such
terms and conditions as Lender in its reasonable discretion may determine; or
(G) enforce all rights to payment with respect to any and all Collateral. In
addition to all other sums due Lender hereunder, Borrowers shall pay Lender all
reasonable costs and expenses incurred by Lender, including reasonable
attorneys' fees and court costs, in obtaining or liquidating the Collateral, in
enforcing payment of the Loan, or in the prosecution or defense of any action or
proceeding by or against Lender or Borrowers concerning any matter arising out
of or connected with the Loan Documents, the Collateral or the Loan, including
without limitation any of the foregoing arising in, arising under or related to
a case under the United States Bankruptcy Code.
(iii) Borrowers' Waivers Regarding Disposition of the
Equipment. If an Event of Default occurs, Borrowers agree that any requirement
of reasonable notice shall be met if such notice is personally served on or
mailed, postage prepaid, to Borrowers in accordance with the notice provisions
hereof at least ten (10) days before the time of sale or other event giving rise
to the requirement of such notice. Lender shall not be obligated to make any
sale or other disposition of the Equipment regardless of notice having been
given. Lender may be the purchaser at any such public sale. Lender may postpone
or cause the postponement of the sale of all or any portion of the Equipment by
announcement at the time and place of such sale, and such sale may, without
further notice, be made at the time and place to which the sale was rescheduled.
None of Lender's rights or remedies hereunder are intended to be exclusive of,
but each shall be cumulative and in addition to, any other right or remedy
referred to hereunder or otherwise available to Lender or its assigns at law or
in equity, and may be pursued singly, successively or concurrently at the sole
discretion of Lender and may be exercised as often as occasion therefor shall
occur. The failure to exercise, or any delay in the exercise of, any right or
remedy shall in no event be construed as a waiver, release or exhaustion of any
such remedies. No express or implied waiver by Lender of any Event of Default
shall constitute a waiver of any other Event of Default or a waiver of any of
Lender's rights upon the reoccurrence of any such Event of Default.
(c) Borrowers hereby authorize Lender, upon the occurrence and
during the continuation of any Event of Default hereunder, at Lender's option to
adjust, compromise and settle any losses under any insurance afforded under the
Loan Documents, and Borrowers do hereby irrevocably constitute Lender and each
of its designees, as its attorneys-in-fact, with full power and authority, upon
the occurrence and during the continuation of any Event of Default hereunder, to
effect such adjustment, compromise and/or settlement and to endorse any drafts
drawn by an insurer of the Equipment or any part thereof and to do everything
necessary to carry out such purposes and to receive and receipt for any unearned
premiums due under policies of such insurance; but unless Lender elects to
adjust, compromise or settle losses as aforesaid, such insurance proceeds shall
be subject to the Lien and security interest of Lender hereunder.
(d) Upon the occurrence, and during the continuation, of an
Event of Default hereunder, (i) any proceeds of any Collateral shall be applied
in accordance with the Note and/or Preferred Marine Mortgages, and (ii) any
other amounts received by Lender in respect of the Loan may be applied first to
costs of collection and thereafter, in reduction of Borrowers' Obligations in
respect of the Loan, in such order and manner as Lender may direct in its sole
discretion, and Borrowers irrevocably waive the right to direct the application
of such amounts and agrees that Lender shall have the continuing and exclusive
right to apply any and all such amounts in Lender's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
Borrowers shall remain liable to Lender with respect to any deficiency remaining
with respect to the Loan after application of such proceeds and other amounts in
accordance with the Loan Documents, and any surplus remaining after such
application shall be paid over to Borrowers or to whomsoever may be entitled
thereto.
(e) To the extent that any of the Loan is now or hereafter
secured by property other than the Collateral, or by a guarantee, endorsement or
property of any other Person, then Lender also shall have the right to proceed
against such other property, guarantee or endorsement upon the occurrence of an
Event of Default hereunder, and Lender shall have the right, in its sole
discretion, to determine which rights, Liens, security interests or remedies
Lender shall at any time pursue, relinquish, subordinate or modify, without in
any way affecting the Loan or any of Lender's rights under this Agreement.
8
12. Notices. All notices and other communications hereunder shall be in
writing and shall be transmitted by hand, facsimile or telex, overnight courier
or certified mail (return receipt requested), postage prepaid. Such notices and
other communications shall be addressed to the respective party at the address
set forth in this section or at such other address as any party may from time to
time designate by notice duly given in accordance with this Section. Such
notices and other communications shall be effective upon receipt (in the case of
transmittal by hand, courier or certified mail, receipt being deemed to occur
when receipted for or, if delivery is refused, upon attempted delivery; and, in
the case of transmittal by facsimile or telex, receipt being deemed to occur
upon confirmation of receipt via confirmed facsimile or telex transmission).
If to Borrowers: Maritrans Inc.
Two Harbour Place
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President/CFO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Maritrans 250 Co.
Two Harbour Place
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Maritrans Intrepid Co.
Two Harbour Place
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: Fifth Third Bank
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13. General Indemnification. Borrowers shall pay, and shall indemnify
and hold Lender harmless from and against, any and all liabilities, causes of
action, claims, suits, penalties, damages, losses, costs or expenses (including
reasonable attorneys' fees), Obligations, liabilities, demands and judgments,
and Liens, of any nature whatsoever (collectively, a "Liability") arising out of
or in any way related to: (a) the Loan Documents or any other written agreement
entered into by Borrowers in connection with the transactions contemplated
hereby and thereby or any amendment, waiver or modification of any of the
foregoing or the enforcement of any of the terms hereof or thereof; (b) a
failure by Borrowers, or by any charterer from or other user authorized by
Borrowers, to comply fully with any Environmental Law with respect to the
Equipment or its operation or use; and (c) any Borrower's failure to perform any
covenant, or breach of any representation or warranty under the Loan Documents;
provided, that the foregoing indemnity shall not extend to the Liabilities to
the extent resulting from the gross negligence or willful misconduct of Lender.
Borrowers shall deliver promptly to Lender (x) copies of any material
communications (including enclosures) received from the United States Coast
Guard or any state, county or municipal environmental or health agency
concerning the Equipment or its operation and (y) copies of any material
communications (including enclosures) submitted by any Borrower or any of its
subsidiaries to the United States Coast Guard or any state, county or municipal
environmental or health agency concerning the Equipment or its operation.
14. Severability; Captions. Any provision of this Agreement or any of
the Loan Documents which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
9
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability shall not invalidate or
render unenforceable such provision in any other jurisdiction. Captions are
intended for convenience or reference only, and shall not be construed to
define, limit or describe the scope or intent of any provisions hereof.
15. Financial and Other Data. During the Term hereof, Maritrans Inc.
shall furnish Lender:
(a) Quarterly Financial Statements. Within sixty (60) days
after the end of each quarterly period (except the last) of each fiscal year,
consolidated financial statements of Maritrans Inc. internally prepared in
accordance with GAAP.
(b) Annual Financial Statements. Within 120 days after the
last day of each fiscal year, consolidated financial statements of Maritrans
Inc., prepared in accordance with GAAP and, audited by an independent public
accountant and reported on without qualification or exception arising out of the
scope of the audit.
(c) Quarterly Compliance Certificates. Within 120 days after
the end of each fiscal year and within 60 days after the end of each of the
first three quarters of each fiscal year of the Company, the Borrowers shall
deliver to the Lender a Quarterly Compliance Certificate dated as of the end of
such fiscal year or quarter and signed by an Authorized Financial Officer of
Maritrans Inc.
(d) Accountants' Certificate. Each set of consolidated
statements and balance sheet delivered by the Borrowers pursuant to 15(b) shall
be accompanied by a certificate or report dated the date of such statements and
balance sheet by the accountants who certified such statements and balance sheet
stating in substance that they have reviewed this Agreement and the Quarterly
Compliance Certificates delivered by the Borrowers as of the end of such fiscal
year, and that in making the examination necessary for their certification of
such statements and balance sheet they did not become aware of any Event of
Default or any inaccuracy in the Quarterly Compliance Certificate as of the end
of such fiscal year, or if they did become so aware, such certificate or report
shall state the nature and period of existence thereof.
(e) Other. Borrowers shall also furnish such other financial
reports, information or data as Lender may reasonably request from time to time.
16. Financial Covenants. So long as any Obligations under the Loan
Documents remain outstanding, Maritrans Inc. shall maintain the financial
covenants in this Section 16. Financial terms and calculations will be in
accordance with GAAP. Unless otherwise provided herein, all covenants will be
calculated with reference to the financial performance of Maritrans Inc. on a
Consolidated basis.
(a) Interest Coverage Ratio. Maritrans Inc.'s Interest
Coverage Ratio, measured on a Consolidated basis at each Measuring Date, shall
never be less than 4.50:1 for each Measuring Date.
(b) Fixed Charge Coverage Ratio. Maritrans Inc.'s Fixed Charge
Coverage Ratio, measured on a Consolidated basis at each Measuring Date, shall
not be less than 1.75:1 for each Measuring Date.
(c) Total Liabilities to Tangible Net Worth Ratio. Maritrans
Inc.'s Total Liabilities to Tangible Net worth Ratio, measured on a Consolidated
basis at each Measuring Date, shall not be more than 2.00:1 for each Measuring
Date.
(d) Funded Debt to EBITDA Ratio. Maritrans Inc.'s Funded Debt
to EBITDA Ratio, measured on a Consolidated basis, shall not be greater than
2.25:1 for each Measuring Date.
(e) Capital Expenditures. Maritrans Inc. shall not contract
for, purchase, make expenditures for, lease pursuant to a Capital Lease or
otherwise incur obligations with respect to Capital Expenditures (whether
subject to a Lien or otherwise) during any period below in the aggregate amount
in excess of the amount set forth for such period:
10
Fiscal Year Ending December 2002 $30,000,000
Fiscal Year Ending December 2003 $30,000,000
Fiscal Year Ending December 2004 $30,000,000
Fiscal Year Ending December 2005 $50,000,000
Fiscal Year Ending December 2006 $50,000,000
; provided however, that the above limitations for Capital Expenditures shall be
cumulative from Fiscal year to Fiscal Year, such that any unused amount will be
carried forward to the next Fiscal Year. By way of example and not by way of
limitation, if the actual amount of Capital Expenditures for Maritrans Inc. in
Fiscal Year ending December 31, 2001 is $25,000,000, the Capital Expenditure
limitations for Maritrans Inc. in the Fiscal Year ending December 31, 2002 would
be increased by $5,000,000 to $35,000,000, and if thereafter the actual amount
of Capital Expenditures for Maritrans Inc. in Fiscal Year ending December 31,
2002 is $25,000,000, the Capital Expenditure limitation for Maritrans Inc. in
the Fiscal Year ending December 31, 2003 would be increased by $10,000,000 to
$40,000,000.
(f) Definitions. For purposes of Section 15 and this Section
16, the definitions set forth in Schedule A hereto shall apply.
17. Representations and Warranties of Borrowers. Each Borrower
represents and warrants, as of the date hereof, that (a) Borrower is duly
organized and validly existing, in good standing under the laws of the state of
its organization; (b) the execution, delivery and performance of the Loan
Documents: (1) have been duly authorized by all necessary corporate action on
the part of Borrower, (2) do not require the approval of any stockholder,
partner, member, trustee, or holder of any Obligations of Borrower except such
as have been duly obtained, and (3) do not contravene any law, governmental
rule, regulation or order now binding on Borrower, or the charter, by-laws or
organizational documents of Borrower, or contravene the provisions of, or
constitute a Default under, or result in the creation of any Lien or encumbrance
upon the property of Borrower under, any indenture, mortgage, contract or other
agreement to which Borrower is a party or by which it or its property is bound;
(c) the Loan Documents, when entered into, will constitute legal, valid and
binding Obligations of Borrower enforceable against Borrower in accordance with
the terms thereof; (d) there are no pending actions or proceedings to which
Borrower is a party, and there are no other pending or threatened actions or
proceedings of which Borrower has knowledge, before any court, arbitrator or
administrative agency, in any such case which, either individually or in the
aggregate, would have a material adverse effect on Borrower; (e) Borrower is not
in default under any obligation for the payment of borrowed money, for the
deferred purchase price of property or for the payment of any Installments under
any agreement which, either individually or in the aggregate, would have a
material adverse effect on Borrower; (f) the financial statements of Maritrans
Inc., copies of which have been furnished to Lender have been prepared in
accordance with generally accepted accounting principles consistently applied
("GAAP"), and fairly present such Borrower's financial condition and the results
of its operations as of the date of and for the period covered by such
statements (subject, in the case of quarterly financial statements, to usual
year-end adjustments), and since the date of such statements there has been no
material adverse change in such conditions or operations; (g) the address stated
above is the chief place of business and chief executive office of Borrower; (h)
Borrower does not conduct business under a trade, assumed or fictitious name,
except as Borrower has notified Lender in writing; (i) this Agreement and the
Preferred Marine Mortgages create valid security interests in the Collateral
securing payment and performance of Borrowers' Obligations in respect of the
Loan evidenced thereby, subject to no Liens; (j) Borrower has filed or has
caused to have been filed all Federal, state and local tax returns which, to the
knowledge of Borrower, are required to be filed, and has paid or caused to have
been paid all taxes as shown on such returns or on any assessment received by
it, to the extent that such taxes have become due, unless and to the extent only
that such taxes, assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by Borrower and adequate reserves
therefor have been established as required under GAAP. To the extent Borrower
believes it advisable to do so, Borrower has set up reserves which are believed
by Borrower to be adequate for the payment of additional taxes for years which
have not been audited by the respective tax authorities; (k)(x) Borrower is not
in violation of any Applicable Law, the violation of which would have a material
adverse effect on Borrower and (y) except to the extent that failure to do so
would not have a material adverse effect on Borrower, Borrower has obtained any
and all licenses, permits, franchises or other governmental authorizations
necessary for the ownership of its properties and the conduct of its business;
and (l) none of the proceeds of the Loan will be used, directly or indirectly,
by Borrower for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry, any
11
"margin security" within the meaning of Regulation G (12 C.F.R. Part 207), or
"margin stock" within the meaning of Regulation U (12 C.F.R. Part 221), of the
Board of Governors of the Federal Reserve System (herein called "margin
security" and "margin stock") or for any other purpose which might make the
transactions contemplated herein a "purpose credit" within the meaning of
Regulation G or Regulation U, or cause this Agreement to violate any other
regulation of the Board of Governors of the Federal Reserve System or the
Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as
amended, or any rules or regulations promulgated under any of such statutes; (m)
Maritrans 250 Co. and Maritrans Intrepid Co., respectively, is, and during the
Term of the Loan, shall be a citizen of the United States under Section 2 of the
Shipping Act, 1916, as amended; and (n) Maritrans Inc. does not have rights or
interests in the Collateral.
18. Perfection. Maritrans 250 Co. and Maritrans Intrepid Co.,
respectively, agree to execute and deliver to Lender such further agreements and
assignments or other instruments, and to do all such other things as Lender may
reasonably deem necessary or appropriate to assure to Lender the perfection and
priority of its security interests under the Loan Documents. MARITRANS 250 CO.
AND MARITRANS INTREPID CO., RESPECTIVELY, HEREBY AUTHORIZES LENDER TO
AUTHENTICATE AND FILE UCC FINANCING STATEMENTS AND AMENDMENTS DESCRIBING THE
COLLATERAL. MARITRANS 250 CO. AND MARITRANS INTREPID CO., RESPECTIVELY, FURTHER
APPOINTS LENDER OR ITS ASSIGNEE AS ITS TRUE AND LAWFUL ATTORNEY IN FACT,
IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE AND FILE ON BEHALF OF
MARITRANS 250 CO. AND MARITRANS INTREPID CO., RESPECTIVELY, ALL UCC FINANCING
STATEMENTS WHICH IN LENDER'S SOLE BUT REASONABLE DISCRETION ARE NECESSARY OR
PROPER TO SECURE LENDER'S INTEREST IN THE EQUIPMENT IN ALL APPLICABLE
JURISDICTIONS. Each Borrower further covenants and agrees that it will not
change its legal name or be a party to a merger, consolidation or other change
in structure without at least ten (10) days' prior written notice to Lender; and
shall execute and deliver to Lender (to be recorded at Borrower's expense) all
UCC statements as may be required by Lender in connection with such event.
19. More than One Borrower. The obligations of Maritrans Inc.
("Maritrans"), ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇. ("▇▇▇ ▇▇."), and Maritrans Intrepid Co.
("Intrepid Co.") are joint and several. Each reference to the term "Borrower"
shall be deemed to refer to each of Maritrans, 250 Co. and Intrepid Co.; each
representation and warranty made by Borrower shall be deemed to have been made
by each such party; each covenant and undertaking on the part of Borrower shall
be determined individually and applied with respect to each such party; and each
event constituting a Default under this Agreement shall be determined with
respect to each such party. A separate action or actions may be brought and
prosecuted against any such party whether an action is brought against any other
party or whether any other party is joined in any such action or actions. Each
such party waives any right to require Lender to: (a) proceed against any other
party; (b) proceed against or exhaust any security held from any other party; or
(c) pursue any other remedy in Lender's power whatsoever. Notices hereunder
required to be provided to Borrower shall be effective if provided to Maritrans.
In the event any obligation of Borrower under this Agreement is deemed
to be an agreement by any individual Borrower to answer for the debt or default
of another individual Borrower (including each other) or as an accommodation or
as an hypothecation of property as security therefor, each Borrower represents
and warrants that: (x) no representation has been made to it as to the
creditworthiness of any other obligor, and (y) it has established adequate means
of obtaining from each other obligor on a continuing basis, financial or other
information pertaining to each other obligor's financial condition. Each
Borrower expressly waives diligence, demand, presentment, protest and notice of
every kind and nature whatsoever, or the alteration or release in any manner of
any security now or hereafter held in connection with any obligations now or
hereafter secured by this Agreement. Should any default by made in the payment
of any such obligations or in the terms or conditions of any security held,
Lender is hereby expressly given the right, at its option, to proceed in the
enforcement of this Agreement independently of any other remedy or security it
may at any time hold in connection with such obligations secured and it shall
not be necessary for Lender to proceed upon or against and/or exhaust any other
security or remedy before proceeding to enforce its rights against any Borrower.
Each Borrower further waives any right of subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
to sums paid to Lender by any Borrower.
20. Miscellaneous. Time is of the essence with respect to this
Agreement. Any failure of Lender to require strict performance by Borrower or
any waiver by Lender of any provision herein shall not be construed as a
12
consent or waiver of any provision of this Agreement. None of the Loan Documents
may be amended except by a writing signed by Lender and Borrowers. This
Agreement will be binding upon Lender only if executed by a duly authorized
officer or representative of Lender. This Agreement, and all other Loan
Documents to which Borrowers are or are to become a party, shall be executed on
Borrowers' behalf by Authorized Signers of Borrowers. Borrowers hereby waive
presentment, notice of dishonor and protest of all instruments included in or
evidencing any of the Loans, and all other notices and demands whatsoever
(except as expressly provided herein). The Loan Documents shall be governed by,
and construed in accordance with, the internal laws of the State of New York
without regard to the conflict of laws principles of such state, including all
matters of construction, validity and performance.
21. Jury Trial Waiver. LENDER AND BORROWERS HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO WHICH LENDER OR BORROWERS MAY BE PARTIES ARISING
OUT OF OR IN ANY WAY PERTAINING TO THE LOAN DOCUMENTS OR SECURED OBLIGATIONS.
THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND VOLUNTARILY BY LENDER AND BORROWERS
WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT.
22. Interpretation. In the event that any term or condition of the Note
conflicts with or is inconsistent with any term or condition of this Loan
Agreement, the terms and conditions of the Note shall prevail. In the event that
any term or condition of the Preferred Marine Mortgages conflicts with or is
inconsistent with the terms and conditions of this Loan Agreement, the terms and
conditions of the Preferred Marine Mortgages shall prevail.
23. Entire Agreement. This Agreement and the other Loan Documents
collectively constitute the entire understanding or agreement between Lender and
Borrower with respect to the financing of the Equipment, and there is no
understanding or agreement, oral or written, which is not set forth herein or
therein.
24. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
[Signature Page Follows]
13
IN WITNESS WHEREOF, Borrowers and Lender have executed this Loan and
Security Agreement as of the date first above written.
Borrowers:
MARITRANS INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
MARITRANS 250 CO.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
MARITRANS INTREPID CO.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
S-1
IN WITNESS WHEREOF, Borrowers and Lender have executed this Loan and
Security Agreement as of the date first above written.
Lender:
FIFTH THIRD BANK
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-2
Schedule A
----------
Financial Covenant Definitions
1.) "Interest Coverage Ratio" means, for Maritrans Inc. on a
Consolidated basis, as of the Measuring Date in question, the quotient obtained
by dividing the EBIT of Maritrans Inc. on a Consolidated basis for the
Four-Quarter Period ending on the Measuring Date by the Prior Period Interest of
Maritrans Inc. on a Consolidated basis, which may also be expressed by the
following formula:
EBIT
Interest Coverage Ratio = ---------------------
Prior Period Interest
(a) "EBIT" means, for any period, the Net Income (Loss) of
Maritrans Inc. on a Consolidated basis for such period, plus
interest expense and income tax expense, in each case of
Maritrans Inc. on a Consolidated basis for such period
determined in accordance with GAAP.
(b) "Prior Period Interest" means interest accrued or accruing
on Maritrans Inc.'s obligations on a Consolidated basis during
the Four-Quarter Period ending on the relevant Measuring Date.
2.) "Fixed Charge Coverage Ratio" means, for Maritrans Inc. on a
Consolidated basis, as of the Measuring Date in question, the quotient obtained
by dividing the EBITDA of Maritrans Inc. on a Consolidated basis for the
Four-Quarter Period ending on the Measuring Date by the sum of the following for
Maritrans Inc. on a Consolidated basis for the Four-Quarter Period ending on the
Measuring Date:
(a) Prior Period Interest, plus
(b) CMLTD, plus
(c) Tax expense, plus
(d) Dividends Paid, plus
(e) Share Repurchases
- which may also be expressed by the following formula:
Fixed Charge Coverage Ratio = EBITDA
------
Prior Period Interest + CMLTD + Tax
Expense + Dividends Paid + Share
Repurchases
(a) "EBITDA" means, for any period, the Net Income (Loss) of
Maritrans Inc. on a Consolidated basis for such period, plus
interest expense, income tax expense, amortization and
depreciation expense, and extraordinary losses, minus
extraordinary gains, in each case of Maritrans Inc. on a
Consolidated basis for such period determined in accordance
with GAAP to the extent included in the determination of such
Net Income (Loss).
(b) "Prior Period Interest" - see above.
(c) "CMLTD" means an amount equal to the installments of
principal to be paid in respect of all Long Term Debt during
the Four-Quarter Period immediately following a relevant
Measuring Date.
(d) "Taxes" means any present or future taxes, levies, impost,
deductions, charges, and all liabilities with respect thereto,
calculated in accordance with GAAP.
A-1
(e) "Dividends Paid" means the aggregate amount of Cash or
other property (other than Maritrans capital stock) paid by
Maritrans to Maritrans' shareholders pro rata based upon the
number of shares of Maritrans capital stock outstanding at the
time of such payment.
(f) "Share Repurchases" means the aggregate amount of Cash,
the principal amount of any promissory note or other
consideration paid by Maritrans for the purchase by Maritrans
of outstanding shares of Maritrans' capital stock.
3.) "Total Liabilities to Tangible Net Worth Ratio" means, for
Maritrans Inc. as of the Measuring Date which is the end of each Four-Quarter
Period, the quotient obtained by dividing (a) the Total Liabilities of Maritrans
Inc. on a Consolidated basis as of such Measuring Date by (b) the Tangible Net
Worth of Maritrans Inc. on a Consolidated basis as of such Measuring Date.
(a) "Total Liabilities" means, at any date, the amount of
total liabilities of a Person which would be properly
classified as total liabilities of such Person on a balance
sheet at such date in accordance with GAAP.
(b) "Tangible Net Worth" means the Consolidated stockholders'
equity of [the Companies] determined and consolidated in
accordance with GAAP, except that there shall be deducted from
such Consolidated stockholders' equity on a Consolidated basis
all treasury stock and all intangible assets of [the
Companies] including but not limited to goodwill, organization
costs, patents, copyrights, trademarks, trade names,
franchises, licenses, research and development expenses,
unamortized debt discount and expense, and deferred charges.
4.) "Funded Debt to EBITDA Ratio" means, for Maritrans Inc., as of the
Measuring Date which is the end of each Four-Quarter Period, the quotient
obtained by dividing (a) Funded Debt of Maritrans Inc. on a Consolidated basis
as of such Measuring Date by (b) Maritrans Inc.'s EBITDA for the Four-Quarter
Period ending on the Measuring Date.
(a) "Funded Debt" means, with respect to any Person at any
time, all Debt (including the current portion thereof) of such
Person which would at such time be classified in whole or in
part as a long-term liability of such Person in accordance
with GAAP and shall also and in any event include (a) any Debt
having a final maturity more than one year from the date of
creation of such Debt and (b) any Debt, regardless of its
term, which is renewable or extendable by such Person
(pursuant to the terms thereof or pursuant to a revolving
credit or similar agreement or otherwise) to a date more than
one year from such date or more than one year from the date of
the creation of such Debt, and also including, in the case of
the Borrowers, the Obligations.
(b) "EBITDA" - see above.
5.) "Capital Expenditures" means, for any period, the aggregate of all
expenditures of Maritrans Inc. during such period on account of property, plant,
equipment or similar fixed assets, which, in accordance with GAAP, are required
to be included or reflected in the Consolidated balance sheet of Maritrans Inc.
6.) "Consolidated" means: (a) with reference to a Subsidiary or
Subsidiaries, such entity the financial statements of which are consolidated
with those of Maritrans for financial reporting purposes on the date or for the
period as or with respect to which a determination is made; and (b) with
reference to an item for financial accounting or reporting purposes, such item
of Maritrans (or any other applicable Borrower) and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
7.) "Authorized Financial Officer" means the Chairman of the Board of
Directors, President, Chief Financial Officer, Treasurer, Assistant Treasurer or
Controller, from time to time, of Maritrans Inc.
8.) "Measuring Date" means each date which is the end of a fiscal
quarter of Maritrans Inc.
9.) "Company" or "Companies" means, collectively, Maritrans Inc., and
each of the other Borrowers, and each of their Consolidated Subsidiaries.
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10.) "Subsidiary" means a corporation, partnership, limited liability
company, business trust, joint venture or other business entity or organization
as to which more than fifty percent (50%) of the equity or voting control is
owned or controlled directly or indirectly by Maritrans Inc. or by or through
one or more of its Subsidiaries, and "Subsidiaries" means all of them.
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