ORIGINALLY A PARTY HERETO AND SHALL BE
BOUND BY AND ENTITLED TO THE BENEFITS OF THIS AGREEMENT, PROVIDED THAT THE
TRANCHE A COMMITMENT OF ANY SUCH BANK, FINANCIAL INSTITUTION OR OTHER ENTITY
SHALL BE IN AN AMOUNT OF NOT LESS THAN $5,000,000.
(B)
UPON ANY INCREASE IN THE AGGREGATE TRANCHE A COMMITMENTS PURSUANT
TO SECTION 2.17(A), WITHIN FIVE BUSINESS DAYS, IN THE CASE OF ANY BASE RATE
LOANS THEN OUTSTANDING, AND AT THE END OF THE THEN CURRENT INTEREST PERIOD WITH
RESPECT THERETO, IN THE CASE OF ANY LIBOR LOANS THEN OUTSTANDING, BORROWER SHALL
PREPAY SUCH LOANS IN THEIR ENTIRETY AND, TO THE EXTENT BORROWER ELECTS TO DO SO
AND SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 5.02, BORROWER SHALL REBORROW
TRANCHE A LOANS FROM THE TRANCHE A LENDERS IN PROPORTION TO THEIR RESPECTIVE
TRANCHE A COMMITMENTS AFTER GIVING EFFECT TO SUCH INCREASE, UNTIL SUCH TIME AS
ALL OUTSTANDING TRANCHE A LOANS ARE HELD BY THE TRANCHE A LENDERS IN SUCH
PROPORTION.
EFFECTIVE UPON SUCH INCREASE, THE AMOUNT OF THE PARTICIPATIONS HELD
BY EACH TRANCHE A LENDER IN EACH LETTER OF CREDIT THEN OUTSTANDING SHALL BE
ADJUSTED SUCH THAT, AFTER GIVING EFFECTIVE TO SUCH ADJUSTMENTS, THE TRANCHE A
LENDERS SHALL HOLD PARTICIPATIONS IN EACH SUCH LETTER OF CREDIT IN THE
PROPORTION ITS RESPECTIVE TRANCHE A COMMITMENT BEARS TO THE AGGREGATE TRANCHE A
COMMITMENTS OF ALL OF THE TRANCHE A LENDERS AFTER GIVING EFFECT TO SUCH
INCREASE.
THE COLLATERAL TRUSTEE AND BORROWER SHALL EXECUTE AND DELIVER SUCH
DOCUMENTS AND INSTRUMENTS DEEMED REASONABLY NECESSARY BY EITHER OF THEM TO
MAINTAIN THE PERFECTION AND PRIORITY OF THE LIENS ON THE COLLATERAL WITH RESPECT
TO SUCH INCREASE IN THE AGGREGATE COMMITMENTS.
53
ARTICLE III
GRANT OF SECURITY INTEREST
SECTION 3.01
GRANT OF SECURITY INTEREST.
(A)
TO SECURE THE PAYMENT AND PERFORMANCE IN FULL OF ALL OBLIGATIONS,
EACH OF BORROWER, K-SEA
LLC, INTERISLAND, TOW BOAT AND DIVING HEREBY GRANTS TO
THE COLLATERAL TRUSTEE FOR THE RATABLE BENEFIT OF THE LENDERS A CONTINUING
SECURITY INTEREST IN AND LIEN UPON, AND A RIGHT OF SET-OFF AGAINST, AND EACH OF
BORROWER, K-SEA
LLC, INTERISLAND, TOW BOAT AND DIVING HEREBY ASSIGNS AND
PLEDGES TO THE COLLATERAL TRUSTEE FOR THE RATABLE BENEFIT OF THE LENDERS, ALL OF
THE COLLATERAL OWNED BY IT OR A SUBSIDIARY GUARANTOR OR IN WHICH SUCH PARTY HAS
AN INTEREST.
(B)
COLLATERAL MEANS:
(I)
EACH OF THE POOL VESSELS, TOGETHER WITH ALL OF ITS MACHINERY,
ANCHORS, CABLES, CHAINS, RIGGING, TACKLE, FITTINGS, TOOLS, PUMPS, PUMPING
EQUIPMENT, GEAR, APPAREL, FURNITURE, APPLIANCES, EQUIPMENT, SPARE AND
REPLACEMENT PARTS AND ALL OTHER APPURTENANCES THEREUNTO APPERTAINING OR
BELONGING, WHETHER NOW OWNED OR HEREAFTER ACQUIRED BY ITS RESPECTIVE OWNER AND
WHETHER ON BOARD OR NOT, AND ALSO ANY AND ALL ADDITIONS, IMPROVEMENTS AND
REPLACEMENTS MADE IN OR TO SUCH POOL VESSELS OR ANY PART THEREOF OR IN OR TO ANY
EQUIPMENT AND APPURTENANCES THEREUNDER APPERTAINING OR BELONGING AND ANY AND ALL
CHARTER HIRE, SUBCHARTER HIRE, FREIGHTS, SUBFREIGHTS, EARNINGS, CHARTERS
(INCLUDING, WITHOUT LIMITATION, ANY RIGHTS OF TERMINATION THEREOF), TO THE
EXTENT SET FORTH