LOAN AND SECURITY AGREEMENT by and between MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., ACTING THROUGH ITS DIVISION, Merrill Lynch Capital As Lender and STERLING SHIPPING CORP. and REMSEN NAVIGATION CORP. As Debtors Dated as of December ____, 2005
by
and between
XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC., ACTING THROUGH ITS DIVISION, Xxxxxxx
Xxxxx Capital
As
Lender
and
STERLING
SHIPPING CORP.
and
REMSEN
NAVIGATION CORP.
As
Debtors
Dated
as of December ____, 2005
LOAN
AND SECURITY AGREEMENT
(this
“Agreement”),
dated
as of December 15, 2005, by and between XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC., acting through its division, Xxxxxxx
Xxxxx Capital (“Lender”),
a
Delaware corporation, as lender, and∙STERLING
SHIPPING CORP. (“Sterling
Shipping”), and REMSEN
NAVIGATION CORP. (“Remsen
Navigation”), as borrowers (each of Sterling Shipping and Remsen Navigation, a
“Debtor”
and
collectively the “Debtors”), each a corporation organized under the laws of the
Republic of the Xxxxxxxx Islands with an address at Trust Company Complex,
Ajeltake Island, X.X. Xxx 0000, Xxxxxx, Xxxxxxxx Xxxxxxx, XX 00000. In
consideration of the mutual agreements contained herein, the parties hereto
agree as follows:
RECITALS
The
Debtors have entered into a series of transactions, pursuant to which (i)
Sterling Shipping has purchased the Panama registered bulk carrier m.v. BILOXI
BELLE, IMO No. 8316261, currently under bareboat charter registry in the
Republic of the Philippines, under Philippine flag and port of registry, Manila
(the “BILOXI BELLE”); and (ii) Remsen Navigation has purchased the Panama
registered bulk carrier m.v. MAORI MAIDEN, IMO No. 8312746, currently under
bareboat charter registry in the Republic of the Philippines, under Philippine
flag and port of registry, Manila (the “MAORI MAIDEN”).
By
this
Agreement, the Debtors desire, among other things, (i) to provide for
the
making of a single Loan by Lender on the same date to the Debtors in an
aggregate principal amount not to exceed U.S.$17,500,000 to enable Sterling
Shipping to refinance its acquisition of the BILOXI BELLE and Remsen Navigation
to refinance its acquisition of the MAORI MAIDEN, (ii) to provide for
the
issuance by the Debtors to Lender of one joint and several Note evidencing
the
consolidated Loan to be made by Lender to the Debtors as herein provided, and
(iii) to provide for the assignment and mortgage by each Debtor to Lender
of, among other things, all such Debtor’s right, title and interest in and to
its respective Vessel and all payments and other amounts received hereunder
or
thereunder in accordance with the terms hereof, as security for the Debtors’
obligations to Lender.
Lender
is
willing to make the Loan to the Debtors on the terms and conditions of this
Agreement in partial consideration for, among other things, the Debtors’
agreement to be jointly and severally liable for all Obligations and to grant
and to cause certain other parties to grant to Lender security interests in
the
Collateral as provided hereunder and to grant to Lender a Mortgage on the whole
of each Vessel and to obtain the guaranty by the Guarantors of the Obligations
pursuant to the Guaranty.
All
things have been done to make the Note, when issued, executed and delivered
to
Lender by the Debtors hereunder, the legal, valid and binding joint and several
obligation of the Debtors.
Section 1. DEFINITIONS.
1.1 Defined
Terms.
As used
in this Agreement, the following terms shall have the following defined
meanings, unless the context otherwise requires (such terms to be equally
applicable to both singular and plural forms of the terms defined):
“Additional
Valuations”
as
defined in Section 5.37 hereof.
“Affiliate”
of any
specified Person shall mean any other Person which, directly or indirectly,
controls, is controlled by, or is under common control with, such Person. For
purposes of this definition, “control” of a Person shall mean the power, direct
or indirect, to vote forty percent (40%) or more of the securities having voting
power for the election of directors of such Person, or otherwise to direct
or
cause the direction of the management and policies of such Person, whether
by
contract or otherwise.
“Agreement”,
“hereof”,
“hereto”,
“hereunder”
and
words of similar import shall mean this Loan and Security Agreement, as the
same
may from time to time be amended, modified or supplemented.
“Amendment
No. 2 to the August 2004 Loan Agreement”
shall
mean that certain amendment no. 2 to the August 2004 Loan Agreement, between
the
Collateral Vessel Owners, as debtors and Lender, as lender, which further amends
certain provisions of the August 2004 Loan Agreement.
“Applicable
Interest Rate”
shall
mean a floating rate equal to two and one-half percent (2.5% ) plus LIBOR.
Interest shall be calculated on the basis of a 360-day year, in each case for
the actual number of days occurring in the period for which interest or fees
are
payable.
“Appraisal
Value”
shall
mean the fair market value of each Vessel as determined by an opinion of value
rendered by a recognized, independent appraisal firm, mutually acceptable to
all
parties, and at the Debtors’ cost. The appraisal will be on a “willing seller,
willing buyer” basis for a charter-free vessel.
“Approved
Shipbrokers”
shall
mean Compass Maritime Services LLC, Xxxxxxx, Xxxxxx & Xxxxx and Xxxxxxx
Marine Services LLC.
“Assigned
Charters”
shall
mean the Head Charters and the Subcharters.
“Assignments”
shall
mean, collectively, the Earnings Assignments and the Assignments of
Insurances.
“Assignment
of Insurances”
shall
mean each of the first priority assignments of insurances granted in favor
of
Lender in form and substance satisfactory to Lender.
“August
2004 Loan”
shall
mean the U.S. $15,000,000 loan advanced by Lender to the Collateral Vessel
Owners under the August 2004 Loan Agreement.
“August
2004 Loan Agreement”
shall
mean that certain loan and security agreement dated as of August 26, 2004,
as
amended by an amendment no. 1 to loan and security agreement dated as of March
30, 2005, each between the Collateral Vessel Owners, as borrowers and Lender,
as
lender pursuant to which Lender made a term loan in the amount of U.S.
$15,000,000 available to the Collateral Vessel Owners.
“B
of A Commitment”
shall
mean that certain loan commitment from the Bank of America N.A. to be obtained
by TBS before April 29, 2006 in a minimum amount of U.S.
$150,000,000.
“Breakage
Costs”
shall
mean any costs incurred by Lender as a result of payment of principal or
interest other than on a scheduled Installment Payment Date in accordance with
the scheduled amortization of the Loan.
“Business
Day”
shall
mean a day other than a Saturday, Sunday or legal holiday under the laws of
the
State of New York.
“CERCLA”
means
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.
Section 9601 et
seq.
and as
further amended from time to time.
“Charterer’s
Consent”
shall
mean the consent and subordination of each charterer that is a party to an
Assigned Charter to the rights of Lender and the Earnings Assignments, the
Mortgage, the Collateral Vessel Owners’ Second Assignment of Earnings, the
Collateral Vessel Owners’ Second Mortgage in respect of the applicable Security
Vessel, in form and substance acceptable to Lender.
“Classification
Society”
shall
mean a classification society which is a member of the International Association
of Classification Societies reasonably acceptable to Lender
“Closing
Fee”
shall
have the meaning ascribed thereto in the Proposal Letter.
“Code”
or
“UCC”
shall
mean the Uniform Commercial Code as from time to time in effect in any
applicable jurisdiction.
“Collateral”
as
defined in Section 6.1 hereof.
“Collateral
Vessel”
shall
mean each of the vessels m.v. IROQUOIS
MAIDEN, IMO Number 8109008
and m.v.
MANHATTAN
PRINCESS, IMO Number 8029715,
together with all of its machinery, anchors, cables, chains, rigging, tackle,
fittings, tools, pumps, pumping equipment, gear, apparel, furniture, appliances,
equipment, spare and replacement parts and all other appurtenances thereunto
appertaining or belonging, whether now owned or hereafter acquired and whether
on board or not, and also any and all additions, improvements and replacements
made in or to such Collateral Vessel or any part thereof or in or to any
equipment and appurtenances thereto appertaining or belonging.
“Collateral
Vessel Owners”
shall
mean Stratford and Sheffield.
“Collateral
Vessel Owners’ Guaranty”
shall
mean the guaranty by the Collateral Vessel Owners of the Obligations of the
Debtors under this Agreement.
“Collateral
Vessel Owners’ Second Assignment of Insurances”
shall
mean each of the second priority assignments of insurances relating to each
of
the Collateral Vessels granted in favor of Lender in form and substance
satisfactory to Lender, and collectively, the “Collateral Vessel Owners’ Second
Assignments of Insurances”.
“Collateral
Vessel Owners’ Second Assignments”shall
mean the Collateral Vessel Owners’ Second Assignments of Insurances and the
Collateral Vessel Owners’ Second Earnings Assignments.
“Collateral
Vessel Owners’ Second Earnings Assignment”
shall
mean each of the second priority assignments of earnings relating to each of
the
Collateral Vessels granted in favor of Lender in form and substance satisfactory
to Lender, and collectively, the “Collateral Vessel Owners’ Second Earnings
Assignments”.
“Collateral
Vessel Owners’ Second Mortgage”
shall
mean each Panamanian second preferred ship mortgage, as the same may hereafter
be amended and/or supplemented from time to time, granted by a Collateral Vessel
Owner on the whole of its Collateral Vessel, in favor of Lender, to secure
the
obligations guaranteed by the such Collateral Vessel Owner under the Collateral
Vessel Owners’ Guaranty, and collectively the “Collateral Vessel Owners’ Second
Mortgages”.
“Commitment”
shall
mean the obligation of Lender to make the Loan in the aggregate principal amount
specified in Section 2.1 hereof.
“Debtor(s)”
as
defined in the preamble of this Agreement.
“Debtors’
Guaranty”
shall
mean the joint and several guaranty by the Debtors of the obligations of the
Collateral Vessel Owners under the August 2004 Loan Agreement.
“Default”
shall
mean any event which, with notice, lapse of time or both, would constitute
an
Event of Default.
“DOC”means
a
Document of Compliance issued to a Company in accordance with Regulation 4.1
of
SOLAS Chapter IX, Management for the Safe Operation of Ships.
“Earnings”
as
defined in the Earnings Assignments.
“Earnings
Assignments”
shall
mean the first priority assignment of charter parties, charter hire, freights
and earnings granted by each Debtor with respect to its Vessel and the
assignments of charter parties, charter hire and earnings granted by any other
disponent owner or intermediate charterer with respect to such
Vessel,
in
favor
of Lender in form and substance satisfactory to Lender and its
counsel.
“Environmental
Action”
means
any administrative, regulatory or judicial action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement arising
under any Environmental Law or Environmental Permit relating to Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment in connection with or arising from exposure to or the actual
or potential release of Hazardous Materials, including (a) by any
Governmental Authority for enforcement, cleanup, removal, response, remedial
or
other actions or damages, and (b) by any Governmental Authority or any
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
“Environmental
Event”
shall
mean (i) an environmental event that has occurred or any environmental
condition that is discovered in, on, beneath, from or involving any Security
Vessel (including the presence, emission or release of Hazardous Materials
or
the violation of any applicable Environmental Law) for which a remediation
or
reporting could reasonably be required under applicable Environmental Law,
or
(ii) notification received by any Debtor or Collateral Vessel Owner
that a
Debtor, Collateral Vessel Owner or any Security Vessel is the subject of an
Environmental Action relating to such Security Vessel that could reasonably
be
expected to result in any ordered remediation or corrective action or other
material liability under applicable Environmental Law.
“Environmental
Law”
shall
mean any and all applicable international, foreign, federal, state, regional
and
local Laws (as well as obligations, duties and requirements relating thereto
under common law) relating to: (a) emissions, discharges, spills, releases
or threatened releases of pollutants, contaminants, Hazardous Materials,
materials containing Hazardous Materials, or hazardous or toxic materials or
wastes into ambient air, surface water (including, without limitation, all
inland and ocean waters), groundwater, watercourses, publicly or privately-owned
treatment works, drains, sewer systems, wetlands, septic systems or onto land;
(b) the use, treatment, storage, disposal, handling, manufacturing,
transportation, or shipment of Hazardous Materials, materials containing
Hazardous Materials or hazardous and/or toxic wastes, materials, products or
by-products (or of equipment or apparatus containing Hazardous Materials);
or
(c) pollution or the protection of human health, safety or the environment
from exposure to or injury or damage caused by Hazardous Materials. Without
limitation, “Environmental
Law”
includes CERCLA and OPA 90 and IMO 13(g) (when and if the latter comes into
effect). Debtors hereby agree to comply with, take or abstain from, any action,
as the case may be, as the International Maritime Organization may require.
“Environmental
Permit”
means
any permit, approval, identification number, license or other authorization
required under any Environmental Law.
“Event
of Default”
as
defined in Section 7 hereof.
“Event
of Loss”
shall
mean, with respect to a Security Vessel, the actual or constructive loss or
the
disappearance of such Security Vessel or the loss of use thereof, due to theft,
destruction, damage beyond repair or damage from any reason whatsoever, to
an
extent, in the sole judgment of Lender, which makes repair uneconomical, or
rendition thereof unfit for normal use, or the condemnation, confiscation or
seizure of, or requisition of title to or use of, such Security Vessel by any
governmental authority or any other Person, whether or not acting under color
of
governmental authority.
“Financial
Statements”
shall
mean, as to any Person or group of Persons, the balance sheets and statements
of
income and cash flows, prepared in accordance with GAAP, of such Person or
group
of Persons as required from time to time to be provided by the Debtors under
this Agreement.
“Funding
Date”
shall
mean the date on which Lender shall make the Loan to the Debtors pursuant
hereto.
“GAAP”
shall
mean generally accepted accounting principles consistently applied in the United
States.
“GMTBS
Africa”
shall
mean GMTBS Africa Line Limited, a corporation organized and existing under
the
laws of Hong Kong.
“GMTBS
Africa Gmbh”
shall
mean GMTBS Africa Line Gmbh, a company organized and existing under the laws
of
the Federal Republic of Germany.
“Governmental
Authority”
shall
mean any governmental or quasi-governmental authority, whether executive,
legislative, judicial, administrative or other, or any combination thereof,
including, without limitation, any national, Federal, state, local, territorial,
county, municipal or other government or governmental or quasi-governmental
agency, arbitrator, board, body, branch, bureau, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other entity of any of the foregoing, whether
domestic or foreign.
“Guarantor”
shall
mean each of the entities listed on Schedule 1 hereto, as the same may be
hereafter amended or modified.
“Guaranty”shall
mean a joint and several guaranty of all Obligations given by the Guarantors
in
form and substance satisfactory to Lender.
“Hazardous
Materials”
shall
mean (a) hazardous materials, hazardous wastes, and hazardous substances
as
those or similar terms are defined under any Environmental Laws, including,
but
not limited to, the following: the Hazardous Materials Transportation Act,
49
U.S.C. Section 1801 et
seq.,
as
amended from time to time, the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et
seq.,
as
amended from time to time, CERCLA, the Clean Water Act, 33 U.S.C.
Section 1251 et
seq.,
as
amended from time to time, the Clean Air Act, 42 U.S.C. Section 7401
et
seq.,
as
amended from time to time, and/or the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et
seq.,
as
amended from time to time, OPA 90; (b) petroleum and petroleum products,
including crude oil and any fractions thereof; (c) natural gas, synthetic
gas, and any mixtures thereof; (d) asbestos and/or any material which
contains any hydrated mineral silicate, including, but not limited to,
chrysolite, amosite, crocidolite, tremolite, anthophylite and/or actinolite,
whether friable or non-friable; (e) polychlorinated biphenyls
(“PCBs”),
or
PCB-containing materials or fluids; (f) radon; (g) any other
hazardous
radioactive, toxic or noxious substance, material, pollutant, or solid, liquid
or gaseous waste; and (h) any hazardous substance that, whether by its
nature or its use, is subject to regulation under any Environmental Law or
with
respect to which any international, federal, state or local Environmental Law
or
governmental agency requires environmental investigation, monitoring or
remediation.
“Head
Charter”
shall
mean each of the bareboat charter parties between a Debtor or a Collateral
Vessel Owner and identified under the heading “Head Charters” on Schedule 5
hereto, registered under the laws of the Republic of the Philippines, as any
such charter is amended, extended or renewed from time to time.
“Hire”
shall
mean all freights, earnings and charter hire under any and all charters and
contracts of affreightment, or requiring or contemplating the use of, a Security
Vessel from time to time, together with additional hire, supplemental hire,
requisition hire and any other amounts paid on account of the use or employment
of such Security Vessel.
“Indebtedness”
shall
mean with respect to any Person, at any date of determination (without
duplication), (i) all indebtedness or other obligation for borrowed
money
or for the deferred purchase price of property or services which in accordance
with GAAP would be shown on the liability side of the balance sheet of such
Person, (ii) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder,
(iii) obligations as lessee under any lease which shall have been or
should
be, in accordance with GAAP, recorded as capital leases, (iv) obligations
under direct or indirect guarantees in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of other
Persons of the kinds referred to in clause (i), (ii) or (iii)
above.
“Installment
Payment Date”
shall
mean, with the respect to the Note, each of the sixty (60) consecutive monthly
dates during the Note Term, the first of which shall be February 1, 2006 on
which a regular installment of principal and interest is due on the Note. If
any
such date is not a Business Day, then any amounts owing on such day shall be
payable on the next succeeding Business Day.
“Interest
Period”
shall
mean, during the Note Term, each monthly period ending on an Installment Payment
Date, provided the first Interest Period shall commence on the Funding Date
and
end on the first Installment Payment Date, and the last Interest Period of
the
Note Term shall end on the Maturity Date.
“ISM
Code”
means
the International Safety Management Code for the Safe Operation of Ships and
Pollution Prevention, as adopted by the Assembly of the International Maritime
Organization on 4 November 1993 by resolution A.741 (18) and incorporated
on 19 May 1994 as Chapter IX of the Safety of Life at Sea Convention
1974.
“ISPS
Code”means
the
International Ship and Port Facility Security Code adopted by the International
Maritime Organization; in accordance with Regulation 1.12 of SOLAS Chapter
XI-2;
Special Measures to Enhance Maritime Security.
“ISSC”means
a
valid and current International Ship Security Certificate issued under the
ISPS
Code.
“Late
Charge Rate”
shall
mean a rate per annum equal to five (5) percentage points higher than the
Applicable Interest Rate, however, in no event to exceed the highest rate
allowed by applicable law, if any.
“Law”
shall
mean any law, rule, regulation or official code, consent decree, constitution,
decree, directive, enactment, guideline, injunction, interpretation, judgment,
order, ordinance, policy statement, proclamation, promulgation, requirement,
rule of law, rule of public policy, settlement agreement, statute, or writ,
of
any Governmental Authority.
“Lender”
as
defined in the preamble of this Agreement.
“Letter
of Undertaking”
shall
mean a Letter of Undertaking delivered to Lender by the Manager of each Vessel
in the form attached hereto as Exhibit A.
“LIBOR”
means
the rate of interest per annum at which deposits in U.S. dollars are offered
to
major banks in the London interbank market as reported by the Wall Street
Journal, as determined in accordance with Section 2.2 hereof.
“Liens”
shall
mean any interest in property securing an obligation owed to, or a claim by,
any
Person other than the owner of the property, whether such interest shall be
based on common law, maritime law, statute, contract or conveyance, including,
but not limited to, the security interest lien arising from any pledge,
mortgage, chattel mortgage, charge, encumbrance, conditional sale or trust
receipt, or from a charter, consignment or bailment for security purposes and
any maritime lien, right of retention, tax lien, mechanic’s lien, materialman’s
lien, xxxxxxx’x xxxx, repairman’s lien, any financing statement or other similar
charge or encumbrance.
“Liner
Guarantors”
as
identified on Schedule 1 hereto.
“Loan”
shall
mean the loan made by Lender to the Debtors, as provided in Section 2.1
and
evidenced by the Note, as provided for in Section 2.2 of this
Agreement.
“Loan
Balances”
shall
mean, collectively, any and all amounts advanced by Lender under and in
connection with this Agreement and the August 2004 Loan Agreement.
“Loan
Documents”
shall
mean, collectively, this Agreement, the Note, the Mortgages, the Collateral
Vessel Owners’ Second Mortgages, the Assignments, the Collateral Vessel Owners’
Second Assignments, the Pledge, the Guaranty, the Collateral Vessel Owners’
Guaranty, the Debtors’ Guaranty, the Letter of Undertaking, the Assigned
Charters, Amendment No. 2 to the August 2004 Loan Agreement and any consents
or
other instruments given with respect to the foregoing, each as may hereinafter
be amended, modified or supplemented pursuant to the terms hereof or thereof
respectively.
“Management
Agreement”
shall
mean an agreement to be entered into between the Manager and the disponent
owner
of each Vessel, in form and substance acceptable to Lender, and providing for
the waiver by the Manager of any lien or security interest in such
Vessel.
“Manager”
shall
mean TBS Shipping Services, Inc., a New York corporation, with an address at
Commerce Building, Suite 306, One Chancery Lane, Xxxxxxxx XX 12, Bermuda.
“Material
Adverse Effect”
shall
mean any fact or circumstance which (i) materially and adversely affects
the business, operations, property or condition of any of the Debtors, the
Collateral Vessel Owners, the Guarantors or any charterer of an Assigned
Charter, (ii) has a material adverse effect on the ability of any of
the
Debtors, the Collateral Vessel Owners, the Guarantors or any charterer of an
Assigned Charter to perform its respective obligations under this Agreement,
the
Note or the other Loan Documents to which it is a party, or (iii) has
a
material adverse effect on the Collateral or Lender’s security interest therein
(including, without limitation, any event, fact or circumstance which results
in
the imposition of any Lien (other than a Permitted Lien not discharged within
the periods provided in this Agreement or the Loan Documents).
“Maturity
Date”
shall
mean the last day of the Note Term.
“Mortgage”
shall
mean each Panamanian first preferred ship mortgage, as the same may hereafter
be
amended and/or supplemented from time to time, granted by a Debtor on the whole
of its Vessel, in favor of Lender, to secure the Obligations contemplated in
this Agreement and under the Debtors’ Guaranty, and collectively, the
“Mortgages”.
“MTSA”means
the
Maritime Transportation Security Act of 2002, as amended, Public Law
107-295.
“Note”
shall
mean the joint and several secured promissory note of the Debtors, substantially
in the form of Exhibit B attached hereto (including Schedule A
thereto), evidencing the Loan made by Lender to the Debtors hereunder, as
described in Section 2.2 hereof.
“Note
Term”
shall
mean the period commencing with the Funding Date and ending on January ____,
2011.
“Obligations”
shall
mean (i) the aggregate unpaid principal amount of, and accrued interest
on,
the Note; (ii) all other obligations and liabilities of the Debtors
and any
of them, now existing or hereafter incurred, under, arising out of or in
connection with this Agreement, the Loan, the Note, the Debtors’ Guaranty or any
of the other Loan Documents; and (iii) any and all other present and
future
indebtedness, obligations and liabilities of any kind under the Loan Documents
whatsoever of either Debtor to Lender, whether direct or indirect, joint or
several, absolute or contingent, liquidated or unliquidated, secured or
unsecured, matured or unmatured and whether originally contracted with Lender
or
otherwise acquired by Lender or from time to time reduced and thereafter
increased.
“OPA
90”
means
the United States Oil Pollution Act, 1990, as amended from time to time, and
the
Environmental Law of any jurisdiction, whether or not in effect on the Funding
Date, the violation of which includes either strict liability of any Debtor
or
unlimited liability of any Debtor.
“Other
Shipowners”
shall
mean the entities identified on Schedule 2 hereto and the term shall be deemed
to include any current or future Affiliate (but excluding GMTBS Africa and
GMTBS
Africa Gmbh) hereafter acquiring one or more vessels.
“Permitted
Liens”
with
respect to a Security Vessel, shall have the meaning assigned to it in the
Mortgage or Collateral Vessel Owner’s Second Mortgage of such Security Vessel
only in respect of such Security Vessel and generally it shall also mean the
following: (a) Liens securing payment of the Obligations, granted pursuant
to any Loan Document; (b) Liens by operation of law for taxes, assessments
or other governmental charges or levies not at the time delinquent or being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books; and where, by posting of bonds or other substitute security, there is
no
material risk of attachment or other levy on any Collateral; (c) Liens
incurred by operation of law in the ordinary course of business in connection
with workmen’s compensation, unemployment insurance or other forms of
governmental insurance benefits, or to secure performance of statutory
obligations; and (d) deposits to secure the performance of statutory
obligations incurred in the ordinary course of business.;.
“Person”
shall
mean any individual, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture, governmental
authority (whether domestic or foreign) or other entity of whatever
nature.
“Pledge”
shall
mean a pledge and assignment by Pledgor of its legal and beneficial shareholding
interest in each Debtor in form and substance satisfactory to Lender.
“Pledgor”
shall
mean Xxxxxxxxx Holdings, Ltd., a Xxxxxxxx Islands corporation.
“Pool”
as
defined in the Pooling Agreement.
“Pooling
Agreement”
shall
mean that certain agreement among the Debtors, the Other Shipowners, the Liner
Guarantors and TBS Worldwide Services, Inc., as amended from time to time and
as
the same may from time to time add or delete one or more parties.
“Prepayment
Date”
shall
mean, as to the Note, the date on which prepayment of the Note is to be made
pursuant to notice given in compliance with Section 2.4(b) of this
Agreement.
“Proceeds”
shall
have the meaning assigned to it in the Code and, in any event, shall include,
but not be limited to, (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Debtor or Collateral Owner from
time to time with respect to its Security Vessel or other Collateral;
(ii) any and all payments (in any form whatsoever) made or due and payable
to a Debtor or Collateral Vessel Owner from time to time in connection with
any
requisition, confiscation, condemnation, seizure or forfeiture of all and any
part of a Security Vessel by any governmental body, authority, bureau or agency
of any other Person (whether or not acting under color of governmental
authority); and (iii) accounts arising out of, any charter, contract
of
affreightment or chattel paper evidencing, any lease or charter of, any and
all
other rents, hire or profits or other amounts from time to time paid or payable
in connection with, the Security Vessel. In no event shall the term be construed
more narrowly than the meaning set forth in the Assignments, the Second
Assignments, the Mortgages and the Collateral Vessel Owners’ Second
Mortgages.
“Prohibited
Jurisdiction”
means
any country or jurisdiction, from time to time, (a) that, at any relevant
time, is subject of a prohibition order (or any similar order or directive),
sanctions or restrictions promulgated or administered by the Office of Foreign
Assets Control of the United States Treasury Department or the United Nations,
or (b) in which, or for which, Lender or any assignee thereof is otherwise
prohibited or restricted, under laws, regulations, sanctions or restrictions
applicable to it or its business, from extending credit, transferring property
or assets, engaging in or facilitating trade or other economic activity, or
otherwise doing business.
“Prohibited
Person”
means
any Person appearing on the Specially Designated Nationals List compiled and
disseminated by the Office of Foreign Assets Control of the United States
Treasury Department, as the same may be amended from time to time.
“Proposal
Fee”
shall
have the meaning given thereto in the Proposal Letter.
“Proposal
Letter”
shall
mean that certain letter dated October 26, 2005 from Lender to TBS regarding
the
transaction provided for in this Agreement.
“Relevant
Percentage(s)”
as
defined in Section 5.37 hereof.
“Security
Vessels”
shall
mean, collectively, the Vessels and the Collateral Vessels.
“Sheffield”
shall
mean Sheffield Maritime Corp., a corporation organized and existing under the
laws of the Republic of the Xxxxxxxx Islands.
“SMC”means
the
Safety Management Certificate issued to a Vessel in accordance with Regulation
4.3 of SOLAS Chapter IX; Management for the Safe Operation of
Ships.
“Stratford”
shall
mean Stratford Shipping Corp., a corporation organized and existing under the
laws of the Republic of the Xxxxxxxx Islands.
“Subcharters”
shall
mean each time charter of a Security Vessel, including, without limitation,
those identified under the heading “Subcharters” on Schedule 5 hereto and to the
August 2004 Loan Agreement and any other contracts for use or employment of
any
Security Vessel, other than the Head Charters.
“TBS”
shall
mean TBS International Limited, a corporation organized and existing under
the
laws of the Commonwealth of Bermuda.
“Valuation”
as
defined in Section 5.37 hereof.
“Vessel”
shall
mean each of the vessels BILOXI BELLE and MAORI MAIDEN, together with all of
its
machinery, anchors, cables, chains, rigging, tackle, fittings, tools, pumps,
pumping equipment, gear, apparel, furniture, appliances, equipment, spare and
replacement parts and all other appurtenances thereunto appertaining or
belonging, whether now owned or hereafter acquired and whether on board or
not,
and also any and all additions, improvements and replacements made in or to
such
Vessel or any part thereof or in or to any equipment and appurtenances thereto
appertaining or belonging.
1.2 Accounting
Terms.
All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
Section 2. AMOUNT
AND TERMS OF LOAN.
2.1 Commitment.
Subject
to the terms and conditions of this Agreement, Lender agrees to make a single
Loan to the Debtors in the principal amount of U.S.$17,500,000. Lender shall
have no obligation to make the Loan to the Debtors after December 30,
2005.
2.2 The
Note.
(a) Note
Term. The Loan shall be evidenced by the Note, which Note (i) shall
be
dated the Funding Date; (ii) shall be for a term equal to the Note Term,
commencing on the Funding Date and ending on the Maturity Date, and (iii) shall
be payable on each Installment Payment Date in sixty (60) consecutive monthly
installments of principal and interest, commencing February 1,2006, with the
first twenty-four (24) such installments to be in the amount of U.S.$401,041.67
and the next thirty-six (36) such installments to be in the amount of
U.S.$218,750; provided,
further,
that
the Note shall bear interest from the date thereof on the unpaid principal
amount thereof at the Applicable Interest Rate at all times while any amounts
are outstanding under the Note during the Note Term.
(b) Interest.
The Loan shall bear interest at the Applicable Interest Rate. The Applicable
Interest Rate shall be determined by Lender two (2) Banking Days prior to the
first (1st)
day of
the relevant Interest Period. Lender shall promptly notify the Debtors in
writing of the Applicable Interest Rate as and when determined. Each such
determination, absent manifest error, shall be conclusive and binding upon
the
Debtors.
(c) Cross-Collateralization.
The Note and all Obligations shall be equally secured by all Collateral. No
lien
securing the Obligations or any of them shall be released or deemed released
unless and until all Obligations are fully and finally repaid and discharged
except as otherwise provided herein.
2.3 Late
Charges.
Any
amount of principal or interest not paid on or before the third Business Day
following the due date thereof under the Note shall, to the extent permitted
by
applicable law, bear late charges thereon, calculated at the Late Charge Rate,
from the due date thereof until such amount shall be paid in full. Debtors
shall
continue to pay in full regular installments under the Note as and when due,
notwithstanding any Event of Loss, until all Obligations are entirely paid
and
performed.
2.4 Prepayment.
(a) An
Event
of Loss. In the event that either Vessel shall suffer an Event of Loss and
unless Lender agrees in writing to a lesser prepayment amount, the Debtors
shall
make a prepayment of the Note, in an amount equal to the lesser of (i) all
Obligations remaining due under the Loan Documents, or (ii) 167% of the then
outstanding principal amount of the Loan multiplied by a fraction, the numerator
of which is the Appraisal Value of the Vessel suffering an Event of Loss and
the
denominator of which is the aggregate Appraisal Value of the lost Vessel and
the
other Vessel then remaining (with Appraised Value determined as at the time
immediately preceding such Event of Loss), together with any other amounts
then
due under this Agreement, the Note or any other Loan Document, on the next
Installment Payment Date after (1) the earlier of 180 days after the date of
such Event of Loss, or (2) the date the relevant Debtor or Lender receives
all
insurance proceeds in respect of such Event of Loss.
(b) Voluntary
Prepayment: At any time after the twelfth (12th)
Installment Payment Date, with not less than 30 days’ prior written notice to
Lender, Debtors may prepay all, but not less than all, of the Loan on an
Installment Payment Date. If any prepayment is made after the twelfth
(12th)
Installment Payment Date or on or before the thirty-sixth (36th)
Installment Payment Date, Debtors shall pay a prepayment fee equal to two
percent (2%) of the principal amount of such prepayment. If the Debtors make
prepayment after the thirty-sixth (36th)
Installment Payment Date, Debtors shall pay a prepayment fee equal to one
percent (1%) of the amount of principal then being prepaid. Notwithstanding
the
foregoing, should TBS obtain the B of A Commitment, with not less than 30 days’
prior written notice, the Debtors may prepay all, but not less than all, of
the
Loan on or prior to the twelfth (12th)
Installment Payment Date, provided that prepayment occurs on an Installment
Payment Date, and is made from the proceeds of the B of A Commitment. If the
Debtors prepay the Loan in accordance with the foregoing sentence, the Debtors
shall pay an early termination fee equal to one percent (1%) of the principal
amount of such prepayment.
(c) Except
as
expressly provided in the foregoing subsections (a) and (b), the Debtors shall
not be permitted to make any prepayments on the Note.
2.5 Use
of Proceeds.
The
proceeds of the Loan shall be advanced to the Debtors and used by them to
finance, maintain and operate the Vessels in the Pool under the Pooling
Agreement and for other lawful purposes of the Debtors only.
2.6 Application
of Payments.
(a) Note
Payments Received During the Note Term. So long as no (x) Default with respect
to any payments due hereunder or under any of the Obligations or (y) Event
of
Default shall have occurred and be continuing, each payment of an installment
under the Note received by Lender during the Note Term shall be applied,
first,
to any
costs, expenses, fees or other amounts due under this Agreement or under the
other Loan Documents not constituting principal and interest due under the
Note,
second,
to late
charges due under the Note, third,
to
interest due under the Note, and fourth,
to the
payment of principal and all other Obligations which are then due and payable.
(b) Casualty
Payments. So long as no (x) Default with respect to any payments due hereunder
or under any of the Obligations or (y) Event of Default shall have occurred
and
be continuing, any amounts received by Lender as a result of an Event of Loss
with respect to any Vessel (including, without limitation, any payment of
prepayment amounts under Section 2.4(a) or insurance or condemnation proceeds)
shall be applied, first, to the prepayment amounts required to be paid by
Section 2.4 hereof; second, to the payment in full of all of the Obligations
set
forth in the Note and the other Loan Documents then due and owing; and, third,
the balance, if any, after payment of the foregoing amounts shall be released
by
Lender to the Debtors.
(c) Other
Amounts. So long as no (x) Default with respect to any payments due
hereunder or under any other Obligation or (y) Event of Default shall
have
occurred and be continuing, all Proceeds (other than Proceeds received in
respect of damage to a Security Vessel, which shall be distributed in accordance
with Section 1.22 of the applicable Mortgage or Collateral Vessel Owners’
Second Mortgage) from time to time received by Lender shall be applied, first,
to any costs, expenses, fees or other amounts due under this Agreement and
the
other Loan Documents not constituting principal and interest due under the
Note,
second, to late charges due under the Note, third, to interest due under the
Note, fourth, to principal installments due under the Note in the inverse order
of maturities, fifth, to the payment in full of all other Obligations which
are
then due and payable, and sixth, if provision as to the application of such
amounts is made in this Agreement or any other Loan Document, Lender shall,
in
its sole discretion, either apply such payment to the purpose for which it
was
made or pay it to the Debtors, which shall so apply it, and seventh, if due
to
the Debtors, Lender shall pay such amounts to the Debtors.
(d) Application
After Declaration. After an Event of Default shall have occurred and be
continuing and after Lender has either, (i) as assignee from the Debtors
of
any charter, declared such charter to be in default, or (ii) declared
the
Note to be due and payable pursuant to Section 8 hereof, or done both
(i)
and (ii), all payments received and amounts realized by Lender, as well as
all
payments or amounts then held by Lender as part of the Collateral, shall be
applied as set forth in said Section 8 hereof and as otherwise provided
in
the other Loan Documents and the documents evidencing the other Obligations,
and
the balance, if any, shall be paid by Lender to the Debtors.
(e) Application
After Default or Event of Default. Subject to Section 2.6(a) hereof,
all
payments received and amounts realized by Lender after a Default or an Event
of
Default shall have occurred and be continuing, but prior to any declaration
thereof by Lender or any acceleration of the Note shall be held by Lender as
part of the Collateral until such time as no Defaults or Events of Default
shall
be continuing hereunder (at which time such funds shall be paid to the Debtors)
or until such funds are applied pursuant to Section 8 hereof.
2.7 Nature
of the Obligations.
Each
Debtor is jointly and severally liable for each and every Obligation. Each
Debtor consents that, without the necessity of any reservation of rights against
it and without notice to or further assent by it, the obligations and
liabilities of each Debtor and any other party or parties for or upon any of
the
obligations of any Affiliate of each Debtor, or any collateral security or
guaranty therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, modified, accelerated,
compromised or released by Lender; all as Lender may deem advisable from time
to
time without impairing, abridging, releasing or affecting the obligations set
forth in this Section 2.7.
Section 3. CONDITIONS
OF BORROWING.
3.1 Conditions
to Be Fulfilled Prior to the Funding Date.
Lender
shall not be required to make the Loan hereunder unless on the Funding
Date:
(a) Inspection.
Lender shall have inspected and found satisfactory the Security
Vessels.
(b) Appraisal.
Lender shall have received an independent third party appraisal of each Security
Vessel to determine the fair market value of each Security Vessel, as completed
by an independent appraiser mutually acceptable to Lender and the Debtors,
all
at the sole cost and expense of the Debtors. Such appraisal shall be determined
not more than fifteen (15) days prior to the Funding Date.
(c) Certificate
of Incumbency of Each Debtor. Lender shall have received a current certificate
of incumbency of each Debtor signed by its Secretary or Assistant Secretary
(or
other authorized officer), which certificate shall certify the names of the
officers of it authorized to execute and deliver any Loan Documents hereunder
or
under any other related document on its behalf, together with specimen
signatures of such officers, and Lender may conclusively rely on such
certificate until receipt of a further certificate of the Secretary or Assistant
Secretary (or other authorized officer) of such Debtor canceling or amending
its
prior certificate and submitting the signatures of the officers named in such
further certificate.
(d) Certificate
of Incumbency of Each Charterer of an Assigned Charter. Lender shall have
received a current certificate of incumbency of each charterer of an Assigned
Charter signed by its Secretary or Assistant Secretary (or other authorized
officer), which certificate shall certify the names of the officers of it
authorized to execute and deliver any Loan Documents to which it is a party
hereunder or under any other related document on its behalf, together with
specimen signatures of such officers, and Lender may conclusively rely on such
certificate until receipt of a further certificate of the Secretary or Assistant
Secretary (or other authorized officer) of such charterer canceling or amending
its prior certificate and submitting the signatures of the officers named in
such further certificate.
(e) Certificate
of Incumbency of the Manager. Lender shall have received a current certificate
of incumbency of the Manager signed by its Secretary or Assistant Secretary
(or
other authorized officer), which certificate shall certify the names of the
officers of it authorized to execute and deliver any Loan Documents to which
it
is a party hereunder or under any other related document on its behalf, together
with specimen signatures of such officers, and Lender may conclusively rely
on
such certificate until receipt of a further certificate of the Secretary or
Assistant Secretary (or other authorized officer) of the Manager canceling
or
amending its prior certificate and submitting the signatures of the officers
named in such further certificate.
(f) Certificate
of Incumbency of Pledgor. Lender shall have received a current certificate
of
incumbency of Pledgor signed by its Secretary or Assistant Secretary (or other
authorized officer), which certificate shall certify the names of the officers
of it authorized to execute and deliver any Loan Documents to which it is a
party hereunder or under any other related document on its behalf, together
with
specimen signatures of such officers, and Lender may conclusively rely on such
certificate until receipt of a further certificate of the Secretary or Assistant
Secretary (or other authorized officer) of Pledgor canceling or amending its
prior certificate and submitting the signatures of the officers named in such
further certificate.
(g) Certificate
of Incumbency of Each Collateral Vessel Owner. Lender shall have received a
current certificate of incumbency of each Collateral Vessel Owner signed by
its
Secretary or Assistant Secretary (or other authorized officer), which
certificate shall certify the names of the officers of it authorized to execute
and deliver any Loan Documents to which it is a party hereunder or under any
other related document on its behalf, together with specimen signatures of
such
officers, and Lender may conclusively rely on such certificate until receipt
of
a further certificate of the Secretary or Assistant Secretary (or other
authorized officer) of each Collateral Vessel Owner canceling or amending its
prior certificate and submitting the signatures of the officers named in such
further certificate.
(h) Certificate
of Incumbency of Each Guarantor. Lender shall have received a current
certificate of incumbency of each Guarantor signed by its Secretary or Assistant
Secretary (or other authorized officer), which certificate shall certify the
names of the officers of it authorized to execute and deliver any Loan Documents
to which it is a party hereunder or under any other related document on its
behalf, together with specimen signatures of such officers, and Lender may
conclusively rely on such certificate until receipt of a further certificate
of
the Secretary or Assistant Secretary (or other authorized officer) of each
Guarantor canceling or amending its prior certificate and submitting the
signatures of the officers named in such further certificate.
(i) Resolutions
of Each Debtor. Lender shall have received a current certified copy of all
corporate proceedings of each Debtor evidencing that all action required to
be
taken in connection with the authorization, execution, delivery and performance
of this Agreement, the Note, its Mortgage, the Assignments, the Debtors’
Guaranty and the other Loan Documents to which it is a party and the
transactions contemplated hereby and thereby has been duly taken.
(j) Resolutions
of Charterers of Assigned Charters. Lender shall have received a current
certified copy of all corporate proceedings of each charterer of an Assigned
Charter (except for the Head Charters) evidencing that all action required
to be
taken in connection with the authorization, execution, delivery and performance
of the Loan Documents to which it is a party and the transactions contemplated
hereby and thereby has been duly taken.
(k) Resolutions
of Pledgor. Lender shall have received a current certified copy of all limited
liability company proceedings of Pledgor evidencing that all action required
to
be taken in connection with the authorization, execution, delivery and
performance of the Pledge, and the transactions contemplated hereby and thereby
has been duly taken.
(l) Resolutions
of the Collateral Vessel Owners. Lender shall have received from each Collateral
Vessel Owner a copy of all corporate or other entity proceedings of such
Collateral Vessel Owner evidencing that all action required to be taken in
connection with the authorization, execution, delivery and performance of the
Collateral Vessel Owners’ Guaranty and the Loan Documents to which each is a
party, shall have been taken by the owners, members, partners or shareholders
and directors thereof.
(m) Resolutions
of the Guarantors. Lender shall have received from each Guarantor a copy of
all
corporate or other entity proceedings of such Guarantor evidencing that all
action required to be taken in connection with the authorization, execution,
delivery and performance of each Guarantor shall have been taken by the owners,
members, partners or shareholders and directors thereof.
(n) Resolutions
of the Manager. Lender shall have received a current certified copy of all
corporate proceedings of the Manager evidencing that all action required to
be
taken in connection with the authorization, execution, delivery and performance
of the Loan Documents to which it is a party and the transactions contemplated
hereby and thereby has been duly taken.
(o) Opinions
of Counsel. Lender shall have received the written opinions addressed to it
of
New York, Panama, Xxxxxxxx Islands, and Bermuda counsel for each Debtor, the
Pledgor, each Collateral Vessel Owner, each Guarantor and each charterer of
an
Assigned Charter (except for the Head Charters), satisfactory in form and
substance to Lender.
(p) Documents.
Each of the Note, the Mortgages, the Assignments and the other Loan Documents
shall be in form and substance satisfactory to Lender and its counsel and shall
have been duly executed and delivered to Lender by the parties thereto and
acknowledgments and consents to Assignments, including, but not limited to,
Charterers’ Consents, in form and substance satisfactory to Lender, from any
charterer of or any party to a contract of affreightment relating to any Vessel
shall have been duly authorized, executed and delivered to Lender.
(q) Insurance.
Lender shall have received evidence satisfactory to it that each Vessel is
insured in accordance with the provisions of this Agreement, the applicable
Mortgage and the Assignments of Insurances.
(r) Mortgages
and Security Interests. All filings, including all applicable UCC-1 filings
pursuant to the Code, recordings and other actions deemed necessary or desirable
by Lender in order to establish, protect, preserve and perfect (i) the Mortgage
as a first naval mortgage on the whole of each Vessel in favor of Lender and
Lender’s lien on and security interest in all other Collateral as a valid
perfected first priority security interest, (ii) the Collateral Vessel Owners’
Second Mortgage as a second naval mortgage on the whole of each Collateral
Vessel in favor of Lender and Lender’s lien on and security interest in all
other collateral securing the Collateral Vessel Owners’ Guaranty as a valid
perfected second priority security interest, shall all have been duly effected,
including, without limitation, the filing of financing statements and the filing
and recordation of the Mortgages and the Collateral Vessel Owners’ Mortgages and
all other actions required to perfect Lender’s security interest in the
Collateral, all in form and substance satisfactory to Lender, and all fees,
taxes and other charges relating to such filings and recordings shall have
been
paid by the Debtors. Lender shall have received UCC-3 releases or other
documents satisfactory to Lender from such Persons as Lender shall deem
necessary or desirable to evidence the release of any liens such Person may
have
on the Collateral.
(s) Discharge
of Any Existing Liens. Lender shall be satisfied that, concurrently with the
funding of the Loan, the Security Vessels are free and clear of all Liens other
than Permitted Liens, as the term is defined herein and in the relevant Mortgage
or Collateral Vessel Owners’ Second Morgage.
(t) Representations.
Lender shall have received a certificate of the Debtors confirming that
(i) the representations and warranties contained in this Agreement,
the
Mortgages and in all of the other Loan Documents and other documents and
instruments executed and delivered to Lender in connection herewith shall be
true and correct in all material respects on and as of the Funding Date with
the
same effect as if made on and as of such date; (ii) no Default or Event
of
Default shall be in existence on the Funding Date or shall occur as a result
of
the Loan; (iii) no Event of Default shall have occurred and be continuing
under any charter of any Security Vessel on the Funding Date; and (iv) the
acceptance by the Debtors of the Loan shall constitute a representation by
the
Debtors that the statements contained in clauses (i), (ii) and (iii) above
are
true and correct on the Funding Date.
(u) No
Material Adverse Change. In the sole determination of Lender, there shall have
been no material adverse change since, in the financial condition, business
or
operations (as the case may be) of any Debtor, Pledgor, Guarantor, Collateral
Vessel Owner or the Manager.
(v) Certificates
of Ownership. Lender shall have received and found to be satisfactory, or will
receive upon the funding of the Loan to the Debtors, an abstract of title or
documents of similar effect as to each Security Vessel confirming that such
Security Vessel is owned by such Debtor or Collateral Vessel Owner and
registered in the Republic of Panama upon the funding of the Loan, free of
all
recorded Liens other than the applicable Mortgage and with respect to the
Collateral Vessels, the first preferred mortgage recorded in favor of Lender
and
the Collateral Vessel Owners’ Second Mortgage and that such Security Vessel is
authorized by both the Republic of Panama and the Philippines to fly the
Philippine flag and show its official number and port of registry under
Philippines law, accordingly.
(w) No
Event
of Loss. No Event of Loss shall have occurred with respect to any Security
Vessel.
(x) Consent
and Subordination; Execution of Charter Assignments. Lender shall have received
and found to be satisfactory each Charterer’s Consent, subordinating any rights
of any charterer under an Assigned Charter (except the Head Charters) in the
Collateral to the rights of Lender under the Earnings Assignments, Assignment
of
Insurances and the Mortgages. Additionally, the Debtors shall have entered
into
the Earnings Assignments, in form and substance satisfactory to Lender,
providing, among other things, for the assignment to Lender of all of the
Debtors’ rights and earnings under the Assigned Charters and the acknowledgment
of and consent to such assignment by any charterer under such Assigned
Charter.
(y) Other
Documents and Information. Lender shall have received from each Debtor, in
form
and substance satisfactory to Lender, such other documents and information
as
Lender may reasonably request.
(z) Legal
Matters. All legal matters with respect to and all legal documents (including,
but not limited to, the Loan Documents) executed in connection with the
transactions contemplated by this Agreement shall be satisfactory to counsel
for
Lender.
(aa) Pay
Proceeds Letter. The Debtors jointly shall submit a letter at least two (2)
Business Days prior to the Funding Date, acceptable to Lender authorizing and
instructing Lender to: (i) make the Loan in proper amount, (ii) to
retain and apply U.S.$87,500 as the Closing Fee on the Funding Date, and (iii)
pay to Lender’s counsel the amount of Lender’s legal fees and disbursements.
Section 4. REPRESENTATIONS
AND WARRANTIES.
In
order
to induce Lender to enter into this Agreement and to make the Loan, each Debtor
represents and warrants to Lender that:
4.1 Organization.
Each
Debtor is a corporation duly organized, validly existing and in good standing
under the laws of the Republic of the Xxxxxxxx Islands, has the necessary right,
power and authority to own its Vessel and its other assets and to transact
the
business in which it is engaged, and each Debtor is duly qualified to do
business in each jurisdiction where such qualification is legally required
and
where the failure to so qualify would materially adversely affect the
enforceability of the Loan Documents or otherwise materially adversely affect
the Collateral or any Debtor’s ability to perform its obligations under any of
the Loan Documents. Pledgor is the record and beneficial owner of one hundred
percent (100%) of the authorized, issued and outstanding stock of Sterling
Shipping and Remsen Navigation.
4.2 Power
and Authority.
Each
Debtor, Pledgor, Collateral Vessel Owner, Guarantor and any charterer of an
Assigned Charter has full corporate power, authority and legal right to execute
and deliver the Loan Documents to which it is a party, and to perform its
obligations hereunder and thereunder respectively, and the Debtors have full
corporate power, authority and legal right to borrow hereunder and to grant
the
security interests created by this Agreement, its Mortgage and each of the
Assignments, the Collateral Vessel Owners have full corporate power, authority
and legal right to grant the security interests created by its Collateral Vessel
Owners’ Second Mortgages and Collateral Vessel Owners’ Second
Assignments.
4.3 Consents
and Permits.
No
consent of any other Person (including any stockholder, trustee or holder of
indebtedness), and no consent, license, approval or authorization of, exemption
by, or registration or declaration with, any governmental body, authority,
bureau or agency (or other Person) is required in connection with the execution,
delivery or performance by (i) each Debtor of this Agreement, the Note, its
Mortgage, the Assignments, the Debtors’ Guaranty or any other Loan Document to
which it is party other than the filing of its Mortgage and the UCC-1 financing
statements and (ii) each Collateral Vessel Owner of its Collateral Vessel
Owners’ Guaranty, Collateral Vessel Owners’ Second Mortgages, the Collateral
Vessel Owners’ Second Assignments or any other Loan Document to which it is
party other than the filing of its Collateral Vessel Owners’ Second Mortgages
and the UCC-1 financing statements.
4.4 No
Legal Bar.
The
execution, delivery and performance by each Debtor, Guarantor, Pledgor and
Collateral Vessel Owner of any Loan Document to which it is a party, does not
and will not violate any provision of any applicable law or regulation or of
any
judgment, award, order, writ or decree of any court or governmental
instrumentality, will not violate any provision of the organizational documents
of any Debtor, Pledgor, Collateral Vessel Owner or Guarantor, and will not
violate any provision of, or cause a default under, any mortgage, indenture,
contract, agreement or other undertaking to which any Debtor, Pledgor,
Collateral Vessel Owner or Guarantor is a party or which purports to be binding
upon any Debtor, Pledgor, Collateral Vessel Owner or Guarantor or upon any
of
their respective assets, and will not result in the creation or imposition
of
any Lien on any of the respective assets of any Debtor, Pledgor, Collateral
Vessel Owner or Guarantor other than the security interests and mortgage
intended to be created hereby and under the Assignments, the Mortgages, the
Collateral Vessel Owners’ Second Assignments, the Collateral Vessel Owners’
Second Mortgages and the Pledge.
4.5 No
Defaults.
None of
the Debtors, Pledgor, Collateral Vessel Owners or Guarantors is in default,
and
no event or condition exists which after the giving of notice or lapse of time
or both would constitute an Event of Default under this Agreement, the Note,
the
Mortgages, the Collateral Vessel Owners Second Mortgages, the Pledge, the
Guaranty, the Assignments, the Collateral Vessel Owners Second Assignments,
the
Collateral Vessel Owners’ Guaranty, the Debtors’ Guaranty or any other Loan
Document or under any mortgage, indenture, contract, agreement, judgment or
other undertaking to which any is a party or upon any of their respective
assets, except for any such default, event or condition which, individually
or
in the aggregate, would not materially adversely affect any of the Debtors’,
Pledgor’s, the Collateral Vessel Owners’ or Guarantors’ ability to perform their
respective obligations under any of this Agreement, the Note, the Mortgages,
the
Collateral Vessel Owners Second Mortgages, the Pledge , the Guaranty, the
Assignments, the Collateral Vessel Owners Second Assignments, the Collateral
Vessel Owners’ Guaranty, the Debtors’ Guaranty or any other Loan Document to
which they are a party, or any such mortgage, indenture, contract, agreement,
judgment or other undertaking.
4.6 Enforceability.
Each of
Loan Documents has been duly authorized, executed and delivered by the parties
thereto (other than Lender) and constitutes a legal, valid and binding
obligation of the Debtors, Pledgor, the Collateral Vessel Owners or the
Guarantors, as the case may be, enforceable in accordance with its respective
terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and an implied
covenant of good faith and fair dealing.
4.7 No
Litigation.
Except
as described on Schedule 3 hereto, there is no action, suit, proceeding
or,
to our knowledge, investigation (whether or not purportedly on behalf of any
Debtor, Pledgor, Collateral Vessel Owner or Guarantor) pending or to our
knowledge threatened against any Debtor, Pledgor, Collateral Vessel Owner or
Guarantor or any of their respective assets in any jurisdiction, which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect. There is no action, suit or proceeding or, to our knowledge,
investigation (a) which involves any Vessel, or Collateral Vessel, the
Assignments, the Collateral Vessel Owners’ Second Assignments, or any of the
transactions contemplated by this Agreement or the other Loan Documents
which, if adversely determined, could reasonably be expected to have
a
Material Adverse Effect, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, pending or threatened
in any jurisdiction.
4.8 Title
to Vessel.
Each
Debtor has and will have, while any Obligation remains outstanding, valid and
marketable title to its Vessel, subject to no Liens except Permitted Liens,
and
each Vessel shall be registered in the name of its respective Debtor with the
Republic of Panama and to the extent permitted by the Republic of Panama and
the
Philippines, under the flag of the Philippines with respect to the period of
such Vessel’s Head Charter; Each Collateral Vessel Owner has and will have,
while any Obligation remains outstanding, valid and marketable title to its
Collateral Vessel, subject to no Liens except Permitted Liens, and each
Collateral Vessel shall be registered in the name of its respective Collateral
Vessel Owner with the Republic of Panama and to the extent permitted by the
Republic of Panama and the Philippines, under the flag of the Philippines with
respect to the period of such Collateral Vessel’s Head Charter (as defined in
the August 2004 Loan Agreement).
4.9 Lender’s
Security Interest.
On the
Funding Date, Lender shall have a legal, valid and continuing (i) first
preferred ship mortgage (as amended, supplemented or otherwise modified from
time to time) and a perfected first lien on and security interest in each
Vessel, and Lender shall have a perfected first lien on and security interest
in
Collateral (except for the second liens of the Collateral Vessel Owners’ Second
Mortgages and the collateral Vessel Owners’ Second Assignments pursuant to which
the Lender shall have a perfected second lien and security interest in the
Collateral the subject of such Loan Documents) subject only to Permitted Liens
and (ii) second preferred ship mortgage (as amended, supplemented or otherwise
modified from time to time) and a perfected second lien on and security interest
in each Collateral Vessel, and Lender shall have a perfected second lien on
and
security interest in the collateral securing the Collateral Vessel Owners’
Guaranty subject only to Permitted Liens and all taxes, fees and other charges
in connection with all of the foregoing shall have been duly paid. There are
no
charters in effect on (i) any Vessel other than the Assigned Charters
specifically identified on Schedule 5 hereto and (ii) any Collateral Vessel
other than the Assigned Charters (as defined in the August 2004 Loan Agreement)
identified on Schedule 5 to the August 2004 Loan Agreement.
4.10 Income
Taxes.
Each
Debtor has filed all federal, state and local income tax returns that are
required to be filed, and has paid all taxes as shown on said returns or which
are required to be paid and all assessments received by it to the extent that
such taxes and assessments have become due, and each Debtor does not have any
knowledge of any actual or proposed deficiency or additional assessment in
connection therewith. The charges, accruals and reserves on the books of each
Debtor in respect of federal, state and local taxes for all open years, and
for
the current fiscal year, make adequate provision for all unpaid tax liabilities
for such periods.
4.11 No
Other Name.
During
the past five (5) years, none of the Debtors, the Collateral Vessel Owners
or
Pledgor has changed its name and none has done business in any name other than
as set forth in the introductory paragraph of this Agreement.
4.12 Payment
of Taxes.
All
sales, use, property or other taxes, licenses, tolls, inspection or other fees,
bonds, permits or certificates which were or may be required to be paid or
obtained in connection with the acquisition by each Debtor, or Collateral Vessel
Owner, of its Security Vessel, as the case may be or such vessel’s subsequent
employment will have been, or when due will be, paid in full or
obtained.
4.13 Environmental
Compliance.
Each
Debtor, Collateral Vessel Owner and any charterer under an Assigned Charter
has
duly complied in all material respects with, and its business, operations,
assets, equipment, property, leaseholds, or other facilities are in compliance
in all material respects with, the provisions of all federal, state and local
environmental, health and safety laws, codes and ordinances, and all rules
and
regulations promulgated thereunder. Except as disclosed in Schedule 4
hereto, neither Pledgor, any Debtor, any Collateral Vessel Owner, any charterer
under an Assigned Charter, nor any Affiliate thereof is in, or has been notified
of, any violation of any Environmental Law with respect to the ownership,
chartering or operation of any Security Vessel, which violation could have
a
Material Adverse Effect under OPA 90 or could otherwise reasonably be expected
to have a Material Adverse Effect on the ability of any Debtor, Collateral
Vessel Owner or of any charterer of an Assigned Charter to perform the
transaction contemplated in this Agreement or under an Assigned
Charter.
4.14 Investment
Company Act.
4.15 Neither
TBS nor any of its Affiliates is an “investment company” or an “affiliated
person” of, or a “promoter” or “principal underwriter” for or a company
“controlled” by an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended; neither the making of the Loan
nor
the application of the proceeds or repayment thereof by the Debtors, nor the
consummation of the other transactions contemplated hereby, will violate any
provision of such act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
4.15 Hire
of Security Vessels.
Each of
the relevant Debtor or Collateral Vessel Owner, together with the Affiliate
Charterers (as defined in the relevant Earnings Assignments and Collateral
Vessel Owners Second Earnings Assignment) are the only Persons entitled to
receive Hire with respect to the Security Vessels.
Section 5. COVENANTS.
Each
Debtor covenants and agrees that, from and after the date hereof and so long
as
the Commitment or the Obligations are outstanding:
5.1 Notices.
Such
Debtor will promptly after obtaining knowledge thereof give written notice
to
Lender of (i) the occurrence of any Default or Event of Default;
(ii) the occurrence of an Event of Loss relating to any Security Vessel;
(iii) the commencement or threat of any material litigation or proceedings
or threatened or asserted claim of lien affecting any Debtor, Pledgor,
Guarantor, the Manager or a Security Vessel; and (iv) any dispute between
any Debtor, Pledgor, the Manager and any governmental regulatory body or other
party that involves and Material Adverse Effect respecting any Vessel or that
could reasonably be expected to materially interfere with the normal business
operations of any Debtor.
5.2 Laws,
Obligations; Operations.
Each
Debtor will and will cause each of the Pledgor, Guarantor, Collateral Vessel
owner to (i) duly observe and conform to all requirements of any
governmental authorities relating to the conduct of its business or to its
properties or assets; (ii) maintain its existence as a legal entity
and
obtain and keep in full force and effect all rights, franchises, licenses and
permits which are necessary to the proper conduct of its business;
(iii) obtain or cause to be obtained as promptly as possible any
governmental, administrative or agency approval and make any filing or
registration therewith which at the time shall be required with respect to
the
performance of the Obligations or the operation of its business; and
(iv) pay all fees, taxes, assessments and governmental charges,
withholdings or levies imposed upon any of the Collateral, and at all times,
such Debtor shall pay or cause to be paid all fees, taxes, assessments and
governmental charges or levies imposed upon any of the Collateral except for
such contested in good faith by appropriate proceedings not involving any risk
of loss of the Vessels or such other Collateral or Lender’s interest or priority
therein.
5.3 Inspection.
Lender
or its authorized representative may, at any reasonable time or times and
annually at the Debtors’ expense, inspect any Security Vessel and at Lender’s
cost (provided, if an Event of Default has occurred and is continuing, every
inspection thereafter shall be at the Debtors’ expense), it shall have the right
to review the operating and insurance records of the Debtors upon reasonable
notice and during normal business hours. Inspection will be conducted in such
a
manner as to minimize interference in the Security Vessels’ operation, provided
that no Event of Default shall be then continuing. The Debtors shall provide,
and shall require any charterer under an Assigned Charter to provide, Lender
advance notice of all known surveys and regulatory inspection in order that
Lender may observe and participate.
5.4 Books.
The
Debtors will keep proper books of record and account in which full, true and
correct entries in accordance with GAAP will be made of all dealings or
transactions in relation to their businesses and activities.
5.5 Financial
Information.
The
Debtors will furnish or cause to be furnished to Lender (a) as soon
as
available, but in any event not later than ninety (90) days after the end of
each fiscal year of the Debtors and Guarantors, Financial Statements of TBS
and
its consolidated subsidiaries as at the end of such fiscal year, all in
reasonable detail, complying in all material respects with all applicable rules
and regulations promulgated by the Securities and Exchange Commission, prepared
in accordance with GAAP applied on a basis consistently maintained throughout
the period involved and audited by independent certified public accountants
reasonably acceptable to Lender; (b) as soon as available, but in no
event
later than forty-five (45) days after the end of each fiscal quarter of the
Debtors and Guarantors unaudited financial statements of such entity as at
the
end of such fiscal quarter, all certified (subject to normal year-end
adjustments) as to fairness of presentation and compliance in all material
respects with all applicable rules and regulations of the Securities and
Exchange Commission with respect to interim financial statements all in
reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and certified by the
chief financial officer of such entity; (c) within ninety (90) days of the
end
of each fiscal year of Debtors and Guarantors, consolidating internally prepared
annual financial statements for each Debtor and each Guarantor; (d) with
each submission of Financial Statements as herein provided, each of the Debtors
and Pledgor shall submit a written executed Certificate of Compliance, a form
of
which is attached hereto as Exhibit C, confirming to Lender the accuracy
of
the respective Financial Statements submitted on that date (subject to normal
year-end audit adjustment),identifying the current charter or other contract
under which the Vessels are employed and the basic deal economics of such
contract including rates, term of the contract and any renewals, confirming
to
Lender that there exists no Default or Event of Default under this Agreement
or
any other of the Loan Documents or, if such Default or Event of Default exists,
the steps being taken to remedy such Default or Event of Default; and
(e) promptly, such additional financial and other information as Lender
may
from time to time reasonably request.
5.6 Vessel
Classification.
5.7
The
Debtor shall do or cause to be done all things necessary to ensure that each
of
the Security Vessels is classed, at a minimum, at the classification and rating
required by the respective Head Charter by the respective Classification Society
without any material outstanding recommendations.
5.7 Incurrence
of Indebtedness.
No
Debtor shall contract, create, incur, assume or suffer to exist any Indebtedness
except (i) Indebtedness represented by the Loan, or any other Loan
Documents or other Obligations, (ii) trade debt incurred in the ordinary
course of such Debtor’s business in a manner and to an extent consistent with
past practices and necessary for the prudent operation of its business or
operation, including, without limitation, contingent liabilities under
Protection and Indemnity entries for club calls and back calls.
5.8 Advances
or Loans; No Transaction of Other Business or
Activities.
No
loans or advances to any Person shall be made by any Debtor.
5.9 Further
Assurances.
Each
Debtor will, promptly at any time and from time to time, at its sole expense,
execute and deliver, and cause any charterer under an Assigned Charter, Pledgor,
Collateral Vessel Owner, Guarantor and the Manager to execute and deliver,
to
Lender such further instruments and documents, and take such further action,
as
Lender may from time to time reasonably request in order to further carry out
the intent and purpose of the Loan Documents and to establish and protect the
rights, interests and remedies created, or intended to be created, in favor
of
Lender hereby and thereby, including, without limitation, the execution,
delivery, recordation and filing of financing statements and continuation
statements. The Debtors hereby authorize Lender, in such jurisdictions where
such action is authorized by law, to effect any such recordation or filing
of
financing statements and continuation statements without the signature of any
Debtor thereon and to file as valid financing statements in the applicable
financing statement records, photocopies hereof and of any other financing
statement executed in connection herewith. Lender agrees to provide the Debtors
with copies of UCC filings, but shall have no liability for failure to do so
and
such failure shall not serve as a defense to the performance by any party of
its
obligations under the Documents. The Debtors will pay, or reimburse Lender
for,
any and all reasonable fees, reasonable costs and expenses of whatever kind
or
nature incurred in connection with the creation, preservation and protection
of
Lender’s security interest in the Security Vessels, the Assignments and the
other Collateral, including, without limitation, all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, payments or discharge of any taxes or Liens upon or in respect of
the
Collateral not discharged as herein required and all other fees, reasonable
costs and expenses in connection with protecting, maintaining or preserving
the
Collateral and Lender’s interests therein, whether through judicial proceedings
or otherwise, or in connection with defending or prosecuting any actions, suits
or proceedings arising out of or related to any Security Vessel, the Pledge
and
the other Collateral and premiums for insurance with respect to any Security
Vessel; and all such amounts that are paid by Lender shall, until reimbursed
by
or on behalf of the Debtors, constitute Obligations of the Debtors secured
by
the Collateral.
5.10 No
Disposition of Collateral.
No
Debtor will and will not permit any charterer under an Assigned Charter,
Collateral Vessel Owner, Pledgor, Guarantor or the Manager sell, convey,
transfer, exchange, lease or otherwise relinquish possession or dispose of
any
of the Collateral (other than obsolete or worn out equipment disposed of and
replaced with equipment of the same or better quality and value, in the ordinary
course of business), or attempt or offer to do any of the foregoing, without
Lender’s prior written consent.
5.11 No
Liens.
The
Debtors will not and will not permit any charterer under an Assigned Charter,
Collateral Vessel Owner, Pledgor, Guarantor or the Manager to create, assume
or
suffer to exist any Lien of any kind upon the Collateral except for liens in
favor of Lender and Permitted Liens.
5.12 Environmental
Compliance.
(a)
The
Debtors shall, and shall require the Collateral Vessel Owners and that any
charterer under an Assigned Charter, and any and all subcharterers, managers,
employees, contractors, subcontractors, agents, representatives, Affiliates,
consultants, occupants and any and all other Persons (other than Lender) to
(i) comply in all material respects with all applicable Environmental
Laws,
(ii) use, employ, process, emit, generate, store, handle, transport,
dispose of and/or arrange for the disposal of any and all Hazardous Materials
in, on, or, directly or indirectly, related to or in connection with a Security
Vessel or any portion thereof in a manner consistent with prudent industry
practice and in compliance in all material respects with all applicable
Environmental Laws, and in a manner which does not pose a significant risk
to
human health, safety (including occupational health and safety) or the
environment, and (iii) obtain, maintain, and have on board each Security
Vessel any required Certificate of Financial Responsibility (“COFR”).
(b) The
Debtors shall, and shall require that a Collateral Vessel Owner and that any
charterer under an Assigned Charter or any other Persons in custody of a
Security Vessel shall, upon the occurrence or discovery of an Environmental
Event with respect to such Security Vessel, promptly carry out, using the
Debtors’ or such other Person’s own funds or proceeds of insurance with respect
thereto, such actions as may be necessary to remediate or cure such
Environmental Event in compliance in all material respects with all applicable
Laws, to comply in all material respects with all applicable Environmental
Laws
and to alleviate any significant risk to human health or the environment if
the
same arises from a condition on or in respect of such Security Vessel, whether
existing prior to or during the Note Term or the term of any charter. Once
a
Debtor or such other Person commences such actions, such Debtor shall, and
shall
cause such other Person to, thereafter diligently and expeditiously proceed
to
comply in all material respects in a timely manner with all Environmental Laws
and to eliminate any significant risk to human health or the environment arising
from such Environmental Event and shall, at the request of Lender, give periodic
progress reports to Lender on its compliance efforts and actions.
5.13 The
Debtors’ Title; Lender’s Security Interest; Personal
Property.
Each
Debtor shall and shall cause the Collateral Vessel Owners to warrant and defend
its good and marketable title to its Security Vessel and Lender’s perfected
first priority security interest in all Collateral (except its second priority
security interest in the Collateral Vessels, the Collateral Vessel Owners’
Second Mortgages and the Collateral Vessel Owners’ Second Assignments, wherein
each, Debtor shall cause the Collateral Vessel Owners to warrant and defend
Lenders perfected second priority security interest), against all claims and
demands whatsoever. The Debtors agree that the Security Vessels shall be, and
at
all times remain, separately identifiable personal property.
5.14 No
Changes in Any Debtor.
No
Debtor, and the Debtor shall procure that no Guarantor, Collateral Vessel Owner
or Pledgor, shall (a) liquidate, dissolve, consolidate or merge itself
into
or with any other entity; (b) materially change its business;
(c) change the form of organization of its business; or (d) without
thirty (30) days’ prior written notice to Lender, change its name, address or
jurisdiction of organization.
5.15 Use
of Vessels; Maintenance; Operation.
The
Debtors shall require and shall cause the Collateral Vessel Owners to require
at
all times that any charterer shall use its due diligence to operate, maintain,
repair, insure, man and supply the Security Vessels in a careful and proper
manner, comply in all material respects with and conform to all governmental
laws, rules and regulations and insurance restrictions relating thereto, and
operate the Security Vessels with competent and duly qualified personnel. The
Debtors shall and shall cause the Collateral Vessel Owner to ensure that, except
as specifically permitted from time to time by an appropriate license issued
by
the United States government and a copy of which shall have been theretofore
furnished to Lender, the Security Vessels shall not be traded, located, operated
or used, directly or indirectly, in a Prohibited Jurisdiction or by a Prohibited
Person, and no charterer nor Pledgor nor any subcharterer or shipper shall
be a
Prohibited Person or organized in a Prohibited Jurisdiction.
5.16 Indemnification.
Without
limiting the generality of any other provision hereof, the Debtors shall jointly
and severally indemnify, protect, save and keep harmless Lender, its agents,
servants, employees, officers, directors and shareholders from and against
any
reduction in the amount payable out of the Collateral to Lender with respect
to
the Obligations, or any other loss, cost or expense (including reasonable legal
fees) incurred by Lender, as the result of any breach of the provisions of
Section 5 hereof, except to the extent any such amount or loss is incurred
solely as a result of the gross negligence or willful misconduct of Lender
or
solely by the breach by Lender of its obligations, representations or warranties
under any of the Loan Documents.
5.17 Performance
of Contracts.
The
Debtors will, and shall require the Collateral Vessel Owner to duly observe
and
perform in all material respects all covenants and obligations to be performed
by it under any charter of any Security Vessel, including, without limitation,
the Head Charters, and will promptly take any and all action as may be
reasonably necessary to enforce its rights under any such charter or to secure
the performance by such charterer of the charterer’s obligations under any such
charter. No Debtor, Collateral Vessel Owner or charterer of any Assigned
Charter, Guarantor or any Affiliate of any of the foregoing shall enter into
any
charter or other contract for the use, employment or operation of a Security
Vessel for a term in excess of six (6) months (except for any renewal of any
Head Charter), without the prior written consent of Lender, which shall not
be
unreasonably withheld or delayed, but to which reasonable conditions may be
attached; provided, however, Lender shall have no obligation to consent to
any
charters or other contracts if, in Lender’s judgment such charter or other
contract would materially increase Lender’s risks in this transaction, reduce
its returns or otherwise disadvantage Lender.
5.18 Governmental
Approvals.
The
Debtors will obtain from time to time all permits, licenses, approvals and
authorizations of, and will file all registrations and declarations with, all
governmental authorities, bureaus and agencies required in connection with
the
execution, delivery, performance, validity or enforceability of this Agreement
(including, without limitation, the payment to Lender at its office address
referred to in this Agreement, in lawful money of the United States of America,
of the obligations of the Debtors under this Agreement) and any other Loan
Document and will take all action necessary to maintain each such permit,
license, approval or authorization, or registration or declaration, in full
force and effect.
5.19 Special
Purpose Covenants.
(a) Positive
Covenants.
Throughout the Note Term, each Debtor shall:
(i) hold
itself out to the public as a legal entity that is separate and distinct from
any other Person, including the other Debtor, the Collateral Vessel Owners,
Guarantors, Pledgor, charterer of Assigned Charters, the Manager, and their
respective Affiliates, and shall conduct its business solely in its own name
and
separate and apart from those of any Affiliate of such Debtor in order not
to
(1) mislead others to believe that they are transacting business with
or
relying on the credit of any entity other than such Debtor, or (2) except
as provided herein or in the other Loan Documents, suggest that such Debtor
is
responsible for the debts of any third party (including any Collateral Vessel
Owner, Pledgor, any charterer of Assigned Charters, Guarantors, the Manager
or
any Affiliate of such Debtor, Pledgor or the Manager) or that any such third
party is liable for the debts of Pledgor;
(ii) timely
file all tax returns required by applicable Law;
(iii) allocate
fairly and reasonably any overhead expenses that are shared with any Affiliate
of any Debtor, any charterer under any Assigned Charter, Pledgor, Guarantor
or
the Manager;
(iv) maintain
records and books of account and prepare financial statements showing its own
assets and liabilities as being separate from those of such Debtor or any other
Affiliate of Debtor, Collateral Vessel Owner, the Pledgor, any charterer under
any Assigned Charter, Guarantor or the Manager, in each case sufficient to
ensure that it will not be costly or difficult to ascertain the separate
identity of such Debtor’s assets from those of any Affiliate or the separate
financial condition of such Debtor from the financial condition of any
Affiliate;
(v) pay
its
liabilities out of its own funds, including salaries of any employees of such
Debtor, and not out of the funds of any Collateral Vessel Owner, the Pledgor,
charterer under any Assigned Charter, Guarantor, the Manager or any other
Affiliate of such Debtor or Pledgor;
(vi) use
separate stationery and invoices;
(vii) take
commercially reasonable steps to correct any known misunderstanding regarding
the separate identity and financial condition of such Debtor; and
(viii) maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated
business.
5.20 Obtain
Consents.
Each
Debtor will, and will cause each Guarantor, Pledgor, Collateral Vessel Owner
to,
without prejudice to Section 4 and this Section 5, 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
Guarantors’, the Pledgor’s and the Collateral Vessel Owners’ respective
obligations under the Loan Documents to which they are a party.
5.21 Taxes
and Assessments.
Each
Debtor will pay and discharge, and cause each of the Guarantors, the Pledgor
and
the Collateral Vessel Owners to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or property prior to the date upon which penalties attach thereto;
provided, however, that it shall not be required to pay and discharge, or cause
to be paid and discharged, any such tax, assessment, charge or levy so long
as
the legality thereof shall be contested in good faith and by appropriate
proceedings or other acts and it shall set aside on its books adequate reserves
with respect thereto.
5.22 Insurance.
Each
Debtor shall maintain and shall cause each Collateral Vessel Owner to maintain,
insurance on its Security Vessel in accordance with Section 1.22 of its
respective Mortgage or Collateral Vessel Owners’ Second Mortgage and shall
furnish Lender with all reports in accordance with Section 1.24 of such mortgage
. Subject to the foregoing sentence, each Debtor shall maintain, and cause
each
Guarantor, the Pledgor and the Collateral Vessel Owners to maintain, with member
clubs of the International Group of P&I Clubs insurance on all their
respective properties and against all such risks and in at least such amounts
as
are usually insured against by companies of established reputation engaged
in
the same or similar business from time to time (including, without limitation,
mortgagee's interest insurance additional perils (pollution) to be taken out
by
such mortgagee with costs to be born by the Debtors).
5.23 ISM
and ISPS Code and MTSA Matters.
Each
Debtor will:
(i) procure
that the relevant charterer will comply with and ensure that each Security
Vessel will comply with the requirements of the ISM Code , ISPS Code and MTSA
in
accordance with the implementation schedule thereof, including (but not limited
to) the maintenance and renewal of valid certificates pursuant thereto
throughout the duration of this Agreement;
(ii) procure
that any charterer will immediately inform Lender if there is any threatened
or
actual withdrawal of its DOC, SMC or the ISSC in respect of any Vessel;
and
(iii) procure
that the relevant charterer will promptly inform Lender upon the issue to the
relevant Debtor or charterer of a DOC and to any Security Vessel of an SMC
or
ISSC.
5.24 Charterer
and Information.
The
Debtors shall deliver to Lender all financial information of the charterers
of
the Assigned Charters available to the Debtors as Lender may from time to time
reasonably request (unless subject to a non-disclosure agreement prohibiting
such disclosure).
5.25 Stock
Exchange Listing.
If
TBS is
listed on NASDAQ Stock Exchange, do or cause to be done all things necessary
to
ensure that TBS remains listed on such stock exchange.
5.26 Negative
Covenants.
Throughout the Note Term, no Debtor shall:
(i) engage
in
any activity other than the ownership and operation of its Vessel and those
other activities expressly required or permitted in the Loan
Documents;
(ii) other
than as expressly provided in the Loan Documents, enter into any transaction
with Pledgor, any Collateral Vessel Owner, any charterer under an Assigned
Charter, any Guarantor, the Manager or any other Affiliate of Pledgor, any
charterer under an Assigned Charter, the Manager or such Debtor except on
arms-length terms;
(iii) make
any
loans or advances to any third party, including any Affiliate of such Debtor
(except only as provided in the Pooling Agreement), or buy or hold evidence
of
indebtedness issued by any Affiliate; or
(iv) identify
itself as a department or division of Pledgor, Guarantor, charterer under any
Assigned Charter, the Manager or any other Person.
5.27 Sale
or Pledge of Shares.
The
Debtors will not, and will procure that the Collateral Vessel Owners will not,
sell, assign, transfer, pledge or otherwise convey or dispose of any of the
shares (including by way of spin-off, installment sale or otherwise) of the
capital stock, or limited liability company interests, as the case may be,
of
either Debtor or the Collateral Vessel Owners.
5.28 Change
of Flag or Classification Society.
The
Debtors will not, and will procure that the Collateral Vessel Owners will not,
change the flag, class or Classification Society of any Security
Vessel.
5.29 Capital
Expenditures.
The
Debtors will not, and will procure that the Collateral Vessel Owners will not,
make any investment or material capital expenditures, excluding expenditures
for
drydocking and repairs for the Security Vessels.
5.30 Change
of Vessel Management.
The
Debtors will not, and will procure that the Collateral Vessel Owners will not,
change the charterer or otherwise change the technical or commercial management
of any Security Vessel.
5.31 Use
of Corporate Funds.
5.32
Other
than as provided in the Pooling Agreement, the Debtors will not permit any
Debtor, and will procure that no Collateral Vessel Owner is permitted, to pay
out any funds to any company or person except (i) in the ordinary course
of
business in connection with the management of the business of such Debtor or
Collateral Vessel Owner, as the case may be, including the operation and/or
repair of the Security Vessels and other vessels owned or operated by such
parties, (ii) the servicing of the Indebtedness permitted hereunder
(but
excluding, any prepayments of any Indebtedness other than the Loan) and (iii)
provided no Event of Default has occurred and is continuing, or will occur
as a
consequence of the payment thereof, the payment of dividends.
5.32 Issuance
of Shares.
The
Debtors will not issue or dispose of any shares of its own capital stock or
limited liability company interests, as the case may be, to any
Person.
5.33 Transactions
with Affiliates.
Other
than as provided in the Pooling Agreement, the Debtors will not enter into
any
transactions with any Affiliate unless on an arm's length basis, except, so
long
as no Event of Default, or event which, but for the giving of notice or passage
of time or both, would constitute an Event of Default, shall have occurred,
any
of the Guarantors may make investments in, capital investments in respect of,
or
loans to, or issue guarantees for its subsidiaries (including in respect of
construction financing).
5.34 Indebtedness.
Other
than as provided in the Pooling Agreement, the Debtors will not incur any
Indebtedness excluding Indebtedness hereunder to Lender and any Indebtedness
existing (or for which a written commitment has been made on or before the
date
hereof) on the date hereof.
5.35 Material
Contract.
The
Debtors will not, and will procure that the Collateral Vessel Owner will not,
amend or permit the amendment of any material provision of the Assigned
Charters.
5.36 No
Bankruptcy Petition.
Neither
Debtor, nor any Collateral Vessel Owner, will file a petition, or permit its
shareholders or directors to file a petition, under the United State Bankruptcy
Code, and TBS shall not include the Debtors or Collateral Vessel Owners in
any
such filings they make (unless required by applicable law to do
so).
5.37 Valuation
.
The
Appraisal Value of the Security Vessels during the Note Term Period shall be
greater than or equal to a minimum of 160% of the Loan Balances during such
period (the "Relevant Percentage"). The Appraisal Value of each Security Vessel
shall be determined at Lender’s discretion, but no less frequently than annually
on the anniversary of the Funding Date, on the basis of a valuation (the
"Valuation") by an Approved Shipbroker provided to Lender. In the event Lender
or the Debtors disagree with the Valuation, then the Debtors and Lender shall
each obtain a separate valuation (the "Additional Valuations") from an Approved
Shipbroker, and the Appraisal Value shall be determined to be the arithmetic
average of the Additional Valuations. All costs relating to any Valuation or
Additional Valuations shall be paid by the Debtors.
5.38 Collateral
Maintenance.
If the
Appraisal Value of the Security Vessels, as determined pursuant to Section
5.37 falls below the Relevant Percentage, within a period of ten (10)
Banking Days following receipt by the Debtors of written notice from Lender
notifying the Debtors 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 Debtors) the Debtors shall (a) deliver to Lender, upon
its
request, additional collateral satisfactory to Lender, in its sole discretion
(including the deposit of cash in a cash collateral account maintained with
Lender), or (b) prepay the Loan or part thereof such that (x) the sum
of
(i) the value of the Security Vessels, as determined in accordance with
the
latest valuation delivered pursuant to Section 5.37, plus (ii) the value
of
additional collateral other than cash collateral, such value to be determined
by
Lender when divided by (y) the Loan (less any cash collateral held by Lender
in
a cash collateral account) shall be equal to or greater than the Relevant
Percentage of the Loan.
5.39 Post-Funding
Date Filing.
Debtors’ covenant within 45 days of the Funding Date to have the lien of the
Mortgages and the Collateral Mortgages noted on the Record Book of the Maritime
Industry Authority of the Republic of the Philippines Department of
Transportation and Communication and shall provide Lender with evidence of
such
notation.
Section 6. SECURITY
INTEREST CONTINUING OBLIGATIONS OF DEBTORS.
6.1 Grant
of Security.
In
addition to, and not in lieu of, the grant of liens, rights and interests made
by the Debtors pursuant to the Assignments, the Pledge and the Mortgage, and
in
order to further secure the prompt and complete (x) payment (whether at the
stated maturity, by acceleration or otherwise) of all principal of, interest
on,
late fees and Breakage Costs with respect to the Loan and all other amounts
payable by the Debtors under the Loan Documents now in existence or hereafter
incurred, and (y) the performance and observance by each Debtor of all of the
agreements and covenants to be performed or observed by it for the benefit
of
Lender contained in the Assignments, the Pledge, the Mortgage and the other
Loan
Documents and in consideration of the Note, the premises and of the covenants
contained herein and in the other Loan Documents and of other good and valuable
consideration given to the Debtors by Lender at or before the Funding Date,
the
receipt of which is hereby acknowledged, the Debtors do hereby grant, bargain,
sell, convey, transfer, mortgage, assign, pledge, and confirm unto Lender and
its permitted successors and assigns, for the security and benefit of Lender,
a
security interest in, and mortgage lien on, all estate, right, title and
interest of any Debtor in, to and under, all and singular, the following
described properties, rights, interests and privileges whether now or hereafter
acquired:
(a) the
Vessels;
(b) continuing
rights of any Debtor in respect of any warranty, indemnity or agreement, express
or implied, as to title, materials, workmanship, design or patent infringement
or related matters with respect to the Vessels, and (ii) all rights, powers,
privileges, options and other benefits of Debtors thereunder (subject to such
reservation) with respect to the Vessels, including, without limitation, the
right to make all waivers and agreements, to give and receive all notices and
other instruments or communications, to take such action upon the occurrence
of
a default thereunder, including the commencement, conduct and consummation
of
legal, administrative or other proceedings, as shall be permitted thereby or
by
law, and to do any and all other things which Debtors are or may be entitled
to
do thereunder (subject to such reservation);
(c) all
property that may, from time to time, hereafter in accordance with the provision
of this Agreement, be expressly subjected to the Lien of this Agreement;
(d) all
records reflecting or relating to the foregoing; and
(e) all
Proceeds of the foregoing;
(all
of
the foregoing referred to in (a) through (e), together with the security
interests granted pursuant to the Mortgages, the Collateral Vessel Owners Second
Mortgage, the Pledge, the Assignments, the Collateral Vessel Owners Second
Assignments, shall be referred to as the “Collateral”).
provided,
however, that, notwithstanding any of the foregoing provisions of this Section
6.1, so long as no Event of Default shall have occurred and be continuing,
each
Debtor shall have the right, to the exclusion of Lender, to quiet enjoyment
of
its Vessel and the other Collateral and to possess, use, retain and control
its
Vessel and the other Collateral.
TO
HAVE
AND TO HOLD all and singular the Collateral unto Lender, its permitted
successors and assigns, forever, in trust, upon the terms and trusts herein
set
forth, for the benefit, security and protection of Lender from time to time,
and
for the uses and purposes and subject to the terms and provisions set forth
in
this Agreement.
It
is
expressly agreed that notwithstanding anything herein to the contrary, each
Debtor shall remain liable under the agreements and instruments granting the
security interests in the Collateral to perform all of its obligations
thereunder, and, except to the extent expressly provided herein or in any other
Loan Document, Lender shall not be required or obligated in any manner to
perform or fulfill any obligations of any Debtor under or pursuant to any
thereof, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim or take any action to collect
or
enforce the payment of any amount which may have been assigned to it or to
which
it may be entitled at any time or times.
6.2 Debtors
Not Relieved of Obligations.
(a) It
is
expressly agreed that, anything contained herein to the contrary
notwithstanding, (i) each Debtor shall at all times perform all of its
duties and obligations under any contracts or charters of its Vessel, including,
but not limited to, its Head Charter or similar contracts relating to the use
or
operation of its Vessel to the same extent as if this Agreement and the
Assignments had not been made, (ii) the exercise by Lender of any of
the
rights assigned hereunder shall not release any Debtor from any of its duties
or
obligations under any Head Charter or similar contracts relating to the use
or
operation of its Vessel, and (iii) Lender shall not have any obligation
or
liability under any Head Charter or similar contracts relating to the use or
operation of its Vessel by reason of this Agreement, the Assignments or the
receipt by Lender of any payment or property under any such charter or similar
contracts relating to the use or operation of its Vessel or pursuant hereto,
nor
shall Lender be obligated to perform or fulfill any of the duties or obligations
of the “owner” under any Head Charter or similar contracts relating to the use
or operation of its Vessel or to make any payment thereunder, or to make any
inquiry as to the nature or sufficiency of any payment or property received
by
it thereunder, or the sufficiency of performance by any Person thereunder,
or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts or the delivery of any property which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Lender
Appointed as Attorney-in-Fact.
Each
Debtor hereby irrevocably constitutes and appoints Lender, with full power
of
substitution, as its true and lawful attorney-in-fact with full and irrevocable
power and authority in the place and stead of such Debtor and in the name of
such Debtor or in its own name, from time to time following the occurrence
and
during the continuance of an Event of Default in Lender’s sole discretion to the
maximum extent permitted by applicable law, for the purpose of carrying out
the
terms of this Agreement or any other Loan Document, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to protect and preserve, and/or exercise its
rights and remedies hereunder and with respect to the Collateral and, without
limiting the generality of the foregoing, hereby gives Lender the power and
right, on behalf of such Debtor and without notice to or assent by such Debtor,
to do the following, upon the occurrence and during the continuance of an Event
of Default: to demand, enforce, collect, receive, receipt, and give release
for
any monies due or to become due under or arising out of or with respect to,
any
of the Collateral, and to endorse all checks and other instruments, and to
do
and take all such other actions relating to any of the Collateral, to file
any
claims or institute any proceedings with respect to any of the foregoing which
Lender deems necessary or desirable in its sole discretion, and to compromise
any such demand, claim or action. Each Debtor hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power
of
attorney is a power coupled with an interest and shall be
irrevocable.
The
powers conferred on Lender hereunder are solely to protect Lender’s interest in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Lender shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its
officers, directors, employees or agents shall be responsible to any Debtor
for
any act or failure to act (except for any act of willful misconduct or gross
negligence).
Section 7. EVENTS
OF DEFAULT.
Each
of
the following events shall constitute an event of default (herein called
“Event
of Default”)
under
this Agreement:
(a) The
Debtors shall fail to pay any amount of principal or interest when due or to
pay
any other Obligation within five (5) Business Days after the same becomes due
(whether on demand, at the stated maturity, by acceleration or otherwise);
or
(b) Any
representation or warranty made by any Debtor, Collateral Vessel Owner,
Guarantor, charterer under an Assigned Charter, Pledgor or the Manager (as
the
case may be) in this Agreement, any Mortgage or any other Loan Document, or
in
any document, certificate or financial or other statement now or hereafter
furnished by any Debtor, Collateral Vessel Owner, Guarantor, charterer under
any
Assigned Charter, Pledgor or the Manager in connection with this Agreement,
the
Mortgage or any other Loan Document shall at any time prove to be untrue or
misleading in any material respect as of the time when made or when deemed
to be
made; provided, however, that, if any fact or state of affairs was
misrepresented through demonstrable inadvertence and is corrected by the maker
of such representation to comply with the requirements of this Agreement within
ten (10) days of becoming aware thereof, such Event of Default shall be deemed
cured; or
(c) Any
Debtor shall fail to observe any covenant, condition or agreement contained
in
Sections 5.6, 5.7, 5.8, 5.10, 5.13, 5.14, 5.19, 5.22, 5.26, 5.36, 5.37,
5.38 or 5.39 hereof, and such failure shall be continuing; or
(d) Any
Debtor, charterer under an Assigned Charter, Pledgor, Collateral Vessel Owner,
Guarantor or the Manager shall fail to observe or perform any other covenant,
condition or agreement contained in this Agreement or any other Loan Document,
and such failure shall continue unremedied for a period of thirty (30) days
after the earlier of (i) the date on which a Debtor obtains knowledge
of
such failure, or (ii) the date on which notice thereof shall be given
by
Lender to the Debtors; or
(e) Any
Debtor, Pledgor, Collateral Vessel Owner, Guarantor or charterer under an
Assigned Charter shall (i) default in the payment of any Indebtedness
to
Lender or to any of Lender’s Affiliates beyond the period of grace, if any,
provided with respect thereto, or (ii) default in the performance or
observance of any other term, condition or agreement contained in any such
obligation or in any agreement relating thereto, if the effect of such default
is to cause, or permit, the holder or holders of such obligation (or a trustee
on behalf of such holder or holders) to cause such obligation to become due
prior to its stated maturity or to realize upon any collateral given as security
therefor, or (iii) default in the payment of any Indebtedness singly
or in
the aggregate in a principal amount greater than U.S.$250,000 to any Person
other than Lender or any of Lender’s Affiliates beyond the period of grace, if
any, or (iv) default in the performance or observance of any other term,
condition or agreement contained in any such obligation or in any agreement
relating thereto, if the effect of such default is to cause, or permit, the
holder or holders of such obligation (or a trustee on behalf of such holder
or
holders) to cause such obligation to become due prior to its stated maturity
or
to realize upon any collateral given as security therefor; or
(f) The
institution by any Debtor, charterer under an Assigned Charter, Collateral
Vessel Owner, Pledgor or Guarantor of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by any of them to the institution of bankruptcy
or
insolvency proceedings against it, or the commencement by any Debtor, Collateral
Vessel Owner, Pledgor, charterer under an Assigned Charter or Guarantor of
a
voluntary proceeding or case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law, or the consent by any of them
to
the filing of any such petition or to the appointment of or taking possession
by
a receiver, liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of any Debtor, Collateral Vessel Owner, Pledgor, charterer
under an Assigned Charter or Guarantor or of any substantial part of their
respective properties, or the making by any of them of any assignment for the
benefit of creditors or the admission by any of them of an inability to pay
its
debts generally as they become due or its willingness to be adjudicated a
bankrupt or the failure of any Debtor, Collateral Vessel Owner, Pledgor,
charterer under an Assigned Charter or Guarantor generally to pay its debts
as
they become due or the taking of corporate action by any Debtor, Collateral
Vessel Owner, Pledgor, charterer under an Assigned Charter or Guarantor in
furtherance of any of the foregoing; or
(g) The
entry
of a decree or order for relief by a court having jurisdiction in respect of
any
Debtor, Collateral Vessel Owner, charterer under an Assigned Charter, Pledgor
or
Guarantor, adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking a reorganization, arrangement, adjustment
or
composition of or in respect of such Person in an involuntary proceeding or
case
under the federal bankruptcy laws, as now or hereafter constituted, or any
other
applicable federal, state or foreign bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or other similar official) of the such Person, or of any
substantial part of its property, or ordering the winding-up or liquidation
of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) days or an assignment for the benefit of
creditors of a majority of all the assets of any Debtor, any Collateral Vessel
Owner, any charterer under an Assigned Charter, Pledgor or Guarantor;
or
(h) A
Mortgage Event of Default (as defined in any Mortgage or Collateral Vessel
Owners’ Second Mortgage) shall have occurred or be continuing; or
(i) The
receipt by Lender of its first notice of an oil spill or discharge or a
hazardous discharge by or an environmental complaint against any Security Vessel
or any Debtor or Collateral Vessel Owner from a source other than a Debtor,
where Lender does not receive notice (which may be given in oral form, provided
same is followed with all due dispatch by written notice given by Certified
Mail, Return Receipt Requested) of such hazardous discharge or environmental
complaint from a Debtor or the Manager within three (3) Business Days from
the
time Lender first receives said notice from a source other than a Debtor or
the
Manager; or
(j) Assertion
by any federal, state, or local agency of a Lien (i) upon any Collateral,
or (ii) if it materially adversely affects any Debtor, Collateral Vessel Owner,
charterer under any Assigned Charter or Guarantor, upon any of the other assets,
equipment, property, leaseholds or other facilities of any Debtor by reason
of
the occurrence of a hazardous discharge or environmental complaint and such
lien
is not removed within ten (10) days of Debtors becoming aware thereof or as
otherwise provided in the Mortgages or the Collateral Vessel Owners’ Mortgages;
or
(k) Any
party
thereto shall terminate, purport to terminate, rescind or cease to perform
in
any material respect the provisions of any Assigned Charter; or
(l) This
Agreement or any other Loan Document shall cease to be in full force and effect
or shall be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Debtor, Pledgor, Collateral Vessel Owner,
charterer under any Assigned Charter, Guarantor or Manager.
Section 8. REMEDIES.
8.1 If
an
Event of Default specified in Sections 7(f) or (g) above shall occur,
then,
and in any such event, the Commitment shall immediately terminate and the
principal amount outstanding under the Note, together with accrued interest
thereon, and all other amounts owing under or with respect to this Agreement
and
the other Loan Documents, shall become immediately due and payable without
any
notice or other action by Lender, and if any other Event of Default shall occur
and be continuing, then, and in any such event, Lender may, by notice of default
given to the Debtors, (a) terminate forthwith the Commitment and/or
(b) declare the Note and all other amounts owing thereunder or with
respect
to this Agreement to be forthwith due and payable, whereupon the principal
amount of the Note, together with accrued interest thereon and all other amounts
owing thereunder or with respect to this Agreement and the other Loan Documents
shall become immediately due and payable without presentment, demand, protest
or
other notice of any kind, all of which are hereby expressly waived to the extent
permitted by applicable law. During the continuance of any Event of Default
hereunder, Lender shall have the right to pursue and enforce any of its rights
and remedies under this Section 8.
8.2 If
an
Event of Default shall occur and be continuing, Lender may exercise, in addition
to all other rights and remedies granted to it in this Agreement, the Note,
the
Mortgages, the Pledge , the Collateral Vessel Owners’ Guaranty, the Collateral
Vessel Owners’ Second Mortgages, the Collateral Vessel Owners’ Second
Assignments, the Guaranty, the Debtors’ Guaranty, the Assignments, any other
Loan Document and in any other instrument or agreement securing, evidencing
or
relating to the Obligations, all rights and remedies of secured parties under
the Code or under any other applicable law. Without limiting the generality
of
the foregoing, each Debtor agrees that in any such event, Lender may exercise
any or all of such Debtor’s respective rights, and Lender, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Debtors, the Collateral Vessel Owners, Pledgor, Guarantors, any charterer
under any Assigned Charter or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give an option or options
to
purchase or otherwise dispose of and deliver the Collateral (or contract to
do
so), or any part thereof, in one or more parcels at public or private sale
or
sales, at any exchange or broker’s board or at any of Lender’s offices or
elsewhere at such prices as it may deem best, for cash or a credit or for future
delivery without assumption of any credit risk. Lender shall have the right
upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Debtor, Collateral
Vessel Owner or Pledgor, which right or equity is hereby expressly released
to
the extent permitted by applicable law. Each Debtor further agrees, at Lender’s
request, to assemble and to cause Pledgor and the Collateral Vessel Owners
to
assemble the Collateral, make it available to Lender at places which Lender
shall reasonably select, whether at any Debtor’s premises or elsewhere. Lender
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale (after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care, safekeeping
or otherwise of any or all of the Collateral or in any way relating to the
rights of Lender hereunder, including reasonable attorneys’ fees and expenses)
to the payment in whole or in part of the Obligations, in such order as Lender
may elect and only after so applying such net proceeds and after the payment
by
Lender of any other amount required by any provision of law need Lender account
for the surplus, if any, to the Debtor. To the extent permitted by applicable
law, each Debtor waives all claims, damages, and demands against Lender arising
out of the repossession, retention or sale of the Collateral. Each Debtor agrees
that Lender need not give more than ten (10) days’ notice (which notification
shall be deemed given when mailed, postage prepaid, addressed to such Debtor
at
its address set forth in Section 9.4 hereof) of the time and place of
any
public sale or of the time after which a private sale may take place and that
such notice is reasonable notification of such matters. The Debtors shall be
jointly and severally liable for any deficiency if the proceeds of any sale
or
disposition of the Collateral are insufficient to pay any and all Obligations
due Lender under any of this Agreement, the Note and the other Loan
Documents.
8.3 The
Debtors agree to pay all costs of Lender, including reasonable attorneys’ fees
and disbursements, incurred with respect to the collection of any of the
Obligations and the enforcement of any of their rights hereunder or under any
other of the Loan Documents.
8.4 The
Debtors hereby waive presentment, demand, protest or any notice (to the extent
permitted by applicable law) of any kind in connection with this Agreement,
any
other Loan Document or the Collateral.
Section 9. MISCELLANEOUS
9.1 Limitation
of Liability/Continuing Indemnities.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that any court or other judicial body of competent jurisdiction determines
that legal principles of fraudulent conveyances, fraudulent transfers or similar
concepts are applicable in evaluating the enforceability against any Debtor
or
its respective assets of this Agreement and that under such principles, this
Agreement would not be enforceable against such Debtor or its assets unless
the
following provisions of this Section 9.1 had effect, then, the maximum liability
of each Debtor hereunder (the “Maximum
Liability Amount”)
shall
be limited so that in no event shall such amount exceed the lesser of (i) the
aggregate outstanding principal amount of the Loan and (ii) an amount equal
to
the aggregate, without double counting, of (a) ninety-five percent (95%) of
such
Debtor’s Adjusted Net Worth (as hereinafter defined) on the date hereof, or on
the date enforcement of this Agreement is sought (the “Determination
Date”),
whichever is greater and (b) the amount of any Valuable Transfer (as hereinafter
defined) to such Debtor; provided that
such
Debtor’s liability under this Agreement shall be further limited to the extent,
if any, required so that the obligations of such Debtor under this Agreement
shall not be subject to being set aside or annulled under any applicable law
relating to fraudulent transfers or fraudulent conveyances. As used herein
“Adjusted
Net Worth”
of the
respective Debtor shall mean, as of any date of determination thereof, an amount
equal to the lesser of (a) an amount equal to the excess of (i) the amount
of
the present fair saleable value of the assets of such Debtor over (ii) the
amount that will be required to pay such Debtor’s probable liability on its then
existing debts, including contingent liabilities (exclusive of its contingent
liabilities hereunder), as they become absolute and matured, and (b) an amount
equal to (i) the excess of the sum of such Debtor’s property at a fair valuation
over (ii) the amount of all liabilities of such Debtor, contingent or otherwise
(exclusive of its contingent liabilities hereunder), as such terms are construed
in accordance with applicable laws governing determinations of the insolvency
of
debtors. In determining the Adjusted Net Worth of
a
Debtor for purposes of calculating the Maximum Liability Amount for such Debtor,
the liabilities of such Debtor to be used in such determination pursuant to
each
clause (ii) of the preceding sentence shall in any event exclude (a) the
liability of such Debtor under this Agreement and (b) the liabilities of such
Debtor subordinated in right of payment to this Agreement. As used herein
“Valuable
Transfer”
shall
mean, in respect of such Debtor, (a) all loans, advances or capital
contributions made to such Debtor with proceeds of the Loan , (b) all debt
securities or other obligations of such Debtor acquired from such Debtor or
retired by such Debtor with proceeds of the Loan
(c)
the fair market value of all property acquired with proceeds of the Loan and
transferred, absolutely and not as collateral, to such Debtor, (d) all equity
securities of such Debtor acquired from such Debtor with proceeds of the Loan,
and (e) the value of any other economic benefits in accordance with applicable
laws governing determinations of the insolvency of debtors, in each such case
accruing to such Debtor as a result of the Loan and this Agreement.
9.2 Customer
Identification- USA Patriot Act Notice; OFAC and Bank Secrecy
Act.
Lender
hereby notifies each of the Debtors that pursuant to the requirements of the
USA
Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001)
(the
“Act”), and Lender’s policies and practices, Lender is required to obtain,
verify and record certain information and documentation that identifies each
Debtor, which information includes the name and address of each Debtor and
such
other information that will allow the Lender to identify each Debtor in
accordance with the Act. In addition, each Debtor shall (a) ensure that no
Person who owns a controlling interest in or otherwise controls any Debtor
or
any subsidiary of any Debtor is or shall be listed on the Specially Designated
Nationals and Blocked Person List or other similar lists maintained by the
Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or
included in any Executive Orders, (b) not use or permit the use of the proceeds
of the Loan to violate any of the foreign asset control regulations of OFAC
or
any enabling statute or Executive Order relating thereto, and (c) comply, and
cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act
(“BSA”) laws and regulations, as amended.
9.3 No
Waiver; Cumulative Remedies.
No
failure or delay on the part of Lender in exercising any right, remedy, power
or
privilege hereunder or under the Note or any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
No right or remedy in this Agreement or any other Loan Document is intended
to
be exclusive but each shall be cumulative and in addition to any other remedy
referred to herein or otherwise available to Lender at law or in equity; and
the
exercise by Lender of any one or more of such remedies shall not preclude the
simultaneous or later exercise by Lender of any or all such other remedies.
To
the extent permitted by law, each Debtor waives any rights now or hereafter
conferred by statute or otherwise which limit or modify any of Lender’s rights
or remedies under this Agreement or any other Loan Document.
9.4 Notices.
All
notices, requests and demands to or upon any party hereto shall be deemed to
have been duly given or made when sent by telecopier with telephonic
confirmation, or deposited in the United States mail, first class postage
prepaid, or sent by a nationally recognized overnight courier service, addressed
to such party as follows, or to such other address as may be hereafter
designated in writing by such party to the other party hereto:
|
Sterling
Shipping Corp.
X.X.
Xxx XX 0000
Xxxxxxxx
XXXX
XXXXXXX
Xxxxxxxxx:
Xxxxxxx X. Xxxx
Facsimile
No.: 0000-000-0000
|
|
|
Remsen
Navigation Corp.
X.X.
Xxx XX 0000
Xxxxxxxx
XXXX
XXXXXXX
Xxxxxxxxx:
Xxxxxxx X. Xxxx
Facsimile
No.: 0000-000-0000
|
|
|
with
a copy to:
|
TBS
Shipping Services Inc.
000
Xxxx Xxxxxx Xxxxxx Xx.
Xxxxxxx,
XX 00000 XXX
Attention:
Xxxxxxxxx X. Xxxxxx
Facsimile
No.: 914/961-5121
|
|
and:
|
Xxxxxxxx
& Xxxxxxx
00
Xxxxxxxx
Xxx
Xxxx, XX 00000 XXX
Attention:
Xxxxx X. Xxxxxx, Esq.
Facsimile
No.: 212/797-1212
|
|
Lender:
|
XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC., ACTING THROUGH ITS DIVISION,
XXXXXXX XXXXX CAPITAL
000
X. XxXxxxx Xx.
Xxxxxxx,
XX 00000
Attention:
Group Senior Credit Officer
Facsimile
No.: 312/750-6108
|
|
with
a copy to:
|
XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC., ACTING THROUGH ITS DIVISION,
XXXXXXX XXXXX CAPITAL
000
X. XxXxxxx Xx.
Xxxxxxx,
XX 00000
Attention:
Portfolio Manager
Facsimile
No.: 312/750-6108
|
| 9.5 |
Payment
of Expenses and Taxes; Indemnity; Performance by Lender of the Debtors’
Obligations.
|
(a) The
Debtors agree, whether or not the transactions contemplated by this Agreement
and the other Loan Documents shall be consummated, to be jointly and severally
liable for and to pay (i) all reasonable costs and expenses of Lender
in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Loan Documents, and the other documents relating hereto,
including, without limitation, the fees and disbursements of counsel to Lender;
(ii) all fees and taxes in connection with the recording of this Agreement,
the Mortgages, the Collateral Vessel Owners’ Second Mortgages, and the other
Loan Documents or any other document or instrument required hereby or thereby;
and (iii) all reasonable costs and expenses of Lender in connection
with
the enforcement of this Agreement, the Note and the other Loan Documents,
including all reasonable legal fees and disbursements arising in connection
therewith. The Debtors also jointly and severally agree to pay, and to jointly
and severally indemnify and save Lender harmless from and against any and all
taxes, including, without limitation, non-U.S. taxes imposed on Lender and
measured by or with reference to income of Lender based on receipt of payments
made or on behalf of any Debtor pursuant to this Agreement, the Note or other
Loan Documents, sales, use, stamp and personal property taxes (other than any
corporate income, capital, franchise or similar taxes payable by Lender with
respect to the payments made to Lender hereunder or thereunder) and all license,
filing, and registration fees and assessments and other charges, if any, which
may be payable or determined to be payable in connection with the execution,
delivery and performance of this Agreement, the Note or the other Loan Documents
or any modification thereof or supplement thereto.
(b) The
Debtors hereby further jointly and severally agree, whether or not the
transactions contemplated by this Agreement shall be consummated, and whether
or
not the Loan has been made by Lender to the Debtors, to jointly and severally
pay, indemnify, and hold Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, out-of-pocket costs, expenses (including legal expenses)
or
disbursements of any kind or nature whatsoever arising out of or with respect
to
this Agreement, the other Loan Documents, the Security Vessels, the other
Collateral or Lender’s interest therein, including, without limitation, the
execution, delivery, enforcement, performance, administration, amendment or
modification of this Agreement, the Note and the other Loan Documents and the
manufacture, purchase, ownership, possession, use, selection, operation or
condition of any Security Vessel or any part thereof (the foregoing being
referred to as the “indemnified liabilities”); provided, however, that the
Debtors shall not have any obligation hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of
Lender.
(c) If
any
Debtor fails to perform or comply, or otherwise cause performance or compliance,
with such agreement, the expenses of Lender incurred in connection with such
performance or compliance, together with interest thereon at the rate provided
for in the Note shall be payable by the Debtor to Lender on demand and until
such payment shall constitute Obligations secured hereby.
9.6 Proposal
Fee.
Debtors
have already paid, and Lender acknowledges receipt of the U.S.$87,500 Proposal
Fee.
9.7 Survival
of Representations and Warranties.
All
representations and warranties made in this Agreement or any of the other Loan
Documents and any certificates delivered pursuant hereto or thereto shall
survive the execution and delivery of this Agreement and the making of the
Loan
hereunder and the agreements contained in Section 9.3 hereof shall survive
payment of the Note.
9.8 Amendments;
Waivers.
No
provision of this Agreement, the Note, any other Loan Document or any related
agreements may be amended or modified in any way, nor may noncompliance
therewith be waived, except pursuant to a written instrument executed by Lender
and the Debtors. In the case of any waiver, Lender and the Debtors shall be
restored to their former position and rights hereunder, under the Note, any
other Loan Document and under any related agreements, and any Default or Event
of Default waived shall be deemed to be cured and not continuing, but no such
waiver shall in any way be, or be construed to be, a waiver of any other or
subsequent Default or Event of Default, or impair any right consequent thereon.
9.9 Counterparts.
This
Agreement may be executed by the parties hereto on any number of separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
9.10 Authorization
to Date, Complete Blanks and Correct Errors.
Each
Debtor hereby irrevocably authorizes Lender and Lender’s agents, representatives
and employees to date, to complete any blank spaces contained in, and to correct
any typographical or mathematical errors appearing in, this Agreement, the
Note
or in any other Loan Documents or other documents pertaining hereto or thereto.
9.11 Merger
Clause.
This
Agreement and the other Loan Documents contain the complete, final and exclusive
statement of the terms of the agreement between Lender and the Debtors relating
to the transactions hereby contemplated
9.12 Successors
or Assigns.
This
Agreement shall inure to the benefit of Lender, its successors and assigns,
and
shall be binding upon the successors of either of the Debtors. The rights and
obligations of the Debtors under this Agreement may not be assigned or
delegated. Lender reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Lender’s rights
and obligations hereunder, in the Note, in any other Loan Document, in the
Collateral and/or the Obligations held by it to others at any time and from
time
to time; and Lender may disclose to any such purchaser, assignee, transferee
or
participant (the “Participant”), or potential Participant, this Agreement and
all information, reports, financial statements and documents executed or
obtained in connection with this Agreement which Lender now or hereafter may
have relating to the Loan, either of the Debtors, or the business of either
Debtor. Lender shall, acting for this purpose as an agent of each of the
Debtors, maintain at its offices a register for the recordation of the names
and
addresses of its participants or assignees, and the amount and terms of its
participations and assignments including specifying any such participant’s or
assignee’s entitlement to payments of principal and interest, and any payments
made, with respect to each such participation or assignment. The Debtors hereby
grant to any Participant all liens, rights and remedies of Lender under the
provisions of this Agreement or any other documents relating hereto or under
applicable laws. Each of the Debtors agrees that any Participant may enforce
such liens and exercise such rights and remedies in the same manner as if such
Participant were Lender and a direct creditor of the Debtors.
9.13 Construction.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such 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.
To
the extent permitted by law, each Debtor hereby waives any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.
THIS
AGREEMENT AND (EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN ANY OTHER LOAN
DOCUMENT) THE OTHER LOAN DOCUMENTS SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, UNITED STATES
OF AMERICA, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE
(WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN TITLE 14
OF
ARTICLE 5 OF THE GENERAL OBLIGATIONS LAW).
9.14 Jurisdiction.
EACH
DEBTOR HEREBY IRREVOCABLY CONSENTS AND AGREES THAT ANY LEGAL ACTION, SUIT,
OR
PROCEEDING ARISING OUT OF OR IN ANY WAY IN CONNECTION WITH THIS AGREEMENT MAY
BE
INSTITUTED OR BROUGHT IN THE COURTS OF THE STATE OF NEW YORK, IN THE COUNTY
OF
NEW YORK, OR THE UNITED STATES COURTS FOR THE SOUTHERN DISTRICT OF NEW YORK,
AS
LENDER MAY ELECT, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH DEBTOR
HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF
ANY
SUCH COURT, AND TO ALL PROCEEDINGS IN SUCH COURTS. EACH DEBTOR IRREVOCABLY
CONSENTS TO SERVICE OF ANY SUMMONS AND/OR LEGAL PROCESS BY REGISTERED OR
CERTIFIED UNITED STATES AIR MAIL, POSTAGE PREPAID, TO SUCH DEBTOR AT THE ADDRESS
SET FORTH IN SECTION 9.4 HEREOF, SUCH METHOD OF SERVICE TO CONSTITUTE,
IN
EVERY RESPECT, SUFFICIENT AND EFFECTIVE SERVICE OF PROCESS IN ANY SUCH LEGAL
ACTION OR PROCEEDING. NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT TO
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT
TO
BRING ACTIONS, SUITS OR PROCEEDINGS IN THE COURTS OF ANY OTHER APPROPRIATE
JURISDICTION. EACH DEBTOR FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN
ANY
SUCH LEGAL ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES OF
AMERICA, BY SUIT ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH
SHALL
BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF THE LIABILITY.
9.15 Waiver
of Trial by Jury. EACH
DEBTOR AND LENDER IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS
AGREEMENT IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY
JURY.
9.16 Necessary
or Indispensable Parties.
EACH DEBTOR WAIVES ANY CLAIM OR DEFENSE IT MAY HAVE THAT ANY OTHER DEBTOR,
PLEDGOR, GUARANTOR, COLLATERAL VESSEL OWNER, CHARTERER OF AN ASSIGNED CHARTER,
OR ANY OTHER PERSON WHATSOEVER IS EITHER A NECESSARY OR INDISPENSABLE PARTY
IN
ANY ACTION COMMENCED BY LENDER AGAINST SUCH DEBTOR’S VESSEL OR AGAINST SUCH
DEBTOR IN ANY WAY IN RESPECT OF THE LOAN, ANY VESSEL, THIS AGREEMENT, THE NOTE
OR ANY OTHER LOAN DOCUMENT.
[signature
page follows]
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above
written.
|
STERLING
SHIPPING CORP.
By:
Name:
Xxxx XxXxxxx
Title:
Attorney-in-Fact
|
|
|
REMSEN
NAVIGATION CORP.
By:
Name:
Xxxx XxXxxxx
Title:
Attorney-in-Fact
|
|
|
XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC., acting through its division,
Xxxxxxx Xxxxx Capital
By:
Name:
Title:
|
ACKNOWLEDGMENT
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
SS.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
this
15 day of December, 2005 before me personally appeared Xxxx XxXxxxx, who, being
by me duly sworn, deposes and says that she resides
at _______________________________,
that
he
is Attorney-in-Fact of STERLING SHIPPING CORP. the corporation described in
and
which executed the foregoing instrument; and that he signed her name thereto
by
order of the Board of Directors of said corporation and the said instrument
is
the act and deed of said corporation.
In
witness whereof, I have hereunto set my hand and affixed my official seal.
________________________________________
Notary
Public
ACKNOWLEDGMENT
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
SS.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
this
___ day of December, 2005 before me personally appeared Xxxx XxXxxxx, who,
being
by me duly sworn, deposes and says that she resides
at _______________________________,
that
he
is Attorney-in-Fact of REMSEN NAVIGATION CORP., the corporation described in
and
which executed the foregoing instrument; and that he signed her name thereto
by
order of the Board of Directors of said corporation and the said instrument
is
the act and deed of said corporation.
In
witness whereof, I have hereunto set my hand and affixed my official seal.
________________________________________
Notary
