Exhibit 4.10
CREDIT AGREEMENT
L67,000,000
DATED 16th December ▇▇▇▇
▇▇▇▇▇▇▇▇▇ HOTEL HOLDING B.V.
as Borrower
- and -
BANK HAPOALIM B.M.
(acting through its London branch)
as Bank
▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇
TEL: ▇▇ ▇▇▇ ▇▇▇▇
FAX: ▇▇ ▇▇▇ ▇▇▇▇
THIS CREDIT AGREEMENT is made on the 16th day of December 2003,
BETWEEN:
(1) RIVERBANK HOTEL HOLDING B.V., a limited liability company organised and
existing under the laws of The Netherlands, with registered office at
▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "BORROWER"); and
(2) BANK HAPOALIM B.M., a banking corporation incorporated in the State of
Israel, acting for the time being through its London branch at ▇/▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, as bank (the "BANK").
RECITALS:
(A) The Borrower and the Bank entered into a term loan agreement on 1 April,
2003 and, thereafter, the Bank has extended additional financing by way of
amendment of that agreement. This agreement amends and restates the terms
of that agreement in their entirety.
(B) The Bank have agreed to make available to the Borrower a credit facility
for the purposes set out in Section 3 (Purpose) upon and subject to the
terms and conditions contained in this Agreement; and
(C) The Borrower wishes to accept the credit facility upon and subject to the
terms and conditions contained in this Agreement.
(D) This Agreement is deemed to constitute an amendment within the meaning of
paragraph 3 of Chapter 2 of the Charge over Shares dated 1 April 2002 which
the parties acknowledge serves as security for this Agreement. Furthermore,
the Debenture (in accordance with its terms) continues to serve as security
for this Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
ACCOUNTS Each of the bank accounts required to be opened and
maintained by the Borrower pursuant to Section 19
(Accounts).
ADDITIONAL COSTS In relation to any period, the rate calculated for such
RATE period by application of the formula set out in
Schedule 2.
ADVANCE The principal amount of each borrowing under this
Agreement.
ADVANCE REQUEST A request for the making of an Advance in
accordance with Section
1
5.2 (Advance Requests and Drawdown).
AGREEMENT This Credit Agreement.
A LOAN The loan having a principal maximum amount of up
to L62,000,000 (sixty two million pounds sterling) plus
the aggregate principal amount of all Deferred Interest
Advances made during the A Loan Availability Period.
A LOAN The period commencing on the date of Financial Close
AVAILABILITY and ending on the earlier of:
PERIOD
(a) the date of Project Completion;
(b) the fourth (4th) anniversary of the Term Sheet
Date; and
(c) the date on which the A Loan is fully drawn,
cancelled or terminated pursuant to the terms of
this agreement.
A LOAN INTEREST The rate of interest payable on the A Loan from time
RATE to time in accordance with Section 8 (Interest).
A LOAN MARGIN One and four-tenths of one percent (1.4%).
A LOAN REPAYMENT The earlier of:
DATE
(a) the fifth (5th) anniversary of the Term Sheet
Date; and
(b) the Economic Completion Date.
APPLICABLE LAW Any applicable:
(a) national (or state) constitution, treaty,
statute, code, law, by-law, legislation,
regulation, ordinance, rule, judgement, rule of
law, official order, judicial order, writ,
decree, request, approval, concession, grant,
franchise, licence, directive, guideline,
policy, standard, plan requirement or
restriction of any legally constituted public
authority; and
(b) decision of, or determination by, or any
interpretation or administration of any of the
foregoing (whether or not having the force of
law) of any governmental authority;
whether in effect as of the date hereof or thereafter
and in each case as amended, re-enacted or replaced.
APPROVED COSTS These costs to be incurred by the Borrower in
connection with the Project and authorised by the Bank
in accordance with the terms of this Agreement.
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ARCHES Arches numbered 122 to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
the subject of a lease dated 31 March 2000 between
Railtrack Plc and MC Parking Limited (as varied by a
deed of variation of the Lease dated 8 May 2003) which
has been assigned to the Borrower.
AUDITORS Mazars PaardeKooper ▇▇▇▇▇▇▇ of Mazars Tower,
Delflandlaand, Amsterdam, The Netherlands
B LOAN The Loan having a principal maximum amount of up
to sixty seven million pounds L67,000,000, equal to the
outstanding amount of the A Loan on the date of the
Advance of the B Loan.
B LOAN INTEREST The rate of interest payable on the B Loan from time to
RATE time in accordance with Section 8 (Interest).
B LOAN MARGIN One and one-tenth of one percent (1.1%)
BANK'S INSURANCE Risk Management Consultants Ltd., or such other
CONSULTANT replacement insurance consultant as may be appointed by
the Bank.
BANK'S PROJECT ▇▇▇▇▇▇▇▇ & Theobold, or such other replacement
MONITOR technical adviser as may be appointed by the Bank.
BORROWER CHARGE The charge over each of the Accounts of the Borrower in
OVER ACCOUNTS favour of the Bank dated the date hereof, in the form
of Schedule 4 hereto.
BUSINESS DAY A day (other than a Saturday or Sunday) on which
banks are open for business in London.
CHARGES OVER (a) the Borrower Charge over Accounts; and
ACCOUNTS
(b) the Operator Charge over Accounts.
CHARGES OVER (a) The charges over shares dated 1 April 2002
SHARES granted by the Shareholders in favour of the Bank
in respect of their shares in the Borrower, and
(b) the charges over shares dated the date of this
agreement granted by the Borrower in favour of
the Bank in respect of its shares in the
Operator, in the form of Schedule 3 hereto.
COLLATERAL The assets subject to the Security Interests created by
the Security Documents.
COLLATERAL The duty of care warranties in favour of the Bank from:
WARRANTIES
(a) the Contractor;
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(b) such sub-contractors of the Contractor as the
Bank may require; and
(c) each member of the Professional Team as the Bank
may require,
in each case in form and substance acceptable to the
Bank.
COMPLETION AND The guarantee dated the date of this agreement executed
COST OVERRUN by the Guarantors in favour of the Bank, in the form of
GUARANTEE Schedule 8 hereto.
CONSTRUCTION The agreement dated [ ] between the
AGREEMENT Borrower and the Contractor.
CONSTRUCTION The period from the date of the Initial Advance until
PERIOD Project Completion Date.
CONSTRUCTION The budget for the Construction Period submitted to the
PERIOD BUDGET Bank by the Borrower, as amended from time to time by
the Borrower with the consent of the Bank.
CONSTRUCTION The works to be performed pursuant to the Construction
WORKS Agreement.
CONTRACTOR Gear Construction Management Ltd., a company organized
and existing under the laws of England and Wales, with
registered office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇.
DEBENTURE The debenture dated 1 April,2003 granted by the
Borrower in favour of the Bank, in the form of
Schedule 6.
DEBT SERVICE In respect of a period, the aggregate amount of:
(a) all Financing Costs accrued or to be accrued
during that period; and
(b) all repayments and/or prepayments of Financing
Principal that fall due during that period.
DEBT SERVICE In respect of any period, the ratio of A:B where:
COVER RATIO
A Operating Profit for that period; and
B Debt Service for that period.
DEBT SERVICE The bank account required to be opened and maintained
RESERVE ACCOUNT by the Borrower pursuant to Section 19 (Accounts).
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DEFAULT An Event of Default or a Potential Default.
DEFAULT RATE As defined in Section 8.4 (Default Interest).
DEFERRED INTEREST The Advances provided for the purposes of
ADVANCES capitalisation of interest in accordance with Section
8.6(a) (Capitalisation of Interest).
DIRECT AGREEMENT The direct agreement to be entered into between the
Operator, the Borrower, the Bank and the Management
Company.
DRAWDOWN DATE In relation to any Advance, the date on which the
Advance is actually made.
ECONOMIC The Bank being satisfied that:
COMPLETION
(a) for the previous 12 months (or such other period
as the Bank may determine) preceding the date of
calculation, the RevPar at the Hotel averaged at
least L74.50 (seventy four pounds and fifty ▇▇▇▇▇
only); and
(b) the Debt Service Cover Ratio for the previous 12
months (or such other period as the Bank may
determine) preceding the date of calculation, was
at least 1.2:1.
ECONOMIC The date of the notice of the Auditor's addressed to
COMPLETION DATE the Bank, confirming that Economic Completion has taken
place.
ECONOMIC The fifth (5th) anniversary of the Term Sheet Date.
COMPLETION
DEADLINE
ELSCINT Elscint Limited, a company incorporated in the State of
Israel with registered number ▇▇-▇▇▇▇▇▇-▇ with
registered office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇.
ENVIRONMENTAL Any administrative, regulatory or judicial action,
CLAIM suit, demand letter, claim, Security Interest, notice
of non-compliance or violation or investigation or
proceeding conducted or initiated by any Person as a
result of, under or in connection with any violation of
Environmental Law.
ENVIRONMENTAL LAW All Applicable Laws concerning health, safety,
bio-diversity, dangerous substances or matters related
to pollution or protection of the environment.
ENVIRONMENTAL All licences and approvals required under any
LICENCE Environmental Law.
EQUITY Each of:
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(a) the share capital of the Borrower; and
(b) the Shareholders Loans.
EQUITY DOCUMENT Each of:
(a) the Shareholders Loan Agreements; and
(b) the Subordination Agreement.
EVENT OF DEFAULT As defined in Section 20 (Defaults).
EXISTING LOAN The loan made by the Bank to the Borrower pursuant
to the Original Loan Agreement in an aggregate amount
(including capitalized interest) of L35,415,319.26
(thirty five million four hundred and fifteen three
hundred and nineteen pounds and twenty six ▇▇▇▇▇).
FACILITY The credit facility denominated in pounds Sterling to
be made available to the Borrower in accordance with
the terms of this Agreement.
FACILITY GUARANTEE a facility guarantee issued by the Bank to a
third party pursuant to Section 10 (LCS and Facility
Guarantees), in a form and substance satisfactory to
the Bank.
FACILITY OFFICE The London branch of the Bank or such other
office as the Bank may designate by written notice to
the Borrower as being the office through which the Bank
will perform any or all of its obligations under this
Agreement.
FINAL MATURITY The date falling ten (10) years after the Economic
DATE Completion Date.
FINANCE DOCUMENTS Each of:
(a) this Agreement;
(b) each Security Document;
(c) each Equity Document; and
(d) any other document designated as such by the Bank.
FINANCIAL CLOSE The date on which all of the conditions precedent
to the Initial Advance (as set out in Section 4
(Conditions Precedent) have been fulfilled or waived by
the Bank in writing, which shall be no later
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than 31 December, 2003.
FINANCIAL Any indebtedness in respect of:
INDEBTEDNESS
(a) moneys borrowed or debit balances at banks and
other financial institutions;
(b) any debenture, bond, note, loan stock or other
security;
(c) any acceptance or documentary credit;
(d) receivables sold or discounted (otherwise than on
a non-recourse basis);
(e) the acquisition cost of any asset to the extent
payable before or after the time of acquisition or
possession by the party liable where the advance
or deferred payment is arranged primarily as a
method of raising finance or financing the
acquisition of that asset;
(f) any lease entered into primarily as a method of
raising finance or financing the acquisition of
the asset leased;
(g) any currency swap or interest swap, cap or collar
arrangement or any other derivative instrument;
(h) any amount raised under any other transaction
having the commercial effect of a borrowing or
raising of money; or
(i) any guarantee, indemnity or similar assurance
against financial loss of any person.
FINANCING COSTS (a) interest, fees, commissions and costs payable by
the Borrower under this Agreement;
(b) amounts ascertained as being payable by the
Borrower under Section 12 (Taxes), Section 13
(Market Disruption), Section 14 (Increased Costs),
Section 23 (Stamp Duties) and Section 24
(Indemnities) of this Agreement; and
(c) any Taxes payable by the Borrower in respect of
the above,
but excluding Financing Principal.
FINANCING Principal amounts outstanding under this Agreement.
PRINCIPAL
FIRST INTEREST The earlier of the first Quarter Date falling after the
PAYMENT DATE three (3) month anniversary of
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(a) the date of Practical Completion; or
(b) the third anniversary of the Term Sheet Date.
FURTHER The further conditions precedent specified in Section
CONDITIONS 4.2 (Further Conditions Precedent).
PRECEDENT
GOOD INDUSTRY The exercise of that degree of skill, diligence,
PRACTICE prudence and foresight which would reasonably and
ordinarily be expected from a skilled and experienced
person engaged in the same type of undertaking under
the same or similar circumstances.
GOVERNMENTAL Any government, governmental department, ministry,
AUTHORITY cabinet, commission, board, bureau, agency, tribunal,
regulatory authority, instrumentality, judicial,
legislative or administrative body or entity, domestic
or foreign, federal, national, state, regional,
provincial or local, having or exercising jurisdiction
over the matter or matters in question.
GUARANTEE The several guarantees dated the date of this agreement
executed by:
(a) the Red Sea Guarantors, jointly and severally;
and
(b) Elscint,
each, in favour of the Bank, in respect of seven and
one-tenth of one per cent (7.1%) of the total
outstanding amounts (whether Financing Principal or
Financing Costs) pursuant to this Agreement.
GUARANTORS Each of the Red Sea Guarantors and Elscint.
HOTEL All that property and building known, or to be known,
as the Riverbank Park Plaza Hotel
HOTEL MANAGEMENT The undertaking given by Park Plaza Europe Limited to
UNDERTAKING the Borrower, dated the date hereof.
INITIAL ADVANCE The first Advance to be made by the Bank.
INSURANCE PROCEEDS All proceeds of Insurances or Additional Insurances
including proceeds in respect of liabilities
arising under any of the Project Documents whether by
way of claims, adjustments thereof, return of premiums
or otherwise.
INSURANCE The account to be opened by the Borrower and maintained
PROCEEDS ACCOUNT in accordance with Section 19 (Accounts).
8
INSURANCE A letter to be entered into by the Borrower and the
PROCEEDS LETTER Bank, to the satisfaction of the Bank, setting out the
procedure for distribution of Insurance Proceeds.
INSURANCES All contracts and policies of insurance and
re-insurance of any kind which are required to be taken
out by, or on behalf of or for the benefit of the
Borrower in accordance with the Project Documents and
the Finance Documents or in which the Borrower has an
interest.
INTELLECTUAL All intellectual property rights, whether or not
PROPERTY RIGHTS patentable, including without limitation, rights in
algorithms, binary code, brands, business methods,
computer programs, computer software, concepts,
confidential information, firmware, composition of
matter or materials, certification marks, collective
marks, copyright, customer lists, data, databases,
designs (whether registered or unregistered),
derivative works, discoveries, distributor lists,
documents, domain names, file layouts, formulae,
goodwill, ideas, improvements, industrial designs,
information, innovations, inventions, integrated
circuits, know-how, logos, manufacturing information,
mask works, materials, methods, moral rights, object
code, original works of authorship, patents, patent
applications, patent rights, including but not limited
to any and all continuations, divisions, reissues,
re-examinations or extensions, plans, processes,
proprietary technology, reputation, research results,
research records, semiconductor chips, service marks,
software, source code, specifications, statistical
models, supplier lists, systems, techniques,
technology, trade secrets, trademarks, trade dress,
trade names, trade styles, and technical information,
and any rights analogous to the foregoing.
INTEREST DUE DATE The last day of any Interest Period on which
date interest is payable by the Borrower to the Bank
pursuant to Section 9 (Interest Periods).
INTEREST PERIOD As determined in accordance with Section 9
(Interest Periods).
LC Any letter of credit issued or to be issued by the Bank
to a third party pursuant to Section 10 (LCS and
Facility Guarantees), such letter of credit to be in a
form satisfactory to the Bank.
LEASE The lease agreement over the site to be entered into
between the Borrower and the Operator, in form and
substance acceptable to the Bank.
9
LIBOR In respect of any Interest Period means the rate
displayed as of 11 a.m. London time on the second
Business Day before the first day of that Interest
Period on the FRBD page of the ▇▇▇▇▇▇ Monitor Money
Rates Service (or such other page or service as may
replace it) as being the interest rate offered in the
Inter-bank Market for Sterling deposits for the same
period as the relevant Interest Period (or if the
periods are not the same, such period, if any, as the
Lender determines to be substantially the same) but if
no such offered quotation appears, the relevant rate
shall be determined on the basis of the respective
rates (as quoted to the Lender at its request) at which
each Reference Bank is offering Sterling deposits for
the relevant currency for the relevant Interest Period
to prime banks in the Inter-bank Market at or about 11
a.m., on the second Business Day before the first day
of the relevant Interest Period.
LOAN ACCOUNT The bank account required to be opened and
maintained by the Borrower pursuant to Section 19
(Accounts).
MANAGEMENT COMPANY Park Plaza Hotel Europe Limited or such other
hotel management company as shall be approved by the
Bank in accordance with Section 20.20.
MATERIAL ADVERSE Any effect which in the opinion of the Bank:
EFFECT
(a) is or is likely to be materially adverse to the
ability of the Borrower or any other Obligor to
perform or comply with any of its material
obligations under the Transaction Documents in a
timely manner; or
(b) is or is likely to be materially prejudicial to:
(i) the interests of the Finance Parties under
the Finance Documents;
(ii) the business, operations or financial
condition of the Borrower or any other
Obligor;
(iii) the validity or enforceability of any of
the Transaction Documents; or
(iv) the implementation or operation of the
Project or the consummation of the
transactions contemplated by the
Transaction Documents.
OBLIGOR (a) the Borrower;
(b) each Shareholder (other than Park Plaza Hotels
Europe Limited)
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(c) each Guarantor; and
(d) the Operator.
OPERATING ACCOUNT Means the account to be opened by the Operator
and maintained in accordance with Section 19
(Accounts).
OPERATING BUDGET The budget for the Operating Period submitted to
the Bank by the Borrower, as amended from time to time
by the Borrower with the consent of the Bank.
OPERATING PERIOD The period from the date of commencement of
commercial operation of the Hotel until the Final
Maturity Date.
OPERATING PROFIT The combined gross operating profit of the
Operator (or such other party as shall operate the
Hotel) before tax, plus:
(a) amortisation and depreciation; and
(b) rent paid by the Operator to the Borrower pursuant
to the lease of the Hotel,
calculated, in each case, in accordance with GAAP and:
1. in the case of a calculation with respect to a year
ending on 30 June in any year, as shown in the two
sets of half yearly financial statements relating
to that year delivered to the Bank pursuant to this
Agreement and with reference to the hotel operating
accounts of the Operator for such period supplied
pursuant to this Agreement.
2. in the case of a calculation with respect to a year
ending on 31 December in any year, as shown in the
financial statements relating to that year
delivered to the Bank pursuant to and with
reference to the hotel operating accounts of the
Operator for such period supplied pursuant to this
Agreement.
OPERATOR Almaren Limited, a company organised and existing under
the laws of England and Wales, with company number
4974811 to be known as Riverbank Hotel Operator
Limited.
OPERATOR CHARGE The charge over the Operating Account to be granted by
OVER ACCOUNTS the Operator in favour of the Bank, in the form of
Schedule 5 hereto.
ORIGINAL LOAN The term loan agreement entered into by the Borrower
AGREEMENT and the Bank on 1 April, 2003, as amended from time to
time.
OUTSTANDING In relation to any LC or Facility Guarantee, the amount
stated in
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LIABILITY AMOUNT such documents to be the maximum amount for which the
Bank could be actually or contingently liable
thereunder which, if not denominated in Sterling, shall
be (for the purposes of this definition) converted into
Sterling on the basis of the Bank's Spot Rate of
Exchange two (2) days prior to issuance of such LC or
Facility Guarantee.
PARTY A party to this Agreement.
PERMITTED (a) any indebtedness arising under the Shareholder
INDEBTEDNESS Loan Agreements provided such indebtedness is
subject to the terms of the Subordinated Loan
Agreements;
(b) indebtedness not exceeding one million pounds
Sterling (L1,000,000) in the aggregate at any
time, incurred by the Borrower or the Operator in
respect of its obligations under finance leases
entered into in relation to the acquisition of
furniture, fittings or other equipment for the
Hotel;
(c) indebtedness incurred by the Operator to
suppliers in the ordinary course of operation of
the Hotel; and
(d) any other indebtedness of the Borrower or the
Operator which is disclosed in writing to the
Bank by the Borrower, and so approved in writing
by the Bank.
PERSON Any individual, company, firm, trust, organisation,
corporation, state, political sub-division of a state,
local, municipal or other Governmental Authority,
association, joint venture or partnership (whether or
not having separate legal personality) and any
international organisation.
PERMITTED Any Security Interest over assets of the Borrower
SECURITY INTERESTS arising solely by operation of law.
POTENTIAL DEFAULT Any event, act or condition which, with the giving of
any notice or the lapse of time or the satisfaction of
any other condition would constitute an Event of
Default.
PRACTICAL The earlier of:
COMPLETION
(a) six (6) months from the date of the first paying
guest utilising the Hotel; or
(b) seventy five percent (75%) of rooms being
certified by the Bank's Project Monitor as being
available for commercial use.
PROCEEDS ACCOUNT The account to be opened by the Operator and
maintained in
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accordance with Section 19 (Accounts).
PROFESSIONAL The letters of appointment by the Borrower of members
APPOINTMENTS of the Professional Team, in form and substance
satisfactory to the Bank.
PROFESSIONAL TEAM Those contractors, sub-contractors, consultants
and advisers set out in Schedule 13 hereto.
PROJECT The project for the design, construction, operation and
maintenance of the Hotel at ▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇, in accordance with the Project Documents.
PROJECT ACCOUNT The account to be opened by the Borrower and
maintained in accordance with Section 19 (Accounts).
PROJECT COMPLETION (a) The completion of the Project such
that the Bank's Project Monitor shall be
satisfied that:
(i) the Project has been completed in all
material respects in accordance with the
Project Documents; and
(ii) the Hotel comprises 396 "first class" rooms
and 66 serviced apartments; and
(iii) the Bank is satisfied on the basis of the
monthly operating reports that the rooms
are available for use.
PROJECT COSTS All costs and expenses paid and to be paid by the
Borrower, including without limitation:
(a) capital costs (including, purchase of all rights
in relation to the Site);
(b) operating costs and expenses;
(c) maintenance costs;
(d) insurance premiums and other insurance related
payments;
(e) administrative, management, legal, accounting and
employee costs;
(f) Taxes required to be paid by the Borrower; and
(g) fees and commissions payable to the Bank.
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PROJECT DOCUMENTS Each of:
(a) the Construction Agreement;
(b) the Operation and Maintenance Agreement;
(c) the Professional Appointments;
(d) the Collateral Warranties; and
(e) any other document designated as such by the Bank.
PROJECT PERMIT All authorizations, consents, approvals, resolutions,
licences, exemptions, filings or registrations required
contractually, under any Applicable Law or otherwise to
enable the Borrower or any other Person to perform its
obligations under, or for the validity or
enforceability of, or in connection with the
consummation of the transactions contemplated by any
Transaction Document or otherwise necessary in order
for the Project to be implemented in accordance with
the terms of the Transaction Documents.
QUARTER DATE 31 March, 30 June, 30 September and 31 December (as
applicable).
RED SEA GUARANTORS (a) Red Sea Club Limited, a company incorporated in
the State of Israel with registered number
▇▇-▇▇▇▇▇▇-▇ whose address is ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇;
(b) Atlantic Pacific Enterprises B.V., a company
incorporated in The Netherlands with registered
office at ▇▇ ▇▇▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇; and
(c) Zilver-▇▇▇▇ B.V., a company incorporated in The
Netherlands with registered office at ▇▇ ▇▇▇▇▇▇
▇▇-▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ Zuidoost,
jointly and severally.
REPAYMENT Each instalment for repayment of the Advances referred
INSTALMENT to in Section 6 (Repayment).
REV PAR The total of revenue from room income per total
available rooms for any given period, calculated by
multiplying average room rate achieved in the Hotel for
a given period by the average room occupancy rate at
the Hotel for that period.
SECURITY Each of:
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DOCUMENTS
(a) the Charges over Shares;
(b) the Charges over Accounts;
(c) the Debenture;
(d) the Guarantees;
(e) the Completion and Cost Overrun Guarantee;
(f) the Direct Agreement;
(g) the Supplemental Debenture; and
(h) any other document or instrument including,
without limitation, any document or instrument
evidencing, creating or perfecting or continuing
the perfection of any Security Interest over any
asset of the Borrower or any other Obligor to
secure any of the obligations of such Person under
any of the Transaction Documents including,
without limitation, the document to be entered
into creating a Security Interest in favour of the
Bank over the Lease.
SECURITY INTEREST Any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other
agreement or arrangement having the effect of
conferring security.
SHAREHOLDERS (a) Euro Sea Hotels N.V. of De Entree 11-13 Toren A,
1101 BH Amsterdam Zuidoost, The Netherlands;
(b) BEA Hotels N.V. ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇; and
(c) Park Plaza Hotels Europe Limited Tropic Isle
Building, Post Office Box 438, Road Town,
Tortola, British Virgin Islands.
SHAREHOLDERS LOAN The shareholders loans pursuant to the agreements
of 1 April 2003, between the Borrower and all further
loans to be provided by the Shareholders to the
Borrower.
SHAREHOLDERS LOANS The shareholders loans provided to the Borrower
by the Shareholders pursuant to the Shareholders Loan
Agreements and in accordance with the Subordinated Loan
Agreements.
SITE (a) All of that leasehold property known as
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ as
registered at HM Land Registry under title number
TGL175396;
15
(b) All of that leasehold property known as land at
Embankment Gardens in front of ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ more particularly comprised in
a lease dated 14 February 2002 between The Mayor
and ▇▇▇▇▇▇▇ of the London Borough of Lambeth and
▇▇▇▇▇▇ Hotel Limited currently registered under
title number ▇▇▇▇▇▇▇▇▇; and
(c) the Arches.
STERLING, POUNDS The lawful currency of the United Kingdom.
STERLING or L
SUBORDINATION The subordination agreement dated 1 April 2003 between
AGREEMENT the Bank, the Borrower and each Shareholder, in the
form of Schedule 7 hereto.
SUPPLEMENTAL The debenture to be entered into by the Borrower
DEBENTURE pledging:
(a) the Arches;
(b) the Insurance Proceeds Account; and
(c) the Debt Service Reserve Account,
in favour of the Bank.
TERM SHEET DATE 27 August, 2002.
TAX All present and future income, value added and other
taxes, levies, imposts, deductions, charges and
withholdings in the nature of taxes (other than taxes
on the profits of the Bank) whatsoever together with
interest thereon and penalties with respect thereto, if
any, and any payments made on or in respect thereof.
TRANSACTION The Finance Documents and the Project Documents.
DOCUMENTS
WHOLESALE The rate per annum, as determined from time to time by
INTEREST RATE the Bank, to be the basic rate - before the application
of any margin - at which the Bank is willing to grant
loans in Sterling for a similar term as the A Loan and
the B Loan (as appropriate).
1.2 INTERPRETATION
In this Agreement, unless the contrary intention appears, a reference to:
(a) "AMENDMENT" includes a supplement, notation or re-enactment and
"AMENDED" is to be construed accordingly;
16
"ASSETS" includes every kind of property, asset, interest, revenue
or right of every description, including any present, future or
contingent right to any revenues;
"MONTH" or a period of one or more "MONTHS" means a period beginning
in one calendar month and ending in the relevant calendar month on
the day numerically corresponding to the day of the calendar month
in which such period started, provided that:
(i) if such period started on the last Business Day in a calendar
month, or if there is no such numerically corresponding day,
such period shall end on the last Business Day in the
relevant calendar month; and
(ii) if such numerically corresponding day is not a Business Day,
such period shall end on the next following Business Day in
the same calendar month or if there is no such Business Day,
such period shall end on the preceding Business Day;
(and "MONTHLY" shall be construed accordingly); and
a "REGULATION" includes any regulation, rule, requirement, official
directive, request or guideline (whether general or specific) and
whether or not having the force of law of or issued by any authority
of any kind.
(b) a provision of law is a reference to that provision as amended or
re-enacted;
(c) the Table of Contents to and the headings in this Agreement shall
not affect the interpretation of this Agreement and all references
to Sections, sub-Sections, Schedules, Appendices or Exhibits are to
Sections and sub-Sections of, and Schedules, Appendices or Exhibits
to, this Agreement;
(d) words and defined terms denoting the singular number include the
plural and vice versa;
(e) references to, or to a provision of, a document are references to it
as amended or supplemented before or after the date of this
Agreement but where this Agreement requires the prior consent of the
Bank or the Borrower in connection with any such amendment or
supplement, this sub-Section shall not affect such requirement;
(f) subject to the terms of this Agreement, any reference in this
Agreement to the Bank or the Borrower shall include their respective
successors and assigns;
(g) a time of day is a reference to London time; and
(h) the Schedules and Exhibits form an integral part of this
Agreement.
2. FACILITY
17
2.1 FACILITY
Subject to the terms of this Agreement, the Bank agree to make the Facility
available to the Borrower in an aggregate amount of up to sixty seven
million pounds sterling (L67,000,000), which shall, at no time, exceed
seventy per cent (70%) of the total Project Cost.
2.2 AVAILABILITY
The Facility shall be made available by way of:
(a) financing principal, including the issuance of LCS and Facility
Guarantees (not exceeding L62,000,000 (sixty two million pounds
sterling); and
(b) Deferred Interest Advances.
3. PURPOSE
3.1 A LOAN
The Borrower shall use the A Loan wholly and exclusively for the following
purposes:
(a) first, towards full and final discharge of the Existing Loan and
payment of fees pursuant to Section 21 (Fees); and
(b) thereafter, for financing Approved Costs incurred in connection
with the Project.
3.2 B LOAN
The Borrower shall use the B Loan for the sole purpose of repayment of the
A Loan.
3.3 NO DUTY TO MONITOR
Without affecting the obligations of the Borrower in any way, the Bank has
no duty to verify or monitor the purpose for which, or the person to whom,
sums so advanced are actually paid.
4. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of the Bank to the Borrower under this Agreement are
subject to the condition precedent that the Bank has received originals, or
where appropriate, certified copies of all of the documents set out in
Schedule 1 (Condition Precedent Documents) in form and substance
satisfactory to the Bank.
4.2 FURTHER CONDITIONS PRECEDENT
18
The obligations of the Bank to make each Advance to the Borrower are
subject to the fulfilment, at the time of the making of (and after giving
effect to) each such Advance, of each of the following further conditions
precedent to the satisfaction of the Bank unless waived in writing by the
Bank:
(a) no Event of Default or Potential Default shall have occurred and
be continuing or may result from the making of the requested
Advance;
(b) the representations and warranties of the Borrower hereunder shall
be true and correct as if each such representation and warranty was
made as of the date of the requested Advance except where expressed
to be made as of an earlier date;
(c) the requested Advance would not cause the total of the Facility
to be exceeded; and
(d) evidence satisfactory to the Bank that sufficient equity funding has
been provided by the Shareholders such that, following the provision
of the Advance to the Borrower, the total amount outstanding under
the Facility shall not exceed seventy per cent (70%) of the Project
Costs incurred by that date;
(e) in connection with the requested Advance, the Bank shall have
received an Advance Request from the Borrower in the form of
Schedule 11 (Form of Advance Request) (together with all
certificates and attachments thereto) by no later than five (5)
Business Days prior to the date of the requested Advance;
(f) the Bank shall have received Collateral Warranties signed by all
sub-contractors who:
(i) have undertaken Construction Works prior to the date of
the Advance Request; and
(ii) will be undertaking Construction Works which will be
funded (in whole or in part) by the requested Advance; and
(g) in respect of the Advance of the B Loan, the Economic Completion
Date shall have occurred.
4.3 CONDITIONS SUBSEQUENT
The Borrower shall ensure that the conditions subsequent set out in
Schedule 1 Part 2 (Conditions Subsequent) are fulfilled to the satisfaction
of the Bank within sixty (60) days of the date of this Agreement.
5. DRAWDOWN
5.1 AVAILABILITY PERIOD
19
Subject to the terms of this Agreement:
(a) A Loan Advances will be made to the Borrower on any Business Day
during the A Loan Availability Period, provided that:
(i) on Financial Close the Initial Advance shall be drawn in an
amount equal, at least, to the Existing Loan plus fees due
and payable in accordance with Section 21 (Fees); and
(ii) the aggregate amount of all Advances of the A Loan shall
not exceed L62,000,000 (sixty two million pounds
sterling); and
(b) the B Loan Advance will be made to the Borrower only on the Economic
Completion Date in an amount equal to the outstanding A Loan
Advances on such date, provided that the Borrower shall have
complied with the procedure set out in section 5.2 (Advance Requests
and Drawdown).
5.2 ADVANCE REQUESTS AND DRAWDOWN
(a) The Borrower shall submit a duly completed Advance Request to the
Bank in the form of Schedule 11 (Form of Advance Request) (together
with all certificates and attachments thereto) by no later than 11
am, at least five (5) Business Days prior to the requested date for
the Advance, specifying, inter alia:
(i) the requested date for the Advance, being a Business Day
during the Availability Period;
(ii) the purpose of such borrowing (which must be permitted by
Section 3 (Purpose)) and, if more than one, the relative
amounts to be applied for each purpose;
(iii) the amount of the requested Advance which shall be a
minimum of L500,000;
(iv) that all conditions precedent to the making of the Advance,
as set out in Sections 4.1 (Documentary Conditions Precedent)
and/or 4.2 (Further Conditions Precedent), as applicable,
shall be fully satisfied or waived, as of the relevant date;
(v) that the Bank's Project Monitor has confirmed:
(i) that the Project Costs to be funded by the
requested Advance are supported by invoices and
that the Advance is required in order to meet these
costs;
(ii) subject to Section 10.6 (Cancellation) on the basis of
Project Costs incurred to date and falling due in the
forthcoming
20
month according to the Construction Period
Budget, the total amount of all Advances (including
Deferred Interest Advances and the requested Advance)
does not exceed seventy per cent (70%) of such Project
Costs; and
(iii) in the case of the requested issuance of an LC or
Facility Guarantee, that the liabilities to be secured
by such LC or Facility Guarantee have been properly
incurred by the Borrower in connection with the
Project.
(b) The Borrower may in an Advance Request, request the Bank to issue an
LC or Facility Guarantee as part of the A Loan and the Bank will
issue such LC or Facility Guarantee by delivering the same to, or to
the order of, the beneficiary stated therein, provided that:
(i) the Bank will be under no obligation to issue an LC or
Facility Guarantee unless it approves the form and substance
of the relevant LC or Facility Guarantee and, for the
avoidance of doubt, no LC or Facility Guarantee will be
approved unless it has an expiry date which is on or before
the date which falls eighteen (18) months after the date of
this agreement;
(ii) the issue of each LC and Facility Guarantee shall, for so
long as they remain valid and outstanding, reduce the amount
available to be borrowed under the A Loan by the Outstanding
Liability Amount of such LC or Facility Guarantee; and
(iii) each issue of an LC or Facility Guarantee shall be subject to
payment by the Borrower to the Bank of commission standard at
the Bank for such LC or Facility Guarantee, which may be paid
by the Borrower by utilizing an Advance under the A Loan.
(c) Each Advance Request shall be irrevocable.
6. REPAYMENT
6.1 A LOAN REPAYMENT
The Borrower shall repay the full amount of the outstanding A Loan
(together will all Financing Costs), in one payment on the A Loan Repayment
Date.
6.2 B LOAN REPAYMENT
The Borrower shall repay the B Loan in accordance with the repayment
schedule attached as Schedule 9. This Schedule shall be updated by the Bank
and delivered to the Borrower on the date of the Advance of the B Loan to
reflect the repayments of the precise amount of such Advance.
21
6.3 LCS AND FACILITY GUARANTEES
Any LC or Facility Guarantee in relation to which the Bank has made a
payment, shall be repaid as part of the A Loan, in accordance with Section
6.1 (A Loan Repayment).
7. PREPAYMENT AND CANCELLATION
7.1 VOLUNTARY PREPAYMENT
The Borrower may not prepay the Facility or any part thereof on or before
the third anniversary of the date of Practical Completion (the "EARLIEST
PREPAYMENT DATE") without obtaining the prior written consent of the Bank.
Thereafter, the Borrower may prepay all or part of the A Loan or the B Loan
on any Interest Payment Date, provided that:
(a) the Borrower shall have given to the Bank not less than thirty
(30) days' prior written notice;
(b) the amount of any partial prepayment shall be at least one
million pounds sterling (L1,000,000);
(c) all other sums then due and payable under this agreement shall
have been paid; and
(d) the Bank shall otherwise be satisfied as to the terms on which
the prepayment is made.
7.2 PREPAYMENT FEE
In the event that the Borrower wishes to prepay all or any part of the A
Loan or B Loan prior to the Earliest Prepayment Date, other than in
accordance with Section 7.1 (Voluntary Prepayment) the Borrower will be
required to pay the Bank an amount equal to three quarters of one percent
(0.75%) per annum (or pro-rata for a part thereof) of the prepaid amount
for the period from the date of prepayment until the third anniversary of
the date of Practical Completion.
7.3 MANDATORY PREPAYMENT
(a) Upon the occurrence of a Prepayment Event, the Borrower shall, upon
the last day of the Interest Period during which the Prepayment
Event occurs, prepay the Advances.
(b) For the purposes of this Section 7.3 (Mandatory Prepayment) the term
"PREPAYMENT EVENT" shall mean the occurrence of any of the
circumstances requiring the Borrower to prepay any amounts in
accordance with Section 15 (Illegality).
(c) Section 7.2 (Prepayment Fee) shall not apply to prepayments in
accordance with this Section 7.3 (Mandatory Prepayment).
22
7.4 MISCELLANEOUS PROVISIONS
(a) Any prepayments under this Agreement shall be made together with
accrued interest and all other amounts accrued and payable hereunder
(including, without limitation, pursuant to Section 24
(Indemnities)).
(b) Any notice of prepayment provided by the Borrower shall be
irrevocable and shall specify the date fixed for prepayment, the
aggregate principal amount of the Advances and the interest thereon
and the Borrower's calculation of accrued interest and all other
amounts (including, without limitation, pursuant to Section 24
(Indemnities)) to be paid on the prepayment date.
(c) No prepayment or repayment is permitted except in accordance with
the express terms of this Agreement.
(d) No amount prepaid under this Agreement may subsequently be
re-borrowed.
(e) Any prepayment shall be applied against the Repayment Instalments in
inverse order of maturity.
(f) The provisions of this Section 7.4 (Miscellaneous Provisions) shall
apply to all prepayments under this Agreement, including pursuant to
Sections 14 (Increased Costs) and 15 (Illegality).
8. INTEREST
8.1 RATE OF INTEREST ON A LOAN
The rate of interest on each Advance in respect of the A Loan, for each
Interest Period, will be calculated as:
(a) the Wholesale Interest Rate;
(b) the A Loan Margin; and
(c) the Additional Cost Rate applicable to such Advance,
provided that, the rate of interest on each Advance in respect of the A
Loan shall in no event be less than the interest rate equal to LIBOR plus
two and two-tenths of one per cent (2.2%).
8.2 RATE OF INTEREST ON B LOAN
The rate of interest on the Advance in respect of the B Loan, for each
Interest Period, will be calculated as:
(a) the Wholesale Interest Rate,
23
(b) the B Loan Margin; and
(c) the Additional Cost Rate applicable to such Advance,
provided that, the rate of interest on the Advance in respect of the B Loan
shall in no event be less than the interest rate equal to LIBOR plus one
and eighty-five hundredths on one per cent (1.85%).
8.3 CALCULATIONS AND DUE DATES
(a) The Borrower shall pay interest on each Advance in arrears on each
Interest Due Date in respect of such Advance.
(b) Interest shall accrue from day to day and shall be calculated on the
basis of the actual number of days elapsed and a year of 360 days.
8.4 DEFAULT INTEREST
(a) If the Borrower fails to pay when due any amount payable by it
hereunder, it shall forthwith on demand by the Bank pay interest on
the overdue amount from the due date up to the date of actual
payment (after as well as before judgment) at the rate determined by
the Bank to be two (2) % per annum above the interest rate specified
in Section 8.1 (Rate of Interest on A Loan) or Section 8.2 (Rate of
Interest or B Loan), as applicable.
(b) The default rate will be determined by the Bank on each Business Day
of the period in respect of which the default interest is payable.
(c) Interest payable under this Section 8.4 (Default interest) shall be
calculated on the basis of the actual number of days elapsed and a
360 day year and shall accrue from day to day. Such interest shall
be capitalised on a weekly basis.
8.5 NOTIFICATION
The Bank shall promptly notify the Borrower of the determination of each
rate of interest under this Agreement.
8.6 CAPITALISATION OF INTEREST
(a) Notwithstanding Section 8.3 (Calculations and Due dates), prior to
the First Interest Payment Date, interest on each Advance shall be
capitalised on the relevant Interest Due Dates and shall be advanced
on such Interest Due Date in the form of a Deferred Interest
Advance.
(b) Each Deferred Interest Advance shall accrue interest at the Interest
Rate applicable to such Advance calculated in accordance with
Section 8.1 (Rate of Interest on A Loan).
9. INTEREST PERIODS
24
9.1 DURATION
(a) The duration of each Interest Period of an Advance shall be three
(3) months.
(b) If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next
Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).
9.2 COMMENCEMENT
The first Interest Period for each Advance shall commence on its Drawdown
Date and each subsequent Interest Period relating to such Advance shall
commence on the expiry of the preceding Interest Period for such Advance.
9.3 CONSOLIDATION
Notwithstanding Section 9.1 (Duration):
(a) the first Interest Period relative to the Initial Advance shall
commence on the Drawdown Date of such Advance and shall end on the
first Quarter Date thereafter; and
(b) the first Interest Period relative to each Advance other than the
Initial Advance shall commence on the Drawdown Date of such Advance
and end on the last day of the Interest Period for the outstanding
Advances, during which the Advance occurs.
9.4 COINCIDENCE WITH A LOAN REPAYMENT DATE AND FINAL MATURITY DATE
(a) If an Interest Period in relation to an Advance of the A Loan would
otherwise overrun the A Loan Repayment Date, it shall be shortened
so that it ends on the A Loan Repayment Date.
(b) If an Interest Period in relation to an Advance of the B Loan would
otherwise overrun the Final Maturity Date, it shall be shortened so
that it ends on the Final Maturity Date.
10. LCS AND FACILITY GUARANTEES
10.1 PAYMENT UNDER LCS AND FACILITY GUARANTEES
(a) In the event that the Bank meets a claim or demand made under an LC
or Facility Guarantee, the amount paid by it shall be treated, for
all purposes hereunder, as being an Advance of the A Loan of an
amount equivalent to the sum so paid by the Bank on the date of
payment by the Bank.
(b) If the LC or Facility Guarantee is denominated in a currency other
than Sterling, the amount actually paid by the Bank pursuant to such
LC or Facility
25
Guarantee shall be converted into Sterling on the basis of the
Bank's Spot Rate of Exchange on the date of payment and the Advance
of the A Loan pursuant to (a) above shall be equal to such amount.
10.2 INDEMNITY
The Borrower will indemnify the Bank on demand and hold it harmless from
and against all liabilities, losses, damages, costs, demands, claims and
actions which the Bank may suffer or incur in connection with the issue or
performance of any LC or Facility Guarantee and any claim or demand made
thereunder or dispute or other matter relating thereto.
10.3 DIRECTION TO PAY
The Borrower irrevocably directs the Bank to pay, without further
confirmation or investigation from or by it, any demand appearing or
purporting to be validly made pursuant to any LC or Facility Guarantee
issued pursuant to this agreement. Where any LC or Facility Guarantee calls
for the production of certificates or other documents, the Bank may assume,
without investigation, that the certificates or documents tendered are
fully signed by the person by whom they appear to be signed and are genuine
and correct. The Bank shall be under no duty to check the identity, good
standing or creditworthiness of any beneficiary of any LC or Facility
Guarantee or to enforce any provision of any LC or Facility Guarantee, each
of which will be issued without any representation or warranty on the part
of the Bank and the Borrower agrees that it will at no time make any claim
against the Bank or issue any proceedings against it in connection with the
issue of, or any payment made under, an LC or Facility Guarantee.
10.4 NO IMPAIRMENT
The Borrower's obligations under this Section 10 (LCS and Facility
Guarantees) shall not be impaired by any waiver or time granted to or by
the Bank in connection with any LC or Facility Guarantee, any defect in, or
invalidity of, any LC or Facility Guarantee or any other circumstance which
might otherwise impair such obligations.
10.5 SUBROGATION
So long as any amount is or is capable of becoming outstanding by the
Borrower under any Financing Document, the Borrower will not, by virtue of
any Advance being made under Section 10.1 (Payment under LCS and Facility
Guarantees) claim, exercise or become entitled to any right of subrogation,
contribution or indemnity against any person in competition with the Bank
in relation to any LC or Facility Guarantee.
10.6 MATURITY
(a) The Bank shall not issue any LC or Facility Guarantee pursuant to
this Agreement which has a maturity or termination date which occurs
later than the last day of the A Loan Availability Period.
26
(b) Upon the A Loan Repayment Date, any outstanding LC or Facility
Guarantee shall be automatically cancelled and the provisions of
Section 10.7 (Cancellation) shall apply.
10.7 CANCELLATION
If an issued LC or Facility Guarantee is no longer required in relation to
the Project and is cancelled and the original returned to the Bank, or if
other evidence is provided to the Bank (such evidence to be in form and
substance satisfactory to the Bank), that no liability exists a no
circumstance can occur which may cause any liability to arise under the
relevant LC or Facility Guarantee, then such LC or Facility Guarantee shall
be treated as null and void and the amount of the A Loan then available
shall be adjusted accordingly by the Bank.
11. PAYMENTS
11.1 PLACE
All payments by the Borrower to the Bank under this Agreement shall be made
to the Facility Office, or at such office or bank as it may notify the
Borrower for this purpose.
11.2 FUNDS
Payments under this Agreement to the Bank shall be made for same day value
by no later than 11.00 am on the due date, or at such times as the Bank may
otherwise specify to the Borrower concerned as being customary at the time
for the settlement of transactions in Sterling.
11.3 CURRENCY
All amounts payable under this Agreement shall be paid in Sterling.
11.4 NO SET-OFF OR COUNTERCLAIM
All payments made by the Borrower under this Agreement shall be made
without set-off or counterclaim.
11.5 NON-BUSINESS DAYS
(a) If a payment under this Agreement is due on a day which is not a
Business Day, the due date for that payment shall instead be the
next Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal
under this Section 11.5 (Non-Business Days) interest is payable on
that principal at the rate payable on the original due date.
11.6 PARTIAL PAYMENTS
27
(a) If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by the Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of the
Borrower under this Agreement in the following order:
(i) FIRST, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Bank (or any receiver appointed
pursuant to the Security Documents on the application of the
Bank);
(ii) SECONDLY, in or towards payment pro rata of any Financing
Costs due but unpaid under this Agreement;
(iii) THIRDLY, in or towards payment pro rata of any Financing
Principal due but unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum
due but unpaid hereunder.
(b) Section 11.6(a) above shall override any appropriation made by
the Borrower.
12. TAXES
12.1 GROSS-UP
All payments by the Borrower hereunder shall be made without any deduction
and free and clear of and without any deduction for or on account of any
Taxes, except to the extent that the Borrower is required by law to make
payment subject to any deduction or withholding of any Taxes. If any Tax or
amounts in respect of Tax must be deducted, or any other deductions must be
made, from any amounts payable or paid by the Borrower, the Borrower shall
pay such additional amounts as may be necessary to ensure that the Bank
receives a net amount equal to the full amount which it would have received
had payment not been made subject to Tax or other deduction.
12.2 NOTIFICATION
If, at any time, the Borrower becomes aware that any deduction or
withholding is or will be required, it shall promptly notify the Bank and
supply details of such requirements.
13. MARKET DISRUPTION
13.1 MARKET DISRUPTION
If:
(a) there shall be no objective possibility for the Bank to finance
itself in Sterling in respect of any Advance about to be made or in
a forthcoming Interest Period; or
28
(b) by reason of circumstances affecting the London interbank market,
adequate and fair means do not exist for ascertaining LIBOR for that
Advance or Interest Period.
then the Bank shall promptly notify the Borrower that this Section 13
(Market Disruption) is in operation.
13.2 SUSPENSION OF ADVANCES
If a notification under Section 13.1 (Market Disruption) applies to an
Advance which has not been made, that Advance shall not be made. However,
on receipt of the notification, the Borrower and the Bank shall enter into
negotiations for a period of not more than thirty (30) days with a view to
agreeing an alternative basis for the borrowing of that Advance.
13.3 ALTERNATIVE BASIS FOR OUTSTANDING ADVANCES
(a) If a notification under Section 13.1 (Market Disruption) applies to
an Advance which is outstanding, then on receipt of the
notification, the Borrower and the Bank shall enter into
negotiations for a period of not more than thirty (30) days with a
view to agreeing an alternative basis for determining the rate of
interest or funding or both applicable to that Advance.
(b) If no alternative basis is agreed (and the relevant circumstances
are continuing at the end of the thirty day negotiation period),
the Bank shall, on or before the last day of the Interest Period
to which the notification relates, certify an alternative
interest rate and interest period for that Advance representing
the Bank's costs of funds for its Participation in the Advance
plus the Margin or require prepayment of such Advance together
with interest thereon on the next Interest Due Date. The
prepayment fee provided in clause 7.2 shall not apply to such
prepayment.
(c) Each alternative basis determined in accordance with this Section
13.3 (Alternative basis for outstanding Advances) shall be binding
on the Borrower and the Bank and treated as part of this Agreement.
13.4 REVIEW
So long as any alternative basis for the ascertaining of the interest rate
or funding is in force, the Bank and the Borrower shall from time to time,
but not less than monthly, review whether or not the circumstances referred
to in Section 13.1 (Market Disruption) still prevail with a view to
returning to the original provisions of this Agreement. Upon any return to
the normal provisions of this Agreement, the Advances shall be continued
for an Interest Period expiring on the next Interest Due Date that would
have applied pursuant to Section 9 (Interest Periods) if the provisions of
this Section 13 (Market Disruption) had not been operating.
14. INCREASED COSTS
29
14.1 INCREASED COSTS
(a) Subject to Section 14.2 (Exceptions), the Borrower shall forthwith
on demand by the Bank pay to the Bank the amount of any increased
cost incurred by it as a result of:
(i) the introduction of, or any change in, or any change in
the interpretation or application of, any Applicable Law;
or
(ii) compliance with any Applicable Law made after the date of
this Agreement,
(including any Applicable Law relating to taxation, or reserve
asset, special deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary control).
(b) Any demand made by the Bank under this Section 14.1(Increased Costs)
shall be contained in a certificate which shall be conclusive and
which shall include a computation of the relevant amount in
reasonable detail.
In this Agreement "INCREASED COST" means:
(i) an additional cost incurred by the Bank or any of its
Affiliates as a result of it having entered into, or
performing, maintaining or funding its obligations under, any
Finance Document; or
(ii) that portion of any additional cost incurred by the Bank or
any of its Affiliates in making, funding or maintaining all
or any advances comprised in a class of advances formed by or
including the Bank's participations in any Advance made or to
be made under this Agreement as is attributable to the Bank
making, funding or maintaining those participations; or
(iii)
the amount of any payment made by the Bank or any of its
Affiliates, or the amount of any interest or other return
foregone by the Bank or any of its Affiliates, calculated by
reference to any amount received or receivable by the Bank or
any of its Affiliates from any other Party under this
Agreement.
14.2 EXCEPTIONS
Section 14.1 (Increased costs) does not apply to any increased cost:
(a) compensated for under Section 12 (Taxes); or
(b) attributable to any change in the rate of, or change in the basis of
calculating Tax on the overall net income of Bank the Bank (or the
overall net income of
30
a division or branch of the Bank) imposed in the jurisdiction in
which its principal office or Facility Office is situated.
15. ILLEGALITY
If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to exercise its rights
under this Agreement, then the Bank may notify the Borrower accordingly;
and
(a) the Borrower shall forthwith prepay the Advances together with all
accrued interest and other amounts payable by it to the Bank under
this Agreement (including, without limitation, pursuant to Section
24 (Indemnities) subject to the Borrower having the benefit of any
transitional period that may be provided by applicable law; and
(b) the unfunded portion of the Facility will forthwith be cancelled.
16. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
16.1 STATUS
The Borrower and each Obligor is duly incorporated with limited liability
and validly existing under the laws of its jurisdiction of incorporation,
with power and authority to own assets and to carry on its business as now
being conducted.
16.2 POWER AND AUTHORITY
(a) The Borrower and each Obligor has all requisite corporate power and
authority to execute and deliver the Transaction Documents to which
it is or will be a party and to carry out and perform its
obligations under such Transaction Documents and to consummate the
transactions contemplated hereby and thereby.
(b) All corporate action on the part of the Borrower and each Obligor,
their respective directors, and shareholders necessary for the
authorisation, execution and delivery of the Transaction Documents
to which they are or will be a party and the performance of all of
their respective obligations thereunder have been taken.
16.3 LEGAL VALIDITY
Each Transaction Document to which the Borrower and each Obligor is or will
be a party constitutes, or when executed in accordance with its terms will
constitute, its legal, valid and binding obligation enforceable in
accordance with its terms.
16.4 NON-CONFLICT
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The Borrower and each Obligor's entry into the Transaction Documents to
which it is or will be a party and the performance of the transactions
contemplated thereby do not and will not:
(a) conflict in any respect with any law or regulation or judicial or
official order; or
(b) conflict with its constitutional documents;
(c) conflict with any document which is binding upon it; or
(d) result in the creation or enforcement of any Security Interest
upon any of its properties or assets.
16.5 NO DEFAULT
(a) No Default is outstanding or might result from the making of any
Advance;
(b) No other event or circumstance is outstanding which constitutes (or
with the giving of notice, lapse of time, determination of
materiality or the fulfilment of any other applicable condition or
any combination of the foregoing, might constitute) a default under
any document which is binding on it which could reasonably be
expected to have a Material Adverse Effect.
(c) No Obligor is in breach of the terms of any Transaction Document in
a manner which could reasonably be expected to have a Material
Adverse Effect.
16.6 PROJECT PERMITS
(a) All Project Permits (other than those set out in Schedule 10)
required in connection with the entry into, performance, validity
and enforceability of the Transaction Documents and the
transactions contemplated by the Transaction Documents or
otherwise in connection with the operation of the Borrower's
business have been obtained or effected and are in full force and
effect and no steps have been taken to revoke or cancel any
Project Permit obtained or effected.
(b) The Borrower has not received any notice of, and is not aware of any
other reason why, any Project Permit not yet required but that may
be required in accordance with the provisions of the Transaction
Documents or otherwise in connection with its business will not be
obtained or effected.
16.7 LITIGATION
(a) No litigation, arbitration or administrative proceedings are
current, pending or, to the best of the Borrower's knowledge,
threatened against or affecting the Borrower or, to the best of
the Borrower's knowledge, current, pending or threatened against
any other party to any Transaction Document, or any of the
Borrower's or their respective properties, revenues or assets or
the Project or
32
the Site which in any single case or taken together, could have a
Material Adverse Effect.
(b) There is no injunction, writ, preliminary restraining order or any
order of any nature issued by an arbitrator, court or other
Governmental Authority directing that any of the material
transactions provided for in any of the Transaction Documents or not
be consummated as herein or therein provided.
(c) Neither the Borrower nor any Obligor is in default with respect to
any writ, order, decree, injunction or other decision of any
Governmental Authority which in any single case or taken together,
could have a Material Adverse Effect.
16.8 FINANCIAL STATEMENTS
The audited financial statements of the Borrower and each Obligor most
recently furnished to the Bank:
(a) have been prepared in accordance with generally accepted
accounting principles, save as specified therein;
(b) have been audited by the Auditors; and
(c) fully and fairly represent the financial condition and state of
affairs of the Borrower and each Obligor as at the date to which
they were drawn up and for the periods specified therein and the
results of their respective financial operations during such period,
and there has been no change in the financial condition of:
(i) the Borrower; or
(ii) any Obligor that has had or is reasonably likely to have a
Material Adverse Effect, since the date to which those
financial statements were drawn up.
16.9 TAXES
(a) The Borrower and each Obligor has filed or caused to be filed all
Tax returns which are required to be filed by the Borrower and
has paid all Taxes due and payable with respect to such returns
or on any assessments made against it or any of its property
(other than any Taxes the amount or validity of which are
currently being contested by the Borrower or any Obligor (as
applicable) in good faith and by appropriate proceedings and in
respect of which an adequate reserve has been established).
(b) No claim is being asserted with respect to any Tax, and there are no
material questions or disputes pending or, to the Borrower's or each
Obligor's best knowledge, threatened by any Governmental Authority
with respect to any Tax.
33
(c) The Borrower and each Obligor has paid, or has provided adequate
reserves (in the good faith judgement of the management of the
Borrower and each Obligor) for the payment of all Taxes applicable
for all prior fiscal years and for the current fiscal year.
(d) Any breach of (a) - (c) above in relation to an Obligor shall only
constitute a breach where in a single case or in the aggregate, such
breach constitutes a Material Adverse Effect.
16.10 WINDING -UP
To the best knowledge of the Borrower (after due enquiry with each
Obligor), no proceedings for the bankruptcy, winding up, insolvency, or
reorganisation of or for any moratorium or scheme of arrangement or any
other similar proceedings relating to the Borrower or any Obligor are
pending before a court in a competent jurisdiction and, if made final by
court order, may have a Material Adverse Effect.
16.11 TITLE AND OWNERSHIP
The Borrower has good and marketable title to the Hotel and all its other
rights and assets free and clear of all Security Interests (other than
Permitted Security Interests) and does not own any assets or property other
than those used in connection with the Project and the operation of the
Hotel.
16.12 NO OTHER BUSINESS
(a) The Borrower has not:
(i) engaged in any business or activities, either alone or in
partnership or joint venture other than the design,
development, construction, financing, ownership (to the
extent relevant), use, operation and maintenance of the
Project; or
(ii) incurred any liabilities other than in connection with its
participation in the transactions contemplated by the
Transaction Documents.
(b) The Borrower has no subsidiaries (other than the Operator, ▇▇▇▇▇▇
Hotel Holding Ltd. and ▇▇▇▇▇▇ Hotel Ltd.) and owns no equity
interest in any other Person.
16.13 CAPITALISATION
(a) The Borrower has an authorised share capital of E90,000 divided into
90,000 ordinary shares of E1 each, none of which is subject to any
Security Interest other than those created by the Security
Documents.
(b) The Borrower has issued 18,000 ordinary shares, which are owned
as follows:
34
(i) BEA Hotels N.V. owns 8,100 ordinary shares;
(ii) EuroSea Hotels N.V. owns 8,100 ordinary shares;_and
(iii) Park Plaza Hotel Europe Limited owns 800 ordinary shares.
(c) The Borrower does not have outstanding any securities convertible
into or exchangeable for its share capital or any rights to
subscribe for or to purchase, or any options, warrants or other
rights to acquire share capital or securities convertible into or
exchangeable or exercisable for share capital, or any agreements,
arrangements or understandings providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its share capital.
16.14 TRANSACTION DOCUMENTS
(a) The copies of the Transaction Documents which the Borrower and each
other relevant Person has delivered to the Bank are true, correct
and complete copies of those documents which include all amendments,
exhibits, schedules, attachments and disclosure letters referred to
therein or delivered pursuant thereto, if any.
(b) Other than the Transaction Documents, there are no other material
agreements concerning the Project to which the Borrower is a party.
(c) No event has occurred or circumstances arisen whereby any
Transaction Document could be terminated or a party to a Transaction
Document could be subject to any penalty.
16.15 NO FORCE MAJEURE
The Borrower is not aware of any continuing event of force majeure as
defined in or contemplated by any of the Transaction Documents.
16.16 PROJECT BUDGETS
(a) Each of the the Construction Period Budget, Operating Budget and
each other projection or budget furnished to the Bank by or on
behalf of the Borrower:
(i) is based on reasonable assumptions and projections as to
all legal and factual matters material to any estimates
included therein;
(ii) is consistent with the provisions of the Transaction
Documents in all material respects;
(iii) has been prepared in good faith and with due care after
careful and proper consideration and enquiry;
35
(iv) fairly represents the Borrower's expectations as to the
matters covered therein;
(v) takes due account of all Applicable Laws as they apply for
the time being, where such Applicable Laws are material to
any estimates included therein; and
(vi) takes into account all other facts and circumstances
affecting the Project, where such facts and circumstances are
material to any estimates included therein.
(b) The Construction Period Budget and each other cash flow and other
projection or budget provided prepared by or on behalf of the
Borrower accurately specifies all costs and expenses incurred by
the Borrower and the Borrower's best estimate of all costs and
expenses anticipated by it to be incurred by it prior to the
Economic Completion Date (in the case of the Construction Period
Budget) and during the relevant period (in the case of each other
relevant cash flow or other projection or budget) to construct,
operate and finance the construction and operation of the Project
in the manner contemplated by the Transaction Documents.
(c) The arithmetic and methodology of all calculations contained in the
the Construction Period Budget, the Operating Budget or any other
projection or budget prepared by or on behalf of the Borrower are
correct and in keeping with best professional practice in all
material respects.
16.17 INTELLECTUAL PROPERTY
The Borrower owns or has the right to use or will, before the Economic
Completion Date, have the right to use by no later than the date upon which
it is required for the Project pursuant to the Transaction Documents or
otherwise, all Intellectual Property Rights and has obtained assignments of
all leases and other rights of whatever nature necessary for the conduct of
its business and the development, commencement, execution, construction,
completion and operation and maintenance of the Project.
16.18 SECURITY AND COLLATERAL
(a) Each Security Document confers the Security Interests it purports
to confer over all of the Collateral referred to in such Security
Document and those Security Interests are first ranking, not
subject to any prior or pari passu Security Interests (other than
Permitted Security Interests) and are not liable to avoidance due
to any (i) bankruptcy, winding-up, composition or any other
similar insolvency proceedings for the reorganisation of the
affairs of the Borrower; or (ii) any other similar act or
circumstance of the Borrower on the date of execution of the
relevant Security Document.
(b) Other than the Security Interests created or purported to be created
under the Security Documents and Permitted Security Interests, there
are no other
36
Security Interests covering the Project, the Site or the Collateral
and no obligations to create any such Security Interests.
(c) The Security Documents have been duly filed, recorded and/or
registered in each office and in each jurisdiction where required to
create, perfect and maintain in full force and effect all Security
Interests under the Security Documents.
(d) Except as expressly stated in the Finance Documents:
(i) the Borrower is the sole legal and beneficial owner of the
Collateral;
(ii) there subsists no breach or failure to comply with the
requirements of any Applicable Law which affects or which
could reasonably be expected to affect materially the value
of the Collateral or the rights of the Finance Parties with
respect to the Security Interests therein;
(iii) there are no covenants, agreements, stipulations,
reservations, conditions, interests, rights or other matters
whatsoever which adversely affect the Collateral or its
assignability;
(iv) the Borrower has received no notice of any adverse claim
by any Person in respect of the ownership of the
Collateral or any interest in it; and
(v) all the buildings and other immovable property located on the
Site are in all material respects in good and substantial
repair.
16.19 PARI PASSU RANKING
The Borrower's obligations (to the extent, if any, they are not secured)
under the Finance Documents rank and will rank at least pari passu with all
its unsecured obligations, except for obligations mandatorily preferred by
applicable law.
16.20 ENVIRONMENT
(a) The Borrower is in full compliance with all applicable Environmental
Laws and Environmental Licences.
(b) Neither the Site nor the Project (nor any other property with
respect to which the Borrower has retained or assumed liability
either contractually or by operation of Applicable Law) contains
or has been affected by any dangerous substance and there are no
other circumstances that are likely to prevent or interfere with
the Borrower's and the Project's compliance with all applicable
Environmental Laws and Environmental Licences or give rise to an
Environmental Claim, which circumstances, have had or are
reasonably likely to have a Material Adverse Effect.
16.21 INSURANCE
37
All Insurances are or, at the time they are required to be maintained or
effected, will be, in full force and effect and no event or circumstance
has occurred, nor has there been any omission to disclose a fact, which
would in either case entitle any insurer to avoid or otherwise reduce its
liability under any policy relating to the Insurances.
16.22 ACCURACY OF REPRESENTATIONS
(a) Each of the representations and warranties herein is true and
correct and none of them omits any matter necessary to make such
representation not misleading in any material respect.
(b) The rights and remedies of the Bank in relation to any
misrepresentations or breach of warranty on the part of the
Borrower shall not be prejudiced by any investigation by or on
behalf of the Bank into the affairs of the Borrower, by the
execution, delivery or performance of any other Transaction
Document or by any other act or thing which may be done by or on
behalf of the Bank or any of them in connection with any
Transaction Document.
16.23 REPETITION
The representations and warranties set out in this Section 16
(Representations and Warranties):
(a) are made on the date hereof;
(b) shall survive the execution hereof, the date of Financial Close,
the cancellation of any Commitments and the making and repayment
of each Advance; and
(c) will be deemed to be repeated on the date of the giving of each
Advance Request, on each Drawdown Date and on the first day of each
Interest Period,
as if each such representation and warranty was made as of such time with
reference to the facts and circumstances then subsisting, except where any
such representation or warranty is expressed to be made as of an earlier
date, it shall be deemed to be repeated with reference to the facts and
circumstances existing at such earlier date.
17. COVENANTS AND UNDERTAKINGS
The Borrower hereby makes the following covenants and undertakings to the
Bank.
17.1 FINANCIAL STATEMENTS AND INFORMATION
(a) The Borrower shall provide to the Bank (each, in two (2) copies):
(i) as soon as available but, in any event, by no later than
120 days from the end of the relevant financial year
(other than in the case of Guarantors, which shall be 180
days from the end of each relevant financial year),
audited annual financial statements of the Borrower,
38
each Guarantor and the Operator, including a balance sheet
and the related statements of operating income, retained
earnings, cash flow and profit and loss, together with the
auditors report thereon, all of which shall be in form and
substance satisfactory to the Bank.
(ii) as soon as available but, in any event, by no later than
90 days from the end of each half-year (i.e. 30 June and
31 December each year) - other than in the case of the
Guarantors, which shall be 120 days from the end of each
half year - , reviewed, but not audited, financial
statements of the Borrower, each Guarantor and the
Operator for such six-month period including a balance
sheet and related statements of income, retained earnings,
cash flow and profit and loss, all of which shall be in
form and substance satisfactory to the Bank, all of which
shall be in form and substance satisfactory to the Bank.
(b) The Borrower shall provide to the Bank, promptly after the
Borrower's receipt thereof, a copy of any "management letter" or
other similar communication received by the Borrower from the
Borrower's Auditors in relation to the Borrower's financial,
accounting or other systems, management or accounts.
(c) Together with the financial statements referred to in (a) above, a
certificate signed by a director of the Borrower certifying that, as
at the date of such certificate, no Event of Default or Potential
Default has occurred and is continuing.
17.2 PROJECT BUDGETS
(a) The Borrower shall supply to the Bank as soon as practicable (and
in any event, at least 30 days prior to the end of each financial
year), a Construction Period Budget or Operating Budget, as
appropriate, for the Borrower for the forthcoming financial year,
including the assumptions made in preparing such budget and,
where such budget contains any adverse variation from any
previous forecast, an explanation of such variation. The
Construction Period Budget shall be supplied to the Bank's
Project Monitor at the same time as the Bank.
(b) Each Construction Period Budget or Operating Budget shall contain
complete, fair and accurate estimates (by principal components)
of operating costs, Debt Service and the status of each of the
Accounts for each month covered by such Budget based on the
Borrower's best projections at such time. From time to time, the
Borrower may propose amendments to the current Budget, and the
Bank may reject such proposal within thirty (30) Business Days
from the date the Borrower submits such proposal if in the
opinion of the Bank, such amendment is not beneficial for the
operation of the Project and, if no such rejection is made, such
amendments shall become effective. An increase in the Budget
solely in order to meet increased costs proportionate to
increased room occupancy shall not be deemed an amendment for the
purposes of this Section 17.2(b).
39
17.3 CONSTRUCTION REPORTS
During the Construction Period, the Borrower shall supply to the Bank and
the Bank's Project Monitor as soon as practicable (and in any event, at
least 15 days after the end of each month), for each month prior to Project
Completion, a progress report on the Project in form and substance
satisfactory to the Bank and including:
(a) details of the progress of the Construction Works;
(b) comparison of the progress of the Construction Works against the
timetable represented to the Bank by the Borrower ;
(c) review of the forecast Construction Works for the following month;
(d) review of any changes to the Construction Works requested or
carried out;
(e) any information indicating that the timetable for the
Construction Works will not be met; and
(f) details of any anticipated cost overruns.
17.4 OPERATION REPORTS
(a) During the Operating Period, the Operator shall supply to the Bank
as soon as practicable (and in any event, at least 15 days after the
end of each month), for each month, a copy of the monthly hotel
operating accounts of the Borrower and/or Operator (as applicable).
(b) As soon as they are available, copies of all documents and
information provided by Park Plaza Hotels Europe Limited to the
Operator pursuant to the hotel management agreement.
17.5 PROJECT NOTICES
Immediately upon receipt or despatch thereof, the Borrower shall and shall
procure that the Operator shall provide the Bank with copies of all
notices, filings, reports, demands, claims, amendments or waivers provided
under or in connection with any Transaction Document or any Project Permit.
17.6 OTHER INFORMATION
(a) The Borrower shall provide the Bank, forthwith upon receipt thereof,
with details of any Security Interest becoming enforceable over any
of the Collateral and any information which is required to create,
maintain, perfect and protect the Security Interests under the
Security Documents in favour of the Bank .
(b) At the request of the Bank, the Borrower shall provide the Bank with
copies of all Project Permits required at the relevant time under
any Applicable Law to
40
enable it to perform its obligations under, or required at the
relevant time for the validity or enforceability of, the Transaction
Documents.
(c) The Borrower shall notify the Bank in writing, promptly upon but in
any event within seven (7) days of becoming aware of them, of
details of any proposed material change in the nature or scope of
the Project or the Site or the business or operations of the
Borrower.
(d) Upon becoming aware that, as of the date that any written
information was supplied by or on behalf of the Borrower or any
Obligor to the Bank, such written information:
(i) was misleading or incorrect in any material respect; or
(ii) might have had the effect of varying any of the Transaction
Documents, the Borrower shall promptly notify the Bank
thereof.
17.7 LITIGATION
(a) Immediately upon becoming aware thereof, the Borrower shall and
shall procure that each Obligor shall notify the Bank and shall
provide copies of documents or items relating to details of any
arbitration, claim, suit, litigation, demand, proceeding,
complaint, assessment, lien, injunction, order, judgement, notice
of non-compliance or violation, investigation or other action by
the Contractor, each Obligor, any Governmental Authority or third
party which is pending or, to the Borrower's knowledge,
threatened against the Borrower or any Obligor which may affect
the Project (a "CLAIM") and, together, in the case of litigation
to which the Borrower is party, with details of how the Borrower
proposes to conduct the litigation, arbitration or proceedings or
otherwise resolve the dispute in question provided that this
clause shall only apply:
(i) in relation to the Borrower, in respect of a Claim or
series of Claims in excess of GBP 500,000;
(ii) in relation to the Operator, in respect of a Claim or
series of Claims in excess of GBP 100,000; and
(iii) in relation to an Obligor, in respect of a Claim or series of
Claims which may have a Material Adverse Effect.
(b) The Borrower will and shall procure that each Obligor and the
Contractor will make all filings and responses to any Claim in a
timely manner and will pursue all remedies and appeals, defend its
rights and properties with diligence and take all lawful action to
avoid anything which, in the judgement of the Bank, has had or is
reasonably likely to have a Material Adverse Effect.
17.8 DEFAULT
41
Immediately upon becoming aware thereof, the Borrower shall and shall
procure that the Operator shall notify the Bank of details of any actual or
alleged Default.
17.9 INSURANCE
Immediately upon becoming aware thereof, the Borrower shall and shall
procure that the Operator shall notify the Bank and the Bank's Insurance
Adviser of details of any claims, renewals or reports made under or in
connection with any of the Insurances.
17.10 DAMAGE
Immediately upon becoming aware thereof, the Borrower shall and shall
procure that the Operator shall notify the Bank of details of any damage to
or destruction of property relevant to the Project.
17.11 ENVIRONMENTAL MATTERS
(a) Immediately upon becoming aware thereof, the Borrower shall and
shall procure that the Operator shall notify the Bank of details
of any non-compliance with any Environmental Law or Environmental
Licence of which it is aware, of any Environmental Claim or of
any material safety hazard or risk (or any event, condition or
circumstance that could form the basis of an Environmental Claim
or safety risk or hazard) with respect to the Borrower, the
Project or the Site or any portion thereof or any Person party to
any Project Document, or any suspension, revocation or
modification of any Environmental Licence.
(b) The Borrower shall comply fully, and will cause all other Persons
occupying, using or present at the Project to comply fully with:
(i) all applicable Environmental Laws; and
(ii) the terms and conditions of all Environmental Licences
applicable to the Borrower or such Person,
and for this purpose will implement procedures to monitor compliance
and contain liability in accordance with its obligations under the
Transaction Documents.
(c) The Borrower will promptly take all actions and pay or cause to be
paid all costs necessary to comply with all Environmental Laws and
eliminate any material risk to human health or property or the
environment.
(d) At the request of the Bank, the Borrower shall cause an
environmental assessment and audit of the Project and the Site to be
conducted to confirm the Borrower's compliance with this Section
17.11 (Environmental Matters). The Borrower agrees to cooperate
fully with the Bank and its agents in connection with any such
assessment or audit and to pay the cost thereof.
42
17.12 GENERAL
The Borrower shall and shall procure that the Operator shall provide to the
Bank such other information or documents (financial or otherwise) as the
Bank may request.
17.13 FORM OF INFORMATION
All financial statements, reports and projections required shall be
prepared in accordance with generally accepted accounting principles and
shall fairly and accurately represent the financial condition of the
Borrower.
17.14 ACCESS TO PROJECT
The Borrower shall procure that the Bank and the Banks' Project Monitor
shall be allowed, upon reasonable notice, to visit any of the properties of
the Borrower and to view the Project, the technical and statistical data,
financial statements, records and other data in the possession or control
of the Borrower with respect to the Project, to discuss the affairs,
finances and the financial statements of the Borrower with and to be
advised as to the same by the officers of the Borrower, and to take copies
of any documents inspected.
17.15 RECORDS
(a) The Borrower shall and shall procure that the Operator shall, at
its expense, keep and maintain in a manner adequate to reflect
truly and fairly the financial condition and results of
operations of the Borrower (including the progress of the
Project) and in accordance with generally accepted accounting
principles and all Applicable Laws, up to date statutory books,
books of account, bank statements and other records of the
Borrower. The Borrower shall maintain adequate management
information and cost control systems.
(b) The Borrower will at all times cause a complete set of the current
and (when available) as-built plans (and all supplements thereto)
relating to the Project to be maintained at the Borrower's main
office for inspection by the Bank and any employees or advisors of
the Bank.
17.16 MAINTENANCE OF EXISTENCE
(a) The Borrower shall at all times preserve and maintain in full
force and effect:
(i) its existence as a special purpose company with limited
liability under the Applicable Laws of the Netherlands;
(ii) all powers, rights, privileges and franchises necessary
for the development, construction, maintenance and
operation of the Project and the maintenance of its
existence; and
(iii) good and marketable title to its properties and assets
(including the Collateral).
43
(b) The Borrower shall not engage in any other business or activities
(either alone or with any other Person) other than those directly
related to the Project.
17.17 PROJECT PERMITS
(a) The Borrower shall, and shall procure that the Contractor and
Operator shall, obtain or cause to be obtained (at the relevant
time) all Project Permits required to commence, construct,
execute, finance, operate and maintain the Project in accordance
with the provisions of the Transaction Documents and all
Applicable Laws and to perform its obligations under the
Transaction Documents, and will comply with all such Project
Permits and all Applicable Laws relating thereto.
(b) Each such Project Permit shall be duly obtained, validly issued, in
full force and effect and not subject to appeal and free from
conditions or requirements which are not reasonably expected to be
satisfied by the date they are required to be satisfied pursuant to
the terms of such Project Permit.
(c) The Borrower shall ensure that each of the Borrower, the Contractor
and the Operator has or at the relevant time will have all rights
necessary to commence, execute, implement, design, build, finance,
operate, complete and maintain the Project (including, without
limitation, all Intellectual Property Rights and all necessary
rights of access, entry, and exit to and from the Site).
17.18 PARI PASSU RANKING
The Borrower shall procure that its obligations under the Finance Documents
do and will rank, at least pari passu as to priority of payment with all
its other present and future obligations, except for obligations
mandatorily preferred by law applying to companies generally.
17.19 NEGATIVE PLEDGE
The Borrower shall not, and shall procure that the Operator shall not
create, or permit to subsist, any Security Interest over any of its present
or future assets, other than Permitted Security Interests.
17.20 SECURITY
(a) The Borrower shall, and shall procure that the Operator shall,
defend the Collateral or cause the Collateral to be defended
against, and shall take, at its expense, any action necessary to
remove any Security Interest (other than Permitted Security
Interests) over any of its present or future assets or the
Collateral, and shall defend the right, title and interest of the
Bank in and to any such asset or Collateral against the claims
and demands of all other Persons.
44
(b) The Borrower will perfect and maintain all Security Interests
created under the Security Documents in favour of the Bank and will
effect all registrations or notifications relating thereto that are
required or advisable in order to perfect or maintain such Security
Interests.
17.21 TRANSACTIONS SIMILAR TO SECURITY
Neither the Borrower nor the Operator shall:
(a) sell, transfer or otherwise dispose of any of its assets on terms
whereby it is or may be leased to or re-acquired or acquired by
it or any of its related entities; or
(b) sell, transfer or otherwise dispose of any of its receivables on
recourse terms, except for the discounting of bills or notes in the
ordinary course of trading,
in circumstances where the transaction (if in excess of seventy thousand
pounds sterling) is entered into primarily as a method of raising finance
or of financing the acquisition of an asset otherwise than pursuant to the
Security Documents.
17.22 DISPOSALS
(a) The Borrower shall not and shall procure that the Operator shall
not either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, convey, transfer, grant or lease or
otherwise dispose of (or agree to do any of the foregoing at any
future time) its interest in the Site or the Project, the benefit
of any of the Transaction Documents, the Collateral, any material
asset or substantial part of its assets.
(b) This restriction shall not apply to disposals of the part of the
Collateral subject only to the floating charge created under the
Debenture in the ordinary course of business or the creation of
Permitted Security Interests.
17.23 BORROWINGS AND GUARANTEES
(a) The Borrower shall not and shall procure that the Operator shall not
create, incur, assume or suffer to exist any loans, credit, debt,
guarantee or other Financial Indebtedness other than Permitted
Indebtedness or as expressly contemplated under the Transaction
Documents.
(b) The Borrower shall not and shall procure that the Operator shall not
make any payment of principal, interest or any other amount in
connection with any Financial Indebtedness (other than Permitted
Indebtedness) without the prior written consent of the Bank.
(c) The Borrower shall not, directly or indirectly, make or have
outstanding any loans or provide credit to any third party.
17.24 CAPITAL EXPENDITURE AND BUDGETS
45
(a) The Borrower shall not incur any expenditure other than those
construction related costs provided for in the Construction Period
Budget and operating costs provided for in the Operating Budget.
(b) The Borrower shall not, directly or indirectly, amend, modify,
allocate, re-allocate or supplement or permit or consent to the
amendment, modification, allocation, re-allocation or supplement of,
any of the provisions of any Operating Budget or Construction Period
Budget, except with the prior consent of the Bank.
17.25 MATERIAL CONTRACTS
(a) The Borrower shall not become a party to any oral or written
agreement, contract or commitment other than in the ordinary course
of business and on an arm's-length basis, without the prior written
consent of the Bank.
(b) The Borrower shall not enter into any transaction or series of
related transactions with any Person other than in the ordinary
course of business and on an arm's-length basis or establish any
sole and exclusive purchasing or sales agency, or enter into any
transaction whereby the Borrower might receive less than the full
fair market value for its services or pay more than fair market
value for products or services of others.
(c) The Borrower shall not enter into any agreement or arrangement to
acquire by lease the use of any property or equipment of any kind
without the prior consent of the Bank, except leases of operating
equipment and premises which give rise to rental payments that are
included in the current Construction Period Budget or Operating
Budget.
17.26 MERGERS AND ACQUISITIONS
(a) The Borrower, shall not and shall procure that the Operator and each
Obligor shall not enter into any voluntary liquidation, bankruptcy,
winding up, dissolution, merger, demerger, amalgamation or
reorganisation.
(b) The Borrower shall not acquire any assets (other than purchases and
acquisitions of inventory and materials, each relating to the
Project and in the ordinary course of business).
17.27 INVESTMENTS, ACCOUNTS
The Borrower shall not and shall procure that the Operator shall not:
(a) invest in the share capital of any corporate body or other entity or
purchase or acquire any shares, obligations or securities of, or any
interest in or make any capital contribution to any Person or make
any other investments;
(b) form or acquire or otherwise have any subsidiary; or
46
(c) open or maintain any accounts other than the Accounts.
17.28 SHARE CAPITAL
(a) The Borrower shall not and shall procure that the Operator shall
not:
(i) purchase, cancel, redeem or take steps to reduce any of
its share capital;
(ii) issue any shares or any options, warrants or other rights to
subscribe, purchase or acquire any shares of the Borrower or
the Operator or securities convertible into or exchangeable
for its share capital to any Person or rights to share in
profits, except for the issuance of shares pro rata to the
Shareholders.
(b) The Borrower shall not and shall procure that the Operator shall not
grant or create any rights or options to participate directly or
indirectly in the revenues or profits of the Borrower.
(c) The Borrower shall not permit or consent to:
(i) any transfer of shares of the Borrower or the Operator; or
(ii) any transfer of any interests in or rights arising in
respect of Subordinated Loans provided to the Borrower
except as is expressly permitted under the terms of the Finance
Documents.
17.29 DISTRIBUTIONS
(a) The Borrower shall not declare, pay or make any distribution or
dividend (in cash, property or otherwise) on any shares of any
class of its capital, or on any warrants, options or other rights
with respect to any such shares provided that the Borrower may,
after the Economic Completion Date, declare and pay dividends if
the Borrower gives the Bank at least 20 days' prior written
notice of its intention to make such a payment and the following
conditions are satisfied:
(i) no Event of Default or Potential Default shall have occurred
and be continuing at the time of making such declaration or
payment or would result from any such payment being made;
(ii) such payment is permitted to be made pursuant to the
provisions of this agreement and the Subordination
Agreement;
(iii) no dividend or distributions have been made by the Borrower
and no repayments of principal or interest arising under the
Shareholder Loan
47
Agreements have been made by the Borrower during the
preceding 12 calendar months;
(iv) the Bank has notified the Borrower that it is satisfied
that:
(A) the Debt Service Cover Ratio for the period comprising
the 12 months immediately preceding the date of the
proposed payment was at least 1.4:1;
(B) the Debt Service Cover Ratio for the 12 months
immediately preceding the date of the calculation
would be not less than 1.3:1 if calculated on the
basis that the dividends or distributions in question
had been paid and on the assumption that interest
rates remain constant; and
(C) the amount required pursuant to Section 19.5 (Debt
Service Reserve Account) has been deposited in the
Debt Service Reserve Account; and
(v) the Bank, acting reasonably, otherwise approves the making of
such payment which shall be approved should the Bank
determine that the Borrower is able to continue to meet all
of its obligations as they fall due.
17.30 SHAREHOLDER LOANS
(a) The Borrower shall not make any payment of interest or repayment of
principal in respect of monies lent to it under any of the
Shareholder Loan Agreements provided that the Borrower may, after
the Economic Completion Date, make such payments in each case on the
scheduled dates therefore under the relevant Shareholder Agreement
if the following conditions are satisfied:
(i) where no Event of Default or Potential Default has occurred
and be continuing at the time of making the payment and will
not result from any such payment being made;
(ii) such payment is permitted to be made pursuant to the
provisions of this agreement and the Subordination
Agreement;
(iii) the Bank has notified the Borrower that it is satisfied
that:
(A) the Debt Service Cover Ratio for the period comprising
the 12 months immediately preceding the date of the
proposed payment was at least 1.4:1; and
(B) the Debt Service Cover Ratio for the 12 months
immediately preceding the date of calculation would be
not less than 1.3:1 if calculated on the basis that
the payment in question had been paid and on the
assumption that interest rates remain constant; and
48
(C) the amount required pursuant to Section 19.5 (Debt
Service Resource Account) has been deposited in the
Debit Service Reserve Account; and
(iv) the Bank, acting reasonably, otherwise approves the making of
such payment which shall be approved should the Bank
determine that the Borrower is able to continue to meet all
of its obligations as they fall due.
17.31 AMENDMENTS
(a) The Borrower shall not and shall procure that the Operator shall
not, without the prior written consent of the Bank:
(i) amend or modify its Articles of Association; or
(ii) change its fiscal year.
(b) The Borrower shall not, directly or indirectly, terminate, cancel or
suspend, or permit or consent to any termination, cancellation or
suspension of, or enter into or consent to or permit the assignment
of the rights or obligations of any party to, any of the Project
Documents other than as expressly required by the terms of the
Finance Documents.
17.32 PROJECT DOCUMENTS
(a) The Borrower shall not and shall procure that the Operator shall not
take any of the following actions without the prior written consent
of the Bank:
(i) propose, allow or agree to any material amendment to a
Project Document;
(ii) propose, allow or agree to the termination of any Project
Document;
(iii) waive compliance with any material provision of a Project
Document; or
(iv) assign or transfer any or all of its rights under a Project
Document or agree to any assignment or transfer of such
rights.
17.33 CONSTRUCTION
(a) The Borrower shall procure that the Project is constructed,
completed, tested, commissioned, equipped and maintained in
accordance with:
(i) Good Industry Practice;
(ii) the requirements relating to the Project the Project
Documents using materials of good quality;
49
(iii) the Construction Period Budget ; and
(iv) all Project Permits and Applicable Laws.
(b) The Borrower shall not:
(i) make or permit any change in the structure or identity of
the Contractor;
(ii) issue, agree to or agree to any change order in respect of
the Construction Works or the designs, technical
specifications or plans for the Construction Works,
without the prior written consent of the Bank.
(c) The Borrower shall not abandon the Project.
17.34 OPERATION
(a) The Borrower shall procure that the Hotel is operated and maintained
by the Operator in accordance with:
(i) Good Industry Practice;
(ii) the requirements relating to the operation in the Project
Documents;
(iii) the Operating Budget; and
(iv) all Project Consents and Applicable Laws.
(b) The Borrower shall not replace or allow any change to the identity
of the Operator without the prior written consent of the Bank.
(c) The Borrower shall perform or cause the Operator to perform on a
timely basis any obligations with respect to the operation,
maintenance and repair of the Project.
(d) The Borrower shall not transfer any shares in the Operator and shall
procure that the Operator does not issue any further shares to any
party.
17.35 TIMETABLE
The Borrower shall procure that:
(a) Practical Completion is achieved by the third (3rd) anniversary
of the Term Sheet Date;
50
(b) Project Completion is achieved by the fourth (4th) anniversary of
the Term Sheet Date; and
(c) the Economic Completion Date occurs on or prior to the Economic
Completion Deadline.
17.36 MAINTENANCE OF PROPERTY
(a) The Borrower shall and shall procure that the Operator shall keep
all of its property and assets useful and necessary in its business
in good working order and condition (normal wear and tear excepted).
(b) The Borrower shall not and shall procure that no other party shall
use, maintain, operate or occupy or allow the use, maintenance,
operation or occupancy of any portion of the Site or the Project in
any manner:
(i) which constitutes or may constitute a public or private
nuisance;
(ii) which may make void, voidable, liable to cancellation or
increase the premium of any of the Insurances or Additional
Insurances then in force with respect to the Site or the
Project or any part thereof; or
(iii) otherwise than for the intended purpose thereof in the
construction, operation, maintenance and use of the Project.
17.37 COMPLIANCE WITH APPLICABLE LAWS
The Borrower shall and shall procure that the Operator shall comply with
all Applicable Laws in respect of the conduct of its business and the
construction, ownership, operation, maintenance and use of the Project and
its assets.
17.38 TAXES
The Borrower shall and shall procure that the Operator shall:
(a) file, or procure the filing of, all Tax and informational returns
that are required to be filed by it in any jurisdiction;
(b) pay and discharge, when due, all Taxes and other governmental
charges imposed on it or its income, property, actions or profits,
except for Taxes being contested in good faith by the Borrower by
proper proceedings timely instituted, and for which the Borrower
sets aside on its books adequate reserves with respect to the
contested taxes;
(c) to the fullest extent it is able to do so, apply any and all Tax
credits, losses, reliefs or allowances in the manner and to the
extent that they were so taken into account and promptly inform
the Bank to the extent that it is not able to do so unless it
demonstrates to the satisfaction of the Bank that doing
51
otherwise would result in a material advantage to the Project and
could not adversely affect the respective interest of the Bank in
any way; and
(d) not surrender or dispose of any Tax credit, loss, relief or
allowance.
17.39 BANK'S ADVISORS
(a) The Borrower agrees to the Bank's Project Monitor and the Bank's
Insurance Consultant carrying out their respective roles described
in the Finance Documents, the relevant Project Documents and their
respective engagement letters.
(b) The Borrower shall cooperate with the Bank's Project Monitor and
the Bank's Insurance Consultant and any other adviser which the
Bank may appoint, and to ensure that each such Person will be
provided with all information reasonably required by such Person
and will exercise due care to ensure that any information which
it may supply to such Person is materially accurate and not, by
omission of information or otherwise, misleading in any material
respect.
17.40 FURTHER ACTIONS
The Borrower shall take all further actions and execute and deliver, from
time to time as reasonably requested by the Bank, at the Borrower's
expense, such other documents as shall be necessary or advisable or that
the Bank may reasonably request, in connection with the rights and remedies
of the Bank granted or provided for by the Transaction Documents, as
applicable, and to consummate the transactions contemplated therein
(including, without limitation, actions which are necessary to establish,
maintain, protect, perfect and continue the Security Interests created
under the Security Documents).
17.41 FINANCIAL COVENANTS
On and from the Economic Completion Date:
(a) The Borrower shall procure that on the last day of each Interest
Period (including the last day of the Interest Period immediately
preceding the Economic Completion Date), the actual Debt Service
Cover Ratio for the preceding twelve (12) month period ending on the
previous 30 June or 31 December is no less than 1.2:1;
(b) The Borrower shall procure that the RevPar will be not less than
L74.50 (seventy four pounds and fifty ▇▇▇▇▇).
17.42 DURATION
The undertakings in Section 17 (Covenants and Undertakings) shall remain in
force for as long as any amount is or may be outstanding under this
Agreement or any Commitment is in force.
52
18. INSURANCES
18.1 REQUIRED INSURANCES
(a) The Borrower shall and shall procure that the Operator shall procure
and maintain insurance in the sums and on the terms set out in
Schedule 12 Part 1 (Insurances) (the "INSURANCES") and shall not
amend any of the Insurances without the prior written consent of the
Bank.
(b) The Borrower shall procure that the amendments to the existing
Insurances set out in Schedule 12 Part 2 (Insurances - Required
Amendments) shall be made to the satisfaction of the Bank and the
Bank's Insurance Consultant within sixty (60) days of the date of
this Agreement.
18.2 ADDITIONAL INSURANCES
The Borrower shall and shall procure that the Operator shall procure and
maintain such additional insurance ("ADDITIONAL INSURANCE") as may
otherwise be required by the Bank to cover new, materially different or
increased risks or contingencies arising or occurring after the date of the
Initial Advance that would be insured by a reasonable and prudent hotel
business (taking into account the availability of such Additional Insurance
in the international insurance market on reasonable commercial terms),
which are not covered to the reasonable satisfaction of the Bank by the
existing Insurances.
18.3 INSURANCE PREMIUMS
The Insurances and any Additional Insurances above shall be procured and
maintained at the expense of the Borrower.
18.4 SUBMISSION OF POLICIES
(a) Upon the request of the Bank, the Borrower shall promptly provide a
schedule indicating the insurance policies maintained or caused to
be maintained by the Borrower, coverage limits of liability,
effective dates of coverage, insurance carrier names and policy
numbers.
(b) Each of the policies regarding the Insurances and the Additional
Insurances shall be submitted to the Bank upon receipt. Upon the
request of the Bank, the Borrower shall promptly provide the Bank
and with copies of the insurance contracts relating to the
Insurances by at least forty (40) days prior to the dates such
policies are required to come into effect in accordance with such
Schedule 12 (Insurances). Such policies to be in the English
language, in form and substance, and issued by companies,
satisfactory to the Bank. The Borrower undertakes, at its own
cost and expense, to procure any reasonable amendments to the
Insurances and Additional Insurances requested by the Bank or the
Bank's Insurance Consultant.
53
(c) Each of the Insurances and Additional Insurances shall contain
provisions specifying that any insurance proceeds shall be deposited
directly into the Insurance Proceeds Account.
18.5 COVENANTS RELATING TO INSURANCE
(a) The Borrower shall ensure that the Bank shall be named as additional
beneficiary under the Insurances and Additional Insurances without
the right of subrogation.
(b) The underwriter of each of the policies of the Insurances and
Additional Insurances shall undertake in the above-mentioned
policies to provide the Bank with at least thirty (30) days written
notice prior to the expiry or cancellation of any of the said
insurance policies or of any proposed alteration to such policies.
(c) The list of Insurances shall not prevent the Borrower, at its own
cost, from taking out such additional insurances which it deems
appropriate at its discretion, nor shall it relieve the Borrower of
the responsibility to take out such additional insurances which may
become accepted practice in the future.
(d) Without prejudice to the preceding provisions, the Borrower shall,
at its own cost, from time to time take out and maintain all other
insurances which the Borrower is required to effect by any
Applicable Law.
(e) If the Borrower fails to take out or maintain in force any of the
insurances required by this Section 18 (Insurances), the Bank
shall be entitled (without prejudice to its other rights and
remedies for the breach) to take out and maintain such part of
all of those policies as it considers (in its complete
discretion) appropriate and to recover the cost of doing so
(including payment of premiums, reasonable administration and
other expenses and charges) from the Borrower as a debt due on
demand.
(f) The Borrower shall comply with the conditions stipulated in each of
the policies for the Insurances and Additional Insurances.
(g) The Borrower shall not make any material alteration to the terms of
any of the insurance policies for the Insurances and Additional
Insurances or do or permit to be done any act or omission the effect
of which would be to void such policies, without the prior approval
of the Bank.
(h) The provisions of this Section 18 (Insurances) shall be deemed
supplemental to, the provisions of the Transaction Documents that
require the maintenance of insurances. In the event that any
insurance whatsoever is purchased, taken or otherwise obtained by
the Borrower with respect to the Project otherwise than as
required hereunder or if not properly endorsed to the Bank as the
sole loss payee or beneficiary or otherwise made upon the terms
required in this Section 18 (Insurances), such insurance shall be
considered assigned by the
54
Borrower hereunder to the Bank with the right of the Bank to make,
settle, compromise and liquidate any and all claims thereunder,
without prejudice to the exercise of any other rights and remedies
that the Bank may have under any of the Transaction Documents, or
under any Applicable Law.
18.6 INSURANCE PROCEEDS
(a) The Bank shall be the first loss payee of all Insurance Proceeds.
(b) The Insurance Proceeds shall be applied (unless the Bank otherwise
specifies) in accordance with the Insurance Proceeds Letter. In the
event that Insurance Proceeds are received prior to the execution of
the Insurance Proceeds Letter, such Insurance proceeds shall be paid
into the Insurance Proceeds Account until such time as the Insurance
Proceeds Letter is completed.
19. ACCOUNTS
19.1 OPERATION OF ACCOUNTS
(a) The Borrower shall procure that the following accounts shall be
opened and maintained at the Facility Office or such other bank or
branch as the Bank may approve:
(i) a Project Account, in the name of the Borrower;
(ii) a Loan Account, in the name of the Borrower;
(iii) a Debt Service Reserve Account, in the name of the
Borrower;
(iv) an Insurance Proceeds Account in the name of the Borrower;
and
(v) an Operating Account, in the name of the Operator,
and such other accounts as the Bank may from time to time require
(the "ACCOUNTS").
(b) The provisions of this Section 19 (Accounts) shall govern the
operation of the Accounts provided that:
(i) the Borrower shall all complete the Bank's standard
account opening forms for each of the Accounts; and
(ii) subject to the terms of this Agreement, the Bank's standard
terms and conditions applicable from time to time shall apply
to the Accounts.
(c) The Bank may require the Borrower to open and maintain additional
accounts in order to deal with any category of payment not
contemplated in this Section 19 (Accounts). In such case, the Bank
and the Borrower shall agree upon the
55
procedures and rules to govern such account in a supplement to this
Section 19 (Accounts). Any such account shall be deemed an Account.
(d) The Borrower undertakes to ensure that no Account is closed without
the prior written consent of the Bank. The Borrower further
undertakes to ensure that it does not establish or maintain any
other account at any other bank or financial institution without the
prior written consent of the Bank.
19.2 GENERAL INSTRUCTIONS
(a) No amounts may be withdrawn or transferred from any of the Accounts,
and the Borrower may not give any instructions in relation to any of
the Accounts, except in accordance with the express terms of this
Agreement.
(b) No Account may go into overdraft and the Borrower shall not issue an
instruction with respect to an Account, and the Bank shall not
comply with an instruction, to the extent that it would cause the
relevant Account to go into overdraft.
(c) At any time a Default has occurred or is continuing, the Borrower
shall not make any withdrawals from the Accounts.
(d) All amounts withdrawn from an Account for a specific purpose or for
payment or satisfaction of a specific liability may be used solely
for such purpose or payment.
(e) Each Account shall earn interest at such rate(s) as may be agreed
from time to time by the Borrower and Bank, which shall in any event
be the most favourable given to similar customers for similar
deposit over similar periods. All interest earned on the balance
standing to the credit of an Account shall be credited to the
Account in question and the Bank is irrevocably authorised and
instructed so to credit such interest.
(f) The Borrower may require that sums standing to the credit of any
Account be invested in short term deposits, in currencies and
maturities that match the then current liabilities of the Borrower.
(g) The Borrower shall not create or permit to subsist any Security
Interest on all or any part of the Accounts, other than any Security
Interests created by the Security Documents, nor assign, transfer or
otherwise dispose of all or any part of its right or title to or
interest in the Accounts.
(h) The Borrower acknowledges that neither any insufficiency of funds in
the Accounts, (or any of them), nor any inability to apply any funds
in the Accounts (or any of them) against any or all amounts owing
under this Agreement, shall at any time limit, reduce or otherwise
affect the Borrower's payment obligations under this Agreement.
19.3 LOAN ACCOUNT
56
(a) The Bank shall provide that all Advances are paid into the Loan
Account and made available for withdrawal by the Borrower through
the Project Account subject to the conditions set forth in Section
19.3 (Project Account).
19.4 PROJECT ACCOUNT
(a) The Borrower shall procure that the following will be paid into the
Project Account:
(i) the proceeds of each Advance;
(ii) all amounts advanced to the Borrower under the Shareholder
Loan Agreements;
(iii) all amounts advanced to the Borrower as Equity
contributions;
(iv) all Insurance Proceeds;
(v) all proceeds of any warranty, indemnify or other claims,
damages, refunds or other settlements received by the
Borrower from any Project Party in relation to the Project.
(b) Amounts paid into the credit of the Project Account may only be
withdrawn by the Borrower for the following purposes:
(i) repaying any amounts due to the Bank pursuant to the
Finance Documents;
(ii) funding the Debt Service Reserve Account in the accordance
with Clause 19.6 (Debt Service Reserve Account); and
(iii) making payments to the Shareholders as permitted in
accordance with Clause 17.29 (Distributions) and Clause 17.30
(Shareholder Loans); and
(iv) paying fees to the Project Parties in accordance with the
provisions of the Project Documents and this Agreement;
and
(v) paying rent to the lessors pursant to the lease agreements
pertaining to the Site; and
(vi) as the Bank may otherwise permit in writing.
19.5 OPERATING ACCOUNT
(a) The Borrower will procure that the Operator will establish and
maintain an Operating Account denominated in Sterling in the name of
Operator at a bank
57
acceptable to the Bank within six (6) months of the date of this
Agreement which account shall be charged by way of a first ranking
charge to the Bank.
(b) The Borrower will procure that the Operator promptly deposit in such
account all trading receipts and other revenues arising to the
Operator or on its behalf in connection with the Hotel.
(c) Amounts standing to the credit of the Operating Account may be
withdrawn by the operator or on behalf of the Borrower only for the
purpose of:
(i) repaying any amounts due to the Bank pursuant to the
Finance Documents;
(ii) paying any costs and expenses properly incurred in the day
to day operation of the Hotel; or
(iii) paying fees due to the Management Company in accordance with
the provisions of the Hotel management undertaking or such
other management company as shall be appointed in accordance
with the terms of this Agreement or otherwise with the prior
written consent of the Bank; or
(ii) paying rent to the Borrower pursuant to the Lease; and
(v) as the Lender may otherwise permit.
(d) The Borrower shall procure that any amount in excess of the amount
necessary to pay budgeted costs and expenses for the day to day
operation of the Hotel for the following three month period are
transferred on a monthly basis to the Project Account.
19.6 DEBT SERVICE RESERVE ACCOUNT
(a) The Borrower shall, following Advance of the B Loan and until
receipt of written confirmation from the Bank that all amounts
due hereunder have been paid, deposit in the Debt Service Reserve
Account all of its Operating Profits until such time as there
shall be standing to the credit of the Debt Service Reserve
Account shall be an amount equal to all payments of principal and
interest due pursuant to this Agreement for the forthcoming
twelve (12) month period are deposited in the Debt Service
Reserve Account.
(b) No amount maybe withdrawn from the Debt Service Reserve Account
without the prior written consent of the Bank.
(c) The Bank shall be entitled to apply any amounts standing to the
credit of the Debt Service Reserve Account in repayment of amounts
outstanding hereunder upon an Event of Default.
58
19.7 INSURANCE PROCEEDS ACCOUNT
(a) The Borrower shall deposit Insurance Proceeds in the Insurance
Proceeds Account in accordance with Section 18.6(b)(ii) and (iii)
and such Insurance Proceeds shall be applied in accordance with the
provisions set out therein.
(b) The Insurance Proceeds Account shall be pledged in favour of the
Bank by way of first ranking fixed charge within sixty (60) days of
the date of this Agreement.
20. DEFAULT
20.1 EVENTS OF DEFAULT
Each of the events set out in Section 20.1 to 20.21 (inclusive) of this
Section 20 is an Event of Default (whether or not caused by any reason
whatsoever outside the control of the Borrower or any other person).
20.2. NON-PAYMENT
The Borrower does not, for whatever reason, within three (3) Business Days
of the due date pay any amount payable by it under this Agreement or any
other Finance Document at the place and in the currency in which it is
expressed to be payable.
20.3 BREACH OF OTHER OBLIGATIONS
(a) The Borrower does not comply with any of the following provisions
of Section 4.3 (Conditions Subsequent), 17.18 (Pari passu
ranking), 17.19 (Negative pledge), 17.21 (Transactions similar to
security), 17.22 (Disposals), 17.23 (Borrowings and Guarantees),
17.26 (Mergers and Acquisitions), 17.28 (Share capital), 17.29
(Distributions), 17.30 (Shareholder Loans), 17.32 (Project
Documents), 17.33 (Construction), 17.34 (Operation), 17.35
(Timetable), 17.41 (Financial covenants) or Section 18
(Insurances) of this Agreement.
(b) The Borrower does not comply with any provision of any Finance
Document (other than those referred to in Sections 20.2
(Non-Payment) and 20.3(a) (Breach of other obligations) above and,
if capable of remedy in the opinion of the Bank, that breach is not
remedied within fifteen (15) days.
20.4 MISREPRESENTATION
A representation, warranty or statement made or repeated by the Borrower or
any Obligor under any Finance Document is incorrect in any material respect
when made or deemed to be made or repeated.
20.5 CROSS DEFAULT
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(a) Any Financial Indebtedness of the Borrower or any Obligor is not
paid when due after giving effect to any grace period applicable
thereto;
(b) An event of default howsoever described (or any event which with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition or any combination of
the foregoing would constitute such an event of default) occurs
under any document relating to Financial Indebtedness of the
Borrower or any Obligor;
(c) Any Financial Indebtedness of the Borrower or any Obligor becomes
prematurely due and payable and is placed on demand as a result of
an event of default (howsoever described) under the document
relating to that Financial Indebtedness;
(d) Any commitment for, or underwriting of, any Financial Indebtedness
of the Borrower or any Obligor is cancelled or suspended as a result
of an event of default (howsoever described) under the document
relating to that Financial Indebtedness; or
(e) Any Security Interest securing Financial Indebtedness over any
asset of the Borrower or any Obligor becomes enforceable,
provided that it shall not be an Event of Default under this Clause 20.5
(Cross Default) where any of the foregoing has occurred with respect to any
party other than the Borrower and such event, in the judgment of the Bank,
has not had and is not reasonably likely to have a Material Adverse Effect.
20.6 INSOLVENCY
The Borrower or any Obligor:
(a) commits an act of bankruptcy, is, or is deemed for the purposes of
any law to be, unable to pay its debts as they fall due or to be
insolvent, or admits inability to pay its debts as they fall due; or
(b) suspends making payments on all or any class of its debts or
announces an intention to do so, or a moratorium is declared in
respect of any of its indebtedness,
provided that it shall not be an Event of Default under this Clause 20.6
(Insolvency) where any of the foregoing has occurred with respect to any
party other than the Borrower and such event, in the judgment of the Bank,
has not had and is not reasonably likely to have a Material Adverse
Effect.
20.7 INSOLVENCY PROCEEDINGS
(a) A resolution for the winding-up, entry into receivership or
administration of the Borrower or any Obligor is passed at a meeting
of the Borrower or any Obligor.
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(b) Any person presents a petition which is not withdrawn or set aside
within ninety (90) days for the winding-up, bankruptcy,
receivership, reorganisation or for the administration of the
Borrower or any Obligor.
(c) An order (provisional or otherwise) for the winding-up or
administration of the Borrower or any Obligor is made.
provided that it shall not be an Event of Default under this Clause
20.7 (Insolvency proceedings) where any of the foregoing has
occurred with respect to any party other than the Borrower and such
event, in the judgment of the Bank, has not had and is not
reasonably likely to have a Material Adverse Effect.
20.8 APPOINTMENT OF RECEIVERS AND MANAGERS
(a) Any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, permanent or interim receiver, administrator or
the like is appointed in respect of the Borrower or any Obligor or
any material part of their respective assets.
(b) The directors of the Borrower or any Obligor request the appointment
of a permanent or interim liquidator, trustee in bankruptcy,
judicial custodian, compulsory manager, interim or permanent
receiver, administrator or the like.
provided that it shall not be an Event of Default under this Clause
20.8 (Appointment of receivers and manager) where any of the
foregoing has occurred with respect to any party other than the
Borrower and such event, in the judgment of the Bank, has not had
and is not reasonably likely to have a Material Adverse Effect.
20.9 CREDITORS' PROCESS
Any execution, attachment, sequestration, or other process affecting any
material asset of the Borrower or any Obligor, provided that in the event
such process is being contested in good faith by appropriate proceedings
such process shall constitute an Event of Default only ninety (90) days
after its initiation if it has yet to be discharged.
provided that it shall not be an Event of Default under this Clause 20.9
(Creditor's process) where any of the foregoing has occurred with respect
to any party other than the Borrower and such event, in the judgment of the
Bank, has not had and is not reasonably likely to have a Material Adverse
Effect.
20.10 ILLEGALITY
(a) It is or becomes unlawful for any member of the Borrower or any
Obligor to perform any of its their respective obligations under the
Transaction Documents.
(b) It is or becomes unlawful for any person (other than the Bank) to
perform any of its obligations under the Transaction Documents.
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(c) Any authorisation required in relation to the performance, validity
or enforceability of any Transaction Document is revoked or amended
in a manner or to an extent that has a Material Adverse Effect.
20.11 EFFECTIVENESS OF SECURITY
(a) Any Security Document entered into by an Obligor is not effective or
is alleged by such Obligor to be ineffective for any reason.
(b) If the Bank shall be of the opinion that any Collateral has become
or is likely to become damaged or has lost or is likely to lose a
material portion of its value.
20.12 PROJECT DOCUMENTS
(a) Any party to a Project Document does not comply with any provision
of that Project Document, in a manner or to an extent that has a
Material Adverse Effect.
(b) Any Project Document is repudiated by a party thereto or is or
becomes void or unenforceable.
(c) Any obligation assumed by a party under a Project Document ceases to
be a valid and binding obligation of, or is repudiated by, that
party or becomes void or unenforceable.
(d) Any Project Document terminates in each case otherwise than by
reason of full performance of the Project Document or expiry of its
term.
20.13 ABANDONMENT
The Borrower abandons all or a material part of the Project.
20.14 NATIONALISATION
Any step is taken by a government body with a view to the seizure,
expropriation or nationalisation of all or a material part of the Project.
20.15 EVENT OF LOSS
(a) There is a loss of any substantial part of the Project or the use
thereof due to destruction or substantial loss or damage, which is
uninsured or which available proceeds of insurance including
government insurance are inadequate to repair; or
(b) An event, circumstance or condition occurs which results in an
insurance settlement with respect to any substantial part of the
Project on the basis of a total loss or constructive total loss.
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20.16 PROJECT PERMITS
Any Project Permit required in relation to the Project or the entry into
performance, validity or enforceability of any Project Document is amended,
suspended or revoked and has not been restored within a period of thirty
(30) days thereof.
20.17 OWNERSHIP OF THE BORROWER
(a) Any change in the ownership of the Borrower or the Operator, except
with the prior consent of the Bank.
(b) Elscint shall cease to own at least 51% of BEA Hotels N.V.
(c) The Papouchado family shall cease to beneficially own at least
51% of Euro Sea Hotels. N.V.
20.18 FORCE MAJEURE
Upon the occurrence and continuance of an event of Force Majeure for a
period which would allow any person (other than the Borrower) to exercise a
right of termination under any Project Document.
20.19 INSURANCE
Any Insurance required in accordance with the Transaction Documents:
(a) is not or ceases to be in full force and effect and has not been
replaced in accordance with the Transaction Documents prior
thereto; or
(b) is avoided or any insurer is or will be entitled to avoid or
otherwise materially reduce its liability under any policy relating
thereto or any insurer repudiates or will be entitled to repudiate
any Insurance or any Security Interests of the Bank therein (unless
before such avoidance, reduction, or repudiation, the Borrower
replaces such insurer with the result that such avoidance,
reduction, or repudiation is prevented).
20.20 LEASE AND APPOINTMENT OF MANAGEMENT COMPANY
At least nine (9) months prior to Practical Completion:
(a) the Borrower or the Operator shall have entered into an agreement
with a third party acceptable to the Bank on terms satisfactory to
the Bank for the management of the Hotel;
(b) simultaneously within the execution of the management agreement
pursuant to (a) above, the Borrower shall procure that the
management company enters into a direct agreement with the Bank, on
terms and in a form satisfactory to the Bank; and
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(c) the Borrower and the Operator shall have entered into the
Lease which shall be charged in favour of the Bank in form and
substance satisfactory to the Bank.
20.21 MATERIAL ADVERSE EFFECT
Any event, condition or circumstance or series of events, conditions or
circumstances occurs which, in the opinion of the Bank, has had or could
reasonably be expected to have a Material Adverse Effect.
20.22 ACCELERATION; OTHER REMEDIES
On and at any time after the occurrence of an Event of Default (which is
continuing, unremedied and unwaived) the Bank may by notice to the
Borrower:
(a) cancel the undrawn part of the Facility; and/or
(b) demand that all or part of the Advances, together with accrued
interest and all other amounts accrued under the Finance Documents
be immediately due and payable, whereupon they shall become
immediately due and payable; and/or
(c) demand that all or part of the Advances together with accrued
interest and all other amounts accrued under the Finance Documents
be payable on demand, whereupon they shall immediately become
payable on demand by the Bank; and/or
(d) give any notice regarding the payment of Insurance Proceeds in
accordance with Section 18.6 (insurance Proceeds);
(e) proceed to enforce or exercise any or all of the rights, remedies
and powers available to it under all or any of the Transaction
Documents and to enforce all or any remedies thereunder in
accordance with Applicable Law.
21. FEES
21.1 PREPARATION FEE
The Borrower shall pay the Bank a preparation fee equal to 0.25% of the
Facility upon the drawdown of the Initial Advance.
21.2 COMMITMENT FEE
The Borrower shall:
(a) as regards the A Loan, pay to the Bank a commitment fee at the rate
of 0.25% per annum for the period from the date of this Agreement,
up to and including the last Day of the A Loan Availability Period.
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(b) The fee shall accrue from day to day and be calculated on the daily
undrawn balance of the A Loan.
(c) The calculation shall, in each case, be made on the basis of the
actual number of days elapsed on a 360 day year.
(d) The fees shall be payable in arrears on each Interest Due Date with
the accrued fee up to the date of this agreement payable upon the
drawdown of the Initial Advance.
21.3 ADVISERS' FEES
The Borrower shall pay the costs and expenses of all third party advisers
appointed by the Bank (including, without limitation, Bank's Project
Monitor, the Bank's Insurance Consultant and legal advisers).
21.4 VAT
Any fee referred to in this Section 21 (Fees) is exclusive of any value
added tax or any other Tax which might be chargeable in connection with
that fee. If any value added tax or other Tax is so chargeable, it shall be
paid by the Borrower at the same time as it pays the relevant fee.
22. COSTS AND EXPENSES
22.1 INITIAL AND SPECIAL COSTS
The Borrower shall forthwith on demand pay the Bank the amount of all costs
and expenses (including legal fees) incurred by the Bank for the services
of external advisers, in connection with:
(a) the review of the Transaction Documents and any other agreements
to which the Borrower is or becomes a party;
(b) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in this
Agreement; and
(ii) any other Finance Document executed after the date of this
Agreement; and
(c) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of the
Borrower and relating to a Transaction Document or a document
referred to in any Transaction Document;
(d) any refinancing which the Borrower may seek to enter into.
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22.2 ENFORCEMENT COSTS
The Borrower shall forthwith on demand pay to the Bank the amount of all
costs and expenses (including legal fees) incurred by the Bank for the
services of external advisers, in connection with:
(a) the enforcement of, or the preservation of any rights under, any
Finance Document; or
(b) in investigating any possible Default.
22.3 RETENTION
The Bank may:
(a) retain sums from any Advance; or
(b) apply amounts held in the Accounts;
toward payment in full of any costs and expenses referred to in this
Section 22 (Costs and Expenses) and Section 23 (Stamp Duties).
23. STAMP DUTIES
The Borrower shall pay, and forthwith on demand indemnify the Bank against
any liability it incurs in respect of, any stamp, registration and similar
tax which is or becomes payable in connection with the entry into,
registration, recording performance or enforcement of any Finance Document.
24. INDEMNITIES
24.1 CURRENCY INDEMNITY
(a) If the Bank receives an amount in respect of the Borrower's
liability under the Finance Documents or if that liability is
converted into a claim, proof, judgment or order in a currency other
than the currency (the "CONTRACTUAL CURRENCY") in which the amount
is expressed to be payable under the relevant Finance Document:
(i) the Borrower shall indemnify the Bank as an independent
obligation against any loss or liability arising out of
or as a result of the conversion;
(ii) if the amount received by the Bank, when converted into the
contractual currency at a market rate in the usual course of
its business is less than the amount owed in the contractual
currency, the Borrower shall forthwith on demand pay to the
Bank an amount in the contractual currency equal to the
deficit; and
66
(iii) the Borrower shall forthwith on demand pay to the Bank
concerned any exchange costs and taxes payable in connection
with any such conversion.
(b) The Borrower waives any right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency other than that
in which it is expressed to be payable.
24.2 PAYMENT INDEMNITIES
(a) In the event that any payment of principal is received by the
Bank from any source otherwise than on the relevant Payment Date
or any payment of interest or any other overdue amount is
received by the Bank from any source otherwise than on the
relevant Interest Due Date relative to the amount so received,
the Borrower shall forthwith on demand (which shall include
details of the loss or liability incurred) indemnify the Bank
against the loss or liability by the Bank due to such payment
being made other than on the relevant Payment Date or Interest
Due Date.
(b) The Borrower's liability includes any loss of margin or other loss
or expense on account of funds borrowed, contracted for or utilised
to fund or maintain the contribution of the Bank to any amount
payable under any Finance Document, any amount repaid or prepaid or
any or all of the Advances.
24.3 OTHER INDEMNITIES
(a) The Borrower shall forthwith on demand (which shall include details
of the loss or liability incurred) indemnify the Bank against any
loss or liability properly incurred that the Bank incurs as a
consequence of:
(i) the occurrence of any Event of Default or Potential
Default;
(ii) the operation of Section 20.21 (Acceleration; Other
Remedies);
(iii) an Advance not being made after the Borrower has delivered an
Advance Request for the Advance, or any Advance (or part
thereof) not being prepaid in accordance with a notice of
prepayment; or
(iv) any Environmental Claim or any actual or alleged breach of
any Environmental Law or Environmental Licence to the extent
that the loss or liability incurred by the Bank would not
have arisen if this Agreement or any of the other Finance
Document had not been executed.
(b) The Borrower's liability in each case includes any loss of margin,
profit or other loss or expense on account of funds borrowed,
contracted for or utilised to fund or maintain the contribution of
the Bank to any amount payable under any Finance Document, any
amount repaid or prepaid or any or all of the Advances.
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25. EVIDENCE AND CALCULATIONS
25.1 ACCOUNTS
Accounts maintained by the Bank in connection with the Agreement are prima
facie evidence of the matters to which they relate.
25.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by the Bank of a rate or amount under
the Finance Documents is, in the absence of manifest error, prima facie
evidence of the matters to which it relates.
26. AMENDMENTS AND WAIVERS
26.1 AMENDMENTS
Any term of the Finance Documents may be amended or waived with the
prior written consent of the Borrower and the Bank. Bank
26.2 WAIVERS AND REMEDIES CUMULATIVE
The rights of the Bank under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of their rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
27. CHANGES TO THE PARTIES
27.1 TRANSFERS BY BORROWER
The Borrower may not assign, transfer or dispose of any interest, rights or
obligations under the Finance Documents except with the prior written
consent of the Bank.
27.2 ASSIGNMENTS AND TRANSFERS BY BANK
(a) The Bank may, subject to Section 27.2(b) below, at any time assign
and transfer any part of the Facility and/or any of its rights
and/or obligations under this Agreement to another bank or financial
institution.
(b) If, as a result of any such assignment, transfer or novation, the
Bank will no longer remain responsible under this Agreement, the
Borrower shall be
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entitled, notwithstanding the provisions of Section 7.2, to prepay
all Advances on the last day of any Interest Period without
incurring any prepayment fee.
(c) The Borrower shall execute and do all such transfers,
assignments, novations, assurances, acts and things as the Bank
may require for perfecting and completing any such assignment,
transfer or novation, and releasing the Bank from and imposing on
the Assignee Lender the Bank's obligations under this Agreement
to the extent the same are transferred, assigned or novated. All
agreements, representations and warranties made in this agreement
shall survive any assignment made pursuant to this clause and
shall also inure to the benefit of all Assignee Lenders.
(d) The Borrower shall not be under greater liability under Clause 12.1
(Gross Up) or Clause 14 (Increased Costs) in the case of an
assignment or transfer by the Bank than it would have been in the
absence of the assignment or transfer. The greater liability should
be tested only at the time of the assignment or transfer, so that,
if subsequent thereto, taxes are imposed or increased costs arise,
the assignee or transferee is not limited.
28. DISCLOSURE OF INFORMATION
28.1 DISCLOSURE
The Bank may disclose to any one of its Affiliates or any person with whom
it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:
(a) a copy of any Transaction Document; and
(b) any information which such person has acquired under, in connection
with or in relation to any Transaction Document or any interest of
such person therein.
29. SET-OFF
(a) The Bank shall have the right of possession, lien and set-off
over any amounts, assets and rights including gold, securities,
coins, bank notes, documents in respect of goods, insurance
policies, bills, assignments of rights, deposits, collaterals and
their countervalue held at the Bank at any time for the Borrower
or on the Borrower's behalf including such as have been delivered
to the bank for collection, security, safe-keeping or otherwise.
The Bank shall be entitled to retain the said assets until
payment in full of the above sums or to realize the by selling
them and applying the countervalue thereof in whole or in part to
the payment of the above sums.
(b) Without derogating from the Bank's right of lien in accordance with
sub-section (a) above, the Bank may at any time, but shall not be
obliged:
(i) to apply to any amounts owed by the Borrower, any amounts
owed to the Borrower by the Bank in any account or manner or
for any reason
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(even before the maturity of the amounts owed to the Borrower
by the Bank as aforesaid).
(ii) to purchase for the Borrower's account, any amount in foreign
currency which may be required for payment of any of the
amounts owed by the Borrower, or to sell any foreign currency
standing to the Borrower's credit at the Bank and to apply
the proceeds to the payments of any of the amounts owed by
the Borrower.
(iii) to debit any of the Borrower's accounts with any of the
amounts owed by the Borrower, irrespective of whether the
Borrower has been called upon to effect payment thereof
pursuant hereto or not.
(iv) In any event the Bank may effect set-off without any prior
notice. However, in the following cases, the Bank may effect
such set-off by giving the Borrower 10 (ten) days' notice
prior to effecting such set-off:
(1) in case of applying any amounts prior to their
maturity.
(2) in case of applying any time deposit which but for
such application would have been automatically
extended or renewed, so that certain rights or benefit
would have accrued to me.
(3) notwithstanding sub-section (b)(v)(1) above, if the
delay in effecting such application might be
detrimental to the Bank or affect any of its rights,
such application may be made immediately. Moreover,
where notice has been sent to the Borrower and in the
course of the 10 day period an attachment order or a
receivership notice affecting the Borrower is received
or a similar event occurs, such application may be
made immediately.
(v) Any purchase or sale under sub-section (b)(ii) above, shall
be effected at the rate of exchange prevailing at the Bank,
out of the amounts in Israeli currency or foreign currency,
as the case may be, standing to the Borrower's credit at the
Bank, or which may be obtained by realizing collaterals given
or which may have been given by the Borrower to the Bank.
The term "the rate prevailing at the Bank" shall mean, with
respect to any purchase of foreign currency for the
Borrower's account, the highest rate for cheques and
transfers at which the Bank at any relevant time generally
sells to its customers the relevant foreign currency against
Israeli currency, in addition to any conversion charge, tax,
levy, compulsory payments or any other similar payments; and
with respect to any sale of foreign currency from the
Borrower's account, the lowest rate for cheques and transfers
at
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which the Bank at any relevant time generally purchases from
its customers the relevant foreign currency against pounds
sterling, after deducting any conversion charge, tax, levy,
compulsory payments or any other similar payments.
(c) The Borrower hereby instructs and authorizes the Bank to debit from
time to time the Loan Account and the Revenue Account with the
amount required to pay the above sums.
These instructions and authorization do not derogate from the Bank's
right to debit the Loan Account and the Revenue Account as provided
in this Section 28. If the state of the Loan Account and the Revenue
Account does not allow it to be debited by the Bank in order to
effect final payment of any amount on account of the above sums, the
Bank may disregard the Borrower's instructions and authorization and
if the Bank has acted accordingly, the Bank may reverse any such
debit and treat any amount the debit of which was reversed as an
unpaid amount on account of the above sums and accordingly to take
whatever action it sees fit pursuant to the provisions hereof.
(d) The Bank shall be entitled at any time to debit any of the
Borrower's accounts (including such accounts held by the Borrower
jointly and severally with other parties) with any sum due or which
shall be due from the Borrower in any way and apply any sums
received from or for the Borrower, to whichever account it may see
fit and to pass any amount standing to my credit to any other
account, as it may see fit.
30. SEVERABILITY
If a provision of any Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other
provision of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of the Finance Documents.
Where provisions of any Applicable Law resulting in such illegality,
invalidity or unenforceability may be waived, they are hereby waived by
Borrower and the Bank to the full extent permitted by Applicable Law so
that the Finance Documents shall be deemed valid and binding agreements, in
each case enforceable in accordance with their respective terms.
31. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.
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32. NOTICES
32.1 GIVING OF NOTICES
All notices or other communications under or in connection with the Finance
Documents shall be given in writing and, unless otherwise stated may be
made by letter or facsimile. Any such notice will be deemed to be given as
follows:
(a) if by letter, when delivered personally or on actual receipt;
(b) if by facsimile, when received in legible form.
However, a notice given in accordance with the above but received on a
non-working day or after business hours in the place of receipt will only
be deemed to be given on the next working day in that place.
32.2 ADDRESSES FOR NOTICES
(a) The address and facsimile number of each Party (other than the
Borrower and the Bank) for all notices under or in connection with
the Finance Documents are:
(i) Bank those notified by that Party for this purpose to the
Bank on or before the date it becomes a Party; or
(ii) any other notified by that Party for this purpose to the Bank
by not less than five Business Days' notice.
(b) The address and facsimile number of the Borrower are:
Riverbank Hotel Holding ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ Moravsky
Facsimile: ▇▇▇-▇▇-▇▇▇ 8355
or such other as the Borrower may notify to the Bank by not less
than five Business Days' notice.
(c) The address and facsimile number of the Bank are:
Bank Hapoalim B.M.
▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
Facsimile:
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with a copy to:
▇▇▇▇▇▇, ▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
or such other as the Bank may notify to the other Parties by not
less than 5 Business Days' notice.
33. LANGUAGE
All documents to be furnished, delivered or provided and all other
communications to be given or made under or in connection with the Finance
Documents shall be in English.
34. SURVIVAL
All indemnities set forth in any of the Finance Documents or Equity
Documents shall survive the execution and delivery of each such Finance
Document and Equity Document, any cancellation or termination of any of the
Commitments, the termination of any Finance Document or Equity Document,
the making and repayment of the Advances and the Notes and any transfer of
the Notes or the rights and obligations of the Bank under any Finance
Document or Equity Document.
35. BORROWER IN CONTROL
In no event shall the rights and interests of any Finance Party under the
Transaction Documents be construed to give any such party, or be deemed to
indicate that any such party has, control of the business, management or
properties of the Borrower or power over the daily management functions and
operating decisions made by Borrower.
36. GOVERNING LAW AND JURISDICTION
36.1 LAW
This Agreement and all disputes and matters relating hereto shall be
governed by and construed in accordance with the laws of England.
36.2 JURISDICTION
The Borrower irrevocably agrees for the benefit of the Bank that any legal
action arising out of or relating to this agreement may be brought in the
Royal Courts of Justice, England and irrevocably submits to the
non-exclusive jurisdiction of such
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courts and, without prejudice to the foregoing, further submits to the
non-exclusive jurisdiction of such other courts as shall be designated by
the Bank as being an appropriate forum.
36.3 PROCESS AGENT
The Borrower irrevocably appoints Mr. ▇▇▇ Mehditache of ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as its agent to receive and
acknowledge on its behalf service of any writ, summons, order, judgment or
other notice of legal process in England. If for any reason the agent named
above (or its successor) no longer serves as agent of the Borrower for this
purpose, the Borrower shall promptly appoint a successor agent and notify
the Bank of the same. Until the Bank receives such notification, it shall
be entitled to treat the agent named above (or its said successor) as the
agent of the Borrower for the purposes of this Section. The Borrower agrees
that any such legal process shall be sufficiently served on it if delivered
to such agent for service at its address for the time being in England
whether or not such agent gives notice of the same to the Borrower.
36.4 NO LIMITATION ON RIGHT OF ACTION
Nothing in this agreement shall limit the right of the Bank to commence any
legal action against the Borrower and/or its assets in any other
jurisdiction or to serve process in any manner permitted by law and the
taking of proceedings in any jurisdiction shall not preclude the Bank from
taking proceedings in any other jurisdiction whether concurrently or not.
36.5 WAIVER - FINAL JUDGMENT CONCLUSIVE
The Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the choice of England (or the choice of any
other jurisdiction made pursuant to Section 36.2 (Jurisdiction)) as the
venue of any legal action arising out of or relating to this agreement and
agrees not to claim that any court in that venue is not a convenient or
proper forum. The Borrower also agrees that a final judgment against it in
any such legal action shall be final and conclusive and may be enforced in
any other jurisdiction and that a certified or otherwise duly authenticated
copy of the judgment shall be conclusive evidence of the fact and amount of
its indebtedness.
37. WAIVER OF IMMUNITY
The Borrower irrevocably and unconditionally:
(a) agrees that if the Bank brings proceedings against it or its assets
in relation to a Finance Document, no immunity from those
proceedings (including, without limitation, suit, attachment prior
to judgment, other attachment, the obtaining or judgement, execution
or other enforcement) will be claimed by or on behalf of itself with
respect to its assets;
(b) waives any such right of immunity which it or its assets now has
or may subsequently acquire; and
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(c) consents generally in respect of any such proceedings to the giving
of any relief or the issue of any process in connection with those
proceedings, including, without limitation, the making, enforcement
or execution against any assets whatsoever (irrespective of its use
or intended use) of any order or judgment which may be made or given
in those proceedings.
THIS SPACE HAS BEEN LEFT INTENTIONALLY BLANK.
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THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.
SIGNATORIES
BY: /S/ BY: /S/
---------------------------- ------------------------
BORROWER BANK
NAME: NAME:
TITLE: TITLE:
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SCHEDULE 1
PART 1
CONDITIONS PRECEDENT DOCUMENTS
(CONDITIONS PRECEDENT)
1. LOAN AGREEMENT
This Agreement duly executed by the Borrower.
2. OTHER DOCUMENTS
Security Documents
Each of the following items duly executed by each party thereto (other than
the Bank):
2.1 the Debenture;
2.2 the Charges over Shares;
2.3 the Guarantees; and
2.4 the Charge over Accounts.
3. CONSTITUTIONAL DOCUMENTS
In relation to the Borrower and each Obligor, a certificate signed by a
Director of such Party attaching true and complete copies of each of the
following:
3.1 its certificate of incorporation, all certificates on change
of name, memorandum and articles of association, by-laws (if
any) and other constitutional documents;
3.2 resolutions of its board of directors:
(a) approving the execution, delivery and performance
by such Party of each Finance Document to which it
is to be a party; and
(b) authorising a person or persons to sign and, if
required, to affix its corporate seal to each such
Finance Document, and all other documents, notices and
requests required in connection with the Facility or
the Project; and
3.3 the specimen signature(s) of the person(s) referred to in
Section 3.2 of this Schedule;
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4. CORPORATE STRUCTURE
A copy of a company structure chart identifying each of the shareholders in
the Borrower and each Obligor, their place of incorporation, the class and
number of shares held by them and the percentage ownership of share capital
which that shareholding represents.
5. EQUITY
Evidence that the greater of not less than 30 per cent of the Project Costs
to date have been contributed in Equity to the Borrower.
6. FINANCIAL AND BUSINESS
A copy of each of the following:
6.1 the audited annual accounts of the Borrower and each Obligor (other
than Atlantic Pacific Enterprises B.V.) for its financial year
ending 31 December 2002, together with the auditors report in
respect of each such set of accounts; and
6.2 the current Construction Period Budget and Operating Budget, in form
and substance satisfactory to the Bank.
7. AUTHORISATIONS
Receipt of a copy of all authorisations, permits, licences, approvals and
consents required for the consummation of the transactions contemplated
under the Transaction Documents.
8. ADVISERS' REPORTS
Receipt of an:
(a) Initial report from the Bank's Technical Advisor; and
(b) an insurance report from the Bank's Insurance Advisor,
in form and substance satisfactory to the Agent.
9. INTELLECTUAL PROPERTY
A schedule of all logos, trade marks, patents, design rights and other
intellectual property owned or licensed by any Obligor in relation to the
Hotel (including as regards the name "Riverbank Hotel") and copies of all
agreements or licences thereto.
10. LICENSING AND PERMITS
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10.1 A copy of each of the Project Permits, to the extent obtained prior
to the date of the first drawdown under this agreement, and a report
addressed by the Borrower to the Lender giving details of each of
those Project Permits and setting out a projected timescale for
acquiring each outstanding Project Permit.
10.2 Evidence that all other approvals, authorizations, licences,
exemptions, filings and notarizations required in relation to the
Financing Documents or the Project have been obtained and are in
full force and effect.
11. INSURANCES
12.1 Evidence, in form and substance satisfactory to the Bank, that all
Insurances required to be in effect at the Drawdown Date of the
Initial Advance pursuant to Schedule 12 (Insurances) are in full
force and effect and all premiums in relation to those insurances
have been paid.
12.2 Copies of all policies of the Insurances.
12. SECURITY MATTERS
(a) Evidence, in form and substance satisfactory to the Bank, that the
Security Interests created by the Security Documents have been duly
perfected and registered at any relevant companies' or other
register.
(b) Evidence, in form and substance satisfactory to the Bank, that each
relevant Person has provided the Bank with consents and such other
forms as may be necessary for the Bank (without any further action
on the part of any other person) to register and perfect each
Security Interest created by each Security Document.
13. ACCOUNTS
Evidence that each of the Accounts have been opened in accordance with the
Account Bank's standard account mandate forms.
14. LEGAL OPINIONS
Legal opinions, in form and substance satisfactory to the Bank from:
(a) Bird & Bird, Dutch legal adviser to the Borrower, Atlantic
Pacific Enterprises B.V. and Zilver-▇▇▇▇ B.V. addressed to the
Bank.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇, English legal adviser to the Borrower, addressed to
the Bank.
(c) Offer Vargon Avnon & Co., Israeli legal adviser to Red Sea Club
Ltd., addressed to the Bank.
(d) Adv. ▇▇▇▇ ▇▇▇▇▇▇, in-house counsel to Elscint Ltd., addressed to
the Bank.
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16. MISCELLANEOUS
16.1 Written confirmation from the person appointed by the Borrower as
its process agent pursuant to Section 36.3 (Process agent) of this
Agreement that such appointment is accepted.
16.2 Written confirmation from the persons appointed by each other
Obligor as process agent in connection with each other Financing
Document to which such Obligor is party that such appointment is
accepted.
16.3 An undertaking from Park Plaza Hotels Europe Limited in favour of
the Bank, that they will agree to manage the Hotel and shall enter
into a management agreement for such purpose upon request by the
Borrower.
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SCHEDULE 1
PART 2
CONDITIONS SUBSEQUENT
1. The Borrower shall procure that the Insurances be amended in accordance
with Schedule 12 Part 2 (Insurances - Required Amendments).
2. The Borrower shall provide those Collateral Warranties as set out in
Part 3 of this Schedule 1.
3. The Borrower shall provide copies of the letters of appointment of the
Professional Team to the Bank.
4. The Borrower shall procure that the Supplemental Debenture is executed.
5. A legal opinion from ▇▇▇▇▇▇ ▇▇▇▇▇, English legal adviser to the Borrower,
in form and substance satisfactory to the Bank, addressed to the Bank
regarding the Supplemental Debenture.
6. The Borrower shall procure that the consent of The Mayor and ▇▇▇▇▇▇▇ of the
London Borough of Lambeth to the assignment of the lease dated 14 February
2002 from ▇▇▇▇▇▇ Hotel Limited to the Borrower be received.
7. The Borrower shall have provided an updated valuation in form and substance
satisfactory to the Bank from ▇▇▇▇▇▇ ▇▇▇▇▇ certifying the total value of
the Project to be L110,000,000 (one hundred and ten million pounds).
8. The Borrower provide to the Bank a copy of the executed Insurance Proceeds
Letter, in form and substance satisfactory to the Bank.
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SCHEDULE 1
PART 3
COLLATERAL WARRANTIES
1. Amended Collateral Warranties (to the extent possible), in form and
substance satisfactory to the Bank, from:
(a) Skanska Cementation Foundations
(b) ▇▇▇▇▇ & Company Limited
2. Amended Collateral Warranties, in form and substance satisfactory to
the Bank, from:
(a) Bourne Steel Limited
(b) EJ Bedekabiner A/s
(c) RTT Engineering Services Limited
(d) Alu-Glass UK Limited
3. Collateral Warranties, in form and substance satisfactory to the Bank,
from:
(a) Gear Construction Management Limited (as Planning Supervisor,
Quantity Surveyor and Management Contractor)
(b) Applied Geotechnical Engineering (to the extent possible)
(c) Isometrix (to the extent possible)
(d) Shachak Communication Engineering
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SCHEDULE 2
ADDITIONAL COSTS RATE FORMULA
1. The Additional Costs Rate applicable to an Advance denominated in Sterling
for each Interest Period shall, subject to paragraph 4 and 5 below, be
determined according to the following formula:
A (D - E) + BD + C (D - F)
--------------------------
100 - (B + C)
where on the day on which the calculation falls to be made:
A is the level of secured loans which the Bank is required by the Bank
of England to maintain in the money market, expressed as a
percentage of Eligible Liabilities;
B is the level of interest free cash balances which the Bank is
required to maintain with the Bank of England, expressed as a
percentage of Eligible Liabilities;
C is the level of interest-bearing Special Deposits which the Bank is
required to maintain with the Bank of England, expressed as a
percentage of Eligible Liabilities;
D is the interest rate at which Sterling deposits for the Relevant
Period are offered to the Bank in the London Interbank Market at or
about 11.00 am on the requested date of drawdown relating to the
Advance concerned;
E is the lower of D% and the interest rate offered by discount houses
to the Bank for secured callable fixtures at or about 11.00am on the
requested date of drawdown relating to the Advance concerned; and
F is the lower of D% and the interest rate payable by the Bank of
England to the Bank on interest-bearing Special Deposits.
2. For the purposes of this schedule 2:
2.1 ELIGIBLE LIABILITIES and SPECIAL DEPOSITS shall bear the meaning
given to them from time to time by the Bank of England; and
2.2 RELEVANT PERIOD means the duration of the relevant Interest Period.
83
3. The Additional Costs Rate shall be calculated at or about 11.00 am on the
first day of each Relevant Period and shall be payable on the date on which
interest is payable in respect of the relevant Advance in accordance with
the terms of this agreement.
4. The Bank shall determine the Additional Costs Rate by application of the
formula set out in paragraph 11 above on the first day of each Relevant
Period (rounding up or down to the nearest whole multiple of 1/32nd of one
per cent.).
5. In the event that there is any change in applicable law or regulation,
or the interpretation thereof, by any governmental authority charged
with the administration thereof, or in the nature of any request or
requirement by the Bank of England, or other applicable banking
authority, the effect of which is to impose, modify or deem applicable
any reserve, special similar requirements against assets held by, or
deposits in, or for the deposit, liquidity or account of, or advances by
the Bank, or in any other respect whatsoever, the Bank shall be entitled
to vary the formula set out in paragraph 1 above so as (but only so as)
to restore the Bank's position - in terms of overall return to the Bank
- to that which prevailed before such change became necessary. The Bank
shall notify the Borrower of any such necessary variation to the formula
and the formula, as so varied, shall be the formula for the purposes of
this agreement with effect from the date of notification.
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SCHEDULE 3
CHARGES OVER SHARES
SCHEDULE 4
BORROWER CHARGE OVER ACCOUNTS
SCHEDULE 5
OPERATOR CHARGE OVER ACCOUNTS
SCHEDULE 6
DEBENTURE
SCHEDULE 7
SUBORDINATION AGREEMENT
SCHEDULE 8
COMPLETION AND COSTS OVERRUN GUARANTEE
SCHEDULE 9
REPAYMENT SCHEDULE
SCHEDULE 10
OTHER PROJECT PERMITS
SCHEDULE 11
FORM OF ADVANCE REQUESTS
SCHEDULE 12
PART 1
INSURANCES
1. Contracts Works Insurance
2. Third Party Liability Insurance
3. Public and Products Liability Insurance
4. Business Interruption Insurance
SCHEDULE 12
PART 2
INSURANCES - REQUIRED AMENDMENTS
1. The amendments set out in the letters of the Bank's Insurance Consultant to
the Bank dated 7 December 2003 and 11 December 2003 (based upon the Bank's
Insurance Consultant's review of the cover notes of the Insurances) which
shall be made to the satisfaction of the Bank:
SCHEDULE 13
PROFESSIONAL TEAM