EXHIBIT 4.3
EXECUTION COPY
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ULTRAPETROL (BAHAMAS) LIMITED
9% First Preferred Ship Mortgage Notes
Due 2014
The
SUBSIDIARY GUARANTORS
named herein
The
PLEDGORS
named herein
--------------------------
INDENTURE
Dated as of November 24, 2004
--------------------------
MANUFACTURERS AND TRADERS TRUST COMPANY,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ...................................... 7.10
(a)(2) ...................................... 7.10
(a)(3) ...................................... N.A.
(a)(4) ...................................... N.A.
(b) ...................................... 7.08; 7.10
(c) ...................................... N.A.
311(a) ...................................... 7.11
(b) ...................................... 7.11
(c) ...................................... N.A.
312(a) ...................................... 2.05
(b) ...................................... 14.03
(c) ...................................... 14.03
313(a) ...................................... 7.06
(b)(1) ...................................... N.A.
(b)(2) ...................................... 7.06
(c) ...................................... 14.02
(d) ...................................... 7.06
314(a) ...................................... 4.02; 4.19; 14.02
(b) ...................................... 12.02
(c)(1) ...................................... 14.04
(c)(2) ...................................... 14.04
(c)(3) ...................................... N.A.
(d) ...................................... 12.04; 12.13; 13.03
(e) ...................................... 14.05
(f) ...................................... 4.19
315(a) ...................................... 7.01
(b) ...................................... 7.05; 14.02
(c) ...................................... 7.01
(d) ...................................... 7.01
(e) ...................................... 6.11
316(a)
(last sentence) ...................................... 14.06
(a)(1)(A) ...................................... 6.05
(a)(1)(B) ...................................... 6.04
(a)(2) ...................................... N.A.
(b) ...................................... 6.07
317(a)(1) ...................................... 6.08
(a)(2) ...................................... 6.09
(b) ...................................... 2.04
318(a) ...................................... 14.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
Page 1
Table of Contents
Page
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions............................................... 1
SECTION 1.02. Other Definitions......................................... 32
SECTION 1.03. Incorporation by Reference of Trust Indenture Act......... 33
SECTION 1.04. Rules of Construction..................................... 33
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating........................................... 34
SECTION 2.02. Execution and Authentication.............................. 34
SECTION 2.03. Registrar and Paying Agent................................ 35
SECTION 2.04. Paying Agent To Hold Money in Trust....................... 35
SECTION 2.05. Securityholder Lists...................................... 36
SECTION 2.06. Replacement Securities.................................... 36
SECTION 2.07. Outstanding Securities.................................... 36
SECTION 2.08. Temporary Securities...................................... 37
SECTION 2.09. Cancelation............................................... 37
SECTION 2.10. Defaulted Interest........................................ 37
SECTION 2.11. CUSIP Numbers............................................. 37
SECTION 2.12. Transfer and Exchange..................................... 37
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee........................................ 38
SECTION 3.02. Selection of Securities To Be Redeemed.................... 38
SECTION 3.03. Notice of Redemption...................................... 39
SECTION 3.04. Effect of Notice of Redemption............................ 39
Page 2
SECTION 3.05. Deposit of Redemption Price............................... 40
SECTION 3.06. Securities Redeemed in Part............................... 40
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities..................................... 40
SECTION 4.02. SEC Reports............................................... 40
SECTION 4.03. Limitation on Indebtedness................................ 41
SECTION 4.04. Limitation on Restricted Payments......................... 43
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries................................ 44
SECTION 4.06. Limitation on Asset Sales................................. 45
SECTION 4.07. Limitation on Lines of Business........................... 47
SECTION 4.08. Limitation on Affiliate Transactions...................... 47
SECTION 4.09. Limitation on Liens....................................... 47
SECTION 4.10. Limitation on Sale/Leaseback Transactions................. 47
SECTION 4.11. Change of Control......................................... 48
SECTION 4.12. Future Subsidiary Guarantors.............................. 49
SECTION 4.13. Impairment of Security Interest........................... 49
SECTION 4.14. Application of Proceeds upon Sale or Loss of a
Mortgaged Vessel....................................... 50
SECTION 4.15. Application of Proceeds upon Permitted Bareboat
Charter................................................ 51
SECTION 4.16. Tender of a Qualified Substitute Vessel; Excess
Proceeds Offers........................................ 53
SECTION 4.17. Additional Amounts........................................ 56
SECTION 4.18. Compliance Certificate.................................... 58
SECTION 4.19. Further Instruments and Acts.............................. 58
SECTION 4.20. Reflagging of Vessels..................................... 59
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets................. 59
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default......................................... 61
SECTION 6.02. Acceleration.............................................. 63
SECTION 6.03. Other Remedies............................................ 64
SECTION 6.04. Waiver of Past Defaults................................... 64
SECTION 6.05. Control by Majority....................................... 64
SECTION 6.06. Limitation on Suits....................................... 64
SECTION 6.07. Rights of Holders To Receive Payment...................... 65
SECTION 6.08. Collection Suit by Trustee................................ 65
SECTION 6.09. Trustee May File Proofs of Claim.......................... 65
SECTION 6.10. Priorities................................................ 65
SECTION 6.11. Undertaking for Costs..................................... 66
SECTION 6.12. Waiver of Stay or Extension Laws.......................... 66
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee......................................... 66
SECTION 7.02. Rights of Trustee......................................... 68
SECTION 7.03. Individual Rights of Trustee.............................. 68
SECTION 7.04. Trustee's Disclaimer...................................... 68
Page 3
SECTION 7.05. Notice of Defaults........................................ 68
SECTION 7.06. Reports by Trustee to Holders............................. 69
SECTION 7.07. Compensation and Indemnity................................ 69
SECTION 7.08. Replacement of Trustee.................................... 69
SECTION 7.09. Successor Trustee by Merger............................... 70
SECTION 7.10. Eligibility; Disqualification............................. 71
SECTION 7.11. Preferential Collection of Claims Against Company......... 71
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.......... 71
SECTION 8.02. Conditions to Defeasance.................................. 72
SECTION 8.03. Application of Trust Money................................ 73
SECTION 8.04. Repayment to Company...................................... 73
SECTION 8.05. Indemnity for Government Obligations...................... 74
SECTION 8.06. Reinstatement............................................. 74
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders................................ 74
SECTION 9.02. With Consent of Holders................................... 75
SECTION 9.03. Compliance with Trust Indenture Act....................... 76
SECTION 9.04. Revocation and Effect of Consents and Waivers............. 76
SECTION 9.05. Notation on or Exchange of Securities..................... 77
SECTION 9.06. Trustee To Sign Amendments................................ 77
SECTION 9.07. Payment for Consent....................................... 77
ARTICLE 10
Guarantees
SECTION 10.01. Guarantees............................................... 77
SECTION 10.02. Limitation on Liability.................................. 79
SECTION 10.03. Successors and Assigns................................... 79
SECTION 10.04. No Waiver................................................ 79
SECTION 10.05. Modification............................................. 79
SECTION 10.06. Release of Subsidiary Guarantor.......................... 80
ARTICLE 11
Pledged Collateral
SECTION 11.01. Grant of Security Interest............................... 80
SECTION 11.02. Delivery of Collateral................................... 81
SECTION 11.03. Representations and Warranties........................... 81
SECTION 11.04. Further Assurances....................................... 82
SECTION 11.05. Dividends; Voting Rights; Release of Collateral.......... 82
SECTION 11.06. Trustee Appointed Attorney-in-Fact....................... 83
SECTION 11.07. Trustee May Perform...................................... 84
SECTION 11.08. Trustee's Duties......................................... 84
SECTION 11.09. Remedies upon Event of Default........................... 84
SECTION 11.10. Application of Proceeds.................................. 85
SECTION 11.11. Continuing Lien.......................................... 85
SECTION 11.12. Certificates and Opinions................................ 85
SECTION 11.13. Additional Agreements.................................... 85
ARTICLE 12
Security Agreements
Page 4
SECTION 12.01. Collateral and Security Agreements....................... 86
SECTION 12.02. Recording; Annual Opinions............................... 86
SECTION 12.03. Disposition of Collateral Without Release................ 88
SECTION 12.04. Release of Mortgaged Collateral.......................... 89
SECTION 12.05. Eminent Domain, Expropriation and Other
Governmental Takings................................... 92
SECTION 12.06. Permitted Releases Not To Impair Lien; Trust
Indenture Act Requirements............................. 93
SECTION 12.07. Suits To Protect the Mortgaged Collateral................ 94
SECTION 12.08. Purchaser Protected...................................... 94
SECTION 12.09. Powers Exercisable by Receiver or Trustee................ 94
SECTION 12.10. Disposition of Obligations Received...................... 94
SECTION 12.11. Determinations Relating to Mortgaged Collateral.......... 95
SECTION 12.12. Release upon Termination of the Company's
Obligations............................................ 95
SECTION 12.13. Substitution of Mortgaged Vessel......................... 95
ARTICLE 13
Application of Trust Moneys
SECTION 13.01. "Trust Moneys" Defined................................... 98
SECTION 13.02. Retirement of Securities................................. 98
SECTION 13.03. Withdrawals of Insurance Proceeds and Condemnation
Awards; Withdrawals of Net Available Cash............. 99
SECTION 13.04. Powers Exercisable Notwithstanding Event of Default...... 103
SECTION 13.05. Powers Exercisable by Trustee or Receiver................ 104
SECTION 13.06. Disposition of Securities Retired........................ 104
SECTION 13.07. Investment and Use of Trust Moneys....................... 104
ARTICLE 14
Miscellaneous
SECTION 14.01. Trust Indenture Act Controls............................. 105
SECTION 14.02. Notices.................................................. 105
SECTION 14.03. Communication by Holders with Other Holders.............. 106
SECTION 14.04. Certificate and Opinion as to Conditions Precedent....... 106
SECTION 14.05. Statements Required in Certificate or Opinion............ 106
SECTION 14.06. When Securities Disregarded.............................. 107
SECTION 14.07. Rules by Trustee, Paying Agent and Registrar............. 107
SECTION 14.08. Legal Holidays........................................... 107
SECTION 14.09. Governing Law............................................ 107
SECTION 14.10. No Recourse Against Others............................... 107
SECTION 14.11. Successors............................................... 107
SECTION 14.12. Multiple Originals....................................... 107
SECTION 14.13. Table of Contents; Headings.............................. 108
SECTION 14.14. Agent for Service; Submission to Jurisdiction;
Waiver of Immunities................................... 108
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
Exhibit B - [Intentionally Omitted]
Exhibit C - Form of Mortgage
Schedule I - Pledged Shares
Schedule II - Pledged Barges
Exhibit 2 - Transferee Form of Letter of Representation
Page 5
INDENTURE dated as of November 24, 2004, among ULTRAPETROL
(BAHAMAS) LIMITED, a Bahamian corporation (the "Company"), the
guarantors listed on the signature pages hereto (the "Subsidiary
Guarantors"), the pledgors listed on the signature pages hereto (the
"Pledgors") and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
(the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 9% First
Preferred Ship Mortgage Notes Due 2014 and, if and when issued pursuant to a
registered exchange for Initial Securities, the Company's 9% First Preferred
Ship Mortgage Notes Due 2014 and if and when issued pursuant to a private
exchange for Initial Securities, the Company's 9% First Preferred Ship Mortgage
Notes Due 2014:
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
"Acquisition Contract" means a sale and purchase contract executed
by the Company or a Restricted Subsidiary to acquire an additional Vessel or
Vessels or any Shipping Business Assets.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Shipping Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; or (iii)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; provided, however, that any such Restricted
Subsidiary described in clause (ii) or (iii) above is primarily engaged in a
Shipping Business.
"Adjusted Treasury Rate" means, with respect to any redemption date,
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after November 24, 2009, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date, in each case
calculated on the third Business Day immediately preceding the redemption date,
plus 0.50%.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
Page 6
purposes of Sections 4.04, 4.06 and 4.08 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Applicable Premium" means with respect to a Security at any
redemption date, the greater of (i) 1.00% of the principal amount of such
Security and (ii) the excess of (A) the present value at such redemption date of
(1) the redemption price of such Security on November 24, 2009 (such redemption
price being described in Section 5 of the Securities exclusive of any accrued
interest), plus (2) all required remaining scheduled interest payments due on
such Security through November 24, 2009 (but excluding accrued and unpaid
interest to the redemption date), computed using a discount rate equal to the
Adjusted Treasury Rate, over (B) the principal amount of such Security on such
redemption date.
"Appraisal Date" means each date as of which the Appraised Value of
the Mortgaged Vessels has been determined.
"Appraised Value" means the average of the fair market sale values
as of a specified date of a specified asset that would be obtained in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined by two Appraisers selected by the Company and, in the event either
of such Appraisers is not a Designated Appraiser (as defined in the definition
of Appraiser), reasonably acceptable to the Trustee. If the Trustee does not
accept an Appraiser (other than a Designated Appraiser) selected by the Company
within 10 days of the first giving of notice by the Company to the Trustee
requesting a determination of an Appraised Value (the "Appraisal Request Date"),
such Appraised Value shall be determined by a panel of three Appraisers, one of
whom shall be selected by the Company, another of whom shall be selected by the
Trustee and the third of whom shall be selected by such other two Appraisers or,
if such Appraisers shall be unable to agree upon a third Appraiser within 5 days
of the selection date of the second of such two Appraisers, by an arbitrator
mutually acceptable to the Company and the Trustee; provided, however, that, if
either party shall not select its Appraiser within 20 days after the Appraisal
Request Date, such Appraised Value shall be determined solely by the Appraiser
selected by the other party. The Appraiser or Appraisers appointed pursuant to
the foregoing procedure shall be instructed to determine such Appraised Value
within 25 days after the final appointment of any Appraiser pursuant hereto, and
such determination shall be final and binding upon the parties. If three
Appraisers shall be appointed, (a) if the median of the determinations of the
Appraisers shall equal the average of such determinations, such average shall
constitute the determination of the Appraisers; otherwise (b) the determination
of the Appraiser that shall differ most from the other two Appraisers shall be
excluded, the remaining two determinations shall be averaged and such average
shall constitute the determination of the Appraisers. For this purpose, the
purchase price of any Mortgaged Vessel acquired after the most recent Appraisal
Date shall constitute that Vessel's Appraised Value.
"Appraiser" means each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Company, Inc.;
▇▇▇▇▇▇▇, Jones, Lynch, ▇▇▇▇▇ & Associates; Poten & Partners; ▇.▇. ▇'▇▇▇▇▇
Shipbroking Limited; ▇. ▇▇▇▇▇▇▇▇ & Company Limited; Galbraiths Limited; Arrow
Valuations, a division of Arrow Research Ltd.; Associated Shipbroking ▇.▇.▇.;
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; Braemar Seascope Valuations Limited; ▇▇▇▇▇▇ Brothers
S.R.L.; Compass Maritime Services LLC; ▇.▇. ▇▇▇▇▇▇ Shipbrokers Ltd.; ▇▇▇▇▇
▇▇▇▇ GmbH & Co. KG; Fearnleys A.S.; ▇.▇. ▇▇▇▇ & Co. Ltd.; ▇▇▇▇ ▇▇▇▇▇▇▇▇
Marine Evaluations, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. Ltd.; L&R Midland Inc.;
Marint (Offshore Services) U.K. Ltd; Marcon International, Inc.; Offshore
Shipbrokers Limited.; ▇.▇. ▇▇▇▇▇▇ AS; R.S. Partners Inc.; ▇.▇. ▇▇▇▇▇▇
Shipbrokers AS; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Young Ltd.; and
Page 7
Atlantic Shipbrokers Limited D/B/A Southport Atlantic (each a "Designated
Appraiser") (and each successor thereto), together with any other Person not
affiliated with the Company engaged in the business of appraising vessels.
"Asset Sale" means any sale, lease, transfer or other disposition
(other than a vessel charter that is not a bareboat charter with a purchase
option) (or series of related sales, leases, transfers or dispositions) by the
Company or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to for the purposes
of this definition as a "disposition") in one transaction or a series of related
transactions, of (i) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary), (ii) any
Vessel, all or substantially all the assets of any division or line of business
of the Company or any Restricted Subsidiary or (iii) any other assets of the
Company or any Restricted Subsidiary outside of the ordinary course of business
of the Company or such Restricted Subsidiary (other than, in the case of (i),
(ii) and (iii) above, (w) any modification or termination of a charter in the
ordinary course of business, (x) a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary,
(y) for purposes of Section 4.06 only, a disposition that constitutes a
Permitted Investment or a Restricted Payment permitted by Section 4.04 and (z)
disposition of assets with a fair market value of less than $500,000).
"Assignment of Insurance" means an assignment of insurance with
respect to any Mortgaged Vessel substantially in the form of and to the effect
set forth as Exhibit D to the Escrow Agreement.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bareboat Charter" means a bareboat charter of a Mortgaged Vessel
pursuant to which the chartering-in party has the right to purchase the
Mortgaged Vessel at the conclusion of the bareboat charter period for a less
than fair market value purchase price.
"Bareboat Charter Funds" means the charterhire payments received by
the Company, a Subsidiary Guarantor or a Pledgor pursuant to a Bareboat Charter
of a Mortgaged Vessel.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Saturday, Sunday or a
day on which banking institutions are authorized or permitted to close in New
York City, New York and Baltimore, Maryland.
"Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
Page 8
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests
(including partnership interests), rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Change of Control" shall mean the occurrence of any of the
following events:
(i) prior to the earlier to occur of (A) the first public offering
of common stock of Parent or (B) the first public offering of common stock
of the Company, the Permitted Holders cease to be the "beneficial owner"
(as defined in rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of
the Voting Stock of the Company, whether as a result of issuance of
securities of the Parent or the Company, any merger, consolidation,
liquidation or dissolution of the Parent or the Company, any direct or
indirect transfer of securities by Parent or otherwise (for purposes of
this clause (i) and clause (ii) below, the Permitted Holders shall be
deemed to beneficially own any Voting Stock of a corporation (the
"specified corporation") held by any other corporation (the "parent
corporation") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent corporation);
(ii) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than a Permitted Holder, is or becomes the
beneficial owner (as defined in clause (i) above, except that for purposes
of this clause (ii) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% of the total voting power
of the Voting Stock of the Company; provided, however, that the Permitted
Holders beneficially own (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Company than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors (for the
purposes of this clause (ii), such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person is the beneficial owner (as
defined in this clause (ii)), directly or indirectly, of more than 35% of
the voting power of the Voting Stock of such parent corporation and the
Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the Voting Stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation);
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a vote of 66?% of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in office; and
Page 9
(iv) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on
a consolidated basis) to another Person other than (A) a transaction in
which the survivor or transferee is a Person that is controlled by the
Permitted Holders or (B) a transaction following which (1) in the case of
a merger or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of the Company immediately prior to
such transaction (or other securities into which such securities are
converted as part of such merger or consolidation transaction) own
directly or indirectly at least a majority of the voting power of the
Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and (2) in the case of a
sale of assets transaction, each transferee becomes an obligor in respect
of the Securities and a Subsidiary of the transferor of such assets.
"Charters" is defined to mean each time charter party between a
Subsidiary Guarantor and any third party with respect to such Subsidiary
Guarantor's Mortgaged Vessel, and as the same may be amended from time to time.
For purposes of this definition, each Pledgor shall be deemed to be a Subsidiary
Guarantor.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" is defined to mean, in each case as pledged and
assigned to the Trustee pursuant to the Indenture or the Security Agreements,
(1) all the issued and outstanding Capital Stock of each Subsidiary Guarantor
owned, directly or indirectly, by the Company (subject to the limitations
described in clause (i) of Section 11.01), pledged from time to time in favor of
the Trustee pursuant to this Indenture and the Security Agreements; (2) all cash
held by the Trustee pursuant to this Indenture or the Security Agreements or in
the Escrow Account pursuant to the Escrow Agreement; and (3) each Subsidiary
Guarantor's and each Pledgor's right, title and interest in and to (i) its
respective Mortgaged Vessel, pursuant to a Mortgage issued by such Subsidiary
Guarantor or Pledgor, as the case may be, in favor of the Trustee; (ii) the
Charters, if any, relating to its Mortgaged Vessel, including the collateral
right to receive all monies and claims for monies due and to become due under
such Charters or in respect of such Mortgaged Vessel and all claims for damages
arising under such Charters or relating to such Mortgaged Vessel, including all
moneys or other compensation payable by reason of requisition of title or for
hire or other compulsory acquisition and all claims for damages in respect of
the actual or constructive total loss of the Mortgaged Vessel; (iii) the
freights, hires, passage moneys or payments in respect of indemnities relating
to its Mortgaged Vessel; (iv) all its policies and contracts of insurance taken
out from time to time in respect of its Mortgaged Vessel; and (v) all proceeds
of any of the foregoing.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to the
remaining term of the Securities from the redemption date to November 24, 2009,
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of a maturity most nearly equal to November 24, 2009.
"Comparable Treasury Price" means, with respect to any redemption
date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of
three, or such lesser number as is obtained by the Trustee, Reference Treasury
Dealer Quotations for such redemption date.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending prior to the date of such
determination for which financial statements have been made publicly available
Page 10
to (ii) Consolidated Interest Expense for such four fiscal quarters; provided,
however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
on the date of determination or if the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to
such Indebtedness as if such Indebtedness had been Incurred on the first
day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of
such period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary had not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used
to repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Sale, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Sale for such period, or increased by an amount equal to the EBITDA (if
negative), directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to
the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with such Asset
Sale for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Sale, any Investment or acquisition of assets
that would have required an adjustment pursuant to clause (3) or (4) above
if made by the Company or a Restricted Subsidiary during such period,
Page 11
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to
an acquisition of assets and the amount of income or earnings relating
thereto or to an Asset Sale, any Investment or the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred, the pro forma
calculations shall be determined in good faith by a responsible financial
or accounting Officer of the Company. If any Indebtedness bears a floating
rate of interest and is being given pro forma effect, the interest of such
Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness
if such Interest Rate Agreement has a remaining term in excess of 12
months).
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of a Vessel or the financing thereof, the Company may (i) if the
Vessel is to be subject to a time charter of at least one year's duration by the
Company, apply pro forma EBITDA for such Vessel based on such new time charter
or (ii) if the Vessel is to be subject to hire on a voyage charter basis by the
Company, apply EBITDA for such Vessel based upon historical earnings of the most
comparable Vessel of the Company or any of its Subsidiaries (as determined in
good faith by the Board of Directors) during such period, or if there is no such
comparable Vessel, based upon industry average earnings for comparable vessels
(as determined in good faith by the Board of Directors).
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of the Company and its consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), on a consolidated basis, after
eliminating (i) all intercompany items between the Company and any Restricted
Subsidiary and (ii) all current maturities of long-term Indebtedness, all as
determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication, (i) interest expense attributable to capital leases and the
interest expense attributable to leases constituting part of a Sale/Leaseback
Transaction, (ii) amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) noncash interest expense, (v) commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (vi) net costs associated with Hedging Obligations
(including amortization of fees), (vii) Preferred Stock dividends in respect of
all Preferred Stock held by Persons other than the Company or a Restricted
Subsidiary to the extent paid in cash in such period, (viii) interest incurred
in connection with Investments in discontinued operations, (ix) interest
accruing on any Indebtedness of any other Person to the extent such Indebtedness
is Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary and (x) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of
the Company and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income:
(i) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that (A) subject to the
exclusion contained in clause (iv) below, the Company's equity in the net
Page 12
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution paid to a Restricted Subsidiary,
to the limitations contained in clause (iii) below) and (B) the Company's
equity in a net loss of any such Person for such period shall be included
in determining such Consolidated Net Income;
(ii) any net income (or loss) of any Person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A)
subject to the exclusion contained in clause (iv) below, the Company's
equity in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income, but only to the extent
that such Restricted Subsidiary was not prohibited from distributing such
net income of such Restricted Subsidiary during such period as a dividend
or other distribution (subject, in the case of a dividend or other
distribution paid to another Restricted Subsidiary, to the limitation
contained in this clause) and (B) the Company's equity in a net loss of
any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any assets of the Company or its consolidated Subsidiaries
(including pursuant to sales of Vessels and to any sale-and-leaseback
arrangement) and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person, in each case which is not
sold or otherwise disposed of in the ordinary course of business, as
determined in good faith by the Board of Directors;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.04
only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments
permitted pursuant to Section 4.04(a)(3)(D).
"Consolidated Net Tangible Assets" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) which would appear on a balance sheet of the
Company and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP (provided that any Vessel shall be valued for purposes of
this definition at its Appraised Value as of the most recent Appraisal Date
occurring not more than 30 days prior to the date of determination), and after
giving effect to purchase accounting and after deducting therefrom Consolidated
Current Liabilities and, to the extent otherwise included, the amounts of: (i)
minority interests in consolidated Subsidiaries held by Persons other than the
Company or a Restricted Subsidiary; (ii) excess of cost over fair value of
assets of businesses acquired, as determined in good faith by the Board of
Directors; (iii) any revaluation or other write-up in book value of assets
subsequent to the Issue Date as a result of a change in the method of valuation
in accordance with GAAP consistently applied; (iv) unamortized debt discount and
Page 13
expenses and other unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, licenses, organization or developmental
expenses and other intangible items; (v) treasury stock; (vi) cash set apart and
held in a sinking or other analogous fund established for the purpose of
redemption or other retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and (vii) Investments in and
assets of Unrestricted Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company for which financial statements have been made
publicly available prior to the taking of any action for the purpose of which
the determination is being made, as (i) the par or stated value of all
outstanding Capital Stock of the Company plus (ii) paid-in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any amounts attributable
to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
Stated Maturity of the Securities; provided, however, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the provisions described
under Sections 4.06, 4.11 and 4.16.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of the
Company and its consolidated Restricted Subsidiaries, (b) depreciation expense
of the Company and its consolidated Restricted Subsidiaries, (c) amortization
expense (including amortization of dry dock expense) of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period) and (d) all
other noncash charges of the Company and its consolidated Restricted
Subsidiaries (excluding any such noncash charge to the extent that it represents
an accrual of or reserve for cash expenditures in any future period), in each
case for such period. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
noncash charges of, a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
Page 14
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders; provided, however, that, for purposes
of the definition of Consolidated Coverage Ratio, EBITDA for a period
attributable to a Mortgaged Vessel subject to a Bareboat Charter shall be
limited to the product of the EBITDA Portion and the Bareboat Charter Funds
received in respect of such Mortgaged Vessel during such period.
"EBITDA Portion" in respect of Bareboat Charter Funds received by
the Company, its Subsidiary Guarantors or the Pledgors in respect of a Mortgaged
Vessel subject to a Bareboat Charter means a fraction, expressed as a
percentage, the numerator of which is the average annual amount of EBITDA
attributable to such Mortgaged Vessel derived by the Company, its Subsidiary
Guarantors and the Pledgors during the two-year period immediately preceding the
commencement of such Bareboat Charter (or such shorter period during which such
Mortgaged Vessel was owned by the Company, its Subsidiary Guarantors or the
Pledgors, in which case such actual EBITDA shall be annualized), and the
denominator of which is the annual amount of Bareboat Charter Funds to be
received by the Company, its Subsidiaries Guarantors or the Pledgors pursuant to
such Bareboat Charter.
"Escrow Account" has the meaning assigned thereto in the Escrow
Agreement.
"Escrow Agreement" means that certain Escrow Agreement, dated as of
the date hereof, between the Company and Manufacturers and Traders Trust
Company, as escrow agent (the "Escrow Agent").
"Escrowed Property" has the meaning assigned thereto in the Escrow
Agreement.
"Event of Loss" is defined to mean any of the following events: (a)
the actual or constructive total loss of a Vessel or the agreed or compromised
total loss of a Vessel, (b) the destruction of a Vessel, (c) damage to a Vessel
to an extent, determined in good faith by the Board of Directors within 90 days
after the occurrence of such damage (and evidenced by an Officers' Certificate
to such effect delivered to the Trustee within such 90-day period), as shall
make repair thereof uneconomical or shall render such Vessel permanently unfit
for normal use (other than obsolescence) or (d) the condemnation, confiscation,
requisition, seizure, forfeiture or other taking of title to a Vessel, or use of
a Vessel that shall not be revoked within six months. An Event of Loss shall be
deemed to have occurred: (i) in the event of the destruction or other actual
total loss of a Vessel, on the date of such loss; (ii) in the event of a
constructive, agreed or compromised total loss of a Vessel, on the date of the
determination of such total loss pursuant to the relevant insurance policy;
(iii) in the case of any event referred to in clause (c) above, upon the
delivery of the Company's Officers' Certificate to the Trustee; or (iv) in the
case of any event referred to in clause (d) above, on the date six months after
the occurrence of such event.
"Event of Loss Proceeds" means all compensation, damages and other
payments (including insurance proceeds other than certain liability insurance
proceeds) received by the Company, any Subsidiary Guarantor, any Pledgor or the
Trustee, jointly or severally, from any Person, including any governmental
authority, with respect to or in connection with an Event of Loss.
"Excess Proceeds" means the sum of (i) any cash released to the
Company by the Trustee from Collateral following a redemption date as described
under Section 4.14 or following a Vessel Tender Date, as described under Section
4.16, to the extent cash is not applied by the Company toward a Permitted Excess
Cash Use within 12 months after such redemption date or Vessel Tender Date, as
the case may be, (ii) any Loss Excess Proceeds and (iii) any Sale Excess
Proceeds.
Page 15
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Securities" has the meaning assigned thereto in the Rule
144A/Regulation S/IAI Appendix hereto.
"Fuel Hedging Agreements" means any spot, forward or option fuel
price protection agreements and other types of fuel hedging agreements designed
to protect against or manage exposure to fluctuations in fuel prices.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the relevant date of determination,
including those set forth in (i) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (ii) statements and pronouncements of the Financial Accounting
Standards Board, (iii) such other statements by such other entity as approved by
a significant segment of the accounting profession and (iv) the rules and
regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be
filed pursuant to Sections 13 or 15(d) of the Exchange Act, including opinions
and pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Guarantee Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor becomes
subject to the applicable terms and conditions of this Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement, Currency Agreement or Fuel
Hedging Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"IFC Loan Agreement" means an agreement as in effect on the Issue
Date between or among any of the Company, UABL Limited, UP Offshore (Bahamas)
Ltd. or any of their respective Subsidiaries, as borrower, and International
Finance Corporation or KfW, as lender or lenders, as the case may be, as it may
be amended or Refinanced from time to time.
"Incidental Asset" is defined to mean any equipment, outfit,
furniture, furnishings, appliances, spare or replacement parts or stores owned
by the Company, a Subsidiary Guarantor or a Pledgor that have become obsolete or
unfit for use or no longer useful, necessary or profitable in the conduct of the
business of the Company or such Subsidiary Guarantor or Pledgor, as the case may
be. In no event shall the term "Incidental Asset" include a Vessel or a
Mortgaged Vessel.
Page 16
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall be deemed the Incurrence
of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into
by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding any accounts payable arising in the ordinary
course of business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (i)
through (iii) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of
such Person or, with respect to any Preferred Stock of any Subsidiary of
such Person, the principal amount of such Preferred Stock to be determined
in accordance with this Indenture (but excluding, in each case, any
accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, Guarantor or otherwise, including by means of any
Guarantee;
(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the fair market
value of such property or assets or the amount of the obligation so
secured; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
Page 17
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the above, the following shall not constitute Indebtedness for
purposes hereof: any commercial obligations assumed or undertaken by the Company
in the ordinary course of business including purchasing or hedging purchases of
bunkers or other consumables and obligations to suppliers.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Initial Securities" has the meaning assigned thereto in the Rule
144A/Regulation S/IAI Appendix hereto.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and Section
4.04, (i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (x) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors.
"Issue Date" means the date on which the Securities are originally
issued.
"KfW" means Kreditanstalt fur Wiederaufbau, an institution
incorporated under the public law of the Federal Republic of Germany.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Loss Excess Proceeds" means at any time the amount by which the Net
Event of Loss Proceeds received by the Company or any of its Restricted
Subsidiaries from one or more Events of Loss with respect to Vessels other than
Mortgaged Vessels occurring on or after the Issue Date in the most recent period
of 12 consecutive months prior to such time exceeds $12.5 million, less the
amount of such excess Net Event of Loss Proceeds applied toward a Permitted
Excess Cash Use.
"Loss Redemption Price" means, per $1,000 principal amount of
Security, the sum of (a) 100% of such principal amount and (b) accrued and
unpaid interest on such Security to the redemption date.
"Maritima SIPSA S.A." means Maritima SIPSA S.A., a Chilean
Page 18
company 49% indirectly owned by the Company as of the Issue Date and its
successors.
"Mortgage" means a mortgage and the related deed of a covenant, if
any, on a Vessel substantially in the form of and to the effect set forth as
Exhibit C to this Indenture.
"Mortgaged Collateral" means all the collateral that is subject to a
Mortgage.
"Mortgaged Vessels" means certain vessels and barges owned by
Subsidiary Guarantors or by Pledgors from time to time, including, as of the
Issue Date, the Vessels listed below and the 193 barges identified on Schedule
II to this Indenture:
Official or Year
Vessel Flag Patente Number Built
------ ---- -------------- -----
Alianza ▇▇▇▇▇▇▇........ Panama 20554-96-C 1976
Alianza G2.............. Panama 20350-92-C 1994(1)
Alianza G3............. Panama 20563-93-C 1993(2)
Alianza ▇▇▇▇▇▇▇......... Panama 20333-92-C 1976
2378-R
Cavalier I.............. Paraguay 1966
26998-00
Cavalier II............. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇
Cavalier III............ Bolivia ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇...... ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ 1986
Princess Marina......... Chile 3074 1986
Princess Nadia.......... Panama 25829-98-A 1987
Princess ▇▇▇▇▇▇......... Panama ▇▇▇▇▇-▇▇ ▇▇▇▇
San ▇▇▇▇▇▇▇ ▇........... Panama 29307-PEXT-4 1972
San ▇▇▇▇▇▇▇ ▇........... ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇-▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇........... Panama 32153-PEXT-1 1971
San ▇▇▇▇▇▇ ▇............ Panama 29311-PEXT-2 1973
San ▇▇▇▇▇▇▇ ▇........... Panama 29309-PEXT-1 1982
San ▇▇▇▇▇............... Panama 32108-PEXT-1 1979
Santa ▇▇ ▇▇............. Panama 29310-PECT-3 1967
-------------
(1) The keel of the barge, Alianza G2, was laid in 1980. The barge was delivered
in 1984. It was refurbished and converted to its current use in 1994.
(2) The barge, Alianza G3, was built in 1982 and was refurbished and converted
to its current use in 1993.
If one of such vessels shall be sold pursuant to the terms of this
Indenture, such vessel shall cease to be a Mortgaged Vessel from and after the
Sale Date. A Qualified Substitute Vessel or a Substitute Mortgaged Vessel may be
substituted for a Mortgaged Vessel in certain circumstances and such substituted
vessel shall become a Mortgaged Vessel upon substitution in accordance with the
terms of this Indenture.
"Net Available Cash" from an Asset Sale means cash payments received
therefrom (including, with respect to any Asset Sale pursuant to Section
4.06(b), any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise and proceeds from the
sale or other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in the form
of assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form), in
each case net of (i) all legal, title and recording tax expenses, commissions
Page 19
and other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale, (ii) all payments made on any Indebtedness which
is secured by any assets subject to such Asset Sale, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must, by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the proceeds
from such Asset Sale, (iii) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale, (iv) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the property or other assets disposed in such Asset Sale and retained by
the Company or any Restricted Subsidiary after such Asset Sale and (v) all Ready
for Sale Costs incurred in connection with such Asset Sale, but only to the
extent that such Ready for Sale Costs directly result, in the good faith
determination of the Board of Directors (which determination shall be evidenced
in the form of a resolution of the Board of Directors and delivered to the
Trustee), in the Company, a Restricted Subsidiary or a Pledgor, as the case may
be, receiving greater cash proceeds in connection with such Asset Sale than the
Company or such Restricted Subsidiary, as the case may be, would have received
if such Ready for Sale Costs were not incurred.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Net Event of Loss Proceeds" is defined to mean, with respect to any
Event of Loss, the Event of Loss Proceeds from such Event of Loss net of related
fees and expenses and payments made to repay Indebtedness or any other
obligation outstanding at the time of such Event of Loss; provided, however,
that such Indebtedness or other obligation is either (A) secured by a Lien on
the property or assets that suffered the Event of Loss or (B) required to be
paid as a result of such Event of Loss.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company or any duly appointed
attorney-in-fact of the Company.
"Officers' Certificate" means a certificate signed by one or more
Officers, provided that any Release Certificate (as defined in the Escrow
Agreement) shall be signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means any Person that owns directly or indirectly all the
Voting Stock of the Company.
"Permitted Excess Cash Use" means (i) the repayment of Senior
Indebtedness of the Company or of a Subsidiary Guarantor (in each case other
than Indebtedness owed to an Affiliate of the Company), (ii) the investment in
Additional Assets or (iii) working capital of the Company and its Restricted
Subsidiaries, but only, in the case of this clause (iii), to the extent
reasonable (as determined by the Board of Directors in good faith) in light of
the operations and prospects of the Company and its Restricted Subsidiaries.
"Permitted Flag Jurisdiction" means the ▇▇▇▇▇▇▇▇ Islands, the United
States of America, any State of the United States or the District of Columbia,
the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of
Page ▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, the British Virgin Islands, the
Cayman Islands, the Isle of Man, Cyprus, the Philippines, Norway, Greece, the
United Kingdom, Argentina, Malta, Brazil, Chile, Paraguay, India, Bolivia,
Spain, Uruguay and any other jurisdiction generally acceptable to institutional
lenders in the shipping industry, as determined in good faith by the Board of
Directors.
"Permitted Holders" means Solimar Holdings Ltd., Inversiones Los
Avellanos S.A., SIPSA S.A., and their Affiliates as of the Issue Date. Except
for a Permitted Holder specifically identified by name, in determining whether
Voting Stock is owned by a Permitted Holder, only Voting Stock acquired and held
by a Person while it is an Affiliate of one of the Permitted Holders
specifically identified by name herein and as of the Issue Date will be treated
as "beneficially owned" by a Permitted Holder
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company (including an Investment in the
Securities), a Restricted Subsidiary or a Person that will, upon the making of
such Investment, become a Restricted Subsidiary; provided, however, that the
primary business of such Restricted Subsidiary is a Shipping Business; (ii)
another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; provided, however, that such
Person's primary business is a Shipping Business; (iii) Temporary Cash
Investments; (iv) receivables owing to the Company or any Restricted Subsidiary
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances; (v)
payroll, travel and similar advances, and advances to ship agents, ship managers
and similar advances, in each case, to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) office space
and related equipment; (vii) loans or advances to employees made in the ordinary
course of business in an aggregate amount not to exceed $250,000 outstanding at
any one time; (viii) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments; (ix) agreements in
respect of Hedging Obligations; (x) any partnership or joint venture that is not
a Restricted Subsidiary in an aggregate amount not to exceed $15.0 million at
any one time; provided, however, that such partnership's or such joint venture's
primary business is a Shipping Business; and (xi) any other Persons not to
exceed $2.0 million in the aggregate at any one time.
"Permitted Liens" means, with respect to any Person,
(a) Liens securing obligations under this Indenture, the Securities
and the Security Agreements;
(b) Liens existing on the Issue Date (other than Liens being
released effective on the Issue Date);
(c) Liens granted after the Issue Date in favor of the Holders;
(d) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company to secure
Indebtedness owing to the Company by such Restricted Subsidiary;
(e) Liens for crews' wages (including the wages of a master and the
wages of stevedores employed directly by a Vessel) and pledges or deposits
by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or
Page 21
leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person is
a party, or deposits as security for contested taxes or import duties or
for the payment of rent, in each case Incurred in the ordinary course of
business;
(f) Liens imposed by law, for sums that are not yet due, are being
contested in good faith by appropriate proceedings or are fully insured
(other than customary deductibles) or other Liens arising out of judgments
or awards against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review;
(g) Liens for property taxes not yet subject to penalties for
nonpayment or which are being contested in good faith and by appropriate
proceedings;
(h) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in
the ordinary course of its business; provided, however, that such letters
of credit do not constitute Indebtedness;
(i) Liens securing such Person's reimbursement obligations in
connection with letters of credit issued for the account of such Person in
connection with the establishment of the financial responsibility thereof
under Title 33 Code of Federal Regulations Part 138 or Title 46 Code of
Federal Regulations Part 540;
(j) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes,
or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
(k) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions
to, property of such Person, including Vessels; provided, however, that
the Lien may not extend to any other property owned by such Person or any
of its Subsidiaries at the time the Lien is Incurred (except property
already subject to a Lien in connection with financing by the same
financing source pursuant to the same financing scheme); provided further
that no such Liens shall extend to any property constituting Collateral or
to any Capital Stock that at such time is not part of the Collateral as a
result of the application of the provisions set forth in Section 11.01(i);
(l) Liens on receivables of the Company and its Restricted
Subsidiaries or on receivables of Ultrapetrol International S.A. to secure
Indebtedness permitted under Section 4.03(b)(1);
(m) Liens on property or shares of Capital Stock of another Person
(other than a Subsidiary Guarantor) at the time such other Person becomes
a Subsidiary of such Person; provided, however, that such Liens are not
created, incurred or assumed in connection with, or in contemplation of,
such other Person becoming such a Subsidiary; provided further, however,
that such Lien may not extend to any other property owned by such Person
or any of its Subsidiaries;
(n) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of
Page 22
a merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that such Liens may not extend to any other
property owned by such Person or any of its Subsidiaries;
(o) Liens securing Hedging Obligations so long as such Hedging
Obligations relate to Indebtedness that is, and is permitted to be under
this Indenture, secured by a Lien on the same property securing such
Hedging Obligations;
(p) any Lien which arises in favor of an unpaid seller in respect of
goods, plant or equipment sold and delivered to the Company in the
ordinary course of business until payment of the purchase price for such
goods or plant or equipment or any other goods, plant or equipment
previously sold and delivered by that seller (except to the extent that
such Lien secures Indebtedness or arises otherwise than due to deferment
of payment of purchase price);
(q) any Lien or pledge created or subsisting in the ordinary course
of business over documents of title, insurance policies or sale contracts
in relation to commercial goods to secure the purchase price thereof;
(r) Liens to secure any Refinancing (or successive Refinancings) or
replacement as a whole, or in part, of any Indebtedness secured by any
Lien referred to in the foregoing clauses (a),(b), (k), (m) and (n);
provided, however, that (x) such new Lien shall be limited to all or part
of the same property that secured the original Lien (plus improvements to
or on such property), (y) the Indebtedness secured by such Lien at such
time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, the committed amount of the
Indebtedness described under clause (a), (b), (k), (m) or (n) at the time
the original Lien became a Permitted Lien and (B) an amount necessary to
pay any fees and expenses, including premiums, related to such Refinancing
and (z) such Lien need not be Incurred at the same time the original Lien
is released;
(s) charters, leases or subleases granted to others in the ordinary
course of business that are subject to the relevant Mortgage and that do
not materially interfere with the ordinary course of business of such
Person and its Restricted Subsidiaries, taken as a whole;
(t) (A) Liens in favor of the Company or any Subsidiary Guarantor,
(B) Liens arising from the rendering of a final judgment or order against
such Person that does not give rise to an Event of Default and (C) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit
and products and proceeds thereof;
(u) Liens in favor of customers and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods;
(v) Liens for salvage and general average;
(w) Liens, including any existing or future Liens, to secure
Indebtedness permitted under Section 4.03(b)(10); provided, however, that
no such Liens shall extend to any property constituting Collateral or to
any Capital Stock that at such time is not part of the Collateral as a
result of the application of the provisions set forth in Section 11.01(i);
and
(x) Liens securing Indebtedness not in excess of $25.0 million in
the aggregate at any time outstanding; provided, however, that no such
Liens shall extend to any property constituting Collateral or to any
Page 23
Capital Stock that at such time is not party the Collateral as a result of
the application of the provisions set forth in Section 11.01(i).
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clause (k), (m) or (n) above to the extent such Lien applies to any
Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to Section 4.06 or acquired pursuant to a Permitted Excess Cash Use.
For purposes of this definition, the term "Indebtedness" shall be deemed to
include interest on such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability issuer, joint venture, association, joint-stock issuer, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pledgor" means any of Maritima SIPSA S.A., UABL S.A. and
Riverpar S.A. for so long as such entity owns a Mortgaged Vessel.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Princely" means Princely International Finance Corp., a
Panamanian corporation, and its successors.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Private Exchange Securities" has the meaning assigned thereto in
the Rule 144A/Regulation S/IAI Appendix hereto.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company or Parent (i) pursuant to an effective
registration statement under the Securities Act or (ii) in an offshore offering
pursuant to Regulation S under the Securities Act, so long as such common stock
shall be listed for trading on a Designated Offshore Securities Market (as such
term is defined in the Securities Act).
"Public Market" means any time after (x) a Public Equity Offering
has been consummated and (y) at least 15% of the total issued and outstanding
common stock of the Company or Parent has been distributed by means of an
effective registration statement under the Securities Act or is eligible for
distribution pursuant to Rule 144(k) under the Securities Act or is listed for
trading on any nationally recognized securities quotation or any Designated
Offshore Securities Market (as such term is defined in the Securities Act).
"Purchase Money Indebtedness" means Indebtedness (including Capital
Lease Obligations) (1) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title retention agreement,
other purchase money obligations and obligations in respect of industrial
revenue bonds or similar Indebtedness, in each case where the maturity of such
Indebtedness does not exceed the anticipated useful life of the asset being
financed, and (2) Incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and improvements, in
the ordinary course of business; provided, however, that any Lien arising in
connection with any such Indebtedness shall be limited to the specific asset
being financed (except property already subject to a Lien in connection with a
financing by the same financing source pursuant to the same financing scheme)
or, in the case of real property or fixtures, including additions and
Page 24
improvements, the real property on which such asset is attached.
"Qualified Substitute Vessel" means, as of any date, one or more
Vessels which (i) are not Mortgaged Vessels as of such date, (ii) will be, upon
acquisition thereof wholly owned by a Restricted Subsidiary of the Company or,
if the Vessel is replacing the Princess ▇▇▇▇▇▇ ▇▇▇▇▇ to the date of the sale by
Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted
Subsidiary, Maritima SIPSA S.A., (iii) are registered under the laws of a
Permitted Flag Jurisdiction and (iv) have an Appraised Value (which for these
purposes shall be deemed to include any credit (as certified in writing in the
form of an Officers' Certificate and delivered to the Trustee) (which has not
previously been applied) to which the Company shall be entitled arising from the
tender on a previous occasion of a Qualified Substitute Vessel having an
Appraised Value in excess of the Appraised Value of the Sold Mortgaged Vessel or
the Lost Mortgaged Vessel in substitution for which it was tendered) at the
Vessel Tender Date applicable to the last Vessel being tendered in substitution
for any Sold Mortgaged Vessel or Lost Mortgaged Vessel at least equal to the
Vessel for which it is being substituted, assuming compliance by the applicable
Subsidiary Guarantor with all the terms of this Indenture and the applicable
Mortgage.
"Quotation Agent" means the Reference Treasury Dealer selected by
the Trustee after consultation with the Company.
"Ready for Sale Cost" is defined to mean, with respect to a Vessel
or Vessels (including any Mortgaged Vessel) to be sold or leased (under a
Capital Lease Obligation) by the Company or any Subsidiary Guarantor, the
aggregate amount of all expenditures incurred to bring such Vessel or Vessels to
the condition and location necessary or desirable to market such Vessel or
Vessels for sale or lease, or necessary for its intended use by the purchaser or
lessor thereof, including any and all vessel preparation and transportation
expenses (including crew wages and transit insurance), loading and discharge
expenses, inspections, appraisals, repairs, modifications, additions,
improvements, permits and licenses in connection with such sale or lease.
"Ready for Sea Cost" is defined to mean, with respect to a Vessel or
Vessels (including any Qualified Substitute Vessel) to be acquired or leased
(under a Capital Lease Obligation) by the Company or any Subsidiary Guarantor,
the aggregate amount of all expenditures incurred to acquire or construct and
bring such Vessel or Vessels to the condition and location necessary for its
intended use, including any and all vessel preparation and transportation
expenses, loading and discharge expenses, inspections, appraisals, repairs,
modifications, additions, improvements, permits and licenses in connection with
such acquisition or lease; provided that in each case such expenditures would be
classified and accounted for as "property, plant and equipment" in accordance
with GAAP.
"Receivables" means at any date of determination all receivables
accounted for on the consolidated balance sheet of Ultrapetrol International
S.A. as of the end of the most recent fiscal quarter for which financial
statements are publicly available in accordance with GAAP plus an amount equal
to the receivables reasonably expected to be established on such balance sheet
upon completion of voyages in progress at such date by Ultrapetrol International
S.A.'s chartered-in vessels.
"Reference Treasury Dealer" means Credit Suisse First Boston LLC and
its successors and assigns and two other nationally recognized investment
banking firms selected by the Company that are primary U.S. Government
securities dealers.
"Reference Treasury Dealer Quotations" means with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue,
Page 25
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day immediately preceding such redemption date.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)); (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock); (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition); or (iv) the making of any
Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means the Subsidiary Guarantors and any
other Subsidiary of the Company that is not an Unrestricted Subsidiary.
"Riverpar S.A." means Riverpar S.A., an indirect subsidiary of
Ultrapetrol (Bahamas) Limited incorporated under the laws of Paraguay and its
successors.
"Sale Equivalent Portion" in respect of Bareboat Charter Funds
received by the Company, its Subsidiary Guarantors or the Pledgors in respect of
a Mortgaged Vessel subject to a Bareboat Charter means the excess of such
Bareboat Charter Funds over the product of the EBITDA Portion and such Bareboat
Page 26
Charter Funds.
"Sale Excess Proceeds" is defined to mean the amount of excess Net
Available Cash from Asset Sales not applied (or committed to be applied) as set
forth in Section 4.06(b)(i).
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"Sale Redemption Price" means, per $1,000 principal amount of
Security, the sum, as calculated by the Company, of (a) the greater of (i) 100%
of such principal amount and (ii)(x) if such redemption date is on or after
November 24, 2009, the redemption price then applicable as described in
paragraph 5 of the Securities or (y) if such redemption date is prior to
November 24, 2009, the sum of the remaining scheduled payments of principal and
interest on such Security, as discounted to their present values to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at a rate equal to the Adjusted Treasury Rate, and (b)
accrued and unpaid interest on such Security to the redemption date.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" has the meaning assigned thereto in the Rule
144A/Regulation S/IAI Appendix hereto.
"Securities Act" means the Securities Act of 1933.
"Security Agreements" means the Escrow Agreement, Mortgages,
assignments of Charters, assignments of freights and hires and assignments of
insurance and any other instruments or documents entered into or delivered in
connection with any of the foregoing, as such agreements, instruments or
documents may from time to time be amended in accordance with the terms hereof
and thereof.
"Senior Indebtedness" of any Person means (i) Indebtedness of such
Person, whether outstanding on the Issue Date or thereafter Incurred, and (ii)
accrued and unpaid interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Company to
the extent post-filing interest is allowed in such proceeding) in respect of (A)
indebtedness for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable unless, in the case of (i) and (ii), in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are subordinate in right of
payment to the Securities or the related Subsidiary Guarantee; provided,
however, that Senior Indebtedness shall not include (1) any obligation of such
Person to any subsidiary of such Person, (2) any liability for Federal, state,
local or other taxes owed or owing by such Person, (3) any accounts payable or
other liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of such Person (and any accrued and unpaid interest in respect
thereof) which is subordinate or junior in any respect to any other Indebtedness
or other obligation of such Person or (5) that portion of any Indebtedness which
at the time of Incurrence is Incurred in violation of this Indenture.
"Shipping Business" means the ownership or operation of Vessels and
any activities within the ship owning and shipping industries and all businesses
which are complementary, incidental, related or ancillary to any such
Page 27
activities, industries and businesses, including owning barges and all kind of
floating vessels or crafts, floating storage production units, storage tanks and
terminals, salvage, port facilities and services, pipelines and all kinds of
loading and discharging facilities and equipment related thereto (including any
investment in real estate in respect of the foregoing).
"Shipping Business Assets" means any assets used in the ordinary
course of the Shipping Business.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"SIPSA S.A." means SIPSA S.A., a company organized under the laws
of Chile.
"Solimar Holdings Ltd." means Solimar Holdings Ltd., a company
organized under the laws of Bermuda.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company or a
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or the related Subsidiary Guarantee pursuant to a written agreement to that
effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Subsidiary Guarantor" means Princely International Finance Corp.
and each Subsidiary of the Company, whether now owned or hereafter formed, that
executes and delivers a Subsidiary Guarantee.
"Subsidiary Guarantee" means a Guarantee of the Company's
obligations with respect to the Securities issued by a Subsidiary of the
Company.
"Substitute Mortgaged Vessel" is defined to mean, as of any date,
one or more Vessels which (i) are not Mortgaged Vessels as of such date, (ii)
will be owned by a Restricted Subsidiary of the Company, (iii) are registered
under the laws of a Permitted Flag Jurisdiction and (iv) have an Appraised Value
at the Vessel Substitution Date at least equal to the Appraised Value of the
Mortgaged Vessel for which it is being substituted, assuming compliance by the
applicable Subsidiary Guarantor with all the terms of this Indenture and the
applicable Mortgage.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency
thereof; (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
Page 28
thereof issued by (A) any bank or trust company organized under the laws of
Argentina or Brazil; provided that, with respect to the Company, the aggregate
amount of such deposits shall not exceed $10.0 million at any time, and (B) a
bank or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States, and which bank or trust company has capital, surplus and undivided
profits aggregating in excess of $50,000,000 (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor; (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above; (iv)
investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher) according to Standard
and Poor's Ratings Group; and (v) investments in securities with maturities of
six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
▇▇.▇▇. 77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"UABL S.A." means UABL S.A., an indirect subsidiary of
Ultrapetrol (Bahamas) Limited incorporated under the laws of Argentina and
its successors.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
(other than a Subsidiary Guarantor) that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors in the manner
provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board
of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary (other than a Subsidiary Guarantor)) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or holds any Lien on any property of,
the Company or any other Subsidiary of the Company that is not a Subsidiary of
the Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.04. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness under Section 4.03(a) and (y) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
Page 29
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Vessel" means a tanker, bulk carrier, barge, liquid petroleum
gas/liquid natural gas tanker, chemical carrier, bulk carrier, container vessel,
reefer vessel, tug boat, push boat, off shore supply vessel, floating storage
production unit, barge and in general any floating craft whose purpose may be
partially or wholly to deploy, procure, process, transport, load, discharge,
transfer or store lawful commodities or to transport crew, personnel or
passengers, and all related spares, stores, equipment, additions and improvement
equipment related to such work whether it is attached to such vessel or not. It
will also include any participation in the described vessels by joint venture or
other commercial forms of participation.
"Vessel Percentage" is defined to mean as of and after any Sale Date
or the Loss Date, as the case may be, and prior to any subsequent adjustment as
provided below, for each of the initial Mortgaged Vessels and the Escrowed
Property, the percentage set forth below opposite such Mortgaged Vessel:
Vessel Percentage
------ ----------
Alianza G2 2.27
Alianza G3 2.07
Alianza Compana 0.51
Alianza ▇▇▇▇▇▇▇ 0.51
Cavalier I 0.54
Cavalier II 0.45
Cavalier III 0.70
Princess ▇▇▇▇▇▇▇▇▇ 13.80
Princess Marina 9.20
Princess Nadia 14.31
Princess ▇▇▇▇▇▇ 13.67
San Antonio I 0.66
San ▇▇▇▇▇▇▇ I 1.68
San ▇▇▇▇▇▇▇ I 0.47
San ▇▇▇▇▇▇ I 0.89
San Nicolas I 0.61
San ▇▇▇▇▇ 0.75
Santa ▇▇ ▇▇ 0.44
Aggregate of 193 barges 21.13
Escrowed Property 15.34
Total....................................... 100.0%
--------------
* Reflects the aggregate Vessel Percentage represented by the 193 barges that
are Mortgaged Vessels under this Indenture as of the Issue Date, with each barge
having an individual Vessel Percentage of approximately 0.13%.
; provided, however, that each Vessel Percentage shall be adjusted, in
connection with any redemption of the Securities following a Sale or Loss of a
Mortgaged Vessel, in each case to give effect to the occurrence of, and after
giving effect to, (i) the acquisition of a Vessel with Escrowed Property and the
delivery of a Mortgage with respect to such Vessel, (ii) the delivery after the
Issue Date of any Qualified Substitute Vessel as part of the Collateral pursuant
to the terms of this Indenture, (iii) the delivery after the Issue Date of any
other Vessel as part of the Collateral, (iv) an Event of Loss after the Issue
Date with respect to any Mortgaged Vessel, (v) the sale after the Issue Date of
any Mortgaged Vessel, in each case effected in accordance with the terms of this
Page 30
Indenture, to be, for each Mortgaged Vessel remaining after such an occurrence,
the percentage that the Appraised Value of such Mortgaged Vessel at the time of
and after giving effect to such occurrence bears to the sum of the aggregate
Appraised Value of the remaining Mortgaged Vessels at the time of and after
giving effect to such occurrence plus the amount of Escrowed Property then
remaining as part of the Collateral. Notwithstanding the foregoing, if any
Vessel Percentage is required to be calculated or adjusted at a time when cash
is on deposit with the Trustee as part of the Collateral as a result of the sale
of a Mortgaged Vessel or the occurrence of an Event of Loss with respect to a
Mortgaged Vessel, the amount of such cash on deposit shall be deemed to be the
Appraised Value of such Vessel giving rise to such cash on deposit and such
Vessel shall be deemed to remain a Mortgaged Vessel for purposes of such
computation or adjustment of Vessel Percentage. The Company shall make all
calculations provided for herein and shall, for any such calculations made after
the Issue Date, provide to the Trustee an Officers' Certificate certifying that
such calculations were performed in accordance the provisions hereof.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Additional Amounts"......................................... 4.17
"Affiliate Transaction"...................................... 4.08
"Appendix"................................................... 2.01
"Bankruptcy Law"............................................. 6.01
"covenant defeasance option"................................. 8.01(b)
"Custodian".................................................. 6.01
"Event of Default"........................................... 6.01
"Excess Proceeds Offer"...................................... 4.16(b)
"Excess Proceeds Payment".................................... 4.16(b)
"Excluded Holder"............................................ 4.17
"legal defeasance option".................................... 8.01(b)
"Legal Holiday".............................................. 14.08
"Loss Date".................................................. 4.14
"Lost Mortgaged Vessel"...................................... 4.14
"Mortgaged Vessel Asset"..................................... 4.06(a)
"Notification Date".......................................... 4.14
"Obligations"................................................ 10.01
"Offer Amount"............................................... 4.16(c)
"Offer Period"............................................... 4.16(c)
"Paying Agent"............................................... 2.03
"Pledged Collateral"......................................... 11.01
"Pledged Shares"............................................. 11.01
"Proceeds Receipt Date"...................................... 4.14
"Purchase Date".............................................. 4.16(c)
"Redemption Amount".......................................... 4.14
"Registrar".................................................. 2.03
"Release Notice"............................................. 12.04
"Sale Date".................................................. 4.14
"Sold Mortgaged Vessel"...................................... 4.14
"Successor Company".......................................... 5.01(a)
"Taxes"...................................................... 4.17
Page 31
"Tendered Vessel Owner"...................................... 4.16(a)
"Trust Moneys"............................................... 13.01
"Vessel Substitution Date"................................... 12.13
"Vessel Tender Date"......................................... 4.16(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities and the Subsidiary
Guarantees;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate
or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has
a junior priority with respect to the same collateral;
(8) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with GAAP and accretion
of principal on such security shall be deemed to be the
Incurrence of Indebtedness;
(9) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock, whichever is greater;
Page 32
and
(10) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were
originally issued.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S/IAI Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. Execution and Authentication. One Officer shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and deliver Securities for original
issue in aggregate principal amount of $180.0 million upon a written order of
the Company signed by an Officer of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount except as provided
in Section 2.06.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Page 33
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent or to notify the Trustee as provided in the
previous sentence, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any
of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-401(1) of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional Obligation of the
Company.
SECTION 2.07. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
Page 34
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.08. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.09. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.10. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.11. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 2.12. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or transfer
pursuant to Sections 3.06, 4.11 and 9.05). The Company shall not be required to
Page 35
make and the Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities or is required to redeem
Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
If the Company is required to redeem Securities pursuant to
paragraph 6 of the Securities, it may reduce the principal amount of Securities
required to be redeemed to the extent it is permitted a credit by the terms of
the Securities and it notifies the Trustee of the amount of the credit and the
basis for it. If the reduction is based on a credit for redeemed or canceled
Securities that the Company has not previously delivered to the Trustee for
cancelation, it shall deliver such Securities with the notice.
The Company shall give each notice to the Trustee provided for in
this Section not less than 45 days nor more than 60 days before the redemption
date unless the Trustee consents in writing to a shorter period. Such notice
shall be accompanied by an Officers' Certificate and an Opinion of Counsel from
the Company to the effect that such redemption will comply with the conditions
herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata to the extent practicable. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
Page 36
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price or the method of calculating such redemption
price pursuant to this Indenture;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on
the Securities.
At the Company's written request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. At least one Business Day
prior to the redemption date, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by the
Company to the Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
Page 37
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture immediately available funds
sufficient to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. The Company shall file with the Trustee
and provide Securityholders, within 15 days after it files them with the SEC,
copies of its annual report and the information, documents and other reports
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act (if any). Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act applicable to a "foreign private issuer" (as such term is
defined in Rule 3b-4 under the Exchange Act), the Company shall file with the
SEC and furnish to the Trustee and Securityholders (i) within 120 days from the
end of each fiscal year, an annual report on Form 20-F (or any successor form)
containing the information required to be contained therein for such fiscal
year, and (ii) within 45 days from the end of each of the first three quarters
in each fiscal year, quarterly reports on Form 6-K containing unaudited
financial statements (including a balance sheet and statement of income, changes
in stockholders' equity and cash flows) and Management's Discussion and Analysis
of Financial Condition and Results of Operations for and as of the end of each
of such quarters (with comparable financial statements for such quarter of the
immediately preceding fiscal year). In each such report, the Company shall
disclose in reasonable detail its calculation of EBITDA for the twelve-month
period ended as of the end of such fiscal year or such fiscal quarter, as
applicable. The Company also shall comply with the other provisions of TIA ss.
314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness except that the Company and its Subsidiary
Guarantors may Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto, the Consolidated Coverage Ratio exceeds 2.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company
and its Restricted Subsidiaries may Incur, directly or indirectly,
any or all of the following Indebtedness:
(1) Indebtedness of the Company and the Subsidiary Guarantors
Incurred pursuant to a working capital line of credit in an amount which,
when added together with the amount of all other Indebtedness Incurred
pursuant to this clause (1) and then outstanding does not exceed $15.0
million;
(2) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that any subsequent issuance or transfer of
any Capital Stock which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the Company;
(3) the Securities;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3) or (10) of this Section
4.03(b));
(5) Refinancing Indebtedness in respect of Indebtedness Incurred
Page 38
pursuant to Section 4.03(a) or pursuant to clause (3), (4), this clause
(5) or clause (8) below;
(6) Indebtedness (A) in respect of performance, surety, appeal or
similar bonds provided in the ordinary course of business, and (B) arising
from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from Guarantees or letters of credit,
surety bonds or performance bonds securing any obligations of the Company
or any of its Restricted Subsidiaries pursuant to such agreements, in any
case Incurred in connection with the disposition of any business or assets
of the Company or any of its Restricted Subsidiaries, including all or any
interest in any Restricted Subsidiary, and not exceeding the gross
proceeds therefrom, other than Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business or assets of the
Company or any of its Restricted Subsidiaries for the purpose of financing
such acquisition;
(7) Hedging Obligations consisting of Interest Rate Agreements or
Currency Agreements directly related to Indebtedness permitted to be
Incurred by the Company pursuant to this Indenture;
(8) Purchase Money Indebtedness Incurred to finance the acquisition
by the Company or a Restricted Subsidiary of additional Vessels or
Shipping Business Assets; provided, however, that, at the date of such
Incurrence, the amount of such Indebtedness shall not exceed 80% of the
cost of acquiring such Vessel or such Shipping Business Assets, including
the purchase price of such Vessel or such Shipping Business Assets under
the Acquisition Contract in respect thereof plus any Ready for Sea Cost;
(9) Indebtedness consisting of the Subsidiary Guarantee of a
Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of
Indebtedness Incurred pursuant to clause (3) or (4) or pursuant to clause
(5) to the extent the Refinancing Indebtedness Incurred thereunder
directly or indirectly Refinances Indebtedness Incurred pursuant to clause
(3) or (4);
(10) Indebtedness Incurred by the Company or any Restricted
Subsidiary pursuant to any IFC Loan Agreement in an aggregate principal
amount which, when added together with the amount of all other
Indebtedness Incurred pursuant to this clause (10) and then outstanding,
does not exceed $40.0 million; and
(11) Indebtedness of the Company, the Subsidiary Guarantors and
other Restricted Subsidiaries in an aggregate principal amount which,
together with all other Indebtedness of the Company outstanding on the
date of such Incurrence (other than Indebtedness permitted by clauses (1)
through (10) above or paragraph (a)), does not exceed $15.0 million;
provided that the aggregate principal amount of Indebtedness that may be
Incurred pursuant to this clause (11) by Restricted Subsidiaries that are
not Subsidiary Guarantors shall not exceed $10.0 million at any time
outstanding.
(c) Notwithstanding the foregoing, the Company shall not Incur
any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof
are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the
Securities to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section
4.03, (i) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described
above, the Company, in its sole discretion, will classify such item
Page 39
of Indebtedness in any manner that complies with this covenant and
only be required to include the amount and type of such Indebtedness
in one of the above clauses and (ii) an item of Indebtedness may be
divided and classified in more than one of the types of
Indebtedness.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); (2) the Company is not
able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a);
or (3) the aggregate amount of such Restricted Payment and all other Restricted
Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter during which the Securities are originally issued to the end of
the most recent fiscal quarter for which financial statements are publicly
available prior to the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company and other than an issuance or sale to an
employee stock ownership plan or to a trust established by the Company or
any of its Subsidiaries for the benefit of their employees to the extent
such issuance or sale is financed with proceeds of debt provided by the
Company or any Subsidiary of the Company);
(C) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange (other than by
a Subsidiary of the Company) subsequent to the Issue Date of any
Indebtedness of the Company convertible or exchangeable for Capital Stock
(other than Disqualified Stock) of the Company (less the amount of any
cash, or the fair value of any other property, distributed by the Company
upon such conversion or exchange);
(D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets, in each case
to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, and (ii) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however, that the foregoing
sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made (and treated as a Restricted
Payment) by the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary; and
(E) $7.5 million
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any Restricted Payment made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of
the Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees); provided,
however, that (A) the amount of such Restricted Payment shall be
Page 40
excluded in the calculation of the amount of Restricted Payments and
(B) the Net Cash Proceeds from such sale shall be excluded from the
calculation of amounts under Section 4.04(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made
by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company or a Subsidiary
Guarantor which is permitted to be Incurred pursuant to Section
4.03; provided, however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be
excluded in the calculation of the amount of Restricted Payments;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with this covenant; provided, however, that at
the time of payment of such dividend, no other Default shall have
occurred and be continuing (or result therefrom); provided further,
however, that such dividend shall be included in the calculation of
the amount of Restricted Payments; or
(iv) the repurchase or other acquisition of shares of, or
options to purchase shares of, common stock of the Company or any of
its Subsidiaries from employees, former employees, directors or
former directors of the Company or any of its Subsidiaries (or
permitted transferees of such employees, former employees, directors
or former directors), pursuant to the terms of agreements (including
employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such common
stock; provided, however, that the aggregate amount of such
repurchases and other acquisitions shall not exceed $250,000 in any
calendar year; provided further, however, that such repurchases and
other acquisitions shall be excluded in the calculation of the
amount of Restricted Payments.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness or Preferred Stock Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Company (other than Indebtedness or Preferred Stock Incurred as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company) and
outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness or Preferred Stock Incurred
pursuant to an agreement referred to in clause (i) or (ii) of this
Page 41
covenant or this clause (iii) or contained in any amendment to an
agreement referred to in clause (i) or (ii) of this covenant or this
clause (iii); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
any such refinancing agreement or amendment are in the aggregate no
less favorable to the Securityholders than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
such predecessor agreements;
(iv) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(v) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or
mortgages;
(vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition; and
(vii) any such restriction applicable to a Restricted
Subsidiary contained in agreements evidencing or relating to
Purchase Money Indebtedness of such Restricted Subsidiary.
SECTION 4.06. Limitation on Asset Sales. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to engage in Asset Sales of
Collateral (other than an Incidental Asset and other than pledged Capital Stock
of a Subsidiary that is not a Subsidiary Guarantor); provided, however, that (i)
the Company or a Restricted Subsidiary may sell all the Capital Stock of a
Subsidiary Guarantor and (ii) a Subsidiary Guarantor may sell a Mortgaged Vessel
(together with the applicable charters, freights and hires and other related
agreements) or transfer a Mortgaged Vessel pursuant to a Bareboat Charter (any
such asset proposed to be sold or transferred pursuant to this clause (ii) is
referred to herein as a "Mortgaged Vessel Asset"), if such sale or transfer of a
Mortgaged Vessel Asset shall be made in compliance with each of the following
conditions:
(i) no Default shall have occurred and be continuing;
(ii) the sale or transfer shall be effected in a commercially
reasonable manner as determined by the Board of Directors and
evidenced by a board resolution;
(iii) the entire consideration for such sale, and all Bareboat
Charter Funds in respect of a Bareboat Charter, shall be cash, which
shall be not less than the Appraised Value of such Mortgaged Vessel
Asset determined within 90 days prior to the date of such sale;
(iv) funds in an amount equal to the Net Available Cash (or
the Sale Equivalent Portion of Bareboat Charter Funds) shall be paid
in full directly to the Trustee as Collateral and shall be received
by the Trustee free of any Lien (other than the Lien of this
Indenture and the Security Agreements); and
(v) the Company shall have complied with the other provisions
of this Indenture applicable to such sale;
Page 42
provided further, however, that the Appraised Value of all Mortgaged Vessels
subject to Bareboat Charters shall not exceed 10% of the aggregate of the
Appraised Values (as of a date not more than 90 days prior to such Bareboat
Charter) of all the Mortgaged Vessels.
The Company shall apply the proceeds from such sale as described
under Sections 4.14, 4.15 and 4.16.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any Asset Sales (other than Asset
Sales permitted by Section 4.06(a)) unless (x) (A) such Asset Sale is by a
Restricted Subsidiary that is not a Subsidiary Guarantor or (B) such Asset
Sale is the sale of an Incidental Asset or of the pledged Capital Stock of
a Subsidiary that is not a Subsidiary Guarantor and (y) in the event and
to the extent that the Net Available Cash received by the Company or any
such Restricted Subsidiary from one or more of such Asset Sales occurring
on or after the Issue Date in any period of 12 consecutive months exceeds
$12.5 million, then the Company shall or shall cause such Restricted
Subsidiary to, within 30 days after the date Net Available Cash so
received exceeds $12.5 million in any period of 12 consecutive months,
apply an amount equal to such Net Available Cash either (i) toward a
Permitted Excess Cash Use or (ii) treat (no later than the end of such
30-day period) such excess Net Available Cash (to the extent not applied
pursuant to clause (i) above) as Sale Excess Proceeds.
SECTION 4.07. Limitation on Lines of Business. The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, engage in any
business other than the Shipping Business.
SECTION 4.08. Limitation on Affiliate Transactions. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property, employee compensation arrangements or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless
the terms thereof (1) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate, (2) if such
Affiliate Transaction involves an amount in excess of $500,000, (i) are set
forth in writing and (ii) have been approved by a majority of the members of the
Board of Directors having no personal stake in such Affiliate Transaction and
(3) if such Affiliate Transaction (other than chartering contracts or contracts
for the transportation of cargo not in excess of 13 months) involves an amount
in excess of $2,000,000, have been determined by a reasonably appropriate
independent qualified appraiser given the size and nature of the transaction to
be fair, from a financial standpoint, to the Company and its Restricted
Subsidiaries.
(b) The provisions of Section 4.08(a) shall not prohibit (i) any
Permitted Investment or Restricted Payment permitted to be paid pursuant
to Section 4.04, (ii) any issuance of securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options, stock ownership and
other employee benefit plans approved by the Board of Directors, (iii) the
grant of stock options or similar rights to employees and directors of the
Company pursuant to plans approved by the Board of Directors, (iv) loans
or advances to employees in the ordinary course of business in accordance
with the past practices of the Company or its Restricted Subsidiaries, but
in any event not to exceed $500,000 in the aggregate outstanding at any
one time, (v) the payment of reasonable fees to directors of the Company
and its Restricted Subsidiaries who are not employees of the Company or
its Restricted Subsidiaries and (vi) any Affiliate Transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries.
Page 43
SECTION 4.09. Limitation on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit
to exist any Lien of any nature whatsoever on any of its properties (including
Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, other than Permitted Liens, without effectively providing
that the Securities shall be secured equally and ratably with (or prior to) the
obligations so secured for so long as such obligations are so secured.
SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (i) the Company
or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the
Securities pursuant to Section 4.09, (ii) the net proceeds received by the
Company or any Restricted Subsidiary in connection with such Sale/Leaseback
Transaction are at least equal to the fair value (as determined by the Board of
Directors) of such property and (iii) the Company applies the proceeds of such
transaction in compliance with Section 4.06.
SECTION 4.11. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require the Company to
repurchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.11(b).
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change of
Control);
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to have
its Securities purchased.
(c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business
Days prior to the purchase date. Holders will be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the purchase date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and
a statement that such Holder is withdrawing his election to have such
Security purchased.
(d) On the purchase date, all Securities purchased by the Company
Page 44
under this Section shall be delivered to the Trustee for cancelation, and
the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities
pursuant to this Section 4.11. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this
Section 4.11, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations
under this Section 4.11 by virtue thereof.
SECTION 4.12. Future Subsidiary Guarantors. (a) To the extent that,
after the Issue Date, the Company acquires additional Vessels with the Escrowed
Property, each such Vessel shall be acquired by a Restricted Subsidiary, the
Company shall cause such Restricted Subsidiary to execute and deliver to the
Trustee a Guarantee Agreement pursuant to which such Restricted Subsidiary will
Guarantee payment of the Securities on the same terms and conditions as those
set forth in Article 10 of this Indenture (unless such Restricted Subsidiary is
already a Subsidiary Guarantor), to execute a Mortgage in favor of the Trustee
pursuant to which such acquired Vessel shall thereafter be a Mortgaged Vessel
for all purposes under this Indenture, to execute the related Security
Agreements and to satisfy such other conditions set forth in Section 3 of the
Escrow Agreement.
(b) To the extent that, after the Issue Date, any Restricted
Subsidiary that is not a Subsidiary Guarantor acquires any Mortgaged
Vessel, the Company shall cause such Restricted Subsidiary to execute and
deliver to the Trustee a Guarantee Agreement pursuant to which such
Restricted Subsidiary will Guarantee payment of the Securities on the same
terms and conditions as those set forth in Article 10 of this Indenture,
to execute a Mortgage in favor of the Trustee pursuant to which such
acquired Vessel shall thereafter be a Mortgaged Vessel for all purposes
under this Indenture, to execute the related Security Agreements and to
satisfy such other conditions set forth in Section 3 of the Escrow
Agreement and the other Security Agreements.
SECTION 4.13. Impairment of Security Interest. Other than in
connection with the creation of Permitted Liens, (a) the Company shall not, and
shall not permit any Restricted Subsidiary or Maritima SIPSA S.A. to, take or
knowingly or negligently omit to take, any action which action or omission might
or would have the result of materially impairing the security interest with
respect to the Collateral for the benefit of the Trustee and the Holders of the
Securities, and (b) the Company shall not, and shall not permit any Restricted
Subsidiary or Maritima SIPSA S.A. to, grant to any Person other than the
Trustee, for the benefit of the Trustee and the Holders of the Securities, any
interest whatsoever in any of the Collateral.
SECTION 4.14. Application of Proceeds upon Sale or Loss of a
Mortgaged Vessel. (a) If either:
(1) a Mortgaged Vessel or the Capital Stock of a Subsidiary
Guarantor or a Pledgor is sold (other than the sale by a Pledgor of its
Mortgaged Vessel or the sale of its Capital Stock to the Company or a
Restricted Subsidiary) (which term shall not include the transfer of the
operation of a Mortgaged Vessel pursuant to a bareboat charter with a
purchase option, which is covered under Section 4.15) in compliance with
Section 4.06(a) (the Mortgaged Vessel so sold or owned by the Subsidiary
Guarantor or Pledgor whose Capital Stock is so sold being the "Sold
Mortgaged Vessel"), or
(2) an Event of Loss occurs at any time with respect to a Mortgaged
Page 45
Vessel (the Mortgaged Vessel suffering such Event of Loss being the "Lost
Mortgaged Vessel"),
then within 25 days after the date title of the Mortgaged Vessel passes to the
buyer (such date being the "Sale Date"), in the case of a sale, or within 25
days after the date such Event of Loss was deemed to have occurred (the "Loss
Date"), the Company shall give written notice (such date of notice being the
"Notification Date") to the Trustee whether it elects to redeem Securities in
connection with such sale or Event of Loss; provided, however, that if a Default
shall have occurred and be continuing on the Notification Date, the Company
shall redeem Securities in accordance with Section 4.14(c).
Upon the receipt by the Company, a Subsidiary Guarantor or a Pledgor
of the Net Available Cash attributable to a Sold Mortgaged Vessel (other than
the receipt by a Pledgor of Net Available Cash attributable to the sale of its
Mortgaged Vessel or the sale of its Capital Stock to the Company or a Restricted
Subsidiary) or of the Net Event of Loss Proceeds attributable to a Lost
Mortgaged Vessel, such amounts shall be deposited with the Trustee pursuant to
Article 13 and shall constitute Collateral pending application in accordance
with Section 4.14(c).
(b) If the Company elects to (or is required to) redeem Securities,
the Company shall apply Net Available Cash or Net Event of Loss Proceeds,
as the case may be, and any other cash, not later than 60 days after the
date (the "Proceeds Receipt Date") of the receipt of such funds in an
amount (the "Redemption Amount") at least equal to the Vessel Percentage
applicable to the Sold Mortgaged Vessel as of the Sale Date or the Lost
Mortgaged Vessel as of the Loss Date, as the case may be, multiplied by
the principal amount of the Securities outstanding on the Sale Date or the
Loss Date, as the case may be (provided, however, that if a Default shall
have occurred and be continuing on the Notification Date, the amount
required to be applied by the Company to redeem Securities shall equal the
greater of such Redemption Amount and such Net Available Cash or Net Event
of Loss Proceeds, as the case may be), to redeem such principal amount of
Securities as can be redeemed at the Sale Redemption Price or the Loss
Redemption Price, as the case may be.
(c) On the redemption date attributable to a Sold Mortgaged Vessel
or a Lost Mortgaged Vessel, the Trustee shall apply the applicable Net
Available Cash or the applicable Net Event of Loss Proceeds then on
deposit with it pursuant to Article 13 (together with any funds the
Company delivers to the Trustee to the extent necessary to pay the Sale
Redemption Price or the Loss Redemption Price for the Securities to be
redeemed) to pay the Sale Redemption Price or the Loss Redemption Price to
the Holders of Securities being redeemed. Upon the effectuation of any
such redemption, all accrued and unpaid interest on the Securities so
redeemed shall be deemed fully paid. To the extent that after the Sale
Redemption Price or the Loss Redemption Price has been paid with respect
to all Securities to be redeemed in respect of such Sold Mortgaged Vessel
or Lost Mortgaged Vessel, as the case may be, any Net Available Cash or
Net Event of Loss Proceeds attributable to such Sold Mortgaged Vessel or
Lost Mortgaged Vessel remains on deposit with the Trustee and no Default
has occurred and is continuing, such Net Available Cash or Net Event of
Loss Proceeds may be released to the Company upon its request, free of the
lien of this Indenture; provided, however, that such funds may only be
used by the Company for a Permitted Excess Cash Use or to make an Excess
Proceeds Offer.
SECTION 4.15. Application of Proceeds upon Permitted Bareboat
Charter. (a) If the Company, a Subsidiary Guarantor or a Pledgor enters into a
Bareboat Charter with respect to a Mortgaged Vessel, then within 25 days after
title to such Mortgaged Vessel passes to the charterer at the end of the
bareboat charter period, the Company shall give written notice to the Trustee
Page 46
whether it elects to redeem Securities in connection with such Bareboat Charter;
provided, however, that if a Default shall have occurred and be continuing on
such Notification Date, the Company shall be required to redeem Securities in
accordance with Section 4.15(b).
Upon receipt by the Company, a Subsidiary Guarantor or a Pledgor of
Bareboat Charter Funds, the Sale Equivalent Portion of such Bareboat Charter
Funds shall be deposited with the Trustee pursuant to Article 13 and shall
constitute Collateral pending application in accordance with Section 4.15(b) and
(c).
(b) If the Company elects to redeem Securities, the Company shall
apply the Sale Equivalent Portion of such Bareboat Charter Funds in
respect of such Mortgaged Vessel plus accrued interest thereon, not later
than 60 days after the date title to the relevant Mortgaged Vessel passes
to the charterer at the end of the bareboat charter period, to redeem such
principal amount of Securities as can be redeemed at the Sale Redemption
Price. On the redemption date attributable to such Bareboat Charter, the
Trustee shall apply the Sale Equivalent Portion of such Bareboat Charter
Funds then on deposit with it (together with any funds the Company
delivers to the Trustee to the extent necessary to pay the Sale Redemption
Price for the Securities to be redeemed) to pay the Sale Redemption Price.
(c) In the event the Company elects not to redeem Securities in
respect of a Mortgaged Vessel subject to a Bareboat Charter, then by the
date which is 12 months after the date title to such Mortgaged Vessel
passes to the charterer at the end of the bareboat charter period, the
Company shall tender, or cause to be tendered, to the Trustee as part of
the Collateral one or more Vessels purchased using the Sale Equivalent
Portion of such Bareboat Charter Funds in respect of such Mortgaged Vessel
and then on deposit with the Trustee together with such funds otherwise
available to the Company, provided that if such funds are insufficient to
purchase Vessels they shall remain on deposit with the Trustee as
Collateral pursuant to Article 13 for application in accordance with the
terms and conditions of this Indenture. The Sale Equivalent Portion of
Bareboat Charter Funds shall be available from time to time (including
prior to the end of the Bareboat Charter period) to the Company pursuant
to the terms of, and subject to the conditions of, this Indenture,
including Article 13 hereof, to make any deposits in respect of, or to
consummate the purchase of, one or more Vessels.
On the date on which a Vessel is tendered to the Trustee as part of
the Collateral with respect to a Mortgaged Vessel that is subject to a Bareboat
Charter, the Company shall deliver to the Trustee, or shall cause the owner of
such Vessel, which shall be a Restricted Subsidiary of the Company or, if the
Princess Marina is subject to a Bareboat Charter prior to the date of the sale
by Maritima SIPSA S.A. of the Princess Marina to the Company or a Restricted
Subsidiary, Maritima SIPSA S.A., to deliver to the Trustee, as the case may be,
the following documents and certificates:
(i) a fully executed Guarantee Agreement in respect of its
Subsidiary Guarantee substantially in the form attached as Exhibit F to
the Escrow Agreement; provided that no Subsidiary Guarantee need be
provided if each of the owner of the Mortgaged Vessel that was subject to
the Bareboat Charter and the owner of the replacement Vessel is not a
Wholly Owned Subsidiary;
(ii) a fully executed Mortgage substantially in the form attached as
Exhibit C to this Indenture (or a preliminary registration thereof,
pending delivery of a copy of the Mortgage) and any related Security
Agreements with respect to such Vessel dated the date such Vessel was
tendered to the Trustee (such Mortgage having been duly received for
recording in the appropriate registry office or, if not practicable, then
Page 47
subject to arrangements reasonably satisfactory to the Trustee having been
made for such recording as soon as practicable, but in no event more than
5 Business Days, after the date such Vessel is tendered to the Trustee);
(iii) appropriate legal opinions substantially in the form attached
as Exhibit E to the Escrow Agreement with respect to the Guarantee
Agreement referred to in clause (i), the Mortgage referred in clause (ii)
(including the validity, perfection, enforceability and priority thereof)
and the related Security Agreements;
(iv) original certificates, certified to be true and complete by an
Officer of the Company, representing the Capital Stock of any Restricted
Subsidiary acquiring such Vessel of which the Company or a Wholly Owned
Subsidiary that is a Subsidiary Guarantor is the record and beneficial
owner (unless such Restricted Subsidiary is already a Subsidiary
Guarantor), together with an Officers' Certificate with respect thereto;
(v) copies, certified to be true and complete by an Officer of the
Company, of any Charters related to such Vessel;
(vi) the report of an insurance broker required by Section
3(U)(viii) of the form of Mortgage attached as Exhibit C to this
Indenture, with respect to insurance policies maintained in respect of
each such Vessel, which report shall include loss payable clauses
substantially in the form set forth in Schedule 1 to the form of
Assignment of Insurance;
(vii) written appraisals by two independent Appraisers of the value
of such Vessel as of a date within 90 days prior to the date on which the
Vessel is tendered to the Trustee; and
(viii) with respect to any oceangoing Vessel, a classification
certificate, dated as of a date not more than 30 days prior to the date on
which such Vessel is tendered, from a classification society with respect
to each such Vessel to the Trustee.
SECTION 4.16. Tender of a Qualified Substitute Vessel; Excess
Proceeds Offers. (a) In the event that the Company elects, with respect to a
Sold Mortgaged Vessel or a Lost Mortgaged Vessel, not to redeem Securities as
described under Section 4.14, then within 12 months after the Proceeds Receipt
Date, the Company shall tender, or cause to be tendered, to the Trustee as part
of the Collateral one or more Vessels constituting a Qualified Substitute
Vessel; provided, however, that if at any time prior to the Vessel Tender Date
(as defined below), an Event of Default shall occur, the Company shall thereupon
become obligated to redeem Securities in accordance with the provisions of
Section 4.14. Net Available Cash or Net Event of Loss Proceeds, as the case may
be, attributable to such Sold Mortgaged Vessel or such Lost Mortgaged Vessel, as
the case may be, will be made available to the Company pursuant to the terms,
and subject to the conditions, of this Indenture, including Article 13 hereof,
to make any deposits in respect of, or to consummate the purchase of, or pay any
Ready for Sea Cost in respect of, the Qualified Substitute Vessel. To the extent
that any such Net Available Cash or Net Event of Loss Proceeds attributable to
such Sold Mortgaged Vessel or Lost Mortgaged Vessel remain on deposit with the
Trustee after the tender of the Qualified Substitute Vessel, such funds shall be
released to the Company, free of the Lien of this Indenture, and the Company
shall use such funds for any Permitted Excess Cash Use or to make an Excess
Proceeds Offer.
On the date on which a Qualified Substitute Vessel is tendered to
the Trustee as part of the Collateral (a "Vessel Tender Date") following a sale
of or an Event of Loss with respect to a Mortgaged Vessel, the Company shall
deliver to the Trustee, or shall cause the owner of such Qualified Substitute
Vessel, which shall be a Restricted Subsidiary of the Company or, if the
Page 48
Qualified Substitute Vessel is replacing the Princess ▇▇▇▇▇▇ ▇▇▇▇▇ to the date
of the sale by Maritima SIPSA S.A. of the Princess Marina to a Restricted
Subsidiary, Maritima SIPSA S.A. (the "Tendered Vessel Owner"), to deliver to the
Trustee, as the case may be, the following documents and certificates:
(i) a fully executed Guarantee Agreement in respect of its
Subsidiary Guarantee substantially in the form attached as Exhibit F to
the Escrow Agreement; provided that no Subsidiary Guarantee need be
provided if each of the owner of the Mortgaged Vessel and the owner of the
Qualified Substitute Vessel is not a Wholly Owned Subsidiary;
(ii) a fully executed Mortgage substantially in the form attached as
Exhibit C to this Indenture (or a preliminary registration thereof,
pending delivery of a copy of the Mortgage) and any related Security
Agreements with respect to such Qualified Substitute Vessel dated the
Vessel Tender Date (such Mortgage having been duly received for recording
in the appropriate registry office or, if not practicable, then subject to
arrangements reasonably satisfactory to the Trustee having been made for
such recording as soon as reasonably practicable, but in no event more
than 5 Business Days, after the Vessel Tender Date);
(iii) appropriate legal opinions substantially in the form attached
as Exhibit E to the Escrow Agreement with respect to the Guarantee
Agreement referred to in clause (i), the Mortgage referred in clause (ii)
(including the validity, perfection, enforceability and priority thereof)
and the related Security Agreements;
(iv) original certificates, certified to be true and complete by an
Officer of the Company, representing the Capital Stock of any Restricted
Subsidiary acquiring such Qualified Substitute Vessel of which the Company
or a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record
and beneficial owner (unless such Restricted Subsidiary is already a
Subsidiary Guarantor), together with an Officers' Certificate with respect
thereto;
(v) copies, certified to be true and complete by an Officer of the
Company, of any Charters related to such Qualified Substitute Vessel;
(vi) the report of an insurance broker required by Section
3(U)(viii) of the form of Mortgage attached as Exhibit C to this
Indenture, with respect to insurance policies maintained in respect of
such Qualified Substitute Vessel, which report shall include loss payable
clauses substantially in the form set forth in Schedule 1 to the form of
Assignment of Insurance;
(vii) written appraisals by two independent Appraisers of the value
of such Qualified Substitute Vessel as of a date within 90 days prior to
the Vessel Tender Date; and
(viii) with respect to oceangoing Vessels, a classification
certificate, dated as of a date not more than 30 days prior to the Vessel
Tender Date, from a classification society with respect to such Qualified
Substitute Vessel.
(b) If, as of the first day of each January, April, July or October,
the aggregate amount of Excess Proceeds not theretofore subject to an
Excess Proceeds Offer (as defined below), totals at least $12.5 million,
the Company shall, not later than the fifteenth Business Day of such
month, make an offer (an "Excess Proceeds Offer") to purchase from the
holders pursuant to and subject to the conditions contained in Section
4.16(c) on a pro rata basis an aggregate principal amount of Securities
equal to the Excess Proceeds available on such first day of the month, at
a purchase price equal to 100% of their principal amount, plus, in each
Page 49
case, accrued interest (if any) to the date of purchase (an "Excess
Proceeds Payment").
(c) (1) Promptly, and in any event within 15 calendar days after the
Company becomes obligated to make an Excess Proceeds Offer, the Company
shall be obligated to deliver to the Trustee and send, by first-class mail
to each Holder, a written notice stating that the Holder may elect to have
his Securities purchased by the Company either in whole or in part
(subject to prorating as hereinafter described in the event such Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at
the applicable purchase price. The notice shall specify a purchase date
not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the
business of the Company which the Company in good faith believes will
enable such Holders to make an informed decision (which at a minimum will
include (i) the most recently filed Annual Report on Form 20-F (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Current Report on Form 6-K of the Company, other than
Current Reports describing Asset Sales otherwise described in the offering
materials (or corresponding successor reports), (ii) a description of
material developments in the Company's business subsequent to the date of
the latest of such Reports, and (iii) if material, appropriate pro forma
financial information) and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the information
contained in clause (3).
(2) Not later than the date upon which written notice of an Excess
Proceeds Offer is delivered to the Trustee as provided above, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the amount of the
Excess Proceeds Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Offer is being made
and (iii) the compliance of such allocation with the provisions of this
Indenture. By not later than 4:00 p.m. on such date, the Company shall also
irrevocably deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust) in Temporary Cash Investments,
maturing on the last day prior to the Purchase Date or on the Purchase Date if
funds are immediately available by open of business, an amount equal to the
Offer Amount to be held for payment in accordance with the provisions of this
Section. Upon the expiration of the period for which the Excess Proceeds Offer
remains open (the "Offer Period"), the Company shall deliver to the Trustee for
cancelation, by no later than 10:00 a.m. on the next Business Day, the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Paying Agent shall, on the Purchase Date, mail
or deliver payment to each tendering Holder in the amount of the purchase price.
In the event that the aggregate purchase price of the Securities delivered by
the Company to the Paying Agent is less than the Offer Amount, the Paying Agent
shall deliver the excess to the Company immediately after the expiration of the
Offer Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the Offer
Period the aggregate principal amount of Securities surrendered by Holders
exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities are
Page 50
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(4) At the time the Company notifies the Trustee which Securities
are to be accepted for purchase and delivers the same to the Trustee, the
Company shall also deliver an Officers' Certificate stating that such Securities
(or portions thereof) are to be accepted by the Company pursuant to and in
accordance with the terms of this Section. A Security shall be deemed to have
been accepted for purchase at the time the Paying Agent, mails or delivers
payment therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the purchase of Securities pursuant
to an Excess Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Section 4.16 by virtue thereof.
SECTION 4.17. Additional Amounts. (a) If the Company, any Subsidiary
Guarantor or any Pledgor (or any of their respective successors), as applicable,
is required by law or by the interpretation or administration thereof by the
relevant government authority or agency to withhold or deduct any amount for or
on account of any present or future tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and other liabilities related
thereto) imposed or levied by or on behalf of the Bahamas, Bolivia, Liberia,
Paraguay, Argentina, Panama, Uruguay or Chile or by any authority or agency
therein or thereof having power to tax (or the jurisdiction of incorporation of
any successor of the Company, any Subsidiary Guarantor or any Pledgor)
(hereinafter "Taxes") from any payment made under or with respect to the
Securities, any Subsidiary Guarantee or any Mortgaged Vessel, as applicable, the
Company, such Subsidiary Guarantor or such Pledgor (or any of their respective
successors), as applicable, shall pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder
(including Additional Amounts) after such withholding or deduction will not be
less than the amount the Holder would have received if such Taxes had not been
withheld or deducted; provided, however, that no Additional Amounts shall be
payable with respect to payments made to a Holder (an "Excluded Holder") in
respect of a beneficial owner (i) which is subject to such Taxes by reason of
its being connected with the Bahamas, Bolivia, Liberia, Paraguay, Argentina,
Panama, Uruguay or Chile otherwise than by the mere holding of Securities or the
receipt of payments thereunder (or under the related Subsidiary Guarantee), (ii)
which presents any Security for payment of principal more than 60 days after the
later of (x) the date on which payment first became due and (y) if the full
amount payable has not been received by the Trustee on or prior to such due
date, the date on which, the full amount payable having been so received, notice
to that effect shall have been given to the Holders by the Trustee, except to
the extent that the Holder would have been entitled to such Additional Amounts
on presenting such Security for payment on the last day of the applicable 60-day
period, (iii) which failed to duly and timely comply with a reasonable, timely
request of the Company to provide information, documents or other evidence
concerning the Holder's nationality, residence, entitlement to treaty benefits,
identity or connection with the Bahamas, Bolivia, Liberia, Paraguay, Argentina,
Panama, Uruguay or Chile or any political subdivision or authority thereof, if
and to the extent that due and timely compliance with such request would have
reduced or eliminated any Taxes as to which Additional Amounts would have
otherwise been payable to such Holder but for this clause (iii), (iv) on account
of any estate, inheritance, gift, sale, transfer, personal property or other
similar Tax, (v) which is a fiduciary, a partnership or not the beneficial owner
of any payment on a Security, if and to the extent that any beneficiary or
settlor of such fiduciary, any partner in such partnership or the beneficial
owner of such payment (as the case may be) would not have been entitled to
Page 51
receive Additional Amounts with respect to such payment if such beneficiary,
settlor, partner or beneficial owner had been the Holder of such Security or
(vi) any combination of the foregoing numbered clauses of this proviso. The
Company, the Subsidiary Guarantors or the Pledgors (or any of their respective
successors), as applicable, shall make such withholding or deduction and remit
the full amount deducted or withheld to the relevant authority as and when
required in accordance with applicable law.
(b) The Company, the Subsidiary Guarantors or the Pledgors (or any
of their respective successor), as applicable, shall furnish to the
Trustee, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing
such payment by the Company, the Subsidiary Guarantors or the Pledgors (or
any of their respective successors), as applicable, in such form as
provided in the normal course by the taxing authority imposing such Taxes
and as is reasonably available to the Company, the Subsidiary Guarantors
or the Pledgors (or any of their respective successors), as applicable.
The Trustee shall make such evidence available to the Holders upon
request. The Company, the Subsidiary Guarantors or the Pledgors (or any of
their respective successors), as applicable, shall upon written request of
each Holder (other than an Excluded Holder), reimburse each such Holder
for the amount of (i) any Taxes so levied or imposed and paid by such
Holder as a result of payments made under or with respect to the
Securities, the Subsidiary Guarantees or a Mortgaged Vessel, as
applicable, and (ii) any Taxes imposed with respect to any such
reimbursement under the immediately preceding clause (i), but excluding
any such Taxes on such Holder's net income, so that the net amount
received by such Holder after such reimbursement will not be less than the
net amount the Holder would have received if Taxes (other than such Taxes
on such Holder's net income) on such reimbursement had not been imposed.
(c) Whenever in this Indenture there is mentioned, in any context,
(a) the payment of principal, (b) purchase prices in connection with a
purchase of Securities, (c) interest or (d) any other amount payable on or
with respect to any of the Securities, or any payment pursuant to the
Subsidiary Guarantees or in respect of a Mortgaged Vessel such mention
shall be deemed to include mention of the payment of Additional Amounts
provided for in this section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof.
(d) The Company, the Subsidiary Guarantors or the Pledgors shall pay
any present or future stamp, court or documentary taxes or any other
excise or property taxes, charges or similar levies that arise in any
jurisdiction from the execution, delivery, enforcement or registration of
the Securities the Subsidiary Guarantees or a Mortgage or any other
document or instrument in relation thereto, or the receipt of any payments
with respect to the Securities, the Subsidiary Guarantees, or a Mortgage
excluding such taxes, charges or similar levies imposed by any
jurisdiction outside of the Bahamas, Bolivia, Liberia, Paraguay,
Argentina, Panama, Uruguay or Chile, the jurisdiction of incorporation of
any successor of the Company or any jurisdiction in which a paying agent
is located, and hereby indemnifies the Holders for any such taxes paid by
such Holders.
SECTION 4.18. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
Page 52
SECTION 4.19. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.20. Reflagging of Vessels. Notwithstanding anything to the
contrary herein, a Restricted Subsidiary or Maritima SIPSA S.A. may (a) reflag
any of its Vessels under the laws of a Permitted Flag Jurisdiction or (b)
reconstitute itself in another jurisdiction or merge with or into another
Restricted Subsidiary for the purpose of reflagging a Vessel that it owns or
operates pursuant to a bareboat charter so long as at all times each Restricted
Subsidiary or Maritima SIPSA S.A. remains a Person organized and existing under
the laws of a Permitted Flag Jurisdiction; provided that the Trustee may release
the Mortgage and related Security Agreements to which any Mortgaged Vessel is
subject in connection with the reflagging of such Mortgaged Vessel in another
Permitted Flag Jurisdiction only if (i) the owner of the Mortgaged Vessel has
executed (A) a Mortgage and (B) the related Security Agreements with respect to
such Mortgaged Vessel, dated the date such Mortgaged Vessel shall be released
from the existing Mortgage and related Security Agreements to which it is
subject, which Mortgage and related Security Agreements shall be in appropriate
form for recording a registration in the appropriate governmental offices of the
Permitted Flag Jurisdiction under which it is being reflagged if required by
applicable law in order to perfect the security interest therein created, as to
which the Trustee shall be entitled to rely on the Opinion of Counsel to the
Company with respect thereto; and (ii) arrangements reasonably satisfactory to
the Trustee have been made for recording the Mortgage referred to in clause (i)
above in the appropriate registry office of the Permitted Flag Jurisdiction
under which the Mortgaged Vessel is being reflagged as soon as reasonably
practicable, but in no event more than 5 Business Days, after the date on which
such Mortgaged Vessel is released from the Mortgage to which it was previously
subject.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of a
Permitted Flag Jurisdiction, and the Successor Company (if not the
Company) shall expressly assume, by an indenture supplemental thereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the Securities and this
Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such transaction as having been
Incurred by such Successor Company or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that is
not less than the Consolidated Net Worth of the Company immediately prior
Page 53
to such transaction;
(v) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation , merger or transfer and such supplemental indenture (if
any) comply with this Indenture; and
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
transaction had not occurred.
The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture, but the predecessor Company, in the case
of a conveyance, transfer or lease shall not be released from the obligation to
pay the principal of and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merger with or into, or convey, transfer or lease
(other than any vessel charter, including a bareboat charter, entered into
in the ordinary course of business), in one transaction or a series of
transactions, all or substantially all its assets to, any Person (other
than the Company or another Subsidiary Guarantor) unless: (i) except in
the case of a (x) Subsidiary Guarantor that has been disposed of in its
entirety to another Person (other than to the Company or any of its
Affiliates), whether through a merger, consolidation or sale of Capital
Stock or assets, if in connection therewith the Company provides an
Officer's Certificate to the Trustee to the effect that the Company will
comply with its obligations under Section 4.06 in respect of such
disposition and (y) a Bareboat Charter, the resulting, surviving or
transferee Person (if not such Subsidiary Guarantor) shall be a Person
organized and existing under the laws of the jurisdiction under which such
Subsidiary was organized or under the laws of a Permitted Flag
Jurisdiction (provided that arrangements reasonably satisfactory to the
Trustee have been made for recording any Mortgage required to be recorded
to maintain the Lien of this Indenture on the Mortgaged Vessel in the
appropriate registry office as soon as practicable after such merger,
consolidation or conveyance, but in no event more than 5 Business Days
after the date on which any Mortgaged Vessel is released from the Mortgage
to which it was previously subject in connection with such merger,
consolidation or conveyance), and such Person shall expressly assume, by a
Guarantee Agreement, in a form satisfactory to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guarantee;
(ii) immediately after giving effect to such transaction or transactions
on a pro forma basis (and treating any Indebtedness which becomes an
obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii)
the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or
transfer and such Guarantee Agreement, if any, complies with this
Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
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(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon redemption, upon required repurchase, upon declaration or otherwise,
or (ii) fails to redeem or purchase Securities when required pursuant to
this Indenture or the Securities following notice thereof properly given
under this Indenture;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and
4.20 (other than a failure to purchase Securities when required under
Section 4.06, 4.11 or 4.16) and such failure continues for 30 days after
the notice specified below;
(5) the Company or any Subsidiary Guarantor or Pledgor fails to
comply with any of its agreements in the Securities, this Indenture (other
than those referred to in clause (1), (2), (3) or (4) above) or the
Security Agreements, or the occurrence of an event of default under a
Mortgage, and such failure continues for 60 days after the notice
specified below;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5,000,000, or
its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
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(9) any judgment or decree (other than and to the extent such
judgment or decree has been issued by a court which does not have any
personal jurisdiction over the Company or such Significant Subsidiary or
any of their respective assets, and in a proceeding in which the Company
or such Significant Subsidiary has made no official appearance) for the
payment of money in excess of $5,000,000 or its foreign currency
equivalent at the time (provided that the amount of such money judgment or
decree shall be calculated net of any insurance coverage that the Company
has determined in good faith is available in whole or in part with respect
to such money judgment or decree) is entered against the Company or any
Significant Subsidiary, remains outstanding for a period of 60 days
following the entry of such judgment or decree and is not discharged,
waived or the execution thereof stayed within 10 days after the notice
specified below;
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee) or
a Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guarantee; or
(11) the security interest under the Security Agreements shall, at
any time, cease to be in full force and effect for any reason (other than
by operation of this Indenture and the Security Agreements) other than the
satisfaction in full of all obligations under this Indenture and discharge
of this Indenture or any security interest created thereunder shall be
declared invalid or unenforceable or the Company or any Subsidiary
Guarantor shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5), (6) or (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6), (10) or (11) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities then outstanding
by notice to the Company and the Trustee, may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(7) or (8) with
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respect to the Company occurs, the principal of and interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The Holders of a majority in principal amount of the Securities then outstanding
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security or (b) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities then outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
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(5) the Holders of a majority in principal amount of the Securities
then outstanding do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder. In the event that the Definitive Securities are not issued to
any beneficial owner promptly after the Registrar has received a request from
the Holder of a Global Security to issue such Definitive Securities to such
beneficial owner of its nominee, the Company expressly agrees and acknowledges,
with respect to the right of any Holder to pursue a remedy pursuant to this
Indenture, the right of such beneficial holder of Securities to pursue such
remedy with respect to the portion of the Global Security that represents such
beneficial holder's Securities as if such Definitive Securities had been issued.
SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to holders of preferred maritime liens or other liens, if
any, that arise by operation of law and that are prior to the Lien of
this Indenture, the Mortgages or the Security Agreements;
SECOND: to the Trustee for amounts due under Section 7.07;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
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that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and the Security Agreements and use the same
degree of care and skill in their exercise as a prudent Person would exercise or
use under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and the Security
Agreements and no implied covenants or obligations shall be read into this
Indenture and the Security Agreements against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture and
the Security Agreements. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture and the Security Agreements.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) Every provision of this Indenture and the Security
Agreements that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it.
(f) Money held in trust by the Trustee shall be segregated, in
a separate trust account from other funds.
(g) No provision of this Indenture or of the Security
Agreements shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of
its duties hereunder or thereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(h) Every provision of this Indenture or of the Security
Agreements relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or such
other information as it may reasonably request. The Trustee shall
not be liable for any action it takes or omits to take in good faith
in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's
conduct does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this
Indenture, the Security Agreements and the Securities shall be full
and complete authorization and protection from liability in respect
to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Security Agreements or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture, the
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Security Agreements or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to an officer in the corporate trust department of
the Trustee, the Trustee shall mail to each Securityholder notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Security (including payments pursuant to the
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The Trustee shall have no obligation to notify the insurers of the Mortgaged
Vessels of any Default unless it has actual knowledge of such Default and a
reasonable period of time to act upon it.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each June 1 beginning with the June 1 following the date of
this Indenture, and in any event prior to July 31 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of June 1 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it
(including costs of collection or costs of any sale or retaking incurred in
connection with the Trustee's exercise, as mortgagee, of its rights and remedies
under the Mortgages), in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee and hold it harmless from and against any
and all damages, suits, actions, loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder and under the Security
Agreements, including adequate advances against costs that may be incurred by
it. The Trustee shall notify the Company promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
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time by so notifying the Company. The Holders of a majority in principal amount
of the Securities then outstanding may remove the Trustee by so notifying the
Trustee in writing and may appoint a successor Trustee. The Company shall remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Securities then outstanding and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07 and shall be relieved of all further liability
hereunder for actions arising from and after such date of resignation or
removal.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities then outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
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SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.06) for cancelation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof and
the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such redemption date (other than Securities replaced
pursuant to Section 2.06), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture and the Security
Agreements shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture and the
Security Agreements on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17 and 4.20 and the operation of Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9), 6.01(10) and 6.01(11) (but,
in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Sections 5.01(a)(iii) and
(iv) and 5.01(b), its obligations under Articles 11 and 13 and each
Subsidiary Guarantor's obligations under Articles 10 and 12 and under the
Security Agreements ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9), 6.01(10) and 6.01(11)
(but, in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.01(a)(iii) or (iv) or 5.01(b). If the Company exercises its legal defeasance
option or its covenant defeasance option, each Subsidiary Guarantor, if any,
shall be released from all its obligations with respect to its Subsidiary
Guarantee and under the Security Agreements including Article 12 and the Company
shall be released from its obligations under Articles 11 and 13 and under the
Security Agreements.
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Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08
and in this Article 8 shall survive until the Securities have been paid in
full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and
8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
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Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request and in accordance with the
terms of this Indenture any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years,
and, thereafter, Securityholders entitled to the money must look to the Company
for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's and the Subsidiary
Guarantors' obligations under this Indenture, the Security Agreements and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the
Subsidiary Guarantors, the Pledgors and the Trustee may amend this Indenture,
the Security Agreements or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to provide additional security for the Securities;
(5) to add guarantees with respect to the Securities, including any
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Subsidiary Guarantees;
(6) to add to the covenants of the Company, a Restricted Subsidiary
or a Pledgor for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company, a Subsidiary Guarantor or a
Pledgor;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder; or
(9) to make any amendment to the provisions of this Indenture
relating to the transfer and legending of Securities; provided, however,
that (a) compliance with this Indenture as so amended would not result in
Securities being transferred in violation of the Securities Act or any
other applicable securities law and (b) such amendment does not materially
and adversely affect the rights of Holders to transfer Securities.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company, the Subsidiary
Guarantors, the Pledgors and the Trustee may amend this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Securities) and any past default or compliance with any
provision may also be waived with the consent of Holders of at least a majority
in principal amount of Securities then outstanding. However, without the consent
of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may or shall be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any changes in the Security Agreements or in Articles 10,
11, 12 or 13 that adversely affect the Holders or would terminate the Lien
of this Indenture or any Security Agreement on any property subject
thereto or deprive the Holder of the security afforded by the Lien of this
Indenture or the Security Agreements;
(7) make any change in Section 6.04 or 6.07 or the second sentence
of this Section;
(8) make any change in any Subsidiary Guarantee that would adversely
affect the Securityholders;
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(9) make any change in Section 4.17 that adversely affects the
rights of any Securityholder or amend the terms of the Securities or this
Indenture in a way that would result in the loss of an exemption from any
of the Taxes described therein.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture, the Security Agreements or the Securities shall comply with
the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
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any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Guarantees
SECTION 10.01. Guarantees. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption, by required repurchase or
otherwise, and all other monetary obligations of the Company and the Subsidiary
Guarantors under this Indenture and the Securities and of the Subsidiary
Guarantors under the Security Agreements and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company and the Subsidiary Guarantors under this Indenture, the Security
Agreements and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 10 notwithstanding any extension or renewal
of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Security Agreements, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Security
Agreements, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Obligations; or (f) subject to Section 10.06,
any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Security Agreements, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
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otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or interest
on any Obligation is rescinded or must otherwise be restored by any Holder or
the Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company or the Subsidiary Guarantors
to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 10.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 10.03. Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture, in the Security Agreements and in the Securities shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions of this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
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rights, remedies or benefits which either may have under this Article 10 at law,
in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article 10, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 10.06. Release of Subsidiary Guarantor. Upon the occurrence
of a sale or other disposition (including by way of consolidation or merger) of
a Subsidiary Guarantor or the sale or disposition of all or substantially all
the assets of such Subsidiary Guarantor (in each case other than to the Company
or an Affiliate of the Company), such Subsidiary Guarantor shall be deemed
released from all obligations under this Article 10 without any further action
required on the part of the Trustee or any Holder. At the request of the Company
and upon receipt of an Officers' Certificate, the Trustee shall execute and
deliver an appropriate instrument evidencing such release.
ARTICLE 11
Pledged Collateral
SECTION 11.01. Grant of Security Interest. To secure the full and
punctual payment when due and the full and punctual performance of the
Obligations, the Company and the Subsidiary Guarantors hereby grant to the
Trustee, for the benefit of the Trustee and the Holders, a security interest in
all its right, title and interest in and to the following, other than such of
the following which are released from the Lien of this Indenture pursuant to
Section 11.05 (the "Pledged Collateral"):
(i) all shares of Capital Stock and other securities of the
Subsidiary Guarantors now owned or hereafter acquired by the Company or
the Subsidiary Guarantors, which on the date hereof are identified on
Schedule I hereto (collectively, the "Pledged Shares"); provided, however,
that (A) shares of Capital Stock and other securities will constitute
Pledged Shares only to the extent that such Capital Stock and other
securities can secure the Securities without Rule 3-10 or Rule 3-16 of
Regulation S-X under the Securities Act ("Rule 3-10" and "Rule 3-16,"
respectively) (or any other law, rule or regulation) requiring separate
financial statements of such Subsidiary Guarantor to be filed with the SEC
(or any other governmental regulatory agency); (B) in the event that
either Rule 3-10 or Rule 3-16 requires or is amended, modified or
interpreted by the SEC to require (or is replaced with another rule or
regulation, or any other law, rule or regulation is adopted, which would
require) the filing with the SEC (or any other governmental regulatory
agency) of separate financial statements of any Subsidiary Guarantor due
to the fact that such Subsidiary Guarantor's Capital Stock and other
securities constitute Pledged Shares, then upon delivery to the Trustee of
an Officer's Certificate identifying Pledged Shares in respect of a
Subsidiary Guarantor that must be released from the Lien of this Indenture
in order for the Company to avoid having to file separate financial
statements for such Subsidiary Guarantor with the SEC, such Capital Stock
and other securities shall automatically be deemed not to be Pledged
Shares, but only to the extent necessary to not be subject to such
requirement; and (C) in the event that either Rule 3-10 or Rule 3-16 is
amended, modified or interpreted by the SEC to permit (or is replaced with
another rule or regulation, or any other law, rule or regulation is
adopted, which would permit) such Capital Stock and other securities to
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constitute Pledged Shares without the filing with the SEC (or any other
governmental regulatory agency) of separate financial statements of such
Subsidiary Guarantor's, then such Capital Stock and other securities and
shall automatically be deemed to be Pledged Shares, but only to the extent
necessary to not be subject to any such financial statement requirement;
(ii) all certificates representing any of the Pledged Shares; and
(iii) all dividends, cash, instruments and other property and
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any of the foregoing.
SECTION 11.02. Delivery of Collateral. Any and all cash,
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to and held by or on behalf of the Trustee and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Trustee. The Trustee shall have the right, at any time after
the occurrence and during the continuance of an Event of Default, in its
discretion and without notice to the Company, to transfer to or to register in
the name of the Trustee or any of its nominees any or all the Pledged
Collateral. In addition, the Trustee shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of different denominations.
SECTION 11.03. Representations and Warranties. The Company and the
Subsidiary Guarantors hereby represent and warrant on the Issue Date as follows:
(a) Each of them is the record and beneficial owner of the
applicable Pledged Shares described on Schedule I, free and clear of
any Lien, except for the Lien created by this Indenture;
(b) Each of them has full corporate power, authority and legal
right to pledge all the Pledged Collateral pledged by it pursuant to
this Indenture.
(c) The Pledged Shares described on Schedule I have been duly
authorized and are validly issued, fully paid and nonassessable.
(d) The pledge in accordance with the terms of this Indenture
creates a valid and perfected first priority Lien on the Pledged
Collateral securing the payment and performance of the Obligations.
(e) The shares described in Schedule I hereto represent 100.0%
of the shares of Capital Stock of the Subsidiary Guarantors owned by
the Company and the Subsidiary Guarantors.
(f) There are no existing options, warrants, calls or
commitments of any character relating to any authorized and unissued
Capital Stock of any Subsidiary Guarantor.
SECTION 11.04. Further Assurances. The Company and the Subsidiary
Guarantors each agree that at any time and from time to time, at the expense of
the Company and the Subsidiary Guarantors, the Company will, or will cause the
Subsidiary Guarantors and Pledgors, promptly execute and deliver all further
instruments and documents and take all further action that may be necessary or
that the Trustee may reasonably request in order to perfect and protect any Lien
granted or purported to be granted hereby or to enable the Trustee to exercise
and enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the foregoing, the Company and the Subsidiary
Guarantors shall, subject to the limitations set forth in clause (i) of Section
11.01, (i) at the time of the issuance by a Subsidiary Guarantor of any shares
of Capital Stock after the Issue Date, deliver 100.0% of such shares to the
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Trustee as Pledged Collateral and provide to the Trustee a revised Schedule I,
and (ii) at the time of any release of Pledged Shares pursuant to Section 11.05,
provide to the Trustee a revised Schedule I. Any such revised Schedule shall
reflect any changes made necessary by the applicable acquisition or release, at
which time the Company and the Subsidiary Guarantors shall be deemed to make
their representations and warranties set forth in paragraphs (a) through (f) of
Section 11.03 with respect to such Schedule, as so revised.
SECTION 11.05. Dividends; Voting Rights; Release of Collateral. (a)
As long as no Default shall have occurred and be continuing and until written
notice thereof from the Trustee to the Company, the Company and the Subsidiary
Guarantors shall be entitled to receive and retain all dividends and other
distributions paid in respect of the Pledged Shares owned by the Company and the
Subsidiary Guarantors; provided, however, that the provisions of this Indenture,
including Section 4.04, shall in all respects govern the Company's use or other
disposition of such cash or other property. Any cash dividends or distributions
delivered to or otherwise held by the Trustee pursuant to this Section 11.05,
and any other cash constituting Collateral delivered to the Trustee, shall be
invested, at the written direction of the Company, by the Trustee in Temporary
Cash Investments.
(b) Upon the occurrence and during the continuance of a
Default and upon written notice thereof from the Trustee to the
Company, the Trustee shall be entitled to receive and retain as
Collateral all dividends paid and distributions made in respect of
the Pledged Shares, whether so paid or made before or after any
Default. Any such dividends shall, if received by the Company or the
Subsidiary Guarantors, be received in trust for the benefit of the
Trustee, be segregated from the other property or funds of the
Company and the Subsidiary Guarantors, and be forthwith delivered to
the Trustee as Collateral in the same form as so received (with any
necessary endorsement).
(c) As long as no Default shall have occurred and be
continuing and until written notice thereof from the Trustee to the
Company, the Company and the Subsidiary Guarantors shall be entitled
to exercise any and all voting and other consensual rights relating
to Pledged Shares or any part thereof for any purpose; provided,
however, that no vote shall be cast, and no consent, waiver or
ratification given or action taken, which would be inconsistent with
or violate any provision of this Indenture, the Security Agreements
or the Securities.
(d) Upon the occurrence and during the continuance of a
Default, all rights of the Company and the Subsidiary Guarantors to
exercise the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 11.05(c) shall
cease upon notice from the Trustee to the Company and the Subsidiary
Guarantors and upon the giving of such notice all such rights shall
thereupon be vested in the Trustee who shall thereupon have the sole
right to exercise such voting and other consensual rights.
(e) In order to permit the Trustee to exercise the voting and
other consensual rights which it may be entitled to exercise
pursuant to Section 11.05(d), and to receive all dividends and
distributions which it may be entitled to receive under Section
11.05(b), the Company and the Subsidiary Guarantors shall, if
necessary, upon written notice of the Trustee, from time to time
execute and deliver to the Trustee such instruments as the Trustee
may reasonably request.
(f) Notwithstanding anything to the contrary in this Article
11, upon satisfaction by the Company of the conditions set forth in
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Article 8 to its legal defeasance option, its covenant defeasance
option or to the discharge of this Indenture, the Lien of this
Indenture on all the Collateral shall terminate and all the Pledged
Collateral shall be released without any further action on the part
of the Trustee or any other Person. In addition, in connection with
any release of a Subsidiary Guarantor pursuant to Section 10.06, the
pledge of the Capital Stock of such Subsidiary Guarantor pursuant to
this Article 11 shall be released and the security interest in the
Mortgaged Collateral shall be released without any further action
required on the part of the Trustee or any Holder. At the request of
the Company, the Trustee shall execute and deliver appropriate
instruments evidencing any release pursuant to this Section
11.05(f).
SECTION 11.06. Trustee Appointed Attorney-in-Fact. The Company and
the Subsidiary Guarantors each hereby appoint the Trustee as their
attorney-in-fact, with full authority in the place and stead of the Company and
the Subsidiary Guarantors, and in the name of the Company and the Subsidiary
Guarantors or otherwise, from time to time in the Trustee's discretion but only
after the occurrence and during the continuance of an Event of Default, to take
any action and to execute any instrument which the Trustee may deem necessary or
advisable in order to accomplish the purposes of this Article 11, including to
receive, endorse and collect all instruments made payable to the Company and the
Subsidiary Guarantors representing any dividend, interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same. This power, being coupled with an interest, is
irrevocable.
SECTION 11.07. Trustee May Perform. If the Company and the
Subsidiary Guarantors fail to perform any agreement contained in this Article
11, the Trustee may itself (but shall not be obligated to) perform, or cause
performance of, such agreement, and the expenses of the Trustee incurred in
connection therewith shall be payable by the Company under Section 7.07.
SECTION 11.08. Trustee's Duties. The powers conferred on the Trustee
under this Article 11 are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its possession and the
accounting for moneys actually received by it under this Article 11, the Trustee
shall have no duty as to any Pledged Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Pledged Collateral.
SECTION 11.09. Remedies upon Event of Default. If any Event of
Default shall have occurred and be continuing, the Trustee may exercise in
respect of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
provided a secured party upon the default of a debtor under the Uniform
Commercial Code at that time, and the Trustee may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Trustee's offices or elsewhere, for cash, on credit or for future delivery,
upon such terms as the Trustee may determine to be commercially reasonable, and
the Trustee or any Securityholder may be the purchaser of any or all the Pledged
Collateral so sold and thereafter hold the same, absolutely, free from any right
or claim of whatsoever kind. The Company and the Subsidiary Guarantors each
agree that, to the extent notice of sale shall be required by law, at least 10
days' notice to the Company and the Subsidiary Guarantors of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been given.
The Trustee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
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further notice, be made at the time and place to which it was so adjourned. The
Trustee shall incur no liability as a result of the sale of the Pledged
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner. The Company and the Subsidiary Guarantors each hereby waive
any claims against the Trustee arising by reason of the fact that the price at
which any Pledged Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if the
Trustee accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
The Company and the Subsidiary Guarantors recognize that, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws, the Trustee may be compelled, with respect to any sale of all
or any part of the Pledged Collateral, to limit purchasers to those who will
agree, among other things, to acquire such securities for their own account, for
investment, and not with a view to the distribution or resale thereof. The
Company and the Subsidiary Guarantors acknowledge and agree that any such sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale without such restrictions and, notwithstanding such
circumstances, agree that any such sale shall be deemed to have been made in a
commercially reasonable manner. The Trustee shall be under no obligation to
delay the sale of any of the Pledged Collateral for the period of time necessary
to permit the Company and the Subsidiary Guarantors to register such securities
for public sale under the Securities Act, or under applicable state securities
laws, even if the Subsidiary Guarantors or the Company would agree to do so.
SECTION 11.10. Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default and after the acceleration of the
Securities pursuant to Section 6.02 (so long as such acceleration has not been
rescinded), any cash held by the Trustee as Pledged Collateral and all cash
proceeds received by the Trustee in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral, shall be
applied by the Trustee in the manner specified in Section 6.10.
SECTION 11.11. Continuing Lien. Except as provided in Section 11.05,
this Indenture shall create a continuing Lien on the Pledged Collateral that
shall (i) remain in full force and effect until payment in full of the
Securities, (ii) be binding upon the Company and the Subsidiary Guarantors and
their successors and assigns and (iii) enure to the benefit of the Trustee and
its successors, transferees and assigns.
SECTION 11.12. Certificates and Opinions. The Company shall comply
with (a) TIA ss. 314(b), relating to Opinions of Counsel regarding the Lien of
this Indenture and (b) TIA ss. 314(d), relating to the release of Pledged
Collateral from the Lien of this Indenture and Officers' Certificates or other
documents regarding fair value of the Pledged Collateral, to the extent such
provisions are applicable. Any certificate or opinion required by TIA ss. 314(d)
may be executed and delivered by an Officer of the Company to the extent
permitted by TIA ss. 314(d).
SECTION 11.13. Additional Agreements. The Company and the Subsidiary
Guarantors each agree that, upon the occurrence and during the continuance of a
Default hereunder, each of them will, at any time and from time to time, upon
the written request of the Trustee, use its best efforts to take or to cause the
issuer of the Pledged Shares and any other securities distributed in respect of
the Pledged Shares (collectively with the Pledged Shares, the "Pledged
Securities") to take such action and prepare, distribute or file such documents,
as are required or advisable in the reasonable opinion of counsel for the
Trustee to permit the public sale of such Pledged Securities. The Company and
the Subsidiary Guarantors each further agree to indemnify, defend and hold
harmless the Trustee, each Holder, any underwriter and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including reasonable fees and
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expenses of legal counsel to the Trustee), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to the Company and the Subsidiary Guarantors or
the issuer of such Pledged Securities by the Trustee or any Holder expressly for
use therein. The Company and the Subsidiary Guarantors each further agree, upon
such written request referred to above, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Securities to qualify, file or
register, any of the Pledged Securities under the Blue Sky or other securities
laws of such states as may be requested by the Trustee and keep effective, or
cause to be kept effective, all such qualifications, filings or registrations.
The Company and the Subsidiary Guarantors will bear all costs and expenses of
carrying out its obligations under this Section 11.13. The Company and the
Subsidiary Guarantors acknowledge that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 11.13 and that such
failure would not be adequately compensable in damages, and therefore agree that
their agreements contained in this Section 11.13 may be specially enforced.
ARTICLE 12
Security Agreements
SECTION 12.01. Collateral and Security Agreements. (a) To secure the
due and punctual payment of the Obligations, the Company, the Subsidiary
Guarantors, the Pledgors and the Trustee have entered or, under the
circumstances described in the Escrow Agreement, will enter, into the Security
Agreements. The Trustee and the Company hereby acknowledge and agree that the
Trustee holds the Collateral in trust for the benefit of the Trustee and the
Holders, in each case pursuant to the terms of the Security Agreements. Each
Holder, by accepting a Security, shall be deemed to have agreed to all the terms
and provisions of the Security Agreements.
(b) As among the Holders, the Mortgaged Collateral shall be held for
the equal and ratable benefit of such Holders without preference, priority
or distinction of any thereof over any other.
(c) Each Holder, by accepting a Security, agrees to all of the terms
and provisions of the Security Agreements, as the same may be amended from
time to time pursuant to the provisions of the Security Agreements and
this Indenture, and authorizes and directs the Trustee to perform its
obligations and exercise its rights under the Security Agreements in
accordance therewith; provided, however, that if any provisions of the
Security Agreements limit, qualify or conflict with the duties imposed by
the provisions of the TIA, the TIA will control.
SECTION 12.02. Recording; Annual Opinions. (a) The Company, the
Subsidiary Guarantors and the Pledgors will take or cause to be taken all action
required to maintain, preserve and protect the Lien on the Mortgaged Collateral
granted by the Security Agreements, including causing the Mortgages and any
other Security Agreement, instruments of further assurance and all amendments or
supplements thereto, to be promptly recorded, registered and filed and at all
times to be kept recorded, registered and filed, and will execute and file
statements and cause to be issued and filed statements, all in such manner and
in such places and at such times as are prescribed in the Escrow Agreement or in
this Indenture as may be required by law fully to preserve and protect the
rights of the Holders and the Trustee under this Indenture and the Security
Agreements to the Mortgaged Collateral.
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The Company, the Subsidiary Guarantors and the Pledgors will from
time to time promptly pay and discharge all recording or filing fees, charges
and taxes relating to the filing or registration of this Indenture and the
Security Agreements, any amendments thereto and any other instruments of further
assurance.
(b) The Company, the Subsidiary Guarantors and the Pledgors shall
furnish to the Trustee:
(i) on the Issue Date or as soon as practicable after the
execution and delivery of this Indenture, an Opinion of Counsel
either (a) to the effect that, in the opinion of such Counsel, this
Indenture and the assignment of the Collateral intended to be made
by the Security Agreements and all other instruments of further
assurance or assignment have been properly recorded, registered and
filed (or proper provision has been made for such recording,
registration and filing) to the extent necessary to make effective
the Lien created by such Security Agreements and reciting the
details of such action, and stating that as to the Lien created
pursuant to such Security Agreements, such recordings, registerings
and filings are the only recordings, registerings and filings
necessary to give notice thereof and that no re-recordings,
re-registerings or refilings are necessary to maintain such notice
(other than as stated in such opinion), and further stating that all
statements have been executed and filed (or proper provision has
been made for such filing) that are necessary fully to preserve and
protect the rights of the Holders and the Trustee with respect to
the Lien under this Indenture and such Security Agreements, or (b)
to the effect that, in the opinion of such counsel, no such action
is necessary to perfect such Lien; and
(ii) on or before November 1 in each year beginning with
November 1, 2005, an Opinion of Counsel, dated as of such date,
either (a) to the effect that, in the opinion of such counsel, such
action has been taken with respect to the recordings, registerings,
filings, re-recordings, re-registerings and re-filings of this
Indenture, the Security Agreements and all financing statements,
continuation statements or other instruments of further assurance as
is necessary to maintain the Lien of this Indenture and the Security
Agreements and reciting with respect to such Lien the details of
such action or referencing to prior Opinions of Counsel in which
such details are given, and stating that all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the rights of the Holders
and the Trustee hereunder and under the Security Agreements with
respect to such Lien, or (b) to the effect that, in the opinion of
such Counsel, no such action is necessary to maintain such Lien.
SECTION 12.03. Disposition of Collateral Without Release. (a)
Notwithstanding the provisions of Section 12.04, so long as no Event of Default
shall have occurred and be continuing, the Company, the Subsidiary Guarantors
and the Pledgors, as the case may be, may, without any release or consent by the
Trustee:
(i) sell or otherwise dispose of any machinery, equipment,
furniture, apparatus, tools or implements, materials or supplies or
other similar property subject to the Lien of this Indenture and the
Security Agreements, which may have become worn out or obsolete, not
exceeding in aggregate value in any one calendar year $1,000,000, or
which may constitute an Incidental Asset, upon substituting for the
same other machinery, equipment, furniture, apparatus, tools or
implements, materials or supplies or other similar property not
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necessarily of the same character but of at least equal value to the
Company as, and costing not less than the amount realized from, the
Collateral disposed of, which shall forthwith become, without
further action, subject to the Lien of this Indenture and the
Security Agreements;
(ii) abandon, terminate, cancel, release or make alterations
in or substitutions of any contracts subject to the Lien of this
Indenture and any of the Security Agreements; provided, however,
that any altered or substituted contracts shall forthwith, without
further action, be subject to the Lien of this Indenture and the
Security Agreements to the same extent as those previously existing;
(iii) surrender or modify any franchise, license or permit
subject to the Lien of this Indenture and any of the Security
Agreements which it may own or under which it may be operating;
provided, however, that, after the surrender or modification of any
such franchise, license or permit, the Company, the applicable
Subsidiary Guarantor or the applicable Pledgor shall still, in the
reasonable opinion of the Board of Directors of the Company, be
entitled, under some other or without any franchise, license or
permit, to conduct its business as it was operating immediately
prior to such surrender or modification; or
(iv) demolish, dismantle, tear down, abandon or scrap any
portion of the Mortgaged Collateral (other than a Mortgaged Vessel),
if in the good faith opinion of the Board of Directors, as evidenced
by a Board Resolution, such demolition, dismantling, tearing down,
abandoning or scrapping is in the best interests of the Company and
the fair market value and utility of the Collateral as an entirety,
and the security for the Securities, will not thereby be impaired.
(b) In the event that the Company, a Subsidiary Guarantor or a
Pledgor has sold, exchanged or otherwise disposed of or proposes to sell,
exchange or otherwise dispose of any portion of the Collateral which under
the provisions of this Section 12.03 may be sold, exchanged or otherwise
disposed of by the Company without any release or consent of the Trustee,
and the Company requests the Trustee to furnish a written disclaimer,
release or quitclaim of any interest in such property under this Indenture
and the Security Agreements, the Trustee shall execute such an instrument
upon delivery to the Trustee of (i) an Officers' Certificate by the
Company reciting the sale, exchange or other disposition made or proposed
to be made and describing in reasonable detail the property affected
thereby, and stating that such property is property which by the
provisions of this Section 12.03 may be sold, exchanged or otherwise
disposed of or dealt with by the Company without any release or consent of
the Trustee and (ii) an Opinion of Counsel stating that the sale, exchange
or other disposition made or proposed to be made was duly taken by the
Company, the Subsidiary Guarantor or the Pledgor in conformity with a
designated subsection of Section 12.03(a) and that the execution of such
written disclaimer, release or quitclaim is appropriate to confirm the
propriety of such sale, disposition or other disposition under this
Section 12.03.
SECTION 12.04. Release of Mortgaged Collateral. In addition to its
rights under Section 12.03, the Company shall have the right, at any time and
from time to time, to sell, exchange or otherwise dispose of any of the
Mortgaged Collateral (other than Trust Moneys, which are subject to release from
the Lien of this Indenture and the Security Agreements as provided under Article
13), upon compliance with the requirements and conditions of this Section 12.04,
Section 4.06, Section 4.14 and Section 4.20, and the Trustee shall release the
same from the Lien of this Indenture and the Security Agreements upon receipt by
the Trustee of a Release Notice requesting such release and describing the
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property to be so released, together with:
(a) If the property to be released has a book value of at least
$5,000,000, a Board Resolution requesting such release and authorizing an
application to the Trustee therefor.
(b) An Officers' Certificate, dated not more than 30 days prior to
the date of the application for such release, in each case stating in
substance as follows:
(i) that, in the opinion of the signers, the security afforded
by this Indenture and the Security Agreements will not be impaired
by such release in contravention of the provisions of this
Indenture, and that if the Mortgaged Collateral to be released is
not being replaced by comparable property, such Collateral has a
book value equal to or less than $1,000,000 and is not necessary for
the efficient operation of the Company's remaining property or in
the conduct of the business of the Company;
(ii) that the Company, a Subsidiary Guarantor or a Pledgor has
disposed of or will dispose of the Collateral so to be released for
a consideration representing, in the opinion of the signers, its
fair value, which consideration may consist of any one or more of
the following, to the extent otherwise permitted by this Indenture:
(A) cash or cash equivalents, (B) obligations secured by a purchase
money Lien upon the property so to be released and (C) any other
property or assets that, except as provided in Section 12.04(d),
upon acquisition thereof by the Company, a Subsidiary Guarantor or a
Pledgor would be subject to the Lien of this Indenture and the
Security Agreements, and subject to no Lien other than Permitted
Liens which, under the applicable provisions of the Security
Agreements relating thereto, are permitted to be superior to the
Lien of the Trustee herein and therein, all of such consideration to
be briefly described in the certificate;
(iii) that no Event of Default has occurred and is continuing;
(iv) the fair value, in the opinion of the signers, of the
property to be released at the date of such application for release;
provided, however, that it shall not be necessary under this clause
(iv) to state the fair value of any property whose fair value is
certified in a certificate of an Appraiser under Section 12.04(c);
(v) whether the aggregate fair value of all Collateral to be
released and of all other Collateral released from the Lien of this
Indenture and the Security Agreements pursuant to this Section 12.04
since the commencement of the then current calendar year is 10% or
more of the aggregate principal amount of the Securities outstanding
on the date of the application and whether said fair value of the
property to be released is at least $100,000 and at least 1% of the
aggregate principal amount of the Securities outstanding on the date
of the application, and if such is the case, that a certificate of
an Appraiser as to the fair value of the property to be released
will be furnished under Section 12.04(c);
(vi) that if the Mortgaged Collateral to be released is only a
portion of a Mortgaged Vessel, following such release, that the fair
value of the Mortgaged Vessel (exclusive of the fair value of the
released Mortgaged Collateral) shall not be less than the fair value
of such Mortgaged Vessel (exclusive of the fair value of the
released Mortgaged Collateral) prior to such release;
(vii) that all conditions precedent herein provided for
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relating to the release of the Collateral in question have been
complied with.
(c) If (i) the fair value of the property to be released and of all
other property released from the Lien of this Indenture and the Security
Agreements pursuant to this Section 12.04 since the commencement of the
then current calendar year, as shown by the certificate required by
Section 12.04(b)(v), is 10% or more of the aggregate principal amount of
the Securities outstanding on the date of the application, and (ii) the
fair value of the Mortgaged Collateral to be so released, as shown by the
certificate filed pursuant to Section 12.04(b)(v), is at least $25,000 and
at least 1% of the aggregate principal amount of the Securities
outstanding on the date of the application, a certificate of an Appraiser
stating:
(1) the then fair value, in the opinion of the signer, of the
property to be released; and
(2) that such release, in the opinion of the signer, will not
impair the Lien of this Indenture or the Security Agreements in
contravention of its terms.
(d) The Net Available Cash, which will be paid to the Trustee
(except Net Available Cash from any Asset Sale which is not required, or
cannot be required through the passage of time or otherwise, to be used to
repurchase or redeem or to make an offer to repurchase Securities
hereunder); and, if any property other than cash, cash equivalents or
obligations is included in the consideration received in connection with
such Asset Sale, such instruments of conveyance, assignment and transfer,
if any, as may be necessary, in the Opinion of Counsel to be given
pursuant to Section 12.04(e), to subject to the Lien of this Indenture and
the Security Agreements all the right, title and interest of the Company
or the applicable Subsidiary Guarantor in and to such property.
(e) An Opinion of Counsel substantially to the effect (i) that any
obligation included in the consideration for any property so to be
released and to be received by the Trustee pursuant to Section 12.04(d) is
a valid and binding obligation enforceable in accordance with its terms
and is effectively pledged under the Security Agreements, (ii) that any
Lien granted by a purchaser to secure a purchase money obligation is a
fully perfected Lien and such instrument granting such Lien is enforceable
in accordance with its terms, (iii) either (x) that such instruments of
conveyance, assignment and transfer as have been or are then delivered to
the Trustee are sufficient to subject to the Lien of this Indenture and
the applicable Security Agreements all the right, title and interest of
the Company or the applicable Subsidiary Guarantor or Pledgor in and to
any property, other than cash, cash equivalents and obligations, that is
included in the consideration for the Mortgaged Collateral so to be
released and is to be received by the Trustee pursuant to Section
12.04(d), subject to no Lien other than Permitted Liens or (y) that no
instruments of conveyance, assignment or transfer are necessary for such
purpose, (iv) that the Company or the applicable Subsidiary Guarantor or
Pledgor has corporate power to own all property included in the
consideration for such release, and (v) that all conditions precedent
herein and under the Security Agreements relating to the release of such
Collateral have been complied with.
(f) If the Mortgaged Collateral to be released is only a portion of
a Mortgaged Vessel, an Opinion of Counsel relating to the Mortgaged Vessel
confirming that after such release, the Lien of the Mortgage continues
unimpaired as a perfected Lien upon the Mortgaged Vessel subject only to
Permitted Liens.
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In connection with any release, the Company shall (i) execute,
deliver and record or file and obtain such instruments as the Trustee may
reasonably require, including amendments to the Security Agreements and this
Indenture, and (ii) deliver to the Trustee such evidence of the satisfaction of
the conditions included in this Indenture and the Security Agreements as the
Trustee may reasonably require.
The Company shall exercise its rights under this Section by delivery
to the Trustee of a notice (each, a "Release Notice"), which shall refer to this
Section, describe with particularity the items of property proposed to be
covered by the release and be accompanied by a counterpart of the instruments
proposed to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee and in form for
execution by the Trustee. Upon such compliance, the Company shall direct the
Trustee to execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 10 Business Days after receipt by the Trustee of a Release
Notice and the satisfaction of the requirements of this Section.
In case an Event of Default shall have occurred and be continuing,
the Company, a Subsidiary Guarantor or a Pledgor, while in possession of the
Mortgaged Collateral (other than cash, cash equivalents, securities and other
personal property held by, or required to be deposited or pledged with, the
Trustee hereunder or under any Security Agreement or with the trustee, mortgagee
or other holder of a Permitted Lien), may do any of the things enumerated in
this Section 12.04, if the Trustee in its discretion, or the Holders of a
majority in aggregate principal amount of the Securities outstanding, by
appropriate action of such Holders, shall consent to such action, in which event
any certificate filed under this Section shall omit the statement to the effect
that no Event of Default has occurred and is continuing. This paragraph shall
not apply, however, during the continuance of an Event of Default of the type
specified in Section 6.01(1) or 6.01(2).
All cash or cash equivalents received by the Trustee pursuant to
this Section 12.04 shall be held by the Trustee, for the benefit of the Holders,
as Trust Moneys under Article 13 subject to application as therein provided. All
purchase money and other obligations received by the Trustee pursuant to this
Section 12.04 shall be held by the Trustee for the benefit of the Holders as
Mortgaged Collateral.
SECTION 12.05. Eminent Domain, Expropriation and Other Governmental
Takings. If any of the Mortgaged Collateral is taken by eminent domain,
expropriation or other similar governmental taking (including a requisition for
hire which is not revoked within six months or a requisition for title) or is
sold pursuant to the exercise by any governmental authority of any right which
it may then have to purchase, or to designate a purchaser or to order a sale of,
all or any part of the Mortgaged Collateral, the Trustee shall release the
property so taken or purchased, but only upon receipt by the Trustee of the
following:
(a) an Officers' Certificate stating that such property has been
taken by eminent domain, expropriation or other similar governmental
taking and the amount of the award therefor, or that such property has
been sold pursuant to a right vested in a governmental authority to
purchase, or to designate a purchaser, or order a sale of such property
and the amount of the proceeds of such sale, that the amount of the
proceeds of the property so sold is not less than the amount to which the
Company or the applicable Subsidiary Guarantor or Pledgor is legally
entitled under the terms of such right to purchase or designate a
purchaser, or under the order or orders directing such sale, as the case
may be, and that all conditions precedent herein provided for relating to
such release have been complied with;
(b) to hold as Trust Moneys, subject to the disposition thereof
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pursuant to Article 13 hereof, the award for such property or the proceeds
of such sale to the extent provided under the Security Agreements; and
(c) an Opinion of Counsel substantially to the effect that:
(1) such property has been taken by eminent domain,
expropriation or other similar governmental taking (including a
requisition for hire which is not revoked within six months or a
requisition for title) or has been sold pursuant to the exercise of
a right vested in a governmental authority to purchase, or to
designate a purchaser or order a sale of, such property; and
(2) the instruments and the award or proceeds of such sale
which have been or are therewith delivered to and deposited with the
Trustee conform to the requirements of this Indenture and the
Security Agreements and that, upon the basis of such application,
the Trustee is permitted by the terms hereof and of the Security
Agreements to execute and deliver the release requested, and that
all conditions precedent herein provided for relating to such
release have been complied with.
In any proceedings for the taking or purchase or sale of any part of
the Mortgaged Collateral, by eminent domain, expropriation or other similar
governmental taking or by virtue of any such right to purchase or designate a
purchaser or to order a sale, the Trustee may be represented by counsel who may
be counsel, at the Company's expense, for the Company.
All cash received by the Trustee pursuant to this Section 12.05
shall be held by the Trustee as Trust Moneys under Article 13 subject to
application as therein provided. All purchase money and other obligations
received by the Trustee pursuant to this Section 12.05 shall be held by the
Trustee as Mortgaged Collateral subject to application as provided in Section
12.10.
SECTION 12.06. Permitted Releases Not To Impair Lien; Trust
Indenture Act Requirements. The release of any Mortgaged Collateral from the
terms hereof and of the Security Agreements or the release of, in whole or in
part, the Liens created by the Security Agreements, will not be deemed to impair
the Lien on the Collateral in contravention of the provisions hereof if and to
the extent the Collateral or Liens are released pursuant to the applicable
Security Agreements and pursuant to the terms of this Article 12. The Trustee
and each of the Holders acknowledge that a release of Mortgaged Collateral or a
Lien strictly in accordance with the terms of the Security Agreements and of
this Article 12 will not be deemed for any purpose to be an impairment of the
Lien on the Mortgaged Collateral in contravention of the terms of this
Indenture. To the extent applicable, the Company and each obligor on the
Securities shall cause ss. 314(d) of the TIA relating to the release of property
or securities from the Lien hereof and of the Security Agreements to be complied
with. Any certificate or opinion required by ss. 314(d) of the TIA may be made
by an officer of the Company, except in cases which ss. 314(d) of the TIA
requires that such certificate or opinion be made by an independent person.
SECTION 12.07. Suits To Protect the Mortgaged Collateral. Subject to
the provisions of the Security Agreements, the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Mortgaged Collateral by any acts which may be
unlawful or in violation of any of the Security Agreements or this Indenture,
and such suits and proceedings as the Trustee, in its sole discretion, may deem
expedient to preserve or protect its interests and the interests of the Holders
in the Mortgaged Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
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rule or order would impair the Lien on the Mortgaged Collateral or be
prejudicial to the interests of the Holders or the Trustee).
SECTION 12.08. Purchaser Protected. In no event shall any purchaser
in good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article 12 to be sold be
under obligation to ascertain or inquire into the authority of the Company or
the applicable Subsidiary Guarantor to make any such sale or other transfer.
SECTION 12.09. Powers Exercisable by Receiver or Trustee. In case
the Mortgaged Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article 12 upon the Company or
a Subsidiary Guarantor with respect to the release, sale or other disposition of
such property may be exercised by such receiver or trustee, and an instrument
signed by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Company or a Subsidiary Guarantor or of any officer or
officers thereof required by the provisions of this Article 12; and if the
Trustee shall be in the possession of the Mortgaged Collateral under any
provision of this Indenture, then such powers may be exercised by the Trustee.
SECTION 12.10. Disposition of Obligations Received. All purchase
money and other obligations received by the Trustee under this Article shall be
held by the Trustee as a part of the Mortgaged Collateral. Upon payment in cash
or cash equivalents by or on behalf of the Company to the Trustee of the entire
unpaid principal amount of any such obligation, to the extent not constituting
Net Available Cash which may be required, through the passage of time or
otherwise, to be used to redeem or repurchase or to make an offer to redeem or
repurchase Securities, the Trustee shall release and transfer such obligation
and any mortgage securing the same upon receipt of any documentation that the
Trustee may reasonably require. Any cash or cash equivalents received by the
Trustee in respect of the principal of any such obligations shall be held by the
Trustee as Trust Moneys under Article 13 subject to application as therein
provided and as provided in the Security Agreements. Until the Securities are
accelerated, pursuant to Section 6.02, all interest and other income on any such
obligations, when received by the Trustee shall be paid to the Company from time
to time in accordance with Section 13.08. If the Securities have been
accelerated pursuant to Section 6.02, any such interest or other income not
theretofore paid, when collected by the Trustee, shall be applied by the Trustee
in accordance with Section 6.10.
SECTION 12.11. Determinations Relating to Mortgaged Collateral. In
the event (i) the Trustee shall receive any written request from the Company, a
Subsidiary Guarantor or a Pledgor under any Security Agreement for consent or
approval with respect to any matter or thing relating to any Mortgaged
Collateral or the Company's, a Subsidiary Guarantor's or a Pledgor's obligations
with respect thereto or (ii) there shall be due to or from the Trustee under the
provisions of any Security Agreement any material performance or the delivery of
any material instrument or (iii) the Trustee shall become aware of any material
nonperformance by the Company, a Subsidiary Guarantor or a Pledgor of any
covenant or any material breach of any representation or warranty of the
Company, a Subsidiary Guarantor or a Pledgor set forth in any Security
Agreement, then, in each such event, the Trustee shall be entitled to hire, at
the sole reasonable cost and expense of the Company, experts, consultants,
agents and attorneys to advise the Trustee on the manner in which the Trustee
should respond to such request or render any requested performance or response
to such nonperformance or breach. The Trustee shall be fully protected in
accordance with Article 7 hereof in the taking of any action recommended or
approved by any such expert, consultant, agent or attorney and by
indemnification provided in accordance with Section 6.05 and other sections of
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this Indenture if such action is agreed to by Holders of a majority in principal
amount of the Securities pursuant to Section 6.05 and, the Trustee may, in its
sole discretion, prior to taking such action if such action could subject it to
environmental liabilities or taxation, require (i) direction from the Holders of
a majority in principal amount of the Securities in accordance with Section 6.05
hereof and (ii) indemnification in accordance with Section 6.05.
SECTION 12.12. Release upon Termination of the Company's
Obligations. In the event that the Company delivers an Officers' Certificate
certifying that all the obligations under this Indenture, the Securities and the
Security Agreements have been satisfied and discharged by complying with the
provisions of Article 8 or by the payment in full of the Company's obligations
under the Securities, this Indenture and the Security Agreements, the Trustee
shall deliver to the Company a notice stating that the Trustee, on behalf of the
Holders, disclaims and gives up any and all rights it has in or to the Mortgaged
Collateral, and any rights it has under the Security Agreements.
SECTION 12.13. Substitution of Mortgaged Vessel. In addition to its
rights under Sections 12.03 and Section 12.04, the Company shall have the right,
at any time and from time to time, to substitute any Mortgaged Vessel with a
Substitute Mortgaged Vessel, upon compliance with the requirements and
conditions of this Section 12.13 and Section 4.06 (if applicable) and Section
4.14. On the date on which a Substitute Mortgaged Vessel is tendered to the
Trustee as part of the Collateral (the "Vessel Substitution Date"), the Trustee
shall release such Mortgaged Vessel from the Lien of this Indenture and the
Security Agreements upon receipt by the Trustee of a Substitution Notice
requesting such substitution, describing the Mortgaged Vessel to be released and
the Substitute Mortgaged Vessel that the Company or a Restricted Subsidiary will
tender, or cause to be to be tendered, to the Trustee as Collateral in
substitution for the Mortgaged Vessel, together with:
(a) If the Mortgaged Vessel to be released has a book value of at
least $5,000,000, a Board Resolution requesting such release and
authorizing an application to the Trustee to tender a Substitute Mortgaged
Vessel in substitution therefor.
(b) An Officers' Certificate, dated not more than 30 days prior to
the date of the application for such release, in each case stating in
substance as follows:
(i) that, in the opinion of the signers, the security afforded
by this Indenture and the Security Agreements will not be impaired
by such substitution in contravention of the provisions of this
Indenture;
(ii) that no Event of Default has occurred and is continuing;
(iii) the Appraised Value of the Substitute Mortgaged Vessel
at the Vessel Substitution Date is at least equal to the Appraised
Value of the Mortgaged Vessel for which it is being substituted; and
(iv) that all conditions precedent herein provided for
relating to the release of the Mortgaged Vessel and the tender of
the Substitute Mortgaged Vessel in question have been complied with.
(c) An Opinion of Counsel substantially to the effect (i) that such
instruments of conveyance, assignment and transfer as have been or are
then delivered to the Trustee are sufficient to subject the Substitute
Mortgaged Vessel to the Lien of this Indenture and the applicable Security
Agreements and to transfer all the right, title and interest of the
Company or the applicable Subsidiary Guarantor or Pledgor in and to such
Substitute Mortgaged Vessel to be received by the Trustee pursuant to this
Section, subject to no Lien other than Permitted Liens, (ii) that the
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Company or the applicable Subsidiary Guarantor or Pledgor has corporate
power to own all Substitute Mortgaged Vessels included in the
consideration for such substitution, and (iii) that all conditions
precedent herein and under the Security Agreements relating to the release
of such Collateral have been complied with.
(d) Written appraisals by two independent Appraisers as of the
Vessel Substitution Date, stating (i) the approximate fair value of the
Mortgaged Vessel to be released and (ii) the approximate fair value of the
Substitute Mortgaged Vessel to be tendered to the Trustee as Collateral in
substitution for the Mortgaged Vessel to be released.
(e) Original certificates, certified to be true and complete by an
Officer of the Company, representing the Capital Stock of any Restricted
Subsidiary owning such Substitute Mortgaged Vessel of which the Company or
a Wholly Owned Subsidiary that is a Subsidiary Guarantor is the record and
beneficial owner (unless such Restricted Subsidiary is already a
Subsidiary Guarantor), together with an Officers' Certificate with respect
thereto.
(f) Copies, certified to be true and complete by an Officer of the
Company, of any Charters related to such Substitute Mortgaged Vessel.
(g) The report of an insurance broker required by Section 3(U)(viii)
of the form of Mortgage attached as Exhibit C to this Indenture, with
respect to insurance policies maintained in respect of each such
Substitute Mortgaged Vessel, which report shall include loss payable
clauses substantially in the form set forth in Schedule 1 to the form of
Assignment of Insurance.
(h) With respect to oceangoing Vessels, a classification
certificate, dated as of a date not more than 30 days prior to the date on
which such Substitute Mortgaged Vessel is tendered, from a classification
society with respect to each such Substitute Mortgaged Vessel.
(i) a fully executed Guarantee Agreement in respect of its
Subsidiary Guarantee substantially in the form attached as Exhibit F to
the Escrow Agreement; provided that no Subsidiary Guarantee need be
provided if each of the owner of the Mortgaged Vessel and the owner of the
Substitute Mortgaged Vessel is not a Wholly Owned Subsidiary;
In connection with any substitution, the Company shall (i) execute,
deliver and record or file and obtain such instruments as the Trustee may
reasonably require, including a Mortgage (which shall be submitted to the
appropriate registry office as soon as reasonably practicable, but in no event
later than 5 Business Days, after the Vessel Substitution Date), the Security
Agreements and this Indenture, and (ii) deliver to the Trustee such evidence of
the satisfaction of the conditions included in this Indenture and the Security
Agreements as the Trustee may reasonably require.
The Company shall exercise its rights under this Section by delivery
to the Trustee of a notice (each, a "Substitution Notice"), which shall refer to
this Section, describe with particularity the Mortgaged Vessels and Substitute
Mortgaged Vessels proposed to be covered by the substitution and be accompanied
by a counterpart of the instruments proposed to give effect to the substitution
fully executed and acknowledged (if applicable) by all parties thereto other
than the Trustee and in form for execution by the Trustee. Upon such compliance,
the Company shall direct the Trustee to execute, acknowledge (if applicable) and
deliver to the Company, at the Company's sole cost and expense, such counterpart
within 10 Business Days after receipt by the Trustee of a Substitution Notice
and the satisfaction of the requirements of this Section.
In case an Event of Default shall have occurred and be continuing,
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the Company, a Subsidiary Guarantor or a Restricted Subsidiary, while in
possession of the Mortgaged Vessels, may do any of the things enumerated in this
Section 12.13, if the Trustee in its discretion, or the Holders of a majority in
aggregate principal amount of the Securities outstanding, by appropriate action
of such Holders, shall consent to such action, in which event any certificate
filed under this Section shall omit the statement to the effect that no Event of
Default has occurred and is continuing. This paragraph shall not apply, however,
during the continuance of an Event of Default of the type specified in Section
6.01(1) or 6.01(2).
ARTICLE 13
Application of Trust Moneys
SECTION 13.01. "Trust Moneys" Defined. All cash or cash equivalents
received by the Trustee:
(a) upon the release of property from the Lien of this
Indenture and the Security Agreements, including all moneys received
in respect of the principal of all purchase money, governmental and
other obligations; or
(b) as compensation for, or proceeds of sale of, any part of
the Mortgaged Collateral taken by eminent domain or purchased by, or
sold pursuant to an order of, a governmental authority or otherwise
disposed of; or
(c) as proceeds of insurance upon any part of the Mortgaged
Collateral (other than any liability insurance proceeds payable to
the Trustee for any loss, liability or expense incurred by it); or
(d) for application under this Article as elsewhere provided
in this Indenture or any Security Agreement, or whose disposition is
not elsewhere otherwise specifically provided for herein or in any
Security Agreement;
(all such moneys being herein sometimes called "Trust Moneys"), shall be held by
the Trustee for the benefit of the Holders of Securities as a part of the
Mortgaged Collateral, shall be held in United States dollars or U.S. dollar
denominated obligations, and, upon any entry upon or sale of the Mortgaged
Collateral or any part thereof pursuant to Article 6, said Trust Moneys shall be
applied in accordance with Section 6.10; but, prior to any such entry or sale,
all or any part of the Trust Moneys may be withdrawn, and shall be released,
paid or applied by the Trustee, from time to time as provided in Sections 13.02
to 13.05, inclusive, may be applied by the Trustee as provided in Section
13.07(b) and, if applicable, shall be released pursuant to Section 4.17.
SECTION 13.02. Retirement of Securities. The Trustee shall apply
Trust Moneys from time to time to the payment of the principal of and interest
on any Securities, at final maturity or to the redemption thereof or the
purchase thereof upon tender or in the open market or at private sale or upon
any exchange or in any one or more of such ways, including pursuant to a
redemption under Article 3 or a required repurchase pursuant to Section 4.11 or
4.16(b), as the Company shall request, upon receipt by the Trustee of the
following:
(a) a resolution of the Board of Directors directing the
application pursuant to this Section of a specified amount of Trust
Moneys (denominated in U.S. dollars) and in case any such moneys are
to be applied to payment, designating any Securities, so to be paid
and, in case any such moneys are to be applied to the purchase of
any Securities, prescribing the method of purchase, the price or
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prices to be paid and the maximum principal amount of any
Securities, to be purchased and any other provisions of this
Indenture governing such purchase;
(b) additional cash (denominated in U.S. dollars) to the
extent necessary to fund the entire payment amount or purchase price
purchase, which cash shall be held by the Trustee in trust for such
purpose;
(c) an Officers' Certificate, dated not more than five days
prior to the date of the relevant application, stating
(i) that no Default exists; and
(ii) that all conditions precedent and covenants herein
provided for relating to such application of Trust Moneys have
been complied with; and
(d) an Opinion of Counsel stating that the documents and the
cash or cash equivalents, if any, which have been or are therewith
delivered to and deposited with the Trustee conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Moneys
have been complied with.
Upon compliance with the foregoing provisions of this Section, the
Trustee shall apply Trust Moneys available therefor as directed and specified by
such resolution, up to, but not exceeding, the principal amount of the
Securities to be so paid, redeemed or purchased.
A resolution of the Board of Directors expressed to be irrevocable
directing the application of Trust Moneys under this Section to the payment of
the principal of particular Securities shall for all purposes of this Indenture
be deemed the equivalent of the deposit of money with the Trustee in trust for
such purpose. Such Trust Moneys and any cash deposited with the Trustee pursuant
to subsection (b) of this Section shall not, after compliance with the foregoing
provisions of this Section, be deemed to be part of the Collateral or Trust
Moneys.
SECTION 13.03. Withdrawals of Insurance Proceeds and Condemnation
Awards; Withdrawals of Net Available Cash. (a) To the extent that any Trust
Moneys consist of either (i) the proceeds of insurance upon any part of the
Mortgaged Collateral or (ii) any award for or the proceeds from any of the
Collateral being taken by eminent domain, expropriation or other similar
governmental taking (including a requisition for hire which is not revoked
within six months or a requisition for title) or sold pursuant to the exercise
by any governmental authority of any right which it may then have to purchase,
or to designate a purchaser or to order a sale of any part of the Mortgaged
Collateral, such Trust Moneys may be withdrawn by the Company or the applicable
Subsidiary Guarantor or Pledgor and shall be paid by the Trustee upon a request
by the Company to the Trustee by the proper officer or officers of the Company
or the applicable Subsidiary Guarantor or Pledgor to reimburse the Company or
the applicable Subsidiary Guarantor or Pledgor for expenditures made, or to pay
costs incurred, by the Company or the applicable Subsidiary Guarantor or Pledgor
to repair, rebuild or replace the property destroyed, damaged or taken
(including the acquisition of a Qualified Substitute Vessel), upon receipt by
the Trustee of the following:
(I) an Officers' Certificate dated not more than 30 days prior to
the date of the application for the withdrawal and payment of such Trust
Moneys and setting forth:
(i) that expenditures have been made, or costs incurred,
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including any Ready for Sea Cost, or will be incurred simultaneous
with such withdrawal of Trust Moneys, by the Company or the
applicable Subsidiary Guarantor or Pledgor in a specified amount for
the purpose of making certain repairs, rebuildings and replacements
of the Mortgaged Collateral (including the acquisition of a
Qualified Substitute Vessel), which shall be briefly described, and
stating the fair value (which shall be substantiated by an
Appraiser's certificate attached thereto) thereof to the Company at
the date of the acquisition thereof by the Company, except that it
shall not be necessary under this paragraph to state the fair value
of any of such repairs, rebuildings or replacements that are
separately described pursuant to paragraph (vi) of this subsection
(I) and whose fair value is stated in the Appraiser's certificate
under the following subsection (II) of this Section;
(ii) that no part of such expenditures, in any previous or
then pending application, has been or is being made the basis for
the withdrawal of any Trust Moneys pursuant to this Section 13.03;
(iii) that no part of such expenditures or costs has been paid
out of either the proceeds of insurance upon any part of the
Mortgaged Collateral not required to be paid to the Trustee under
the Mortgage or any award for or the proceeds from any of the
Mortgaged Collateral being taken not required to be paid to the
Trustee under Section 12.05 hereof, as the case may be;
(iv) that there is no outstanding indebtedness or other
obligation, other than costs for which payment is being requested,
known to the Company, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or for
labor, wages, materials or supplies in connection with the making
thereof, which, if unpaid, might become the basis of a vendor's,
mechanics', laborer's, materialmen's, statutory or other similar
Lien upon any of such repairs, rebuildings or replacement, which
Lien might, in the opinion of the signers of such certificate,
materially impair the security afforded by such repairs, rebuildings
or replacement;
(v) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the Company's, the
Subsidiary Guarantors' or the Pledgors' business;
(vi) whether any part of such repairs, rebuildings or
replacements, within six months before the date of acquisition
thereof by the Company, a Subsidiary Guarantor or a Pledgor, has
been used or operated by others other than the Company, a Subsidiary
Guarantor or a Pledgor in a business similar to that in which such
property has been or is to be used or operated by the Company, a
Subsidiary Guarantor or a Pledgor, and whether the fair value to the
Company, a Subsidiary Guarantor or a Pledgor, at the date of such
acquisition, of such part of such repairs, rebuildings or
replacement is at least $25,000 and 1% of the aggregate principal
amount of the outstanding Securities; and, if all such facts are
present, such part of said repairs, rebuildings or replacements
shall be separately described, and it shall be stated that an
Appraiser's certificate as to the fair value to the Company of such
separately described repairs, rebuildings or replacements will be
furnished under the following subsection (II) of this Section
13.03(a);
(vii) that no Default shall have occurred and be continuing;
(viii) that the Trust Moneys that will remain after such
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withdrawal will be sufficient to complete the maintenance or repairs
of the property destroyed, damaged or taken; and
(ix) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(II) In case any part of such maintenance or repairs is separately
described pursuant to the foregoing paragraph (vi) of subsection (I) of
this Section, a certificate of an Appraiser stating the fair value to the
Company, the Subsidiary Guarantors or the Pledgor, in such Appraiser's
opinion, of such separately described maintenance or repairs at the date
of the completion thereof by the Company, the Subsidiary Guarantors or the
Pledgors.
(III) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this
Indenture or the Security Agreements, and that, upon the basis of
such Company request and the accompanying documents specified in
this Section 13.03, all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with, and
the Trust Moneys whose withdrawal is then requested may be lawfully
paid over under this Section 13.03;
(ii) that the Company or the applicable Subsidiary Guarantor
or Pledgor has acquired title to said repairs, rebuildings and
replacements at least the equivalent to its title to the property
destroyed, damaged or taken, and that the same and every part
thereof are free and clear of all Liens prior to the Lien of this
Indenture and the Security Agreements, except Permitted Liens to
which the property so destroyed, damaged or taken shall have been
subject at the time of such destruction, damage or taking; and
(iii) that all the Company's or the applicable Subsidiary
Guarantor's or Pledgor's right, title and interest in and to said
repairs, rebuilding or replacements, or combination thereof, are
then subject to the Lien of this Indenture and the Security
Agreements.
(b) To the extent that any Trust Moneys consist of Net Available
Cash attributable to a Sold Mortgaged Vessel (other than the receipt by a
Pledgor of Net Available Cash attributable to the sale of its Mortgaged
Vessel or the sale of its Capital Stock to the Company or a Restricted
Subsidiary) or to the Sale Equivalent Portion of Bareboat Charter Funds,
such Trust Moneys may be withdrawn by the Company or the applicable
Subsidiary Guarantor or Pledgor, and shall be paid by the Trustee, upon a
request by the Company to the Trustee by the proper officer or officers of
the Company or the applicable Subsidiary Guarantor or Pledgor, to the
Company or the applicable Subsidiary Guarantor or Pledgor, in connection
with the acquisition of a Qualified Substitute Vessel, including certain
related maintenance and repairs, in accordance with the conditions set
forth below and, upon receipt by the Trustee of the following:
(I) an Officers' Certificate dated not more than 30 days prior to
the date of the application for the withdrawal and payment of such Trust
Moneys and setting forth:
(i) either (x) that expenditures have been made, or costs
incurred, or will be incurred simultaneously with such withdrawal of
Trust Moneys, by the Company or the applicable Subsidiary Guarantor
or Pledgor in a specified amount in connection with the acquisition
of a Qualified SubstituteVessel in accordance with the terms of an
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Acquisition Contract that has been (or will be) executed and is (or
will be) in full force and effect for the purpose of acquiring a
Qualified Substitute Vessel to replace the Mortgaged Vessel, which
Qualified Substitute Vessel shall be briefly described, and stating
the fair value thereof (which shall be substantiated by an
Appraiser's certificate attached thereto) to the Company at the date
of the acquisition thereof by the Company, or (y) that expenditures
have been made, or costs incurred, including Ready for Sea Costs, or
will be incurred simultaneously with such withdrawal of Trust
Moneys, by the Company or the applicable Subsidiary Guarantor or
Pledgor in a specified amount for the purpose of making certain
maintenance, repairs (including structural modifications) or
drydocking expenses, including survey expenses, relating to such
Qualified Substitute Vessel, which shall be briefly described, and
stating the fair value thereof (which shall be substantiated by an
Appraiser's certificate attached thereto) to the Company at the date
of the acquisition thereof by the Company;
(ii) that no part of such expenditures, in any previous or
then pending application, has been or is being made the basis for
the withdrawal of any Trust Moneys pursuant to this Section 13.03;
(iii) that there is no outstanding indebtedness or other
obligation, other than costs for which payment is being requested,
known to the Company, after due inquiry, for the purchase price or
construction of such maintenance or repairs, or for labor, wages,
materials or supplies in connection with the making thereof, which,
if unpaid, might become the basis of a vendor's, mechanics',
laborer's, materialmen's, statutory or other similar Lien upon any
of such repairs, rebuildings or replacement, which Lien might, in
the opinion of the signers of such certificate, materially impair
the security afforded by such repairs, rebuildings or replacement;
(iv) that the Qualified Substitute Vessel to be acquired,
maintained or repaired is necessary or desirable in the conduct of
the Company's, the Subsidiary Guarantors' or the Pledgors' business;
(v) that no Default shall have occurred and be continuing;
(vi) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(II) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this
Indenture and the Security Agreements, and that, upon the basis of
such Company, Subsidiary Guarantor or Pledgor request and the
accompanying documents specified in this Section 13.03, all
conditions precedent herein provided for relating to such withdrawal
and payment have been complied with, and the Trust Moneys whose
withdrawal is then requested may be lawfully paid over under this
Section 13.03;
(ii) that the Company or the applicable Subsidiary Guarantor
or Pledgor has acquired title to said Qualified Substitute Vessel,
and that the same and every part thereof are free and clear of all
Liens prior to the Lien of this Indenture and the Security
Agreements, except Permitted Liens; and
(iii) that all the Company's or the applicable Subsidiary
Guarantor's or Pledgor's right, title and interest in and to such
Qualified Substitute Vessel, are then subject to the Lien of this
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Indenture and the Security Agreements.
(c) Upon compliance with the foregoing provisions of this Section
13.03(a) or (b), the Trustee shall pay on the Company's request an amount
of Trust Moneys of the character aforesaid equal to the amount of the
expenditures or costs stated in the Officers' Certificate required by
Section 13.03(a) or (b); provided, however, that notwithstanding the
above, so long as no Default shall have occurred and be continuing, in the
event that any insurance proceeds or award for such property or proceeds
of such sale, in each case contemplated by Section 13.03(a), does not
exceed $5,000,000, and, in the good faith estimate of the Company and the
applicable Subsidiary Guarantor or Pledgor, such destruction or damage
resulting in such insurance proceeds or such taking or sale resulting in
such award does not detrimentally affect the value or use of the Mortgaged
Collateral in any material respect, upon delivery to the Trustee of an
Officers' Certificate to such effect, the Company may direct the Trustee
and, upon such direction, the Trustee and the Company shall direct the
insurer to release directly to the Company or the applicable Subsidiary
Guarantor or Pledgor such insurance proceeds or award for such property or
proceeds of such sale, free of the Lien hereof and of the Security
Agreements.
SECTION 13.04. Powers Exercisable Notwithstanding Event of Default.
In case Default shall have occurred and shall be continuing, the Company, while
in possession of the Mortgaged Collateral (other than cash, cash equivalents,
securities and other personal property held by, or required to be deposited or
pledged with, the Trustee hereunder or under the Security Agreements), may do
any of the things enumerated in Sections 13.02 and 13.03 if the Trustee in its
discretion, or the Holders of a majority in aggregate principal amount of the
outstanding Securities, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under any of such Sections
shall omit the statement to the effect that no Default has occurred and is
continuing. This Section 13.04 shall not apply, however, during the continuance
of a Default of the type specified in Section 6.01(1) or 6.01(2).
SECTION 13.05. Powers Exercisable by Trustee or Receiver. In case
the Mortgaged Collateral (other than any cash, cash equivalents, securities and
other personal property held by, or required to be deposited or pledged with,
the Trustee hereunder or under the Security Agreements) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in this Article 13 conferred upon the Company, the Subsidiary Guarantors and the
Pledgors with respect to the withdrawal or application of Trust Moneys may be
exercised by such receiver or trustee, in which case a certificate signed by
such receiver or trustee shall be deemed the equivalent of any Officers'
Certificate required by this Article 13. If the Trustee shall be in possession
of any of the Mortgaged Collateral hereunder or under the Security Documents,
such powers may be exercised by the Trustee in its discretion.
SECTION 13.06. Disposition of Securities Retired. All Securities
received by the Trustee and for whose purchase Trust Moneys are applied under
this Article 13, if not otherwise canceled, shall be promptly canceled and
destroyed by the Trustee unless the Trustee shall be otherwise directed by
Company request. Upon destruction of any Securities, the Trustee shall issue a
certificate of destruction to the Company.
SECTION 13.07. Investment and Use of Trust Moneys. (a) All or any
part of any Trust Moneys held by the Trustee hereunder (except such as may be
held for the account of any particular Securities), shall from time to time at
the direction of the Company be invested or reinvested by the Trustee in
Temporary Cash Investments. Unless a Default occurs and is continuing, any
interest on such Temporary Cash Investments (in excess of any accrued interest
paid at the time of purchase) which may be received by the Trustee shall be paid
periodically to the Company. Such Temporary Cash Investments shall be held by
Page 90
the Trustee as a part of the Mortgaged Collateral, subject to the same
provisions hereof as the cash used by it to purchase such cash equivalents. The
Trustee shall not be liable or responsible for any loss resulting from such
investments or sales except only for its own grossly negligent action, its own
grossly negligent failure to act or its own willful misconduct in complying with
this Section 13.07.
(b) If the Company or any Subsidiary Guarantor or Pledgor shall fail
to perform any of its covenants in this Indenture or under any Security
Agreement, the Trustee may (but shall not be required to) at any time and
from time to time, use, apply and advance any Trust Moneys held by it
under this Article 13 or make advances to effect performance of any such
covenant on behalf of the Company, such Subsidiary Guarantor or such
Pledgor as contemplated by this Indenture or the Security Agreements;
provided, however, that the Trustee shall not be required to make any such
advances from its own funds; provided further, however, that all moneys so
used or advanced by the Trustee, together (in the case of funds advanced
by the Trustee) with interest at the rate borne by the Securities shall be
repaid by the Company or the applicable Subsidiary Guarantor or Pledgor
upon demand and such advances shall be secured under the Mortgages prior
to the Securities. For repayment of all such advances the Trustee shall
have the right to use and apply any Trust Moneys at any time held by it
under Article 13 but no such use of Trust Moneys or advance shall relieve
the Company, such Subsidiary Guarantor or such Pledgor from any Default.
ARTICLE 14
Miscellaneous
SECTION 14.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 14.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or overnight
courier addressed as follows:
if to the Company or any Subsidiary Guarantor or Pledgor:
Ultrapetrol (Bahamas) Limited
c/o H&J Corporate Services Ltd.
Shirlaw House
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
Nassau, Bahamas
Attention of Secretary
with a copy to:
Ultrapetrol (Bahamas) Limited
c/o Ravenscroft Shipping Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention of Secretary
if to the Trustee:
Manufacturers and Traders Trust Company
Corporate Trust Administration
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Page 91
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The Company, the Subsidiary Guarantors, the Pledgors or the Trustee
by notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 14.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Pledgors, the Trustee,
the Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 14.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company, Subsidiary Guarantor or a
Pledgor to the Trustee to take or refrain from taking any action under this
Indenture, the Company or such Subsidiary Guarantor shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 14.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 14.06. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
Page 92
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 14.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 14.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York and the State of Maryland. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 14.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 14.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Securities or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 14.11. Successors. All agreements of the Company, the
Subsidiary Guarantors and Pledgors in this Indenture and the Securities shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 14.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 14.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 14.14. Agent for Service; Submission to Jurisdiction; Waiver
of Immunities. By the execution and delivery of this Indenture, the Company and
each of the Pledgors and the Subsidiary Guarantors (i) acknowledges that it has,
by separate written instrument, irrevocably designated and appointed CT
Corporation System (and any successor entity), as its authorized agent upon
which process may be served in any suit or proceeding arising out of or relating
to this Indenture, the Securities or the Security Agreements that may be
instituted in any federal or state court in the State of New York, Borough of
Manhattan or brought by the Trustee (whether in its individual capacity or in
its capacity as Trustee hereunder), and acknowledges that CT Corporation System
has accepted such designation, (ii) submits to the jurisdiction of any such
court in any such suit or proceeding, and (iii) agrees that service of process
upon CT Corporation System and written notice of said service to the Company or
the applicable Pledgor or Subsidiary Guarantor, shall be deemed in every respect
effective service of process upon the Company or such Pledgor or Subsidiary
Guarantor, as the case may be, in any such suit or proceeding. The Company and
each of the Pledgors and the Subsidiary Guarantors further agree to take any and
all action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
CT Corporation System in full force and effect so long as this Indenture shall
be in full force and effect.
The Company and each of the Pledgors and the Subsidiary Guarantors
hereby irrevocably and unconditionally waive, to the fullest extent they may
legally effectively do so, any objection which they may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Indenture, the Security Agreements or the Securities in any federal or
state court in the State of New York, Borough of Manhattan. The Company and each
of the Pledgors and the Subsidiary Guarantors hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
To the extent either the Company or any of the Pledgors or the
Subsidiary Guarantors has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, it hereby irrevocably
waives such immunity in Securities and the Security Agreements, to the extent
permitted by law.
Page 93
In Witness Whereof, the parties have caused this Indenture to be
duly executed as of the date first written above.
ULTRAPETROL (BAHAMAS) LIMITED, as principal
obligor on the Securities,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
Bayham Investments ▇.▇.
▇▇▇▇▇▇▇ Maritime Inc.
Cavalier Shipping Inc.
Corporacion de Navegacion Mundial S.A.
Danube Maritime Inc.
General Ventures Inc.
Imperial Maritime Ltd. (Bahamas) Inc.
Kattegat Shipping Inc.
Kingly Shipping Ltd.
Majestic Maritime Ltd.
Massena Port S.A.
Monarch Shipping Ltd.
Noble Shipping Ltd.
Oceanpar S.A.
Oceanview Maritime Inc.
Parfina S.A.
Parkwood Commercial Corp.
Princely International Finance Corp.
Regal International Investments S.A.
Riverview Commercial Corp.
Sovereign Maritime Ltd.
Stanmore Shipping Inc.
▇▇▇▇▇▇ Marine Inc.
Ultrapetrol International S.A.
Ultrapetrol S.A.
UP Offshore (Holdings) Ltd.
each as a Subsidiary Guarantor,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
RIVERPAR S.A.
UABL S.A.,
each as a Pledgor,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
MANUFACTURERS AND TRADERS TRUST COMPANY, as
Trustee,
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Page 94
RULE 144A / REGULATION S / IAI APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1 Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depository for such a Regulation S
Global Security, to the extent applicable to such transaction and as in effect
from time to time.
"Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
appropriate restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Distribution Compliance Period", with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the issue date with respect to such Securities.
"Exchange Securities" means the 9% First Preferred Ship Mortgage
Notes due 2014 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement.
Page 95
"IAI" means an institutional "accredited investor", as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
"Initial Purchaser" means Credit Suisse First Boston LLC.
"Initial Securities" means $180,000,000 aggregate principal amount
of 9% First Preferred Ship Mortgage Notes due 2014 issued on the Issue Date.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchaser to issue and deliver to
the Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 9% First Preferred Ship
Mortgage Notes due 2014 issued in connection with a Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated November 10,
2004, among the Company, the Subsidiary Guarantors and the Pledgors named
therein and the Initial Purchaser.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated November 24, 2004, among the Company, the Subsidiary Guarantors
and the Pledgors named therein and the Initial Purchaser.
"Rule 144A Securities" means all Securities offered and sold to QIBs
in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto, and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend relating to restrictions on transfer relating to the
Securities Act set forth in Section 2.3(e) hereto.
1.2 Other Definitions
Term Defined in Section:
---- -------------------
"Agent Members" 2.1(b)
"Global Securities" 2.1(a)
Page 96
"IAI Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Regulation S Global Security" 2.1(a)
"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
2. The Securities.
2.1 (a) Form and Dating. The Initial Securities will be offered and
sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. Initial Securities initially resold
pursuant to Rule 144A shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form (collectively,
the "Rule 144A Global Security"); Initial Securities initially resold pursuant
to Regulation S shall be issued initially in the form of one or more permanent
global Securities in definitive, fully registered form (collectively, the
"Regulation S Global Security"); and Initial Securities to be resold to IAIs
shall be issued initially in the form of one or more permanent global Securities
in definitive, fully registered form (collectively, the "IAI Global Security"),
in each case without interest coupons and with the global securities legend and
the applicable restricted securities legend set forth in Exhibit 1 hereto, which
shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Securities Custodian and registered in the name of
the Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture. Beneficial ownership
interests in the Regulation S Global Security will be exchangeable for interests
in a Rule 144A Global Security, an IAI Global Security or a Definitive Security
only after the expiration of the Distribution Compliance Period.
Beneficial interests in Regulation S Global Securities or IAI Global
Securities may be exchanged for interests in Rule 144A Global Securities if (1)
such exchange occurs in connection with a transfer of Securities in compliance
with Rule 144A and (2) the transferor of the beneficial interest in the
Regulation S Global Security or the IAI Global Security, as applicable, first
delivers to the Trustee a written certificate (in a form satisfactory to the
Trustee) to the effect that the beneficial interest in the Regulation S Global
Security or the IAI Global Security, as applicable, is being transferred to a
Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing
for its own account or the account of a QIB in a transaction meeting the
requirements of Rule 144A, and (c) in accordance with all applicable securities
laws of the States of the United States and other jurisdictions.
Beneficial interests in Regulation S Global Securities and Rule 144A
Global Securities may be exchanged for an interest in IAI Global Securities if
(1) such exchange occurs in connection with a transfer of the Securities in
compliance with an exemption under the Securities Act and (2) the transferor of
the Regulation S Global Security or Rule 144A Global Security, as applicable,
first delivers to the Trustee on behalf of the transferee a written certificate
(substantially in the form of Exhibit 2) to the effect that the Regulation S
Global Security or Rule 144A Global Security, as applicable, is being
transferred (x) to an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional
investor acquiring the Securities for its own account or for the account of such
Page 97
an institutional accredited investor, for investment purposes and not with a
view to or for offer or sale in connection with any distribution in violation of
the Securities Act, (y) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions and (z) in an aggregate
principal amount of Securities of no less than $250,000 or, if such transfer is
in an aggregate principal amount of Securities of less than $250,000, such
transferor shall also deliver to the Trustee an opinion of counsel acceptable to
the Company that such transfer is in compliance with the Securities Act.
Beneficial interests in a Rule 144A Global Security or an IAI Global
Security may be transferred to a Person who takes delivery in the form of an
interest in a Regulation S Global Security, whether before or after the
expiration of the Distribution Compliance Period, only if the transferor first
delivers to the Trustee a written certificate (in the form provided in the
Indenture) to the effect that such transfer is being made in accordance with
Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
The Rule 144A Global Security, the IAI Global Security and the
Regulation S Global Security are collectively referred to herein as "Global
Securities". The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to
a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Definitive Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities shall
not be entitled to receive physical delivery of Definitive Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
on the Issue Date, an aggregate principal amount of $180.0 million 9% First
Preferred Ship Mortgage Notes due 2014, and (2) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
Initial Securities, Exchange Securities or Private Exchange Securities. The
aggregate principal amount of Securities outstanding at any time may not exceed
Page 98
$180,000,000 except as provided in Section 2.06 of this Indenture.
2.3 Transfer and Exchange.
Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an
equal principal amount of Definitive Securities of
other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and
the Registrar, duly executed by the Holder thereof or its attorney duly
authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities Act,
pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below,
and are accompanied by the following additional information and documents,
as applicable:
(A) if such Definitive Securities are being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect; or
(B) if such Definitive Securities are being transferred
to the Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred
(x) pursuant to an exemption from registration in accordance with
Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y)
in reliance upon another exemption from the requirements of the
Securities Act: (i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in Section 2.3(e)(i).
Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
beneficial interest in a Rule 144A Global Security, an IAI Global Security or a
Regulation S Global Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being transferred to
a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C)
being transferred after expiration of the Distribution Compliance Period
by a Person who initially purchased such Security in reliance on
Regulation S to a buyer who elects to hold its interest in such Security
in the form of a beneficial interest in the Regulation S Global Security;
Page 99
and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Rule 144A Global Security (in the case of a
transfer pursuant to clause (b)(i)(A)), IAI Global Security (in the case
of a transfer pursuant to clause (b)(i)(B)) or Regulation S Global
Security (in the case of a transfer pursuant to clause (b)(i)(C)) to
reflect an increase in the aggregate principal amount of the Securities
represented by the Rule 144A Global Security, IAI Global Security or
Regulation S Global Security, as applicable, such instructions to contain
information regarding the Depository account to be credited with such
increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security, IAI Global Security or Regulation S Global Security, as applicable, to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security, IAI Global Security or Regulation S Global Security, as applicable,
equal to the principal amount of the Definitive Security so canceled. If no Rule
144A Global Securities, IAI Global Securities or Regulation S Global Securities,
as applicable, are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate of the Company, a new Rule 144A Global Security, IAI
Global Security or Regulation S Global Security, as applicable, in the
appropriate principal amount.
Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository, in
accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
therefor. A transferor of a beneficial interest in a Global Security shall
deliver to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with such
instructions, instruct the Depository to credit to the account of the
Person specified in such instructions a beneficial interest in the Global
Security and to debit the account of the Person making the transfer the
beneficial interest in the Global Security being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Security to which
such interest is being transferred in an amount equal to the principal
amount of the interest to be so transferred, and the Registrar shall
reflect on its books and records the date and a corresponding decrease in
the principal amount of the Global Security from which such interest is
being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
Page 100
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix, prior to
the consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of the
Initial Securities intended to ensure that such transfers comply with Rule
144A, Regulation S or another applicable exemption under the Securities
Act, as the case may be) and such other procedures as may from time to
time be adopted by the Company.
Restrictions on Transfer of Regulation S Global Securities. During
the Distribution Compliance Period, beneficial ownership interests in Regulation
S Global Securities may only be sold, pledged or transferred in accordance with
the Applicable Procedures and only (i) to the Company, (ii) in an offshore
transaction in accordance with Regulation S or (iii) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any State of the United States.
Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global Securities
(and all Securities issued in exchange therefor or in substitution
thereof), in the case of Securities offered otherwise than in reliance on
Regulation S, shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, as amended (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN institutional
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Page 101
Each certificate evidencing a Security offered in reliance on
Regulation S shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED
ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
Each Definitive Security shall also bear the following additional
legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH REGISTRAR AND TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security, if the transferor thereof certifies in
writing to the Registrar that such sale or transfer was made in reliance
on Rule 144 (such certification to be in the form set forth on the reverse
of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the effectiveness
of a Shelf Registration Statement with respect to such Initial Securities
or Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such Initial
Security or such Private Exchange Security issued to certain Holders be
issued in global form will cease to apply, and a certificated Initial
Security or Private Exchange Security or an Initial Security or Private
Exchange Security in global form, in each case without restrictive
transfer legends, will be available to the transferee of the Holder of
such Initial Securities or Private Exchange Securities upon exchange of
such transferring Holder's certificated Initial Security or Private
Exchange Security or directions to transfer such Holder's interest in the
Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to Holders of such
Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form, in each case without
the restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in
global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Private
Page 102
Exchange Securities in global form with the global securities legend and
the applicable restricted securities legend set forth in Exhibit 1 hereto
will be available to Holders that exchange such Initial Securities in such
Private Exchange.
Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed, purchased
or canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the Securities
Custodian, to reflect such reduction.
No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a participant
in the Depository or other Person with respect to the accuracy of the
records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or
other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect
to such Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Securities shall
be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be
exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with
respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Definitive Securities.
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depository or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor depository is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive Securities
under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Security, an
equal aggregate principal amount of Definitive Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section 2.4 shall be executed, authenticated and delivered only in denominations
of $1,000 principal amount and any integral multiple thereof and registered in
such names as the Depository shall direct. Any Definitive Security delivered in
exchange for an interest in the Transfer Restricted Security shall, except as
otherwise provided by Section 2.3(e) hereof, bear the applicable restricted
securities legend and definitive securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of one of the events specified in
Section 2.4(a) hereof, the Company shall promptly make available to the Trustee
a reasonable supply of Definitive Securities in definitive, fully registered
form without interest coupons. In the event that such Definitive Securities are
not issued, the Company expressly acknowledges, with respect to the right of any
Holder to pursue a remedy pursuant to Section 6.06 of the Indenture, the right
of any beneficial owner of Securities to pursue such remedy with respect to the
portion of the Global Security that represents such beneficial owner's
Securities as if such Definitive Securities had been issued.
Page 103
EXHIBIT 1
to
RULE 144A / REGULATION S / IAI APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE
LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF
SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES
ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH
OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend for Securities offered otherwise than in
Reliance on Regulation S]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (V) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Restricted Securities Legend for Securities Offered in Reliance on
Regulation S.]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
Page 104
No.
CUSIP:______________
ISIN:________________
9% First Preferred Ship Mortgage Notes Due 2014
ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation, promises to
pay to ______________ , or registered assigns, the principal sum of Dollars on
November 24, 2014.
Interest Payment Dates: May 24 and November 24.
Record Dates: May 9 and November 9.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:_____________
ULTRAPETROL (BAHAMAS) LIMITED,
by ________________________________
Name:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee, certifies that this is
one of the Securities referred
to in the Indenture.
by ______________________________
Authorized Signatory
Page 105
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9% First Preferred Ship Mortgage Note Due 2014
1. Interest
Ultrapetrol (Bahamas) Limited, a Bahamian corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this Security at a rate of 10% per
annum from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured. The Company will pay interest semiannually on May 24 and November 24 of
each year, commencing May 24, 2005. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from November 24, 2004. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 9 or November 9 next preceding the interest payment date
Page 106
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by the
Depository. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on a
certificated Security will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, Manufacturers and Traders Trust Company, a New York
banking corporation ("Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors,
the Pledgors and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are general secured obligations of the Company
limited to $180,000,000 aggregate principal amount (subject to Section 2.06 of
the Indenture). The Initial Securities issued on the Issue Date and all Exchange
Securities or Private Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit (i) the incurrence of additional debt by the
Company and its subsidiaries, (ii) the payment of dividends on capital stock of
the Company and the purchase, redemption or retirement of capital stock or
subordinated indebtedness, (iii) investments, (iv) certain liens and
Sale/Leaseback transactions, (v) certain transactions with affiliates, (vi)
sales of assets, (vii) lines of business and (viii) certain consolidations,
mergers and transfers of assets. The Indenture also prohibits certain
restrictions on distributions from subsidiaries. These covenants are subject to
important exceptions and qualifications.
5. Optional Redemption
Except as set forth in the next three paragraphs and in paragraph 6
below, the Securities may not be redeemed prior to November 24, 2009. On and
after that date, the Company may redeem the Securities in whole at any time or
in part from time to time upon not less than 30 nor more than 60 days' notice at
the following redemption prices (expressed in percentages of principal amount on
the redemption date), plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date):
Page 107
if redeemed during the 12-month period beginning November 24, of the year set
forth below
Period Percentage
------ ----------
2009....................................................... 104.500%
2010....................................................... 103.000
2011....................................................... 101.500
2012 and thereafter........................................ 100.000
In addition, at any time and from time to time prior to November 24,
2007, the Company shall be entitled at its option on one or more occasions to
redeem Securities in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 109.00% plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the related interest payment
date); provided, however, that at least $115.0 million aggregate principal
amount of the Securities must remain outstanding and be held, directly or
indirectly, by Persons other than the Company and its Affiliates, after each
such redemption.
Prior to November 24, 2009, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date).
In addition, Securities may be redeemed, at the option of the
Company, at any time as a whole but not in part, on not less than 30 nor more
than 60 days' notice, at 100% of the principal amount thereof, plus accrued and
unpaid interest to the date of redemption (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in the event the Company or the Subsidiary Guarantors or
the Pledgors, as the case may be, has become or would become obligated to pay,
on the next date on which any amount would be payable with respect to the
Securities, any Additional Amounts as a result of a change in or an amendment to
the laws (including any regulations or rulings promulgated thereunder) of the
Bahamas, Argentina, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or
Chile (or any relevant jurisdiction, political subdivision or taxing authority
thereof or therein), or any change in or amendment to any official position
regarding the application or interpretation of such laws, regulations or rulings
(including a holding by a court of competent jurisdiction), which change or
amendment is announced or becomes effective on or after the Issue Date and the
Company, the Subsidiary Guarantors or the Pledgors, as the case may be, cannot
avoid such obligations by taking reasonable steps to avoid them; provided,
however, that (a) no such notice of redemption shall be given earlier than 60
days prior to the earliest date on which the Company, the Subsidiary Guarantors
or the Pledgors, as the case may be, would be obligated to pay such Additional
Amounts if a payment in respect of the Securities or the Subsidiary Guarantee
were then due, and (b) at the time any such redemption notice is given, such
obligation to pay Additional Amounts must remain in effect. Prior to any such
redemption of the Securities, the Company shall deliver to the Trustee or any
paying agent an Officers' Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of redemption have occurred.
6. Other Redemptions
To the extent that, after the close of business on December 31,
Page 108
2005, the amount of cash and the fair market value (as determined by the Board
of Directors in good faith) of securities on deposit in the Escrow Account
exceeds $1.0 million, the Company will be obligated to use all such remaining
Escrowed Property to redeem (the "Special Mandatory Redemption") as much
principal amount of the Securities as can be redeemed with such Escrowed
Property at a redemption price equal to the sum of 101% of the principal amount
of such Securities, and the accrued interest thereon to the Special Mandatory
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) (such
redemption price, the "Special Mandatory Redemption Price"). For purposes
hereof, "Special Mandatory Redemption Date" means January 30, 2006.
Upon the permitted sale of a Mortgaged Vessel or the Capital Stock
of a Subsidiary Guarantor (other than the sale by a Pledgor of its Mortgaged
Vessel or the sale of its Capital Stock to the Company or a Restricted
Subsidiary) (which term shall not include the transfer of the operation of a
Mortgaged Vessel pursuant to a bareboat charter with a purchase option) or an
Event of Loss with respect to a Mortgaged Vessel, the Company must either (a)
not later than 60 days after the Proceeds Receipt Date, redeem Securities, in
whole or in part on a pro rata basis, in an aggregate principal amount equal to
(i) the Redemption Amount or (ii) the Net Available Cash or Net Event of Loss
Proceeds, as the case may be, at a redemption price equal to the Sale Redemption
Price or the Loss Redemption Price, as the case may be (provided, however, that
if a Default shall have occurred and be continuing on the Notification Date, the
amount required to be applied by the Company to redeem Securities shall equal
the greater of such Redemption Amount and such Net Available Cash or Net Event
of Loss Proceeds, as the case may be), or (b) if no Default shall have occurred
and be continuing, tender to the Trustee a Qualified Substitute Vessel within 12
months after the Proceeds Receipt Date.
In the event that the Company, a Subsidiary Guarantor or a Pledgor
enters into a Bareboat Charter, the Company must either (a) not later than 60
days after the date title to the relevant Mortgaged Vessel passes to the
charterer, redeem Securities, in whole or in part on a pro rata basis, in such
principal amount as can be redeemed with the Sale Equivalent Portion of the
Bareboat Charter Funds at the Sale Redemption Price or (b) if no Default shall
have occurred and be continuing, tender to the Trustee as part of the Collateral
one or more Vessels within 12 months of the date title to such Mortgaged Vessel
passes to the charterer.
7. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
8. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. Guarantee
Page 109
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
10. Security
The Securities will be secured by the Mortgages on the Mortgaged
Vessels, the security interests created by the other Security Agreements, the
Escrowed Property and all the issued and outstanding Capital Stock of certain of
the Subsidiary Guarantors.
11. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
12. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
13. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
14. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its and the Subsidiary Guarantors' obligations under the
Securities, the Security Agreements and the Indenture if the Company deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity, as the case
may be.
15. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Security Agreements or the Securities may be amended with the
written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount outstanding of the Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Securityholder, the
Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend the
Indenture, the Security Agreements or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add additional guarantees with respect to the
Securities or to provide additional security for the Securities, or to add
Page 110
additional covenants or surrender rights and powers conferred on the Company or
a Subsidiary Guarantor or a Pledgor, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
16. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon required purchase, upon acceleration or otherwise,
or failure by the Company or the Subsidiary Guarantors to redeem or purchase
Securities when required; (iii) failure by the Company to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company or Significant Subsidiaries if the amount accelerated (or so unpaid)
exceeds $5.0 million; (v) certain events of bankruptcy or insolvency with
respect to the Company or Significant Subsidiaries; (vi) certain judgments or
decrees for the payment of money in excess of $5.0 million and (vii) certain
events or defaults with respect to the Subsidiary Guarantees or the Security
Agreements. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
17. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
18. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company and the Subsidiary Guarantors to the extent
provided therein.
23. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Ultrapetrol (Bahamas) Limited
c/o H&J Corporate Services Ltd.
Shirlaw House
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
Nassau, Bahamas
Attention of Secretary
Page 111
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Date: Your Signature:
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
|_| to the Company; or
(1) |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
(2) |_| inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933
in compliance with Rule 904 under the Securities Act of 1933;
or
(4) |_| pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933; or
(5) |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933)
that has furnished to the Trustee a signed letter containing
certain representations and agreements and, if applicable, an
opinion of counsel satisfactory to the Company that such
transfer is in compliance with the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (4)
is checked, the Trustee shall be entitled to require, prior to registering
any such transfer of the Securities, such legal opinions, certifications and
other information as the Company has reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act of 1933.
-------------------------------
Signature
Signature Guarantee:
------------------------------ -------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Page 112
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company and
the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
-----------------------------
Notice: To be executed by
an executive officer
Page 113
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Amount of Amount of Principal
decrease in increase in amount of this Signature of
Principal Principal Global authorized
amount of amount of Security officer of
this this following such Trustee or
Date of Global Global decrease or Securities
Exchange Security Security increase Custodian
Page 114
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or 4.16 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.11 or 4.16 of the Indenture, state the
amount in principal amount: $_____________________
Dated: Your Signature:
--------------------- --------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
-----------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Page 115
EXHIBIT A TO THE
RULE 144A / REGULATION S / IAI APPENDIX
FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
*/**/
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
Page 116
No.
CUSIP:______________
ISIN:________________
9% First Preferred Ship Mortgage Notes Due 2014
ULTRAPETROL (BAHAMAS) LIMITED, a Bahamian corporation, promises to
pay to ________ , or registered assigns, the principal sum of ________ Dollars
on November 24, 2014.
Interest Payment Dates: May 24 and November 24.
Record Dates: May 9 and November 9.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
ULTRAPETROL (BAHAMAS) LIMITED,
by ____________________________
Name:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee, certifies that this is one
of the Securities referred to in the Indenture.
by _________________________
Authorized Signatory
Page 117
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
[OR PRIVATE EXCHANGE SECURITY]]
9% First Preferred Ship Mortgage Note Due 2004
1. Interest
Ultrapetrol (Bahamas) Limited, a Bahamian corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this Security at a rate of 10% per
annum from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured. The Company will pay interest semiannually on May 24 and November 24 of
each year, commencing May 24, 2005. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from November 24, 2004. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities plus 1% per annum, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 9 or November 9 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by the
Depository. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on a
certificated Security will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).
3. Paying Agent and Registrar
Initially, Manufacturers and Traders Trust Company, a New York
banking corporation ("Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors,
the Pledgors and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are general secured obligations of the Company
limited to $180,000,000 aggregate principal amount (subject to Section 2.06 of
the Indenture). The Initial Securities issued on the Issue Date and all Exchange
Page 118
Securities or Private Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit (i) the incurrence of additional debt by the
Company and its subsidiaries, (ii) the payment of dividends on capital stock of
the Company and the purchase, redemption or retirement of capital stock or
subordinated indebtedness, (iii) investments, (iv) certain liens and
Sale/Leaseback transactions, (v) certain transactions with affiliates, (vi)
sales of assets, (vii) lines of business and (viii) certain consolidations,
mergers and transfers of assets. The Indenture also prohibits certain
restrictions on distributions from subsidiaries. These covenants are subject to
important exceptions and qualifications.
5. Optional Redemption
Except as set forth in the next three paragraphs and in paragraph 6
below, the Securities may not be redeemed prior to November 24, 2009. On and
after that date, the Company may redeem the Securities in whole at any time or
in part from time to time upon not less than 30 nor more than 60 days' notice at
the following redemption prices (expressed in percentages of principal amount on
the redemption date), plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date):
if redeemed during the 12-month period beginning November 24, of the year set
forth below
Period Percentage
------ ----------
2009....................................................... 104.500%
2010....................................................... 103.000
2011....................................................... 101.500
2012 and thereafter........................................ 100.000
In addition, at any time and from time to time prior to November 24,
2007, the Company shall be entitled at its option on one of more occasions to
redeem Securities in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 109.00% plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the related interest payment
date); provided, however, that at least $115.0 million aggregate principal
amount of the Securities must remain outstanding and be held, directly or
indirectly, by Persons other than the Company and its Affiliates, after each
such redemption.
Prior to November 24, 2009, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date).
In addition, Securities may be redeemed, at the option of the
Company, at any time as a whole but not in part, on not less than 30 nor more
than 60 days' notice, at 100% of the principal amount thereof, plus accrued and
unpaid interest to the date of redemption (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in the event the Company or the Subsidiary Guarantors or
the Pledgors, as the case may be, has become or would become obligated to pay,
on the next date on which any amount would be payable with respect to the
Securities, any Additional Amounts as a result of a change in or an amendment to
Page 119
the laws (including any regulations or rulings promulgated thereunder) of the
Bahamas, Argentina, Bolivia, Liberia, Paraguay, Argentina, Panama, Uruguay or
Chile (or any relevant jurisdiction, political subdivision or taxing authority
thereof or therein), or any change in or amendment to any official position
regarding the application or interpretation of such laws, regulations or rulings
(including a holding by a court of competent jurisdiction), which change or
amendment is announced or becomes effective on or after the Issue Date and the
Company, the Subsidiary Guarantors or the Pledgors, as the case may be, cannot
avoid such obligations by taking reasonable steps to avoid them; provided,
however, that (a) no such notice of redemption shall be given earlier than 60
days prior to the earliest date on which the Company, the Subsidiary Guarantors
or the Pledgors, as the case may be, would be obligated to pay such Additional
Amounts if a payment in respect of the Securities or the Subsidiary Guarantee
were then due, and (b) at the time any such redemption notice is given, such
obligation to pay Additional Amounts must remain in effect. Prior to any such
redemption of the Securities, the Company shall deliver to the Trustee or any
paying agent an Officers' Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of redemption have occurred.
6. Other Redemptions
To the extent that, after the close of business on December 31,
2005, the amount of cash and the fair market value (as determined by the Board
of Directors in good faith) of securities on deposit in the Escrow Account
exceeds $1.0 million, the Company will be obligated to use all such remaining
Escrowed Property to redeem (the "Special Mandatory Redemption") as much
principal amount of the Securities as can be redeemed with such Escrowed
Property at a redemption price equal to the sum of 101% of the principal amount
of such Securities, and the accrued interest thereon to the Special Mandatory
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date) (such
redemption price, the "Special Mandatory Redemption Price"). For purposes
hereof, "Special Mandatory Redemption Date" means January 30, 2006.
Upon the permitted sale of a Mortgaged Vessel or the Capital Stock
of a Subsidiary Guarantor (other than the sale by a Pledgor of its Mortgaged
Vessel or the sale of its Capital Stock to the Company or a Restricted
Subsidiary) (which term shall not include the transfer of the operation of a
Mortgaged Vessel pursuant to a bareboat charter with a purchase option) or an
Event of Loss with respect to a Mortgaged Vessel, the Company must either (a)
not later than 60 days after the Proceeds Receipt Date, redeem Securities, in
whole or in part on a pro rata basis, in an aggregate principal amount equal to
(i) the Redemption Amount or (ii) the Net Available Cash or Net Event of Loss
Proceeds, as the case may be, at a redemption price equal to the Sale Redemption
Price or the Loss Redemption Price, as the case may be (provided, however, that
if a Default shall have occurred and be continuing on the Notification Date, the
amount required to be applied by the Company to redeem Securities shall equal
the greater of such Redemption Amount and such Net Available Cash or Net Event
of Loss Proceeds, as the case may be), or (b) if no Default shall have occurred
and be continuing, tender to the Trustee a Qualified Substitute Vessel within 12
months after the Proceeds Receipt Date.
In the event that the Company, a Subsidiary Guarantor or a Pledgor
enters into a Bareboat Charter, the Company must either (a) not later than 60
days after the date title to the relevant Mortgaged Vessel passes to the
charterer, redeem Securities, in whole or in part on a pro rata basis, in such
principal amount as can be redeemed with the Sale Equivalent Portion of the
Bareboat Charter Funds at the Sale Redemption Price or (b) if no Default shall
have occurred and be continuing, tender to the Trustee as part of the Collateral
one or more Vessels within 12 months of the date title to such Mortgaged Vessel
passes to the charterer.
Page 120
7. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
8. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. Guarantee
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
10. Security
The Securities will be secured by the Mortgages on the Mortgaged
Vessels, the security interests created by the other Security Agreements, the
Escrowed Property and all the issued and outstanding Capital Stock of certain of
the Subsidiary Guarantors.
11. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
12. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
13. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
14. Discharge and Defeasance
Page 121
Subject to certain conditions, the Company at any time may terminate
some or all of its and the Subsidiary Guarantors' obligations under the
Securities, the Security Agreements and the Indenture if the Company deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity, as the case
may be.
15. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Security Agreements, or the Securities may be amended with the
written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount outstanding of the Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Securityholder, the
Company, the Subsidiary Guarantors, the Pledgors and the Trustee may amend the
Indenture, the Security Agreements or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add additional guarantees with respect to the
Securities or to provide additional security for the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
a Subsidiary Guarantor or a Pledgor, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
16. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon required purchase, upon acceleration or otherwise,
or failure by the Company or the Subsidiary Guarantors to redeem or purchase
Securities when required; (iii) failure by the Company to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company or Significant Subsidiaries if the amount accelerated (or so unpaid)
exceeds $5.0 million; (v) certain events of bankruptcy or insolvency with
respect to the Company or Significant Subsidiaries; (vi) certain judgments or
decrees for the payment of money in excess of $5.0 million and (vii) certain
events or defaults with respect to the Subsidiary Guarantees or the Security
Agreements. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
17. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
Page 122
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
18. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company and the Subsidiary Guarantors to the extent
provided therein.
23. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Ultrapetrol (Bahamas) Limited
c/o H&J Corporate Services Ltd.
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 55-19084
Nassau, Bahamas
Attention of Secretary
Page 123
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
Date: Your Signature:
Sign exactly as your name appears on the other side of this Security.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or 4.16 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.11 or 4.16 of the Indenture, state the
amount in principal amount: $_____________________
Dated: ____________________ Your Signature: _________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: __________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Page 125
Exhibit B
[Intentionally Omitted]
Page 126
EXHIBIT C
FIRST PREFERRED [FLEET] MORTGAGE
DATED: ___, 2004
[MORTGAGOR]
TO
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
Page 127
THIS FIRST PREFERRED [FLEET] MORTGAGE dated this [DAY] day of [MONTH],
2004 is made and given by [MORTGAGOR], a corporation organized and existing
under the laws of [JURISDICTION OF FORMATION], having its registered office at
[ADDRESS], (the "Owner," which expression includes its successors and assigns),
to MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, with
offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ as trustee (the
"Trustee", which expression shall include its successors and assigns), for the
holders of the Securities (as defined below) pursuant to the Indenture dated as
of November ___, 2004 (as amended or supplemented from time to time, the
"Indenture," the form of which is attached hereto as Exhibit A) among
Ultrapetrol (Bahamas) Limited, a Bahamian corporation (the "Company"), the
guarantors whose names are set forth on the signature pages thereof ([including
the Owner and, ]collectively, the "Guarantors"), the pledgors whose names are
set forth on the signature pages thereof ([including the Owner
and,]collectively, the "Pledgors") and the Trustee.
W I T N E S S E T H:
WHEREAS:
(1) The Owner is the sole, legal and beneficial owner of the whole of
[each of] the [NATIONALITY] flag vessel[s] listed on Schedule 1 attached hereto
and made a part hereof (the ["Vessels", and each a] "Vessel").
(2) Pursuant to the Indenture, the Company issued certain Securities
(as defined in the Indenture), in the aggregate principal amount of ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$180,000,000), the proceeds of which
have been used to repay the Company's existing 10 1/2% First Preferred Ship
Mortgage Notes due 2008, to refinance the acquisition cost of other vessels
owned by the Guarantors, and for general corporate purposes.
(3) By the Indenture, the Guarantors [(including the Owner)], have
jointly and severally guaranteed, upon the terms and conditions contained
therein, the punctual payment, performance and observance when due of the
obligations of the Company under and in connection with the Securities,
including, but not limited to, the Company's obligation to pay the principal of,
and premium and interest on, the Securities as provided in the Indenture and the
Securities.
(4) The Owner[, as a Pledgor under the Indenture,] has agreed to grant
this Mortgage to secure its, the [other] Subsidiary Guarantors' and the
Company's obligations under the Indenture.
(5) Subject to the terms hereof, in order to secure the prompt and due
payment to the Trustee of any and all sums which may be or become due to the
Trustee and/or the Securityholders from the Owner under or pursuant to the
Indenture, the Securities, this Mortgage and any Security Agreement and also to
secure the exact performance and observance and compliance with all and any of
the covenants and agreements and terms and conditions contained in the
Indenture, the Securities, this Mortgage and in the other Security Agreements,
Page 128
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
1. Definitions. (A) Capitalized terms used in this Mortgage and not
otherwise defined herein shall have the meanings assigned to such terms in the
Indenture, and the definitions of such terms shall be equally applicable to both
the singular and plural forms of such terms. In this Mortgage and in the
recitals hereto unless the context otherwise requires:
"Earnings" means all freight, hire and passage moneys, compensation
payable in the event of requisition of [the/any] Vessel for hire,
remuneration for salvage and towage services, demurrage and detention
moneys and any other earnings whatsoever due or to become due in
respect of [the/any] Vessel at any time during the Security Period;
"Event of Default" means any of the events of default set out in
Clause 5 of this Mortgage;
"Insurances" includes all policies and contracts of insurance and all
entries of [the/each] Vessel in a protection and indemnity or war
risks association or club which are from time to time taken out or
entered into pursuant to this Mortgage in respect of [the/each] Vessel
and [its/their] respective Earnings or otherwise howsoever in
connection with the Vessel[s];
"Mortgage" means this first preferred [fleet] mortgage;
"Obligations" means the obligations of the Owner to the Trustee and
the holders of the Securities under or in connection with the
Indenture, including the payment of all sums of money (whether for
principal, premium, if any, interest, fees, expenses or otherwise)
from time to time payable by the Owner pursuant to the Indenture, the
payment of the principal of (and premium, if any) and interest on the
Securities, the payment of all other sums payable by the Company under
the Indenture, the payment of all other sums payable under the
Security Agreements, and this Mortgage and the performance of all
other provisions contained in the Indenture, the Security Agreements
and this Mortgage , which sums shall be payable by the Owner on demand
made by the Trustee following an Event of Default specified in Clause
5 hereof;
"Permitted Flag Jurisdiction" means the Republic of the ▇▇▇▇▇▇▇▇
Islands, the United States of America, any State of the United States
or the District of Columbia, the Commonwealth of the Bahamas, the
Republic of Liberia, the Republic of Panama, the Commonwealth of
Bermuda, Singapore, the British Virgin Islands, the Cayman Islands,
the Isle of Man, Cyprus, the Philippines, Norway, Greece, the United
Kingdom, Argentina, Malta, Brazil, Chile, Paraguay, India, Bolivia,
Spain, Uruguay and any other jurisdiction generally acceptable to
institutional lenders in the shipping industry, as determined in good
faith by the Board of Directors of the Company;
"Requisition Compensation" means all moneys or other compensation
payable and belonging to the Owner during the Security Period by
reason of requisition for title or other compulsory acquisition of
[the/any] Vessel otherwise than by requisition for hire;
"Security Period" means the period terminating upon discharge of the
security created by the Indenture, the Securities, the Security
Agreements and this Mortgage by satisfaction of all Obligations
including the payment of all monies payable thereunder;
"Total Loss" means:
Page 129
(a) the actual total loss or destruction of [the/any] Vessel;
(b) the constructive total loss of [the/any] Vessel as agreed by
the underwriters of the insurance carried on such Vessel;
(c) damage to the [the/any] Vessel which shall make repair
thereof uneconomical or shall render such Vessel permanently
unfit for normal use for any reason whatsoever; and
(d) the theft, entrapment, condemnation, confiscation,
requisition, seizure, forfeiture, purchase or other taking of title to
or use [the/any] Vessel, and the continuation of any such event for a
period of one hundred eighty (180) days.
"Vessel[s]" means the whole of [the/each] vessel listed on Schedule 1
hereto (which the Owner hereby warrants to be free from any charge or
encumbrance whatsoever except liens permitted hereby, and of which the
Owner hereby warrants that it is the sole legal and beneficial owner
thereof) and includes any share or interest therein and, to the extent
owned by the Owner, her boats and her engines, machinery, tackle,
outfit, spare gear, fuel consumable or other stores, belongings and
appurtenances whether on board or ashore and whether now owned or
hereafter acquired;
(B) In Clause 3(U) hereof:
(i) "excess risks" means the proportion of claims for general
average and salvage charges and under the ordinary
running-down clause not recoverable in consequence of the
value at which a vessel is assessed for the purpose of such
claims exceeding her insured value;
(ii) "protection and indemnity risks" means the usual risks
covered by a United States or an English protection and
indemnity association or club including the proportion not
recoverable in case of collision under the ordinary
running-down clause; and
(iii) "war risks" means the risk of mines and all risks excluded
from the standard form of United States marine policy by the
War, Strikes and Related Exclusions Clause.
(C) This Mortgage shall be read together with the Indenture but in
case of any conflict between the two instruments the provisions of the Indenture
shall prevail.
2. Grant of Mortgage; Continuing Security.
2.1 In consideration of the premises and of other good and valuable
consideration, the receipt and adequacy whereof are hereby acknowledged, and in
order to secure the payment of the Obligations and to secure the performance and
observance of and compliance with the covenants, terms and conditions in the
Indenture and in this Mortgage contained, the Owner has granted, conveyed and
mortgaged and does by these presents grant, convey and mortgage to and in favor
of the Trustee, its successors and assigns, for the benefit of the holders of
the Securities the whole of the Vessel[s] to the intent that this Mortgage shall
constitute in favor of the Trustee a first and absolute mortgage on the
Vessel[s] named herein in accordance with the provisions of [REFERENCE TO
RELEVANT DOMESTIC LAW] as amended, TO HAVE AND TO HOLD the same unto the
Trustee, its successors and assigns, forever, upon the terms set forth in this
Mortgage for the enforcement of the payment of the Obligations and to secure the
performance and observance of and compliance with the covenants, terms and
conditions in the Indenture and in this Mortgage contained;
Page 130
PROVIDED, ONLY, and the conditions of these presents are such
that, if the Owner or any of the other Guarantors and/or their respective
successors or assigns shall pay or cause to be paid to the Trustee, its
successors and assigns, the Obligations as and when the same shall become due
and payable in accordance with the terms of the Indenture and this Mortgage and
shall perform, observe and comply with all and singular of the covenants, terms
and conditions in the Indenture and this Mortgage contained, expressed or
implied, to be performed, observed or complied with by and on the part of the
Owner or its successors or assigns, all without delay or fraud and according to
the true intent and meaning hereof and thereof, then, these presents and the
rights of the Trustee under this Mortgage shall cease and determine and, in such
event, the Trustee agrees, at the expense of the Owner, to execute all such
documents as the Owner may reasonably require to discharge this Mortgage under
the laws of the [JURISDICTION]; otherwise to be and remain in full force and
effect.
2.2 IT IS DECLARED AND AGREED:
(A) that the security created by this Mortgage and the other Security
Agreements shall be held by the Trustee as a continuing security for the payment
of the Obligations; that the security so created shall not be satisfied by any
intermediate payment or satisfaction of any part of the amount hereby and
thereby secured; that the security so created shall be in addition to and shall
not in any way be prejudiced or affected by any collateral or other security now
or hereafter held by the Trustee for all or any part of the monies hereby and
thereby secured; that every power and remedy given to the Trustee hereunder
shall be in addition to and not a limitation of any and every other power or
remedy vested in the Trustee under any other of the Security Agreements and that
all the powers so vested in the Trustee may be exercised from time to time and
as often as the Trustee may deem expedient;
(B) that the security created by this Mortgage and the other Security
Agreements shall not be impaired, affected or discharged by reason of any time
or other indulgence granted by the Trustee to the Owner or any other party
thereto or any forbearance (whether as to payment, time, performance or
otherwise howsoever) which might but for this provision have any such effect or
by reason of any variation in the terms of any of the Security Agreements or by
reason of the unenforceability, invalidity or termination of or any irregularity
in any of the Security Agreements or the execution thereof by the Owner or any
other party thereto or any deficiency in the power of the Owner or any other
party thereto to enter into and perform their respective obligations thereunder
and should any obligation or purported obligation of the Owner or any such other
party which if enforceable or valid or continuing would be secured by this
Mortgage and the Security Agreements be or become wholly or in part
unenforceable or invalid or terminated for any reason whatsoever the Owner will
keep the Trustee fully indemnified against any loss suffered by the Trustee as a
result of any failure by the Owner or such other party to perform any such
obligation or purported obligation; and
(C) any certificate submitted by the Trustee to the Owner as to the
amount owing in respect of the Obligations of any part thereof shall be
conclusive and binding on the Owner in the absence of manifest error.
3. Covenants. The Owner hereby covenants with the Trustee and
undertakes throughout the Security Period as follows:
(A) to repay the Obligations in accordance with the provisions of the
Indenture and the Securities;
(B) to remain a corporation, validly organized and in good standing
under the laws of the [JURISDICTION], to keep, at all times, the Vessel[s] duly
documented under [JURISDICTION] law and to pay all taxes, assessments,
Page 131
governmental charges, fines and penalties lawfully imposed on [the/any] Vessel
or any income therefrom and not to do or suffer to be done anything whereby such
registration may be forfeited or imperiled, except as permitted in the
Indenture;
(C) not to suffer to be continued any lien, charge, mortgage or
encumbrance for longer than ninety (90) days after same becomes due and payable
except for the lien of this Mortgage, Permitted Liens (as defined in the
Indenture), or liens for loss, damage or expense, which are fully covered by
insurance or, in respect of which, a bond or other security has been posted by
the Owner with the appropriate court or other tribunal to prevent the arrest or
secure the release of [the/any] Vessel from arrest on account of such claim or
lien, and not, except in favor of this Mortgagee, to pledge, charge, assign or
otherwise encumber (in favor of any person other than this Mortgagee) the
Insurances, Earnings or Requisition Compensation of the Vessel[s] or to suffer
the creation of any such pledge, charge, assignment or encumbrance as aforesaid
to or in favor of any person other than this Mortgagee; and the Owner will pay
or cause to be discharged or make adequate provisions for the satisfaction or
discharge of all claims or demands, or will cause the Vessel[s] to be released
or discharged from any lien, encumbrance or charge therefor;
(D) not to transfer or change the flag or port of documentation of
[the/any] Vessel[s] except to a Permitted Flag Jurisdiction, and not to sell,
agree to sell, mortgage, transfer, abandon or otherwise dispose of [the/any]
Vessel or any interest therein unless permitted by the terms of the Indenture;
(E) not (without the previous consent in writing of the Trustee which
shall be granted so long as such agreement is permitted by the terms of the
Indenture) to enter into any agreement or arrangement whereby the Earnings of
[the/any] Vessel (after payment only of all operating costs of such Vessel and
service of the Owner's obligations under the Indenture) may be shared with any
other person;
(F) not (without the previous consent in writing of the Trustee) to
make or permit any charterer to make, any modification to [the/any] Vessel which
would involve material detrimental alteration of her structure, type or
performance characteristics;
(G) to, at the Owner's expense, comply with and satisfy all of the
requisites and formalities established by the laws of [JURISDICTION], in order
to establish this Mortgage as a first preferred [fleet] mortgage thereunder,
upon the Vessel[s] and to comply with the provisions of all laws regulations and
requirements (statutory or otherwise) from time to time applicable to vessels
registered under the [NATIONALITY] flag;
(H) to at all times and without cost or expense to the Trustee,
maintain and preserve, or cause to be maintained and preserved, [the/each]
Vessel in good running order and repair, so that [the/each] Vessel shall be in
every respect seaworthy; and, in the case of the ocean going vessels, will keep
[the/each] Vessel, or cause [the/each] Vessel to be kept, in such condition as
will entitle [the/each] Vessel to maintain its [respective] current
classification [ratings] and annually will furnish the Trustee a certificate by
such classification society confirming that such classification is maintained;
and to comply with the provisions of all laws, regulations and requirements
(statutory or otherwise) from time to time applicable to vessels registered
under the laws of the [JURISDICTION] and to procure that all repairs to or
replacements of any damaged, worn or lost parts or equipment be effected in such
manner (both as regards workmanship and quality of materials) as not to diminish
the value of the Vessel[s];
(I) in the case of the ocean going vessels, to submit [the/each]
Vessel regularly to such periodical or other surveys as may be required for
classification purposes and to supply to the Trustee, upon request, copies of
Page 132
all survey reports and confirmation of class certificates issued in respect
thereof;
(J) to permit or to cause the Trustee by surveyors or other persons
appointed by the Trustee on the Trustee's behalf to board [the/any] Vessel at
all reasonable times for the purpose of inspecting her condition or for the
purpose of satisfying themselves in regard to proposed or executed repairs and
to afford all proper facilities aboard such Vessel for such inspections (in a
manner and at a time not to interfere with the normal operation of such Vessel);
(K) to pay and discharge all debts, damages and liabilities whatsoever
which have given or may give rise to maritime or possessory liens on or claims
enforceable against [the/any] Vessel except to the extent permitted by Clause
3(C) hereof and in the event of an arrest of [the/any] Vessel pursuant to legal
process or in the event of her detention in the exercise or purported exercise
of any such lien as aforesaid to procure the release of such Vessel from such
arrest or detention within fifteen (15) days from such arrest or detention upon
receiving notice thereof by providing bail or otherwise as the circumstances may
require;
(L) not to permit [the/any] Vessel to be operated in any manner
contrary to law, or to engage in unlawful trade or carry any cargo that would
expose such Vessel to penalty, forfeiture or capture, and not to permit to be
done anything which can or may injuriously affect the registration or enrollment
of such Vessel under the laws and regulations of [JURISDICTION] and will at all
times keep such Vessel documented thereunder, except in the case of any change
of registry permitted by the Indenture or this Mortgage, in which case a
Mortgage will be recorded against such Vessel under the laws of such new
registry state;
(M) not to enter or trade to or to continue to trade in any zone after
it is declared a war zone by [the/such] Vessel's war risk insurers unless the
Trustee shall have first given its consent thereto in writing or the Owner shall
have obtained such special insurance cover as the Trustee may reasonably
require;
(N) to promptly furnish to the Trustee all such information as it may
from time to time reasonably require regarding [the/any] Vessel, her employment
position and engagements, particulars of all towages and salvages and copies of
all charters and other contracts for her employment or otherwise howsoever
concerning her;
(O) to notify or cause to be notified to the Trustee forthwith by
electronic means (thereafter confirmed by letter) of:
(i) any accident to [the/any] Vessel involving repairs the cost
whereof will or is likely in the opinion of the Owner to
exceed One Million United States Dollars (US$1,000,000) (or
the equivalent in any other currency);
(ii) any occurrence in consequence whereof [the/any] Vessel has
become or is likely to become a Total Loss;
(iii) any arrest of [the/any] Vessel or the exercise or purported
exercise of any lien on [the/any] Vessel or its [respective]
Earnings;
(iv) any requirement or recommendation made by any insurer or
classification society or by any competent authority which
is not immediately complied with within the time required
for compliance by said insurer, classification society or
other competent authority; or
Page 133
(v) any occurrence of an Event of Default specified in Clause 5
hereof or an event which with the giving of notice, lapse of
time (or both) will constitute or be likely to constitute an
Event of Default specified therein;
(P) to promptly to pay or cause to be paid all tolls, dues and other
outgoings whatsoever in respect of [each of] the Vessel[s] and to keep or cause
to be kept proper books of account in respect of [each of] the Vessel[s] and its
[respective] Earnings;
(Q) not without the previous consent of the Trustee in writing, or as
otherwise permitted in the Indenture, to demise charter [the/any] Vessel or to
permit [the/any] Vessel to be demised chartered;
(R) other than for routine drydocking and as otherwise contemplated by
the Indenture, not without the previous consent in writing of the Trustee to put
[the/any] Vessel into the possession of any person for the purpose of work being
done upon her if the Vessel has become or is likely to become a total loss or
for an amount exceeding or likely to exceed Two Million United States Dollars
(US$2,000,000) (or the equivalent in any other currency) unless such work is
fully covered by insurance or unless such person shall first have given to the
Trustee, and in terms satisfactory to it, a written undertaking not to exercise
any lien on such Vessel or her Earnings for the cost of such work or otherwise;
(S) to pay to the Trustee on demand all monies (including counsel
fees) whatsoever which the Trustee shall from time to time may expend, be put to
or become liable for, in or about the protection, maintenance or enforcement of
the security created by this Mortgage, the Indenture and the other Security
Agreements or in or about the exercise by the Trustee of any of the powers
vested in it hereunder or thereunder and to pay interest thereon at the Default
Rate;
(T) to place or to cause to be placed and at all times and places to
retain or to cause to be retained a properly certified copy of this Mortgage on
board [the/each] Vessel with its [respective] papers and cause this Mortgage to
be exhibited to any and all persons having business with [the/any] Vessel which
might give rise to any lien thereon other than liens for crew's wages and
salvage, and to any representative of the Trustee on demand; and to place and
keep or to cause to be placed and kept prominently displayed in the chart room
and in the Master's cabin of [the/each] Vessel a framed printed notice in plain
type in English of such size that the paragraph of reading matter shall cover a
space not less than six (6) inches wide by nine (9) inches high, reading as
follows:
"NOTICE OF MORTGAGE"
"This Vessel is covered by a First Preferred [Fleet] Mortgage in favor
of Manufacturers and Traders Trust Company, as Trustee/Mortgagee, under the
authority of the laws of the [JURISDICTION]. Under the terms of the said First
Preferred [Fleet] Mortgage, neither the Owner nor any charterer nor the Master,
nor any officer or agent of this Vessel nor any other person has any right,
power or authority to create, incur or permit to be imposed upon this Vessel any
lien whatsoever other than the lien of said First Preferred [Fleet] Mortgage and
liens for crew's wages or salvage."
(U) (i) at all times and at its own cost and expense to cause to be carried
and maintained in respect of [the/each] Vessel insurance payable in United
States dollars in amounts, against risks (including marine hull and machinery
(including excess value) insurance, marine protection and indemnity insurance,
war risks insurance and liability arising out of pollution and the spillage or
leakage of cargo and cargo liability insurance) and in a form which is
substantially equivalent to the coverage carried by other responsible and
experienced companies engaged in the operation of vessels similar to the
Page 134
Vessel[s] and with insurance companies, underwriters, mutual insurance
associations or clubs of recognized standing;
(ii) to procure that no insurance referred to in sub-clause (i)
above, will provide for a deductible amount in excess of One
Million United States Dollars (US$1,000,000) per occurrence;
(iii) to use its best efforts with its insurance
brokers/underwriters to include a clause to the effect that
no policy is to be cancellable or subject to lapse without
at least seven (7) business days' prior notice to the
Trustee;
(iv) in the case of all marine and war risk hull and machinery
policies, to cause the Trustee to be named an additional
insured and to use its best efforts (and cause its insurance
broker to use its best efforts) to cause the insurers under
such policies to waive any liability of the Trustee for
premiums or calls payable under such policies;
(v) for purposes of insurance against total loss, to insure
[the/each] Vessel for an amount not less than its fair
value. Unless the Trustee shall have otherwise directed, a
total loss or any loss involving damage to [the/any] Vessel
which is not in excess of One Million United States Dollars
(US$1,000,000) may be paid directly for repair or salvage or
to reimburse the Owner for the same;
(vi) to obtain the protection and indemnity insurances referred
to in sub-clause (i) above with the least limited liability
available on commercially reasonable terms (including
without being limited thereto provisions as to additional
insureds, loss payees and prior notice of cancellation);
(vii) to renew all such Insurances or cause or procure the same
to be renewed before the relevant policies or contracts
expire and to procure that the insurers or the firm of
insurance brokers referred to hereinbelow shall promptly
confirm in writing to the Trustee as and when each such
renewal or replacement is effected;
(viii) to procure concurrently with the execution hereof and
thereafter at intervals of not more than twelve (12)
calendar months, a detailed report from a firm of marine
insurance consultants or brokers who shall not be an
affiliate of the Company, appointed by the Owner , with
respect to the Insurances together with their opinion to the
Trustee that the Insurances comply in all material respects
with the provisions of this Clause 3(U);
(ix) to use its best efforts to cause the said marine insurance
broker or the insurers to agree to advise the Trustee
promptly of any failure to renew or any default in payment
of any premium in respect of Insurances on [the/any] Vessel;
(x) to use its best efforts to cause the said independent marine
insurance brokers to agree to ▇▇▇▇ their records and to use
their best efforts to advise the Trustee, at least ten (10)
(seven (7) in respect of war risks) business days prior to
the expiration date of any of the Insurances, that such
Insurances have been renewed or replaced with new insurance
which complies with the provisions of this Clause 3(U);
Page 135
(xi) duly and punctually to pay or to cause duly and punctually
to be paid all premiums, calls, contributions or other sums
payable in respect of all such Insurances, and duly and
punctually to perform and observe or to cause duly and
punctually to be performed and observed any other
obligations and conditions under all such Insurances;
(xii) to execute or to cause to be executed such guarantees as
may from time to time be required by any relevant protection
and indemnity association or club;
(xiii) to procure that all policies, bindings, cover notes or
other instruments of the Insurances referred to in
sub-clause (i) above shall be taken out in the name of the
Owner as named assured and shall incorporate a Loss Payable
Clause naming the Trustee as loss payee prepared in
compliance with the terms of this Mortgage;
(xiv) to procure that copies of all such instruments of
Insurances as are referred to in sub-clause (xiii) above
shall be from time to time deposited with the Trustee after
receipt by the Owner thereof and that the insurers shall, if
so requested by the Trustee, furnish the Trustee with a
letter or letters of undertaking in such form as may be
reasonably required by the Trustee in respect of such
Insurances;
(xv) to use its best efforts to procure that the protection and
indemnity association or club wherein [the/each] Vessel is
entered shall, if so required by the Trustee, furnish the
Trustee with a letter or letters of undertaking in such form
as may be reasonably required by the Trustee;
(xvi) not to employ [the/any] Vessel or suffer [the/any] Vessel
to be employed otherwise than in conformity with the terms
of all policies, bindings, cover notes or other instruments
of the Insurances (including any warranties express or
implied therein) without first obtaining the written consent
of the insurers to such employment (if required by such
insurers) and complying with such requirements as to extra
premiums or otherwise as the insurers may prescribe;
(xvii) to do all things necessary, proper and desirable, and
execute and deliver all documents and instruments to enable
the Trustee to collect or recover any moneys to become due
in respect of the Insurances;
(xviii) in the event of an actual, constructive or compromised
Total Loss of [the/any] Vessel, any adjustment or compromise
of such loss by the Owner shall be for the highest amount
reasonably obtainable, and all insurance or other payments
for such loss shall be applied as set forth in the
Indenture; and
(xix) not to change any material terms of any insurances or
suffer them to be changed in a manner that is adverse to the
Mortgagee without the Trustee's written approval.
4. Mortgagee's Right to Cure. (A) The Trustee shall without prejudice
to its other rights and powers hereunder be entitled (but not bound) at any time
and as often as may be necessary to take any such action as it may in its
absolute discretion think fit for the purpose of protecting the security created
by this Mortgage, the Indenture and the other Security Agreements and each and
Page 136
every expense or liability so incurred by the Trustee in or about the protection
of the security shall be repayable to it by the Owner on demand together with
interest thereon at the Default Rate.
(B) Without prejudice to the generality of the foregoing:
(i) in the event that the provisions of Clause 3(U) hereof or
any of them shall not be complied with, the Trustee shall be
at liberty to effect and thereafter to replace, maintain and
renew all such Insurances upon [the/each] Vessel as in its
sole discretion it may think fit;
(ii) in the event that the provisions of Clauses 3(H) and/or (I)
hereof shall not be complied with, the Trustee shall be at
liberty to arrange for the carrying out of such repairs
and/or surveys as it deems expedient or necessary;
(iii) in the event that the provisions of Clause 3(K) hereof are
not complied with, the Trustee shall be at liberty to pay
and discharge all such debts, damages and liabilities as are
therein mentioned and/or to take any such measures as it
deems expedient or necessary for the purpose of securing the
release of the relevant Vessel;
and each and every expense or liability so incurred by the Trustee shall be
recoverable from the Owner as hereinbefore provided.
5. Events of Default. Upon happening of any of the following events
(an "Event of Default") the Trustee may declare immediately due and payable all
the Obligations (in which case all of the same shall be immediately due), and
bring suit at law, in equity or in admiralty, as it may be advised, to recover
judgment for the Obligations and collect the same out of any and all property of
the Owner whether covered by this Mortgage or otherwise.
The events referred to above are any and/or all of the following:
(a) an Event of Default under the Indenture;
(b) a default in the payment of the Obligations, when due at maturity
(together with any applicable grace period) or by acceleration;
(c) a default by the Owner in the due and punctual observance of any
of the covenants contained in subclauses (A), (B), (C), (D), (E),
(F), (G), (K), (L), (M), (N), (P), (Q), (R), (S), and (U) of
Clause 3 of this Mortgage;
(d) a default by the Owner in the due and punctual observance of any
of the covenants contained in subclauses (H), (I), (J), (O) and
(T) of Clause 3 of this Mortgage which default continues
unremedied for a period of thirty (30) days after notice thereof
from the Trustee to the Owner;
(e) it becomes impossible or unlawful for the Owner to fulfill any of
the covenants and obligations contained in this Mortgage and the
Trustee considers that such impossibility or illegality will have
a material adverse effect on its rights under this Mortgage or
the enforcement thereof;
6. Remedies. Subject to Clause 11 below, if an Event of Default
specified in Clause 5 hereof occurs, the Trustee shall become forthwith entitled
to put into force and to exercise all rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of applicable law and all the
powers possessed by it as mortgagee of [the/each] Vessel and in particular:
Page 137
(A) To take and enter into possession of the Vessel[s, or any of
them], at any time, wherever the same may be, without legal
process and without being responsible for loss or damage, and the
Owner or other person in possession forthwith upon demand of the
Trustee will surrender to the Trustee possession of the Vessel[s,
or any of them], and the Trustee may, without being responsible
for loss or damage, hold, lay-up, lease, charter, operate or
otherwise use the Vessel[s, or any of them,] for such time and
upon such terms as it may deem to be for its best advantage, and
demand, collect and retain all hire, freights, earnings, issues,
revenues, income, profits, return premiums, salvage awards or
recoveries in general average, and all other sums due or to
become due in respect of the Vessel[s, or any of them], or in
respect of any insurance thereon from any person whomsoever, in
accordance with the terms of this Mortgage.
(B) To take and enter into possession of the Vessel[s, or any of
them], at any time, wherever the same may be, without legal
process, and if it seems desirable to the Trustee and without
being responsible for loss or damage, sell the Vessel[s, or any
of them,] at any place and at such time as the Trustee may
specify and in any such manner and such place (whether by public
or private sale) as the Trustee may deem advisable, in accordance
with the terms of this Mortgage and with power to postpone any
such sale and without being answerable for any loss occasioned by
such sale or resulting from postponement thereof.
(C) To discharge, compound, release or compromise claims against the
Owner in respect of the Vessel[s, or any of them,] which have
given or may give rise to any charge or lien on the Vessel[s, or
any of them], or which are or may be enforceable by proceedings
against the Vessel[s, or any of them].
(D) Pending sale of the Vessel[s, or any of them], to manage, insure,
maintain and repair the Vessel[s, or any of them], and to employ,
sail or lay up the Vessel[s, or any of them,] in such manner and
for such period as the Trustee in its absolute discretion shall
deem expedient and for the purposes aforesaid the Trustee shall
be entitled to do all acts and things incidental or conducive
thereto and in particular to enter into such arrangements
respecting the Vessel[s, or any of them,] its respective
insurance, management, maintenance, repair, classification and
employment including (without limitation) giving all necessary
instructions to the Master concerning use and operation of the
Vessel[s, or any of them,] in all respects as if the Trustee were
the owner of the Vessel[s] and without being responsible for any
loss thereby incurred.
(E) To recover from the Owner on demand any such losses as may be
incurred by the Trustee in or about the exercise of the power
vested in the Trustee under sub-clause (D) above.
(F) To recover from the Owner on demand all expenses, payments and
disbursements incurred by the Trustee in or about or incidental
to the exercise by it of any of the powers aforesaid.
(G) To exercise all the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of any applicable
law.
PROVIDED ALWAYS that
Page 138
(a) upon any sale of the Vessel[s, or any of them], or by the Trustee
pursuant to sub-clause (B) above the purchaser shall not be bound
to see or inquire whether the Trustee's power of sale has arisen
in the manner herein provided, and the sale shall be deemed to be
within the power of the Trustee, and the receipt of the Trustee
for the purchase money shall effectively discharge the purchaser
who shall not be or be in any way answerable therefor;
(b) any sale of the Vessel[s, or any of them,] made in pursuance of
the Trustee's right under this Mortgage will operate to divest
all right, title and interest of any nature whatsoever of the
Owner therein and thereto and shall bar any claim from the Owner,
its successors and assigns, and all persons claiming by, through
or under them.
7. Right of Sale. The Trustee is hereby appointed attorney-in-fact of
the Owner to execute and deliver to any buyer aforesaid, and is hereby vested
with full power and authority to make, in the name and on behalf of the Owner, a
good conveyance of the title to the Vessel[s] so sold, provided, however, that
the Trustee shall not exercise any of its powers under this Clause 7 unless an
Event of Default specified in Clause 5 hereof shall have occurred. In the event
of a sale of the Vessel[s, or any of them], under any power herein contained,
the Owner will, if and when required by the Trustee, execute such form of
conveyance of the Vessel[s, or any of them,] as the Trustee may direct or
approve.
8. Receiver. Whenever any right to enter and take possession of the
Vessel[s, or any of them,] accrues to the Trustee, the Trustee may require the
Owner to deliver or to cause to be delivered, and the Owner shall on demand, at
its own cost and expense, deliver or cause to be delivered to the Trustee the
Vessel[s, or any of them], as demanded. If any legal proceedings shall be taken
to enforce such right under this Mortgage, the Trustee shall be entitled as a
matter of right to the appointment of a receiver of the Vessel[s, or any of
them], and the freights, hire, earnings, revenues, income and profits due or to
become due and arising from the operation thereof.
9. Right to Defend. Upon the happening of any Event of Default
specified in Clause 5 hereof, the Owner authorizes and empowers the Trustee or
its appointee to appear in the name of the Owner, its successors and assigns, in
any court of any country or nation of the world where a suit is pending against
the Vessel[s, or any of them,] because of or on account of any alleged lien
against the Vessel[s, or any of them,] from which the Vessel[s, or any of them,]
has not been released and to take such proceedings as may seem proper towards
the defense of such suit and the purchase or discharge of such lien, and all
expenditures made or incurred by it for the purpose of such defense, purchase,
or discharge shall be a debt due from the Owner, its successors, and assigns to
the Trustee, and shall be secured by the lien of this Mortgage and the rights of
the Trustee hereunder.
10. Remedies Cumulative. Each and every power and remedy herein given
to the Trustee shall be cumulative and shall be in addition to every other power
and remedy herein given or now or hereafter existing at law, in equity,
admiralty, or by statute, and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by the Trustee, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other power
or remedy. No delay or omission by the Trustee or any of the Securityholders in
the exercise of any right or power or in pursuance of any remedy accruing upon
any Event of Default specified in Clause 5 hereof shall impair any such right,
power, or remedy or be construed to be a waiver of any such Event of Default or
to be any acquiescence therein; nor shall the acceptance by the Trustee of any
security or of any payment of or on account of any part of the Obligations
Page 139
falling due for payment after any such Event of Default or of any payment on
account of any past default be construed to be a waiver of any right to take
advantage of any future Event of Default or of any past Event of Default not
completely cured thereby.
11. Acceptance of Cure. If at any time after an Event of Default
specified in Clause 5 hereof and prior to the actual sale of the Vessel[s, or
any of them,] by the Trustee or prior to the commencement of any foreclosure
proceedings, the Owner offers to cure completely all such Events of Default and
to pay to the Trustee all expenses and advances incurred or made by it
consequent on such Events of Default, then the Trustee may accept, but is not
obligated to accept except as required pursuant to the terms of the Indenture,
such offer and payment and restore the Owner to its former position, but such
action shall not affect any subsequent Event of Default or impair any rights of
the Trustee consequent thereto.
12. Application of Proceeds. All monies received by the Trustee in
respect of:
(i) the sale of the Vessel[s, or any of them],
(ii) Requisition Compensation, or
(iii) the charter, use or other disposition the Vessel[s, or any of
them].
shall be first applied to pay or make good all such payments, disbursements,
expenses, attorneys fees and losses whatsoever (together with interest thereon
as hereinbefore provided for in the Indenture) as may have been incurred by the
Trustee in or about or incidental to the exercise by the Trustee of the powers
specified or otherwise referred to in Clauses 6, 7, 8, 9 and 14 hereof or any of
them and the balance shall be applied in the manner prescribed in the Indenture.
PROVIDED ALWAYS that in the event that such balance is insufficient to pay in
full the whole of the Obligations the Trustee shall be entitled to collect the
shortfall from the Owner or any other person liable therefor.
13. No Waiver; Illegality; Invalidity. (A) No delay or omission of the
Trustee or any of the Securitiesholders to exercise any right or power vested in
them under this Mortgage, the Indenture or the Security Agreements or any of
them shall impair such right or power or be construed as a waiver of or as
acquiescence in any default by the Owner and no express waiver given by the
Trustee or any of the Securityholders in relation to any default by the Owner,
or breach by the Owner of any of its obligations under this Mortgage shall
prejudice the rights of the Trustee under this Mortgage, the Indenture or the
Security Agreements arising from any subsequent default or breach (whether or
not such subsequent default or breach is of a nature different from the previous
default or breach) nor shall the giving by the Trustee of any consent to the
doing of any act which by the terms hereof requires the consent of the Trustee
prejudice the right of the Trustee to give or withhold as it may think fit its
consent to the doing of any other such similar act.
(B) The Trustee shall not be obliged to make any inquiry as to the
nature or sufficiency of any payment received by it hereunder or following the
occurrence of an Event of Default specified in Clause 5 hereof to make any claim
or take any action to collect any monies hereby assigned or to enforce any
rights and benefits hereby assigned to the Trustee or to which the Trustee may
at any time be entitled hereunder.
(C) In case any one or more the provisions contained in this Mortgage
should be invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any be affected or impaired thereby and shall remain in full
Page 140
force and effect.
14. Delegation. The Trustee shall be entitled at any time and as often
as may be expedient to delegate all or any of the powers and discretions vested
in it by the Indenture, the Security Agreements or this Mortgage or any of them
(including the power vested in it by virtue of Clause 11 hereof) in such manner
upon such terms and to such persons as the Trustee in its absolute discretion
may think fit, provided, however, that the Trustee shall not exercise its rights
under this Clause 14 until an Event of Default specified in Clause 5 hereof
shall have occurred and be continuing.
15. Indemnity. THE OWNER HEREBY AGREES AND UNDERTAKES to indemnify the
Trustee against all obligations and liabilities whatsoever and whensoever
arising which the Trustee may incur in good faith in respect of, in relation to,
or in connection with the Vessel[s, or any of them], or otherwise howsoever in
relation to or in connection with any of the matters dealt with in the
Indenture, this Mortgage or the Security Agreements.
16. Mortgagee as Attorney-in-Fact. (A) The Owner hereby irrevocably
appoints the Trustee as its attorney-in-fact for the duration of the Security
Period to do in its name or in the name of the Owner all acts which the Owner,
or its successors or assigns could do in relation to [any of] the Vessel[s],
including without limitation, to demand, collect, receive, compromise, settle
and ▇▇▇ for (insofar as the Trustee lawfully may), all freights, hire, earnings,
issues, revenues, income, and profits of the Vessel[s], and all amounts due from
underwriters under the Insurances as payment of losses or as return premiums or
otherwise, salvage awards and recoveries, recoveries in general, average or
otherwise, and all other sums due or to become due to the Owner or in respect of
the Vessel[s], and to make, give and execute in the name of the Owner,
acquittances, receipts, releases, or other discharges for the same, whether
under seal or otherwise, to take possession of, sell or otherwise dispose of or
manage or employ, [any of] the Vessel[s], to execute and deliver charters and a
▇▇▇▇ of sale with respect to [any of] the Vessel[s], and to endorse and accept
in the name of the Owner all checks, notes, drafts, warrants, agreements and all
other instruments in writing with respect to the foregoing. PROVIDED, HOWEVER,
that, unless the context otherwise permits under this Mortgage, such power shall
not be exercisable by or on behalf of the Trustee unless and until any Event of
Default stipulated in Clause 5 hereof shall have occurred and be continuing.
(B) The exercise of the power granted in this Clause 16 by or on
behalf of the Trustee shall not require any person dealing with the Trustee to
conduct any inquiry as to whether any such Event of Default has occurred and is
continuing, nor shall such person be in any way affected by notice that any such
Event of Default has not occurred nor is continuing, and the exercise by the
Trustee of such power shall be conclusive evidence of its right to exercise the
same.
17. Owner's Right of Possession and Use. Unless and until an Event of
Default specified in Clause 5 hereof has occurred and be continuing, the Owner
(i) shall be permitted and suffered to retain title, actual possession and use
of the Vessel[s], and (ii) shall have the right, from time to time, in its
discretion, and without application to the Trustee, to dispose of, free from the
lien hereof, any boilers, engine, machinery, masts, spars, sail, rigging, boats,
anchors, cables, chains, tackle, apparel, furniture, fittings, equipment or any
other appurtenances of the Vessel[s] that are no longer useful, necessary,
profitable or advantageous in the operation of the Vessel[s], subject to first
or simultaneously replacing the same by new boilers, engines, machinery, masts,
spars, sails, rigging, boats, anchors, cables, chains, tackle, apparel,
furniture, fittings, equipment or other appurtenances of substantially equal
value to the Owner which shall forthwith become subject to the lien of this
Mortgage as a first preferred [fleet] mortgage thereon.
18. Further Assurances. THE OWNER HEREBY FURTHER UNDERTAKES at its own
Page 141
expense to execute, sign, perfect, do and (if required) register every such
further assurance, document, act or thing as in the reasonable opinion of the
Trustee may be necessary or desirable for the purpose of more effectually
mortgaging the Vessel[s] or perfecting the security constituted by the Indenture
and this Mortgage.
19. Extent of Security. The Vessel[s] and their respective equipment
and appurtenances shall respond for the principal amount of the indebtedness
secured by this Mortgage, including interest, costs and other charges secured by
this Mortgage.
20. Special Power of Attorney. The Owner and the Trustee each confer a
special power of attorney with right of substitution upon [LOCAL COUNSEL NAME],
lawyers of [JURISDICTION] empowering them to take all necessary steps to
permanently record this instrument of mortgage in the appropriate registry of
the [JURISDICTION] and from time to time details of the indebtedness secured
hereby.
21. No Waiver of Preferred Status. Anything herein to the contrary
notwithstanding, it is intended that nothing herein shall waive the preferred
status of this Mortgage under the laws of the [JURISDICTION], the United States
Vessel Mortgage Act, 1920, as amended, inter alia, by Public Law 100-710 (46 USC
Section 30101 et seq.) or the corresponding provisions of the laws of any other
jurisdiction in which it is sought to be enforced and that, if any provision or
portion thereof herein shall be construed to waive the preferred status of this
Mortgage, then such provision to such extent shall be void and of no effect.
22. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to such party at
its address or facsimile number set forth below or at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to each other party hereto. Each such notice, request or other communication
shall be effective (i) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified in this Clause and telephonic confirmation of
receipt thereof is obtained or (ii) if given by mail, prepaid overnight courier
or any other means, when received at the address specified in this Clause or
when delivery at such address is refused.
If to the Owner: [MORTGAGOR]
[ADDRESS]
Attention: [NAME]
Facsimile: [NUMBER]
with copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Trustee: Manufacturers and Traders Trust Company
Corporate Trust Administration
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copy to: Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
23. Successors and Assigns. This Mortgage and the rights and
obligations of each of the parties hereto under the Securities and the Security
Agreements shall be binding upon, and inure to the benefit of, the Owner and the
Trustee and their respective successors and assigns, except that the Owner may
not assign any of its rights or obligations under any such documents without the
prior written consent of the Trustee. In giving consent as aforesaid to an
assignment by the Owner, the Trustee shall be entitled to impose such conditions
as shall be reasonable.
24. Headings. In this First Preferred [Fleet] Mortgage, clause
headings are inserted for convenience of reference only and shall be ignored in
the interpretation of this First Preferred [Fleet] Mortgage.
25. Governing Law. This Mortgage shall be governed by the laws of the
[JURISDICTION] and the owner hereby irrevocably submits to the nonexclusive
jurisdiction of the Courts of the State of New York.
26. Recording. For the purpose of recording this First Preferred
[Fleet] Mortgage as required by [REFERENCE TO RELEVANT DOMESTIC LAW], the total
amount is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$180,000,000) plus
interest and performance of mortgage covenants. The discharge amount is the same
as the total amount. [It is not intended that this Mortgage shall include
property other than the Vessels and it shall not include property other than the
Vessel[s] as the term "vessel" is used in [REFERENCE TO RELEVANT DOMESTIC LAW].
Notwithstanding the foregoing, for property other than the Vessel[s], if any
should be determined to be covered by this Mortgage, the discharge amount is
zero point zero one percent (0.01%) of the total amount.]
[ 27. Language. If any inconsistency shall arise between the English
and Spanish test of this Mortgage, the English text thereof shall prevail.]
[Signature page follows.]
Page 142
IN WITNESS whereof the parties hereto have caused this Mortgage to be
executed the day and year first before written.
[MORTGAGOR]
By___________________________
[TITLE]
Page 143
NOTARIAL CERTIFICATE
[STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK] )
I, ___________, a notary public in and for the [County of New York],
hereby certify:
On the ____ day of _______________, 2004 before me personally appeared
__________________ to me known and known to me to be the person who signed the
foregoing First Preferred [Fleet] Mortgage on the [NATIONALITY] flag vessels
described therein, as Attorney-in-Fact of [MORTGAGOR], a corporation organized
under the laws of the [JURISDICTION].
I further certify that sufficient proof was submitted to me that
_______ is duly authorized to sign the foregoing First Preferred [Fleet]
Mortgage for and on behalf of the said corporation and that the purposes for
which the said instrument is granted are within the scope of the objects and
activities of the said corporation.
I further certify that the signature of _______, the person who
executed the foregoing Mortgage on behalf of the said corporation, was set
thereon in my presence and is, therefore, authentic.
IN WITNESS WHEREOF, I have hereunder set my hand this [DAY] day of
[MONTH] 2004.
____________________________
Notary Public
Page 144
SCHEDULE 1
----------
Official Gross Net
Vessel Name Number Length Breadth Depth Tons Tons
----------- ------ ------ ------- ----- ---- ----
mts mts mts
Page 145
SCHEDULE I
TO THE INDENTURE
Description of Pledged Shares
-----------------------------
Number
Certificate of
# Issuer Number Shares Record Owner
--- -------------------------- ----------- ------ ----------------------
1. ▇▇▇▇▇▇▇ Maritime Inc. 1 100 Princely International
Finance Corp.
2. Bayham Investments S.A. 1 100 Regal International
Investments S.A.
3. Cavalier Shipping Inc. 11 100 Regal International
Investments S.A.
4. Corporacion de Navigacion
Mundial S.A. 1 999 Princely International
Finance Corp.
Corporacion de Navigacion
Mundial S.A. 2 1 Regal International
Investments S.A.
5. Danube Maritime Inc. 3 33 Princely International
Finance Corp.
Danube Maritime Inc. 5 67 Princely International
Finance Corp.
6. General Ventures Inc. 1 500 Princely International
Finance Corp.
7. Imperial Maritime Ltd.
Page 146
(Bahamas) Inc. 2 100 Princely International
Finance Corp.
8. Kattegat Shipping Inc. 2 100 Ultrapetrol (Bahamas)
Limited
9. Kingly Shipping Ltd. 1 5,000 Princely International
Finance Corp.
10. Majestic Maritime Ltd. 1 5,000 Ultrapetrol (Bahamas)
Limited
11. Massena Port S.A. 1 5,000 Ultrapetrol (Bahamas)
Limited
12. Monarch Shipping Ltd. 1 5,000 Princely International
Finance Corp.
13. Noble Shipping Ltd. 1 5,000 Princely International
Finance Corp.
14. Oceanview Maritime Inc. 2 100 Princely International
Finance Corp.
15. Parkwood Commercial Corp. 1 100 Ultrapetrol (Bahamas)
Limited
16. Princely International
Finance Corp. 12 670,211 Ultrapetrol (Bahamas)
Limited
17. Regal International
Investments S.A. 6 660 Princely International
Finance Corp.
18. Regal International
Investments S.A. 7 660 Princely International
Finance Corp.
19. Regal International
Investments S.A. 8 660 Princely International
Finance Corp.
20. Regal International
Investments S.A. 9 660 Princely International
Finance Corp.
21. Regal International
Investments S.A. 10 660 Princely International
Finance Corp.
22. Riverview Commercial Corp. 1 10,000 Princely International
Finance Corp.
23. Sovereign Maritime Ltd. 1 5,000 Princely International
Finance Corp.
24. Stanmore Shipping Inc. 1 100 Ultrapetrol (Bahamas)
Limited
25. ▇▇▇▇▇▇ Marine Inc. 1 100 Princely International
Finance Corp.
Page 147
26. Ultrapetrol International
S.A. 1 20 Princely International
Finance Corp.
27. Ultrapetrol International
S.A. 2 20 Princely International
Finance Corp.
28. Ultrapetrol International
S.A. 3 20 Princely International
Finance Corp.
29. Ultrapetrol International
S.A. 4 20 Princely International
Finance Corp.
30. Ultrapetrol International
S.A. 5 20 Princely International
Finance Corp.
31. UP Offshore (Holdings) Ltd. 1 5000 Ultrapetrol (Bahamas)
Limited
Page 148
SCHEDULE II
TO THE INDENTURE
Pledged Barges
Barge
Number Barge Flag ID Number Owner
--------------------------------------------------------------------------------
1. IGUAZU 400 Liberia 12073 General Ventures Inc.
2. IGUAZU 401 Liberia 12074 General Ventures Inc.
3. IGUAZU 402 Liberia 12075 General Ventures Inc.
4. IGUAZU 403 Liberia 12076 General Ventures Inc.
5. IGUAZU 404 Liberia 12090 General Ventures Inc.
6. IGUAZU 405 Liberia 12105 General Ventures Inc.
7. IGUAZU ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ General Ventures Inc.
8. IGUAZU 900 Liberia 12077 General Ventures Inc.
9. IGUAZU 901 Liberia 12078 General Ventures Inc.
10. IGUAZU 902 LIberia 12079 General Ventures Inc.
11. IGUAZU 904 Liberia 12081 General Ventures Inc.
12. IGUAZU 905 Liberia 12082 General Ventures Inc.
13. IGUAZU 906 Liberia 12083 General Ventures Inc.
14. IGUAZU 907 Liberia 12084 General Ventures Inc.
15. IGUAZU 908 Liberia 12085 General Ventures Inc.
16. IGUAZU 909 Liberia 12086 General Ventures Inc.
17. IGUAZU 910 Liberia 12089 General Ventures Inc.
18. IGUAZU 912 Liberia 12091 General Ventures Inc.
19. IGUAZU 913 Liberia 12092 General Ventures Inc.
20. IGUAZU 914 Liberia 12093 General Ventures Inc.
21. IGUAZU 915 Liberia 12094 General Ventures Inc.
22. MATADOR I Bolivia HRB 083 Monarch Shipping Ltd.
23. MATADOR II Bolivia HRB 084 Monarch Shipping Ltd.
24. MATADOR III Bolivia HRB 085 Monarch Shipping Ltd.
25. MATADOR IV Bolivia HRB 086 Monarch Shipping Ltd.
26. MATADOR IX Bolivia HRB 091 Monarch Shipping Ltd.
27. MATADOR LXI Bolivia HRB 112 Monarch Shipping Ltd.
28. MATADOR V Bolivia HRB 087 Monarch Shipping Ltd.
29. MATADOR VI Bolivia HRB 088 Monarch Shipping Ltd.
30. MATADOR VII Bolivia HRB 089 Monarch Shipping Ltd.
Page 149
31. MATADOR VIII Bolivia HRB 090 Monarch Shipping Ltd.
32. MATADOR X Bolivia HRB 092 Monarch Shipping Ltd.
33. MATADOR XI Bolivia HRB 093 Monarch Shipping Ltd.
34. MATADOR XII Bolivia HRB 094 Monarch Shipping Ltd.
35. MATADOR XIII Bolivia HRB 095 Monarch Shipping Ltd.
36. MATADOR XIV Bolivia HRB 096 Monarch Shipping Ltd.
37. MATADOR XIX Bolivia HRB 101 Monarch Shipping Ltd.
38. MATADOR XV Bolivia HRB 097 Monarch Shipping Ltd.
39. MATADOR XVI Bolivia HRB 098 Monarch Shipping Ltd.
40. MATADOR XVII Bolivia HRB 099 Monarch Shipping Ltd.
41. MATADOR XVIII Bolivia HRB 100 Monarch Shipping Ltd.
42. MATADOR XX Bolivia HRB 102 Monarch Shipping Ltd.
43. MATADOR XXII Bolivia HRB 103 Monarch Shipping Ltd.
44. MATADOR XXIII Bolivia HRB 104 Monarch Shipping Ltd.
45. MATADOR XXIV Bolivia HRB 105 Monarch Shipping Ltd.
46. MATADOR XXIX Bolivia HRB 110 Monarch Shipping Ltd.
47. MATADOR XXV Bolivia HRB 106 Monarch Shipping Ltd.
48. MATADOR XXVI Bolivia HRB 107 Monarch Shipping Ltd.
49. MATADOR XXVII Bolivia HRB 108 Monarch Shipping Ltd.
50. MATADOR XXVIII Bolivia HRB 109 Monarch Shipping Ltd.
51. MATADOR XXX Bolivia HRB 111 Monarch Shipping Ltd.
52. GAUCHO IX Paraguay 2808-BTQ Oceanpar S.A.
53. GAUCHO V Paraguay 2804-BTQ Oceanpar S.A.
54. GAUCHO VI Paraguay 2805-BTQ Oceanpar S.A.
55. GAUCHO VII Paraguay 2806-BTQ Oceanpar S.A.
56. GAUCHO VIII Paraguay 2807-BTQ Oceanpar S.A.
57. GAUCHO X Paraguay 2809-BTQ Oceanpar S.A.
58. GAUCHO XI Paraguay 2810-BTQ Oceanpar S.A.
59. MATADOR L Paraguay 2831 B Oceanpar S.A.
60. MATADOR LI Paraguay 2832 B Oceanpar S.A.
61. MATADOR LII Paraguay 2833 B Oceanpar S.A.
62. MATADOR LIII Paraguay 2834 B Oceanpar S.A.
63. MATADOR LIV Paraguay 2835 B Oceanpar S.A.
64. MATADOR LIX Paraguay 2838 B Oceanpar S.A.
65. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ B Oceanpar S.A.
66. MATADOR LVIII Paraguay 2837 B Oceanpar S.A.
67. MATADOR LX Paraguay 2839 B Oceanpar S.A.
68. MATADOR LXII Paraguay 2824 B Oceanpar S.A.
69. MATADOR XL Paraguay 2820 B Oceanpar S.A.
70. MATADOR XLI Paraguay 2821 B Oceanpar S.A.
71. MATADOR XLII Paraguay 2822 B Oceanpar S.A.
72. MATADOR XLIII Paraguay 2823 B Oceanpar S.A.
73. MATADOR XLIV Paraguay 2826 B Oceanpar S.A.
74. MATADOR XLV Paraguay 2827 B Oceanpar S.A.
75. MATADOR XLVI Paraguay 2828 B Oceanpar S.A.
76. MATADOR XLVII Paraguay 2829 B Oceanpar S.A.
77. MATADOR XLVIII Paraguay 2830 B Oceanpar S.A.
78. MATADOR XXXI Paraguay 2811 B Oceanpar S.A.
79. MATADOR XXXII Paraguay 2812 B Oceanpar S.A.
80. MATADOR XXXIII Paraguay 2813 B Oceanpar S.A.
81. MATADOR XXXIV Paraguay 2814 B Oceanpar S.A.
82. MATADOR XXXIX Paraguay 2819 B Oceanpar S.A.
83. MATADOR XXXV Paraguay 2815 B Oceanpar S.A.
84. MATADOR XXXVI Paraguay 2816 B Oceanpar S.A.
85. MATADOR XXXVII Paraguay 2817 B Oceanpar S.A.
86. MATADOR XXXVIII Paraguay 2818 B Oceanpar S.A.
87. GAUCHO I Paraguay 2379-BTQ Parfina S.A.
88. GAUCHO II Paraguay 2380-BTQ Parfina S.A.
89. GAUCHO III Paraguay 2381-BTQ Parfina S.A.
90. GAUCHO IV Paraguay 2382-BTQ Parfina S.A.
91. RIVER ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
92. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
93. RIVER ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
Page 150
94. RIVER ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
95. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
96. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
97. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
98. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
99. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
100. RIVER ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
101. RIVER ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ S.A.
102. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
103. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
104. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
105. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
106. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
107. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
108. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
109. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
110. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
111. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
112. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
113. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
114. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
115. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
116. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
117. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
118. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
119. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
120. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
121. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
122. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
123. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
124. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
125. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
126. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
127. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
128. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
129. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
130. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
131. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
132. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
133. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
134. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
135. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
136. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
137. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
138. ACBL 667 Panama 32105-NY Riverview Commercial Corp.
139. ACBL 668 Panama 32106-NY Riverview Commercial Corp.
140. ACBL 695 Panama 32107-NY Riverview Commercial Corp.
141. ACBL 696 Panama 32096-NY Riverview Commercial Corp.
142. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
143. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
144. RIVER 810 Panama 32101-NY Riverview Commercial Corp.
145. RIVER 811 Panama 32102-NY Riverview Commercial Corp.
146. RIVER 822B Panama 32097-NY Riverview Commercial Corp.
147. RIVER 823B Panama 32100-NY Riverview Commercial Corp.
148. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
149. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
150. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
151. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
152. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
153. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
154. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
155. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
156. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
Page 151
157. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
158. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
159. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
160. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
161. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
162. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
163. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
164. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
165. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
166. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
167. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
168. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
169. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
170. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
171. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
172. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
173. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
174. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
175. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
176. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
177. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
178. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ S.A.
179. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
180. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
181. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
182. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
183. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
184. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
185. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ S.A.
186. TN ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2191 UABL S.A.
187. TN ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2192 UABL S.A.
188. TN ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2193 UABL S.A.
189. TN ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2194 UABL S.A.
190. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
191. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
192. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverview Commercial Corp.
193. ACBL 699 Panama 32098NY Riverview Commercial Corp.
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EXHIBIT 2 TO THE
RULE 144A / REGULATION S / IAI APPENDIX
Form of
Transferee Letter of Representation
Ultrapetrol (Bahamas) Limited
c/o H&J Corporate Services Ltd.
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 55-19084
Nassau, Bahamas
Attention of Secretary
In care of
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 9% First Preferred Ship Mortgage Notes due 2014 (the "Securities")
of Ultrapetrol (Bahamas) Limited (the "Company").
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Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:_________________________________________
Address:______________________________________
Taxpayer ID Number:___________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor", and we are acquiring the Securities not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We are purchasing at least $250,000 principal
amount of the Securities or, if less, are furnishing herewith an opinion of
counsel as described in clause (iii) of paragraph 2 below. We have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Securities, and we
invest in or purchase securities similar to the Securities in the normal course
of our business. We, and any accounts for which we are acting, are each able to
bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (i) to the Company,
(ii) in the United States to a person whom the seller reasonably believes is a
qualified institutional buyer in a transaction meeting the requirements of Rule
144A, (iii) to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional
accredited investor purchasing for its own account or for the account of an
institutional accredited investor, in each case in a minimum principal amount of
the Securities of $250,000, or if such transfer is in respect of an aggregate
principal amount of Securities of less than $250,000, only if such institutional
accredited investor furnishes to the Trustee an opinion of counsel acceptable to
the Company that such transfer is in compliance with the Securities Act, (iv)
outside the United States in a transaction complying with the provisions of Rule
904 under the Securities Act, (v) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to
an effective registration statement under the Securities Act, in each of cases
(i) through (vi) subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (iii) above prior to
the Resale Restriction Termination Date, the transferor shall deliver a letter
from the transferee substantially in the form of this letter to the Trustee,
which shall provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. Each
purchaser acknowledges that the Company and the Trustee reserve the right prior
to the offer, sale or other transfer prior to the Resale Restriction Termination
Date of the Securities pursuant to clause (iii), (iv) or (v) above to require
the delivery of an opinion of counsel, certifications or other information
satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________________,
539411 by:___________________________
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