UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
January 18, 2005 (January 12, 2005)
___________________
TORCH OFFSHORE, INC.
(Exact Name of Registrant as Specified in its Charter)
000-32855
(Commission File Number)
Delaware 74-2982117
(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification No.)
401 Whitney Avenue, Suite 400
Gretna, Louisiana 70056-2596
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(504) 367-7030
___________________
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the Registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
Item 1.01 Entry into a Material Definitive Agreement.
On January 12, 2005, Torch Offshore, Inc. (the "Company"),
and its wholly-owned subsidiaries, Torch Offshore, L.L.C.
and Torch Express, L.L.C., each debtors-in-possession under
Chapter 11 of the U.S. Bankruptcy Code, entered into an
agreement with Regions Bank and Export Development Canada
("EDC") (collectively, the "Lenders") for debtor-in-
possession financing (the "DIP Facility").
The DIP Facility provides a $6.9 million revolving credit
facility and a $2.0 million discretionary letter of credit
facility to fund the Company's working capital requirements
and other corporate purposes during the Company's Chapter 11
proceedings. The credit facilities are equally shared
between Regions Bank and EDC. The interest rate on the DIP
Facility is the prime rate plus 4.00% per annum.
The DIP Facility requires the Company to meet certain
obligations, including the delivery of a weekly written
report with respect to the cash flow forecast compared to
actual results, quarterly and annual financial statements,
and certificates of compliance on a quarterly and annual
basis. The Company is also subject to limitations on paying
indebtedness, creating liens against their property, and the
weekly actual borrowing base test (as defined) cannot vary
by more than 5% (in the negative) from the Company's
forecasted borrowing base test (as defined).
Amounts owed by the Company under the DIP Facility may be
accelerated following certain events of default, including,
but not limited to: failure of the Company to make principal
or interest payments under the DIP Facility; breaches of
certain covenants, representations and warranties set forth
in the DIP Facility; the conversion of the Company's Chapter
11 case to a Chapter 7 case under the U.S. Bankruptcy Code
or the appointment of a trustee pursuant to Chapter 7 or
Chapter 11 of the U.S. Bankruptcy Code; default under any
post-petition indebtedness; failure of the U.S. Bankruptcy
Court to approve a Final Order before January 31, 2005; and
a material adverse effect impacting the business or property
of the Company and its wholly-owned subsidiaries, taken as a
whole.
The DIP Facility has received interim approval (the "Interim
Order") from the U.S. Bankruptcy Court for the Eastern
District of Louisiana. Pursuant to the terms of the DIP
Facility, the Company will have access to the interim
funding through April 1, 2005, subject to a budget and other
restrictions. In addition, the DIP Facility and Interim Order
permit the use of cash collateral (defined as cash plus cash
receipts on receivables) by the Company.
A copy of the Debtor-in-Possession Credit Agreement is filed
as Exhibit 10.1 and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
The information provided in Item 1.01 of this Current Report
regarding the DIP Facility is incorporated into this Item
2.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
-------------- -----------
10.1 Debtor-in-Possession Credit Agreement dated
January 12, 2005 by and among Torch Offshore,
Inc., Torch Offshore, L.L.C. and Torch
Express, L.L.C. and the Undersigned Lenders,
including Regions Bank as Agent for the
Lenders.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
TORCH OFFSHORE, INC.
By: /s/ ROBERT E. FULTON
Date: January 18, 2005 -------------------------
Robert E. Fulton
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
10.1 Debtor-in-Possession Credit Agreement dated
January 12, 2005 by and among Torch Offshore,
Inc., Torch Offshore, L.L.C. and Torch
Express, L.L.C. and the Undersigned Lenders,
including Regions Bank as Agent for the
Lenders.
Exhibit 10.1
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
THIS DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this
"Agreement") is effective the 12th day of January, 2005 (the
"Effective Date"), and is made and entered into by and among
TORCH OFFSHORE, INC., a Delaware corporation ("Borrower"),
TORCH OFFSHORE, LLC ("TOLLC") and TORCH EXPRESS, LLC
("TELLC" and, together with TOLLC, the "Guarantors"), each
debtors-in-possession in cases pending under chapter 11 of
the Bankruptcy Code (defined below), the undersigned Lenders
(as hereinafter defined), including Regions Bank in its
capacity as a Lender hereunder and as Agent for the Lenders
under this Agreement.
WITNESSETH:
WHEREAS, on January 7, 2005 (the "Petition Date"), the
Borrower and the other Loan Parties (defined below) filed
voluntary petitions with the United States Bankruptcy Court
for the Eastern District of Louisiana (including any other
court having jurisdiction over the Cases, the "Bankruptcy
Court") initiating cases under chapter 11 of the Bankruptcy
Code, Case Nos. 05-10137, 05-10138 and 05-10140 (each, a
"Case" and, collectively, the "Cases"), and the Loan Parties
have continued in the possession of their assets and in the
management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code;
WHEREAS, the Borrower has requested that the Lenders
and the Agent enter into this Agreement to provide (i) a
$6,900,000 committed revolving credit facility and (ii) a
$2,000,000 discretionary letter of credit facility, all of
the Borrower's obligations under which are to be guaranteed
by the other Loan Parties and secured as provided in the
Interim Order (defined below) or the Final Order (defined
below), when applicable, and in the Security Documents, and
the proceeds of which may only be used as expressly
permitted by the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto hereby mutually promise and agree as follows:
SECTION l. DEFINITIONS.
1.1 Definitions. In addition to the terms defined
elsewhere in this Agreement or in any Exhibit or Schedule
hereto, when used in this Agreement, the following terms
shall have the following meanings (such meanings shall be
equally applicable to the singular and plural forms of the
terms used, as the context requires):
Agent means Regions Bank in its capacity as agent for
the Lenders hereunder and its successors in such capacity.
Applicable Rate means the Base Rate plus 4.00% per
annum.
Assignment Agreement means any of those certain
Assignment Agreements described in Section 11.13 herein.
Assignment of Earnings has the meaning ascribed thereto
in Section 5.6(b).
Bankruptcy Code means Title 11 of the United States
Code, as heretofore and hereafter amended, and codified as
11 U.S.C. section 101, et seq.
Base Rate means the "prime rate" as published in the
The Wall Street Journal on a daily basis, or, if The Wall
Street Journal suspends publication of the "prime rate", the
interest rate announced from time to time by Regions at its
main office as its "commercial base rate" on commercial
loans (which rate shall fluctuate as and when said
commercial base rate shall change). Such commercial base
rate is not the lowest interest rate offered by Regions to
its customers.
Borrower's Representative means any one of Lyle G.
Stockstill or Robert E. Fulton or any other person
subsequently authorized by a corporate resolution, duly
authorized and adopted by the board of directors of Borrower
in form acceptable to Lenders.
Budget has the meaning set forth in Section 8.3.
Business Day means any day except a Saturday, Sunday,
or legal holiday observed by any Lender.
Capitalized Lease means any lease of Property, whether
real and/or personal, by a Person as lessee which as
determined in accordance with GAAP is required to be
capitalized on the balance sheet of such Person.
Capitalized Lease Obligations of any Person means, as
of the date of any determination thereof, the amount at
which the aggregate rental obligations due and to become due
under all Capitalized Leases under which such Person is a
lessee would be reflected as a liability on a balance sheet
of such Person as determined in accordance with GAAP.
Carve Out means, solely effective after receipt by the
Borrower of written notice from the Lenders of the
occurrence (and solely during the continuance) of an Event
of Default hereunder, the aggregate sum of: (i) unpaid
Bankruptcy Court costs and U.S. Trustee's fees, (ii) the
fees and costs incurred by professionals retained by the
Loan Parties, retained by any official committee of
unsecured creditors or other similar committee appointed by
the Bankruptcy Court, or otherwise paid by the bankruptcy
estate of the Loan Parties in the Cases, in each case
incurred or paid prior to the receipt by the Borrower of
written notice of such Event of Default, and (iii) fees and
costs incurred by professionals retained by the Loan Parties
from and after the receipt by the Borrower of written notice
of such Event of Default, not to exceed the aggregate sum of
$100,000. Notwithstanding anything contained in this
definition to the contrary, all such fees
and costs described in the foregoing sentence, shall not be
paid in excess of the amounts relating thereto set forth in
the Budget for the periods that correspond to the periods
during which such fees were earned and costs incurred.
Change in Control means (i) an event or series of
events as a result of which any "person" or "group" (as such
terms are used in Sections 13(d)(3) and 14(d) of the
Exchange Act) (excluding Borrower or any wholly owned
Subsidiary thereof) is or becomes, directly or indirectly,
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, whether or not applicable) of more
than 45% of the combined voting power of the then
outstanding securities entitled to vote generally in
elections of directors, managers or trustees, as applicable,
of Borrower or any successor entity ("Voting Stock"), (ii)
the completion of any consolidation with or merger of
Borrower into any other Person, or sale (it being understood
that the vessel sales and related transactions required
under Section 9.10 of this Agreement shall not be considered
a "sale" for purposes of a "Change of Control"), conveyance,
transfer or lease by Borrower of all or substantially all of
its assets to any Person, or any merger of any other Person
into Borrower in a single transaction or series of related
transactions, and, in the case of any such transaction or
series of related transactions, the outstanding common stock
of Borrower is changed or exchanged as a result, unless the
stockholders of the Borrower immediately before such
transaction own, directly or indirectly, immediately
following such transaction, at least 55% of the combined
voting power of the outstanding voting securities of the
Person resulting from such transaction in substantially the
same proportion as their ownership of the Voting Stock
immediately before such transaction, or (iii) the occurrence
of any event whereby less than a majority of the members of
the Board of Directors of Borrower shall be persons who
either (a) were serving as directors on the Effective Date
or (b) were nominated as directors and approved by the vote
of the majority of the directors who are directors referred
to in clause (a) or this clause (b).
Code means the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of the
Code shall be construed to also refer to any successor
sections.
Collateral means all of the following Property now or
hereafter owned by any one or more of the Loan Parties: (i)
all Property in respect of which a Lien has been granted by
any one or more of the Loan Parties in favor of the Agent
for the benefit of the Secured Parties pursuant to the terms
of the Orders, (ii) all Property in respect of which a Lien
has been granted by any one or more of the Loan Parties in
favor of the Agent for the benefit of the Secured Parties
under the terms of the Preferred Ship Mortgages and
Assignments of Earnings, including, without limitation, the
Vessels, (iii) all Property in respect of which a Lien has
been granted by any one or more of the Loan Parties in favor
of the Agent for the benefit of the Secured Parties under
the terms of the Security Agreements, including, without
limitation, all accounts, inventory, chattel paper and
general intangibles (including, without limitation, all
patents) of any one or more of the Loan Parties, and (iv)
all Property in respect of which a Lien has been granted by
any one or more of the Loan Parties in favor of the Agent
for the benefit of the Secured Parties pursuant to the terms
of the other Security Documents and other Loan Documents.
Commitment means, with respect to each Lender, such
Lender's Line of Credit Commitment.
Committee means any statutory committee or committees
appointed in the Cases.
Company Business means (i) the offshore pipeline
installation and sub-sea construction for the oil and gas
industry and (ii) any other activities ancillary to the
foregoing.
Consummation Date means the date of the substantial
consummation (as defined in Section 1101(2) of the
Bankruptcy Code and which, for purposes of this Agreement,
shall be no later than the effective date) of a
Reorganization Plan of any Loan Party that is confirmed
pursuant to an order of the Bankruptcy Court in the Cases.
Continuing Guarantee means a Continuing Guarantee
substantially in the form of Exhibit B executed now or at
any time hereafter by a Guarantor and delivered to Agent, as
the same may be amended, supplemented or otherwise modified
from time to time.
EDC means Export Development Canada.
Default means the occurrence of any event or condition
specified in Section 9 hereof, whether or not any
requirement for notice or lapse of time or other condition
precedent has been satisfied.
Disbursement Date has the meaning ascribed thereto in
Section 4.3.
Distribution in respect of any Person means (a)
dividends or other distributions of cash, stock, assets or
other property on or in respect of any shares of stock,
membership interest or other equity interest in such Person;
and (b) the redemption, repurchase or other acquisition of
any shares of stock, membership interest or other equity
interest in such Person or of any warrants, rights or other
options to purchase any such stock, membership interest or
other equity interest (except when solely in exchange for
such stock, membership interest or other equity interest);
provided that, the issuance or granting of stock, warrants,
rights or other options to purchase stock of Borrower shall
not be considered a Distribution.
Dollars and $ means, unless otherwise provided herein,
dollars of the United States of America.
Effective Date has the meaning set forth in the first
paragraph of this Agreement.
Environmental Law means any federal, state or local
statute, law, rule, regulation, order, consent decree,
judgment, permit, license, code, deed restriction, common
law, treaty, convention, ordinance or other governmental
requirement, domestic or foreign, relating to public health,
safety or the environment, including, without limitation,
those relating to releases, discharges or emissions to air,
water, land or groundwater, to the use of groundwater, to
the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management
of hazardous or solid waste, hazardous substances or crude
oil, or any fraction thereof, to exposure to toxic or
hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid hazardous
substances, in each case applicable to any of the Property
owned, leased or operated by Borrower or any Subsidiary or
the operation, construction or modification of any such
Property, including, without limitation, the following: the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C.
9601 et seq., the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
556901 et seq., the Hazardous Materials Transportation Act,
the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1976, the Safe Drinking Water Control
Act, the Clean Air Act of 1966, the Toxic Substances Control
Act of 1976, the Occupational Safety and Health Act of 1977,
the Emergency Planning and Community Right-to-Know Act of
1986, the National Environmental Policy Act of 1975, the Oil
Pollution Act of 1990, the Louisiana Environmental Quality
Act (La. R.S. 30:2001 et seq.), and the Louisiana Abandoned
Oil field Waste Site Law, La. R.S. 30:71 et seq. and any
amendments to these laws and any rules and regulations
promulgated thereunder.
ERISA means the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each
case as in effect from time to time.
Event of Default has the meaning ascribed thereto in
Section 9.
Exchange Act means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the
Securities Exchange Commission.
Fees means all fees payable by Borrower under Section
5.2.
Fed Funds Rate means, for any day, the rate per annum
(rounded upwards, if necessary to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on
the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to
the Agent on such day on such transactions.
Final DIP Payment Date means the date when (i) all
Commitments shall have expired or been terminated, (ii) the
principal of and interest on each Loan and Fees shall have
been paid in full, (iii) all Letters of Credit shall have
expired, been cancelled or been cash collateralized or other
arrangements satisfactory to the Agent and the Lenders shall
have been made, and all amounts drawn under Letters of
Credit shall have been reimbursed (together with any allowed
interest thereon), and (iv) all other Obligations (other
than any unmatured indemnity obligations) shall have been
satisfied.
Final Order means an order of the Bankruptcy Court,
satisfactory to the Agent and the Lenders in their sole
discretion, approving the Loan Documents and granting the
Superpriority Claim status and the Liens described in
Section 3.1, which Final Order (i) shall have been entered
upon an application or motion of the Borrower satisfactory
in form and substance to the Agent and the Lenders in all
material respects, on such prior notice to such parties as
may in each case be reasonably satisfactory to the Agent and
the Lenders, (ii) shall be in full force and effect and
(iii) shall not have been stayed, reversed, modified or
amended in any respect; and, if the Final Order is the
subject of a pending appeal in any respect, neither the
making of any Loans nor the issuance of any Letters of
Credit nor the performance by any Loan Party of any of its
obligations hereunder or under the Loan Documents or under
any other instrument or agreement referred to herein shall
be the subject of a presently effective stay pending appeal.
Final Order Closing Date means the date on which the
following conditions shall have been satisfied: (i) the
Final Order shall have been entered by the Bankruptcy Court
and (ii) the Agent and the Lenders shall have received a
favorable written opinion of counsel to the Loan Parties,
dated the Final Order Closing Date and in substantially the
form of the opinion delivered with respect to the Interim
Order on the Effective Date.
First Day Orders means all orders entered by the
Bankruptcy Court on the Petition Date, within five days
thereafter or based on motions filed thereon or within three
Business Days thereafter.
GAAP means generally accepted accounting principles at
the time in the United States of America.
Guarantors has the meaning set forth in the first
paragraph of this Agreement.
Guarantor Pledge Agreement has the meaning ascribed
thereto in the defined term Guarantor Pledge Documents.
Guarantor Pledge Documents means, with respect to each
Guarantor, the following documents: (a) a security agreement
(a "Guarantor Pledge Agreement") in form and substance
required by the Required Lenders granting Lenders a pledge
of and a security interest in all of the common stock,
membership interest, partnership interest or other equity
interest in such Guarantor owned directly or indirectly by
Borrower and/or any one or more Guarantors, (b) executed
stock powers covering all of the common stock of such
Guarantor owned directly or indirectly by Borrower and/or
any one or more Guarantors, (c) such opinions of counsel for
Borrower and/or any Guarantors as the Required Lenders may
reasonably require, and (d) such financing statements,
resolutions, certificates, approvals, documents and
instruments as the Required Lenders may reasonably require.
Indebtedness means, with respect to any Person, without
duplication, all indebtedness, liabilities and obligations
of such Person, but in any event including, without
limitation, all (i) obligations of such Person for borrowed
money or for the deferred purchase price of Property or
services (including, without limitation, all notes payable
and all obligations evidenced by bonds, debentures, notes or
other similar instruments), (ii) obligations secured by any
Lien on, or payable out of the proceeds of production from,
any Property or assets owned by such Person, whether or not
such Person has assumed or become liable for the payment of
such obligations, (iii) indebtedness, liabilities and
obligations of third parties, including joint ventures and
partnerships of which such Person is a venturer or general
partner, recourse to which may be had against such Person,
(iv) obligations created or arising under any conditional
sale or other title retention agreement with respect to
Property acquired by such Person, notwithstanding the fact
that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default are limited to
repossession or sale of such Property, (v) Capitalized Lease
Obligations of such Person, (vi) all accounts payables of
such Person, (vii) all indebtedness, liabilities and
obligations of such Person under guarantees or endorsements,
and (viii) all obligations of such Person, contingent or
otherwise, relative to the face amount of letters of credit
(as may be reduced pursuant to their terms), whether or not
drawn.
Indemnitees has the meaning ascribed thereto in Section
11.4.
Interim Order means an interim order of the Bankruptcy
Court, as filed and approved by the Bankruptcy Court on
January 11, 2005, approving the Loans and Letters of Credit
made or to be made to the Borrower by Lenders on or after
the Effective Date in accordance with this Agreement, as the
same may be amended, restated, supplemented or otherwise
modified from time to time with the express written consent
of the Agent and Required Lenders and granting the
Superpriority Claim status and the Liens described in
Section 3.1, which Interim Order (i) shall be in full force
and effect and (ii) shall not have been stayed, reversed,
modified or amended in any respect; and, if the Interim
Order is the subject of a pending appeal in any respect,
neither the making of any Loans nor the issuance of any
Letters of Credit nor the performance by any Loan Party of
any of its obligations hereunder or under the Loan Documents
or under any other instrument or agreement referred to
herein shall be the subject of a presently effective stay
pending appeal.
Investment means any investment by Borrower or any
Guarantor in any Person, whether payment therefor is made in
cash or capital stock of Borrower or any Guarantor, and
whether such investment is by acquisition of stock or
Indebtedness, or by loan, advance, transfer of property out
of the ordinary course of business, capital contribution,
equity or profit sharing interest, extension of credit on
terms other than those normal in the ordinary course of
business, guarantee or otherwise becoming liable
(contingently or otherwise) in respect of the Indebtedness
of any Person, or otherwise.
Interest Rate Protection Agreement means any interest
rate exchange, collar, cap or similar agreement providing
interest rate protection, entered into by Borrower in
respect of the Loans.
Lenders shall collectively mean Regions and EDC, and
their respective successors and assigns, with each being a
Lender.
Lenders' Pre-Petition Collateral has the meaning set
forth in Section 3.1.
Lenders' Pre-Petition Indebtedness means Indebtedness
of the Loan Parties under the following credit facilities:
(i) a $15,000,000 revolving credit facility pursuant to the
terms of the Regions Loan Agreement, (ii) a $5,000,000 non-
revolving credit facility pursuant to the terms of the Sixth
Amendment to the Regions Loan Agreement and (iii) a
$79,000,000 construction credit facility pursuant to the
terms of the Regions/EDC Credit Agreement.
Lenders' Pre-Petition Loan Documents means the loan and
credit agreements, security agreements, ship mortgages,
assignments, pledge agreements and other loan and security
documents relating to, evidencing or securing the Lenders'
Pre-Petition Indebtedness.
Letter of Credit and Letters of Credit has the meanings
ascribed thereto in Section 4.1(a).
Letter of Credit Application means an application and
agreement for letters of credit substantially in the form
attached to the Regions/EDC Credit Agreement, executed by
Borrower or by Borrower and a Guarantor (if the Letter of
Credit is to be for the account of a Guarantor) and
delivered to Regions pursuant to Section 4.1(a), as the same
may from time to time be amended, modified, extended or
renewed.
Letter of Credit Maximum Amount means an aggregate
amount not exceeding $2,000,000.00.
Letter of Credit Loan and Letter of Credit Loans has
the meaning ascribed thereto in Section 4.3.
Letter of Credit Period means, with respect to any
Letter of Credit, the period commencing on the Effective
Date and ending no later than the fifth day prior to the
Termination Date.
Letter of Credit Request has the meaning ascribed
thereto in Section 4.1(a).
Lien means any interest in Property securing an
obligation owed to, or a claim by, a Person other than the
owner of the Property, whether such interest is based on
common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust,
hypothec, prior claim, right of retention, maritime lien or
right in rem, pledge, assignment, judgment lien, deemed
trust or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt, and any
consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions,
encroachments, easements, servitudes, rights-of-way,
covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property.
Line of Credit Commitment means for all Lenders the
aggregate principal amount of $6,900,000.00.
Line of Credit Loan and Line of Credit Loans have the
meanings ascribed thereto in Section 2.1.
Line of Credit Notes has the meaning ascribed thereto
in Section 2.4.
Line of Credit Period means the period commencing on
the Effective Date and ending on the Termination Date.
Loans shall collectively mean the Line of Credit Loans
and the Letter of Credit Loans, with each being a Loan, and
shall include all principal, interest, attorneys' fees and
costs owed thereon.
Loan Documents means this Agreement, the Notes, the
Letter of Credit Application(s), the Continuing Guarantees,
the Security Documents and all other agreements, documents
and instruments heretofore, now or hereafter delivered to
the Agent or any of the Lenders with respect to or in
connection with or pursuant to this Agreement, any Loans
made hereunder or thereunder, or any Letters of Credit
issued hereunder or thereunder, and executed by or on behalf
of Borrower and/or any Guarantor, all as the same may from
time to time be amended, modified, extended or renewed.
Loan Parties means, collectively, the Borrower and the
Guarantors.
Material Adverse Effect means a material adverse effect
on the Properties, assets, liabilities, business,
operations, income or condition (financial or otherwise) of
Borrower and the Guarantors taken as a whole.
Note means each Line of Credit Note, with all such
notes being collectively referred to as the Notes.
Notice of Borrowing has the meaning ascribed thereto in
Section 2.3(a).
Obligations means, without duplication, any and all
present and future Indebtedness (including, without
limitation, principal of the Loans, interest thereon, Fees,
collection costs and expenses, attorneys' fees and other
amounts), liabilities and obligations (including, without
limitation, reimbursement obligations with respect to
Letters of Credit issued by Regions under this Agreement and
charge backs owed by Borrower with respect to checks and
other items of payment returned for insufficient funds under
Section 2.6) of Borrower and each Guarantor, and of any one
or more of them, to any one or more of the Secured Parties
evidenced by or arising under or in connection with this
Agreement, the Notes, the Letter of Credit Application(s),
and/or any of the other Loan Documents, whether direct or
contingent, due or to become due or now existing or
hereafter arising.
Obligor means Borrower, each Guarantor and each other
Person who is or shall at any time hereafter become
primarily or secondarily liable on any of the Obligations.
Orders means the Interim Order and the Final Order.
Overadvance has the meaning ascribed thereto in Section
2.2.
Permitted Liens means any of the following: (a) Liens
for property taxes and assessments or governmental charges
or levies, provided that payment thereof is not at the time
required by Section 8.1(d); (b) (i) deposits to secure the
performance of bids, tenders, trade contracts or leases
(other than Capitalized Leases) or to secure statutory
obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business
and not in connection with the borrowing of money or the
acquisition of inventory or other Property and (ii) Liens
(other than any Liens imposed by ERISA) arising in the
ordinary course of business or incidental to the ownership
of Properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like
laws, carrier's, mechanic's, materialmen's, repairmen's,
vendor's, warehousemen's and attorneys' liens and statutory
landlords' liens); provided in each case that payment
thereof is not at the time required by Section 8.1(d) or
8.1(e); (c) Survey exceptions, issues with regard to the
merchantability of title, easements or reservations, or
rights of others for rights-of-way, servitudes, utilities
and other similar purposes, or zoning or other restrictions
as to the use of real properties, which could not reasonably
be expected to have a Material Adverse Effect; (d) Liens
permitted by the Required Lenders in writing; (e) Liens on
Properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section
8.2(a)(v); (f) Liens on Schedule 1.1A attached hereto; (g)
leases of or purchase money security interests against
specific equipment securing Indebtedness permitted under
Section 8.2(a)(xiii); (h) Liens under the Lenders' Pre-
Petition Loan Documents; (i) Liens granted in connection
with Pre-Petition Indebtedness relating to the MIDNIGHT
WRANGLER and MIDNIGHT GATOR in a principal amount not
exceeding $15,000,000.00 in the aggregate at any one time
outstanding; (j) Liens granted in connection with Pre-
Petition Indebtedness relating to the MIDNIGHT EAGLE in a
principal amount not exceeding $9,250,000.00 in the
aggregate at any one time outstanding; (k) Liens granted
with respect to Post-Petition Indebtedness relating to the
MIDNIGHT WRANGLER, MIDNIGHT GATOR and MIDNIGHT EAGLE, and
all Post-Petition accounts receivables generated with
respect thereto; (l) Liens with respect to all other
property or assets of the Debtors that does not constitute
part of the Collateral; and (m) Liens created under the Loan
Documents.
Person means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability
company, institution, entity or government (whether
national, federal, state, county, city, municipal or
otherwise, including, without limitation, any
instrumentality, division, agency, body or department
thereof).
Post-Petition means, when used with respect to any
Indebtedness, obligation, liability, claim or other matter
with respect to any Loan Party, that such Indebtedness,
obligation, liability, claim or other matter arose on or
after the Petition Date.
Pre-Petition means, when used with respect to any
Indebtedness, obligation, liability, claim or other matter
with respect to any Loan Party, that such Indebtedness,
obligation, liability, claim or other matter arose prior to
the Petition Date.
Pre-Petition Payment means any payment (by way of
adequate protection or otherwise), directly or indirectly,
of principal or interest or otherwise on account of any Pre-
Petition Indebtedness or trade payables or other Pre-
Petition claims against any Loan Party, including without
limitation, the providing of a letter of credit or other
security to provide assurance of any such payment.
Preferred Ship Mortgages has the meaning ascribed
thereto in Section 5.6(b).
Property means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or
intangible. Properties means the plural of Property.
Pro Rata Share means with respect to each Lender with
respect to Line of Credit Loans or Letters of Credit, the
percentage amount equal to the quotient of (x) such Lender's
share of the Line of Credit Commitment set forth (i) next to
such Lender's signature to this Agreement or (ii) after the
Effective Date, in any Assignment Agreement, divided by (y)
the aggregate amount of Line of Credit Commitments. On the
Effective Date, the Pro Rata Share of Regions and EDC is 50%
each.
Regions means Regions Bank, an Alabama state bank, in
its individual corporate capacity as a Lender hereunder,
including, without limitation, its capacity as a Lender
hereunder with respect to its Pro-Rata Share of the Line of
Credit Loans and with respect to its issuance of Letters of
Credit.
Regions Loan Agreement means that certain Amended and
Restated Loan Agreement dated as of December 20, 2002,
between Regions and Borrower, as previously amended.
Regions/EDC Credit Agreement means that certain Credit
Agreement dated as of April 23, 2003, among the Borrower,
Regions and EDC, as previously amended.
Required Lenders means at any time Lenders having
Fifty-One (51%) Percent of the aggregate amount of the Line
of Credit Loans, the Letter of Credit Loans and the face
amount (or participation interest in the face amount) of
Letters of Credit then outstanding or, if no such Loans or
Letters of Credit are then outstanding, Fifty-One (51%)
Percent of the total Commitments of all of the Lenders;
provided further that the Required Lenders must in all
instances be at least two Lenders.
Restricted Investment means any Investment, or any
expenditure or any incurrence of any liability to make any
expenditure for an Investment, other than:
(a) Guarantees, loans or advances by Borrower to a
Guarantor or a Guarantor to Borrower;
(b) Investments made Pre-Petition;
(c) Investments permitted by the First Day Orders or
any other order of the Bankruptcy Court approved by the
Lenders; and
(d) Investments in the Subsidiaries of Borrower as of
the Effective Date.
Secured Parties shall collectively mean Agent and the
Lenders.
Security Agreements has the meaning ascribed thereto in
Section 5.6(a).
Security Documents means the Preferred Ship Mortgages,
the Assignments of Earnings, the Security Agreements, the
Guarantor Pledge Documents and any other Loan Documents in
respect of which a Lien has been granted by the Loan Parties
in favor of the Agent for the benefit of the Secured
Parties.
Subsidiary means (a) any corporation of which more than
fifty percent (50%) of the issued and outstanding capital
stock entitled to vote for the election of directors is at
the time owned directly or indirectly by Borrower and/or any
one or more Subsidiaries, or (b) any partnership, limited
liability company, business trust, or any other similar
entity of which more than fifty percent (50%) of the voting
interests is at the time owned directly or indirectly by
Borrower and/or any one or more Subsidiaries, and
specifically including, but not limited to, each of the
entities described on Schedule 7.13.
Superpriority Claim means a claim against any Loan
Party in any of the Cases that is a superpriority
administrative expense claim having priority over any and
all administrative expenses, diminution claims and all other
claims, now existing or hereafter arising, of any kind
whatsoever (other than the Carve Out), including, without
limitation, any and all administrative expenses of the kind
specified in Sections 503(b) and 507(b) of the Bankruptcy
Code, and any and all administrative expenses or other
claims arising under Sections 105, 326, 328, 330, 331,
503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the
Bankruptcy Code), whether or not such claims or expenses may
become secured by a judgment lien or other non-consensual
lien, levy or attachment.
TELLC has the meaning set forth in the first paragraph
of this Agreement
Termination Date means the earlier to occur of (i)
April 1, 2005 (which date may be extended up to 90
additional days thereafter upon the written consent of
Lenders in the exercise of their sole discretion, such
consent, if any, to be conditioned, among other things, upon
receipt of a new Budget and the Agent's and the Lenders'
complete satisfaction therewith), (ii) the Consummation
Date, and (iii) the acceleration of the Loans and the
termination of the Line of Credit Commitments in accordance
with the terms hereof.
TOLLC has the meaning set forth in the first paragraph
of this Agreement.
US Vessels means the following vessels registered with
the United States of America and owned by the Loan Party
mentioned below: (i) Midnight Brave, Official Number 529263,
owned by TOLLC, (ii) Midnight Fox, Official Number 1065954,
owned by TOLLC, (iii) Midnight Dancer, Official Number
586595, owned by TOLLC, (iv) Midnight Rider, Official Number
1035377, owned by TOLLC, together with all masts, boilers,
cables, engines, machinery, bowsprits, sails, rigging,
boats, anchors, chains, tackle, apparel, furniture,
fittings, tools, pumps, equipment, fuel, supplies, spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements now or hereafter belonging thereto, affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.
Vanuatu Vessels means the following vessels registered
with the Republic of Vanuatu and owned by the Loan Party
mentioned below: (i) Midnight Express, Official Number 1450,
owned by TELLC, (ii) Midnight Carrier, Official Number 1208,
owned by TOLLC, (iii) and Midnight Star, Official Number
398, owned by TOLLC, together with all masts, boilers,
cables, engines, machinery, bowsprits, sails, rigging,
boats, anchors, chains, tackle, apparel, furniture,
fittings, tools, pumps, equipment, fuel, supplies, spare
parts and all other attachments, appurtenances, accessories,
additions, fixtures, equipment, appliances, improvements and
replacements now or hereafter belonging thereto, affixed
thereto, or used in connection therewith, whether because of
repairs or otherwise, whether or not removed therefrom.
Vessels means, collectively, the US Vessels and Vanuatu
Vessels. References to the name of a Vessel shall refer to
such vessel described in either the definition of US Vessels
or Vanuatu Vessels.
1.2 Accounting Terms and Determinations. Except as
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations
hereunder shall be made and all financial statements
required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied
on a basis consistent (except for changes accompanied by a
concurrence from Borrower's independent certified public
accountants) with the most recent audited financial
statements of Borrower delivered to the Lenders.
SECTION 2. LINE OF CREDIT LOANS.
2.1 Line of Credit Commitments. Subject to the terms
and conditions set forth in this Agreement and so long as no
Default or Event of Default has occurred and is continuing,
during the Line of Credit Period, each Lender severally (and
not jointly) agrees to lend to Borrower from time to time on
a revolving basis (individually, a "Line of Credit Loan" and
collectively, the "Line of Credit Loans") amounts not to
exceed, in the aggregate at any one time outstanding, such
Lender's Pro Rata Share of (x) the Line of Credit Commitment
minus (y) the aggregate principal amount of all outstanding
Line of Credit Loans. Within the foregoing limitations,
Borrower may borrow under this Section 2.1, prepay under
Section 5.3 and reborrow at any time during the Line of
Credit Period under this Section 2.1. Loans under this
Section 2.1 shall be made from the several Lenders ratably
in proportion to their respective Pro Rata Shares. The
failure of any Lender to make any Line of Credit Loan
required under this Agreement shall not release any other
Lender from its obligation to make Line of Credit Loans as
provided herein. Each Line of Credit Loan shall bear
interest on the outstanding principal amount thereof, for
each day from the date such Loan is made until it becomes
due, at a rate per annum equal to the Applicable Rate. Such
interest shall be payable on all such Line of Credit Loans
monthly in arrears on the last day of each month (or the
immediate subsequent Business Day if any such last day is
not a Business Day) and at maturity. Any overdue principal
of and, to the extent permitted by law, overdue interest on,
any Line of Credit Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to
the sum of three percent (3%) plus the Applicable Rate.
2.2 Total Line of Credit Loans Shall Not Exceed
Commitments. If the Line of Credit Loans outstanding should
at any time exceed $6,900,000.00 (such excess Loans being an
"Overadvance"), such Overadvance shall nevertheless
constitute Indebtedness that is secured by the Collateral
and entitled to all of the benefits of this Agreement and
the other Loan Documents. Any such Overadvance shall be
payable by the Borrower on demand by the Agent and shall
bear interest at the Applicable Rate. The Agent shall not
be responsible or liable for failure to make any demand for
payment under this Section 2.2.
2.3 Method of Borrowing.
(a) With respect to each Line of Credit Loan,
Borrower's Representative shall give notice (a "Notice of
Borrowing") to each Lender by 10:30 a.m. (New Orleans time)
at least one (1) Business Day before each Line of Credit
Loan, specifying:
(i) the date of such Line of Credit Loan, which shall
be a Business Day,
(ii) the aggregate principal amount of such Line of
Credit Loan,
(iii) that on the date of, and after giving effect
to, such Line of Credit Loan, no Default or Event of Default
has occurred and is continuing, and
(iv) that on the date of, and after giving effect to,
such Line of Credit Loan, all of the representations and
warranties of Borrower contained in Section 7 of this
Agreement and of Borrower and the Guarantors contained in
the other Loan Documents are true and correct in all
material respects as if made on and as of the date of such
Line of Credit Loan (except to the extent that such
representations and warranties expressly relate solely to an
earlier date (in which case such representations and
warranties shall have been true and correct on and as of
such earlier date)).
(b) A Notice of Borrowing shall not be revocable by
Borrower.
(c) Not later than 3:00 p.m. (New Orleans time) on
the date of each Line of Credit Loan, each Lender shall make
available its Pro Rata Share of such Line of Credit Loan, in
federal or other funds immediately available in New Orleans,
Louisiana, to the Borrower at the Borrower's operating
account at Regions (or such other account mutually agreed
upon in writing between each Lender and Borrower). The
parties hereto agree that no Lender is obligated to send any
proceeds via wire transfer after 2:00 p.m. (New Orleans
time). In any event, each Lender shall remain responsible
with respect to making its Pro Rata Share of each Line of
Credit Loan available to Borrower. Agent shall not be
required to make any amount available to Borrower hereunder
except to the extent that Agent and such Lender shall have
made alternative arrangements to fund Line of Credit Loans
as mutually agreed between them, provided, however, that
under such alternative arrangement, unless the Agent shall
have been notified in writing by a Lender prior to the date
a Line of Credit Loan is to be made hereunder that such
Lender does not intend to make its Pro Rata Share of such
Line of Credit Loan available to the Agent, the Agent may,
after notice to such Lender, assume that such Lender will
make such Pro Rata Share available to the Agent on such
date, and the Agent may, but has no obligation to do so, in
reliance upon such assumption, make available to Borrower
the corresponding amount. If such corresponding amount is
not in fact made available to the Agent by such Lender and
the Agent has made such amount available to Borrower, the
Agent shall be entitled to receive such amount from such
Lender or the Borrower forthwith upon its demand, together
with interest thereon in respect of each day during the
period commencing on the date such amount was advanced to
Borrower and ending on but excluding the date the Agent
recovers such amount from (i) the Lender at a rate per annum
equal to the Fed Funds Rate or (ii) from the Borrower at the
Applicable Rate.
2.4 Line of Credit Notes.
(a) The Line of Credit Loans of each Lender to
Borrower shall be evidenced by a promissory note of Borrower
dated the Effective Date and payable to the order of such
Lender in a principal amount equal to its Line of Credit
Commitment in substantially the form of Exhibit A (with
appropriate insertions) (as such promissory notes may from
time to time be amended, modified extended or renewed, the
"Line of Credit Notes").
(b) Each Lender may record, and prior to any
transfer of its Line of Credit Note may endorse on the
schedules forming a part thereof, appropriate notations to
evidence the date and amount of each Line of Credit Loan
made by it and the date and amount of each payment of
principal made by Borrower with respect thereto. Each
Lender is hereby irrevocably authorized by Borrower so to
endorse its Line of Credit Note and to attach to and make a
part of any such Line of Credit Note a continuation of any
such schedule as and when required; provided, however that
the obligation of Borrower to repay each Line of Credit Loan
actually made hereunder shall be absolute and unconditional,
notwithstanding any failure of any Lender to endorse or any
mistake by any Lender in connection with endorsement on the
schedules attached to its respective Line of Credit Note.
The internal records of each Lender shall constitute for all
purposes prima facie evidence of (i) the amount of principal
and interest owing to such Lender on its Line of Credit
Loans from time to time, (ii) the amount of each Line of
Credit Loan made by such Lender to Borrower and (iii) the
amount of each principal and/or interest payment received by
such Lender on its Line of Credit Loans.
2.5 Maturity. All Line of Credit Loans not paid prior
to the last day of the Line of Credit Period, together with
all accrued and unpaid interest thereon and all fees and
other amounts owing by Borrower to the Lenders with respect
thereto, shall be due and payable by Borrower on the last
day of the Line of Credit Period.
2.6 Collections Account. (a) All payments on all
accounts receivable of the Loan Parties shall be deposited
by the Loan Parties on each Business Day such payments are
received to a collections account with Regions (the
"Collections Account"). Borrower shall pay all of Regions'
standard fees and charges in connection with the Collection
Account as such fees and charges may change from time to
time. Borrower hereby grants to Agent, for the benefit of
the Lenders, a security interest in and lien upon the
Collections Account and all checks, items of payment and all
funds deposited and collected in the Collections Account
from time to time as collateral for the Obligations.
Borrower acknowledges and agrees that (i) neither the Agent
nor any Lender has any obligation to monitor or apply funds
in the Collections Account to the payment of the
Obligations, (ii) Borrower retains the full responsibility
(except during the existence of an Event of Default) to
direct Regions from time to time in writing (or as otherwise
agreed) as to the disbursement of funds in the Collections
Account (including, without limitation, disbursements to pay
down the Line of Credit Loans, interest thereon or Fees) in
accordance with the terms of this Agreement, the Budget and
the Orders, (iii) neither Agent nor any Lender has any
obligation to fund any overdrafts drawn on the Collections
Account or any other account of a Loan Party with the Agent
or any of the Lenders, (iv) notwithstanding the foregoing,
during the existence of an Event of Default, and without
limiting the Agent's other rights and remedies, Agent shall
have sole authority to disburse funds in the Collections
Account and Borrower may not direct disbursements as to, or
withdraw funds from, the Collections Account and (v) Regions
shall have the right to charge back to the Collections
Account any item which is returned for inability to collect,
plus accrued interest (at the Applicable Rate) during the
period of Regions' provisional credit for such item prior to
receiving notice of dishonor, or, in the exercise of the
Lenders' sole discretion, make a Line of Credit Loan to be
applied to such charge back amount.
(b) Upon the deposit of any items of payment into the
Collections Account, Borrower shall provide Lenders with a
detailed written backup report in form and content
satisfactory to the Lenders.
2.7 Midnight Express Application of Proceeds of Sale.
(a) Proceeds from the sale of the Midnight Express (as
described in Section 9.9) shall be applied first to the
payment of reasonable transaction costs directly incurred in
connection with such sale as approved by the Lenders in
writing (including, without limitation, attorneys' fees and
expenses, and broker and other professional fees), second,
to the payment of the Obligations, and, third, subject to
(b) of this Section 2.7, to pay Lenders' Pre-Petition
Indebtedness described in clause (ii) of the definition
thereof, and the balance, if any, to such of the Obligations
and Lenders' Pre-Petition Indebtedness as Lenders shall
direct, the extent, manner and amount of such application to
be at Lenders' sole discretion (proceeds from the sale of
any other Vessels shall be applied first to the payment of
reasonable transaction costs directly incurred in connection
with such sale (including, without limitation, attorneys'
fees and expenses, and broker and other professional fees),
second, to the payment of such of the Obligations and
Lenders' Pre-Petition Indebtedness as Lenders shall direct,
the extent, manner and amount of such application to be at
Lenders' sole discretion); provided, however, in the event
and to the extent any maritime Lien or claim is determined
by a final order of the Bankruptcy Court (or any other court
of competent jurisdiction) to prime or otherwise be senior
in priority to the Liens securing the Lenders' Pre-Petition
Indebtedness, then, in such event and to such extent, the
proceeds from the sale of the Midnight Express or any other
Vessel shall be applied to the payment of such maritime
Liens before being applied to the Lenders' Pre-Petition
Indebtedness.
(b) After payment of transactions costs and the
Obligations pursuant to clause (a) of this Section 2.7,
following receipt by Debtors or Lenders, as applicable, of
sale proceeds pursuant to subsection (a) of this Section
2.7, Debtors or Lenders, as applicable, shall establish a
reserve account at Regions and deposit such amounts received
from the sale proceeds before being applied to the Lenders'
Per-Petition Indebtedness as necessary to pay any bona fide
maritime Liens or claims determined by the Debtors and
Lenders to prime or otherwise be senior in priority to the
Liens securing the Lenders' Pre-Petition Indebtedness, which
funds shall be disbursed at the earlier of (i) entry of a
final order determining that such maritime Lien or claim
primes or is otherwise senior in priority to the Lenders'
Pre-Petition Indebtedness to such claimant and (ii) a
further order of the Bankruptcy Court with respect thereto.
SECTION 3. SUPERPRIORITY STATUS OF OBLIGATIONS AND OF
LIENS
3.1 Priority and Liens. Each Loan Party hereby
covenants, represents and warrants that, upon entry of the
Interim Order, the Obligations and the Liens against the
Collateral securing the Obligations shall, in each case
subject to the Carve Out: (i) be Superpriority Claims, (ii)
pursuant to section 364(c)(2) of the Bankruptcy Code,
constitute perfected first priority (except that the Lien
against the Midnight Rider shall not have Superpriority
Claim status solely with respect to the Lien against the
Midnight Rider securing the Lenders' Pre-Petition
Indebtedness under the Regions Loan Agreement) liens on (1)
all of the Loan Parties' assets that were pledged to secure
the Lenders' Pre-Petition Indebtedness (the "Lenders'
Prepetition Collateral"), (2) all accounts receivable
generated by the Debtors postpetition from the Prepetition
Collateral and (3) avoided liens or security interests under
section 551 of the Bankruptcy Code, and (iii) pursuant to
Section 364(d)(1) of the Bankruptcy Code, constitute
perfected first priority priming liens on the Prepetition
Collateral, which shall prime any maritime liens that may be
senior to liens of the Lenders against the Lenders'
Prepetition Collateral with respect to the Lenders' Pre-
Petition Indebtedness.
3.2 Payment of Obligations. Upon the maturity
(whether by acceleration or otherwise) of any of the
Obligations, the Lenders shall be entitled to immediate
payment of such Obligations without further application to
or order of the Bankruptcy Court.
3.3 No Discharge: Survival of Claims. Each Loan Party
agrees that (i) its obligations hereunder and under the
other Loan Documents shall not be discharged by the entry of
an order confirming any Reorganization Plan, dismissing any
Case or converting any Case to a case under Chapter 7 of the
Bankruptcy Code (and each Loan Party, pursuant to Section
1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge with respect to such obligations) and (ii) the
Superpriority Claims granted to the Agent and the Lenders
pursuant to the Orders and described in Section 3.1 and the
Liens granted to the Agent pursuant to the Orders and
described in Sections 3.1 and 5.7 shall not be affected in
any manner by the entry of an order confirming any
Reorganization Plan, dismissing any Case or converting any
Case to a case under Chapter 7 of the Bankruptcy Code.
3.4 Use of Cash Collateral. Notwithstanding anything
to the contrary contained herein, (x) the Borrower shall not
be permitted to request a Line of Credit Loan under Section
2.1, or request the issuance of a Letter of Credit under
Section 4.1 unless (i) the Bankruptcy Court shall have
entered the Interim Order and (ii) the Loan Parties shall at
that time have the use of all Cash Collateral (defined in
the Orders) subject to any limitations or conditions
contained in the Orders for the purposes described in the
Interim Order and (y) upon the occurrence and during the
continuation of an Event of Default, the Loan Parties may
not use any Cash Collateral.
SECTION 4. LETTERS OF CREDIT.
4.1 Letter of Credit Discretionary Facility.
(a) Subject to the terms and conditions of this
Agreement, during the Letter of Credit Period, and so long
as no Default or Event of Default has occurred and is
continuing (provided, however, that Regions shall have no
liability to any of the other Lenders for issuing a Letter
of Credit after the occurrence of any Default or Event of
Default unless Regions has previously received notice in
writing by Borrower, the Agent (if not Regions) or any of
the other Lenders of the occurrence of such Default or Event
of Default), Regions hereby agrees to consider requests in
the exercise of its sole discretion from Borrower to issue
commercial letters of credit and irrevocable standby letters
of credit for the account of Borrower or for the account of
Borrower and any other Loan Party (individually, a "Letter
of Credit" and collectively, the "Letters of Credit") in an
amount not exceeding the Letter of Credit Maximum Amount and
for the term specifically requested by Borrower by notice in
writing to Regions substantially in the form attached to the
Regions/EDC Credit Agreement (a "Letter of Credit Request")
at least three (3) Business Days prior to the requested
issuance thereof; provided, however, that:
(i) Regions shall have no commitment under this
Agreement to issue any Letter of Credit and may reject, for
any reason, any request for the issuance of any Letter of
Credit in the exercise of its sole discretion;
(ii) Borrower, and if the Letter of Credit is to
be issued for the account of Borrower and a Guarantor, such
Guarantor, shall have executed and delivered to Regions a
Letter of Credit Application with respect to such Letter of
Credit, with Borrower and such Guarantor (if the Letter of
Credit will be issued for the account of Borrower and a
Guarantor) to be jointly, severally and solidarily liable
thereunder;
(iii) the term of any such Letter of Credit shall
not extend beyond the last day of the Letter of Credit
Period;
(iv) any Letter of Credit may only be utilized in
the ordinary course of business for the requirements of the
Company Business;
(v) the sum of (A) the aggregate undrawn face
amount of all outstanding Letter(s) of Credit plus (B) the
aggregate principal amount of all outstanding Letter of
Credit Loans shall not at any one time exceed the Letter of
Credit Maximum Amount; and
(vi) the text of any such Letter of Credit is
provided to Regions no less than three (3) Business Days
prior to the requested issuance date, the terms and
conditions of which must be acceptable to Regions.
(b) Regions will make available the original of each
Letter of Credit to the beneficiary thereof (and will
promptly provide each of the other Lenders and the Agent
with a copy of such Letter of Credit).
(c) Borrower hereby further agrees to pay (or arrange
for a Guarantor, if it executed the Letter of Credit
Application, to pay) to Regions, solely for the account of
the Regions, a facing fee in the amount of 0.12% of the face
amount of each Letter of Credit upon the issuance thereof.
Borrower further agrees to pay Regions standard negotiation
charges upon demand from time to time. No Lender other than
Regions shall have any right to share in any facing fees or
negotiation fees paid by Borrower (or a Guarantor) to
Regions in connection with any of the Letters of Credit.
4.2 Participation by Other Lenders.
(a) Upon the issuance of a Letter of Credit, each
Lender shall share the obligation represented by each such
Letter of Credit so issued, in an amount equal to such
Lender's Pro Rata Share. The participation of each Lender
in each Letter of Credit shall be automatic. Each other
Lender shall make available to Regions, regardless of
whether any Default or Event of Default shall have occurred
and is continuing, an amount equal to its respective Pro
Rata Share of each drawing on each Letter of Credit in same
day or immediately available funds not later than 11:00 a.m.
New Orleans time on each Disbursement Date (as hereinafter
defined) for each such drawing. In the event that any
Lender fails to make available to Regions the amount of such
Lender's Pro Rata Share of any drawing on a Letter of Credit
as provided herein, Regions shall be entitled to recover
such amount on demand from such Lender together with
interest at the daily average Federal Funds Rate for the
first two Business Days after the Disbursement Date and
thereafter at the Applicable Rate.
(b) Regions shall distribute to each Lender that has
paid all amounts payable by it under this Section 4.2 with
respect to any Letter of Credit issued by Regions such
Lender's Pro Rata Share of all payments received by Regions
from Borrower in reimbursement of drawings honored by
Regions under such Letter of Credit when such payments are
received (to the extent that such Lender has not already
received such amounts).
4.3 Disbursements. Regions shall notify Borrower
promptly of the presentment for payment of any Letter of
Credit (on the date of presentment, if possible, and
otherwise on the next Business Day, it being agreed that
such notice may be made by phone), together with notice of
the date (the "Disbursement Date") such payment shall be
made, and Regions will promptly notify the other Lenders of
such matters. Subject to the terms and provisions of such
Letter of Credit, Regions shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. On
the Disbursement Date, Borrower shall, prior to or
contemporaneous with a payment on such Letter of Credit,
reimburse (or cause any Guarantor for which the Letter of
Credit was issued to reimburse) Regions and the other
Lenders (to the extent each Lender has paid its Pro Rata
Share of such drawing) for all amounts which will be or have
been disbursed under such Letter of Credit. In the event a
payment under a Letter of Credit is made without
contemporaneous receipt of payment from Borrower in
accordance with this Section 4.3, such payment shall
constitute a loan (individually a "Letter of Credit Loan"
and collectively, the "Letter of Credit Loans") by Regions
and/or the other Lenders (to the extent each Lender has paid
its Pro Rata Share of such drawing) to Borrower. All Letter
of Credit Loans shall accrue interest at the Applicable Rate
and shall be payable on demand. Regions shall distribute to
each Lender that has paid all amounts payable by it under
Section 4.2 with respect to a Letter of Credit such Lender's
Pro Rata share of all interest and other amounts received by
Regions from Borrower (or any Guarantor) under the Letter of
Credit Loan relating to such Letter of Credit (to the extent
that such Lender has not already received such amounts).
4.4 Reimbursement. Borrower's obligation under
Section 4.3 to reimburse Regions and the other Lenders with
respect to each drawing under each Letter of Credit
(including interest thereon) (to the extent each Lender has
paid its Pro Rata Share of such drawing), and each Lender's
obligation to fund each drawing shall, absent the gross
negligence or willful misconduct of Regions, be absolute and
unconditional under any and all circumstances and
irrespective of any setoff, counterclaim, or defense to
payment which Borrower or any Lender may have or have had
against any Lender, Borrower or any beneficiary of a Letter
of Credit, including, without limitation, any defense based
upon the occurrence of any Default or Event of Default, any
draft, demand or certificate or other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient, or any failure to apply or
misapplication by the beneficiary of the proceeds of any
disbursement, or the legality, validity, form, regularity,
or enforceability of such Letter of Credit.
4.5 Replacement or Collateralization of Letters of
Credit. Notwithstanding any provision contained in this
Agreement or any of the Letter of Credit Applications to the
contrary, upon the occurrence of any Event of Default, at
Agent's option, Borrower shall, upon Agent's demand, deliver
to Agent cash or other collateral acceptable to Agent having
a value, as determined by Agent, at least equal to the
aggregate undrawn face amount of all outstanding Letters of
Credit issued by Regions. Any such collateral and/or any
amounts received by Agent pursuant to this Section 4.5 shall
be held by Agent in a separate account at Agent
appropriately designated as a cash collateral account in
relation to this Agreement and the Letters of Credit and
retained by Agent as collateral security for the payment of
the Obligations. Cash amounts delivered to Agent pursuant
to the foregoing requirements of this Section 4.5 shall be
invested, at the request and for the account of Borrower, in
investments of a type and nature and with a term acceptable
to Agent. Such amounts, including in the case of cash
amounts invested in the manner set forth above, any
investment realized thereon, shall not be used by Agent to
pay any amounts drawn or paid under or pursuant to any
Letter of Credit, but may be applied to reimburse Regions
for drawings or payments under or pursuant to the Letters of
Credit which Regions has paid, or if no such reimbursement
is required shall be used by Agent for application to such
other of the Obligations as Agent shall determine. Any
amounts remaining in any cash collateral account established
pursuant to this Section 4.5 after the payment in full of
all of the Obligations and the expiration or cancellation of
all of the Letters of Credit shall be returned to Borrower.
SECTION 5. GENERAL PROVISIONS FOR ALL LOANS.
5.1 Determination of Interest Rates. The Agent shall
(in accordance with this Agreement) determine each interest
rate applicable to the Loans hereunder. Upon request, the
Agent shall give prompt notice to Borrower and the Lenders
of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of
manifest error.
5.2 Fees.
(a) Borrower shall pay to Agent for the ratable
account of the Lenders, a commitment fee which is fully
earned and non-refundable on the Effective Date but which
shall become payable on the Termination Date, of 1.5% of the
Line of Credit Commitment, equal to $103,500.00.
(b) Borrower shall pay to Agent for the ratable
account of the Lenders, a letter of credit issuance fee
which is fully earned and non-refundable on the date of
issuance of any Letter of Credit but which shall become
payable on the Termination Date, of 1.5% of the full face
amount of each Letter of Credit when issued.
5.3 Early Payments.
(a) Borrower may, upon notice to the Agent, which
notice shall be irrevocable, specifying that it is paying
its Line of Credit Loans, pay without penalty or premium
such Line of Credit Loans in whole or in part at any time,
or from time to time. Each such optional payment shall be
applied to pay the Line of Credit Loans of the several
Lenders in proportion to their respective Pro Rata Shares.
(b) Upon receipt of a notice of payment pursuant to
Section 5.3(a), the Agent shall promptly notify each Lender
of the contents thereof and of such Lender's ratable share
of such payment.
5.4 General Provisions as to Payments. Borrower shall
make each payment of principal of, and interest on, the
Loans and of fees and all other amounts payable hereunder,
not later than 12:00 noon (New Orleans time) on the date
when due, in federal or other funds immediately available in
New Orleans, Louisiana, to the Agent at its address referred
to in Section 11.7. The Agent will promptly distribute to
each Lender in immediately available funds its ratable share
of each such payment received by the Agent for the account
of the Lenders. Whenever any payment of principal of, or
interest on, the Loans or of fees shall be due on a day
which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day. If
the date for any payment of principal is extended by
operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.
5.5 Computation of Interest. Interest on Loans
hereunder shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
5.6 Security. In order to secure payment when due of
the Obligations:
(a) Security Documents. Borrower shall cause each
Guarantor to execute a Security Agreement substantially in
the form of Exhibit D (with appropriate insertions) (the
"Security Agreement") in favor of the Agent for the benefit
of the Secured Parties. Borrower shall cause each Guarantor
to execute any and all financing statements, continuation
statements and such other documents as may from time to time
be requested by Agent or the Required Lenders in order to
create, perfect and maintain the security interest created
by the Security Agreement.
(b) Preferred Ship Mortgages; Assignments of
Earnings. Borrower shall cause each Guarantor to execute
preferred fleet mortgage(s) and preferred ship mortgage(s)
(the "Preferred Ship Mortgages") granting Agent, for the
benefit of the Lenders, preferred mortgages on their
respective Vessels together with all proceeds thereof and to
execute Assignments of Earnings with respect to the Vessels
(the "Assignments of Earnings"), together with a UCC-1
Financing Statement filed in connection therewith, all of
the foregoing to be substantially in the same form
previously executed in order to secure the Lenders' Pre-
Petition Indebtedness.
(c) Continuing Guarantees. Borrower shall cause
each Guarantor to execute and deliver to Agent a Continuing
Guarantee substantially in the form of Exhibit B (with
appropriate insertions).
(c) Guarantor Pledge Documents. Borrower shall
execute and deliver, and cause each Guarantor to execute and
deliver, to Agent Guarantor Pledge Documents pertaining to
the outstanding stock or other equity interest of each
Guarantor.
(d) Patent and Trademark Office Filing. Borrower
shall execute and deliver, and cause each Guarantor to
execute and deliver, to Agent on or before the date which is
20 days after the Effective Date, patent security
agreements, in form and substance satisfactory to the
Lenders, to be recorded at Borrower's expense (not to exceed
$1,000) with the U.S. Patent and Trademark Office.
(e) Further Documents. Borrower shall execute, and
shall cause each Guarantor to execute, any and all documents
as may from time to time be reasonably requested by Agent or
the Required Lenders in order to create, perfect and
maintain the Liens created by the Loan Documents subject
only to Permitted Liens. Upon demand, Borrower shall pay to
Agent or to any other party designated by Agent all filing
fees incurred by Agent in the perfection of the Liens
contemplated by the Loan Documents.
5.7 Guaranty of Obligations of Guarantors. Borrower
hereby unconditionally, irrevocably, jointly, severally and
solidarily guarantees the due and punctual payment to the
Agent for the benefit of the Secured Parties when stated to
be due of all present and future obligations and liabilities
of each Guarantor evidenced by or arising under or in
connection with the Security Agreement, Preferred Ship
Mortgages and/or any other security documents executed by
such Guarantor in favor of Agent for the benefit of the
Secured Parties, whether direct or contingent, due or to
become due or now existing or hereafter arising.
5.8 Form of Loan Documents. Borrower and each
Guarantor will agree to such modifications to the form of
the Continuing Guarantees, Security Agreement, Preferred
Ship Mortgages, Guarantor Pledge Agreements and the other
Loan Documents that are reasonably necessary to comply with
applicable law or that Agent may otherwise reasonably
require.
5.9 Deposit Accounts. As security for the
Obligations, Borrower shall, and Borrower shall cause each
Guarantor, to maintain all of its primary operating accounts
with Agent.
5.10 Insurance Proceeds.
(a) All policies of insurance on the Collateral
shall designate Agent, for the benefit of the Secured
Parties, as lender loss payee pursuant to a mortgagee's loss
payable endorsement acceptable to Lenders. Such insurance
policies shall contain an agreement by the insurer not to
cancel or reduce coverage under the policies without giving
Agent at least thirty (30) days prior written notice of its
intention to do so. Agent is hereby authorized and
empowered, at its option, to collect and receive the
proceeds from any policy or policies of insurance, and each
insurance company is hereby authorized and directed to make
payment of all such losses directly to Agent instead of to
Borrower or any Guarantor and Lenders jointly to be applied
first to the payment of the Obligations and second to the
Lenders' Pre-Petition Indebtedness; provided, that, so long
as no default or Event of Default shall have occurred and be
continuing, payments in respect of any hull losses for a
Vessel under $100,000 may be paid directly to Borrower or
Guarantors as appropriate to be applied either toward the
repair costs to such Vessel or toward payment of the
Obligations.
SECTION 6. PRECONDITIONS TO LOANS AND LETTERS OF
CREDIT.
6.1 Initial Line of Credit Loan or Initial Letter of
Credit. Notwithstanding any provision contained herein to
the contrary, none of the Lenders shall have any obligation
to make the initial Line of Credit Loan hereunder and
Regions shall have no obligation to issue a Letter of Credit
hereunder unless each of the following requirements is
satisfied and Lender has received each of the following
documents:
(a) This Agreement, the Line of Credit Notes, the
Security Documents, the Continuing Guarantees and the other
Loan Documents required by Section 5.6, each duly authorized
and executed;
(b) A copy of resolutions of the Board of
Directors of Borrower, duly adopted, which authorize the
execution, delivery and performance of the Loan Documents
executed by Borrower and each Guarantor, certified by the
Secretary or an Assistant Secretary of Borrower;
(c) A copy of the unanimous consent of the sole
member of each Guarantor, which authorizes the execution,
delivery and performance of the Loan Documents executed by
such Guarantor;
(d) An incumbency certificate, executed by the
Secretary or an Assistant Secretary of Borrower, which shall
identify by name and title and bear the signatures of all of
the officers of Borrower executing any of the Loan Documents
delivered at or prior to the closing;
(e) Opinions of counsel for Borrower and the
Guarantors satisfactory to Agent relating to the Cases and
the Loan Documents and such other matters as the Lenders may
reasonably require;
(f) Payment of Agent's reasonable costs and
expenses as provided for in Section 11.3 and payment to
Agent for the ratable benefit of the Lenders of the fees
required under Section 5.2(b);
(g) The Agent and Lenders shall have received a
copy of the signed and entered Interim Order;
(h) All of the First Day Orders shall be
satisfactory in form and substance to the Agent and the
Lenders in their sole discretion in all material respects;
(i) Evidence that appropriate insurance for the
Vessels is in force;
(j) All information, approvals, documents or
other instruments as the Required Lenders may reasonably
request;
(k) On the date of and immediately after giving
effect to such Line of Credit Loan or Letter of Credit, no
Default or Event of Default shall have occurred and be
continuing;
(l) No material adverse change in the Properties,
assets, liabilities, business, operations, income or
condition (financial or otherwise) of Borrower and the
Guarantors taken as a whole shall have occurred since the
Effective Date and be continuing;
(m) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as permitted pursuant to this Agreement or the other Loan
Documents, all of the representations and warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and correct in all material respects on and as of the date
of such Line of Credit Loan or Letter of Credit, as the case
may be, as if made on and as of the date of such Line of
Credit Loan or Letter of Credit (except to the extent that
such representations and warranties expressly relate solely
to an earlier date (in which case such representations and
warranties shall have been true and correct on and as of
such earlier date)); and
(n) The Agent and the Lenders shall have received
the Budget which shall be satisfactory to the Agent and the
Lenders in their sole discretion.
A request for a Line of Credit Loan or for the
issuance of a Letter of Credit by Borrower hereunder shall
be deemed to be a representation and warranty by Borrower on
the date of such Line of Credit Loan or Letter of Credit, as
the case may be, as to the facts specified in clauses (k),
(l) and (m) of this Section 6.1.
Unless otherwise expressly provided above, all
documents described above must be in form and substance and
upon terms and conditions satisfactory to the Required
Lenders in their reasonable discretion.
6.2 All Line of Credit Loans. Notwithstanding
any provision contained herein to the contrary, none of the
Lenders shall have any obligation to make any further Line
of Credit Loan hereunder, unless each of the following
requirements is satisfied:
(a) With respect to any new Line of Credit Loan,
the Agent shall have received a Borrowing Notice for such
Line of Credit Loan as required by Section 2.3;
(b) On the date of and immediately after giving
effect to such Line of Credit Loan, no Default or Event of
Default shall have occurred and be continuing;
(c) No material adverse change in the Properties,
assets, liabilities, business, operations, income or
condition (financial or otherwise) of Borrower and the
Guarantors taken as a whole shall have occurred since the
Effective Date and be continuing; and
(d) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as permitted pursuant to this Agreement or the other Loan
Documents, all of the representations and warranties
contained in Section 7 of this Agreement and of Borrower and
the Guarantors contained in the Loan Documents shall be true
and correct in all material respects on and as of the date
of such Line of Credit Loan as if made on and as of the date
of such Line of Credit Loan (except to the extent that such
representations and warranties expressly relate solely to an
earlier date (in which case such representations and
warranties shall have been true and correct on and as of
such earlier date)).
(e) On any date on which a Line of Credit Loan is
made, the Interim Order or the Final Order, as the case may
be, shall have been entered and shall not have been stayed,
amended, vacated, reversed or rescinded without the prior
written consent of the Lenders.
Each request for a Line of Credit Loan by Borrower
hereunder shall be deemed to be a representation and
warranty by Borrower on the date of such Line of Credit Loan
as to the facts specified in clauses (b). (c), (d) and (e)
of this Section 6.2.
6.3 Letters of Credit. Notwithstanding any
provision contained herein to the contrary, Regions shall
have no obligation to consider a request from Borrower that
Regions issue any Letter of Credit hereunder unless each of
the following requirements is satisfied:
(a) Regions shall have received a Letter of Credit
Request for such Letter of Credit as required by Section
4.1(a);
(b) Regions shall have received a Letter of Credit
Application for such Letter of Credit as required by Section
4.1(a), duly executed by an authorized officer of Borrower
and of a Guarantor (if such Letter of Credit is for the
account of Borrower and a Guarantor) as account party;
(c) Borrower shall have complied with all of the
procedures and requirements set forth in Section 4.1;
(d) On the date of and immediately after the
issuance of such Letter of Credit, no Default or Event of
Default shall have occurred and be continuing;
(e) No material adverse change in the Properties,
assets, liabilities, business, operations, income or
condition (financial or otherwise) of Borrower and the
Guarantors taken as a whole shall have occurred since the
Effective Date and be continuing;
(f) Except for subsequent changes consented to in
writing by the Required Lenders after the Effective Date, or
as permitted pursuant to this Agreement or the other Loan
Documents, all of the representations and warranties of
Borrower contained in Section 7 of this Agreement and of
Borrower and the Guarantors contained in the other Loan
Documents shall be true and correct in all material respects
on and as of the date of the issuance of such Letter of
Credit as if made on and as of the date of the issuance of
such Letter of Credit (except to the extent that such
representations and warranties expressly relate solely to an
earlier date (in which case such representations and
warranties shall have been true and correct on and as of
such earlier date));
(g) Regions shall have received such other
documents, certificates and agreements as it may reasonably
request; and
(h) On any date on which a Letter of Credit is
issued, the Interim Order or the Final Order, as the case
may be, shall have been entered and shall not have been
stayed, amended, vacated, reversed or rescinded without the
prior written consent of the Lenders.
Each request for the issuance of a Letter of Credit
by Borrower hereunder shall be deemed to be a representation
and warranty by Borrower on the date of the issuance of such
Letter of Credit as to the facts specified in clauses (d),
(e), (f) and (h) of this Section 6.3.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to each of
the Lenders that:
7.1 Existence and Power. Borrower and each
Guarantor: (i) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization; (ii) has all requisite powers and all
governmental and regulatory licenses, authorizations,
consents and approvals required to carry on its business as
now conducted; and (iii) is qualified to transact business
as a foreign entity in, and is in good standing under the
laws of, all states in which it is required by applicable
law to maintain such qualification and good standing except
for those states in which the failure to qualify or maintain
good standing could not reasonably be expected to have a
Material Adverse Effect.
7.2 Authorization. The execution, delivery and
performance by Borrower of this Agreement and the other Loan
Documents and the commencement of the Cases are within the
powers of Borrower and have been duly authorized by all
necessary action. The execution, delivery and performance
by each Guarantor of any Continuing Guarantee and any other
Loan Documents executed by such Guarantor and the
commencement of the Cases are within the powers of such
Guarantor and have been duly authorized by all necessary
action.
7.3 Governmental Approvals. Except for the entry
of the Interim Order (and, where applicable, the Final
Order), no consent or approval of any governmental agency or
authority is required in connection with the execution,
delivery and performance by Borrower and the Guarantors of
the Loan Documents.
7.4 Binding Effect. Subject in each case to the
entry of the Interim Order (or, where applicable, the Final
Order), all Loan Documents are legal, valid and binding
obligations of Borrower and each Guarantor, as applicable,
enforceable according to their terms and conditions, and all
statements made in this Agreement are true and correct as of
the date hereof in all material respects, and the Letter of
Credit Application(s) and any future Loan Documents not
executed contemporaneously with the execution of this
Agreement, when executed and delivered in accordance with
this Agreement, will constitute the legal, valid and binding
obligations of Borrower and each Guarantor, as applicable,
enforceable in accordance with their respective terms.
7.5 ERISA. To the extent applicable, Borrower and
each Guarantor has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect
to each plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the
Code, and has not incurred any liability to the Pension
Benefit Guaranty Corporation or to a plan under Title IV of
ERISA which the failure to comply with could have a Material
Adverse Effect.
7.6 No Defaults. Neither Borrower nor any
Guarantor is in default in the performance, observance or
fulfillment of any Post-Petition (i) obligations, covenants
or conditions contained in any indenture, agreement or other
instrument to which it is a party, and which could have a
Material Adverse Effect or (ii) judgment, order, writ,
injunction, decree or decision of any government agency or
authority.
7.7 Liabilities, Litigation. Neither Borrower
nor any Guarantor has any material (individually or in the
aggregate) liabilities, direct or contingent, except as
disclosed or referred to in the most recent balance sheet of
Borrower delivered to the Lenders and, except as described
in the most recent balance sheet of Borrower delivered to
the Lenders or in the most recent quarterly 10Q or annual
10K filing of Borrower with the Securities and Exchange
Commission, there is no material (individually or in the
aggregate) litigation, legal or administrative proceeding,
investigation or other action of any nature pending or, to
the knowledge of Borrower, threatened against or affecting
Borrower or any Guarantor.
7.8 Tax Payment. Borrower and each Guarantor has
filed all tax returns and reports required to be filed,
which the failure to file could have a Material Adverse
Effect, and has paid all taxes, assessments, fees and other
governmental charges levied upon Borrower or any Guarantor
or upon any property owned by Borrower or any Guarantor or
upon any income of Borrower or any Guarantor, which are due
and payable, including interest and penalties, which the
failure to pay could have a Material Adverse Effect, or has
provided adequate reserves for the payment thereof.
7.9 Title to Property. Borrower and each
Guarantor is the sole and absolute owner of, or has the
legal right to use and occupy, all Property it claims to own
or which is necessary for Borrower or such Guarantor to
conduct its material businesses free and clear of all Liens
other than Permitted Liens and subject to the turnover and
release from arrest of the Midnight Express, Midnight Eagle
and Midnight Wrangler. Borrower and each Guarantor enjoys
peaceful and undisturbed possession in all material respects
under all leases under which its is operating as lessee
which is necessary for Borrower or such Guarantor to conduct
its material businesses free and clear of all Liens other
than Permitted Liens.
7.10 Compliance With Laws. Borrower and each
Guarantor has complied in all material respects with all
valid laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations,
directions and requirements of all federal, state, county,
municipal and other governments, agencies, departments,
divisions, commissions, boards, courts, authorities,
officials and officers, domestic or foreign, including,
without limitation, (i) all laws regarding the collection,
payment, and deposit of employees' income, unemployment,
social security, sales, and excise taxes (subject to any
Bankruptcy Court orders limiting or conditioning such
compliance), (ii) all requirements of ERISA, (iii) all
Environmental Laws and (iv) all laws pertaining to
occupational safety and health.
7.11 Other Instruments; None Burdensome. Neither
Borrower nor any Guarantor is a party to any indenture,
agreement or other instrument affecting its business,
properties or assets, operation or condition, whether
financial or otherwise, which could have a Material Adverse
Effect except as disclosed in the balance sheet of Borrower
delivered to the Lenders and, except as described in the
most recent balance sheet of Borrower delivered to the
Lenders or in the most recent quarterly 10Q or annual 10K
filing of Borrower with the Securities and Exchange
Commission.
7.12 Investments. Except as may be permitted by
Section 8.2(g) neither Borrower nor any Guarantor has any
Restricted Investments.
7.13 Subsidiaries. There are no Subsidiaries other
than as specifically set forth in Schedule 7.13. As of the
Effective Date, the stock or other equity interest of each
Guarantor is owned solely by Borrower. Borrower may at any
time amend, modify or supplement Schedule 7.13 by notifying
Agent in writing of any changes with respect to a Subsidiary
that is not a Guarantor, including any formation,
acquisition, merger or liquidation of any Subsidiary that is
not a Guarantor or any change in the capitalization of any
Subsidiary that is not a Guarantor, in each case, in
accordance with the terms of this Agreement and provided
that any such new Subsidiary shall, within fifteen (15) days
of the creation or acquisition of such Subsidiary, execute
and deliver to Agent all documents required by Section 5.6
SECTION 8. COVENANTS.
8.1 Affirmative Covenants of Borrower. Borrower
covenants and agrees that until the Final DIP Payment Date:
(a) Information. Borrower will deliver to Agent:
(i) within 45 days after the close of
each quarter of Borrower's fiscal year,
consolidated financial statements of
Borrower and its Subsidiaries consisting
of a balance sheet as of the end of such
fiscal quarter, a statement of earnings
and surplus for such fiscal quarter, and
a statement of cash flow for such fiscal
quarter certified by the Borrower's
Chief Financial Officer;
(ii) within 120 days after the
close of Borrower's fiscal year, a copy
of annual consolidated financial
statements of Borrower and its
Subsidiaries, including a balance sheet
as of the end of each such fiscal year,
a statement of earnings and surplus for
such fiscal year, and a statement of
cash flow for such fiscal year, which
statements shall be audited by an
independent certified public accounting
firm acceptable to the Required Lenders;
(iii) simultaneously with the
delivery of each set of financial
statements of Borrower referred to
above, a certificate of the Borrower's
Chief Financial Officer substantially in
the form attached to the Regions/EDC
Credit Agreement (with appropriate
insertions), accompanied by supporting
financial work sheets where appropriate,
stating whether there exists on the date
of such certificate any Default, and if
a Default then exists, setting forth the
details thereof and the action which
Borrower is taking or proposes to take
with respect thereto;
(iv) within thirty (30) days of filing,
furnish Lenders with copies of the state
and federal tax returns filed by
Borrower, with all schedules and
supporting documentation;
(v) promptly upon, and in any event within
three business days of, becoming aware
of the occurrence of any event which
constitutes a Default, notice of such
occurrence together with a detailed
statement by a responsible officer of
Borrower of the steps being taken by
Borrower to cure the effect of such
event;
(vi) on or before 3:00 p.m. eastern time on
each Tuesday, Borrower shall provide the
Agent and the Lenders with a weekly
written report with respect to the
Budget setting forth the actual
performance of the Borrower against the
forecasts in the Budget and an analysis
of any material variance of such actual
performance against such forecasted
performance in the Budget; and
(vii) with reasonable promptness,
such further information regarding the
business, affairs and financial
condition of Borrower or any Guarantor
as the Required Lenders may from time to
time reasonably request.
(b) Compliance with Laws. Borrower will observe
and comply, and cause each Guarantor to observe and comply,
with all valid laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations,
directions and requirements of all federal, state, county,
municipal and other governments, agencies, departments,
divisions, commissions, boards, courts, authorities,
officials and officers, domestic or foreign, including,
without limitation, (i) all laws regarding the collection,
payment, and deposit of employees' income, unemployment,
social security, sales, and excise taxes (subject to any
Bankruptcy Court orders limiting or conditioning such
compliance), (ii) all applicable requirements of ERISA,
(iii) all applicable Environmental Laws and (iv) all laws
pertaining to occupational safety and health, which the
failure to comply with could have Material Adverse Effect.
(c) Payment of Indebtedness. In addition to the
Borrower's obligations to pay the Obligations from time to
time, the Borrower will, and it will cause each Guarantor
to, pay and discharge any and all other Post-Petition
Indebtedness (unless prohibited by any Bankruptcy Court
orders with respect to such other Post-Petition
Indebtedness) payable by Borrower or a Guarantor, as the
case may be, and any interest or premium thereon, when due
in accordance with the agreement, document or instrument
relating to such Indebtedness, provided, however, that
neither Borrower nor any Guarantor shall be required to pay
any such Indebtedness (excluding the Obligations) which is
being contested in good faith and by appropriate proceedings
being diligently conducted and for which adequate provision
in accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be paid any such Indebtedness forthwith upon the
commencement of proceedings to foreclose any Lien which is
attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond.
(d) Payment of Taxes. Borrower will, and will
cause each Guarantor to, pay and discharge all Post-Petition
taxes, assessments and governmental charges or levies
imposed upon it, or upon its income and profits, prior to
the date on which penalties might attach thereto and all
lawful claims which, if unpaid, might become a Lien upon the
assets of Borrower or any Guarantor; provided, however, that
neither Borrower nor any Guarantor shall be required to pay
and discharge any such tax, assessment, charge, levy or
claim so long as the legality thereof shall be contested in
good faith and by appropriate proceedings and for which
adequate provision in accordance with GAAP has been made,
except that Borrower or such Guarantor, as the case may be,
shall pay or cause to be paid all such taxes, assessments
and governmental charges forthwith upon the commencement of
proceedings to sell, seize or collect any Property attached
as security therefor, unless such sale, seizure or
collection is stayed by the filing of an appropriate bond.
(e) Payment of Claims. Borrower will, and it
will cause each of Guarantor to, promptly pay and discharge
all Post-Petition (i) trade accounts payable in accordance
with usual and customary business practices and (ii) claims
for work, labor or materials which if unpaid might become a
Lien upon any of its Property or assets; provided, however,
that neither Borrower nor any Guarantor shall be required to
pay any such account payable or claim the payment of which
is being contested in good faith and by appropriate
proceedings and for which adequate provision as determined
in accordance with GAAP has been made, except that Borrower
or such Guarantor, as the case may be, shall pay or cause to
be paid all such accounts payable and claims forthwith upon
the commencement of proceedings to foreclose any Lien which
is attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond.
(f) Insurance. Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies,
insurance on all its Property in at least such amounts and
against at least such risks as are usually insured against
in the same general area by companies engaged in the same or
a similar business. All such insurance may be subject to
reasonable deductible amounts. Borrower shall deliver to
Agent certificate(s) of insurance on the date hereof and
upon the annual (or other shorter period of time) renewal of
such policies specifying the details of all insurance then
in effect; together with a certificate of an officer of
Borrower that all premiums then due have been paid.
Borrower shall notify Agent immediately in writing of any
material fire or other casualty to or accident involving any
of the Collateral, whether or not such fire, casualty or
accident is covered by insurance. Borrower shall notify,
and shall cause each Guarantor to notify, promptly the
insurance company and to submit an appropriate claim and
proof of claim to the insurance company if any Collateral is
damaged or destroyed by fire or other casualty. Borrower
shall not, and shall not allow any Guarantor to, declare or
agree with underwriters that any Collateral is a
constructive or compromised, agreed or arranged constructive
total loss without the prior written consent of the Required
Lenders.
(g) Maintenance of Property. Borrower will, and
will cause each of its Subsidiaries to, at all times,
maintain, protect and keep in good repair, working order and
condition (ordinary wear and tear excepted), all Property
necessary to the operation of Borrower and its Subsidiaries'
material businesses.
(h) Maintenance of Intellectual Property.
Borrower will, and will cause each of its Subsidiaries to,
obtain or maintain in full force and effect, all licenses,
franchises, intellectual property, permits, authorizations
and other rights as are necessary for the conduct of its
business.
(i) Corporate Existence. Borrower will, and it
will cause each of its Subsidiaries to, do all things
necessary to (i) preserve and keep in full force and effect
at all times its corporate or other existence and (ii) be
duly qualified to do business in all jurisdictions where the
nature of its business or its ownership of Property requires
such qualification except for those jurisdictions in which
the failure to qualify could not reasonably be expected to
have a Material Adverse Effect.
(j) Notice of Claim. Borrower will, and will
cause each of its Subsidiaries to, promptly, and in any
event within three business days, notify Lenders of (i) the
arising of any Post-Petition litigation or dispute,
threatened against or affecting assets of Borrower or any
Guarantor, which, if adversely determined, could have a
Material Adverse Effect or (ii) any default under any Post-
Petition contract to which Borrower or any Guarantor is a
party. Receipt of notice by Agent of any such litigation in
the Cases shall constitute notice for purposes of this
Section 8.1(j).
(k) Maintenance of Books and Records,
Consultations and Inspections. Borrower will, and it will
cause each of its Subsidiaries to, maintain books and
records in accordance with GAAP and in which full, true and
correct entries shall be made of all dealings and
transactions in relation to its business and activities.
Borrower will, and it will cause each of its Subsidiaries
to, permit Lenders (and any Person appointed by the Required
Lenders to whom Borrower does not reasonably object) to
discuss the affairs, finances and accounts of Borrower and
each Guarantor with the officers of Borrower and each
Guarantor and their independent public accountants, all at
such reasonable times and as often as the Required Lenders
may from time to time reasonably request. Borrower will
also permit, and will cause each Guarantor to permit,
inspection of its Property, books and records by Lenders
(and any Person appointed by the Required Lenders to whom
Borrower does not reasonably object) during normal business
hours and at other reasonable times.
(l) Further Assurances. Borrower will, and it
will cause each Guarantor to, execute and deliver to
Lenders, at any time and from time to time, any and all
further agreements, documents and instruments, and take any
and all further actions which may be required under
applicable law, or which Lenders may from time to time
reasonably request, in order to effectuate the transactions
contemplated by this Agreement and the other Loan Documents.
(m) Agreements. Neither Borrower nor any
Guarantor will default under any Post-Petition indenture,
contract, agreement, lease or other instrument to which
Borrower or any Guarantor is a party or by which Borrower,
any Guarantor or any Property of Borrower or any Guarantor
is bound or affected.
(n) State of Organization; Location of Chief
Executive Office and Collateral. Neither Borrower nor any
Guarantor will change its state of incorporation or other
organization, principal place of business or chief executive
office, unless Borrower or such Guarantor, as applicable,
has obtained Agent's prior written consent and has taken
such action as is necessary to cause the security interest
of Secured Parties in the Collateral to continue to be a
first priority perfected security interest subject only to
Permitted Liens, which consent shall not be unreasonably
conditioned, delayed or withheld.
(o) Accountant. Borrower shall give each of the
Lenders prompt notice of any change of Borrower's
independent certified public accountants. Borrower shall at
all times utilize independent certified public accountants
of nationally recognized standing reasonably acceptable to
the Required Lenders.
(p) Midnight Hunter. In the event that the
Borrower or the other Loan Parties have not contracted or
otherwise arranged for a profitable job that utilizes the
Midnight Hunter with the result that the Midnight Hunter
remains idle for a consecutive two (2) week period, the
Borrower shall notify the Agent in writing and, upon a
request from the Agent with respect thereto, shall file a
motion seeking, and take all necessary step to obtain, the
rejection of the lease for the Midnight Hunter in the Case.
(q) Pursuit of Accounts Receivable. Borrower
shall, and shall cause each Guarantor to, pursue payment on
all accounts receivable, and, in connection therewith,
Borrower may not, and will not allow any Guarantor to,
settle or compromise any account receivable by an amount in
excess of $100,000 per account debtor without the Lenders'
prior written consent.
8.2 Negative Covenants of Borrower. Borrower
covenants and agrees that until the Final DIP Payment Date:
(a) Limitation on Indebtedness. Borrower will
not, and it will not cause or permit any Guarantor to, incur
or be obligated on any Indebtedness other than: (i) the
Obligations to the Agent and the Lenders; (ii) Indebtedness
relating to employee benefit plans; (iii) Indebtedness
described in clause (a) or (b) of the defined term
Restricted Investment; (iv) Indebtedness in respect of
taxes, assessments, governmental charges or levies and
claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be
made in accordance with the provisions of Section 8.1(d) or
Section 8.1(e); (v) Indebtedness in respect of judgments or
awards (which do not constitute an Event of Default under
Section 9.8) that have been in force for less than the
applicable period for taking an appeal and for which
adequate provision as determined in accordance with GAAP has
been made so long as execution is not levied thereunder and
in respect of which Borrower or any Guarantor shall at the
time in good faith be prosecuting an appeal or proceedings
for review and a suspensive appeal bond in the full amount
of such judgment or award shall have been obtained by
Borrower or such Guarantor with respect thereto; (vi)
current liabilities of Borrower or any Guarantor incurred in
the ordinary course of business not incurred through (A) the
borrowing of money, or (B) the obtaining of credit except
for credit on an open account basis customarily extended and
in fact extended in connection with normal purchases of
goods and services; (vii) endorsements for collection,
deposits or negotiation and warranties of products or
services, in each case incurred in the ordinary course of
business; (viii) Indebtedness in respect of performance,
surety or appeal bonds obtained in the ordinary course of
Borrower's or any Guarantor's business; (xi) Indebtedness
existing as of the Petition Date; (x) Pre-Petition
Indebtedness relating to the MIDNIGHT WRANGLER and MIDNIGHT
GATOR in a principal amount not exceeding $15,000,000.00 in
the aggregate at any one time outstanding; (xii) Pre-
Petition Indebtedness relating to the MIDNIGHT EAGLE in a
principal amount not exceeding $9,250,000.00 in the
aggregate at any one time outstanding; (xiii) Post-Petition
Indebtedness relating to the MIDNIGHT WRANGLER, MIDNIGHT
GATOR and MIDNIGHT EAGLE, and all Post-Petition accounts
receivables generated with respect thereto; (xiv) Post-
Petition Indebtedness with respect to all other property or
assets of the Debtors that does not constitute part of the
Collateral; and (xv) guarantees by Borrower of the
performance of contracts by Guarantors entered into in the
ordinary course of business.
(b) Consolidation, Merger, Sale of Assets,
Dissolution, Etc. Borrower will not, and will not cause or
permit any Guarantor to, (i) directly or indirectly, merge
into or with or consolidate with any other Person or permit
any other Person to merge into or with or consolidate with
it provided that Borrower may cause a Guarantor to merge or
consolidate into Borrower or any other Guarantor, (ii) sell,
assign, lease, transfer, abandon or otherwise dispose of any
of its Property (including, without limitation, any shares
of capital stock or other equity interest of a Guarantor
owned by Borrower or another Guarantor), except for (A)
sales in the ordinary course of business of those items
excluded from the definition of Restricted Investments, (B)
sales of inventory in the ordinary course of business, (C)
sales of the Midnight Express or other Vessels as
contemplated in Section 9.10 of this Agreement or (C) sales
of vessels that are not Collateral so long as the proceeds
thereof are used to pay Indebtedness or purchase replacement
vessels or equipment or (iii) undertake any major expansion.
(c) Changes in Nature of Business. Borrower will
not, and it will not cause or permit any of Guarantor to,
engage in any business if, as a result, the general nature
of the business which would then be engaged in by Borrower
and the Guarantors, considered as a whole, would be
substantially changed from the Company Business.
(d) Change in Control. Borrower shall not allow
any Change in Control to occur.
(e) Ownership of Subsidiaries. Borrower will not
cause or permit any of its Subsidiaries to (i) authorize or
issue any new types, varieties or classes of capital stock,
membership interest or any other equity interest or any
bonds or debentures, subordinated or otherwise, or any
warrants or options to purchase any stock, membership
interest or any other equity interest, (ii) authorize or
issue any additional shares of capital stock, membership
interest or any other equity interest, (iii) declare any
stock, membership interest or other equity interest
Distributions or stock, membership interest or other equity
interest splits or (iv) take any other action which could,
directly or indirectly, decrease Borrower's ownership
interest in any of its Subsidiaries.
(f) Liens. Borrower will not, and will not cause
or permit any Guarantor to, mortgage or encumber any of its
Property or suffer any Liens to exist on any of its Property
without the prior written consent of the Required Lenders
other than Permitted Liens.
(g) Restricted Investments. Borrower will not,
and it will not cause or permit any Guarantor to, directly
or indirectly, make or hold any Post-Petition Restricted
Investments.
(h) Change in Management. Borrower will not, and
will not cause or permit any of its Subsidiaries to,
terminate or make any substantial change in the duties, as
of the Effective Date, of Lyle G. Stockstill.
(i) Critical Vendors. Borrower may not, and will
not allow any Loan Party to, pay any critical vendors for
Pre-Petition Date claims without the prior written consent
of the Agent and the Lenders.
(j) Accounts Receivable Ending Balance. Tested
as of the end of each week, Borrower's (x) weekly actual
"borrowing base test" shall not vary by more than 5% (in the
negative) from the Borrower's (y) weekly forecasted
"borrowing base test" (the term "borrowing base test" to
mean the line item in the Budget similarly named).
8.3 Use of Proceeds. Borrower covenants and agrees
that the proceeds of the Line of Credit Loans will be used
solely as set forth in the 13 week cash flow forecast as
agreed from time to time between the Borrower, the Agent and
the Lenders (the "Budget"), but shall not be used in direct
connection with or to directly support the operation of the
Midnight Gator, Midnight Wrangler or Midnight Eagle, but,
for the absence of doubt, may be used for general and
administrative expenses of the Borrower and the other Loan
Parties. Immediately upon the sale of any Vessel, the
Budget then in effect shall be amended as agreed among the
Borrower, the Agent and the Lenders to reflect the
elimination of expenses associated with such sold Vessel.
The Letters of Credit will be used solely for the
requirements of the Company Business in the ordinary course
of business. In no event may the proceeds of any Loan or
Letter of Credit be used in violation of any applicable law
or regulation.
SECTION 9. EVENTS OF DEFAULT.
If any of the following (each of the following herein
sometimes called an "Event of Default") shall occur and be
continuing:
9.1 Borrower shall fail to pay any of the
Obligations (or interest on the Lenders' Pre-Petition
Indebtedness) when due and such failure shall continue
unremedied for five (5) days after written or telegraphic
notice thereof shall have been given to Borrower by Agent;
9.2 Any representation or warranty of Borrower or
any Guarantor made in this Agreement, in any other Loan
Document to which Borrower or any Guarantor is a party or in
any certificate, agreement, instrument or statement
furnished or made or delivered pursuant hereto or thereto by
Borrower or any Guarantor or in connection herewith or
therewith, shall prove to have been untrue or incorrect in
any material respect when made or effected;
9.3 Borrower or any Guarantor shall fail to perform
or observe any term, covenant, or agreement (other than
failure to pay when due any of the Obligations) contained in
this Agreement or in any other Loan Document, and such
failure shall continue unremedied for twenty (20) days after
the earlier to occur of (x) actual knowledge by Borrower or
Guarantor or (y) written or telegraphic notice thereof shall
have been given to Borrower by Agent, or if Borrower or any
Loan Party shall fail to perform, or otherwise cause or
permit a default under, any term, condition, provision or
requirement contained in any Order;
9.4 This Agreement or any of the other Loan
Documents shall at any time for any reason (other than
cancellation by Agent) cease to be in full force and effect
or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability
thereof shall be contested or denied by Borrower or any
Guarantor, or if the transactions completed hereunder or
thereunder shall be contested by Borrower or any Guarantor
or if Borrower or any Guarantor shall deny that it has any
or further liability or obligation hereunder or thereunder;
9.5 Any of the Cases shall be dismissed or converted
to a case under chapter 7 of the Bankruptcy Code or any Loan
Party shall file a motion or other pleading seeking the
dismissal of any of the Cases under Section 1112 of the
Bankruptcy Code or otherwise; a trustee under chapter 7 or
chapter 11 of the Bankruptcy Code, a responsible officer or
an examiner with enlarged powers relating to the operation
of the business (powers beyond those set forth in Section
1106(a)(3) and (4) of the Bankruptcy Code) under Section
1106(b) of the Bankruptcy Code shall be appointed in any of
the Cases and the order appointing such trustee, responsible
officer or examiner shall not be reversed or vacated within
30 days after the entry thereof; or an application shall be
filed by any Loan Party for the approval of any other
Superpriority Claim (other than the Carve Out) in any of the
Cases which is pari passu with or senior to the claims of
the Agents and the Lenders with respect to the Collateral
against any Loan Party hereunder, or there shall arise or be
granted any such pari passu or senior Superpriority Claim
with respect to the Collateral;
9.6 The Bankruptcy Court shall enter an order or
orders granting relief from the automatic stay applicable
under Section 362 of the Bankruptcy Code to the holder or
holders of any security interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like)
on any of the Collateral, or an order of the Bankruptcy
Court shall be entered reversing, amending, supplementing,
staying, vacating or otherwise modifying the Interim Order
or the Final Order, as applicable;
9.7 Borrower, any Guarantor or any other Obligor
shall be in default under any Post-Petition Indebtedness;
9.8 One or more judgments, decrees, arbitration
awards or rulings shall be entered against Borrower or any
Guarantor involving in the aggregate a liability (not paid
or covered by insurance) of $10,000.00 or more arising from
a Post-Petition event and all such judgments, decrees,
awards, and rulings shall not have been vacated, paid,
discharged, stayed or suspensively appealed within thirty
(30) days from the entry thereof;
9.9 The Final Order has not been entered by the
Bankruptcy Court on or before January 31, 2005 or such other
date as agreed to in writing by the Agent and Lenders in
their sole discretion;
9.10 If the Loan Parties have failed to (i) execute a
binding agreement for the sale of the Midnight Express and
file a motion with the Bankruptcy Court seeking to establish
bid procedures for such sale on or prior to a date to be
agreed upon among the Borrower, the Agent and the Lenders or
(ii) file a motion on or before February 10, 2005 to approve
the employment of a broker designated by Borrower (and
approved by the Agent and the Lenders, such approval not to
be unreasonably withheld) to sell all other Vessels
comprising part of the Collateral, such Vessels to be listed
for an aggregate sale amount, together with the reasonably
anticipated proceeds from the sale of the Midnight Express,
of not less than an amount sufficient to pay in full the
Obligations and the Lenders' Pre-Petition Indebtedness;
9.11 Except as permitted by the Orders or the First
Day Orders, any Loan Party shall make any Pre-Petition
Payment other than Pre-Petition Payments authorized by the
Bankruptcy Court;
9.12 Borrowers' chief restructuring advisor, Bridge
Associates LLC, shall no longer provide such services for
any reason (whether such services are terminated by any
Borrower, Bridge Associates LLC or otherwise);
9.13 The Loan Parties shall (or any successor in
interest to any Loan Party, including, without limitation,
any trustee in the Cases or any other cases under the
Bankruptcy Code in which any of the Loan Parties is a debtor
therein) assert any claim for costs or expenses of
administration of the Cases against any of the Collateral,
pursuant to Section 506(c) of the Bankruptcy Code or
otherwise; or
9.14 A material adverse change with respect to the
Properties, assets, liabilities, business, operations,
income or condition (financial or otherwise) of Borrower and
the Guarantors taken as a whole shall have occurred since
the Effective Date.
THEN, and in each such event, and without further
order of or application to the Bankruptcy Court, the Agent
shall, if requested in writing by the Required Lenders, and
may, in its sole and absolute discretion, upon the oral
request of the Required Lenders, declare that the
obligations of the Lenders to make Loans under this
Agreement and to issue Letters of Credit under this
Agreement have terminated, whereupon such obligations of the
Lenders shall be immediately and forthwith terminated, and
the Agent shall, if requested in writing by the Required
Lenders, and may, in its sole and absolute discretion, upon
the oral request of the Required Lenders, declare the entire
outstanding principal balance of and all accrued and unpaid
interest on the Notes and all of the other Loans under this
Agreement and all of the other Obligations to be forthwith
due and payable, whereupon all of the unpaid principal
balance of and all accrued and unpaid interest on the Notes
and all of the other Loans under this Agreement and all such
other Obligations shall become and be immediately due and
payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived
by Borrower, and the Agent and each of the Lenders may
terminate the Borrower's use of Cash Collateral and exercise
any and all other rights and remedies which they may have
under any of the Loan Documents or under applicable law;
provided, however, that upon the occurrence of any event
described in Sections 9.5, the obligations of the Lenders to
make Loans under this Agreement and to issue Letters of
Credit under this Agreement shall automatically terminate
and the entire outstanding principal balance of and all
accrued and unpaid interest on the Notes and all of the
other Loans under this Agreement and all of the other
Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived
by Borrower, and the Agent and each of the Lenders may
exercise any and all other rights and remedies which they
may have under any of the Loan Documents or under applicable
law.
SECTION 10. AGENT.
10.1 Appointment. Regions is hereby appointed by
the Lenders as Agent under and for purposes of this
Agreement, the Notes and the other Loan Documents. The
Agent agrees to act as such upon the express conditions
contained in this Agreement and the other Loan Documents.
The Agent shall hold all Collateral as the agent for all of
the Lenders and all net proceeds of the Collateral shall be
shared by the Lenders ratably in accordance with their
respective Pro Rata Shares.
10.2 Powers.
(a) The Agent shall have and may exercise such
powers hereunder as are specifically delegated to the Agent
by the terms of this Agreement and the other Loan Documents,
together with such powers as are reasonably incidental
thereto. Each Lender and the Agent hereby authorizes the
Agent to enter into the Loan Documents to which Agent is a
party and to take all actions contemplated thereby and
confirms its appointment of Regions Bank as Agent under the
terms and conditions of the Loan Documents. Each Lender
hereby confirms its agreement to be bound by the terms and
conditions of the security documents included within the
Loan Documents. The Agent shall have no implied duties to
the Lenders, nor any obligation to the Lenders to take any
action under this Agreement or any of the other Loan
Documents, except any action specifically provided by this
Agreement or any of the other Loan Documents to be taken by
the Agent. Without limiting the generality of the
foregoing, the Agent shall not be required to take any
action with respect to any Default or Event of Default,
except as expressly provided in Section 9. Each Lender and
the Agent agree that no Lender shall have any right
individually to seek to realize upon the Collateral granted
for the benefit of the Agent and the Lenders pursuant to any
of the Loan Documents, it being understood and agreed that
such rights and remedies may be exercised by the Agent as
Agent for the benefit of the Secured Parties upon the terms
of the Loan Documents.
(b) Each of the Lenders also hereby irrevocably
appoints and authorizes the Agent to act as security trustee
on its behalf with regard to (i) the security, powers,
rights, titles, benefits and interests (both present and
future) constituted by and conferred on it or for its
benefit under or pursuant to this Agreement or any of the
Loan Documents (including, without limitation, the benefit
of all covenants, undertakings, representations, warranties
and obligations given, made or undertaken to it in this
Agreement or in any of the other Loan Documents), (ii) all
monies, property and other assets paid or transferred to or
vested in it or any agent thereof or received or recovered
by it or any agent thereof pursuant to, or in connection
with, this Agreement or any of the other Loan Documents,
whether from the Borrower, any of the Subsidiaries or any
other person, and (iii) all monies, investments, property or
other assets at any time representing or deriving from any
of the foregoing, including all interest, income and other
sums at any time received or receivable by it or any agent
thereof in respect of the same (or any part thereof). The
Agent hereby accepts such appointment but shall have no
obligations under this Agreement or under any of the Loan
Documents except those expressly set forth herein and
therein.
(c) Each Lender hereby agrees, and each holder of
any Obligations by the acceptance thereof will be deemed to
agree, that, except as otherwise set forth herein, any
action taken by the Agent or the Required Lenders in
accordance with the provisions of this Agreement or the
other Loan Documents, and the exercise by the Agent or the
Required Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the
Lenders. The Agent is hereby authorized on behalf of all of
the Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time, to take
any action with respect to any Collateral or Loan Documents
which may be necessary to perfect and maintain perfected the
Liens on the Collateral granted by the Loan Documents. The
Lenders irrevocably authorize the Agent at its option and in
its discretion, to release any Lien granted to or held by
the Agent upon any Collateral (i) upon termination of the
Line of Credit Commitments and the payment in full of all
Obligations; (ii) constituting property sold or to be sold
or disposed of as part of or in connection with any
disposition permitted hereunder or by any other Loan
Document; (iii) constituting property in which neither
Borrower nor any Guarantor owned any interest at the time
the Lien was granted or at any time thereafter; (iv)
constituting property leased to Borrower or any Guarantor
under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to
expire and which has not been, and is not intended by
Borrower or any Guarantor to be, renewed or extended; (v)
consisting of an instrument evidencing Indebtedness if the
Indebtedness evidenced thereby has been paid in full; or
(vi) if approved, authorized or ratified in writing by the
Required Lenders. Upon request by the Agent at any time,
the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to
this Section 10.2.
10.3 General Immunity. Neither the Agent nor any of
its directors, officers, employees, agents or advisors shall
be liable to any of the Lenders for any action taken or not
taken by it (i) with the consent or at the request of the
Required Lenders or (ii) in the absence of its own gross
negligence or willful misconduct.
10.4 No Responsibility for Loans, Recitals, Etc.
Neither the Agent nor any of its directors, officers,
employees, agents or advisors shall (i) be responsible for
or have any duty to ascertain, inquire into or verify any
recitals, reports, statements, representations or warranties
contained in this Agreement or any of the other Loan
Documents or furnished pursuant hereto or thereto; (ii) be
responsible for any Loans or Letters of Credit hereunder
(except in Agent's capacity as a Lender hereunder with
respect to its Pro Rata Share thereof pursuant to the terms
of this Agreement), (iii) be bound to ascertain or inquire
as to the performance or observance of any of the terms of
this Agreement or any of the other Loan Documents; (iv) be
responsible for the satisfaction of any condition specified
in Section 6, except receipt of items required to be
delivered to the Agent; or (v) be responsible for the
validity, effectiveness, genuineness or enforceability of
this Agreement or any of the other Loan Documents; or (vi)
be responsible for the creation, attachment or perfection of
any security interests or liens purported to be granted to
the Agent or any of the Lenders pursuant to this Agreement
or any of the other Loan Documents. The Agent shall not
incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may
be a Lender wire, telex, telecopy or similar writing)
believed by it to be genuine or to be signed by the proper
party or parties.
10.5 Right to Indemnity. Notwithstanding any other
provision contained in this Agreement to the contrary, to
the extent Borrower fails to reimburse the Agent pursuant to
Section 11.3 or Section 11.5, the Lenders shall ratably in
accordance with their respective Pro Rata Shares of the
aggregate amount of Loans and Letters of Credit then
outstanding, or if no Loans or Letters of Credit are then
outstanding, their respective Pro Rata Shares of the total
Commitments of all of the Lenders, indemnify the Agent and
hold it harmless from and against any and all liabilities,
losses (except losses occasioned solely by failure of
Borrower to make any payments or to perform any obligations
required by this Agreement (other than those described in
Sections 11.3 and 11.5), the Notes, the Letter of Credit
Applications or any of the other Loan Documents), costs
and/or expenses, including, without limitation, reasonable
attorneys' fees and expenses, which the Agent may incur,
directly or indirectly, in connection with this Agreement,
the Notes or any of the other Loan Documents, or any action
or transaction related hereto or thereto; provided only that
the Agent shall not be entitled to such indemnification for
any losses, liabilities, costs and/or expenses directly and
solely resulting from its own gross negligence or willful
misconduct. This indemnity shall be a continuing indemnity,
contemplates all liabilities, losses, costs and expenses
related to the execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, and shall
survive the satisfaction and payment of the Loans, the
expiration or other termination of the Letters of Credit and
the termination of this Agreement.
10.6 Action Upon Instructions of Required Lenders.
The Agent agrees, upon the written request of the Required
Lenders, to take any action of the type specified in this
Agreement or any of the other Loan Documents as being within
the Agent's rights, duties, powers or discretion.
Notwithstanding the foregoing, the Agent shall be fully
justified in failing or refusing to take any action
hereunder, unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all
liabilities, losses, costs and expenses (including, without
limitation, attorneys' fees and expenses) which may be
incurred by it by reason of taking or continuing to take any
such action, other than any liability which may arise out of
Agent's gross negligence or willful misconduct. The Agent
shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with written
instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all
holders of the Notes. In the absence of a request by the
Required Lenders, the Agent shall have authority, in its
sole discretion, to take or not to take any action, unless
this Agreement or any of the other Loan Documents
specifically requires the consent of the Required Lenders or
of all of the Lenders.
10.7 Reliance on Documents; Employment of Agents and
Counsel. The Agent shall be entitled to rely upon any note,
notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine
and correct and to have been signed or sent by the proper
person or persons. The Agent may execute any of its duties
as Agent hereunder by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders
for the default or misconduct of any such agents or
attorneys-in-fact selected by it in good faith and with
reasonable care, except as to money or securities received
by it or its authorized agents. The Agent shall be entitled
to advice and opinion of legal counsel concerning all legal
matters and all matters pertaining to the duties of the
Agent.
10.8 May Treat Payee as Owner. The Agent may deem
and treat the payee of any Note as the owner thereof for all
purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with
the Agent pursuant to Section 11.14. Any request, authority
or consent of any person, firm or corporation who at the
time of making such request or giving such authority or
consent is the holder of any such Note shall be conclusive
and binding on any subsequent holder, transferee or assignee
of such Note or of any Note issued in exchange therefor.
10.9 Agent's Reimbursement. Each Lender agrees to
reimburse the Agent pro rata in accordance with its Pro Rata
Share for any out-of-pocket expenses not reimbursed by
Borrower (a) for which the Agent is entitled to
reimbursement by Borrower under this Agreement or any of the
other Loan Documents and (b) for any other out-of-pocket
expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery,
amendment, modification, extension, renewal, administration
and/or enforcement of this Agreement and/or any of the other
Loan Documents.
10.10 Rights as a Lender. With respect to its
commitment, the Loans made by it and the Notes issued to it,
Regions shall have the same rights and powers hereunder as
any Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" shall,
unless the context otherwise indicates, include Regions in
its individual capacity. Regions may accept deposits from,
lend money to and generally engage in any kind of banking or
trust business with Borrower as if it were not the Agent.
10.11 Independent Credit Decision. Each Lender
acknowledges that it has, independently and without reliance
upon the Agent or any Lender and based on the financial
statements referred to in Section 7.7 and such other
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also
acknowledges that it will, independently and without
reliance upon the Agent or any Lender and based on such
documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the
other Loan Documents.
10.12 Resignation of Agent. Subject to the
appointment of a successor Agent, the Agent may resign as
Agent for the Lenders under this Agreement and the other
Loan Documents at any time by thirty (30) days notice in
writing to the Lenders. Such resignation shall take effect
upon appointment of such successor Agent. The Required
Lenders shall have the right to appoint a successor Agent
(and if no Default or Event of Default then exists
hereunder, such appointment shall be with the consent of
Borrower, which consent shall not be unreasonably withheld),
and the successor Agent shall be entitled to all of the
rights of, and vested with the same powers as, the original
Agent under this Agreement and the other Loan Documents.
Resignation by the Agent shall not affect or impair the
rights of the Agent under Sections 10.5 and 10.9 hereof with
respect to all matters preceding such resignation.
10.13 Duration of Agency. The agency established by
Section 10.1 hereof shall continue, and Sections 10.1
through and including this Section 10.13 shall remain in
full force and effect, until all of the Obligations shall
have been paid in full and the Lenders' commitments to make
Loans, issue Letters of Credit and/or extend credit to or
for the benefit of Borrower shall have terminated or expired
(and the provisions of Section 10.5 shall continue
thereafter as provided therein).
SECTION 11. GENERAL.
11.1 No Waiver. No failure or delay by the Agent or
any of the Lenders in exercising any right, remedy, power or
privilege hereunder or under any other Loan Document shall
operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The remedies provided herein and in the other
Loan Documents are cumulative and not exclusive of any
remedies provided by law. Nothing herein contained shall in
any way affect the right of any of the Lenders to exercise
any statutory or common law right of Lender's lien or
setoff.
11.2 Right of Setoff. Upon the occurrence and
during the continuance of any Event of Default, each of the
Lenders is hereby authorized at any time and from time to
time, without notice to Borrower (any such notice being
expressly waived by Borrower) and to the fullest extent
permitted by law, to setoff and apply any and all deposits
(general or special, time or demand, provisional or final)
at any time held by such Lender(s) and any and all other
indebtedness at any time owing by such Lender(s) to or for
the credit or account of Borrower against any and all of the
Obligations. Each of the Lenders agrees to promptly notify
Borrower after any such setoff and application made by such
Lender(s), provided, however, that the failure to give such
notice shall not affect the validity of such setoff and
application. The rights of the Lenders under this Section
11.2 are in addition to any other rights and remedies
(including, without limitation, other rights of setoff)
which the Lenders may have. Nothing contained in this
Agreement or any other Loan Document shall impair the right
of any of the Lenders to exercise any right of setoff or
counterclaim it may have against Borrower and to apply the
amount subject to such exercise to the payment of
indebtedness of Borrower unrelated to this Agreement or the
other Loan Documents.
11.3 Cost and Expenses. Borrower agrees, whether or
not any Loan is made hereunder or any Letter of Credit is
issued hereunder, to pay the Agent upon demand (i) all out-
of-pocket costs and expenses and all reasonable attorneys'
fees of the Agent and/or each of the Lenders in connection
with the Cases and the preparation, documentation,
negotiation, execution, amendment, modification, extension
and/or renewal of this Agreement, the Notes, the Letter of
Credit Application(s) and the other Loan Documents, (ii) all
out-of-pocket costs and expenses and all reasonable
attorneys' fees of the Agent and/or each of the Lenders in
connection with the preparation of any waiver or consent
hereunder or under any other Loan Documents, (iii) if an
Event of Default occurs, all out-of-pocket costs and
expenses and all reasonable attorneys' fees incurred by the
Agent and/or each of the Lenders in connection with such
Event of Default and collection and other enforcement
proceedings resulting therefrom, (iv) all out-of-pocket
costs and expenses and all reasonable attorneys' fees
incurred by the Agent and/or each of the Lenders in
connection with the enforcement of any rights and/or
remedies of the Agent or any of the Lenders to collect any
of the Obligations, and (v) all other reasonable attorneys'
fees and out-of-pocket costs and expenses incurred by the
Agent and/or each of the Lenders relating to or arising out
of or in connection with this Agreement or any of the other
Loan Documents. Borrower further agrees to pay or reimburse
the Agent and each of the Lenders for any stamp or other
taxes or costs which may be payable with respect to the
execution, delivery, recording and/or filing of this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents. All of the obligations of
Borrower under this Section 11.3 shall survive the
satisfaction and payment of the Obligations and the
termination of this Agreement. As used herein, "attorneys'
fees" shall include, without limitation, fees on a solicitor
and its own client basis and extra-judicial fees.
11.4 Environmental Indemnity. Borrower hereby agrees
to indemnify the Agent and each of the Lenders and any
holder(s) of the Notes, and the officers, directors,
employees, agents and affiliates of the Agent, each of the
Lenders and such holder(s) (collectively, the "Indemnitees")
and hold the Indemnitees harmless from and against any and
all losses, liabilities, damages, injuries, costs, expenses
and claims of any and every kind whatsoever (including,
without limitation, reasonable court costs and attorneys'
fees and expenses) which at any time or from time to time
may be paid, incurred or suffered by the Indemnitees, with
respect to or as a direct or indirect result of the
violation by Borrower or any Guarantor of any Environmental
Laws; or with respect to, or as a direct or indirect result
of the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from,
properties owned or operated by Borrower and/or any
Guarantor of any hazardous substances or any other hazardous
or toxic waste, substance or constituent or other substance
(including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or
arising under the Environmental Laws); and the provisions of
and undertakings and indemnification set out in this Section
11.4 shall survive the satisfaction and payment of the
Obligations and the termination of this Agreement; provided
that Borrower shall have no obligation to an Indemnitee
hereunder with respect to indemnified liabilities arising
from the gross negligence or willful misconduct of that
Indemnitee.
11.5 General Indemnity. In addition to the payment
of expenses pursuant to Section 11.3, whether or not the
transactions contemplated hereby shall be consummated,
Borrower hereby agrees to indemnify and pay Indemnitees and
hold Indemnitees harmless from and against any and all other
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of
counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitees
shall be designated a party thereto), that may be imposed
on, incurred by or asserted against the Indemnitees, in any
manner relating to or arising out of this Agreement, any of
the other Loan Documents or any other agreement, document or
instrument executed and delivered by Borrower or any other
Obligor in connection herewith or therewith, the statements
contained in any commitment letters delivered by the Agent
or any of the Lenders, the agreement of any of the Lenders
to make the Loans hereunder, the agreement of Lenders to
issue the Letters of Credit hereunder or the use or intended
use of the proceeds of any Loan hereunder (collectively, the
"Indemnified Liabilities"); provided that Borrower shall
have no obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities arising from the gross negligence
or willful misconduct of that Indemnitee. To the extent that
the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them. The provisions of the
undertakings and indemnification set out in this Section
11.5 shall survive satisfaction and payment of the
Obligations and the termination of this Agreement. No
provision contained in this Section 11.5 shall affect any
rights Borrower may have against any Lender which defaults
under this Agreement or is intended to indemnify any such
Agent or Lender which defaults under this Agreement (but
only such Agent or Lender that defaults under this
Agreement) for any such Indemnified Liabilities arising from
such defaulting Lender's action.
11.6 Authority to Act. The Agent shall be entitled
to act on any notices and instructions (telephonic or
written) believed by the Agent in good faith to have been
sent or delivered by any person identifying himself as
Borrower's Representative, regardless of whether such notice
or instruction was in fact delivered by such person, and
Borrower hereby agrees to indemnify the Agent and hold the
Agent harmless from and against any and all losses and
expenses, if any, ensuing from any such action.
11.7 Notices. Any notice, request, demand, consent,
confirmation or other communication hereunder shall be in
writing and delivered in person or sent by telecopy or
registered or certified mail, return receipt requested and
postage prepaid, to the applicable party at its address or
telecopy number set forth on the signature pages hereof, or
at such other address or telecopy number as any party hereto
may designate as its address for communications hereunder by
notice so given. Such notices shall be deemed effective on
the day on which delivered or sent if delivered in person or
sent by telecopy, or on the third (3rd) Business Day after
the day on which mailed, if sent by registered or certified
mail; provided, however, that notices to the Agent under
Section 3 shall not be effective until actually received by
the Agent.
11.8 Sharing of Payments. The Lenders agree among
themselves that except as otherwise expressly set forth
herein, in the event that any of the Lenders shall directly
or indirectly obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff,
banker's lien or counterclaim, through the realization,
collection, sale or liquidation of any collateral or
otherwise) on account of or in respect of any of the Loans
or other Obligations in excess of its Pro Rata Share of all
such payments, such Lender(s) shall immediately purchase
from the other Lender(s) participations in the Loans or
other Obligations owed to such other Lender(s) in such
amounts, and make such other adjustments from time to time,
as shall be equitable to the end that the Lenders share such
payment ratably in accordance with their respective Pro Rata
Shares of the outstanding Loans and other Obligations. (For
purposes of clarification, the provisions of this Section
11.9 shall not apply to any payments relating to the
Lenders' Pre-Petition Indebtedness). The Lenders further
agree among themselves that if any such excess payment to a
Lender shall be rescinded or must otherwise be restored, the
other Lender(s) which shall have shared the benefit of such
payment shall, by repurchase of participation theretofore
sold, or otherwise, return its share of that benefit to the
Lender whose payment shall have been rescinded or otherwise
restored. Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in any of the Obligations, whether or not
acquired pursuant to the foregoing arrangements, may
exercise rights of setoff, banker's lien or counterclaim and
other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of
Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law any
of the Lenders receives a secured claim in lieu of a setoff
to which this Section 11.9 would apply, such Lender(s)
shall, to the extent practicable, exercise their rights in
respect of such secured claim in a manner consistent with
the rights of the Lender(s) entitled under this Section 11.9
to share in the benefits of any recovery of such secured
claim.
11.9 Governing Law; Waiver of Jury Trial. This
Agreement, the Notes, the Letter of Credit Application(s)
and all of the other Loan Documents shall be governed by and
construed in accordance with the internal laws of the State
of Louisiana, the Bankruptcy Code, and United States federal
maritime law, as applicable. THE LOAN PARTIES, THE AGENT AND
THE LENDERS IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND THE AGENT
AND/OR ANY OF THE LENDERS ARE PARTIES RELATING TO OR ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER TRANSACTION DOCUMENTS.
11.10 Amendments and Waivers. Any provision of this
Agreement, the Notes, the Letter of Credit Application(s) or
any of the other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is
signed by Borrower and the Required Lenders (and, if the
rights or duties of the Agent in its capacity as Agent are
affected thereby, by the Agent); provided that no such
amendment or waiver shall, unless signed by all of the
Lenders, (i) increase the Commitment of any Lender, (ii)
reduce the principal amount of or rate of interest on any
Loan or any fees hereunder or the amount for which Borrower
or any Guarantor is obligated to reimburse Regions in
respect of a drawing under a Letter of Credit, (iii)
postpone the date fixed for any payment of principal of or
interest on any Loan or any reimbursement obligation in
respect of a drawing under a Letter of Credit, or any fees
hereunder, (iv) change the Pro Rata Share of the Commitments
or of the aggregate principal amount of Loans or Letters of
Credit of any Lender, (v) change the number of Lenders which
shall be required for the Lenders or any of them to take any
action or obligations under this Section or under any other
provision of this Agreement, (vi) release any Collateral
(including, without limitation, release of any Continuing
Guarantee) other than pursuant to Section 10.2; (vii)
postpone the scheduled expiration date of the Line of Credit
Period or the Letter of Credit Period hereunder or extend
the expiry date of a Letter of Credit beyond the Letter of
Credit Period; or (viii) amend this Section 11.11.
11.11 References; Headings for Convenience. Unless
otherwise specified herein, all references herein to Section
numbers refer to Section numbers of this Agreement, all
references herein to Exhibits A, B, C and D refer to annexed
Exhibits A, B, C and D which are hereby incorporated herein
by reference and all references herein to Schedule 7.13
refer to annexed Schedule 7.13 which is hereby incorporated
herein by reference. The Section headings are furnished for
the convenience of the parties and are not to be considered
in the construction or interpretation of this Agreement.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular
provision of this Agreement.
11.12 Successors and Assigns, Participations.
(a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that
Borrower may not assign or otherwise transfer any of its
rights or delegate any of its obligations under this
Agreement. Any Lender may sell participations in its Notes
and its rights under this Agreement in whole or in part to
any commercial Lender organized under the laws of the United
States or Canada or any state or providence thereof without
the consent of Borrower or the Agent so long as each
agreement pursuant to which any such participation is
granted provides that no such participant shall have any
rights under this Agreement or any other Loan Document (the
participants' rights against the Lender granting its
participation to be those set forth in the Participation
Agreement between the participant and such Lender), and such
selling Lender shall retain the sole right to approve or
disapprove any amendment, modification or waiver of any
provision of this Agreement or any of the other Loan
Documents. Each such participant shall be entitled to the
benefits of the yield protection provisions hereof to the
extent such Lender would have been so entitled had no such
participation been sold.
(b) Any Lender which, in accordance with Section
11.13(a), grants a participation in any of its rights under
this Agreement or its Notes shall give prompt notice thereof
to the Agent and Borrower.
(c) Unless otherwise agreed to by Borrower in
writing, no Lender shall, as between Borrower and that
Lender, be relieved of any of its obligations under this
Agreement as a result of such Lender's granting of a
participation in all or any part of such Lender's Notes or
all or any part of such Lender's rights under this
Agreement.
11.13 Assignment Agreements. Each Lender may, from
time to time with the consent of Borrower and Agent (which
will not in any instance be unreasonably withheld), sell or
assign a pro rata part of all of the indebtedness evidenced
by the Notes then owed by it together with an equivalent
proportion of its obligation to make Loans hereunder and the
credit risk incidental to the Letters of Credit pursuant to
an Assignment Agreement, in form and substance reasonably
acceptable to Agent and Borrower, executed by the assignor
and the assignee, which agreements shall specify in each
instance the portion of the indebtedness evidenced by the
Notes which is to be assigned to each such assignee and the
portion of the Commitments of the assignor and the credit
risk incidental to the Letters of Credit (which portions
shall be equivalent) to be assumed by it (an "Assignment
Agreement"); provided that (i) nothing herein contained
shall restrict, or be deemed to require any consent as a
condition to, or require payment of any fee in connection
with, any sale, discount or pledge by any Lender of any Note
or other obligation hereunder to a Federal reserve bank and
(ii) the consent of the Borrower shall not be required for
assignments or sales to a Lender or any affiliate of a
Lender. Upon the execution of each Assignment Agreement by
the assignor and the assignee (i) such assignee shall
thereupon become a "Lender" for all purposes of this
Agreement with a Commitment in the amount set forth in such
Assignment Agreement and with all the rights, powers and
obligations afforded a Lender hereunder, (ii) the assignor
shall have no further liability for funding the portion of
its Commitments assumed by such other Lender and (iii) the
address for notices to such Lender shall be as specified in
the Assignment Agreement, and Borrower shall execute and
deliver Notes to the assignee Lender in the amount of its
Commitments and new Notes to the assignor Lender in the
amount of its Commitments after giving effect to the
reduction occasioned by such assignment, all such Notes to
constitute "Notes" for all purposes of this Agreement, and
there shall be paid to the Agent, as a condition to such
assignment, an administration fee of $2,500 plus any out-of-
pocket costs and expenses incurred by it in effecting such
assignment, such fee to be paid by the assignor or the
assignee as they may mutually agree, but under no
circumstances shall any portion of such fee be payable by or
charged to Borrower.
11.14 Withholding Tax. At the time it becomes a party
to this Agreement, each Lender that is organized under the
laws of a jurisdiction outside the United States shall
deliver to the Agent and Borrower either a valid and
currently effective Internal Revenue Service Form 1001 or
Form 4224 or, in the case of a bank claiming exemption from
U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent version thereof or
successors thereto, (and if such bank delivers a Form W-8, a
certificate representing that such bank is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of Borrower and is not a controlled foreign
corporation related to Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Lender, establishing that payments relating
to this Agreement are (i) not subject to United States
Federal withholding tax under the Code because such payments
are effectively connected with the conduct by such Lender of
a trade or business in the United States or (ii) totally
exempt from United States Federal withholding tax.
11.15 Binding Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided,
however, that Borrower may not assign or delegate any of its
rights or obligations under this Agreement.
11.16 NO ORAL AGREEMENTS, ENTIRE AGREEMENT. ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE.
TO PROTECT BORROWER, THE AGENT AND THE LENDERS FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENT REACHED BY
BORROWER, THE AGENT AND THE LENDERS COVERING SUCH MATTERS
ARE CONTAINED IN THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, WHICH AGREEMENT AND OTHER LOAN DOCUMENTS ARE A
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT AMONG
BORROWER, THE AGENT AND THE LENDERS, EXCEPT AS BORROWER, THE
AGENT AND THE LENDERS MAY LATER AGREE IN WRITING TO MODIFY
THEM. THIS AGREEMENT EMBODIES THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDES ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR WRITTEN)
RELATING TO THE SUBJECT MATTER HEREOF.
11.17 Severability. In the event any one or more of
the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired thereby.
11.18 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one
and the same instrument.
11.19 Resurrection of the Obligations. To the
extent that any of the Lenders receives any payment on
account of any of the Obligations, and any such payment(s)
or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, subordinated
and/or required to be repaid to a trustee, receiver or any
other Person under any contract, bankruptcy act, state or
federal law, common law or equitable cause, then, to the
extent of such payment(s) received, the Obligations or part
thereof intended to be satisfied and any and all Liens upon
or pertaining to any Property or assets of Borrower and
theretofore created and/or existing in favor of such
Lender(s) as security for the payment of such Obligations
shall be revived and continue in full force and effect, as
if such payment(s) had not been received by such Lender(s)
and applied on account of the Obligations.
11.20 No Third Party Beneficiary. This Agreement is
solely for the benefit of the parties and is not a
stipulation for the benefit of any other Person except for
any approved assignee of Borrower and any assignee of the
Lenders.
11.21 Independence of Covenants. All of the
covenants contained in this Agreement and the other Loan
Documents shall be given independent effect so that if a
particular action, event or condition is prohibited by any
one of such covenants, the fact that it would be permitted
by an exception to, or otherwise be in compliance within the
provisions of, another covenant shall not avoid the
occurrence of a Default or Event of Default if such action
is taken, such event occurs or such condition exists.
11.22 Confidentiality. The Agent and each of the
Lenders shall keep confidential any information delivered,
made available or otherwise conveyed by Borrower or any
Guarantor in connection with this Agreement and the
transactions contemplated hereby; provided that, the
provisions of this Section 11.22 shall not be construed to
prohibit Agent or any Lender from disclosing any information
to (i) Agent or any Lender (or any attorneys, agents or
consultants of Agent or any Lender), (ii) any participant or
assignee or prospective participant or assignee of any
Lender (so long as such participant or assignee or
prospective participant or assignee agrees to be bound by
the provisions of this Section 11.22), (iii) any affiliate
of Agent or any Lender or (iv) any Person as required by
law, regulation or court order. Notwithstanding anything to
the contrary herein, the Borrower agrees to EDC's
disclosure, following the Effective Date, of the following
information: the name of the Borrower, the EDC financial
service provided and the date of related agreement, the
amount of EDC support in an approximate dollar range, and
the name of the Exporter.
11.23 Conflicting Provisions. In the event any of
the terms and provisions of this Agreement conflict with any
terms and provisions contained in any other Loan Document,
the terms and provisions of this Agreement shall govern
provided that, nothing in this Agreement shall be construed
to limit the Property encumbered by the Loan Documents.
IN WITNESS WHEREOF, Borrower, the Guarantors (as
to those representations, warranties and covenants to which
they are obligated in this Agreement), the Agent and the
Lenders have executed this Credit Agreement effective as of
the date first written above.
TORCH OFFSHORE, INC.
By: /s/ Robert E. Fulton
--------------------
Name:
Title:
401 Whitney Avenue,Suite 400
Gretna, Louisiana 70056
Telecopy number:(504)367-7075
TORCH OFFSHORE, L.L.C.
By: /s/ Robert E. Fulton
--------------------
Name:
Its Manager
401 Whitney Avenue,Suite 400
Gretna, Louisiana 70056
Telecopy number:(504)367-7075
TORCH EXPRESS, L.L.C.
By: /s/ Robert E. Fulton
--------------------
Name:
Its Manager
401 Whitney Avenue,Suite 400
Gretna, Louisiana 70056
Telecopy number:(504)367-7075
REGIONS BANK
Share of the
Line of Credit Commitment: $3,450,000.00
By: /s/ Mike J. Paternostro
-----------------------
Mike J. Paternostro
Senior Vice President
301 St. Charles Avenue
New Orleans, LA 70130
Telecopier:(504)584-1347
EXPORT DEVELOPMENT CANADA
Share of the
Line of Credit Commitment: $3,450,000.00
By: /s/ Sean Mitchell
------------------
Sean Mitchell
Manager Special Risks
By: /s/ Bruce Dunlop
-----------------
Bruce Dunlop
Portfolio Manager
151 O'Connor
Ottawa, Canada K1A1K3
(Telecopier:(613)598-3186
EXHIBIT A
FORM OF LINE OF CREDIT NOTE
EXHIBIT B
FORM OF CONTINUING GUARANTEE
EXHIBIT C
FORM OF INTERIM ORDER
EXHIBIT D
FORM OF SECURITY AGREEMENT
SCHEDULE 1.1A
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