Dated 31 July 2013 SEVEN SEAS CRUISES S. DE R.L. as Guarantor - and - CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK as Security Trustee Guarantee relating to a Loan Agreement dated 31 July 2013 in respect of the passenger cruise ship newbuilding...
Exhibit 10.22
Execution Version
Dated 31 July 2013
SEVEN SEAS CRUISES S. DE ▇.▇.
as Guarantor
- and -
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Security Trustee
relating to
a Loan Agreement dated 31 July 2013 in respect of the passenger
cruise ship newbuilding presently designated as Hull No. 6250
Execution Version
Index
| Clause | Page | |||||
| 1 |
Interpretation | 1 | ||||
| 2 |
Guarantee | 2 | ||||
| 3 |
Liability as Principal and Independent Debtor | 2 | ||||
| 4 |
Expenses | 3 | ||||
| 5 |
Adjustment of Transactions | 3 | ||||
| 6 |
Payments | 4 | ||||
| 7 |
Interest | 4 | ||||
| 8 |
Subordination | 5 | ||||
| 9 |
Enforcement | 5 | ||||
| 10 |
Representations and Warranties | 6 | ||||
| 11 |
Undertakings | 7 | ||||
| 12 |
Judgments and Currency Indemnity | 12 | ||||
| 13 |
Set Off | 12 | ||||
| 14 |
Supplemental | 12 | ||||
| 15 |
Assignment and Transfer | 14 | ||||
| 16 |
Notices | 14 | ||||
| 17 |
Invalidity of Loan Agreement | 15 | ||||
| 18 |
Governing Law and Jurisdiction | 15 | ||||
| Schedules |
||||||
| Schedule 1 Form of Compliance Certificate |
18 | |||||
| Execution |
||||||
| Execution Page |
17 | |||||
Execution Version
THIS GUARANTEE is made on 31 July 2013
BETWEEN
| (1) | SEVEN SEAS CRUISES S. DE ▇.▇., a Panamanian sociedad de responsilidad limitada having its domicile in the Republic of Panama with its resident agent being ▇▇▇▇▇, Fabrega & Fabrega (the “Resident Agent”) with address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Panama represented by duly authorised for the purpose hereof as guarantor (the “Guarantor”); |
| (2) | CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK a société anonyme, having a share capital of EUR 7.254.575.271 and its registered office located at ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ La Défense Cedex, France registered under the no. Siren 304 187 701 at the Registre du Commerce et des Sociétés of Nanterre as security trustee (the “Security Trustee”, which expression includes its successors and assigns). |
BACKGROUND
| (A) | By a memorandum of agreement dated October 12th, 2012 (as amended from time to time) entered into between (i) Fincantieri - Cantieri Navali Italiani SpA, a company incorporated in Italy with registered office in Trieste, ▇▇▇ ▇▇▇▇▇▇, ▇, and having fiscal code 00397130584 (the “Builder”) and (ii) Prestige Cruise Holdings Inc. and a shipbuilding contract dated 21 June 2013 (the “Shipbuilding Contract”) entered into between (i) the Builder and (ii) the Borrower, the Builder has agreed to design, construct and deliver, and the Borrower has agreed to purchase, a 738 passenger cruise ship currently having hull number 6250 as more particularly described in the Shipbuilding Contract to be delivered on 30 June 2016 subject to any adjustments of such delivery date in accordance with the Shipbuilding Contract |
| (B) | By a Loan Agreement dated July 2013 and made between (i) the Borrower, (ii) the Lenders, (iii) the Joint Mandated Lead Arrangers, (iv) the Agent and SACE Agent and (v) the Security Trustee, it was agreed that the Lenders would make available to the Borrower a loan facility of the Dollar Equivalent of up to EUR 299,866,962 for the purpose of assisting the Borrower in financing (a) payment under the Shipbuilding Contract of all or part of 80% of the Final Contract Price up to the Eligible Amount, (b) payment to the Borrower of the Dollar Equivalent of 100% of the first instalment of the SACE Premium already paid direct to SACE on or before 30 days following the issuance of the SACE Insurance Policy and (c) payment to SACE of the Dollar Equivalent of 100% of the second instalment of the SACE Premium. |
| (C) | The execution and delivery to the Security Trustee of this Guarantee is one of the conditions precedent to the availability of the facility under the Loan Agreement. |
IT IS AGREED as follows:
| 1 | INTERPRETATION |
| 1.1 | Defined expressions |
Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Guarantee unless the context otherwise requires.
| 1.2 | Construction of certain terms |
In this Guarantee:
“bankruptcy” includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country.
Execution Version
“Loan Agreement” means the loan agreement dated July 2013 referred to in Recital (A) and includes any existing or future amendments or supplements, whether made with the Guarantor’s consent or otherwise.
“Seven Seas Group” means the Guarantor and its subsidiaries.
| 1.3 | Application of construction and interpretation provisions of Loan Agreement |
Clauses 1.2 to 1.5 of the Loan Agreement apply, with any necessary modifications, to this Guarantee.
| 2 | GUARANTEE |
| 2.1 | Guarantee and indemnity |
The Guarantor unconditionally and irrevocably:
| (a) | guarantees to the Security Trustee punctual performance by the Borrower of all the Borrower’s obligations under or in connection with the Loan Agreement and every other Finance Document; |
| (b) | undertakes to the Security Trustee that whenever the Borrower does not pay any amount when due under or in connection with the Loan Agreement and the other Finance Documents, the Guarantor shall immediately on demand pay that amount as if it was the principal obligor; |
| (c) | agrees that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Security Trustee and each other Secured Party immediately on demand by the Security Trustee against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under the Loan Agreement or any other Finance Document on the date when it would have been due. Any such demand for indemnification shall be made through the Security Trustee, for itself or on behalf of the Security Parties. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 2.1 if the amount claimed had been recoverable on the basis of a guarantee. |
| 2.2 | No limit on number of demands |
The Security Trustee may serve any number of demands under Clause 2.1.
| 3 | LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR |
| 3.1 | Principal and independent debtor |
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.
| 3.2 | Waiver of rights and defences |
Without limiting the generality of Clause 3.1, the obligations of the Guarantor under this Guarantee will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Guarantee (without limitation and whether or not known to it or any Secured Party) including:
| (a) | any time, waiver or consent granted to, or composition with, the Borrower or other person; |
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Execution Version
| (b) | the release of the Borrower or any other person under the terms of any composition or arrangement with any creditor of any affiliate of the Borrower; |
| (c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
| (d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Borrower or any other person; |
| (e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security. |
| (f) | any insolvency or similar proceedings; |
| (g) | any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, the Finance Documents; |
| (h) | any release or loss whatsoever of any guarantee, right or Security Interest created by the Finance Documents; |
| (i) | any failure whatsoever promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or |
| (j) | any other Finance Document or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it. |
| 4 | EXPENSES |
| 4.1 | Costs of preservation of rights, enforcement etc |
The Guarantor shall pay to the Security Trustee on its demand the amount of all expenses incurred by the Security Trustee or any other Secured Party in connection with any matter arising out of this Guarantee or any Security Interest connected with it, including any advice, claim or proceedings relating to this Guarantee or such a Security Interest.
| 4.2 | Fees and expenses payable under Loan Agreement |
Clause 4.1 is without prejudice to the Guarantor’s liabilities in respect of the Borrower’s obligations under clauses 9 (Fees) and 10 (Taxes, Increased Costs and Related Charges) of the Loan Agreement and under similar provisions of other Finance Documents.
| 5 | ADJUSTMENT OF TRANSACTIONS |
| 5.1 | Reinstatement of obligation to pay |
The Guarantor shall pay to the Security Trustee on its demand any amount which any Secured Party is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Borrower or of any other Obligor (or similar person) on the ground that the Loan Agreement or any other Finance Document, or a payment by the Borrower or of such other Obligor, was invalid or on any similar ground.
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Execution Version
| 6 | PAYMENTS |
| 6.1 | Method of payments |
Any amount due under this Guarantee shall be paid:
| (a) | in immediately available funds; |
| (b) | to such account as the Security Trustee may from time to time notify to the Guarantor; |
| (c) | without any form of set-off, cross-claim or condition; and |
| (d) | free and clear of any tax deduction except a tax deduction which the Guarantor is required by law to make. |
| 6.2 | Grossing-up for taxes |
If the Guarantor is required by law to make a tax deduction, the amount due to the Security Trustee shall be increased by the amount necessary to ensure that the Security Trustee and (if the payment is not due to the Security Trustee for its own account) the Secured Party beneficially interested in the payment receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.
| 6.3 | Tax Credits |
If an additional payment is made by the Guarantor under this Clause and any Secured Party determines that it has received or been granted a credit against or relief of or calculated with reference to the deduction giving rise to such additional payment, such Secured Party shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment and provided that it has received the cash benefit of such credit, relief or remission, pay to the Guarantor such amount as such Secured Party shall in its reasonable opinion have concluded to be attributable to the relevant deduction. Any such payment shall be conclusive evidence of the amount due to the Guarantor hereunder and shall be accepted by the Guarantor in full and final settlement of its rights of reimbursement hereunder in respect of such deduction. Nothing herein contained shall interfere with the right of each Secured Party to arrange its tax affairs in whatever manner it thinks fit.
| 6.4 | To the extent that this Clause 6 (Payments) imposes obligations or restrictions on a Secured Party, such obligations or restrictions shall not apply to SACE and SACE shall have no obligations hereunder nor be constrained by such restrictions. |
| 7 | INTEREST |
| 7.1 | Accrual of interest |
Any amount due under this Guarantee shall carry interest after the date on which the Security Trustee demands payment of it until it is actually paid, unless interest on that same amount also accrues under the Loan Agreement.
| 7.2 | Calculation of interest |
Interest on sums payable under this Guarantee shall be calculated and accrue in the same way as interest under clause 6 of the Loan Agreement.
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Execution Version
| 7.3 | Guarantee extends to interest payable under Loan Agreement |
For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Loan Agreement, including that payable under clause 17 of the Loan Agreement.
| 8 | SUBORDINATION |
| 8.1 | Subordination of rights of Guarantor |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, all rights which the Guarantor at any time has (whether in respect of this Guarantee or any other transaction) against the Borrower, any other Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and in particular, the Guarantor shall not:
| (a) | claim, or in a bankruptcy of the Borrower or any other Obligor prove for, any amount payable to the Guarantor by the Borrower or any other Obligor, whether in respect of this Guarantee or any other transaction; |
| (b) | take or enforce any Security Interest for any such amount; |
| (c) | exercise any right to be indemnified by an Obligor; |
| (d) | bring legal or other proceedings for an order requiring the Borrower or any other Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under this Guarantee; |
| (e) | claim to set-off any such amount against any amount payable by the Guarantor to the Borrower or any other Obligor; or |
| (f) | claim any subrogation or right of contribution or other right in respect of any Finance Document or any sum received or recovered by any Secured Party under a Finance Document. |
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Security Trustee or as the Security Trustee may direct for application in accordance with the Loan Agreement and the Finance Documents.
| 9 | ENFORCEMENT |
| 9.1 | No requirement to commence proceedings against Borrower |
The Guarantor waives any right it may have of first requiring the Security Trustee or any other Secured Party to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Guarantee. Neither the Security Trustee nor any other Secured Party will need to make any demand under, commence any proceedings under, or enforce any guarantee or any Security Interest contained in or created by, the Loan Agreement or any other Finance Document before claiming or commencing proceedings under this Guarantee. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
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Execution Version
| 9.2 | Conclusive evidence of certain matters |
However, as against the Guarantor:
| (a) | any judgment or order of a court in England or the ▇▇▇▇▇▇▇▇ Islands or the United States of America in connection with the Loan Agreement; and |
| (b) | any statement or admission of the Borrower in connection with the Loan Agreement, |
shall be binding and conclusive as to all matters of fact and law to which it relates.
| 9.3 | Suspense account |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Security Trustee and any Secured Party may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by it (or any trustee or agent on its behalf which, in the case of a Secured Party, shall include the Agent and the Security Trustee) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Guarantee.
| 10 | REPRESENTATIONS AND WARRANTIES |
| 10.1 | General |
The Guarantor represents and warrants to the Security Trustee as follows on the date of this Guarantee, which representations and warranties shall be deemed to be repeated, with reference mutatis mutandis to the facts and circumstances subsisting, as if made on each day from the date of this Guarantee to the end of the Security Period.
| 10.2 | Status |
The Guarantor is duly organised and validly existing as a sociedad de responsilidad limitada and in good standing under the laws of Panama.
| 10.3 | Corporate power |
As a sociedad de responsilidad limitada organised under the laws of Panama, the Guarantor has the capacity, and has taken all action and obtained all consents necessary for it:
| (a) | to execute this Guarantee; and |
| (b) | to make all the payments contemplated by, and to comply with, this Guarantee. |
| 10.4 | Consents in force |
All the consents referred to in Clause 10.3 remain in force and nothing has occurred which makes any of them liable to revocation.
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Execution Version
| 10.5 | Legal validity |
This Guarantee constitutes the Guarantor’s legal, valid and binding obligations enforceable against the Guarantor in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally.
| 10.6 | No conflicts |
The execution by the Guarantor of this Guarantee and its compliance with this Guarantee will not involve or lead to a contravention of:
| (a) | any law or regulation; or |
| (b) | the constitutional documents of the Guarantor; or |
| (c) | any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets. |
| 10.7 | No withholding taxes |
All payments which the Guarantor is liable to make under this Guarantee may be made without deduction or withholding for or on account of any tax payable under any law of Panama and the United States of America.
| 10.8 | No default |
To the knowledge of the Guarantor, no Event of Default has occurred which is continuing.
| 10.9 | Information |
All information which has been provided in writing by or on behalf of the Guarantor to the Security Trustee or any other Secured Party in connection with any Finance Document satisfied the requirements of Clause 11.2; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.4; and there has been no material adverse change in the financial position or state of affairs of the Guarantor from that disclosed in the latest of those accounts.
| 10.10 | No litigation |
No legal or administrative action involving the Guarantor has been commenced or taken or, to the Guarantor’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Guarantor’s financial position or profitability.
| 10.11 | No Security Interests |
None of the assets or rights of the Guarantor is subject to any Security Interest except any Security Interest which (i) qualifies as a Permitted Security Interest with respect to the Guarantor or (ii) is permitted by Clause 11.11.
| 11 | UNDERTAKINGS |
| 11.1 | General |
The Guarantor undertakes with the Security Trustee to comply with the following provisions of this Clause 11 at all times from the date of this Deed to the end of the Security Period, except as the Security Trustee may otherwise permit.
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Execution Version
| 11.2 | Information provided to be accurate |
All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee will be true and not misleading and will not omit any material fact or consideration.
| 11.3 | Provision of financial statements |
The Guarantor will send to the Security Trustee:
| (a) | as soon as practicable, but in no event later than 120 days after the end of each financial year of the Guarantor beginning with the year ending 31 December 2013, the audited consolidated accounts of the Guarantor and its subsidiaries; |
| (b) | as soon as practicable (and in any event within ninety (90) days of the commencement of each financial year) the budgetary forecast (profit and loss statement, balance sheet statement and cash flow statement) of the Guarantor for the two following years; |
| (c) | as soon as practicable (and in any event within forty-five (45) days of the end of the contemplated quarter in respect of the first three quarters of each fiscal year and 90 days in respect of the final quarter) a copy of the unaudited consolidated quarterly management accounts (including current and year to date profit and loss statements and balance sheet compared to the previous year and to budget) of the Guarantor certified as to their correctness by the chief financial officer of the Guarantor; |
| (d) | a compliance certificate in the form set out in Schedule 1 to this Guarantee or in such other form as the Security Trustee may reasonably require (each a “Compliance Certificate”) at the same time as there is delivered to the Security Trustee, and together with, each set of audited consolidated accounts under paragraph (a) and the set of unaudited consolidated accounts under paragraph (b) which constitute those for the First Financial Quarter, duly signed by the chief financial officer of the Guarantor and certifying whether or not the requirements of Clause 11.15 are then complied with; and |
| (e) | such additional financial or other relevant information regarding the Guarantor and the Seven Seas Group as the Security Trustee may reasonably request. |
| 11.4 | Form of financial statements |
All accounts (audited and unaudited) delivered under Clause 11.3 will:
| (a) | be prepared in accordance with GAAP; |
| (b) | when required to be audited, be audited by the auditors which are the Guarantor’s auditors at the date of this Guarantee or other auditors approved by the Security Trustee provided that, such approval by the Security Trustee shall not be unreasonably withheld or delayed; |
| (c) | give a true and fair view of the state of affairs of the Guarantor and its subsidiaries at the date of those accounts and of their profit for the period to which those accounts relate; and |
| (d) | fully disclose or provide for all significant liabilities of the Guarantor and its subsidiaries. |
| 11.5 | Shareholder and creditor notices |
The Guarantor will send the Security Trustee, at the same time as they are despatched, copies of all communications which are despatched to the Guarantor’s shareholders or creditors generally or any class of them.
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Execution Version
| 11.6 | Consents |
The Guarantor will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Security Trustee of, all consents required:
| (a) | for the Guarantor to perform its obligations under this Guarantee; |
| (b) | for the validity or enforceability of this Guarantee; |
and the Guarantor will comply with the terms of all such consents.
| 11.7 | Notification of litigation |
The Guarantor will provide the Security Trustee with details of any material legal or administrative action involving the Guarantor as soon as such action is instituted or it becomes apparent to the Guarantor that it is likely to be instituted (and for this purpose proceedings shall be deemed to be material if they involve a claim in an amount exceeding ten million Dollars or the equivalent in another currency).
| 11.8 | Domicile and principal place of business |
The Guarantor:
| (a) | will maintain its domicile with the Resident Agent and at the address stated at the commencement of this Agreement or at such other Resident Agent and/or address in the Republic of Panama as is notified beforehand to the Security Trustee; |
| (b) | will maintain its principal place of business and keep its corporate documents and records in the United States of America at ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, Florida, or at such other address in the United States of America as is notified beforehand to the Security Trustee; and |
| (c) | will not move its domicile out of the Republic of Panama nor its principal place of business out of the United States of America without the prior agreement of the Security Trustee, acting with the authorisation of the Secured Parties, such agreement not to be unreasonably withheld. |
| 11.9 | Notification of default |
The Guarantor will notify the Security Trustee as soon as the Guarantor becomes aware of the occurrence of an Event of Default and will thereafter keep the Security Trustee fully up-to-date with all developments.
| 11.10 | Maintenance of status |
The Guarantor will maintain its separate corporate existence and remain in good standing under the laws of Panama.
| 11.11 | Negative pledge |
The Guarantor shall not, and shall procure that the Borrower will not create or permit to arise any Security Interest over any asset present or future except Security Interests created or permitted by the Finance Documents and except for the following:
| (a) | Security Interests created with the prior consent of the Security Trustee or otherwise permitted by the Finance Documents; |
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| (b) | in the case of the Guarantor, Security Interests which qualify as Permitted Security Interests with respect to the Guarantor; |
| (c) | in the case of the Borrower, Security Interests permitted under clause 13.5 of the Loan Agreement; |
| (d) | Security Interests provided in favour of lenders under and in connection with any refinancing of the Existing Indebtedness or any financing arrangements entered into by any member of the Seven Seas Group for the acquisition of additional or replacement ship(s) (including any refinancing of any such arrangement) but limited to: |
| (i) | pledges of the share capital of the relevant ship owning subsidiary(/ies); and/or |
| (ii) | ship mortgages and other securities over the financed ship(s). |
| 11.12 | No disposal of assets, change of business |
The Guarantor will:
| (a) | not and shall procure that its subsidiaries, as a group, shall not transfer all or substantially all of the cruise vessels owned by them and shall procure that any cruise vessels which are disposed of in compliance with the foregoing shall be disposed on a willing seller willing buyer basis at or about market rate and at arm’s length subject always to the provisions of any pertinent loan documentation, and |
| (b) | continue to be the member of a group of companies whose main business is the operation of cruise vessels as well as the marketing of cruises on board such vessels and the Guarantor will not change its main line of business so as to affect any Obligor’s ability to perform its obligations under the Finance Documents or to imperil, in the opinion of the Security Trustee, the security created by any of the Finance Documents or the SACE Insurance Policy. |
| 11.13 | No merger etc |
The Guarantor shall not, and shall procure that none of its subsidiaries will, enter into any form of merger, sub-division, amalgamation, restructuring, consolidation, winding-up, dissolution or anything analogous thereto or acquire any entity, share capital or obligations of any corporation or other entity without the prior consent of the Secured Parties, such consent not to be unreasonably withheld, provided that in any case and subject always to the provisions of Clauses 11.14 and 11.17, reorganisations (other than reorganisations directly involving the Borrower) of subsidiaries of the Guarantor and the creation of new subsidiaries of the Guarantor shall be permitted.
| 11.14 | Maintenance of ownership of Borrower and Guarantor |
Unless otherwise agreed/consented to by the Secured Parties, Prestige Holdings shall remain direct or indirect beneficial owner of the entire issued and allotted share capital of the Guarantor, free from any Security Interest and the Guarantor shall remain the legal holder and direct beneficial owner of all membership interest in the Borrower, free from any Security Interest, except that created in favour of the Security Trustee.
| 11.15 | Financial Covenants |
The Guarantor shall ensure that for each relevant Financial Year and by reference to the accounts delivered under Clause 11.3 that at all times beginning at the end of the First Financial Quarter the minimum Free Liquidity will be not less than Thirty five million Dollars ($ 35,000,000)
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| 11.16 | Financial definitions |
For the purposes of Clause 11.15:
“Cash Balance” means, at the date of determination, the unencumbered and otherwise unrestricted cash and cash equivalents of the Seven Seas Group;
“Financial Year” means any financial year of the Seven Seas Group ending on 31 December;
“First Financial Quarter” means the financial quarter ending immediately prior to or on the date falling 90 days before the Intended Delivery Date;
“Free Liquidity” means, at any date of determination, the aggregate of the Cash Balance and any amounts freely available for drawing under any revolving credit facilities of the Seven Seas Group, which remain undrawn, could be drawn for general working capital purposes or other general corporate purposes and would not, if drawn, be repayable within six (6) months.
| 11.17 | Negative Undertakings |
The Guarantor shall:
| (a) | not at any time after the end of the First Financial Quarter, declare or pay dividends or make any other distributions or payment in respect of Financial Indebtedness owed to its shareholders without the prior written consent of the Agent, provided that the Guarantor may declare and pay dividends to its shareholders after the Delivery Date or make any other distributions or payments in respect of Financial Indebtedness owed to the shareholders subject to (i) it on each such occasion satisfying the Agent acting on behalf of the Secured Parties that it will continue to meet all the requirements of Clause 11.15, if such covenant was to be tested immediately following the payment of any such dividend and (ii) there being no Event of Default which is continuing under the Loan Agreement and no Event of Default shall arise from the payment of such dividend.; |
| (b) | not, and shall procure that none of its subsidiaries shall: |
| (i) | make loans to any person that is not the Guarantor or a direct or indirect subsidiary of the Guarantor; or |
| (ii) | issue or enter into one or more guarantees covering the obligations of any person which is not the Guarantor or a direct or indirect subsidiary of the Guarantor |
except if such loan is granted to a non subsidiary or such guarantee is issued in the ordinary course of business covering the obligations of a non subsidiary and the aggregate amount of all such loans and guarantees made or issued by the Guarantor and its subsidiaries does not exceed USD25,000,000 or is otherwise approved by the Security Trustee which approval shall not be unreasonably withheld if such loan or guarantee in respect of a non subsidiary would neither:
| (A) | affect the ability of any Obligor to perform its obligations under the Finance Documents; nor |
| (B) | imperil the security created by any of the Finance Documents or the SACE Insurance Policy; nor |
| (C) | affect the ability of the Guarantor to comply with the financial covenant contained in Clause 11.15 if such covenant was to be tested immediately following the grant of such loan or the issuance of such guarantee, as demonstrated by evidence satisfactory to the Security Trustee. |
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| 12 | JUDGMENTS AND CURRENCY INDEMNITY |
| 12.1 | Judgments relating to Loan Agreement |
This Guarantee shall cover any amount payable by the Borrower under or in connection with any judgment relating to the Loan Agreement.
| 12.2 | Currency indemnity |
In addition, clause 20.4 (currency indemnity) of the Loan Agreement shall apply, with any necessary adaptations, in relation to this Guarantee.
| 13 | SET-OFF |
| 13.1 | Application of credit balances |
Each Secured Party may without prior notice:
| (a) | apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of that Secured Party in or towards satisfaction of any sum then due from the Guarantor to that Secured Party under this Guarantee; and |
| (b) | for that purpose: |
| (i) | break, or alter the maturity of, all or any part of a deposit of the Guarantor; |
| (ii) | convert or translate all or any part of a deposit or other credit balance into Dollars; |
| (iii) | enter into any other transaction or make any entry with regard to the credit balance which the Secured Party concerned considers appropriate. |
| 13.2 | Existing rights unaffected |
No Secured Party shall be obliged to exercise any of its rights under Clause 13.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Secured Party is entitled (whether under the general law or any document).
| 13.3 | Sums deemed due to a Lender |
For the purposes of this Clause 13, a sum payable by the Guarantor to the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to that Lender.
| 14 | SUPPLEMENTAL |
| 14.1 | Continuing guarantee |
This Guarantee shall remain in force as a continuing security at all times during the Security Period, regardless of any intermediate payment or discharge in whole or in part.
| 14.2 | Rights cumulative, non-exclusive |
The Security Trustee’s rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
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| 14.3 | No impairment of rights under Guarantee |
If the Security Trustee omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Security Trustee under this Guarantee.
| 14.4 | Severability of provisions |
If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.
| 14.5 | Guarantee not affected by other security |
This Guarantee is in addition to and shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which the Security Trustee or any Secured Party may now or later hold in connection with the Loan Agreement.
| 14.6 | Guarantor bound by Loan Agreement |
The Guarantor agrees with the Security Trustee to be bound by all provisions of the Loan Agreement which are applicable to the Security Parties in the same way as if those provisions had been set out (with any necessary modifications) in this Guarantee.
| 14.7 | Applicability of provisions of Guarantee to other Security Interests |
Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 and 17 shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 and 17.
| 14.8 | Applicability of provisions of Guarantee to other rights |
Clauses 3 and 17 shall also apply to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 and 17), being an agreement referring to this Guarantee.
| 14.9 | Third party rights |
Other than a Secured Party or the Italian Authorities, no person who is not a party to this Guarantee has any right under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce or to enjoy the benefit of any term of this Guarantee.
| 14.10 | Waiver of rights against SACE |
Nothing in this Guarantee or any of the Finance Documents is intended to grant to the Guarantor or any other person any right of contribution from or any other right or claim against SACE and the Guarantor hereby waives irrevocably any right of contribution or other right or claim as between itself and SACE.
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| 15 | ASSIGNMENT AND TRANSFER |
| 15.1 | Assignment and transfer by Security Trustee |
The Security Trustee may assign or transfer its rights under and in connection with this Guarantee to the same extent as it may assign or transfer its rights under the Loan Agreement.
The Guarantor may not assign or transfer its rights under and in connection with this Guarantee.
| 16 | NOTICES |
| 16.1 | Notices to Guarantor |
Any notice or demand to the Guarantor under or in connection with this Guarantee shall be given by letter or fax at:
Seven Seas Cruises S. DE. ▇.▇.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address which the Guarantor may notify to the Security Trustee.
| 16.2 | Application of certain provisions of Loan Agreement |
Clauses 30.3 to 30.8 of the Loan Agreement apply to any notice or demand under or in connection with this Guarantee.
| 16.3 | Validity of demands |
A demand under this Guarantee shall be valid notwithstanding that it is served:
| (a) | on the date on which the amount to which it relates is payable by the Borrower under the Loan Agreement; |
| (b) | at the same time as the service of a notice under clause 18.21 (actions following an Event of Default) of the Loan Agreement; |
and a demand under this Guarantee may refer to all amounts payable under or in connection with the Loan Agreement without specifying a particular sum or aggregate sum.
| 16.4 | Notices to Security Trustee |
Any notice to the Security Trustee under or in connection with this Guarantee shall be sent to the same address and in the same manner as notices to the Security Trustee under the Loan Agreement.
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| 17 | INVALIDITY OF LOAN AGREEMENT |
| 17.1 | Invalidity of Loan Agreement |
In the event of:
| (a) | the Loan Agreement or any provision thereof now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any reason whatsoever; or |
| (b) | without limiting the scope of paragraph (a), a bankruptcy of the Borrower, the introduction of any law or any other matter resulting in the Borrower being discharged from liability under the Loan Agreement, or the Loan Agreement ceasing to operate (for example, by interest ceasing to accrue); |
this Guarantee shall cover any amount which would have been or become payable under or in connection with the Loan Agreement if the Loan Agreement had been and remained entirely valid, legal and enforceable, or the Borrower had not suffered bankruptcy, or any combination of such events or circumstances, as the case may be, and the Borrower had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Borrower under or in connection with the Loan Agreement shall include references to any amount which would have so been or become payable as aforesaid.
| 17.2 | Invalidity of Finance Documents |
Clause 17.1 also applies to each of the other Finance Documents to which the Borrower is a party.
| 18 | GOVERNING LAW AND JURISDICTION |
| 18.1 | English law |
This Guarantee and any non contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
| 18.2 | Exclusive English jurisdiction |
Subject to Clause 18.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.
| 18.3 | Choice of forum for the exclusive benefit of the Security Trustee |
Clause 18.2 is for the exclusive benefit of the Security Trustee, which reserves the rights:
| (a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
| (b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
The Guarantor shall not commence any proceedings in any country other than England in relation to a Dispute.
| 18.4 | Process agent |
The Guarantor irrevocably appoints EC3 Services Limited at its registered office for the time being, presently at ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
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| 18.5 | Secured Parties’ rights unaffected |
Nothing in this Clause 18 shall exclude or limit any right which any Secured Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
| 18.6 | Meaning of “proceedings” |
In this Clause 18, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure and a “Dispute” means any dispute arising out of or in connection with this Guarantee (including a dispute relating to the existence, validity or termination of this Guarantee) or any non contractual obligation arising out of or in connection with this Guarantee.
THIS GUARANTEE has been entered into on the date stated at the beginning of this Guarantee.
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| GUARANTOR | ||
| SIGNED by ▇▇▇▇ ▇▇▇▇▇▇ | ) /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |
| for and on behalf of | ) | |
| SEVEN SEAS CRUISES S. DE ▇.▇. | ) | |
| as its duly appointed attorney-in-fact | ) | |
| in the presence of: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ) | |
| SECURITY TRUSTEE | ||
| SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| for and on behalf of | ) | |
| CRÉDIT AGRICOLE CORPORATE | ) | |
| AND INVESTMENT BANK | ) | |
| as its duly appointed attorney-in-fact | ) | |
| in the presence of: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ) | |
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FORM OF COMPLIANCE CERTIFICATE
| To: | CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK |
▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ La Défense cedex
France
Attn: [—]
[—] 200[—]
Dear Sirs
Loan Agreement dated [—] 2013 (the “Loan Agreement”) made between (1) Explorer New Build, LLC (the “Borrower”), (2) the banks and financial institutions named at schedule 1 therein as lenders, (3) Credit Agricole Corporate and Investment Bank, Société Générale, HSBC Bank plc and KFW IPEX Bank Gmbh as Joint Mandated Lead Arrangers, (4) Credit Agricole Corporate and Investment Bank as Agent and SACE Agent and (5) Credit Agricole Corporate and Investment Bank as Security Trustee for a loan facility of up to the aggregate of the Dollar Equivalent of EUR 299,866,962 and Guarantee dated [—] 2013 (the “Guarantee”) made between (1) us as guarantor and (2) Credit Agricole Corporate and Investment Bank as Security Trustee
We refer to the Loan Agreement and the Guarantee. Terms defined in the Loan Agreement and the Guarantee have their defined meanings when used in this Compliance Certificate.
We also refer to the financial covenant set out in Clause 11.15 of the Guarantee.
We certify that, as at the date of this Compliance Certificate, in relation to such covenant and by reference to the latest accounts provided under Clause 11.3[(a)/(b)] of the Guarantee:
Free Liquidity is $[—] and therefore [is/is not] less than $35,000,000;
To evidence compliance with the terms of Clause 11.15, we attach:
[a copy of the latest annual consolidated accounts of the Seven Seas Group as Appendix A;] or
[copies of the existing quarterly unaudited consolidated accounts of the Seven Seas Group for the current Financial Year together with projections for the quarter(s) still to come in the current Financial Year - applies to First Financial Quarter only.]
No Event of Default has occurred in relation to the Borrower or the Guarantor.
Signed:
Chief Financial Officer of
Seven Seas Cruises S. De. ▇. ▇.
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