▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
$15,000,000 SERIES A SENIOR SECURED NOTES DUE AUGUST 19, 2010
and
$105,000,000 SERIES B SENIOR SECURED NOTES DUE MAY 19, 2020
AMENDED AND RESTATED
NOTE AGREEMENT
May 19, 2005
TABLE OF CONTENTS
Page
1. AUTHORIZATION OF ISSUE OF NOTES......................................1
1A. Authorization and Issuance of Series A Notes...............1
1B. Authorization of Issue of Series B Notes...................2
2. PURCHASE AND SALE OF SERIES B NOTES; AMENDMENT AND RESTATEMENT.......2
2A. Purchase and Sale of Series B Notes........................2
2B. Amendment and Restatement..................................2
3. CONDITIONS OF CLOSING................................................3
3A. Certain Documents..........................................3
3B. Representations and Warranties; No Default.................4
3C. Purchase Permitted by Applicable Laws......................4
3D. Perfection of Liens and Security Interests.................5
3E. Shipbuilding Contract; Citizenship.........................5
3F. Certificates of Insurance..................................5
3G. Lien Searches..............................................5
3H. Material Adverse Change....................................5
3I. Fees and Expenses..........................................5
4. PREPAYMENTS..........................................................5
4A. Required Prepayments of Notes..............................5
4B. Optional Prepayment With Yield-Maintenance Amount..........6
4C. Notice of Optional Prepayment..............................6
4D. Application of Prepayments.................................7
4E. Retirement of Notes........................................7
5. AFFIRMATIVE COVENANTS................................................7
5A. Financial Statements.......................................7
5B. Inspection of Property.....................................8
5C. Deliveries; Further Assurances.............................9
5D. Information Required by Rule 144A.........................10
5E. Maintenance of Properties; Insurance......................10
6. NEGATIVE COVENANTS..................................................10
6A. Financial Covenants.......................................10
6B. Dividend and Investment Limitation........................10
6C. ▇▇▇▇, ▇▇▇▇ and Other Restrictions.........................11
7. EVENTS OF DEFAULT...................................................15
7A. Acceleration..............................................15
7B. Rescission of Acceleration................................17
7C. Notice of Acceleration or Rescission......................18
7D. Other Remedies............................................18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...........................18
8A. Organization..............................................18
8B. Financial Statements......................................18
8C. Actions Pending...........................................19
8D. Outstanding Debt..........................................19
8E. Title to Properties.......................................19
8F. Taxes.....................................................19
8G. Conflicting Agreements and Other Matters..................19
8H. Offering of the Notes.....................................20
8I. Use of Proceeds; Regulation U, etc........................20
8J. ERISA.....................................................20
8K. Governmental Consent......................................21
8L. Holding Company and Investment Company Status.............21
8M. Possession of Franchises, Licenses, etc...................21
8N. Environmental and Safety Matters..........................22
8O. Establishment of Security Interest........................22
8P. Employee Relations........................................22
8Q. Regulations and Legislation...............................22
8R. Disclosure................................................22
9. REPRESENTATIONS OF THE PURCHASERS...................................23
9A. Nature of Purchase........................................23
9B. Source of Funds...........................................23
10. DEFINITIONS; ACCOUNTING MATTERS....................................24
10A. Yield-Maintenance Terms..................................24
10B. Other Terms..............................................26
10C. Accounting Principles, ▇▇▇▇▇ and Determinations..........32
11. MISCELLANEOUS......................................................32
11A. Note Payments............................................32
11B. Expenses.................................................32
11C. Consent to Amendments....................................33
11D. Form, Registration, Transfer and Exchange of Notes.......33
11E. Persons Deemed Owners; Participations....................34
11F. Survival of Representations and Warranties;
Entire Agreement.........................................34
11G. Successors and Assigns...................................34
11H. Independence of Covenants................................34
11I. Notices..................................................35
11J. Descriptive Headings.....................................35
11K. Satisfaction Requirement.................................35
11L. Governing Law............................................35
11M. Payments Due on Non-Business Days........................35
11N. Severability.............................................35
11O. Severalty of Obligations.................................35
11P. Consent to Forum.........................................36
11Q. Counterparts.............................................36
11R. Binding Agreement........................................37
Schedules and Exhibits
Exhibit A-1 -- Form of Series A Note
Exhibit A-2 -- Form of Amended and Restated Series B Note
Exhibit B -- Form of Disbursement Direction Letter
Exhibit C -- Form of Intercreditor Agreement
Exhibit D -- Form of Mortgage
Exhibit E Form of Security Agreement
Exhibit F-1 -- Form of Opinion of Company's General Counsel
Exhibit F-2 -- Form of Opinion of Company's Maritime Counsel
Exhibit F-3 -- Form of Opinion of Company's Special Hawaiian Counsel
Schedule 8G -- Agreements Restricting Incurrence of Debt
Schedule 8K -- Filings and Recordings
Schedule 8O -- Locations
MATSON NAVIGATION COMPANY, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
As of May 19, 2005
Each of the Persons named in the Purchaser Schedule
attached hereto as a holder of the Series A Notes
(the "Existing Holders")
and
Each of the Persons named in the Purchaser Schedule
attached hereto as a purchaser of the Series B Notes
(the "Purchasers")
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇ Navigation Company, Inc. (the "Company")
hereby agrees with you as set forth below. Reference is made to paragraph 10
hereof for definitions of capitalized terms used herein and not otherwise
defined:
INTRODUCTION
The Company and the Existing Holders are parties to the Private Shelf
Agreement, dated June 29, 2001 (as heretofore amended, the "Existing
Agreement"), under which the Company issued and sold to the Existing Holders,
and there are now outstanding, the Company's Series A Senior Notes due August
19, 2010 (the "Series A Notes") in the outstanding principal amount of
$15,000,000. The Company and the Purchasers are desirous of entering into this
Agreement under which, subject to the terms and conditions hereof, the Company
would issue and sell to the Purchasers the Series B Notes, which will be secured
by the Collateral. The Company and the Existing Holders are desirous of, subject
to the terms and conditions hereof, amending and restating the Existing
Agreement to read as set forth herein, amending and restating the form of the
Series A Notes to be in the form of Exhibit A-1 to this Agreement and to provide
that the Series A Notes will be secured by the Collateral on a pari passu basis
with the Series B Notes.
Accordingly, the parties agree as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. Authorization and Issuance of Series A Notes. Under the
Existing Agreement the Company authorized the issue of, and issued and sold to
the Existing Holders, the Series A Notes, which bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of 4.31% per annum and on overdue payments at
the rate per annum set forth therein, and have such other particular terms as
are set forth in the Series A Notes, and which will, after the effectiveness of
the amendment and restatement of the Existing Agreement be substantially in the
form of Exhibit A-1 attached hereto. The terms "Series A Note" and "Series A
-----------
Notes" as used herein shall include each Series A Note delivered pursuant to the
Existing Agreement, each Series A Note delivered pursuant to any provision of
this Agreement and each Series A Note delivered in substitution or exchange for
any such Series A Note pursuant to any such provision.
1B. Authorization of Issue of Series B Notes. The Company has
authorized the issue of its senior secured promissory notes (the "Series B
Notes") in the aggregate principal amount of $105,000,000, to be dated the date
of issue thereof, to mature May 19, 2020, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 4.79% per annum and on overdue payments at the rate
per annum set forth therein, and to be substantially in the form of Exhibit A-2
-----------
attached hereto. The term "Series B Notes" as used herein shall include each
such Series B Note delivered pursuant to any provision of this Agreement and
each such Series B Note delivered in substitution or exchange for any other
Series B Note pursuant to any such provision and the term "Notes" as used herein
shall include each Series A Note and each Series B Note.
2. PURCHASE AND SALE OF SERIES B NOTES; AMENDMENT AND
RESTATEMENT.
2A. Purchase and Sale of Series B Notes. The Company hereby agrees
to sell to each Purchaser and, subject to the terms and conditions herein set
forth, each Purchaser agrees to purchase from the Company the aggregate
principal amount of Series B Notes set forth opposite such Purchaser's name in
the Purchaser Schedule attached hereto at 100% of such aggregate principal
amount. The Company will deliver to each Purchaser, at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ LLP at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, one or more Series B
Notes registered in such Purchaser's name (or, if specified in the Purchaser
Schedule, in the name of the nominee(s) for such Purchaser specified in the
Purchaser Schedule), evidencing the aggregate principal amount of Series B Notes
to be purchased by such Purchaser and in the denomination or denominations
specified with respect to such Purchaser in the Purchaser Schedule against
payment of the purchase price thereof by transfer of immediately available funds
on the date of closing, which shall be May 19, 2005 (herein called the "closing"
or the "date of closing"), for credit to the account or accounts as shall be
specified in a letter on the Company's letterhead, in substantially the form of
Exhibit B attached hereto, from the Company to the Purchasers delivered prior to
---------
the date of closing.
2B. Amendment and Restatement. Subject to the terms and conditions
herein set forth, the Company and the Existing Holders agree that, effective on
the date of closing, the Existing Agreement shall be amended and restated in its
entirety to read as set forth in this Agreement and each Series A Note
outstanding as of the date of closing shall be amended and restated in its
entirety to be a like principal amount of Series A Notes in the form of Exhibit
-------
A-1 attached to this Agreement. The Series A Notes issued pursuant to paragraph
---
3A(i) are (i) given in exchange and substitution for, and not as payment of the
indebtedness evidenced by, the outstanding Series A Notes held by the Existing
Holders as of the date of closing that are being amended and restated pursuant
to this paragraph 2B, (ii) merely a re-evidence of the indebtedness evidenced by
such outstanding Series A Notes, and (iii) are not intended to constitute a
novation or discharge of the indebtedness evidenced by such outstanding Series A
Notes. Any Series A Note issued pursuant to paragraph 3A(i) in exchange for any
such outstanding Series A Note shall be dated the interest payment date up to
which interest has been paid on such outstanding Series A Note and shall carry
the rights to unpaid interest which was carried on the outstanding Series A Note
for which such Series A Note was issued in exchange, so that neither gain nor
loss of interest shall result from any such exchange.
3. CONDITIONS OF CLOSING. The obligation of each Purchaser to
purchase and pay for the Series B Notes to be purchased by such Purchaser
hereunder, and the effectiveness of the amendment and restatement of the
Existing Agreement and the form of the outstanding Series A Notes hereby, are
subject to the satisfaction, on or before the date of closing, of the following
conditions:
3A. Certain Documents. Such Purchaser and each Existing Holder
shall have received the following, each dated the date of closing:
(i) The Series B Note(s) to be purchased by such Purchaser or
an amended and restated Series A Notes in the form of Exhibit A-1
-----------
hereto in a like principal amount as the outstanding principal amount
of the Series A Note held by such Existing Holder, as the case may be.
(ii) An Intercreditor and Collateral Agency Agreement among
the Purchasers, the Existing Holders and the Collateral Agent in the
form of Exhibit C hereto (herein, as the same may be amended, modified
---------
or supplemented from time to time in accordance with the provisions
thereof, called the "Intercreditor Agreement").
(iii) A copy of a First Preferred Ship Mortgage made by the
Company in favor of the Collateral Agent for the benefit of the holders
of the Notes in the form of Exhibit D hereto (herein, as the same may
---------
be amended, modified or supplemented from time to time in accordance
with the provisions thereof, the "Mortgage").
(iv) A Security Agreement between the Company and the
Collateral Agent for the benefit of the holders of the Notes in the
form of Exhibit E hereto (as the same may be amended, modified or
---------
supplemented from time to time in accordance with the provisions
thereof, called the "Security Agreement").
(v) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the other Transaction Documents and the issuance of the
Notes, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement, the
Notes and the other Transaction Documents.
(vi) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign this
Agreement, the Notes, the other Transaction Documents and the other
documents to be delivered hereunder.
(vii) Certified copies of the Certificate of Incorporation and
By-laws of the Company.
(viii) A favorable opinion of the Company's general counsel
(or such other counsel designated by the Company and acceptable to the
Purchaser(s) and the Existing Holders) satisfactory to such Purchaser
and each Existing Holder and substantially in the form of Exhibit F-1
-----------
attached hereto and as to such other matters as such Purchaser or any
Existing Holder may reasonably request. The Company hereby directs such
counsel, and the counsel referred to in paragraph 5C(1), to deliver
such opinion and the opinions described in paragraph 5C(1), agrees that
the issuance and sale of any Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser and
Existing Holder receiving such opinions will and is hereby authorized
to rely on such opinions.
(ix) A good standing certificate for the Company from the
secretaries of state of Hawaii and California, in each case dated as of
a recent date and such other evidence of the status of each Company as
such Purchaser or any Existing Holder may reasonably request.
(x) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser or
any Existing Holder.
3B. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 hereof and in each
Transaction Document shall be true on and as of the date of closing, except to
the extent of changes caused by the transactions herein contemplated; there
shall exist on the date of closing no Event of Default, Default, Event of Loss
or event or condition which, with notice or lapse of time, or both, would
constitute an Event of Loss; and the Company shall have delivered to such
Purchaser and each Existing Holder an Officer's Certificate, dated the date of
closing, to such effects.
3C. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Series B Notes to be purchased by such Purchaser on the terms
and conditions herein provided (including the use of the proceeds of such Series
B Notes by each Company) shall not violate any applicable law or governmental
regulation (including, without limitation, Section 5 of the Securities Act or
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation, and such Purchaser shall have received such certificates or other
evidence as it may request to establish compliance with this condition. This
paragraph 3C is a closing condition and shall not be construed as a tax
indemnity.
3D. Perfection of Liens and Security Interests. All documents or
instruments, including Uniform Commercial Code financing statements, necessary,
or deemed by such Purchaser or any Existing Holder to be desirable to be made,
to perfect a first priority security interest in the Collateral in favor of the
Collateral Agent shall have been executed and delivered to the Collateral Agent
and the Mortgage shall have been delivered to Marine Documentation, Inc. to be
held for filing with the United States Coast Guard.
3E. Shipbuilding Contract; Citizenship. The Shipbuilding Contract
shall be in full force and effect. Such Purchaser and each Existing Holder shall
have received a copy of the Shipbuilding Contract. The Company shall be a
citizen of the United States, within the meaning of Section 2 of the Shipping
Act, 1916, as amended, qualified to own and operate vessels engaged in the
coastwise trade.
3F. Certificates of Insurance. The Company shall have delivered
from insurance carriers acceptable to such Purchaser and each Existing Holder
certificates of insurance evidencing insurance required to be maintained under
Section 1.13 of the Mortgage under insurance policies with loss payable clauses
in favor of the Collateral Agent and acceptable to such Purchaser and each
Existing Holder, together with a certificate of the chief financial officer of
the Company, dated the date of closing, describing the insurance obtained and
stating that such insurance is in full force and effect and that all premiums
then due thereon have been paid, and that, in the opinion of such officer, such
insurance complies with the provisions of Section 1.13 of the Mortgage.
3G. Lien Searches. Such Purchaser and each Existing Holder shall
have received (i) a certificate of ownership (CG-1330) issued by the United
States Coast Guard showing the Company as the owner of the vessel, free and
clear of all liens and encumbrances except the Mortgage and (ii) certified
copies of Requests for Information or Copies (Form UCC-11) or equivalent reports
listing all effective financing statements which name the Company (under its
present name and previous names) as debtor and which are filed in the office of
the Secretary of State in the states of Hawaii and California.
3H. Material Adverse Change. No material adverse change in the
business, condition (financial or otherwise), operations or prospects of the
Company and its Subsidiaries, taken as a whole, since December 31, 2004 shall
have occurred.
3I. Fees and Expenses. Without limiting the provisions of
paragraph 11B hereof, the Company shall have paid the reasonable fees, charges
and disbursements of special counsel and special maritime counsel to the
Purchasers and the Existing Holders to the extent invoiced by no later than one
(1) day prior to the date of closing.
4. PREPAYMENTS. The Notes shall be subject to required prepayment
as and to the extent provided in paragraph 4A. The Notes shall also be subject
to prepayment under the circumstances set forth in paragraph 4B. Any prepayment
made by the Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any required prepayment as
specified in paragraph 4A.
4A. Required Prepayments of Notes.
4A(1). Required Prepayments of Series A Notes. As set forth in the
Series A Notes, until the Series A Notes shall be paid in full, the Company
shall apply to the prepayment of the Series A Notes, without premium, the sum of
(i) $2,000,000 on August 19 in each of the years 2005 to 2007, inclusive, and
(ii) $3,000,000 on August 19 in each of the years 2008 and 2009, and such
principal amounts of the Series A Notes, together with interest thereon to the
prepayment date, shall become due on such prepayment dates. The remaining
outstanding principal amount of the Series A Notes, together with any accrued
and unpaid interest thereon, shall become due on August 19, 2010, the maturity
date of the Series A Notes.
4A(2). Required Prepayments of the Series B Notes. Until the Series B
Notes shall be paid in full, the Company shall apply to the prepayment of the
Notes, without premium, the sum of $3,500,000 on May 19 and November 19 in each
of the years 2005 to 2019, inclusive, and such principal amounts of the Series B
Notes, together with interest thereon to the prepayment dates, shall become due
on such prepayment dates. The remaining outstanding principal amount of the
Notes, together with any accrued and unpaid interest thereon, shall become due
on May 19, 2020, the maturity date of the Series B Notes.
4A(3). Required Prepayment Upon Event of Loss or Collateral Event.
Within thirty (30) days after the occurrence of an Event of Loss and within ten
(10) days after the occurrence of a Collateral Event, the Company shall prepay
the entire outstanding principal of the Notes and the entire outstanding
principal amount of the Notes, together with interest thereon to such date and
together with the Yield-Maintenance Amount, if any, with respect to each Note,
shall be due and payable on such date.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes
of each Series shall be subject to prepayment, in whole at any time or from time
to time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4B shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the
holder of each Note of a Series to be prepaid pursuant to paragraph 4B
irrevocable written notice of such prepayment not less than five Business Days
prior to the prepayment date, specifying such prepayment date, the aggregate
principal amount of the Notes of such Series to be prepaid on such date, the
principal amount of the Notes of such Series held by such holder to be prepaid
on that date and that such prepayment is to be made pursuant to paragraph 4B.
Notice of prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest thereon to the prepayment
date and together with the Yield-Maintenance Amount, if any, herein provided,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4B, give telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each Significant Holder which shall have
designated a recipient for such notices in the Purchaser Schedule attached
hereto or by notice in writing to the Company.
4D. Application of Prepayments. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of any
Series pursuant to paragraph 4A or 4B, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series (including, in the case of
prepayments pursuant to paragraph 4A(1) or 4A(2) for the purpose of this
paragraph 4D only, all Notes of such Series prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A or 4B) according to
the respective unpaid principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by prepayment
pursuant to paragraphs 4A or 4B, or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquired, directly or
indirectly, Notes of any Series held by any holder unless the Company or such
Subsidiary or Affiliate shall have offered to prepay or otherwise retire or
purchase or otherwise acquire, as the case may be, the same proportion of the
aggregate principal amount of Notes of such Series held by each other holder of
Notes of such Series at the time outstanding upon the same terms and conditions.
Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by
the Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4D.
5. AFFIRMATIVE COVENANTS. So long as any Note is outstanding and
unpaid, the Company covenants as follows:
5A. Financial Statements. The Company covenants that it will
deliver to each holder of the Notes in duplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and cash
flows of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly
period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting forth in
each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and certified by an
authorized financial officer of the Company, subject only to changes
resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days
after the end of each fiscal year, consolidated statements of income
and cash flows of the Company and its Subsidiaries for such year and a
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all in
reasonable detail and reasonably satisfactory in scope to the Required
Holder(s) and certified by independent public accountants of recognized
national standing whose opinion shall be unqualified and otherwise
satisfactory in scope and substance to the Required Holder(s);
(iii) promptly upon transmission thereof, copies of all such
financial, proxy and information statements, notices and other reports
as are sent to the Company's public stockholders and copies of all
registration statements (without exhibits) and all reports which are
filed with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and
Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any of its Subsidiaries by
independent accountants in connection with any material annual, interim
or special audit made by them of the books of such Company or such
Subsidiary;
(v) together with the delivery of any financial statements
pursuant to clause (ii) above, the certificate or certificates
described in Section 1.10(b) of the Mortgage and the report and opinion
described in Section 1.13(b) of the Mortgage; and
(vi) with reasonable promptness, such other financial data as
any holder of Notes may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder of Notes an Officers'
Certificate (a) demonstrating (with computations in reasonable detail)
compliance with the covenants in paragraphs 6A(1), 6A(2), 6B, 6C(2), 6C(4) and
(b) stating that there exists no Default, Event of Default, Event of Loss or
event or condition which, with notice or lapse of time, or both, would
constitute an Event of Loss, or if any such Default, Event of Default, Event of
Loss or event or condition exists, specifying the nature and period of existence
thereof and what action the Company proposes to take with respect thereto.
The Company also covenants that forthwith upon the chief executive
officer, chief financial officer, treasurer or controller of the Company
obtaining actual knowledge of an Event of Default, Default, Event of Loss or
event or condition which, with notice or lapse of time, or both, would
constitute an Event of Loss, it will deliver to each holder of Notes an
Officers' Certificate specifying the nature and period of existence thereof and
what action the Company proposes to take with respect thereto.
5B. Inspection of Property. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant ▇▇▇▇▇▇'s expense, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine their books and financial records and
to make copies thereof or extracts therefrom and to discuss their affairs,
finances and accounts with the principal officers and the Company's independent
certified public accountants, all at such reasonable times and as often as such
Significant Holder may reasonably request; provided that a principal financial
officer of the Company shall have prior notice of, and may elect to be present
during, discussions with the Company's independent public accountants.
5C. Deliveries; Further Assurances. The Company covenants to, at
its sole expense:
5C(1). Vessel Delivery and Mortgage Filing. On or before May 23,
2005: (a) the construction of the Vessel shall have been completed substantially
in accordance with the plans and specifications of the Shipbuilding Contract and
the Vessel shall have successfully completed its trial run in accordance with
the provisions of the Shipbuilding Contract; (b) all material conditions
precedent to the Company's obligations to acquire the Vessel under the
Shipbuilding Contract shall have been satisfied (except to the extent waived by
the Company with the consent of the Purchasers and each Existing Holder), the
Company shall have accepted delivery of the Vessel and, at the time the Company
shall have accepted delivery of the Vessel, the Vessel shall not have suffered
any material damage and the Vessel shall have received the highest
classification and rating of the American Bureau of Shipping for vessels of the
same age and type as the Vessel without any outstanding recommendations that
would offset such class; (c) the Company shall have caused the Mortgage and the
Bill of Sale to be duly filed with the United States Coast Guard at the National
Vessel Documentation Center in Falling Waters, West Virginia and shall have paid
all fees in connection therewith; (d) the Vessel shall have been duly documented
under the laws of the United States in the name of the Company with coastwise
and registry endorsements; (e) the Company shall have taken good, indefeasible,
marketable, and insurable title to the Vessel free and clear of all Liens (other
than Permitted Liens as defined in the Mortgage); (f) the Company shall have
caused each Purchaser and each Existing Holder to receive a favorable opinion of
(i) ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, the Company's special maritime counsel, satisfactory to
each Purchaser and each Existing Holder and substantially in the form of Exhibit
-------
F-2 attached hereto and as to such other matters as any Purchaser or any
---
Existing Holder may reasonably request, and (ii) the Company's special Hawaiian
counsel, satisfactory to each Purchaser and each Existing Holder and
substantially in the form of Exhibit F-3 attached hereto and as to such other
-----------
matters as any Purchaser or any Existing Holder may reasonably request; (g)
pursuant to Article VII (3) of the Shipbuilding Contract the Purchasers and each
Existing Holder shall have received a copy of (i) the Protocol of Delivery and
Acceptance, and (ii) a copy of the Bill of Sale in the form of a Builder's
Certificate; (h) the Company shall have made all filings and recordings referred
to in paragraph 3D and the Company shall have paid all fees in connection
therewith; and (i) the Purchasers and the Existing Holders shall have received
evidence of each of the foregoing.
5C(2). Additional Filings. In addition to the filing required in
paragraph 5C(2), promptly execute and deliver, or cause to be executed and
delivered, to the holders of the Notes or the Collateral Agent, in due form for
filing or recording (the Company hereby agrees to pay the cost of filing or
recording the same (including without limitation any and all filing fees and
recording taxes)) in all public offices necessary or deemed necessary by the
Required Holder(s) or the Collateral Agent, such other collateral assignments,
security agreements, pledge agreements, mortgages, and other instruments and
documents, and do such other acts and things, including, without limitation, all
acts and things as the Required Holder(s) or the Collateral Agent may from time
to time reasonably request, to establish and maintain to the satisfaction of the
Required Holder(s) and the Collateral Agent a valid and perfected first priority
security interest in favor of the Collateral Agent in all of the present and/or
future Collateral free of all other Liens (other than Permitted Liens, as
defined in the Mortgage) whatsoever and to deliver to the Collateral Agent or
the holders of the Notes such certificates, documents, instruments and opinions
in connection therewith as may be reasonably requested by the Collateral Agent
or the Required Holder(s), each in form and substance reasonably satisfactory to
the Collateral Agent and the Required Holder(s). The Company hereby irrevocably
makes, constitutes and appoints the Collateral Agent (and all other persons
designated by the Collateral Agent for that purpose) as the Company's true and
lawful agent and attorney-in-fact to, if the Company fails to make any filing or
recording required in this paragraph 5C, sign the Company's name on any such
agreements, instruments and documents referred to in the preceding sentences and
to deliver such agreements, instruments and documents to such Persons as the
Required Holder(s) or the Collateral Agent in their sole discretion may elect.
5D. Information Required by Rule 144A. The Company covenants that
it will, upon the request of the holder of any Note, provide such holder, and
any qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5D, the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5E. Maintenance of Properties; Insurance. The Company covenants
that it and each Subsidiary will (i) maintain or cause to be maintained in good
repair, working order and condition all properties used or useful at that time
in its business and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof and (ii) in addition to
and without limiting the requirements contained in any Collateral Document,
maintain insurance with reputable and financially sound insurers in such amounts
and against such liabilities and hazards as is customarily maintained by other
companies operating similar businesses.
6. NEGATIVE COVENANTS. So long thereafter as any Note or amount
due hereunder or under any other Transaction Document is outstanding and unpaid,
the Company covenants as follows:
6A. Financial Covenants. The Company will not permit:
6A(1). Working Capital Requirement. Consolidated Working Capital at
any time to be less than $1; or
6A(2). Net Worth Requirement. Consolidated Net Worth at any time to
be less than the greater of (i) $250,000,000 or (ii) an amount equal to 65% of
Consolidated Net Worth as of the end of the fiscal year of the Company most
recently ended prior to the date of determination of compliance with this
paragraph 6A(2);
6B. Dividend and Investment Limitation. The Company covenants that
it will not pay or declare any dividend on any class of stock or make any other
distribution on account of any class of its stock, or redeem, purchase or
otherwise acquire, directly or indirectly, any shares of its stock or make any
Restricted Investment (all of the foregoing being herein called "Restricted
Payments") if at the time any proposed Restricted Payment is to be made, or
after giving effect to any proposed Restricted Payment, a Default or an Event of
Default exists or would exist.
6C. Lien, Debt and Other Restrictions. The Company covenants that
it will not and will not permit any Subsidiary to:
6C(1). Liens. Create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned or hereafter acquired, except
(i) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(ii) Liens (other than Liens pursuant to ERISA) incidental to
the conduct of its business or the ownership of its property and assets
which were not incurred in connection with the borrowing of money or
the obtaining of advances or credit, and which do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business,
(iii) Liens on property or assets of a Subsidiary securing
obligations of such Subsidiary to the Company or another Subsidiary,
(iv) Liens on container(s) and equipment acquired subsequent
to December 31, 2000 (including Liens in connection with financing or
capitalized leases), securing Funded Debt of the Company or any
Subsidiary permitted by paragraph 6C(2); provided that any such Lien
may arise at any time after the date on which the encumbered
container(s) or equipment were acquired if such Lien relates to a cross
border lease of such container(s) or equipment where (A) the lease or
financing agreement provides that in the event of the bankruptcy or
insolvency of the lessor, lessee, trustee or other lease transaction
party, a default or casualty, or any other type of lease termination
event (whether scheduled or otherwise), title to the leased containers
or equipment reverts to the Company or such Subsidiary, (B) the
aggregate amount of lease payments and consideration paid to obtain
reconveyance of title to the leased containers or equipment does not
exceed the original cost thereof, (C) no security interest, financing
statement or similar filings are made in the United States of America
in respect of the leased containers or equipment for the benefit of any
Person other than the Company or such Subsidiary and (D) prior to such
Lien becoming effective, the Company or such Subsidiary receives a
legal opinion of counsel to the lessor and trustee, if any, to the
effect that the agreements referred to in subclause (A) of this clause
(iv) are valid and legally binding agreements, enforceable against the
lessor or trustee, if any, in accordance with their respective terms,
(v) Liens on Capital Assets acquired subsequent to December
31, 2000 (excluding any asset consisting of, or acquired with,
insurance proceeds received in connection with any asset owned on
December 31, 2000) securing Funded Debt of the Company and Subsidiaries
permitted by clause (iii) of paragraph 6C(2),
(vi) Liens encumbering the Company's Capital Construction Fund
to the extent incurred in connection with Company's financing of
obligations constituting "qualified withdrawals" under regulations
adopted by the Maritime Administration under the Merchant Marine Act,
1936, as amended,
(vii) any Lien existing on any property of any Person at the
time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any Subsidiary
through purchase, merger or consolidation or otherwise, whether or not
assumed by the Company or such Subsidiary; provided that (a) any such
Lien shall not encumber any other property of the Company or such
Subsidiary, and (b) the aggregate amount of Funded Debt secured by all
such Liens is at all times permitted by paragraph 6C(2),
(viii) Permitted Liens, as defined in the Mortgage; and
(ix) Liens in the Collateral in favor of the Collateral Agent
to secure the Notes,
provided that, other than Permitted Liens (as defined in the Mortgage), no Liens
shall be permitted in or on the Collateral;
6C(2). Funded Debt. Create, incur, assume or suffer to exist any
Funded Debt, except
(i) Funded Debt of any Subsidiary to the Company or another
Subsidiary,
(ii) Funded Debt of Subsidiaries in an aggregate principal
amount at no time in excess of $25,000,000 (exclusive of Funded Debt
permitted by clause (i) or (iii) hereof),
(iii) Funded Debt of Subsidiaries described in clause (v) of
paragraph 6C(1) and Funded Debt of the Company; provided that the
aggregate principal amount thereof shall at no time exceed an amount
equal to 200% of Consolidated Net Worth at such time;
6C(3). Merger. Enter into any transaction of merger, consolidation or
other combination with any other Person; provided that
(i) any Subsidiary may merge with the Company; provided that
the Company shall be the continuing or surviving corporation and no
Default or Event of Default will result therefrom,
(ii) any Subsidiary may merge with another Subsidiary, and
(iii) the Company may merge, consolidate or combine with any
other corporation; provided that (a) immediately after such merger,
consolidation or combination, no Default or Event of Default shall
exist and (b) if the Company is not the continuing or surviving
corporation, the successor corporation shall be a solvent corporation
organized under the laws of any state of the United States of America
and shall expressly assume in writing all of the obligations of the
Company under this Agreement, including all covenants herein contained,
and such successor or acquiring corporation shall be substituted for
the Company with the same effect as if it had been named herein as a
party hereto;
6C(4). Sale of Assets. Sell, lease or transfer or otherwise dispose
of any Capital Asset to any Person, except that during any rolling twelve-month
period, the Company may sell or otherwise dispose of Capital Assets (other than
Capital Assets constituting part of the Collateral unless the Notes are prepaid
in full prior to or concurrently with such sale pursuant to paragraph 4B) which
constituted up to 10% of the total value of the assets of the Company as of
December 31, 2004, so long as (A) such Capital Assets sold contributed less than
25% of the Consolidated Net Earnings in each of the three fiscal years
immediately preceding any such sale and (B) such Capital Assets, when considered
together with all other Capital Assets sold or otherwise disposed of subsequent
to December 31, 2004, do not constitute in excess of 30% of the total value of
the assets of the Company as of December 31, 2004;
6C(5). Sale of Stock and Debt of Subsidiaries. Sell or otherwise
dispose of, or part with control of, any shares of stock or Debt of any
Subsidiary, except to the Company or another Subsidiary, and except that all
shares of stock and Debt of any Subsidiary at the time owned by or owed to the
Company and all Subsidiaries may be sold as an entirety for a cash consideration
which represents their fair value (as determined in good faith by the Board of
Directors of the Company), at the time of sale of the shares of stock and Debt
so sold, and provided that at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of stock or Debt of any other Subsidiary
(unless all of the shares of stock and Debt of such other Subsidiary owned,
directly or indirectly, by the Company and all Subsidiaries are simultaneously
being sold as permitted by this paragraph 6C(5));
6C(6). Sale and Lease-Back. Enter into any arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by the Company or any Subsidiary of real or personal property owned
by the Company or any Subsidiary as of December 31, 2004 (including any such
property acquired with insurance proceeds received in connection with any real
or personal property owned by the Company or any Subsidiary on such date), which
has been or is to be sold or transferred by the Company or any Subsidiary to
such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or rental
obligations of the Company or any Subsidiary;
6C(7). Transactions with Affiliates and Stockholders. Directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or otherwise deal with, in the ordinary course of
business or otherwise (i) any Affiliate, (ii) any Person owning, beneficially or
of record, directly or indirectly, either individually or together with all
other Persons to whom such Person is related by blood, adoption or marriage,
stock of the Company or stock of any Person owning stock of the Company (of any
class having ordinary voting power for the election of directors) aggregating 5%
or more of such voting power or (iii) any Person related by blood, adoption or
marriage to any Person described or coming within the provisions of clause (i)
or (ii) of this paragraph 6C(7); provided that the Company and Subsidiaries may
enter into such transactions on terms no less favorable to the Company or
Subsidiary than if no such relationship existed, including (subject in each case
to the limitations of paragraph 6B)) Restricted Payments and transactions of the
Company involving the sale or purchase of shares of the Company's stock;
6C(8). Loans, Advances and Investments. Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person, except that the Company or any Subsidiary may
(i) make or permit to remain outstanding loans or advances to
any Subsidiary;
(ii) own, purchase or acquire stock, obligations or securities
of a Subsidiary or of a Person which immediately after such purchase or
acquisition will be a Subsidiary;
(iii) acquire and own stock, obligations or securities
received in settlement of debt (created in the ordinary course of
business) owing to the Company or any Subsidiary,
(iv) make investments in accordance with the resolutions of
the Board of Directors of the Company; provided that such resolutions
authorize only investments rated investment grade by Standard & Poor's
Corporation, ▇▇▇▇▇'▇ Investors Services, or any other nationally
recognized credit rating agency,
(v) make Restricted Investments to the extent permitted by
paragraph 6B; and
(vi) make other investments, loans and advances (other than
Restricted Investments which may be made only to the extent permitted
by paragraph 6B) which in aggregate (at original cost) do not exceed
$30,000,000;
Notwithstanding the foregoing, amounts in the Capital Construction Fund may be
invested only as provided in clause (iv) above; or
6C(9). Terrorism Sanctions Regulations. Become, or permit any
Subsidiary to become, a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti-Terrorism Order, or to knowingly engage, or
permit any Subsidiary to knowingly engage, in any dealings or transactions with
any such Person.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or interest or Yield-Maintenance Amount on, any Note for more than two
Business Days after the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company or any Subsidiary defaults in any payment of
principal of, or premium or interest on, any obligation for money
borrowed (or of any obligation under conditional sale or other title
retention agreement or of any obligation issued or assumed as full or
partial payment for property whether or not secured by a purchase money
mortgage or of any obligation under notes payable or drafts accepted
representing extensions of credit) other than the Notes beyond any
period of grace provided with respect thereto, or the Company or any
Subsidiary fails to perform or observe any other agreement, term or
condition contained in any agreement (or any other event thereunder or
under any such agreement occurs and is continuing) and the effect of
such default, failure or other event is to cause, or permit the holder
or holders of such obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due (or to be repurchased
by the Company or any Subsidiary) prior to any stated maturity;
provided that the aggregate amount of all obligations as to which such
a payment default shall occur or such a failure or other event causing
or permitting acceleration (or resale to a Company or any Subsidiary)
shall occur and be continuing exceeds $25,000,000; or
(iii) any representation or warranty made by the Company in
the Existing Agreement, herein or in any other Transaction Document or
by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement or any other Transaction
Document shall be false or misleading in any material respect on the
date as of which made; or
(iv) the Company fails to perform or observe any agreement
contained in paragraph 6 or 5C(1) hereof; or
(v) the Company or any Subsidiary fails to perform or observe
any other agreement, term or condition contained herein and such
failure shall not be remedied within 30 days after any officer of the
Company obtains actual knowledge thereof, or the Company or any
Subsidiary fails to perform or observe any agreement contained in any
other Transaction Document and such failure shall not be remedied
within the grace period, if any, provided therefor in such Transaction
Document (or, if no such grace period is provided for in such
Transaction Document, within 30 days after any officer of the Company
obtains actual knowledge thereof); or
(vi) the Company or any Material Subsidiary makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or
(vii) any decree or order for relief in respect of the Company
or any Material Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or similar law, whether now or hereafter
in effect (herein called the "Bankruptcy Law"), of any jurisdiction; or
(viii) the Company or any Material Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any such Material Subsidiary, or of
any substantial part of the assets of the Company or any such Material
Subsidiary, or commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Material Subsidiary)
relating to the Company or any Material Subsidiary under the Bankruptcy
Law of any other jurisdiction; or
(ix) any petition or application of the type described in
clause (viii) of this paragraph 7A is filed, or any such proceedings
are commenced, against the Company or any Material Subsidiary and the
Company or such Material Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 30 days; or
(x) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or any Material Subsidiary decreeing a
split-up of the Company or such Material Subsidiary which requires the
divestiture of (A) assets representing a substantial part, or the stock
of, or other ownership interest in, a Material Subsidiary whose assets
represent a substantial part of the consolidated assets of the Company
or a Material Subsidiary or (B) assets or the stock of or other
ownership interest in a Subsidiary that has contributed a substantial
part of consolidated net income of the Company or a Material Subsidiary
for any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more than
60 days; or
(xii) (a) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (b) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBCG or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of such proceedings, (c) the aggregate
"amount of unfunded benefit liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $25,000,000, (d) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected to incur
any liability pursuant to Title I or IV or ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans,
(e) the Company or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (f) the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events described in
clauses (a) through (f) above, either individually or together with any
other such event or events, could reasonably be expected to have a
material adverse effect on the business or condition (financial or
otherwise) of the Company; or
(xiii) any judgment(s) or decree(s) in the aggregate amount of
$25,000,000 or more shall be entered against the Company or any of its
Subsidiaries that are not paid or fully covered (beyond any applicable
deductibles) by insurance and such judgment(s) or decree(s) shall not
have been vacated, discharged or stayed or bonded pending appeal within
60 days from the entry thereof; or
(xiv) an "event of default", as defined in the Mortgage, has
occurred;
then (a) if such event is an Event of Default specified in clause (vii), (viii)
or (ix) of this paragraph 7A with respect to the Company, all of the Notes at
the time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and the Yield-Maintenance Amount with
respect thereto, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Company, and (b) with respect to any event
constituting an Event of Default, the Required Holder(s) of any Series of Notes
may at its or their option, by notice in writing to the Company, declare all of
the Notes of such Series to be, and all of the Notes of such Series shall
thereupon be and become, immediately due and payable together with interest
accrued thereon and together with the Yield-Maintenance Amount, if any, with
respect to each Note of such Series, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company.
7B. Rescission of Acceleration. At any time after any or all of
the Notes of a Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of such Series may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have become due otherwise
than by reason of such declaration, and interest on such overdue interest and
overdue principal and Yield-Maintenance Amount at the rate specified in the
Notes of such Series, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement (as this Agreement pertains to the Notes of such Series). No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement, the other Transaction Documents and such Note by
exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement contained in
this Agreement or any other Transaction Document or in aid of the exercise of
any power granted in this Agreement or any other Transaction Document. No remedy
conferred in this Agreement or any other Transaction Document upon the holder of
any Note or the Collateral Agent is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization. The Company and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the state of
its organization. The Company and each Subsidiary has the full power and
authority to own its properties and to carry on its business as now being
conducted. The Company has full power, authority and right to execute and
deliver, and to perform and observe, the provisions of this Agreement, the Notes
and the other Transaction Documents and to carry out the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement, the Notes and the other Transaction Documents has been duly
authorized by all necessary corporate and other action, and, when duly executed
and delivered, will be the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms.
8B. Financial Statements. The Company has furnished each Purchaser
and each Existing Holder with the following financial statements, identified by
a principal financial officer of the Company: (i) consolidated balance sheets of
the Company and its Subsidiaries as of: December 31, 2004, December 26, 2003,
and December 27, 2002, and consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries for each such year,
certified by Deloitte & Touche; and (ii) consolidated balance sheets of the
Company and its Subsidiaries as of April 1, 2005 and as of March 26, 2004 and
consolidated statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for the three-month period ended on each such date,
in each case prepared by the Company. Such financial statements (including any
related schedules and/or notes) are true and correct in all material respects
(subject, as to interim statements, to changes resulting from audits and
year-end adjustments), have been prepared in accordance with GAAP consistently
followed throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its Subsidiaries required to be shown in
accordance with such principles. The balance sheets fairly present the condition
of the Company and its Subsidiaries as at the dates thereof, and the statements
of income, shareholders' equity and cash flows fairly present the results of the
operations and cash flows of the Company and its Subsidiaries for the periods
indicated. As of the date of closing, there has been no material adverse change
in the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole since December 31, 2004.
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or governmental
body which could reasonably be expected to result in any material adverse change
in the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any Subsidiary has
any Funded Debt outstanding except as permitted by paragraph 6C(2). There exists
no default under the provisions of any instrument evidencing any Debt of the
Company or any Subsidiary or of any agreement relating thereto.
8E. Title to Properties. The Company has and each Subsidiary has
good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other properties and
assets, including the properties and assets reflected in the most recent audited
balance sheet referred to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business), subject to no Liens of any kind
except Liens permitted by paragraph 6C(1). There is no material default, nor any
event that, with notice or lapse of time or both, would constitute such a
material default under any material lease to which either the Company or any
Subsidiary is a lessee, lessor, sublessee or sublessor.
8F. Taxes. The Company has and each Subsidiary has filed all
Federal, state and other income tax and informational returns which are required
to be filed by it. The Company and each such Subsidiary has paid all taxes as
shown on its returns and on all assessments received to the extent that such
taxes have become due, except such assessments as are being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP.
8G. Conflicting Agreements and Other Matters. Neither the
execution nor delivery of this Agreement, the Notes or any other Transaction
Document, nor the offering, issuance and sale of the Notes, nor fulfillment of
nor compliance with the terms and provisions of this Agreement, the Notes or any
other Transaction Document will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary (other than Liens in the
Collateral in favor of the Collateral Agent pursuant to the Collateral
Documents) pursuant to, their respective articles or incorporation or bylaws (or
other comparable governing documents, as applicable), any award of any
arbitrator or any agreement, instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any Subsidiary is subject. Neither
the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing any of their respective Debt,
any agreement relating thereto or any other contract or agreement which
restricts or otherwise limits the incurring of Debt pursuant hereto, except as
set forth on Schedule 8G hereto.
8H. Offering of the Notes. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or any
similar security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person or Persons other than the
Purchasers and the Existing Holders, and neither the Company nor any agent
acting on its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of Section 5 of the Securities
Act or to the provisions of any securities or blue sky law of any applicable
jurisdiction.
8I. Use of Proceeds; Regulation U, etc. The proceeds of sale of
the Series B Notes will, on the date of closing, be deposited into the Capital
Construction Fund of the Company and withdrawn from the Capital Construction
Fund and used to pay the purchase price of the Vessel under the Shipbuilding
Contract. None of the proceeds of the Notes have been or will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" (as defined in Regulation U (12 CFR
Part 221) of the Board of Governors of the Federal Reserve System (herein called
"margin stock")) or for the purpose of maintaining, reducing or retiring any
indebtedness which was originally incurred to purchase or carry any stock that
is currently a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such Regulation U. Neither
the Company nor any agent acting on its behalf has taken or will take any action
which might cause this Agreement or the Notes to violate Regulation U,
Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability to the
PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole. Neither the Company, any of its
Subsidiaries or any ERISA Affiliate has incurred or presently expects to incur
any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the Company and
its Subsidiaries taken as a whole. The execution and delivery of this Agreement
and the other Transaction Documents and the issuance and sale of the Notes were
and will be exempt from, or did not and will not involve any transaction which
is subject to the prohibitions of, section 406 of ERISA and did not and will not
involve any transaction in connection with which a penalty could be imposed
under section 502(i) of ERISA or a tax could be imposed pursuant to section 4975
of the Code. The representation by the Company in the next preceding sentence is
made in reliance upon and subject to the accuracy of each Existing Holder's
representation in paragraph 9B of the Existing Agreement (with respect to the
Series A Notes) each Purchaser's representation in paragraph 9B (with respect to
the Series B Notes).
8K. Governmental Consent. Neither the nature of the Company or any
of its Subsidiaries, nor any of their respective businesses or properties, nor
any relationship between the Company or a Subsidiary and any other Person, nor
any circumstance in connection with the offering, issuance, sale or delivery of
the Notes is such as to require on the part of the Company or any Subsidiary any
authorization, consent, approval, exemption or other action by, notice to or
filing with any court, administrative or governmental body (other than routine
filings after the date of closing with the Securities and Exchange Commission
and/or state blue sky authorities, the filings and recordings necessary to
perfect the Liens in the Collateral intended to be created by the Collateral
Documents and any filings described on Schedule 8K hereto) in connection with
(i) the execution and delivery of this Agreement or the other Transaction
Documents, (ii) the offering, issuance, sale or delivery of the Notes or (iii)
fulfillment of or compliance with the terms and provisions of this Agreement,
the Notes or the other Transaction Documents.
8L. Holding Company and Investment Company Status. Except as set
forth in the next succeeding sentence, neither the Company nor any of its
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company,"
or a "public utility," within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or a "Public utility" within the meaning of the Federal
Power Act, as amended, or an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or an "Investment adviser" within
the meaning of the Investment Advisers Act of 1940, as amended. The Company and
its Subsidiaries are not a "holding company" or a "subsidiary" or an "affiliate"
of a "holding company" as such term is defined in the Public Utility Holding
Company Act of 1935, as amended, and are not regulated thereunder. On each date
as of which this representation is made or confirmed, the Parent has on file
with the Securities and Exchange Commission such an exemption statement, which
is in full force and effect.
8M. Possession of Franchises, Licenses, etc. The Company and its
Subsidiaries possess all material franchises, certificates, licenses,
development and other permits and other authorizations from governmental
political subdivisions or regulatory authorities and all patents, trademarks,
service marks, trade names, copyrights, licenses, easements, rights of way and
other rights (collectively, "Material Rights"), free from burdensome
restriction, that are necessary in the judgment of the Company in any material
respect for the ownership, maintenance and operation of their business,
properties and assets, and neither the Company nor any of its Subsidiaries is in
violation of any Material Rights in any material respect. No event has occurred
which permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such Material Rights, or which materially and
adversely affects the rights of the Company or its Subsidiaries thereunder.
8N. Environmental and Safety Matters. The Company and its
Subsidiaries and all of their respective properties and facilities have complied
at all times and in all respects with all Environmental and Safety Laws except
where failure to comply would not result in a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8O. Establishment of Security Interest. Schedule 8O hereto sets
forth as of the date of closing (i) the jurisdiction of incorporation and
organizational number of the Company, and (ii) the location of the chief
executive office of the Company. Upon the delivery of the Vessel and the filing
of the Mortgage with the United States Coast Guard and the filing of the
Financing Statement with the Bureau of Conveyances of the State of Hawaii, (i)
all filings, assignments, pledges and deposits of documents or instruments will
have been made, and all other actions have been taken, that are necessary under
applicable law and are required to be made or taken on or prior to the date of
closing under the provisions of this Agreement and the other Transaction
Documents to create and perfect a first priority lien on and security interest
in the Collateral (subject only to Permitted Liens, as defined in the Mortgage)
in favor of the Collateral Agent to secure the Notes; (ii) the Collateral and
the Collateral Agent's rights with respect to the Collateral will not be subject
to any setoff, claims, withholdings or other defenses (except any such setoff,
claim or defense which could not, individually or in the aggregate, materially
impair the rights of the Collateral Agent with respect to the Collateral) (iii)
the Company will be the owner of the Collateral described in the Collateral
Documents free from any Lien, security interest, encumbrance and any other claim
or demand, other than Permitted Liens (as defined in the Mortgage).
8P. Employee Relations. Neither the Company nor any Subsidiary is
the subject of (i) any material strike, work slowdown or stoppage, union
organizing drive or other similar activity or (ii) any material action, suit,
investigation or other proceeding involving alleged employment discrimination,
unfair termination, employee safety or similar matters or, to the best knowledge
of the Company, is any such event imminent or likely to occur except those
which, individually or in aggregate, could not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
8Q. Regulations and Legislation. To the best knowledge of the
Company, no law, regulation, interpretation or legislation has been enacted or
issued that could reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8R. Disclosure. Neither this Agreement, any other Transaction
Document nor any other document, certificate or statement furnished to any
Purchaser or any Existing Holder by or on behalf of the Company in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. There is no fact peculiar to the Company or any
Subsidiary which materially adversely affects, or in the future may (so far as
the Company can now foresee) materially adversely affect, the consolidated
business, property, assets, prospects or financial condition of the Company and
the Subsidiaries and which has not been set forth in this Agreement or in the
other documents, certificates and statements furnished to each Purchaser and
each Existing Holder by or on behalf of the Company prior to the date this
representation is made or confirmed in connection with the transactions
contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is acquiring the Series B
Notes purchased by it hereunder for the purpose of investment for its own
account or for the account of funds that it manages for investment purposes and
not with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act, provided that the disposition of such
Purchaser's property shall at all times be and remain within its control. Such
Purchaser has no present intention of selling, granting participation in, or
otherwise distributing any of the Series B Notes to be issued to it in any
transaction which would be in violation of the securities laws of the United
States of America or any state or other jurisdiction thereof, without prejudice,
however, to Purchaser's rights at all times to sell or otherwise dispose of all
or any part of such securities under a registration under Securities Act or
under an exemption from such registration available under the Securities Act and
subject, nevertheless, to the disposition of such Purchaser's property being at
all times within its control. Such Purchaser acknowledges that the Series B
Notes will not, on the Closing Date, be registered under the Securities Act, on
the grounds that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration under the Securities Act, and
that the Company's reliance on such exemption is predicated on the
representations set forth in this Article 9.
9B. Source of Funds. At least one of the following statements is
an accurate representation as to each source of funds (a "Source") to be used by
such Purchaser to pay the purchase price of the Series B Notes to be purchased
by such Purchaser hereunder:
(i) the Source is an "insurance company general account" (as
that term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the
reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC Annual Statement")) for the general account
contract(s) held by or on behalf of any employee benefit plan together
with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE
95-60) or by the same employee organization in the general account do
not exceed 10% of the total reserves and liabilities of the general
account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(ii) the Source is a separate account that is maintained
solely in connection with such Purchaser's fixed contractual
obligations under which the amounts payable, or credited, to any
employee benefit plan (or its related trust) that has any interest in
such separate account (or to any participant or beneficiary of such
plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or
(iii) the Source is either (a) an insurance company pooled
separate account, within the meaning of PTE 90-1, or (b) a bank
collective investment fund, within the meaning of the PTE 91-38 and,
except as disclosed by such Purchaser to the Company in writing
pursuant to this clause (iii), no employee benefit plan or group of
plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(iv) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM Exemption"))
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of Part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (a) the identity of such QPAM and (b) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this clause (iv); or
(v) the Source constitutes assets of a "plan(s)" (within the
meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by
an "in-house asset manager" or "INHAM" (within the meaning of Part IV
of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person
controlling or controlled by the INHAM (applying the definition of
"control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
interest in the Company and (a) the identity of such INHAM and (b) the
name(s) of the employee benefit plan(s) whose assets constitute the
Source have been disclosed to the Company in writing pursuant to this
clause (v); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this clause (vii); or
(viii) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan", "governmental
plan", and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
9C. Experience and Information. Such Purchaser (a) is an
"accredited investor" as defined in Rule 501 of Regulation D promulgated under
the Securities Act; (b) understands that the Series B Notes have not been
registered under the Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering; (c) by and through its officers
(each of whom has such knowledge and experience in financial and business
matters as to be capable of evaluating such Purchaser's investment), has such
knowledge and experience in financial and business matters as to be capable of
evaluating its investment, and such Purchaser has the ability to bear the
economic risks of its investment; (d) by and through its officers, has reviewed
this Agreement, including all exhibits and schedules hereto, and has received
(i) consolidated balance sheets of the Company and its Subsidiaries as of
December 31, 2004, December 26, 2003, and December 27, 2002, and consolidated
statements of income, shareholders' equity and cash flows of the Company and its
Subsidiaries for each such year, certified by Deloitte & Touche, and (ii)
consolidated balance sheets of the Company and its Subsidiaries as of April 1,
2005 and as of March 26, 2004 and consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
three-month period ended on each such date, in each case prepared by the
Company; and (e) by and through its officers, has had, during the course of the
transactions contemplated hereby and prior to its receipt of the Series B Notes,
the opportunity to ask questions of, and has received answers from, the Company
concerning the transactions contemplated hereby and to obtain any additional
information which the Company possesses or could acquire without unreasonable
effort or expense; provided, however, that nothing in this representation nor
any such investigation by such Purchaser or by its officers shall limit,
diminish, or constitute a waiver of any representation or warranty made under
this Agreement or any Transaction Document by the Company or impair any rights
which such Purchaser may have with respect thereto.
9D. Rule 144. Such Purchaser understands that the Series B Notes
may not be sold, transferred, or otherwise disposed of without registration
under the Securities Act or the availability of an exemption therefrom and that
in the absence of such registration or exemption, the Series B Notes must be
held indefinitely. In particular, such Purchaser is aware that the Series B
Notes may not be sold pursuant to Rule 144 promulgated under the Securities Act
unless all of the applicable conditions of that Rule are met, and that the
Company is making no representation that such conditions will be met in the
future. Such Purchaser represents that, in the absence of an effective
registration statement covering the Series B Notes, it will sell, transfer, or
otherwise dispose of the Series B Notes only in a manner consistent with its
representations set forth in paragraph 9A.
9E. Legends. Such Purchaser understands that the certificates
evidencing the Series B Notes will bear the following legends, in addition to
any legend required by applicable state securities laws:
"THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM THE
REQUIREMENT FOR SUCH A REGISTRATION STATEMENT."
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the text of
any other paragraph) shall have the respective meanings specified therein and
all accounting matters shall be subject to determination as provided in
paragraph 10C.
10A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City or San Francisco, California are
required or authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that (i) is to be prepaid pursuant to paragraph 4B or (ii) is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Designated Spread" shall mean 50 basis points.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (converted to reflect the
periodic basis on which interest on such Note is payable, if payable other than
on a semiannual basis) equal to the Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page PX1" on the Bloomberg Financial Services Screen (or
such other display as may replace Page PX1 on the Bloomberg Financial Services
Screen or, if Bloomberg Financial Services shall cease to report such yields or
shall cease to be Prudential Capital Group's customary source of information for
calculating yield-maintenance amounts on privately placed notes, then such
source as is then Prudential Capital Group's customary source of such
information), for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, (ii) the Treasury
Constant Maturity Series yields reported, for the latest day for which such
yields shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities. The Reinvestment Yield shall be rounded to the same number of
decimal places as appears in the coupon of the applicable Note.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal (i) is to be prepaid pursuant
to paragraph 4B or (ii) is declared to be immediately due and payable pursuant
to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. Other Terms.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control another Person if such
first Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" shall have the meaning specified in paragraph 11C.
"Anti-Terrorism Order" means Executive Order No. 13,224 of September
24, 2001, Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49,
079 (2001), as amended.
"Assignment" shall have the meaning specified in paragraph 3A(v).
"Authorized Officer" shall mean any officer of the Company designated
as an "Authorized Officer" in the Information Schedule or any officer of the
Company designated as an "Authorized Officer" for the purpose of this Agreement
in a certificate executed by one of the Company's Authorized Officers.
"Bankruptcy Law" shall have the meaning specified in clause (vii) of
paragraph 7A.
"Builder" shall mean Kvaerner Philadelphia Shipyard Inc., a
Pennsylvania corporation.
"Business Day" shall have the meaning specified in paragraph 10A.
"Capital Assets" shall mean all assets other than current assets, and
shall not include any amounts in the Capital Construction Fund.
"Capital Construction Fund" shall mean the fund established and
maintained by Company in accordance with Section 607 of the Merchant Marine Act,
1936, as amended.
"Capitalized Lease Obligation" shall mean, with respect to any Person,
any rental obligation of such Person which, under GAAP, is or will be required
to be capitalized on the books of such Person, taken at the amount thereof
accounted for as indebtedness (net of interest expense) in accordance with such
principles.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et. seq.), as amended,
and the regulations promulgated thereunder.
"closing" or "date of closing" shall have the meaning specified in
paragraph 2A hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean the Vessel and all other tangible or intangible
property in which a Lien is purported to be granted pursuant to the Collateral
Documents, whether now owned or hereafter acquired and whether now or hereafter
existing.
"Collateral Agent" shall mean The Prudential Insurance Company of
America, in its capacity as collateral agent under the Intercreditor Agreement,
and its successor and assigns in that capacity.
"Collateral Documents" shall mean the Mortgage, the Assignment, the
Security Agreement and any other agreement, document or instrument in effect on
the date of closing or executed by the Company after the date of closing under
which the Company has granted a lien upon or security interest in any property
or assets to the Collateral Agent to secure all or any part of the obligations
of the Company under this Agreement or the Notes, and all financing statements,
certificates, documents and instruments relating thereto or executed or provided
in connection therewith, each as amended, restated, supplemented or otherwise
modified from time to time.
"Collateral Event" shall mean (i) any Collateral Document shall cease
to be in full force and effect, or the Company shall contest or deny the
validity or enforceability of, or deny that it has any liability or obligations
under, any Collateral Document, or (ii) the Collateral Agent does not have or
ceases to have a valid first priority perfected security interest (subject only
to Permitted Liens, as defined in the Mortgage) in any material Collateral for
the benefit of the holders of the Notes.
"Consolidated Net Earnings" shall mean, for any period, the
consolidated net income of the Company and Subsidiaries as determined in
accordance with GAAP.
"Consolidated Net Worth" shall mean, as of the time of any
determination, the sum of (i) the par value (or value stated on the books of the
Company) of the capital stock of all classes of the Company, plus (or minus in
the case of a surplus deficit) (ii) the amount of the consolidated surplus,
whether capital or earned, of the Company and its Subsidiaries.
"Consolidated Tangible Net Worth" shall mean, as of the time of any
determination, Consolidated Net Worth minus the sum of treasury stock,
unamortized debt discount and expense, goodwill, trademarks, trade names,
patents, deferred charges and other intangible assets of the Company and
Subsidiaries on a consolidated basis and any write-up of the value of any of
their assets after December 31, 2000.
"Consolidated Total Capital" shall mean, as of the time of any
determination, the sum of (i) consolidated Funded Debt of the Company and
Subsidiaries, (ii) Consolidated Net Worth and (iii) Deferred Income Taxes.
"Consolidated Working Capital" shall mean the excess of consolidated
current assets over consolidated current liabilities of the Company and
Subsidiaries.
"Current Debt" shall mean any obligation for borrowed money (and any
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money) payable on demand or within a
period of one year from the date of the creation thereof; provided that any
obligation shall be treated as Funded Debt, regardless of its term, if such
obligation is renewable pursuant to the terms thereof or of a revolving credit
or similar agreement effective for more than one year after the date of the
creation of such obligation, or may be payable out of the proceeds of a
revolving credit or similar agreement effective for more than one year after the
date such agreement was entered into pursuant to the terms of such agreement.
"Debt" shall mean Funded Debt and/or Current Debt, as the case may be.
"Deferred Income Taxes" shall mean as of the time of any determination,
the liability for deferred income taxes of the Company and Subsidiaries on a
consolidated basis.
"Environmental and Safety Laws" shall mean all Federal, state and
local laws, regulations and ordinances, relating to the discharge, handling,
disposition or treatment of Hazardous Materials and other substances or the
protection of the environment or of employee health and safety, including,
without limitation, CERCLA, the Hazardous Materials Transportation Act
(49 U.S.C. Section 1901 et. Seq.), the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et. Seq.), the Federal Water Pollution Control Act
(33 U.S.C. Section 1251 et. Seq.), the Clean Air Act (42 U.S.C. Section 7401
et. seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et. seq.),
the Occupational Safety and Health Act (29 U.S.C. Section 651 et. seq.) and the
Emergency Planning and Community Right-To-Know Act (42 U.S.C. Section 11001
et. seq.), each as the same may be amended and supplemented.
"ERISA" shall mean the Employment Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Event of Loss" with respect to the Vessel shall mean the occurrence of
any of the following events at any time: (i) the Vessel shall be either totally
destroyed or damaged beyond repair or any other event shall occur that results
in the Vessel being permanently rendered unfit for its intended use, including
but not limited to damage that is not susceptible to repair within the earlier
of the final maturity of the Series B Notes or two (2) years from the date the
damage occurred, (ii) the entire Vessel or any substantial and essential portion
thereof shall have been condemned, confiscated, or seized or shall have been
requisitioned for use for a period of 18 months or for a period which extends
beyond the final maturity of the Series B Notes, (iii) there shall be a
requisition or taking of title to the entire Vessel or any substantial and
essential portion thereof, or (iv) the seizure of the Vessel by the United
States or any other country or nation. For the avoidance of doubt, use of the
Vessel by the Company under a Voluntary Intermodal Sealift Agreement shall not
constitute a requisition for use or a taking of title.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Agreement" shall have the meaning specified in the
Introduction to this Agreement.
"Existing Holders" shall have the meaning specified in the address
block to this Agreement.
"Funded Debt" shall mean and include, without duplication, (i) any
obligation payable more than one year from the date of creation thereof, which
is shown on the balance sheet as a liability in accordance with GAAP (including
Capitalized Lease Obligations but excluding reserves for deferred income taxes
and other reserves to the extent that such reserves do not constitute an
obligation), (ii) endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business), guarantees and
other contractually incurred contingent liabilities (whether direct or indirect)
in connection with the obligations of any Person, to the extent that such
obligations are payable more than one year from the date of creation thereof
(including all guarantees of Funded Debt of another Person) and (iii)
obligations under any contract providing for the making of loans, advances or
capital contributions to any Person, or for the purchase of any property from
any Person, in each case in order to enable such Person primarily to maintain
working capital, net worth or any other balance sheet condition or to pay debts,
dividends or expenses, to the extent that such obligations are payable more than
one year from the date of creation thereof; provided that any obligation shall
be treated as Funded Debt, regardless of its term, if such obligation is
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation of
such obligation, or may be payable out of the proceeds of a revolving credit or
similar agreement effective for more than one year after the date such agreement
was entered into pursuant to the terms of such agreement.
"GAAP" shall have the meaning provided in paragraph 10C.
"including" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"Intercreditor Agreement" shall have the meaning specified in paragraph
3A(ii) hereof.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
deposit arrangement, lien (statutory or otherwise) or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement (exclusive of financing
statements field for precautionary purposes only) under the Uniform Commercial
Code of any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or securing
the payment or performance of an obligation.
"margin stock" shall have the meaning specified in paragraph 8I.
"Material Subsidiary" shall mean any Subsidiary, the tangible net worth
of which is, on the date of determination, 5% or more of Consolidated Tangible
Net Worth.
"Mortgage" shall have the meaning specified in paragraph 3A(iii).
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" shall have the meaning specified in paragraph 1B.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its Chief Executive Officer, Chief Financial Officer, President,
one of its Vice Presidents or its Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor or replacement entity thereto under ERISA.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an unincorporated
organization and a government or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by either Company or any ERISA
Affiliate.
"Prohibited Transaction" shall mean any transaction described in
section 406 of ERISA which is not exempt by reason of section 408 of ERISA or
the transitional rules set forth in section 414(c) of ERISA and any transaction
described in section 4975(c) of the Code which is not exempt by reason of
section 4975(c) (2) or section 4975(d) of the Code, or the transitional rules of
section 2003(c) of ERISA.
"Purchasers" shall have the meaning given in the Address Block to this
Agreement.
"Required Holder(s)" shall mean the holder or holders of at least 51%
of the aggregate principal amount of the Notes or of a Series of Notes, as the
context may require, from time to time outstanding.
"Restricted Investment" shall mean any loan or advance to, or purchase
of or investment in any stock, notes, obligations or securities or, or any other
interest in, or any capital contribution to, any Affiliate or any Person with
any ownership interest in any Affiliate.
"Restricted Payments" shall have the meaning specified in paragraph 6B.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning specified in paragraph
3A(iv).
"Series" of Notes shall mean Notes which have (i) the same final
maturity, (ii) the same principal prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the original principal amount of each
Note), (iv) the same interest rate, (v) the same interest payment periods and
(vi) the same date of issuance (which, in the case of a Note issued in exchange
for another Note, shall be deemed for these purposes the date on which such
Note's ultimate predecessor Note was issued). The Series A Notes and the Series
B Notes each constitute a separate "Series" of Notes.
"Series A Notes" shall have the meaning specified in the Introduction
to this Agreement.
"Series B Notes" shall have the meaning specified in paragraph 1B.
"Shipbuilding Contract" shall mean the Shipbuilding Contract (Hull003),
dated as of February 14, 2005, by and between the Builder and the Company, as
amended, restated, supplemented or otherwise modified from time to time.
"Significant Holder" shall mean (i) each Purchaser and each Existing
Holder, so long as such Purchaser or Existing Holder shall hold any Note, or
(ii) any other holder of at least 10% of the aggregate principal amount of the
Notes of any Series from time to time outstanding.
"Subsidiary" shall mean any Person, all of the stock (or other equity
interests) of every class of which, except directors' qualifying or residency
shares (or their equivalent) shall, at the time as of which any determination is
being made, be owned by the Company either directly or through Subsidiaries.
"Transaction Documents" shall mean this Agreement, the Notes, the
Intercreditor Agreement, the Company's Acknowledgment to Intercreditor
Agreement, the Collateral Documents and the other agreements, documents,
certificates and instruments now or hereafter executed or delivered by the
Company or any Subsidiary or Affiliate in connection with this Agreement.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note purchased under this Agreement.
"Vessel" a container vessel of the type Philadelphia CV 2600, named
M.V. ▇▇▇▇▇▇▇▇, official number 1168529, as more full described in Article I to
the Shipbuilding Contract.
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting principles" and
"GAAP" shall be deemed to refer to generally accepted accounting principles in
effect in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as any
Purchaser or Existing Holder shall hold any Note, it will make payments of
principal of, interest on, and any Yield-Maintenance Amount payable with respect
to, such Note, which comply with the terms of this Agreement, by wire transfer
of immediately available funds for credit on the date due to the account or
accounts of such Purchaser or Existing Holder specified in the Purchaser
Schedule attached hereto or such other account or accounts in the United States
as such Purchaser or Existing Holder may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser and Existing ▇▇▇▇▇▇ agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 11A to any Transferee which shall have made the same
agreement as the Purchasers and Existing Holders have made in this paragraph
11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser, each
Existing Holder and any Transferee harmless against liability for the payment
of, all out-of-pocket expenses arising in connection with such transactions,
including (i) all document production and duplication charges and the fees and
expenses of any special counsel and any maritime counsel engaged by the
Purchasers, the Existing Holders or any Transferee in connection with this
Agreement on any other Transaction Document, the transactions contemplated
hereby and thereby and any subsequent proposed modification of, or proposed
consent under, this Agreement or any other Transaction Document, whether or not
such proposed modification shall be effected or proposed consent granted, (ii)
the reasonable costs and expenses, including attorneys' fees, incurred by any
Purchaser, any Existing Holder or any Transferee in enforcing any rights under
this Agreement, the Notes or any other Transaction Document (including, without
limitation, to protect, collect, lease, sell, take possession of, release or
liquidate any of the Collateral) or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the transactions contemplated hereby or by reason of any
Purchaser's, any Existing Holder's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy case,
and (iii) all costs and expenses, including without limitation reasonable
attorneys' fees, preparing, recording and filing all financing statements,
instruments and other documents to create, perfect and fully preserve and
protect the Liens granted in the Collateral Documents and the rights of the
holders of the Notes, provided however, the Company will not be required to pay
the expenses of any holder of a Note or any Transferee in connection with the
transfer of any Note by any holder of a Note to any Transferee. The obligations
of the Company under this paragraph 11B shall survive the transfer of any Note
or portion thereof or interest therein by any Purchaser, any Existing Holder or
any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, and (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration. Each holder of any Note at the time or thereafter outstanding shall
be bound by any consent authorized by this paragraph 11C, whether or not such
Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such consent. No course of
dealing between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein and in the Notes, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
11D. Form, Registration, Transfer and Exchange of Notes. The Notes
are issuable as registered notes without coupons in denominations of at least
$1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Each prepayment of principal payable on each
prepayment date upon each new Note issued upon any such transfer or exchange
shall be in the same proportion to the unpaid principal amount of such new Note
as the prepayment of principal payable on such date on the Note surrendered for
registration of transfer or exchange bore to the unpaid principal amount of such
Note. No reference need be made in any such new Note to any prepayment or
prepayments of principal previously due and paid upon the Note surrendered for
registration of transfer or exchange. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and Yield Maintenance Amount, if
any, and interest on such Note and for all other purposes whatsoever, whether or
not such Note shall be overdue, and the Company shall not be affected by notice
to the contrary. Subject to the preceding sentence, the holder of any Note may
from time to time grant participations in all or any part of such Note on such
terms and conditions as may be determined by such holder in its sole and
absolute discretion.
11F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein in any other Transaction
Document or made in writing by or on behalf of the Company in connection
herewith or therewith shall survive the execution and delivery of this
Agreement, the Notes and the other Transaction Document, the transfer of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser, any Existing Holder or any Transferee.
Subject to the preceding sentence, this Agreement, the Notes, the other
Transaction Document and, until the effectiveness of the amendment and
restatement thereof by this Agreement, the Existing Agreement, embody the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to the subject matter hereof.
11G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of either of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
11H. Independence of Covenants. All covenants hereunder and in the
other Transaction Documents shall be given independent effect so that if a
particular action or condition is prohibited by any one of such covenants, the
fact that it would be permitted by an exception to, or otherwise be in
compliance within the limitations of, another covenant shall not (i) avoid the
occurrence of a Default or Event of Default if such action is taken or such
condition exists or (ii) in any way prejudice an attempt by the holder of any
Note to prohibit, through equitable action or otherwise, the taking of any
action by the Company or any Subsidiary which would result in a Default or Event
of Default.
11I. Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to any Purchaser or Existing Holder, addressed as
specified for such communications in the Purchaser Schedule attached hereto or
at such other address as any such Purchaser shall have specified to the Company
in writing, (ii) if to any other holder of any Note, addressed to it at such
address as it shall have specified in writing to the Company or, if any such
holder shall not have so specified an address, then addressed to such holder in
care of the last holder of such Note which shall have so specified an address to
the Company and (iii) if to the Company, addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Chief Financial Officer or at such other
address as the Company shall have specified to each holder of a Note in writing,
provided, however, that any such communication to the Company may also, at the
-------- -------
option of the Person sending such communication, be delivered by any other means
either to the Company at its address specified above or to any Authorized
Officer of the Company.
11J. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is, by the terms of this
Agreement, required to be satisfactory to any Purchaser, any Existing Holder or
the Required Holder(s), the determination of such satisfaction shall be made by
such Purchaser, such Existing Holder or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the
Person(s) making such determination.
11L. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York.
11M. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
interest, or Yield-Maintenance Amount payable with respect to, any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
interest payable on such next succeeding Business Day.
11N. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11O. Severalty of Obligations. The sales of Series B Notes to the
Purchasers are to be several sales, and the obligations of the Purchasers and
the Existing Holders under this Agreement are several obligations. No failure by
any Purchaser or Existing Holder to perform its obligations under this Agreement
shall relieve any other Purchaser or Existing Holder or the Company of any of
its obligations hereunder, and no Purchaser or Existing Holder shall be
responsible for the obligations of, or any action taken or omitted by, any other
such Person hereunder.
11P. Consent to Forum. THE COMPANY HEREBY IRREVOCABLY CONSENTS AND
AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN ANY WAY
IN CONNECTION WITH THIS AGREEMENT OR THE NOTES MAY BE INSTITUTED OR BROUGHT IN
THE COURTS OF THE STATE OF CALIFORNIA OR THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF CALIFORNIA, AS ANY NOTEHOLDER MAY ELECT, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS
AND SUBMITS TO, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, AND TO ALL
PROCEEDINGS IN SUCH COURTS. THE COMPANY IRREVOCABLY CONSENTS TO SERVICE OF ANY
SUMMONS AND/OR LEGAL PROCESS BY REGISTERED OR CERTIFIED UNITED STATES AIR MAIL,
POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS AS SET FORTH IN PARAGRAPH 11I
HEREOF, SUCH METHOD OF SERVICE TO CONSTITUTE, IN EVERY RESPECT, SUFFICIENT AND
EFFECTIVE SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING. NOTHING IN
THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY NOTEHOLDER TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF ANY
NOTEHOLDER TO BRING ACTIONS, SUITS OR PROCEEDINGS WHETHER IN REM, IN PERSONAM,
-- --- -- --------
IN LAW, EQUITY, ADMIRALTY OR OTHERWISE IN THE COURTS OF ANY OTHER JURISDICTION.
THE COMPANY FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN ANY SUCH LEGAL
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA, BY SUIT ON THE
JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE
OF THE FACT AND THE AMOUNT OF THE LIABILITY.
11Q. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[Balance of Page Intentionally Left Blank]
11R. Binding Agreement. When this Agreement is executed and
delivered by the Company, the Purchasers and the Existing Holders, it shall
become a binding agreement between the Company, the Purchasers and the Existing
Holders.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a
Hawaii corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
-------------------------------
Its: Senior Vice President and
Chief Financial Officer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Vice President
INFORMATION SCHEDULE
Authorized Officers for the Company
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇
President and Senior Vice President, Chief
Chief Executive Officer Financial Officer
▇▇▇▇▇▇ NAVIGATION COMPANY, INC. ▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Treasurer
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
PURCHASER SCHEDULE
(Series A Notes)
Aggregate
Principal
Amount of
Series A Notes Note
Held Denomination(s)
---- ---------------
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $13,498,000 $13,498,000
(1) All payments on account of Series A
Notes held by such purchaser shall be
made by wire transfer of immediately
available funds for credit to:
Account No.: P86188 (please do not
include spaces)
JPMorgan Chase Bank
New York, NY
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Each such wire transfer shall set forth
the name of the Company, a reference to
"4.31% Series A Senior Secured Notes due
August 19, 2010, Security No.
!INV# 8604!, PPN# 576863\A1" and the due
date and application (as among principal,
interest and Yield-Maintenance Amount)
of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
Aggregate
Principal
Amount of
Series A Notes Note
Held Denomination(s)
---- ---------------
PRUCO LIFE INSURANCE COMPANY $1,502,000 $1,502,000
(1) All payments on account of Series A
Notes held by such purchaser shall be
made by wire transfer of immediately
available funds for credit to:
Account No.: JPMorgan Chase Bank
New York, NY
ABA NO.: ▇▇▇-▇▇▇-▇▇▇
Account No.: P86192 (please do not
include spaces)
Account Name: Pruco Life Private Placement
Each such wire transfer shall set forth
the name of the Company, a reference to
"4.31% Series A Senior Notes due August
19, 2010, Security No. !INV# 8604!, PPN#
576863\A1," and the due date and
application (as among principal, interest
and Yield-Maintenance Amount) of the
payment being made.
(2) Address for all notices relating to payments:
Pruco Life Insurance Company
c/o The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
Pruco Life Insurance Company
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
PURCHASER SCHEDULE
(Series B Notes)
Aggregate
Principal
Amount of
Series B Notes
To be Note
Purchased Denomination(s)
--------- ---------------
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $90,737,000 $87,615,350
$3,121,650
(1) All payments on account of the
Series B Note held by such Purchaser
in the original aggregate principal
amount of $87,615,350 shall be made
by wire transfer of immediately
available funds for credit to:
Account No.: P86188 (please do not
include spaces)
JPMorgan Chase Bank
New York, NY
ABA No.: ▇▇▇-▇▇▇-▇▇▇
All payments on account of the Series B
Note issued in the original aggregate
principal amount of $3,121,650 shall be
made by wire transfer of immediately
available fund for credit to:
Account No.: P86189 (please do not
include spaces)
JPMorgan Chase Bank
New York, NY
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Each such wire transfer shall set forth
the name of the Company, a reference to
"4.79% Series B Senior Secured Notes due
May 19, 2020, Security No. [ ]" and the
due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made.
(2) Address for all notices relating to
payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Billings and Collections
(3) Address for all other communications
and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
Aggregate
Principal
Amount of
Series B Notes
To be Note
Purchased Denomination(s)
--------- ---------------
PRUCO LIFE INSURANCE COMPANY $14,263,000 $14,263,000
(1) All payments on account of Series B
Notes held by such purchaser shall
be made by wire transfer of immediately
available funds for credit to:
Account No.: JPMorgan Chase Bank
New York, NY
ABA NO.: ▇▇▇-▇▇▇-▇▇▇
Account No.: P86192 (please do not
include spaces)
Account Name: Pruco Life Private Placement
Each such wire transfer shall set forth
the name of the Company, a reference to
"4.79% Series B Senior Secured Notes due
May 19, 2020, Security No. [ ]," and the
due date and application (as among principal,
interest and Yield-Maintenance Amount) of
the payment being made.
(2) Address for all notices relating to payments:
Pruco Life Insurance Company
c/o The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
Pruco Life Insurance Company
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
EXHIBIT A-1
-----------
[FORM OF AMENDED AND RESTATED SERIES A NOTE]
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
AMENDED AND RESTATED SERIES A SENIOR SECURED NOTE
No.
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: August 19, 2003
INTEREST RATE: 4.31%
INTEREST PAYMENT DATES: February 19, May 19, August 19, and November 19
FINAL MATURITY DATE: August 19, 2010
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Hawaii, hereby promises to pay to _____________________,
or registered assigns, the principal sum of ______________________ DOLLARS
payable on the Principal Prepayment Dates and in the amounts specified above,
and on the Final Maturity Date specified above in an amount equal to the unpaid
balance of the principal amount hereof, with interest (computed on the basis of
a 360-day year--30-day month) (a) on the unpaid balance thereof at the Interest
Rate per annum specified above, on each Interest Payment Date specified above
and on the Final Maturity Date specified above, commencing with the Interest
Payment Date next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and any overdue payment of interest, payable on each Interest Payment
Date as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 2%
over the Interest Rate specified above or (ii) 2% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City
as its Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.
This Note is one of a series of Series A Senior Secured Notes (herein
called the "Notes") outstanding under an Amended and Restated Note Agreement,
dated as of May 19, 2005 (herein called the "Agreement"), between the Company,
on the one hand, and each Purchaser and Existing Holder listed on the Purchaser
Schedule attached thereto, on the other hand, and is entitled to the benefits
thereof.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
This Note is secured by, and entitled to the benefits of, the
Collateral Documents. Reference is made to the Collateral Documents for a
statement concerning the terms and conditions governing the collateral security
for the obligations of the Company hereunder.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note (i) merely re-evidences the indebtedness evidenced by the
Company's Series A Senior Note No. A-___, dated August 19, 2003 (the "Existing
Note"), (ii) is given in evidence for, and not as payment of, the Existing Note,
and (iii) is not intended to constitute an novation of the Existing Note.
This Note shall be construed and enforced in accordance with the
internal law of the State of New York.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
By: _________________________________
Title: _________________________________
EXHIBIT A-2
-----------
[FORM OF SERIES B NOTE]
THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
THE REQUIREMENT FOR SUCH A REGISTRATION STATEMENT.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
4.79% SERIES B SENIOR SECURED NOTE DUE MAY 19, 2020
No. _____ May 19, 2005
$________
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a
corporation organized and existing under the laws of the State of Hawaii (herein
called the "Company"), hereby promises to pay to ____________________________
___________________________, or registered assigns, the principal sum of
_________________________ DOLLARS on May 19, 2020, with interest (computed on
the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at
the rate of 4.79% per annum from the date hereof, payable semi-annually on the
19th day of November and May in each year, commencing with the November 19, or
May 19 next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as
defined in the Agreement) and, to the extent permitted by applicable law, any
overdue payment of interest, payable semi-annually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) 6.79% or (ii) 2.0% over the rate of
interest publicly announced by The Bank of New York from time to time in New
York City as its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Series B Senior Secured Notes (herein
called the "Notes") issued pursuant to an Amended and Restated Note Agreement,
dated as of May 19, 2005 (herein called the "Agreement"), among the Company and
the original purchasers of the Notes and the Existing Holders of the Company's
Series A Notes named in the Purchaser Schedule attached thereto and is entitled
to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.
This Note is secured by, and entitled to the benefits of, the
Collateral Documents. Reference is made to the Collateral Documents for a
statement concerning the terms and conditions governing the collateral security
for the obligations of the Company hereunder.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and
not otherwise defined herein shall have the meanings as defined in the
Agreement.
This Note shall be construed and enforced in accordance with the
internal law of the state of New York.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
By: ________________________________________
Title:__________________________________
EXHIBIT B
---------
[FORM OF DISBURSEMENT DIRECTION LETTER]
[On Company Letterhead - place on one page]
[Date]
The Prudential Insurance Company of America
Pruco Life Insurance Company
c/o Prudential Capital Group
Four Embarcadero Center, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: 4.79% Series B Senior Secured Notes due May 19, 2020 (the "Notes")
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Note
Agreement (the "Note Agreement"), dated May 19, 2005, between ▇▇▇▇▇▇ Navigation
Company, Inc., a Hawaii corporation (the "Company"), and you and the existing
holders of the Company's Series A Notes. Capitalized terms used herein shall
have the meanings assigned to such terms in the Note Agreement.
You are hereby irrevocably authorized and directed to disburse
the $105,000,000 purchase price of the Notes by wire transfer of immediately
available funds to [bank name and address], ABA #______________, for credit to
the account of the ______________, account no. _____________.
Disbursement when so made shall constitute payment in full of
the purchase price of the Notes and shall be without liability of any kind
whatsoever to you.
Very truly yours,
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
By: ____________________________________
Title:______________________________
EXHIBIT C
---------
[FORM OF INTERCREDITOR AGREEMENT]
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
("Agreement"), dated May 19, 2005, is entered into by the holders and purchasers
of certain promissory notes of ▇▇▇▇▇▇ Navigation Company, Inc. (the "Company")
listed on Schedule A hereto (together with their successors and assigns, the
"Holders") and The Prudential Insurance Company of America in its capacity as
collateral agent (in such capacity, and together with its successor and assigns,
the "Collateral Agent") for the Holders.
WITNESSETH
----------
WHEREAS, the Company and the Holders have entered into that
certain Amended and Restated Note Agreement dated the date hereof (as amended,
restated, supplemented or otherwise modified, the "Note Agreement") and the
Company and the Collateral Agent have entered into that certain Form of First
Preferred Ship Mortgage dated the date hereof (as amended, restated,
supplemented or otherwise modified, the "Mortgage");
WHEREAS, the Note Agreement requires the execution and
delivery of this Agreement;
WHEREAS, all obligations of the Company under the Note
Agreement, the Series A Notes, the Series B Notes (collectively with the Series
A Notes, the "Notes") and the other Transaction Documents and all other
"Obligations", as defined in the Mortgage (the "Obligations") will be secured as
set forth in the Collateral Documents; and
WHEREAS, the parties hereto desire to enter into this
Agreement to set forth their mutual understanding with respect to (a) the
exercise of certain rights, remedies and options by the respective parties
hereto under the above described documents and (b) the appointment of the
Collateral Agent.
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby covenant and agree as
follows:
Section 1. Definitions; Rules of Construction. (a) Capitalized
terms used but not defined herein shall have the meanings given to such terms in
paragraph 10 of the Note Agreement, which paragraph 10 is incorporated by
reference herein as though set forth fully herein. As used herein, the term
"Required Holders" shall mean the "Required Holders", as defined in the Note
Agreement, of all of the Notes. Unless otherwise defined herein or in the Note
Agreement, all terms defined in Article 9 of the UCC as in effect from time to
time in the State of New York which are used herein shall have the respective
meanings given to those terms in the Uniform Commercial Code as in effect from
time to time in the State of New York.
(b) Unless otherwise stated, any agreement, contract or
document defined or referred to herein shall mean such agreement, contract or
document and all schedules, exhibits and attachments thereto as in effect as of
the date hereof, as the same may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof and of
the Transaction Documents.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall, unless otherwise
expressly specified, refer to this Agreement as a whole and not to any
particular provision of this Agreement and all references to Sections or
Schedules shall be references to Sections or Schedules of this Agreement unless
otherwise expressly specified.
(d) Any reference to any Person shall include its
permitted successors and assigns, and in the case of any governmental authority,
any Person succeeding to its functions and capacities.
(e) Defined terms in this Agreement shall include in the
singular number the plural and in the plural number the singular.
Section 2. Appointment and Duties of Collateral Agent. (a)
Subject in all respects to the terms and provisions of this Agreement, the
Holders hereby designate and appoint Prudential to act as the Collateral Agent
under this Agreement and the other Collateral Documents for the benefit of the
Holders with respect to the Liens upon and the security interests in the
Collateral and the rights and remedies granted under and pursuant to this
Agreement and the other Collateral Documents, and Prudential hereby accepts such
appointment and agrees to act as such agent.
(b) Subject to the Collateral Agent having been directed
to take such action in accordance with this Agreement, each of the Holders
hereby authorizes Prudential, as the Collateral Agent, to take such actions on
its behalf under the provisions of this Agreement and the other Collateral
Documents, and to exercise such powers and perform such duties as are expressly
delegated to the Collateral Agent by the terms of this Agreement and the other
Collateral Documents, together with such other powers as are reasonably
incidental thereto. Subject to the provisions of Section 9(b) hereof, the
------------
Collateral Agent is hereby irrevocably authorized to take all actions on behalf
of the Holders to enforce the rights and remedies of the Collateral Agent and
the Holders provided for in the Collateral Documents or by applicable law with
respect to the liens upon and security interests in the Collateral granted to
secure the Obligations; provided, however, that, notwithstanding any provision
-------- -------
to the contrary in the Collateral Documents, (i) the Collateral Agent shall act
solely at and in accordance with the written direction of the Required
Holder(s), (ii) the Collateral Agent shall not, without the written consent of
the Required Holder(s), release or terminate by affirmative action or consent
any Lien upon or security interest in any Collateral granted under the
Collateral Documents (except upon disposition of such Collateral after an Event
of Default pursuant to direction given under clause (i) hereof or upon the
disposition of such Collateral as permitted under the terms of the Note
Agreement) and (iii) the Collateral Agent shall not accept any Obligation in
whole or partial consideration for the disposition of any Collateral without the
written consent of all Holders. The Collateral Agent agrees to make such demands
and give such notices under the Collateral Documents as may be requested by, and
to take such action to enforce the Collateral Documents and to foreclose upon,
collect and dispose of the Collateral or any portion thereof as may be directed
by, the Required Holder(s); provided, however, that the Collateral Agent shall
-------- -------
not be required to take any action that is contrary to law or the terms of the
Collateral Documents or this Agreement. Once a direction to take any action has
been given by the Required Holder(s) to the Collateral Agent, and subject to any
other directions which may be given from time to time by the Required Holder(s),
decisions regarding the manner in which any such action is to be implemented and
conducted (with the exception of any decision to settle, compromise or dismiss
any legal proceeding, with or without prejudice) shall be made by the Collateral
Agent, with the assistance and upon the advice of its counsel.
(c) Notwithstanding any provision to the contrary
elsewhere in this Agreement or the other Collateral Documents, the Collateral
Agent shall not have any duties or responsibilities, except those expressly set
forth in this Agreement and the other Collateral Documents, or any fiduciary
relationship with any Holders, and no implied covenants, functions or
responsibilities shall be read into this Agreement or the other Collateral
Documents, or otherwise exist against the Collateral Agent. The Collateral Agent
shall not be responsible for determining whether any insurance policy delivered
to it under any Collateral Document complies with the requirements therefor
contained in the Collateral Documents.
(d) Notwithstanding anything to the contrary in this
Agreement or any other Collateral Document, the Collateral Agent shall not
exercise any rights or remedies under this Agreement or any other Collateral
Document or give any consent under this Agreement or any other Collateral
Document or enter into any agreement amending, modifying, supplementing or
waiving any provision of this Agreement or any other Collateral Document unless
it shall have been directed to do so in writing by the Required Holder(s).
Section 3. Priority of Security Interests. (a) Each Holder
agrees that the security interest of each Holder in any Collateral ranks and
will rank equally in priority with the security interest of the other Holders in
the same Collateral.
(b) Notwithstanding anything to the contrary in clause
(a), as between the Holders and the Collateral Agent, the priorities specified
in this Agreement with respect to the Collateral and all proceeds of the
Collateral are applicable irrespective of any statement to the contrary in any
other Collateral Document or any other agreement, the time or order or method of
attachment or perfection of Liens, the time or order of the filing of financing
statements, or the giving or failure to give notice of the acquisition or
expected acquisition of purchase money or other security interests, and to the
extent not provided for in this Agreement, the rights and priorities of the
Holders shall be determined in accordance with applicable law.
Section 4. Exercise of Rights. So long as any Obligations
remain outstanding, each of the Holders hereby acknowledges and agrees as
follows:
(a) The Collateral Agent shall administer the Collateral
in the manner contemplated by the Collateral Documents and this Agreement, and
exercise, only upon the written instruction of, and on behalf of, the Required
Holder(s) in accordance with Sections 4 and 5 hereof, such rights and remedies
----------------
with respect to the Collateral as are granted to it under this Agreement, the
other Collateral Documents and applicable law.
(b) Upon the request of the Collateral Agent, such Holder
will provide the Collateral Agent (i) notice of the amount of outstanding
Obligations owed by the Company to such Holder under the Transaction Documents
and (ii) any other information that the Collateral Agent may reasonably request.
Section 5. Exercise of Remedies and Application of Proceeds.
So long as any Obligations remain outstanding, the following provisions shall
apply:
(a) Upon the written request of the Required Holder(s),
the Collateral Agent shall be authorized to take any and all actions and to
exercise any and all rights, remedies and options which it may have under the
Collateral Documents and which the Required Holder(s) direct it to take under
this Agreement, including realization and foreclosure on the Collateral.
(b) As between the Holders and the Collateral Agent, the
proceeds of any sale, disposition or other realization or foreclosure by the
Collateral Agent upon the Collateral or any portion thereof pursuant to the
Collateral Documents shall be governed by this Section 5(b). Any non-cash
------------
proceeds resulting from such liquidation of the Collateral shall be held by the
Collateral Agent for the benefit of the Holders until later sold or otherwise
converted into cash, at which time the Collateral Agent shall apply such cash in
accordance with the next sentence of this Section 5(b). The Collateral Agent
------------
shall distribute any cash proceeds net of expenses resulting from liquidation of
the Collateral to the Holders, promptly after receipt thereof, on a pro rata
basis in accordance with the respective outstanding amounts of the Obligations
owed to each. Notwithstanding any other provision hereof, as between the Holders
and the Collateral Agent, in the event of any conflict between the terms of this
Section 5(b) and the other Collateral Documents, the provisions of this Section
------------ -------
5(b) shall control.
----
Section 6. Receipt of Money or Proceeds. The Holders hereby
agree that if, after an acceleration of the Notes, any Holder receives any
payment or distribution of assets of the Company of any kind or character,
whether monies or cash proceeds resulting from liquidation of the Collateral,
other than in accordance with the terms of this Agreement, such Holder shall
hold such payment or distribution in trust for the benefit of the Holders and
shall immediately remit such payment or distribution to the Collateral Agent for
application or distribution, as the case may be, in accordance with the terms of
this Agreement.
Section 7. Rights of Collateral Agent. (a) The Collateral
Agent may execute any of its duties under this Agreement or any other Collateral
Document by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.
(b) Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall (i) be
liable to any Holder for any action lawfully taken or omitted to be taken by it
under or in connection with this Agreement or any other Collateral Document or
in connection with the Collateral (except for such action taken or omitted with
gross negligence or willful misconduct) or (ii) be responsible in any manner to
any of the Holders for any recitals, statements, representations or warranties
made by the Company or any representative thereof contained in this Agreement or
any other Transaction Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Collateral Agent
under or in connection with, this Agreement or any other Transaction Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Transaction Document or for any
failure of the Company to perform its obligations thereunder. The Collateral
Agent shall not be under any obligation to any other Holder to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Company.
(c) As between the Holders and the Collateral Agent, the
Collateral Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company), independent accountants
and other experts selected by the Collateral Agent. In connection with any
request of the Required Holder(s), the Collateral Agent shall be entitled to
rely and shall be fully protected in relying on a certificate of any Person,
signed by an authorized representative of such Person, setting forth the amount
and type of Obligations held by such Person as of the date of such certificate,
which certificate shall state that the Person signing such certificate is an
authorized representative of such Person and shall state specifically the
Collateral Document and provision thereof pursuant to which the Collateral Agent
is being directed to act. The Collateral Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Collateral Document (i) if such action would, in the reasonable opinion of the
Collateral Agent, be contrary to law or the terms of this Agreement or the other
Collateral Documents or (ii) if such action is not specifically provided for in
this Agreement or other Collateral Document it shall not have received any such
advice or concurrence of the Required Holder(s) as it deems appropriate. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Collateral Document in
accordance with a request of the Required Holder(s) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Holders.
(d) The Collateral Agent shall not be deemed to have
actual, constructive, direct or indirect knowledge or notice of the occurrence
of any Default or Event of Default unless and until an officer of the Collateral
Agent responsible for the administration of this Agreement has received a
written notice or a certificate from a Holder stating that a Default or Event of
Default has occurred. The Collateral Agent shall have no obligation whatsoever
either prior to or after receiving such notice or certificate to inquire whether
a Default or Event of Default has in fact occurred and shall be entitled to rely
conclusively, and shall be fully protected in so relying, on any such notice or
certificate so furnished to it. In the event that the Collateral Agent receives
a notice of or certificate regarding the occurrence of any Default or Event of
Default, the Collateral Agent shall give notice thereof to the Holders. The
Collateral Agent shall take such action with respect to such Default or Event of
Default as so requested pursuant to Section 4 hereof.
---------
(e) The Company will pay to the Collateral Agent upon
demand the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel (and any local counsel) and of
any experts and agents, which the Collateral Agent may reasonably incur in
connection with (i) the administration of this Agreement and the other
Collateral Documents, (ii) the custody or preservation of, or the sale of,
collection from or other realization upon, any of the Collateral, (iii) the
exercise or enforcement (whether through negotiations, legal proceedings or
otherwise) of any of the rights of the Collateral Agent or the Holders hereunder
or under the other Collateral Documents or (iv) the failure by the Company to
perform or observe any of the provisions hereof or of any of the other
Collateral Documents.
(f) The Prudential Insurance Company of America agrees to
serve as Collateral Agent hereunder without compensation. If any successor
Collateral Agent is appointed pursuant to Section 10, the Company, by its
acknowledgement and consent hereto, agrees to compensate such Collateral Agent
upon customary terms. Such compensation paid to any successor Collateral Agent
and all reasonable out-of-pocket expenses incurred by the Collateral Agent or
such successor Collateral Agent on behalf of the Holders incident to the
exercise or enforcement of any terms or provisions of the Collateral Documents
shall be indebtedness to the Collateral Agent or such successor Collateral
Agent, secured by the Collateral. Upon the request of the Collateral Agent or
such successor Collateral Agent, however, the Holders will reimburse the
Collateral Agent or such successor Collateral Agent, to the extent not paid by
the Company or its Subsidiaries, for any such expenses (but in no event any
fees) in accordance with each Holder's pro rata percentage of the Obligations.
--- ----
Section 8. Lack of Reliance on the Collateral Agent. Each of
the Holders expressly acknowledges that neither the Collateral Agent nor any of
its officers, directors, employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including, without limitation, any review of the affairs of
the Company, shall be deemed to constitute any representation or warranty by the
Collateral Agent to any Holder. Each Holder represents to the Collateral Agent
that it has, independently and without reliance upon the Collateral Agent or any
other Holder, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company. Each Holder also represents that it will, independently and without
reliance upon the Collateral Agent or any other Holder, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly required to be furnished to the Holders by
the Collateral Agent hereunder, the Collateral Agent shall not have any duty or
responsibility to provide any Holder with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of the
Collateral Agent or any of its officers, directors, employees, agents or
attorneys-in-fact.
Section 9. Indemnification; Bankruptcy. (a) The Company, by
its consent hereto, hereby agrees to indemnify the Collateral Agent and each
Holder and, in their capacity as such, their officers, directors, shareholders,
controlling persons, employees, agents and servants (each "Indemnified Party")
from and against any and all claims, damages, losses, liabilities, obligations,
penalties, actions, causes of action, judgments, suits, costs, expenses or
disbursements (including, without limitation, reasonable attorneys' and
consultants' fees and expenses) (collectively "Damages") of any kind or nature
whatsoever which may at any time be imposed on, incurred by or asserted against
any Indemnified Party (or which may be claimed against any Indemnified Party by
any Person) by reason of, in connection with or in any way relating to or
arising out of, any Transaction Document, any Collateral or any other documents
or transactions in connection with or relating thereto, unless due to the gross
negligence or willful misconduct of such Indemnified Party. The Company further
shall, upon demand by any Indemnified Party, pay to such Indemnified Party all
reasonable costs and expenses incurred by such Indemnified Party in enforcing
any rights under the Transaction Documents, including reasonable fees and
expenses of counsel. If the Company fails to indemnify the Collateral Agent for
any Damages for which the Company is obligated to indemnify the Collateral Agent
under this Section 9(a), promptly after demand therefor, each Holder, severally
------------
and not jointly, agrees to pay to the Collateral Agent its pro rata share, in
accordance with the respective outstanding amounts of the Obligations owed to
it, of the amount of such Damages that have not been paid by the Company. The
agreements in this Section 9(a) shall survive the payment or satisfaction in
------------
full of the Obligations and the resignation or removal of the Collateral Agent
or the termination of this Agreement.
(b) Nothing contained herein shall limit or restrict the
independent right of any Holder to initiate an action or actions in any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar proceeding in its individual
capacity and to appear or be heard on any matter before the bankruptcy or other
applicable court in any such proceeding, including, without limitation, with
respect to any question concerning post-petition financing arrangements. The
Collateral Agent is not entitled to initiate such actions on behalf of any
Holder or to appear and be heard on any matter before the bankruptcy or other
applicable court in any such proceeding as the representative of any Holder. The
Collateral Agent is not authorized in any such proceeding to enter into any
agreement for, or give any authorization or consent with respect to, the
post-petition usage of Collateral, unless such agreement, authorization or
consent has been approved in writing by the Required Holder(s). This Agreement
shall survive the commencement of any such bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar proceeding.
Section 10. Resignation and Removal of the Collateral Agent.
The Collateral Agent may resign as Collateral Agent upon thirty (30) days'
notice to the Holders and may be removed at any time upon the written request of
the Required Holder(s), with any such resignation or removal to become effective
only upon the appointment of a successor Collateral Agent under this Section 10.
----------
If the Collateral Agent shall resign or be removed as Collateral Agent by the
Required Holder(s), then the Required Holder(s) shall (and if no such successor
shall have been appointed within thirty (30) days of the Collateral Agent's
resignation or removal, the Collateral Agent may) appoint a successor agent for
the Holders, whereupon such successor agent shall succeed to the rights, powers
and duties of the "Collateral Agent," and the term "Collateral Agent" shall mean
such successor agent effective upon its appointment, and except as provided in
Sections 9(a) and 9(b) above, the former Collateral Agent's rights, powers and
----------------------
duties as Collateral Agent shall be terminated without any other or further act
or deed on the part of such former Collateral Agent (except that the resigning
Collateral Agent shall deliver all Collateral then in its possession to the
successor Collateral Agent) or any of the other Holders. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent.
Section 11. Agreement for Benefit of Parties Hereto. Nothing
in this Agreement, express or implied, is intended or shall be construed to
confer upon, or to give to, any Person other than the parties hereto and their
respective successors and assigns and Persons for whom the parties hereto are
acting as agents or representatives, any right, remedy or claim under or by
reason of this Agreement or any covenant, condition or stipulation hereof, and
the covenants, stipulations and agreements contained in this Agreement are and
shall be for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns and Persons for whom the parties hereto are
acting as agents or representatives.
Section 12. Severability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected and/or
impaired thereby.
Section 13. Notices. All notices, demands, certificates or
other communications hereunder shall be in writing and shall be deemed
sufficiently given or served for all purposes when delivered personally, when
sent by certified or registered mail, postage prepaid, return receipt requested,
or by private courier service, or, if followed and confirmed by mail or courier
service notice, when telecopied, in each case, with the proper address as
indicated below. Each party may, by written notice given to the other parties,
designate any other address or addresses to which notices, certificates or other
communications to them shall be sent as contemplated by this Agreement. Notices
shall be deemed to have been given if and when received by an officer, manager
or supervisor in the department of the addressee specified for attention (unless
the addressee refuses to accept delivery, in which case such notices shall be
deemed to have been given when first presented to the addressee for acceptance),
and notices so delivered to the Collateral Agent shall be deemed received by an
officer of the Collateral Agent responsible for administering this Agreement.
Until otherwise so provided by the respective parties, all notices, certificates
and communications to each of them shall be addressed as follows:
Any Holder: At the address specified for notices to
such Holder under the Note Agreement
Collateral Agent: The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Embarcadero CenterSuite ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Company: ▇▇▇▇▇▇ Navigation Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Section 14. Successors and Assigns. Whenever in this Agreement
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included and all covenants, promises and
agreements in this Agreement by or on behalf of the respective parties hereto
shall bind and inure to the benefit of the respective successors and assigns of
such parties, whether so expressed or not.
Section 15. Counterparts. This Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all counterparts together constituting only one instrument.
Section 16. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of New York.
Section 17. Consent To Jurisdiction. THE COMPANY HEREBY
IRREVOCABLY CONSENTS AND AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING
ARISING OUT OF OR IN ANY WAY IN CONNECTION WITH THIS AGREEMENT OR THE NOTES MAY
BE INSTITUTED OR BROUGHT IN THE COURTS OF THE STATE CALIFORNIA OR THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, AS ANY NOTEHOLDER
MAY ELECT, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY
IRREVOCABLY ACCEPTS AND SUBMITS TO, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT,
AND TO ALL PROCEEDINGS IN SUCH COURTS. THE COMPANY IRREVOCABLY CONSENTS TO
SERVICE OF ANY SUMMONS AND/OR LEGAL PROCESS BY REGISTERED OR CERTIFIED UNITED
STATES AIR MAIL, POSTAGE PREPAID, TO THE OWNER AT ITS ADDRESS AS SET FORTH IN
PARAGRAPH 11I HEREOF, SUCH METHOD OF SERVICE TO CONSTITUTE, IN EVERY RESPECT,
SUFFICIENT AND EFFECTIVE SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR
PROCEEDING. NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY NOTEHOLDER
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE
RIGHT OF ANY NOTEHOLDER TO BRING ACTIONS, SUITS OR PROCEEDINGS WHETHER IN REM,
-- ---
IN PERSONAM, IN LAW, EQUITY, ADMIRALTY OR OTHERWISE IN THE COURTS OF ANY OTHER
-- --------
JURISDICTION. THE COMPANY FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN ANY
SUCH LEGAL ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
ANY OTHER JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA, BY SUIT
ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE
EVIDENCE OF THE FACT AND THE AMOUNT OF THE LIABILITY.
Section 18. No Impairments of Other Rights. Nothing in this
Agreement is intended or shall be construed to impair, diminish or otherwise
adversely affect any other rights the Holders may have or may obtain against the
Company.
Section 19. Amendment; Waiver. No consent, amendment or waiver
of any provision of this Agreement shall be effective unless the same shall be
in writing and signed by the Holders and the Collateral Agent, and, in the case
of an amendment to Sections 7(e), 7(f), 9(a) or 17 of this Agreement, also
-------------------------------
signed by the Company, and any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No delay on
the part of any Holder in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial waiver by such
Holder of any right, power or remedy preclude any further exercise thereof, or
the exercise of any other right, power or remedy.
Section 20. Headings. Headings herein are for convenience only
and shall not be relied upon in interpreting or enforcing this Agreement.
Section 21. Termination. This Agreement shall remain in full
force and effect until indefeasible payment in full of all of the Obligations.
Following such date, Section 9(a) of this Agreement shall continue in full force
and effect.
Section 22. Entire Agreement. This Agreement, including the
documents referred to herein, embodies the entire agreement and understanding of
the parties hereto, and supersedes all prior agreements and understandings of
the parties hereto, relating to the subject matter herein contained.
Section 23. Consequential Damages. In no event (other than in
respect of its gross negligence or willful misconduct) shall the Collateral
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the
Collateral Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
IN WITNESS WHEREOF, the undersigned have caused this
Intercreditor and Collateral Agency Agreement to be duly executed by their duly
authorized officers, all as of the date first written above.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, in its individual
capacity and as Collateral Agent
By: ________________________________
Vice President
PRUCO LIFE INSURANCE COMPANY
By: ________________________________
Vice President
Schedule A
The Prudential Insurance Company of America
Pruco Life Insurance Company
ACKNOWLEDGMENT OF AND CONSENT AND AGREEMENT
TO INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
The Company, as described in the Intercreditor and Collateral
Agency Agreement set forth above, acknowledges and, to the extent required,
consents to the terms and conditions thereof. The undersigned Company does
hereby further acknowledge and agree to its agreements under Sections 7(e),
--------------
7(f), 9(a) and 17 of the Intercreditor and Collateral Agency Agreement and
-----------------
acknowledges and agrees that it is not a third-party beneficiary of, and has no
rights under, the Intercreditor and Collateral Agency Agreement.
IN WITNESS WHEREOF, the Company has caused this Acknowledgment
of and Consent and Agreement to Intercreditor and Collateral Agency Agreement to
be executed by their duly authorized officers May 19, 2005.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a
Hawaii corporation
By: __________________________________
Its: __________________________________
EXHIBIT D
---------
[FORM OF MORTGAGE]
EXECUTION
---------
FIRST PREFERRED SHIP MORTGAGE
-----------------------------
(UNITED STATES)
This FIRST PREFERRED SHIP MORTGAGE (hereinafter called the "Mortgage")
--------
effective May 19, 2005, is granted by ▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a
Hawaiian corporation, with its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Owner") in favor of THE PRUDENTIAL INSURANCE COMPANY OF
-----
AMERICA, a New Jersey corporation, with an office at ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as collateral agent for itself and the other
Purchasers party to the Note Agreement referred to below (hereinafter, together
with its successors and assigns, called the "Mortgagee"). Capitalized terms
---------
which are used herein without definition and which are defined in the Note
Agreement referred to below shall have the same meanings herein as in the Note
Agreement.
W H E R E A S
WHEREAS, the Owner is the sole owner of the whole of the M.V. ▇▇▇▇▇▇▇▇,
official number 1168529 (the "Vessel");
------
WHEREAS, pursuant to the terms of that certain Amended and Restated
Note Agreement, dated May 19, 2005 (hereinafter, as amended and supplemented
from time to time, the "Note Agreement," a copy of which is attached hereto as
--------------
Exhibit 1 (without exhibits) and incorporated by reference herein, with the same
---------
force and effect as if fully set forth herein), by and among the Owner and the
persons named in the Purchaser Schedule attached thereto as the holders or
purchasers of certain Notes of the Owner (collectively the "Purchasers"),
----------
certain Purchasers have agreed to extend additional credit to the Owner (subject
to the conditions set forth in the Note Agreement) in the principal sum of One
Hundred and Five Million Dollars ($105,000,000), and certain Purchasers have
agreed that existing indebtedness of the Owner in the principal sum of
$15,000,000 will hereafter be outstanding under the Note Agreement and shall be
secured hereby, all of which the Owner has agreed to repay pursuant to the terms
stated therein;
WHEREAS, it is a condition precedent to the Purchasers' extending
credit to the Owner under the Note Agreement that the Owner execute and deliver
this Mortgage to the Mortgagee; and
WHEREAS, the Owner, in order to secure the payment of the Notes, and
such additional sums as the Owner may be obligated to pay under the covenants,
terms and conditions contained in the Note Agreement, the Notes, and this
Mortgage, and in order to secure the performance and observance of and
compliance with all agreements, covenants, terms and conditions contained in the
Note Agreement, the Notes, and this Mortgage, has duly authorized the execution
and delivery of this Mortgage under and pursuant to Chapter 313 of Title 46
United States Code in favor of the Mortgagee;
NOW, THEREFORE, in consideration of the premises and of the extension
of credit as above recited, and of other good and valuable consideration, the
receipt and adequacy whereof is hereby acknowledged, and in order to secure the
payment and performance of the Notes (including the principal thereof and
interest thereon, and Yield Maintenance Amount, if any, with respect thereto),
and such additional sums as the Owner may be obligated to pay under the
agreements, covenants, terms and conditions contained in the Note Agreement and
this Mortgage, and in order to secure the performance and observance of and
compliance with all the agreements, covenants, terms and conditions contained in
the Note Agreement, the Notes, this Mortgage, and the other Transaction
Documents (collectively, the "Obligations"), the Owner has granted, conveyed,
mortgaged, pledged, assigned, transferred, set over and confirmed and does by
these presents grant, convey, mortgage, pledge, assign, transfer, set over and
confirm unto the Mortgagee, its successors and assigns, all of the following
described property: the whole of the Vessel, together with her engines, boilers,
machinery, boats, anchors, cables, chains, rigging, tackle, apparel, furniture,
equipment (including all sonar, global positioning system, and navigational
equipment), spare parts and gear and all other appurtenances thereunto
appertaining or belonging, whether now owned or hereafter acquired, whether on
board or not, and any and all additions, improvements and replacements hereafter
made in, on or to said vessel, or any part thereof, or in or to the equipment
and appurtenances aforesaid, all the foregoing being included in the term
"Vessel" as used herein.
------
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto the Mortgagee, and its successors and assigns to its, and to its
successors' and assigns' own use, benefit and behoof, forever; upon the terms
herein set forth for the enforcement of the payment of the Obligations in
accordance with the terms of the Note Agreement and the Notes and to secure the
performance and observance of, and compliance with, all agreements, covenants,
terms and conditions contained in this Mortgage;
PROVIDED ONLY, and the condition of these presents is such, that if the
Owner, or their respective successors or assigns, shall fully discharge the
Obligations, including, without limitation, the irrevocable payment in full in
cash of all of the indebtedness evidenced by the Notes and all interest,
expenses and fees thereon, and all Yield Maintenance Amounts, if any, with
respect thereto, and all other such sums as may hereafter become secured by this
Mortgage and shall perform, observe and comply with all agreements, covenants,
terms and conditions in this Mortgage, expressed or implied, to be performed,
observed or complied with by and on the part of the Owner, then these presents
and the rights hereunder shall cease, determine and be void, and otherwise shall
be and remain in full force and effect.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Vessel is to be
held subject to the further covenants, conditions, provisions, terms and uses
hereinafter set forth:
ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OWNER
The Owner represents to, and covenants and agrees with, the Mortgagee
as follows:
ss.1.1. Performance. The Owner will observe, perform and comply with
-----------
all the covenants, terms and conditions herein and in the Note Agreement and the
Notes, expressed or implied, on its part to be observed, performed or complied
with and will pay the Obligations including, without limitation, its
indebtedness as set forth in the Note Agreement and the Notes and interest
thereon in accordance with the terms thereof.
ss.1.2. Authorization; Citizenship. The Owner was duly organized and is
------------- -----------
now validly existing as a corporation under the laws of the State of Hawaii with
a principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Owner
is now and shall remain a citizen of the United States as defined in Section 2
of the Shipping Act, 1916, as amended, qualified to own and operate vessels in
the coastwise trade. The Owner shall maintain in full force and effect the
Vessel's Certificate of Documentation. The Owner is duly authorized to mortgage
the Vessel to the Mortgagee; all corporate action of the Owner necessary for the
execution and delivery of this Mortgage has been duly and effectively taken; and
this Mortgage in the hands of the holder thereof is the valid and enforceable
obligation of the Owner in accordance with its terms.
ss.1.3. Title. The Owner lawfully owns and is lawfully possessed of the
-----
Vessel, free from any lien, encumbrance, security interest or charge of any kind
(except the lien of this Mortgage, liens for wages of the crew, including the
Master of the Vessel, relating to the current voyage, for wages of stevedores
when employed directly by the Vessel or for general average or salvage, other
statutory liens that by law have priority over this Mortgage, liens covered by
valid policies of insurance held by the Mortgagee and meeting the requirements
of ss.1.13 hereof, and liens not covered by insurance incurred in the ordinary
course of business, provided, in each case, that such lien does not pose a
significant risk of sale, forfeiture, or loss of the Vessel (any such lien, a
"Permitted Lien")); and the Owner warrants, and will defend the title and
--------- ----
possession thereto and to every part thereof for the benefit of the Mortgagee
against the claims and demands of all persons whosoever.
ss.1.4. First Preferred Mortgage. The Owner will, at its expense and at
----- --------- --------
no cost to the Mortgagee, comply with and satisfy all the provisions of Chapter
313 of Title 46 United States Code in order to establish, record and maintain
this Mortgage as a first preferred ship mortgage upon the Vessel, and will do
all such other acts and execute all such instruments, deeds, conveyances,
mortgages and assurances as the Mortgagee shall reasonably require in order to
subject the Vessel to the lien of this Mortgage as aforesaid.
ss.1.5. Operation. The Owner will at all times operate the Vessel in
---------
compliance in all respects with all governmental rules, regulations and
requirements, applicable to the Vessel (including without limitation, all
requirements of the Shipping Act, 1916, as amended; the Merchant Marine Act,
1920, as amended; the International Convention for the Safety of Life at Sea
("SOLAS"), 1974; and the International Convention on Standards of Training,
-----
Certification and Watchkeeping for Seafarers, 1978) and in compliance in all
material respects with all rules, regulations and requirements of the American
Bureau of Shipping (or other classification society of like standing
satisfactory to the Mortgagee). The Owner will neither cause nor permit the
Vessel to be operated in any manner contrary to the applicable law or to carry
any cargo that will expose the Vessel to penalty, forfeiture or capture and will
not do or suffer or permit anything to be done which can or might adversely
affect the documentation of the Vessel under the laws and regulations of the
United States of America and will at all times keep the Vessel duly documented
thereunder; provided, however, that the foregoing provisions of this ss.1.5
-------- -------
shall not apply to the extent the Owner is prevented from complying therewith
during any period in which (i) there has been a loss with respect to the Vessel
(other than an Event of Loss) and the Owner shall not have had a reasonable time
to repair the same, or (ii) the use of the Vessel has been requisitioned by any
governmental entity.
ss.1.6. Government Assessments. The Owner will pay and discharge or
---------- -----------
cause to be paid and discharged, when due and payable from time to time, all
taxes, assessments, governmental charges, fines and penalties imposed on the
Vessel or any income therefrom and all lawful claims which if unpaid might
become a lien or charge upon the Vessel, except that it shall be entitled to
contest any such taxes, assessments, governmental charges, fines and penalties
in good faith, provided it obtains a bond, or an insurance underwriter's letter
of undertaking or sets aside on its books adequate reserves with respect
thereto.
ss.1.7. Permitted Liens. Neither the Owner, the Master of the Vessel,
--------- -----
any charterer nor any other person has or shall have any right, power or
authority to suffer to continue, create, incur or permit to be placed or imposed
upon the Vessel any liens, encumbrance, security interest or charge whatsoever
other than Permitted Liens.
ss.1.8. Notice of Mortgage. The Owner will carry or cause to be carried
------ -- --------
a properly certified copy of this Mortgage on board the Vessel with the Vessel's
documents and will cause such certified copy and the Vessel's documents to be
exhibited to any and all persons having business with the Vessel which might
give rise to a maritime lien thereon or to any sale, conveyance, mortgage or
lease thereof, and to any representative of the Mortgagee; and will cause to be
placed and kept prominently displayed in the chart room and in the Master's
cabin of the Vessel a notice, framed under glass, printed in plain type of such
size that the paragraph of reading matter shall cover a space not less than six
inches wide and nine inches high, reading as follows:
NOTICE OF FIRST PREFERRED SHIP MORTGAGE
This Vessel is owned by ▇▇▇▇▇▇ Navigation Company, Inc. and is subject
to a First Preferred Ship Mortgage in favor of The Prudential Insurance
Company of America, as Collateral Agent for itself and certain other
lenders, as Mortgagee, under authority of Chapter 313 of Title 46
United States Code. Under the terms of said Mortgage neither the Owner
of this Vessel, nor any one on the Owner's behalf, nor any charterer,
nor the Master, nor any other person has any right, power or authority
to create, incur or permit to be placed or imposed upon this Vessel,
any lien whatsoever, other than the lien of said Mortgage and liens for
wages of crew or the Master of this Vessel arising from the current
voyage, for wages of stevedores when employed directly by this ▇▇▇▇▇▇,
or for general average or salvage.
ss.1.9. Removal of Liens. If a notice of claim of lien is recorded
------- -- -----
against the Vessel, or a libel is filed against the Vessel, or the Vessel is
attached, levied upon, or taken into custody, the Owner will promptly notify the
Mortgagee thereof by telecopy or telex, confirmed by letter; and within seven
(7) days of such recording, filing, attachment, levy, or taking, will cause a
certificate of discharge to be recorded in the case of any such recording of
notice of claim or will cause the Vessel to be released in the case of any such
attachment, levy or other taking into custody and will cause all liens thereon
relating to such recording, libel, attachment, levy or other taking into custody
to be discharged and will promptly notify the Mortgagee thereof.
ss.1.10. Condition and Maintenance of the Vessel. Upon the delivery of
--------- --- ----------- -- --- ------
the Vessel by the Builder to the Owner, the Vessel shall be tight, staunch and
strong and well and sufficiently tackled, appareled, furnished and equipped and
in all respects seaworthy (it being understood, for the avoidance of doubt, that
the Owner makes no covenant as to seaworthiness after such delivery). The Owner
will at all times and without cost and expense to the Mortgagee (a) maintain and
preserve or cause to be maintained and preserved the Vessel in good running
order and repair, and will cause all equipment and parts thereof which become
worn out, broken or damaged to be repaired or replaced and (b) will keep the
Vessel, or cause the Vessel to be kept, in such condition as will entitle the
Vessel to the highest class and rating for vessels of the same age and type by
the American Bureau of Shipping (or other classification society of like
standing satisfactory to the Mortgagee), without recommendation affecting class,
and annually, together with the delivery of financial statements under paragraph
5A(ii) of the Note Agreement, will furnish to the Mortgagee a certificate or
certificates of such society that such classification is maintained, and to be
covered by and operated in compliance with a valid Coast Guard Certificate of
Inspection, and (c) furnish to the Mortgagee copies of all material damage
reports and required periodic class surveys made by the American Bureau of
Shipping (or other classification society of like standing satisfactory to the
Mortgagee). Notwithstanding the preceding sentence, if at any time the Vessel
shall fail to meet such standards, the Owner shall not be in breach of this
ss.1.10 provided such failure is cured within the time prescribed by the
American Bureau of Shipping or such other classification society for curing such
condition, or such failure occurs during any period in which (i) there has been
a loss with respect to the Vessel (other than an Event of Loss) and the Owner
shall not have had a reasonable time to repair the same, or (ii) the use of the
Vessel has been requisitioned by any governmental entity that does not permit
the Owner to maintain the classification and rating of the Vessel. The Vessel
shall, and the Owner covenants that it will, at all times comply with all
applicable United States law, treaties and conventions, and rules and
regulations issued thereunder, and shall have on board, when required thereby,
valid certificates showing compliance therewith. The Owner will not make, or
permit to be made, any substantial change in the structure, type, speed, or
propulsion of the Vessel that would diminish the value of the Vessel.
ss.1.11. Access. Except during the continuance of any event of default
------
under this Mortgage, the Note Agreement, or the Notes, or an event that, with
the giving of notice or the lapse of time, or both, would constitute an event of
default under this Mortgage, the Note Agreement or the Notes, the Owner will, at
a reasonable time during each calendar year, afford the Mortgagee or its
authorized representatives, at the Mortgagee's expense, full and complete access
to the Vessel where the same shall be located at the time for the purpose of
inspecting the same and its cargoes and papers. During the continuance of an
event of default under this Mortgage, the Note Agreement, or the Notes, or an
event that, with the giving of notice or the lapse of time, or both, would
constitute an event of default under this Mortgage, the Note Agreement or the
Notes, the Owner will at all reasonable times afford the Mortgagee or its
authorized representatives, at the Owner's expense, full and complete access to
the Vessel where the same shall be located at the time for the purpose of
inspecting the same and its cargoes and papers. At all reasonable times, the
Owner, at the request of the Mortgagee, will deliver for inspection copies of
any and all contracts and documents relating to the Vessel, whether on board or
not.
ss.1.12. Sale or Other Disposition of the Vessel. (a) The Owner will
---- -- ----- ----------- -- --- ------
not sell, mortgage, or transfer the Vessel, unless prior to or concurrently
therewith all Notes shall have been prepaid in full in accordance with paragraph
4B of the Note Agreement.
(b) The Owner will not charter the Vessel to, or permit the Vessel to
serve under any contract of affreightment with, a person included within the
definition of "designated foreign country" or a "national" of a "designated
foreign country" in the "Foreign Assets Control Regulations" or "Cuban Assets
Control Regulations" of the United States Treasury Department, 31 C.F.R. Chapter
V, as amended, within the meaning of said regulations or of any regulation,
interpretation or ruling issued thereunder.
(c) (i) The Owner shall not enter into any demise, bareboat or time
charter with any entity unless (i) the charter is subject to and subordinate to
the rights of the Mortgagee under this Mortgage, and, (ii) in the case of
charters in excess of one year, the charter contains the following provision:
"This Charter is subject and subordinate to a First Preferred
Ship Mortgage in favor of The Prudential Insurance Company of
America, as Mortgagee, and to each of the rights and remedies
of said Mortgagee under said Mortgage and shall be terminable
at the option of said Mortgagee in the event of the
foreclosure of said Mortgage by said Mortgagee, which option
shall be exercisable by the Mortgagee within thirty (30) days
of such foreclosure, provided the Mortgagee has actual
knowledge of such charter."
(ii) The Owner shall, within ten (10) calendar days of entering into
such charter in excess of a year transmit a copy of the charter to the
Mortgagee.
ss.1.13. Insurance. At all times while and so long as this Mortgage
---------
shall be outstanding:
(a) The Owner will, at its own expense insure the Vessel and keep the
same insured (in lawful money of the United States) for hull and machinery,
employer's liability, pollution liability, war risk, and against protection and
indemnity risks, generally insured against by prudent companies engaged in the
same or similar business, in such form, and with such financially sound and
reputable insurance companies, underwriters, funds, mutual insurance
associations or clubs, acceptable to the Mortgagee, as shall be necessary for
the protection of the Mortgagee and in accordance with the provisions of this
ss.1.13; provided, that the Mortgagee in the exercise of its reasonable
--------
discretion may from time to time require such other or additional insurance as
is then being obtained by prudent shipowners generally.
(b) The Owner will furnish to the Mortgagee, concurrently with the
execution hereof and thereafter together with the delivery of financial
statements under paragraph 5A(ii) of the Note Agreement, a certificate signed by
its chief financial officer setting forth the terms and conditions of the
insurances, including the amount and scope of coverage, deductibles, identity of
underwriters and share of placement by each underwriter with respect to the
insurance carried and maintained on the Vessel together with a statement that
the insurance coverages in place and the amount thereof are prudent and
reasonable taking into account existing industry practices, the operating area
and operation of the Vessel and the risks associated with such operations, and
that such insurance is in compliance with the provisions of this ss.1.13. The
Owner will advise the Mortgagee promptly of any lapse of any such insurance by
expiration, failure to renew or otherwise and of any default in payment of any
premium, whether for new insurance or for insurance replacing, renewing or
extending existing insurance, and of any other act or omission on the part of
the Owner which might invalidate or render unenforceable, or cause the lapse of
or prevent the renewal or extension of, in whole or in part, any insurance on
the Vessel. The Owner will furnish or cause to be furnished to the Mortgagee,
from time to time, upon request, detailed information with respect to any
insurance carried or maintained on the Vessel pursuant to the requirements of
this ss.1.13. The Owner will also advise the Mortgagee, at least fourteen (14)
Business Days prior to the expiration date of any insurance carried pursuant to
this Mortgage, that such insurance has been renewed or replaced with new
insurance which complies with the provisions of this ss.1.13 and such advice
shall be in the same detail in respect to such renewed or replacement insurance
as is required in respect of insurance described in the aforesaid certificate.
(c) Until otherwise required by the Mortgagee, the protection and
indemnity, hull and machinery insurance required by this ss.1.13 may be on the
American Institute or London Institute forms current at the time such insurance
takes effect. Protection and indemnity insurance in respect to the Vessel shall
be by entry per club rules in a United States or British mutual insurance
association or placed with underwriters acceptable to the Mortgagee and shall
include pollution liabilities (including coverage for third party claims,
statutory and governmental cleanup liabilities, penalties and fines in the
minimum amount for any one occurrence of $500,000,000). The deductibles and
franchises for all types of insurance shall not exceed $2,500,000 per
occurrence. For the purposes of insurance against total loss, the Vessel shall
be insured for and valued at an amount at least equal to 110% of the aggregate
unpaid principal amount of the Notes.
(d) All insurance shall be taken out in the names of the Owner and the
Mortgagee as their respective interests may appear; the policies or certificates
shall provide that there shall be no recourse against the Mortgagee for payment
of premiums, assessments, or club calls; all insurance shall provide for at
least fourteen (14) Business Days' prior notice to be given to the Mortgagee by
the underwriters in event of cancellation or any material change in coverage,
except for protection and indemnity insurance, which shall provide for at least
fourteen (14) Business Days' prior notice to be given to the Mortgagee.
(e) All hull and machinery insurance policies or certificates shall
provide that losses thereunder shall be payable to the Mortgagee except to the
extent otherwise provided below, and all insurance moneys received by the
Mortgagee shall be distributed as provided below in this ss.1.13. However, the
policies or certificates may provide that unless the underwriters shall have
been otherwise instructed by notice in writing from the Mortgagee:
(i) any loss under any insurance on the Vessel with respect to
protection and indemnity or collision liability risks may be paid directly to
the person to whom any liability covered by such insurance has been incurred, or
to the Owner to reimburse it for any loss, damage or expense incurred by it and
covered by such insurance, provided that in the latter event the underwriter
shall have first received evidence that the liability insured against has been
discharged; and
(ii) in the case of any loss (other than a loss covered by
subparagraph (i) above in this paragraph (e) or by paragraph (f) of this
ss.1.13) under any insurance with respect to the Vessel involving any damage to
or liability of the Vessel, the underwriters may pay directly for the repair,
salvage, liability or other charges involved, or, if the Owner shall have first
fully repaired the damage and paid the cost thereof or discharged the liability
or paid other charges and the underwriters shall have first received evidence
thereof, may pay the Owner as reimbursement therefor; provided, however, that
--------
(a) if such damage involves a loss in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000), the underwriters shall not make such payment
without first obtaining the written consent of the Mortgagee, and (b) no payment
shall be made to the Owner if there shall have occurred an event of default
under this Mortgage, the Note Agreement or the Notes or an event that, with the
giving of notice or the lapse of time, or both, would constitute an event of
default under this Mortgage, the Note Agreement or the Notes. Any loss which is
paid to the Mortgagee but which should have been paid, in accordance with the
provisions of this paragraph, directly to the Owner, shall be paid by the
Mortgagee to or as directed by the Owner, but only if there shall not have
occurred any event of default under this Mortgage, the Note Agreement or the
Notes, or any event that, with the giving of notice or lapse of time, or both,
would constitute an event of default under this Mortgage, the Note Agreement or
the Notes. In the event of a loss referred to in clause (a) of the first
sentence of this subparagraph (ii), and if there is no event of default under
this Mortgage, the Note Agreement or the Notes, or any event that, with the
giving of notice or lapse of time, or both, would constitute an event of default
under this Mortgage, the Note Agreement or the Notes, the Mortgagee shall, if
requested by the Owner in writing, consent that the underwriters pay directly
for repairs, liabilities, salvage claims or other charges and expenses covered
by the policies, or if the Owner certifies to the Mortgagee (such certificate to
be accompanied by written confirmation by the underwriter or a surveyor or
adjuster), that all known damage with respect to the particular loss has been
repaired and the cost of such liabilities, salvage claims, or other charges and
expenses discharged or paid, consent that the underwriters reimburse the Owner
therefor and consent that the underwriters pay any balance to the Owner.
(f) If there is an Event of Loss, all amounts payable therefor shall be
paid to the Mortgagee and shall be applied in accordance with paragraph 7A of
the Note Agreement.
(g) Upon request of the Mortgagee, the Owner shall deliver to the
Mortgagee certified copies of all cover notes, binders and certificates of entry
in protection and indemnity associations, and all endorsements and riders
amendatory thereof in respect of insurance maintained under this Mortgage.
(h) The Owner agrees that it will not do any act, or voluntarily suffer
or permit any act to be done, whereby any insurance required hereunder shall or
may be suspended, impaired or defeated and will not suffer or permit the Vessel
to engage in any voyage or to carry any cargo not permitted under the policies
of insurance in effect, without first covering the Vessel with the usual and
customary insurance for such voyage or the carriage of such cargo.
(i) In the event that any claim or lien is asserted against the Vessel
for loss, damage or expense which is covered by insurance hereunder, and it is
necessary for the Owner to obtain a bond or supply other security to prevent the
arrest of the Vessel or to release the Vessel from arrest on account of such
claim or lien, the Mortgagee may, in its sole discretion, and upon notice to the
Owner, assign to any person, firm or corporation executing a surety or guarantee
bond or other agreement to save or release the Vessel from such arrest, all
right, title and interest of the Mortgagee in and to said insurance covering
said loss, damage or expense, as collateral security to indemnify such person,
firm or corporation against liability under said bond or other agreement.
ss.1.14. Reimbursement. The Owner will, upon demand therefor, pay or
-------------
reimburse the Mortgagee, with interest at the rate for overdue amounts due on
the Series A Notes, for: (i) any and all expenses or expenditures which the
Mortgagee may from time to time incur or make in connection with insurance
premiums, discharge or purchase of any lien, libel or seizure of the Vessel,
taxes, dues, assessments, governmental charges, fines and penalties, repairs,
reasonable attorneys' fees and any other expenses or expenditures which the
Owner is obligated herein to incur or make, but fails to incur or make; and (ii)
all costs, fees and expenses suffered, incurred or made by the Mortgagee in
exercising, protecting or pursuing its rights or remedies under this Mortgage
(including, but not limited to, expenses of any sale or taking of the Vessel,
reasonable attorneys' fees and court costs). Such obligation of the Owner to
reimburse the Mortgagee shall be an additional indebtedness due from the Owner,
secured by this Mortgage, and shall be payable by the Owner on demand. The
Mortgagee, though privileged so to do, shall be under no obligation to the Owner
or to any other person to incur or make any such expenses or expenditures, nor
shall the incurring or making thereof relieve the Owner of any default in that
respect.
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
ss.2.1. Events of Default. Subject to paragraph 7A(v) of the Note
------ -- -------
Agreement, the Owner shall be in default hereunder upon the happening of any one
or all of the following events or conditions (each an "event of default"):
(a) any Event of Default (as defined in the Note Agreement) shall have
occurred and be continuing; or
(b) default shall be made in the due and punctual observance or
performance of any of the provisions of this Mortgage, provided, however, that
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in the case of the provisions of ss.ss.1.5 and 1.10 of this Mortgage, such
default (i) shall be material and the Owner shall have failed, within thirty
(30) days of receiving actual knowledge of the same, either to cure such default
or to commence taking such action with respect thereto as shall be required by
relevant law or governmental agencies having jurisdiction or shall thereafter
fail diligently to pursue such cure or actions, or (ii) shall impair the Owner's
performance of its obligations under this Mortgage or the Note Agreement; or
(c) the Certificate of Documentation of the Vessel is subject to
invalidity, revocation, or cancellation for any reason whatsoever; or
(d) the Owner or any charterer shall abandon the Vessel; or
(e) the Owner or any demise charterer shall cease to be a citizen of
the United States under Section 2 of the Shipping Act, 1916, as amended,
qualified to own and operate vessels in the coastwise trade.
If any event of default as specified herein shall have occurred and be
continuing, then and in each and every such case the Mortgagee shall have the
right to:
(1) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of Chapter 313 of Title
46 United States Code and all acts amendatory thereof and supplemental
thereto, or to creditors, mortgagees, or secured parties by the
applicable law of any other jurisdiction;
(2) Bring suit at law, in equity or in admiralty to recover
judgment for any and all outstanding Obligations or any sum secured by
this Mortgage, or otherwise, and collect the same out of any and all
property of the Owner whether covered by this Mortgage or otherwise;
(3) Take and enter into possession of the Vessel, 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 Mortgagee shall surrender to
the Mortgagee possession of the Vessel, and the Mortgagee may, without
being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use the Vessel, for such time and upon such terms
as it may deem to be for its best advantage, and demand, collect and
retain, compromise and sue for all hire, freights, earnings, issues,
revenues, income, profits, return premiums, salvage awards or
recoveries, recoveries in general average, and all other sums due or to
become due in respect of the Vessel, including any amounts payable in
respect of any insurance in connection with the Vessel, from any person
whomsoever, accounting only for the net profits, if any, arising from
such use of the Vessel and charging upon all receipts from the use of
the Vessel or from the sale thereof by court proceedings or pursuant to
subparagraph (4) next following, all costs, expenses, charges, damages
or losses by reason of such use; and if at any time the Mortgagee shall
avail itself of the right herein given to take the Vessel, the
Mortgagee shall have the right to dock the Vessel for a reasonable time
at any dock, pier or other premises of the Owner without charge, or to
dock it at any other place at the cost and expense of the Owner;
(4) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process, and if it seems
desirable to the Mortgagee and without being responsible for loss or
damage, sell the Vessel at public or private sale, at any place and at
such time as the Mortgagee may deem advisable, free from any claim by
the Owner in admiralty, in equity, at law or by statute. In the case of
a public sale, the Mortgagee shall give notice of the time and place of
the sale with a general description of the property in the following
manner:
(i) by publishing such notice for ten (10)
consecutive days in a daily newspaper of general circulation
published in the home port and the places of sale of the
Vessel; and
(ii) by mailing a similar notice to the Owner at
least ten (10) days prior to the date fixed for such sale.
In the event that the Vessel shall be offered for sale by a private
sale, no newspaper publication of notice shall be required, but the
Mortgagee shall mail written notice of sale to the Owner at least ten
(10) days prior to the date fixed for entering into the contract of
sale. The Mortgagee may, without notice or publication, adjourn any
public or private sale or cause such sale to be adjourned from time to
time by announcement at the time and place fixed for sale or for
entering into a contract of sale, and such sale or contract of sale
may, without further notice, be made at the time and place to which the
sale or contract of sale was so adjourned. The Mortgagee shall not be
obligated to make any sale of the Vessel if it shall determine not to
do so, regardless of the fact that notice of sale may have been given.
Any sale may be conducted without bringing the Vessel to the place
designated for such sale and in such manner as the Mortgagee may deem
to be for the best advantage of the Mortgagee..
(5) Instruct the Owner to terminate any existing management
agreements affecting the Vessel, and the Owner shall, upon the giving
of such instructions by the Mortgagee, immediately terminate any such
management agreements and shall appoint other managers satisfactory to
the Mortgagee and upon terms and conditions satisfactory to the
Mortgagee.
(6) Instruct the Owner to make application, if relevant, to
the United States Maritime Administration ("MarAd") for permission of
-----
MarAd to sell or transfer the Vessel foreign for purposes of scrapping
of the Vessel or other purposes requiring such permission, and the
Owner shall, upon the giving of such instructions by the Mortgagee,
immediately apply for such permission of MarAd.
ss.2.2. Finality of Sale. Any sale of the Vessel made in pursuance of
-------- -- ----
this Mortgage, whether by exercise of the power of sale granted herein or by
virtue of any judicial proceedings, shall operate to divest all right, title and
interest of any nature whatsoever of the Owner therein and thereto, and shall
bar the Owner, its successors and assigns, and all persons claiming by, through
or under them. No purchaser shall be bound to inquire whether notice has been
given, or whether any default has occurred, or as to the propriety of the sale,
or as to the application of the proceeds thereof. In the case of any such sale,
any purchaser who is the holder of any of the Obligations shall be entitled, for
the purpose of making settlement or payment for the property purchased and
subject to the sharing provisions among the Purchasers set forth in the
Intercreditor Agreement, to apply the balance due under the Note Agreement or a
part thereof as part or all of the purchase price to the extent of the amount
remaining due and unpaid thereon. At any such sale, the holder of any
Obligations may bid for and purchase such property and upon compliance with the
terms of sale may hold, retain and dispose of such property without further
accountability therefor.
ss.2.3. Appointment of Attorney. (a) The Mortgagee is hereby appointed
----------- -- --------
attorney-in-fact of the Owner, with full power of substitution, upon the
occurrence of any event of default, to make application, if relevant, to MarAd
for permission of MarAd to sell or transfer the Vessel foreign.
(b) The Mortgagee is hereby appointed attorney-in-fact of the Owner,
with full power of substitution, upon the occurrence of any event of default, to
execute and deliver to any purchaser upon any sale of the Vessel made in
pursuance of this Mortgage, whether by exercise of the power of sale granted
herein or by virtue of any judicial proceedings, and is hereby vested with full
power and authority to make, in the name and in behalf of the Owner, a good
conveyance of the title to the Vessel when so sold. In the event of any sale of
the Vessel by exercise of any power herein contained, the Owner will, if and
when required by the Mortgagee, execute such form of conveyance of the Vessel as
the Mortgagee may direct or approve.
(c) The Mortgagee is hereby irrevocably appointed attorney-in-fact of
the Owner, with full power of substitution, upon the occurrence of any event of
default, in the name of the Owner to demand, collect, receive, compromise and
sue for, so far as may be permitted by law, all freights, hire, earnings,
issues, revenues, income and profits of the Vessel, including all amounts due
from underwriters under any insurance thereon 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 at the time of the
occurrence of any event of default in respect of the Vessel, or in respect of
any insurance thereon, from any person whomsoever, and to make, give and execute
in the name of the Owner acquittance, 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 the Vessel, to execute and deliver
charters and a bill of sale with respect to the Vessel and to endorse and accept
in the name of the Owner all checks, note, drafts, warrants, agreements and
other instruments in writing with respect to the foregoing.
ss.2.4. Additional Rights. Whenever any right to enter and take
---------- ------
possession of the Vessel accrues to the Mortgagee, it may require the Owner to
deliver and the Owner shall on demand, at its own cost and expense, deliver the
Vessel to the Mortgagee. If any legal proceedings shall be taken to enforce any
right under this Mortgage, the Mortgagee shall be entitled as a matter of right
to the appointment of a receiver of the Vessel and the freights, hire, earnings,
issues, revenues and profits due or to become due and arising from the operation
thereof.
ss.2.5. Release of Liens. The Owner authorizes and empowers the
------- -- -----
Mortgagee or its appointees or any of them 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 because of or on account of any
alleged lien against the Vessel from which the Vessel has not been released and
to take such proceedings as to them may seem proper toward the defense of such
suit, and the purchase or discharge of such lien, and all expenditures made or
incurred by them for the purpose of such defense or purchase or discharge shall
be a debt due from the Owner, its successors and assigns, to the Mortgagee and
shall be secured by the lien of this Mortgage.
ss.2.6. Cumulative Remedies; No Waiver. Each and every power and remedy
---------- -------- -- ------
herein given to the Mortgagee 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, in 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 Mortgagee, 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 consistent or inconsistent power or remedy. No delay or
omission by the Mortgagee in the exercise of any right or power or in the
prosecution of any remedy accruing upon any event of default shall impair any
such right, power or remedy or be construed to be a waiver of any such event of
default or to be an acquiescence therein; nor shall the acceptance by the
Mortgagee of any security or of any payment maturing after any event of default
or of any payment on account of any past default be construed to be a waiver of
any right arising out of any future event of default or of any past event of
default not completely cured thereby. In case the Mortgagee shall have proceeded
to enforce any right, power or remedy under this Mortgage by foreclosure, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Mortgagee, then, and
in every such case, the Owner and the Mortgagee shall be restored to their
former positions and rights hereunder with respect to the property subject or
intended to be subject to this Mortgage, and all rights, remedies and powers of
the Mortgagee shall continue as if no such proceedings had been taken.
ss.2.7. Offers to Cure. If at any time after the occurrence of an event
------ -- ----
of default and prior to the actual sale of the Vessel by the Mortgagee or prior
to commencement of any foreclosure proceedings, the Owner offers to cure
completely all events of default and to pay all expenses and advances to the
Mortgagee consequent on such event of default, with interest at the rate of
interest for overdue amounts due on the Series A Notes, then the Mortgagee may,
if it in its sole discretion so elects, accept 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 consequent thereon.
ss.2.8. Application of Proceeds. In the event of any taking of the
----------- -- --------
Vessel by the Mortgagee or any sale of the Vessel under any of the powers herein
specified, the proceeds of any such sale and the net earnings of any charter
operation or other use of the Vessel by the Mortgagee under any such power,
together with any and all moneys received by the Mortgagee pursuant to or under
the terms of this Mortgage or in any proceedings hereunder or with respect
hereto, the application of which has not elsewhere herein been specifically
provided for, shall be applied as set forth in the Intercreditor Agreement.
ss.2.9. Further Assurances. In the event that this Mortgage or any
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provision hereof, shall be deemed invalid in whole or in part by reason of any
present or future law or any decision of any court having jurisdiction, or if
the documents at any time held by the Mortgagee be deemed by the Mortgagee for
any reason insufficient to carry out the provisions, true intent or spirit of
this Mortgage, then, from time to time, the Owner will execute, on its own
behalf, such other and further assurances and documents as in the opinion of the
Mortgagee may be required more effectually to subject the Vessel to the payment
of the principal sum of the Obligations as herein provided, and to the
performance of the terms and provisions of the Notes, the Note Agreement and
this Mortgage.
ss.2.10. Severability. Any provision of this Mortgage which is
------------
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
ss.2.11. Requisition of Title, Use. (a) In the event that the title or
----------- -- ----- ---
ownership of the Vessel shall be requisitioned, purchased or taken by any
government of any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, decree, order or otherwise,
the lien of this Mortgage shall be deemed to attach to the claim for
compensation therefor, and the compensation, purchase price, reimbursement or
award for such requisition, purchase or other taking of such title or ownership
is hereby agreed to be payable to the Mortgagee, who shall be entitled to
receive the same and shall apply it as provided in the Note Agreement. In the
event of any such requisitioning, purchasing or taking of the Vessel, and the
failure of the Mortgagee to receive proceeds as herein provided, the Owner shall
promptly execute and deliver to the Mortgagee such documents, if any, and shall
promptly do and perform such acts, if any, as in the opinion of the Mortgagee
may be necessary or useful to facilitate or expedite the collection by the
Mortgagee of such part of the compensation, purchase price, reimbursement or
award as is payable to it hereunder.
(b) In the event that any government of any country or any department,
agency or representative thereof shall not take over the title or ownership of
the Vessel but shall requisition, charter or in any manner take over the use of
the Vessel pursuant to any present or future law, proclamation, decree, order or
otherwise and shall, as a result of such requisitioning, chartering or taking of
the use of the Vessel pay or become liable to pay sums by reason of the loss of
or injury to or depreciation of the Vessel, any such sum is hereby made payable
to the Mortgagee, who shall apply it as provided in the Intercreditor Agreement.
In the event of any such requisitioning, chartering or taking of the use of the
Vessel, the Owner shall promptly execute and deliver to the Mortgagee such
documents, if any, and shall promptly do and perform such acts, if any, as in
the reasonable opinion of the Mortgagee may be necessary or useful to facilitate
or expedite the collection by the Mortgagee of such claims arising out of the
requisitioning, chartering or taking of the Vessel.
ARTICLE III
SATISFACTION OF MORTGAGE
ss.3.1. Satisfaction of Mortgage. If the Owner shall indefeasibly pay
------------ -- --------
and discharge the entire indebtedness secured hereby by well and truly paying or
causing to be paid the principal of and interest due on the Notes and all other
Obligations as and when the same becomes due and payable and if the Owner shall
also indefeasibly pay or cause to be paid all other sums payable hereunder by
the Owner, then this Mortgage and the lien, rights and interest hereby granted
shall cease, determine and become null and void, and the Mortgagee shall, at the
request of the Owner, execute and deliver such instrument or instruments of
release or satisfaction as may be necessary to satisfy and discharge the lien
hereof; and forthwith the estate, right, title and interest of the Mortgagee in
and to all property subject to this Mortgage shall thereupon cease, determine
and become null and void.
ARTICLE IV
SUNDRY PROVISIONS
ss.4.1. Filing Clause. For the purposes of filing this First Preferred
------ ------
Ship Mortgage, as required by Chapter 313 of Title 46 United States Code, the
total principal amount of the direct or contingent obligations that are or may
be secured by the Mortgage is ONE HUNDRED TWENTY MILLION DOLLARS AND NO/100
CENTS ($120,000,000.00), excluding interest, expenses, fees, Yield Maintenance
Amounts, and any additional amounts for which the Owner may become liable in
connection with the performance of the covenants of this Mortgage, the Notes,
and the Note Agreement. The discharge amount is the same as the total amount.
ss.4.2. Successors and Assigns. All of the covenants, promises,
---------- --- -------
stipulations and agreements of the Owner in this Mortgage contained shall bind
the Owner and its successors and assigns and shall inure to the benefit of the
Mortgagee and its successors and assigns provided, that the Owner shall not
assign or transfer any of its rights or obligations hereunder.
ss.4.3. Agents. Wherever and whenever herein any right, power or
------
authority is granted or given to the Mortgagee, such right, power or authority
may be exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act or acts of the Mortgagee hereunder.
ss.4.4. Notices. Any notice, request, demand, direction, consent or
-------
waiver or other documents in respect of this Mortgage shall be sufficient for
every purpose if in writing and sent either by telegram or letter (delivered by
hand or sent by registered or certified mail, return receipt requested, postage
prepaid), addressed as follows:
(a) To the Owner:
▇▇▇▇▇▇ Navigation Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(b) To the Mortgagee:
The Prudential Insurance Company of America, as Collateral Agent
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Managing Director
Any notice, request or communication hereunder shall be deemed to have been
given in the case of a letter, when delivered by hand at the address provided in
this Section or three (3) days after having been deposited in the mail with
first class postage prepaid, addressed as aforesaid, or in the case of a
telegram, when delivered by the telegraph company, or in the case of a telex,
when dispatched, to the telex number provided for in this Section and the
appropriate answerback is received or, in the case of a telecopy, at the time of
dispatch thereof, if in the normal business hours in the state or country where
received or otherwise at the opening of business on the next succeeding business
day. Any party may change the person or address to whom or which the notices are
to be given hereunder, by notice duly given hereunder.
ss.4.5. No Waiver of Preferred Status. Notwithstanding anything
-- ------ -- --------- ------
contained in this Mortgage to the contrary, nothing herein shall waive the
preferred status of this Mortgage and if any provision herein shall be construed
to waive such status, then such provision shall to the extent so construed be
void and of no effect.
ss.4.6. Indemnity. The Owner assumes liability for, and agrees to
---------
indemnify and hold the Mortgagee harmless from, all claims, costs, expenses
(including reasonable legal fees and expenses), damages and liabilities arising
from or pertaining to this Mortgage or the ownership, use, possession or
operation of the Vessel; provided that the Owner shall have no obligation
--------
hereunder for indemnified liabilities arising from the gross negligence or
willful misconduct of the Mortgagee. The agreements and indemnities contained in
this Section shall survive the maturity or earlier discharge of this Mortgage
and payment in full of the Obligations.
ss.4.7. Consent to Forum. THE OWNER HEREBY IRREVOCABLY CONSENTS AND
------- -- -----
AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN ANY WAY
IN CONNECTION WITH THIS MORTGAGE MAY BE INSTITUTED OR BROUGHT IN THE COURTS OF
THE STATE OF CALIFORNIA OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF CALIFORNIA, AS THE MORTGAGEE MAY ELECT, AND BY EXECUTION AND
DELIVERY OF THIS MORTGAGE, THE OWNER HEREBY IRREVOCABLY ACCEPTS AND SUBMITS TO,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, AND TO ALL PROCEEDINGS IN SUCH
COURTS. THE OWNER IRREVOCABLY CONSENTS TO SERVICE OF ANY SUMMONS AND/OR LEGAL
PROCESS BY REGISTERED OR CERTIFIED UNITED STATES MAIL, POSTAGE PREPAID, TO THE
OWNER AT ITS ADDRESS AS SET FORTH IN SECTION 4.4 OF ARTICLE IV HEREOF, SUCH
METHOD OF SERVICE TO CONSTITUTE, IN EVERY RESPECT, SUFFICIENT AND EFFECTIVE
SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING. NOTHING IN THIS
MORTGAGE SHALL AFFECT THE RIGHT OF THE MORTGAGEE TO EFFECT SERVICE OF PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF THE MORTGAGEE TO BRING
ACTIONS, SUITS OR PROCEEDINGS WHETHER IN REM, IN PERSONAM, IN LAW, EQUITY,
-- --- -- --------
ADMIRALTY OR OTHERWISE IN THE COURTS OF ANY OTHER JURISDICTION. THE OWNER
FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN ANY SUCH LEGAL ACTION, SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION,
WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA, BY SUIT ON THE JUDGMENT, A
CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT
AND THE AMOUNT OF THE LIABILITY.
ss.4.8. Governing Law. The Mortgage shall be governed by and construed
--------- ---
under Chapter 313 of Title 46 United States Code, to the extent applicable, and
otherwise in accordance with the laws of the State of New York.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Owner has executed this Mortgage the day and
year first above written.
▇▇▇▇▇▇ Navigation Company, Inc.
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President &
Chief Financial Officer
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss:
COUNTY OF ALAMEDA )
On this _____ day of May, 2005, before me, a Notary Public in and for
the State of California, City and County of Alameda, personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇, duly know to me to be the Senior Vice President and Chief Financial
Officer of ▇▇▇▇▇▇ Navigation Company, Inc., a Hawaiian corporation, the entity
described herein, who executed the First Preferred Ship Mortgage annexed hereto,
and who acknowledged to me that he executed said Mortgage on behalf of said
entity by the authority set forth in the documents constituting and governing
such entity.
WITNESS my hand and official seal.
_____________________________________
Notary Public
My commission expires: _____ __, ___.
EXHIBIT 1
---------
[NOTE PURCHASE AGREEMENT (WITHOUT EXHIBITS)]
EXHIBIT E
---------
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of May 19, 2005 (as amended,
restated, supplemented or otherwise modified, this "Agreement"), is entered into
by ▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a Hawaiian corporation, (referred to herein
as the "Company") in favor of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
acting in its capacity as collateral agent for the Secured Parties (together
with its successors in such capacity, the "Collateral Agent"). Capitalized terms
used herein shall have the meanings specified in Section 1.1 hereof.
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Amended and
Restated Note Agreement, dated as of May 19, 2005 (hereinafter, as amended and
supplemented from time to time, the "Note Agreement," by and among the Company
--------------
and the persons named in the Purchaser Schedule attached thereto as the holders
or purchasers of certain Notes of the Company (collectively the "Purchasers"),
----------
certain Purchasers have agreed to extend additional credit to the Company
(subject to the conditions set forth in the Note Agreement) in the principal sum
of One Hundred and Five Million Dollars ($105,000,000), and certain Purchasers
have agreed that existing indebtedness of the Company in the principal sum of
$15,000,000 will hereafter be outstanding under the Note Agreement and shall be
secured hereby, all of which the Company has agreed to repay pursuant to the
terms stated therein;
WHEREAS, it is a condition precedent to the Purchasers'
extending credit to the Company under the Note Agreement that the Company
execute and deliver this Agreement to the Collateral Agent; and
WHEREAS, the Company, in order to secure the payment of the
Notes, and such additional sums as the Company may be obligated to pay under the
covenants, terms and conditions contained in the Note Agreement, the Notes, and
this Agreement, and in order to secure the performance and observance of and
compliance with all agreements, covenants, terms and conditions contained in the
Note Agreement, the Notes, and this Agreement, the Company has duly authorized
the execution and delivery of this Agreement;
NOW THEREFORE, for and in consideration of the premises and
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and the Collateral Agent, intending to be legally bound, do hereby
covenant and agree as follows:
ARTICLE 1
DEFINED TERMS AND PRINCIPLES OF CONSTRUCTION
1.1 Defined Terms.
(a) Capitalized terms used herein that are not otherwise
defined herein shall have the meanings ascribed to such terms in paragraph 10 to
the Note Agreement, which paragraph 10 is incorporated herein by reference as
though set forth fully herein. Unless otherwise defined herein or in the Note
Agreement, all terms defined in the Uniform Commercial Code as in effect in the
State of New York (the "UCC") which are used herein (whether or not capitalized
herein or in the UCC) shall have the respective meanings given those terms in
the UCC.
(b) The following terms shall have the meanings herein
specified:
"Collateral" shall have the meaning specified in Section
2.1(a).
"Financing Statements" shall mean all financing statements,
recordings, filings or other instruments of registration necessary and
appropriate to perfect a security interest or Lien in any Collateral by filing
in any appropriate filing or recording office in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant applicable law.
"Secured Obligations" shall mean the payment and performance
of the Notes (including the principal thereof and interest thereon, and Yield
Maintenance Amount, if any, with respect thereto), and such additional sums as
the Company may be obligated to pay under the agreements, covenants, terms and
conditions contained in the Note Agreement, this Agreement, and any other
Transaction Document.
"Secured Parties" shall mean the Collateral Agent and the
holders of the Notes from time to time.
"Termination Date" shall mean the date on which the Secured
Obligations have been paid in full in cash or cash equivalents and any
commitment under the Note Agreement, Notes or other Transaction Document has
expired or been terminated.
ARTICLE 2
GRANT OF SECURITY INTEREST
2.1 Assignment and Grant of Security Interest.
(a) As collateral security for the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of all of the Secured Obligations, whether now existing or hereafter
arising and howsoever evidenced, the Company hereby assigns, transfers and
grants to the Collateral Agent and hereby creates in favor of the Collateral
Agent, for the benefit of the Secured Parties, a continuing Lien on and first
priority security interest (the priority of which security interest shall be
subject only to the Permitted Liens as defined in the Mortgage) in, and right of
set-off against, all of the right, title and interest of such Company in and to
the following (collectively, the "Collateral"):
(1) All goods, equipment, and inventory pertaining to or relating to the Vessel,
whether or not on board; and
(2) any and all additions and Accessions to any of the foregoing, all
improvements thereto, all substitutions and replacements therefor and all
products and Proceeds thereof.
(b) The security interest granted to the Collateral Agent
pursuant to this Agreement extends to all Collateral of the kind which is the
subject of this Agreement which the Company may acquire at any time during the
continuation of this Agreement, whether such Collateral is in transit or in the
Company's, the Collateral Agent's, any Secured Party's, or any other Person's
constructive, actual or exclusive occupancy or possession.
(c) The occurrence of an Event of Default under the Note
Agreement shall constitute an Event of Default hereunder.
2.2 Security Interest Absolute. All rights of the Collateral
Agent and all security interests created hereunder shall be absolute and
unconditional irrespective of any circumstance or occurrence whatsoever,
including, without limitation:
(a) any lack of validity or enforceability of all or any part
of the Secured Obligations or of any security therefor or of any Transaction
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from or exercise or
non-exercise of any right under any Transaction Document or any other agreement
or instrument relating thereto; or
(c) any exchange, release or non-perfection of any other
collateral for, or any release or amendment or waiver of or consent to any
departure from any guaranty for, all or any part of the Secured Obligations.
2.3 Power of Attorney.
(a) Without limiting any other rights or powers granted to the
Collateral Agent hereunder, the Company hereby constitutes and appoints the
Collateral Agent, or any Person or agent whom the Collateral Agent may
designate, as the Company's attorney-in-fact for the purpose of carrying out the
terms of this Agreement, at the Company's cost and expense, to exercise all or
any of the foregoing powers in accordance with Article 9 of the UCC upon the
occurrence and during the continuance of an Event of Default, which powers,
being coupled with an interest, shall be irrevocable until the Termination Date:
(i) to receive, take, endorse, sign, assign and deliver, all in the
Collateral Agent's name or in the Company's name, any and all checks, notes,
drafts and other documents or instruments relating to the Collateral;
(ii) to request from any debtor under the Collateral in the Company's
name or in the Collateral Agent's name, information concerning the amounts owing
thereon;
(iii) to transmit to any debtor indebted under the Collateral notice of
the Collateral Agent's interest therein;
(iv) to notify any debtor indebted under the Collateral to make payment
directly to the Collateral Agent;
(v) to take or bring, in the Company's name or in the Collateral
Agent's name, all steps, actions, suits or proceedings deemed by the Collateral
Agent to be necessary or desirable to enforce or effect collection of any amount
due under any of the Collateral;
(vi) to prepare and file any Financing Statement in the name of the
Company as debtor for the purpose of perfecting Liens;
(vii) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the covenants of the Company
contained in this Agreement;
(viii) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral;
(ix) generally, to sell or transfer and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though the Collateral Agent were the absolute owner thereof for all purposes,
and to do, at the Collateral Agent's option and the Company's expense, at any
time, or from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the Liens of
the Collateral Agent thereon, consistent with any express requirement of the
UCC;
(xiii) to execute, in connection with any foreclosure, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral;
(xiv) to defend the title to the Collateral against the claims and
demands of any Person, subject to Liens permitted above; and
(xv) to exercise any and all other rights, remedies, powers and
privileges of the Company with respect to the Collateral.
(b) The Company hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof, in each case pursuant to the
powers granted hereunder. The Company hereby acknowledges and agrees that in
acting pursuant to this power-of-attorney the Collateral Agent shall be acting
in its own interest and on behalf of the Secured Parties, and the Company
acknowledges and agrees that the Collateral Agent and the Secured Parties shall
have no fiduciary duties to the Company and the Company hereby waives any claims
to the rights of a beneficiary of a fiduciary relationship hereunder.
2.4 The Company's Duties. Anything herein contained to the
contrary notwithstanding, the Company shall remain liable to perform all of its
obligations under or with respect to the Collateral and neither the Collateral
Agent nor any other Secured Party shall have any obligations or liabilities
under or with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent or any other Secured Party be required
or obligated in any manner to perform or fulfill any of the obligations of the
Company under or with respect to any Collateral.
2.5 State of Organization. The Company shall not change its
legal name or its state of organization until (i) it has given to the Collateral
Agent not less than thirty (30) days' prior written notice of its intention so
to do, clearly describing such new state of organization and such new legal name
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, and (ii) it has taken all action necessary to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
2.6 Financing Statements. The Company irrevocably authorizes
the Collateral Agent at any time, and from time to time, to file in any
jurisdiction any initial Financing Statements, amendments thereto and
continuation statements that (a) indicate the Collateral, and (b) contain any
other information required by Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such Financing Statement or amendment is filed regarding
the sufficiency or filing office acceptance of any Financing Statement or
amendment, including, if required, whether the Company is an organization, the
type of organization and any organization identification number issued to the
Company, agrees to furnish any such information to the Collateral Agent promptly
upon request. The Company further ratifies and affirms its authorization for any
Financing Statement sand/or amendments thereto, executed and filed by the
Collateral Agent in any jurisdiction prior to the date of this Agreement. The
Company also agrees to sign and deliver to the Collateral Agent and the other
Secured Parties such similar statements or instruments of registration under the
law of any jurisdiction, in form acceptable to the Collateral Agent, as the
Collateral Agent may from time to time reasonably request or as are necessary or
desirable in the reasonable opinion of the Required Holder(s), as communicated
to the Company, to establish and maintain the security interests contemplated
hereunder as valid, enforceable, first priority security interests as provided
herein (the priority of which lien and security interest shall be subject only
to Permitted Liens) and the other rights and security contemplated herein. The
Company will pay any applicable filing fees and related expenses.
ARTICLE 3
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
3.1 Events of Default; Obtaining the Collateral Upon an Event
of Default. If an Event of Default has occurred and is continuing, the
Collateral Agent, in addition to its other rights and remedies hereunder, and
the rights of the Secured Parties under each Transaction Document, shall be
entitled to do any of the following in connection with the Collateral:
(a) exercise any rights or remedies granted to a secured party
under the Uniform Commercial Code as in effect in any relevant jurisdiction or
under any other relevant law to enforce this Agreement and the security
interests contained herein;
(b) proceed to protect and enforce the rights vested in it by
this Agreement, including, but not limited to, the right to substitute itself or
any of its nominees or trustees in lieu of the Company, to cause all revenues
hereby pledged as security and all other moneys pledged hereunder to be paid
directly to it, and to enforce its rights hereunder to such payments and all
other rights hereunder by such appropriate judicial proceedings as it shall deem
most effective to protect and enforce any of such rights, either at law or in
equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Contracts, or in aid of the exercise of any
power therein or herein granted, or for any foreclosure hereunder and sale under
a judgment or decree in any judicial proceeding, or to enforce any other legal
or equitable right vested in it by this Agreement or by law whether in the
Company's name, in the Collateral Agent's name or in the name of the Collateral
Agent's designees;
(c) cause any action at law or suit in equity or other
proceeding to be instituted and prosecuted to collect or enforce any of the
Secured Obligations or any rights hereunder or included in the Collateral, or
enforce or to foreclose any other agreement or other instrument by or under or
pursuant to which such Secured Obligations are issued or secured, subject in
each case to the provisions and requirements thereof;
(d) sell, assign or otherwise liquidate any or all of the
Collateral or cause the Collateral to be sold or otherwise disposed of and take
possession of the proceeds of any such sale or liquidation;
(e) incur reasonable expenses, including reasonable and
documented attorneys' fees and expenses, consultants' fees and other costs
appropriate to the exercise of any right or power under this Agreement;
(f) perform any obligation of the Company hereunder or under
any other Transaction Document, and make payments, purchase, contest or
compromise any encumbrance, charge or Lien, and pay taxes and expenses, without,
however, any obligation so to do;
(g) take possession of the Collateral and render it usable,
and repair and renovate the same, without, however, any obligation so to do, and
enter upon any location where the same may be located, control, manage, operate,
rent or lease the Collateral, collect all rents and income from the Collateral
and apply the same to reimburse the Secured Parties for any cost or expenses
incurred hereunder or under any Transaction Document and to the payment or
performance of the Company's obligations hereunder or under any Transaction
Document and apply the balance to the Secured Obligations;
(h) secure the appointment of a receiver of the Collateral or
any part thereof; or
(i) take possession of the Collateral or any part thereof by
directing the Company in writing to turn over the Collateral to the Collateral
Agent at any reasonable place or places designated by the Collateral Agent, in
which event the Company shall at its own expense:
(i) forthwith cause the same to be moved to the place or places so
designated by the Collateral Agent and there delivered to the Collateral Agent,
(ii) store and keep any Collateral so delivered to the Collateral Agent
at such place or places pending further action by the Collateral Agent, and
(iii) while Collateral shall be so stored and kept, provide such guards
and maintenance services as shall be reasonably necessary to protect the same
and to preserve and maintain them in good condition.
The parties hereto hereby agree that the Company's obligation
to deliver the Collateral as set forth above is of the essence of this Agreement
and that, accordingly, upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by the Company of such obligation.
3.2 Remedies; Disposition of the Collateral.
(a) If an Event of Default has occurred and is continuing, any
Collateral, whether or not repossessed by the Collateral Agent pursuant to
Section 3.1, may be sold, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale the property to be sold, and in general in such manner, at such time or
times, at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of any applicable law, determine to
be commercially reasonable, as fully and completely as though the Collateral
Agent were the absolute owner thereof.
(b) Subject to subsection (a) of this Section 3.2, any
Collateral may, upon the occurrence and during the continuance of an Event of
Default, be sold, leased or otherwise disposed of, in the condition in which the
same existed when taken by the Collateral Agent or after any overhaul or repair
which the Collateral Agent, upon consultation with such Persons, including
independent consultants and engineers, as it shall deem appropriate, shall
determine to be commercially reasonable. Any such disposition shall be made upon
not less than ten (10) Business Days' written notice to the Company specifying
the time such disposition is to be made and, if such disposition shall be a
public sale, specifying the place of such sale. Any such sale may be adjourned
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Company hereby waives any claims against the Collateral Agent arising by reason
of the fact that the price at which Collateral may have been sold at a private
sale was less than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Secured Obligations, even if the
Collateral Agent accepts the first offer received or does not offer the
Collateral to more than one offeree. All fees of the Collateral Agent and all
expenses (including court costs and reasonable attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Collateral.
(c) The Collateral Agent may dispose of the Collateral under
subsection (b) of this Section 3.2 without giving any warranties as to the
Collateral. The Collateral Agent may disclaim warranties relating to title,
possession, quiet enjoyment, and the like. Such a disclaimer will not affect the
commercial reasonableness of such disposition.
(d) The Collateral Agent will comply with any applicable state
or federal law requirements in connection with the disposition of the Collateral
under subsection (b) of this Section 3.2. Such a compliance will not affect the
commercial reasonableness of such disposition.
3.3 Purchase of the Collateral. The Collateral Agent may be a
purchaser of the Collateral or any part thereof or any right or interest therein
at any sale thereof, whether pursuant to foreclosure, power of sale or otherwise
hereunder and the Collateral Agent may apply the purchase price to the payment
of the Secured Obligations. Any purchaser of all or any part of the Collateral
shall, upon any such purchase, acquire good title to the Collateral so
purchased, free of the security interests created by this Agreement.
3.4 Waiver.
(a) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE
COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR
THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL PURSUANT TO THE
TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE
COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE OR UNDER ANY OTHER RELEVANT LAW AND THE COMPANY HEREBY
FURTHER WAIVES:
(i) all damages occasioned by such taking of possession except any
damages which are finally judicially determined to have been the direct result
of the Collateral Agent's or any Secured Party's bad faith, gross negligence or
willful misconduct;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent's
rights hereunder;
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law in
order to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof pursuant to the terms of this
Agreement, and the Company, for itself and all who may claim under it, insofar
as it or they may now or hereafter lawfully do so, hereby waives the benefit of
such laws; and
(iv) any right the Company may have to require the Collateral Agent to
pursue any other Person for any of the Secured Obligations.
(b) Without limiting the generality of the foregoing, the
Company hereby waives and releases any and all rights to require the Collateral
Agent or the Secured Parties to collect any of the Secured Obligations from any
specific item or items of Collateral or from any other party liable as guarantor
or in any other manner in respect of any of the Secured Obligations or from any
collateral (other than the Collateral) for any of the Secured Obligations.
(c) Any sale of, or the grant of options to purchase (when
exercised), or any other realization upon, any Collateral pursuant to the terms
of this Agreement shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the Company therein and thereto, and
shall be a perpetual bar both at law and in equity against the Company and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
the Company.
3.5 Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason, then, in
every such case, the Company, the Collateral Agent and each holder of any of the
Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral, subject to the security interest
created under this Agreement, and all rights, remedies and powers of the
Collateral Agent shall continue as if no such proceeding had been instituted.
3.6 Limitation on Duties Regarding Preservation of Collateral.
The Collateral Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
similar types of accounts. In any event, (i) the Collateral Agent shall have no
obligation hereunder to take any steps to preserve rights against prior parties
to any Collateral and (ii) the Collateral Agent, any Secured Party and any of
their respective directors, officers, employees or agents shall not be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Company or otherwise.
3.7 Application of Proceeds. The Collateral Agent shall apply
any proceeds from time to time held by it and the net proceeds of any
collection, recovery, receipt, appropriation, realization or sale with respect
to the Collateral in accordance with the Intercreditor Agreement. For the
avoidance of doubt, it is understood that the Company shall remain liable to the
extent of any deficiency between the amount of the proceeds of the Collateral
and the aggregate amount of the Secured Obligations. The Company is entitled to
any portion of the proceeds and if the Collateral Agent disposed of the
Collateral on credit, the Company will only be credited with the payments (a)
actually made by the purchaser, (b) received by the Collateral Agent, and (c)
applied to the indebtedness of such purchaser. If such purchaser fails to pay,
the Collateral Agent may resell the Collateral and the Company shall be credited
with the proceeds of the resale. If the Company is entitled to any portion of
the proceeds and the Collateral Agent disposed of the Collateral for non-cash
consideration, the Company will only be credited with payments received as cash
proceeds of non-cash consideration.
ARTICLE 4
MISCELLANEOUS
4.1 Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to the Collateral Agent, at Four Embarcadero Center,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and (ii) if to the Company, addressed to it
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Chief Financial Officer
or at such other address as the Company shall have specified to the Collateral
Agent in writing, provided, however, that any such communication to the Company
-------- -------
may also, at the option of the Person sending such communication, be delivered
by any other means either to the Company at its address specified above or to
any Authorized Officer of the Company.
4.2 Continuing Security Interest. This Agreement shall create
a continuing Lien in the Collateral until the release thereof pursuant to
Section 4.3.
4.3 Release. Upon the Termination Date, the Collateral Agent,
upon the written request, and at the expense, of the Company shall execute and
deliver all such documentation necessary to release the Liens created pursuant
to this Agreement. In addition, the Collateral Agent, upon the written request,
and at the expense, of the Company, shall execute and deliver all such
documentation necessary to release the Liens created pursuant to this Agreement
with respect to Collateral sold, assigned or otherwise disposed of by the
Company pursuant to the Note Agreement and other Transaction Documents.
4.4 Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent or any Secured Party hereunder or pursuant
hereto is rescinded or must otherwise be restored or returned by the Collateral
Agent or such Secured Party, as the case may be, upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or upon
the appointment of any intervener or conservator of, or trustee or similar
official for, the Company or any substantial part of the Company's assets, or
upon the entry of an order by any court avoiding the payment of such amount, or
otherwise, all as though such payments had not been made.
4.5 Independent Security. The security provided for in this
Agreement shall be in addition to and shall be independent of every other
security which the Secured Parties may at any time hold for any of the Secured
Obligations hereby secured, whether or not under the Collateral Documents. The
execution of any other Collateral Document shall not modify or supersede the
security interest or any rights or obligations contained in this Agreement and
shall not in any way affect, impair or invalidate the effectiveness and validity
of this Agreement or any term or condition hereof. The Company hereby waives its
rights to plead or claim in any court that the execution of any other Collateral
Document is a cause for extinguishing, invalidating, impairing or modifying the
effectiveness and validity of this Agreement or any term or condition contained
herein. The Collateral Agent shall be at liberty to accept further security from
the Company or from any third party and/or release such security without
notifying the Company and without affecting in any way the obligations of the
Company under the Collateral Documents or any other Transaction Document.
4.6 Amendments. No waiver, amendment, modification or
termination of any provision of this Agreement, or consent to any departure by
the Company therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent and the Company. None of the
Collateral shall be released without the prior written consent of the Collateral
Agent. Any such amendment, waiver or consent shall be effective only in the
specific instance and for the specified purpose for which given.
4.7 Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to the benefit
of the Collateral Agent and the other Secured Parties and their respective
successors and assigns. The Company may not assign or otherwise transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Collateral Agent and the Required Holder(s).
4.8 Survival. All agreements, statements, representations and
warranties made by the Company herein or in any certificate or other instrument
delivered by the Company or on its behalf under this Agreement shall be
considered to have been relied upon by the Collateral Agent and the Secured
Parties and shall survive the execution and delivery of this Agreement and each
other Transaction Document until termination thereof or indefeasible payment in
full in cash or cash equivalents of all of the Secured Obligations regardless of
any investigation made by the Collateral Agent or the Secured Parties, or made
on their behalf.
4.9 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between the Company and the Collateral Agent
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.
4.10 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
4.11 Headings Descriptive. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
4.12 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
4.13 Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York.
4.14 Consent to Forum. THE COMPANY HEREBY IRREVOCABLY CONSENTS
AND AGREES THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR IN ANY
WAY IN CONNECTION WITH THIS AGREEMENT OR THE NOTES MAY BE INSTITUTED OR BROUGHT
IN THE COURTS OF THE STATE OF CALIFORNIA OR THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF CALIFORNIA, AS ANY NOTEHOLDER MAY ELECT, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS
AND SUBMITS TO, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT, AND TO ALL
PROCEEDINGS IN SUCH COURTS. THE COMPANY IRREVOCABLY CONSENTS TO SERVICE OF ANY
SUMMONS AND/OR LEGAL PROCESS BY REGISTERED OR CERTIFIED UNITED STATES AIR MAIL,
POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS AS SET FORTH IN PARAGRAPH 11I
HEREOF, SUCH METHOD OF SERVICE TO CONSTITUTE, IN EVERY RESPECT, SUFFICIENT AND
EFFECTIVE SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING. NOTHING IN
THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY NOTEHOLDER TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF ANY
NOTEHOLDER TO BRING ACTIONS, SUITS OR PROCEEDINGS WHETHER IN REM, IN PERSONAM,
-- --- -- --------
IN LAW, EQUITY, ADMIRALTY OR OTHERWISE IN THE COURTS OF ANY OTHER JURISDICTION.
THE COMPANY FURTHER AGREES THAT FINAL JUDGMENT AGAINST IT IN ANY SUCH LEGAL
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION, WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA, BY SUIT ON THE
JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE
OF THE FACT AND THE AMOUNT OF THE LIABILITY.
4.15 Entire Agreement. This Agreement, together with any other
agreement executed in connection herewith, including the Transaction Documents
and the other documents referred to herein and therein, is intended by the
parties as a final expression of their agreement as to the matters covered
hereby and is intended as a complete and exclusive statement of the terms and
conditions thereof.
4.16 Recourse. There shall be full recourse to the Company and
all of its assets and properties for the liabilities of the Company under this
Agreement, the Notes and other Transaction Documents.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered on the date first above written.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.,
a Hawaii corporation
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as Collateral Agent
By: _______________________________________
Vice President
EXHIBIT F-1
-----------
[FORM OF OPINION OF COMPANY'S GENERAL COUNSEL]
May 19, 2005
The Prudential Insurance Company of America
Pruco Life Insurance Company
c/o Prudential Capital Group
Four Embarcadero Center
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
As the General Counsel of ▇▇▇▇▇▇ Navigation Company, Inc., a Hawaii
corporation (the "Company"), I am familiar with the Amended and Restated Note
Agreement, dated as of May 19, 2005, between the Company, on the one hand, and
you, on the other hand (the "Agreement"), pursuant to which the Company has
issued to you today its Amended and Restated Series A Senior Secured Notes in
the aggregate principal amount of $15,000,000 (the "Series A Notes") and its
4.79% Series B Senior Secured Notes in the aggregate principal amount of
$105,000,000 (the "Series B Notes" and collectively with the Series A Notes, the
"Notes") and you and the Company are agreeing to amend and restate the Existing
Agreement. All capitalized terms used herein that are defined in the Agreement
shall have, unless otherwise defined herein, the respective meanings specified
in the Agreement. This letter is being delivered to you in satisfaction of the
condition set forth in clause (viii) of paragraph 3A of the Agreement and with
the understanding that you are purchasing the Notes and agreeing to the
amendment and restatement of the Existing Agreement in reliance on the opinions
expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of documents and records of the Company, and have made such other
investigations, as I have deemed relevant and necessary as a basis for my
opinion hereinafter set forth. I have relied upon such certificates of public
officials and of officers of the Company with respect to the accuracy of
material factual matters contained therein which I have not independently
established. With respect to the opinion expressed in paragraph 6 below, I have
also relied upon the representation made by each of you in paragraph 9A of the
Agreement.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Hawaii, with the corporate power,
authority and legal right to conduct its business as presently conducted.
2. The Company has the full corporate power, authority and legal right
to execute and deliver the Agreement, the Notes and each other Transaction
Document and to perform and observe its obligations thereunder.
3. The Agreement, the Notes and each other Transaction Document have
been duly authorized by all requisite corporate action on the part of the
Company and have been duly executed and delivered by authorized officers of the
Company and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms.
4. The execution and delivery of the Agreement, the Notes and each
other Transaction Document by the Company do not, and the performance and
observance of the terms thereof will not, breach, conflict with or contravene
any provisions in the articles of incorporation or by-laws of the Company or any
provision of any material law or regulation (other than federal securities laws
and regulations as to which I express no opinion in this paragraph 4) applicable
to the Company or its properties or other assets normally applicable to
transaction of the type contemplated by the Transaction Documents or to business
corporations generally.
5. The execution and delivery of the Agreement, the Notes and each
other Transaction Document do not, and the performance and observance of the
terms thereof will not, (A) conflict with, (B) result in any breach of the
terms, conditions or provisions of, (C) constitute a default under or violation
of, or (D) result in or permit the creation or imposition of any Liens (other
than Liens in favor of the Collateral Agent under the Collateral Documents)
upon any of the properties or other assets of the Company pursuant to, any
material order, judgment, decree, indenture, mortgage or any other material
agreement or instrument known to me (inclusive of all agreements listed on
Schedule 8G to the Agreement) to which the Company is a party or by which any
of its properties or other assets are bound
6. The issuance, sale and delivery of the Series B Notes to you is an
exempt transaction under the Securities Act of 1933, as amended, and does not
require the registration of the Series B Notes under such Act, nor is
qualification of an indenture in respect thereof required under the Trust
Indenture Act of 1939, as amended.
7. The extension, arranging and obtaining of the credit represented by
the Notes does not result in any violation of Regulation U or X of the Board of
Governors of the Federal Reserve System.
8. To the best of my knowledge after due inquiry, there is no action,
suit, investigation or proceeding pending or threatened against any Company or
any of its Subsidiaries or any of their respective properties which could
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
9. The Company is a citizen of the United States within the meaning of
the Shipping Act, 1916, as amended, qualified to own and operate vessels in the
coastwise trade.
10. None of the Company or any of its Subsidiaries is a "public
utility" within the meaning of the Federal Power Act, as amended, or an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended, or an
"investment adviser" within the meaning of the Investment Advisers Act of 1940,
as amended. The Company and its Subsidiaries are not a "holding company" or a
"subsidiary" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, and are not regulated
thereunder.
11. The Security Agreement creates in favor of the Collateral Agent for
the benefit of the holders of the Notes a valid security interest in the
Collateral described therein to the extent that the Uniform Commercial Code, as
currently in effect in the state of New York (the "New York UCC") is applicable
thereto (the "Security Interest"). The New York UCC provides for the filing of a
financing statement (the "Financing Statement") to perfect the Security Interest
in the state of incorporation of the Company. The state of incorporation of the
Company is Hawaii.
The above opinions are subject to the following qualifications:
(i) That the opinions concerning the enforceability of
the rights and remedies provided in any document
against any particular party are subject to any
applicable bankruptcy, reorganization, insolvency,
arrangement, moratorium, fraudulent transfer, usury
or other similar laws affecting generally the
enforcement of creditors' rights from time to time in
effect;
(ii) That the opinions concerning the validity, binding
effect and enforceability of any document with
respect to any party are based on the assumption that
such document constitutes or will constitute a legal,
valid and binding agreement of the other parties
thereto;
(iii) That with respect to the opinions concerning the
enforceability of any document, no opinion is
expressed as to the specific remedy any court, other
governmental authority or arbitrator may grant,
impose or render;
(iv) That the opinions concerning the enforceability of
certain remedies authorized or contained in any
document may be limited by general principles of
equity (regardless of whether enforceability is
considered in a proceeding in equity or at law); and
(v) That the opinions concerning enforceability are
subject to the effect of court decisions and statutes
which indicate that provisions in the Agreement which
permit you to take action or make determinations may
be subject to a requirement that such actions be
taken or such determinations be made on a reasonable
basis in good faith or that it be shown that such
action is reasonably necessary for your protection.
Except as specifically provided above, this opinion speaks as of the
date hereof, and I have no responsibility to update this opinion for events of
circumstances occurring after the date hereof or as to facts relating to prior
events which are subsequently brought to my attention. I shall not have any
obligation or duty to advise you of any changes of law. I am admitted to
practice in the State of New York and, except with respect to the opinions
rendered in paragraphs 1 through 3 hereof, this opinion is limited solely to the
present law of the States of New York and the United States of America, to
present judicial interpretations thereof and to the facts as they currently
exist.
This opinion is rendered solely in connection with the transaction
described herein and, without my express permission, may not be relied upon by
any Person other than you and any Transferee.
Very truly yours,
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
EXHIBIT F-2
-----------
[FORM OF OPINION OF COMPANY'S MARITIME COUNSEL]
[▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP LETTERHEAD]
May _____, 2005
The Prudential Insurance Company of America
(Individually and as Collateral Agent)
Pruco Life Insurance Company
Four Embarcadero Center, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: ▇▇▇▇▇▇ Navigation Company, Inc.
First Preferred Ship Mortgage on the M.V. MANULANI
--------------------------------------------------
Ladies and Gentlemen:
We are rendering to you this opinion as special federal maritime
counsel for ▇▇▇▇▇▇ Navigation Company, Inc., a Hawaii corporation (the
"Shipowner"), in connection with the Amended and Restated Note Agreement between
the Shipowner and the existing holders and purchasers of promissory notes of the
Shipowner identified on the Purchaser Schedule thereto, dated May 19, 2005 (the
"Note Agreement"), and specifically the First Preferred Ship Mortgage, dated as
of May 19, 2005 (the "Mortgage") from the Shipowner to The Prudential Insurance
Company of America, as Collateral Agent for itself and certain other lenders
(the "Mortgagee") to secure the Shipowner's obligations under the Note Agreement
on the vessel M.V. ▇▇▇▇▇▇▇▇, ▇▇▇▇ No. 003, Official No. 1168529 (the "Vessel").
These opinions are given as of the date hereof. In rendering these
opinions, we have examined the following:
1. The Mortgage;
2. The Note Agreement; and
3. Such other documents, instruments and records as we have
deemed relevant or material in order to enable us to render
the opinions expressed herein.
As to certain questions of fact relevant to the opinions expressed
below, we have relied upon and have assumed, without independent investigation,
the accuracy of statements and certificates and affidavits of facts of
representatives of the Shipowner and public officials and upon the
representations and warranties made in the Note Agreement and the Mortgage
(other than those which are expressed herein as our opinions). We have made no
effort to independently verify the facts set out in the Note Agreement, the
Mortgage or documents, instruments and other records referred to in item 3
above.
In rendering the following opinions, we have assumed: (i) the
authenticity of all records, documents and instruments submitted to us as
originals; (ii) the conformity to the originals of all records, documents, and
instruments submitted to us as copies of such documents; (iii) the due
authorization, execution and delivery of the Note Agreement, the Mortgage and
the records, documents and instruments referred to in items 1 through 3 above by
parties thereto other than the Shipowner and that, except as expressly set forth
in paragraph 2 below, the Note Agreement, the Mortgage, such documents,
instruments and other records constitute legal, valid and binding obligations of
the parties thereto enforceable in accordance with their terms; (iv) the
genuineness of all signatures other than the Shipowner's; and (v) the legal
capacity of natural persons and the good faith of all persons in the
negotiations relating to the Note Agreement and the Mortgage.
Based upon the foregoing and our examination of such questions of law
as we have deemed necessary or appropriate for the purpose of these opinions,
and, subject to the assumptions, qualifications, exceptions and limitations set
forth herein, we advise you that in our opinion:
1. The Shipowner is the sole owner of the whole of the Vessel, free
and clear of any claim, lien, charge, right in rem, mortgage, security interest,
or other encumbrance of any character, except any rights of the Mortgagee under
the Mortgage, the Note Agreement and such liens of the character not prohibited
by the Note Agreement and the Mortgage as may now exist.
2. The Vessel has been duly documented in the name of the Shipowner
under the laws of the United States of America with coastwise and registry
endorsements, and the Mortgage has been duly filed, in both cases at the
National Vessel Documentation Center of the United States Coast Guard (the
"NVDC") (the only office in which such filing is necessary), and the Mortgage
constitutes a first "preferred mortgage" under Title 46, United States Code,
Chapter 313, Subchapter II, having the effect and with the priority provided in
said Code. No period re-recording or periodic refiling of the Mortgage is
necessary under existing law to continue the lien of the Mortgage.
3. The Shipowner has full power and authority under any applicable
federal statute, law or governmental regulation to enter into and carry out the
terms of the Mortgage.
4. No consent, approval, authorization, order, registration or
qualification of or with, or notice to, any governmental agency or body is
required for the execution and delivery of the Mortgage by the Shipowner or for
the performance by the Shipowner of its obligations under the Mortgage, except
such as have been duly obtained, effected, or given.
5. No federal taxes are payable in respect of the execution, delivery
and recording of the Mortgage other than the filing fees already paid in
connection with the filing and recording of the Mortgage.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations.
A. The foregoing opinions are expressly limited to matters under and
governed by the federal laws of the United States of America and we express no
opinion as to the effect on the matters covered by this opinion of the laws of
any other jurisdiction.
B. The following qualifications apply to certain specific opinions
set forth above:
(i) In giving the opinions set forth in paragraph 1 above, we
have relied, with your permission, solely upon
(a) certificates regarding liens of the Shipowner and the
Shipyard, Kvaerner Philadelphia Shipyard Inc., dated the
date hereof, and (b) certificates and copies of records of
the NVDC, copies of which are attached hereto.
(ii) To the extent our opinions in paragraph 2 above relate to
the due documentation of the Vessel in the Shipowner's
name, we have relied, with your permission, solely upon the
Vessel's Certificate of Documentation and other certificates
issued by the NVDC on the date hereof, copies of which are
attached hereto, and to the extent our opinion in said
paragraph relates to the due filing of the Mortgage
at the NVDC, we have relied, with your permission,
solely upon records of and certificates issued by the NVDC
on the date hereof.
(iii) With respect to the opinions in paragraph 3, we have relied,
with your permission, solely on a certificate of the
General Counsel of the Shipowner, dated the date hereof and
attached hereto, that the Shipowner has the full corporate
power and authority to perform all acts therein set forth,
and to permit the Mortgage to be the legal, valid and
binding obligation of the Shipowner enforceable against it
in accordance with its terms.
C. The foregoing opinions regarding the ability of the Shipowner to
carry out the terms of the Mortgage are further subject to the following:
(i) The enforceability of the Mortgage may be limited or
affected by (a) bankruptcy, insolvency, reorganization,
moratorium, liquidation, fraudulent transfer, fraudulent
conveyance, preferential transfer and other similar laws
(including court decisions) now or hereafter in effect and
affecting the rights and remedies of creditors generally or
providing for the relief of debtors.
(ii) The enforceability of the Mortgage is subject to the effect
of general principles of equity, including without
limitation concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or in law and
no opinion is expressed as to the specific remedy in an
action of an equitable nature that any court or other
governmental authority or arbitrator may grant, impose or
render.
(iii) In rendering the foregoing opinions, we express no
opinion as to provisions in the Mortgage that purport to
waive, affect or alter rights or defenses of any party
which, in each case as a matter of law or equity, may not be
waived, affected or altered.
(iv) In rendering the foregoing opinions, we express no
opinion as to provisions in the Mortgage as to the validity,
legality, enforceability or binding effect of provisions
relating to indemnities and rights of contribution to the
extent prohibited by public policy or which might require
indemnification for losses or expenses caused by gross
negligence, willful misconduct, fraud or illegality of an
indemnified party.
D. This letter constitutes a legal opinion by this Firm. In this
regard, it is based upon our professional knowledge of the law and our judgment
at this time, and is prepared and rendered in accordance with the standard of
care applicable to opinions issued by law firms and/or lawyers in the State of
California.
The opinions expressed herein are solely for the benefit of, and may
only be relied upon by you and your successors and assigns. This opinion may not
be furnished to (except in connection with any legal or arbitral proceedings or
as may be required by applicable law, and in any such events as shall be
directed or required incident thereto pursuant to a duly issued subpoena, writ,
order or other legal process, or to any regulatory body having jurisdiction over
you, including the National Association of Insurance Commissioners), or relied
upon by any other person without the prior written consent of this Firm. The
opinions expressed herein are as of the date hereof and we make no undertaking
to amend or supplement such opinions as facts and circumstances come to our
attention or changes in the law occur which could affect such opinions.
Very truly yours,
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
CERTIFICATE OF GENERAL COUNSEL
------------------------------
I, ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Senior Vice President and General Counsel, of
▇▇▇▇▇▇ NAVIGATION COMPANY, INC., a Hawaii corporation (the "Shipowner"), do
hereby certify that, to the best of my knowledge, each of the representations
and warranties set forth below is true.
1. The Shipowner is a corporation duly organized, validly existing and
in good standing under the laws of the State of Hawaii, has not failed to
qualify to do business in any jurisdiction in which its business or properties
require such qualification, and had and has full legal rights, corporate power
and authority to own its own properties and assets and to conduct its business
as it is presently conducted. The executive office of the Shipowner is located
in Oakland, California.
2. The Shipowner had and has legal power and authority to enter into
and carry out the terms of the First Preferred Ship Mortgage, dated as of the
Delivery Date (the "Document").
3. The Document has been duly authorized, executed and delivered by the
Shipowner and constitutes, in accordance with its respective terms, a legal,
valid and binding instrument enforceable against the Shipowner in accordance
with its terms, except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws of general application
relating to or affecting the enforcement of creditors' rights as from time to
time in effect.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, I have set my hand to this Certificate of
Shipowner on this _____ day of May, 2005.
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.,
Shipowner
By: ___________________________________
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Senior Vice President &
General Counsel
EXHIBIT F-3
-----------
[FORM OF OPINION OF COMPANY'S SPECIAL HAWAIIAN COUNSEL]
May __, 2003
Each Purchaser and Existing Holder
as defined in the Agreement (as defined below)
c/o Prudential Capital Group
Four Embarcadero Center
Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: ▇▇▇▇▇▇ Navigation Company, Inc.
Amended and Restated Note Agreement dated as of May 19, 2005
------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special Hawaii counsel for ▇▇▇▇▇▇ Navigation Company,
Inc., a Hawaii corporation (the "Company"), in connection with the Amended and
Restated Note Agreement, dated as of even date herewith, between the Company, on
the one hand, and you, on the other hand (the "Agreement"), pursuant to which
the Company has issued to you today its amended and restated Series A Notes in
the aggregate principal amount of $15,000,000 and its Series B Notes in the
aggregate principal amount of $105,000,000 (collectively, the "Notes") and you
and the Company are agreeing to amend and restate the Existing Agreement. All
capitalized terms used herein that are defined in the Agreement shall have,
unless otherwise defined herein, the respective meanings specified in the
Agreement. This letter is being delivered to you at the request of the Company
under paragraph 5C(1) of the Agreement and with the understanding that you are
relying on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of documents and records of the Company, and have made such other
investigations, as we have deemed relevant and necessary as a basis for my
opinion hereinafter set forth. We have relied upon such certificates of public
officials, of officers of the Company and of representatives of the title
company with respect to the accuracy of material factual matters contained
therein which we have not independently established.
In rendering these opinions we have examined the following, each of
which is dated as of May 19, 2005, unless another date is indicated
(collectively, the "Transaction Documents"):
1. the Agreement;
2. the Mortgage to be filed with the United States Coast Guard at
the National Vessel Documentation Center in Falling Waters,
West Virginia;
3. the Security Agreement (the "Security Agreement") between the
Company and The Prudential Insurance Company of America,
acting in its capacity as collateral agent (the "Collateral
Agent"); and
4. the Uniform Commercial Code financing statement (the
"Financing Statement"), authorized by the Company in favor of
the Collateral Agent, to be filed in the Bureau of Conveyances
of the State of Hawaii (the "Bureau").
In connection with this opinion letter, we have reviewed the
Transaction Documents delivered to us. Furthermore, we have assumed, without
independent investigation or verification, the accuracy of all factual
representations and warranties (other than those which are expressed herein as
our opinions) set forth in the Transaction Documents and in any certificates
delivered pursuant thereto or which have been delivered to us. In our capacity
as special counsel, our role has been limited to the review of the Financing
Statement and certain provisions of the Transaction Documents and we have not
otherwise participated in the overall transaction of which such documents form a
part (the "Transaction").
For purposes of this opinion letter, we have assumed, without
independent investigation or inquiry:
(a) all natural persons who are involved in the Transaction have
sufficient legal capacity to enter into and perform the Transaction or to carry
out their role in it;
(b) each party to the Transaction holds the requisite title and rights
to any property involved in the Transaction;
(c) each party to the Transaction has satisfied those legal
requirements that are applicable to it to the extent necessary to make the
Transaction Documents enforceable against it and, except for the Financing
Statement with respect to the Company, each of the Transaction Documents is
enforceable against all of the parties thereto;
(d) each party to the Transaction has complied with all legal
requirements pertaining to its status as such status relates to its rights to
enforce the Transaction Documents against the other parties thereto;
(e) each document submitted to us for review is accurate and complete,
each such document that is an original is authentic, each such document that is
a copy conforms to an authentic original, and all signatures on each such
document are genuine;
(f) all Persons relying on this opinion letter and their agents acting
for them in connection with the Transaction have acted in good faith and without
notice of any defense against the enforcement of any rights created by, or
adverse claim to any property or security interest transferred or created as
part of, the Transaction;
(g) the Mortgage has been or will be duly filed and/or recorded in all
places necessary (if and to the extent necessary) to create the lien as provided
--
therein;
(h) the description of the collateral in the Mortgage and the Security
Agreement is accurate and is sufficient under applicable law (1) to provide
notice to third parties of the liens and security interests provided thereby and
(2) to create an effective contractual obligation under applicable law; and
(i) the execution and delivery by each party to each of the Transaction
Documents, consummation of the Transactions and compliance by such party with
the provisions of each of the Transaction Documents does not and will not (1)
violate applicable provisions of statutory law or regulation or (2) breach or
otherwise violate any existing obligation of such party under any court or
administrative orders, writs, judgments or decrees.
For purposes of this opinion letter, the term "Hawaii UCC" means the
Uniform Commercial Code as enacted in the State of Hawaii, Chapter 490 of the
Hawaii Revised Statutes, as amended.
Based upon the foregoing, and subject to the limitations,
qualifications, assumptions and exceptions set forth herein, we are of the
opinion that:
The Financing Statement is in proper form for filing in the Bureau. The
Financing Statement has been duly filed in the Bureau under the Hawaii UCC.
Subject to the application of Chapter 313 of Title 46 United States Code with
respect to any portion of the collateral described in the Financing Statement
which is covered by such Chapter, such filing is sufficient to perfect the
security interest in favor of the Collateral Agent created by the Security
Agreement in all right, title and interest of the Company in those items and
types of collateral described in the Security Agreement in which a security
interest may be perfected by the filing of a financing statement in the State of
Hawaii under the Hawaii UCC (the "Hawaii Collateral"). No filing or recording,
other than the filing of the Financing Statement in the Bureau, is necessary for
the perfection of such security interest to the extent the filing of a financing
statement in the State of Hawaii under the Hawaii UCC is effective to perfect
such security interest.
We express no opinion as to the existence of, or as to the title of the
Company to, any item of Hawaii Collateral referred to above or as to the
priority or (except as set forth above) the perfection of any security interest
referred to above. We call you attention to the fact that:
(a) the effectiveness of the Financing Statement terminates five years
after the date of filing unless a continuation statement is filed prior to such
termination in accordance with section 490:9-515 of the Hawaii UCC;
(b) section 490:9-507 of the Hawaii UCC provides that, if the Company
so changes its name that a filed financing statement becomes seriously
misleading, the filing is not effective to perfect a security interest in
collateral acquired by the Company more than four months after the change
unless a new appropriate financing statement is filed before the expiration of
that period;
(c) if certain tangible collateral is transferred to a person located
in a state in which a financing statement has not been filed or if the Company's
location changes to a state in which a financing statement has not been filed,
section 490:9-306 of the Hawaii UCC requires that a new appropriate financing
statement be filed in such new state within twelve months after such transfer
or four months after such change to continue perfection of the security
interest;
(d) under certain circumstances described in section 490:9-315 of the
Hawaii UCC, the rights of a secured party to enforce a perfected security
interest in proceeds of collateral may be limited;
(e) under certain circumstances described in part 3, subpart 3 of
Article 9 of the Hawaii UCC, purchasers of collateral may take the same free of
a perfected security interest;
(f) section 490:9-311 of the Hawaii UCC exempts from the filing
provisions of the Hawaii UCC transactions as to which a system of filing--state
or federal--has been established under federal law and makes clear that when
such a system exists, perfection of a relevant security interest can be
achieved only through compliance with that system (i.e., filing under the
----
Article 9 of the Hawaii UCC is not a permissible alternative); and
The opinions expressed herein are subject to the following exceptions,
limitations, qualifications and assumptions:
a. We express no opinion herein with respect to compliance with
any anti-fraud provisions of applicable federal or state
securities laws, rules or regulations.
b. Our opinions set forth herein are subject to, and may be
limited by (i) bankruptcy, insolvency, reorganization,
liquidation, fraudulent conveyance, fraudulent transfer,
preference, conservatorship, rearrangement, moratorium and
other similar laws (including court decisions) in effect and
affecting the rights and remedies of creditors generally or
providing for relief of debtors, (ii) the refusal of a
particular court (A) to grant equitable remedies, including,
without limiting the generality of the foregoing, specific
performance, or (B) to grant a particular remedy sought under
the Transaction Documents as opposed to another remedy
provided for therein or another remedy available at law or in
equity, (iii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law), (iv) judicial discretion, and
(v) obligations and standards of good faith, fair dealing,
materiality, impracticability or impossibility of performance,
unconscionability, diligence, reasonableness and care
established by applicable law, including without limitation
(1) such obligations and standards as arise pursuant to
sections 490:1-102(3), 490:1-203 and 490:1-208 of the Hawaii
UCC, and (2) concepts of the course of dealings between the
parties, the applicable usage of trade and similar provisions
of common law and judicial decisions.
c. The opinions expressed herein are limited to the laws of the
State of Hawaii, and we express no opinion with respect to
the applicability thereto, or the effect thereon, of the laws
of any other jurisdiction (including federal laws of the
United States of America). We note that certain of the
Transaction Documents purport to be governed by the laws of
jurisdictions other than the State of Hawaii. We render no
opinion as to the effect of such choice of law provisions
or as to the laws of any other jurisdiction to the extent
that they may apply to such documents or the opinions
stated herein with respect to the Transaction Documents and
the transactions contemplated thereby.
This opinion letter speaks as of the date hereof, and we have no
responsibility to update this opinion letter for events of circumstances
occurring after the date hereof or as to facts relating to prior events which
are subsequently brought to our attention. We shall not have any obligation or
duty to advise you of any changes of law. We are admitted to practice in the
State of Hawaii and this opinion is limited solely to the present law of the
State of Hawaii, to present judicial interpretations thereof and to the facts as
they currently exist.
A copy of this opinion letter may be delivered by you to subsequent
purchasers in connection with the purchase and sale of any of the Notes, and
such Persons may rely on this opinion letter as if it were addressed and had
been delivered to them on the date hereof. The General Counsel of the Company
may also rely on this opinion letter in connection with the rendering of legal
opinions to you as if this opinion letter were addressed to and had been
delivered to such General Counsel on the date hereof. Subject to the foregoing,
the opinions expressed in this opinion letter are solely for your use in
connection with the transactions described in and for the purposes contemplated
by the Transaction Documents. Without our prior written consent, this opinion
letter may not be used or relied upon by you for any other purpose whatsoever,
except for the use of this opinion letter (a) in connection with review of the
transactions described in the Transaction Documents by a regulatory agency
having supervisory authority over you (including the National Association of
Insurance Commissioners) for the purpose of confirming the existence of this
opinion letter, (b) in connection with the assertion of a defense as to which
this opinion letter is relevant and necessary, or (c) in response to a court
order.
Very truly yours,
1
Schedule 8G
None.
Schedule 8K
None.
Schedule 8O
Jurisdiction of Incorporation:
Hawaii
Location of Chief Executive Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Organization Number:
Not available in Hawaii