Private & Confidential
DATED 21 DECEMBER 2005
----------
US$649,000,000
FACILITIES AGREEMENT
FOR
NAVIOS MARITIME HOLDINGS INC.
ARRANGED BY
HSH NORDBANK AG
AS MANDATED LEAD ARRANGER
WITH
HSH NORDBANK AG
ACTING AS AGENT
AND
HSH NORDBANK AG
ACTING AS SECURITY AGENT
[▇▇▇▇▇▇ ▇▇▇▇ LOGO]
CONTENTS
CLAUSE PAGE
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1 Definitions and Interpretation...................................... 1
SECTION 2 : THE FACILITIES............................................... 40
2 The Facilities...................................................... 40
3 Purpose............................................................. 41
4 Conditions of Utilisation........................................... 41
SECTION 3 : UTILILSATION................................................. 43
5 Utilisation......................................................... 43
SECTION 4 : REPAYMENT, PREPAYMENT AND CANCELLATION....................... 46
6 Repayment........................................................... 46
7 Illegality, Voluntary Prepayment and Cancellation................... 52
8 Mandatory Prepayment................................................ 53
9 Restrictions........................................................ 63
SECTION 5 : COSTS OF UTILISATION......................................... 65
10 Interest............................................................ 65
11 Interest Periods.................................................... 66
12 Changes to the Calculation of Interest.............................. 67
13 Fees................................................................ 68
SECTION 6 : ADDITIONAL PAYMENT OBLIGATIONS............................... 69
14 Tax Gross Up and Indemnities........................................ 69
15 Increased Costs..................................................... 71
16 Other Indemnities................................................... 72
17 Mitigation by the Finance Parties................................... 73
18 Costs and Expenses.................................................. 74
SECTION 7 : ACCOUNTS..................................................... 75
19 Accounts............................................................ 75
SECTION 8 : REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT.......... 78
20 Representations..................................................... 78
21 Information Undertakings............................................ 87
22 Financial Covenants................................................. 93
23 General Undertakings................................................ 98
24 Events of Default................................................... 115
SECTION 9 : CHANGES TO THE PARTIES....................................... 121
25 Changes to the Lenders.............................................. 121
26 Matters concerning the Obligors..................................... 125
SECTION 10 : THE FINANCE PARTIES......................................... 128
27 Role of the Agent, the Arranger and others.......................... 128
28 Conduct of Business by the Finance Parties.......................... 137
29 Sharing Among the Finance Parties................................... 138
SECTION 11 : ADMINISTRATION.............................................. 140
30 Payment Mechanics................................................... 140
31 Set-off............................................................. 142
32 Notices............................................................. 142
33 Calculations and Certificates....................................... 144
34 Partial Invalidity.................................................. 144
35 Remedies and Waivers................................................ 144
36 Amendments and Waivers.............................................. 145
37 Counterparts........................................................ 146
38 Publicity........................................................... 146
39 Patriot Act Notice.................................................. 146
SECTION 12 : GOVERNING LAW AND ENFORCEMENT............................... 147
40 Governing Law....................................................... 147
41 Jurisdiction........................................................ 147
42 Service of process.................................................. 147
Schedule 1 The Original Parties.......................................... 148
Schedule 2 The Ships..................................................... 153
Schedule 3 Conditions Precedent.......................................... 155
Schedule 4 Requests...................................................... 172
Schedule 5 Mandatory Cost Formula........................................ 174
Schedule 6 Form of Transfer Certificate.................................. 176
Schedule 7 Form of Resignation Letter.................................... 178
Schedule 8 Form of Compliance Certificate................................ 179
Schedule 9 LMA Form of Confidentiality Undertaking....................... 180
Schedule 10 Timetables................................................... 183
Schedule 11 The Group including the Target Group......................... 184
Schedule 12 Form of Hedge Counterparty Accession Letter.................. 185
Schedule 13 Form of Trust Deed........................................... 186
THIS AGREEMENT is dated 21 December 2005 and made between:
(1) NAVIOS MARITIME HOLDINGS INC. as the Borrower;
(2) HSH NORDBANK AG as mandated lead arranger (the "ARRANGER");
(3) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The Original
Parties) as lenders (the "ORIGINAL LENDERS");
(4) HSH NORDBANK AG as agent of the other Finance Parties (the "AGENT");
(5) HSH NORDBANK AG as Security Agent for the Secured Parties (the "SECURITY
AGENT"); and
(6) HSH NORDBANK AG as the original hedge counterparty (the "ORIGINAL HEDGE
COUNTERPARTY").
IT IS AGREED as follows:
SECTION 1: INTERPRETATION
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCEPTABLE BANK" means:
(a) a bank or financial institution which has a rating for its long-term
unsecured and non credit-enhanced debt obligations of A or higher by
Standard & Poor's Rating Services or Fitch Ratings Ltd or A2 or higher
by ▇▇▇▇▇'▇ Investor Services Limited or a comparable rating from an
internationally recognised credit rating agency; or
(b) any other bank or financial institution approved by the Agent.
"ACCOUNT LETTERS OF UNDERTAKING" means, together, certain letters of
undertaking executed or (as the context may require) to be executed by
certain members of the Group in respect of (a) certain Permitted Existing
Accounts held by such members of the Group with HSBC Bank in Greece and (b)
the CNSA Account held with Banco de la Republica Oriental del Uruguay in
Uruguay and "ACCOUNT LETTER OF UNDERTAKING" means any of them.
"ACCOUNT PLEDGES" means, together, the CNSA Account Pledges, the HSH
Hamburg Account Pledge, the Wachovia Deposit Account Security Agreement,
the HSH London Account Charge, the Greek Account Pledges and any other
Security over the Permitted Existing Accounts and "ACCOUNT PLEDGE" means
any of them.
"ACCOUNTANTS' REPORT" means the report by Ernst & Young dated 28 February
2005 relating to the Target and its Subsidiaries prior to the Completion.
"ACCOUNTING PRINCIPLES" means:
(a) US GAAP as adopted in the Original Financial Statements delivered
pursuant to Part I of Schedule 3 (Conditions Precedent); or
(b) where any change in (a) has been agreed under clause 21.3.2(c)
(Requirements as to Financial Statements) such accounting principles,
standards, practices and bases as have been so agreed.
"ACCOUNTING REFERENCE DATE" means 31 December.
"ACCOUNTS" means the HSH Accounts, the CNSA Accounts, the Wachovia Accounts
and the Permitted Existing Accounts.
1
"ACQUISITION" means the acquisition by the Borrower of the Target Shares on
the terms of the Acquisition Documents.
"ACQUISITION AGREEMENT" means the stock purchase agreement dated 28
February 2005 relating to the sale and purchase of the Target Shares and
made between the Target, the Vendors, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ as the
Vendor's agent and ISE.
"ACQUISITION COSTS" means all fees, costs and expenses, stamp, registration
and other Taxes incurred by ISE or any other member of the Group in
connection with the Acquisition or the Transaction Documents.
"ACQUISITION DOCUMENTS" means the Acquisition Agreement and any other
document designated as an "ACQUISITION DOCUMENT" by the Agent and the
Borrower.
"ACT" means the Companies ▇▇▇ ▇▇▇▇, as amended.
"ADDITIONAL COLLATERAL OWNER" means each member of the Group which is or is
to become (pursuant to the relevant Purchase Option MOA or (as the case may
be) the relevant MOA) the registered owner of an Additional Collateral Ship
and "ADDITIONAL COLLATERAL OWNERS" means any or all of them.
"ADDITIONAL COLLATERAL SHIP" means:
(a) each of the motor vessels listed in rows 7, 10, 11, 13, 14 and 15 of
Schedule 2 (The Ships) (being, on the date of this Agreement,
Chartered Ships); and
(b) each of the motor vessels listed in rows 27 to 30 (inclusive) of
Schedule 2 (The Ships) (being the MOA Ships),
each indicated as a vessel to be purchased by the member of the Group
specified opposite such Additional Collateral Ship and, in relation to a
Facility (and the Facility Loan or Facility Loans relating to such
Facility), it means the Additional Collateral Ship opposite the name of
which that Facility is specified in the relevant column of Schedule 2 (The
Ships), and "ADDITIONAL COLLATERAL SHIPS" means any or all of them.
"ADDITIONAL COST RATE" has the meaning given to it in Schedule 5 (Mandatory
Cost Formula).
"ADDITIONAL SECURITY PROVIDER" means a company which becomes a Security
Provider in accordance with clause 23.32 (Security Providers) or clause
26.2 (Additional Security Providers).
"AFFILIATE" means in relation to any person, (a) any person which Controls
such first person or which is under common Control with such first person
or (b) any person who is a director or officer (i) of such first person, or
(ii) of any person described in (a) above, where, for the purposes of this
definition the reference in the definition of "Control" to 50 per cent.
shall be deemed to be 25 per cent..
"AGENCY AGREEMENT" means, in relation to each Charter Company (other than
Hestia Shipping Ltd.), the agency agreement entered into or (as the context
may require) to be entered into between the relevant Charter Company and
the Security Agent and "AGENCY AGREEMENTS" means any or all of them.
"ANEMOS GUARANTEE" means the guarantee, in the agreed form, executed or (as
the context may require) to be executed by Anemos Maritime Holdings Inc. in
favour of the Security Agent.
"ANNUAL FINANCIAL STATEMENTS" has the meaning given to it in clause 21
(Information Undertakings).
"APPROVED BROKER" means each of Arrow Research Ltd. of London, England,
Astrup Fearnley A/S of Oslo, Norway, H Clarkson & Company Ltd. of London,
England, Maersk Broker K/S of Copenhagen, Denmark, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Young Ltd. of London, England and any other ship brokers nominated by the
Agent from time to time and includes their respective successors in title
and "APPROVED BROKERS" means any or all of them.
"ASSIGNMENT OF TERMINAL INSURANCES" means each assignment, in the agreed
form, executed or (as the context may require) to be executed by any of
Navios Corporation or any other member of the
2
Group in favour of the Security Agent in respect of its rights under
certain of the insurances over the Terminal and "ASSIGNMENTS OF TERMINAL
INSURANCES" means any or all of them.
"AUDITORS" means the auditors for the time being of the Group being
PricewaterhouseCoopers or such other firm approved in advance by the Agent
(such approval not to be unreasonably withheld or delayed).
"AUTHORISATION" means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
"AVAILABILITY PERIOD" means, in relation to each Facility, the period from
and including the date of this Agreement to and including:
(a) in respect of any of Facility A, Facility B1, Facility B2, Facility
B3, Facility C1, Facility C2, Facility D1, Facility D2, Facility D3
and Facility D4, 31 January 2006; or
(b) in respect of either of Facility C3 and Facility C4, 28 February 2006;
or
(c) in respect of either of Facility C5 and Facility C6, 30 April 2006,
or, in each such case, such longer period as the Lenders may in their sole
discretion determine.
"AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
Commitment under that Facility minus:
(a) the amount of its participation in any outstanding Loans under that
Facility; and
(b) in relation to any proposed Loan, the amount of its participation in
any other Loans that are due to be made under that Facility on or
before the Utilisation Date for that proposed Loan.
"AVAILABLE FACILITY" means, in relation to a Facility, the aggregate for
the time being of each Lender's Available Commitment in respect of that
Facility.
"BASE CASE MODEL" means the financial model including profit and loss,
balance sheet and cashflow projections in agreed form relating to the
Group.
"BORROWER" means Navios Maritime Holdings Inc., a corporation incorporated
in the ▇▇▇▇▇▇▇▇ Islands.
"BORROWINGS" has the meaning given to that term in clause 22.1 (Financial
definitions).
"BREAK COSTS" means the amount (if any) by which:
(a) the interest which a Lender should have received for the period from
the date of receipt of all or any part of its participation in a Loan
or Unpaid Sum to the last day of the current Interest Period in
respect of that Loan or Unpaid Sum, had the principal amount or Unpaid
Sum received been paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by placing an
amount equal to the principal amount or Unpaid Sum received by it on
deposit with a leading bank in the Relevant Interbank Market for a
period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.
"BUDGET" means, in relation to any period, any budget delivered by the
Borrower to the Agent in respect of that period pursuant to clause 21.4
(Budget), prepared in accordance with the terms of clause 21.4.3 (Budget).
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
are open for general business in Athens, Hamburg, London and New York City
and in such other relevant locations as the Agent may notify to the
Borrower.
3
"BUSINESS PLAN" means the business plan setting out the strategy and future
expectations and intentions for the Borrower and the Group, in the agreed
form, prepared by the Borrower.
"CAPITAL EXPENDITURE" has the meaning given to that term in clause 22.1
(Financial definitions).
"CASH EQUIVALENT INVESTMENTS" means at any time:
(a) certificates of deposit maturing within one year after the relevant
date of calculation and issued by an Acceptable Bank;
(b) any investment in marketable debt obligations issued or guaranteed by
the government of the United States, the United Kingdom, any member
state of the European Economic Area or any Participating Member State
or by an instrumentality or agency of any of them having an equivalent
credit rating, maturing within one year after the relevant date of
calculation and not convertible or exchangeable to any other security;
(c) commercial paper not convertible or exchangeable to any other
security:
(i) for which a recognised trading market exists;
(ii) issued by an issuer incorporated in the United States, the United
Kingdom, any member of the European Economic Area or any
Participating Member State;
(iii) which matures within one year after the relevant date of
calculation; and
(iv) which has a credit rating of either A-1 or higher by Standard &
Poor's Rating Services or Fitch Ratings Ltd or P-1 or higher by
▇▇▇▇▇'▇ Investor Services Limited, or, if no rating is available
in respect of the commercial paper, the issuer of which has, in
respect of its long-term unsecured and non-credit enhanced debt
obligations, an equivalent rating;
(d) any investment accessible within 30 days in money market funds which
have a credit rating of either A-1 or higher by Standard & Poor's
Rating Services or Fitch Rating Ltd or P-1 or higher by ▇▇▇▇▇'▇
Investor Services Limited and which invest substantially all their
assets in securities of the types described in sub-paragraphs (a) to
(c) above; or
(e) any other debt security approved by the Agent,
in each case, to which any member of the Group is beneficially entitled at
that time and which is not issued or guaranteed by any member of the Group
or subject to any Security (other than one arising under the Transaction
Security Documents).
"CHARGED PROPERTY" means all of the assets of the Obligors which from time
to time are, or are expressed to be, the subject of the Transaction
Security.
"CHARTER" means each of the time charter contracts identified in schedule
3.16 to the Acquisition Agreement and any other time charter in existence
at the date of this Agreement, each having a term which exceeds or by
virtue of any optional extension therein contained may exceed 11 months
from the Closing Date or from the first Utilisation Date, and any other
time charter or bareboat charter contract entered into after the date of
this Agreement having a term which exceeds or which by virtue of any
optional extension therein contained may exceed 11 months and which is
entered into by a member of the Group (whether as a charterer,
sub-charterer or owner) and "CHARTERS" means any or all of them.
"CHARTER COMPANIES" means Navios Corporation, Navimax Corporation, Navios
Handybulk Inc., Navios International Inc. and Hestia Shipping Ltd. and
"CHARTER COMPANY" means any of them.
"CHARTER EARNINGS" means, in relation to a Chartered Ship, all moneys
whatsoever from time to time due and payable to the relevant Obligor
arising out of the chartering or other employment or utilisation of such
Chartered Ship including any pool earnings and any damages for breach (or
payments for variation or termination) of any charterparty or other
contract for the employment of such Chartered Ship.
4
"CHARTERED SHIP" means each of the motor vessels listed in Schedule 2 (The
Ships) indicated as a chartered ship in the relevant column opposite such
Chartered Ship's name and any other motor vessel taken on charter (whether
on time, voyage, trip, bareboat or other basis), by any member of the Group
as charterer from time to time, in each case for so long as such motor
vessel is not an Owned Ship, and "CHARTERED SHIPS" means any or all of
them.
"CHARTERS AND COAS REPORT" means, collectively, the reports in the agreed
form prepared by ▇▇▇▇▇▇, Fenwick & Willan dated 5 July 2005 and 20 December
2005 and by ▇▇▇▇▇ and ▇▇▇▇▇▇▇ dated 21 February 2005, 16 March 2005 and 19
December 2005, all of which are addressed to, and/or capable of being
relied upon by, the Arranger and the other Secured Parties.
"CLASSIFICATION" means, in relation to each Owned Ship, the highest class
available to a vessel of such Ship's type with the Classification Society
of such Ship whether for the purposes of the relevant Transaction Security
Documents (if any) or otherwise.
"CLASSIFICATION SOCIETY" means Lloyds Register of Shipping or such other
classification society being a member of the International Association of
Classification Societies (or any successor organisation) which the Agent
shall, at the request of a member of the Group, have agreed in writing
shall be treated as the Classification Society in relation to the Ship
owned by such member whether for the purposes of the relevant Transaction
Security Documents (if any) or otherwise.
"CLOSING DATE" means 25 August 2005, being the date on which Completion
occurred.
"CNSA" means Corporacion Navios Sociedad Anonima of ▇▇▇▇ ▇▇▇▇▇▇ Nueva
▇▇▇▇▇▇▇, Parana s/n, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇.
"CNSA ACCOUNT" means each of:
(a) the dollar account in the name of CNSA held with Banco de la Republica
Oriental del Uruguay in Uruguay;
(b) the peso account in the name of CNSA held with Citibank in Uruguay;
(c) the peso account in the name of CNSA held with C.O.F.A.C. in Uruguay;
and
(d) the dollar account in the name of CNSA held with the Agent in London,
or such other account or accounts as the Security Agent may agree and "CNSA
ACCOUNTS" means any or all of them.
"CNSA ACCOUNT PLEDGE" means, in respect of each of the CNSA Accounts held
with Citibank and ▇.▇.▇.▇.▇.▇▇ Uruguay, the first priority account pledge,
in the agreed form, executed or (as the context may require) to be executed
by CNSA in favour of the Security Agent in respect of such CNSA Account and
"CNSA ACCOUNT PLEDGES" means any or all of them.
"CNSA ASSETS" means all of CNSA's assets (including the Terminal and any
plant, buildings, machinery, tools, moveables, lease rights, Intellectual
Property, insurance proceeds and any other rights) wherever situated.
"CNSA ASSIGNMENT OF EARNINGS" means the assignment, in the agreed form,
executed or (as the context may require) to be executed by CNSA in favour
of the Security Agent in respect of its rights under certain of the
Terminal Earnings.
"CNSA ASSIGNMENT OF INSURANCES" means the assignment, in the agreed form,
executed or (as the context may require) to be executed by CNSA and/or any
other relevant member of the Group in favour of the Security Agent in
respect of its rights under certain of the insurances over the Terminal.
"CNSA GUARANTEE" means the guarantee, in the agreed form, executed or (as
the context may require) to be executed by CNSA in favour of the Security
Agent.
"CNSA QUARTERLY REPORT" means a report in the agreed form detailing the
performance and operation of CNSA in the period to which such report
relates.
5
"CNSA SHARE PLEDGE" means the first priority share pledge, in the agreed
form, executed or (as the context may require) to be executed by Navios
Corporation and CNSA in favour of the Security Agent in respect of Navios
Corporation's shares in CNSA.
"CODE" means the U.S. Internal Revenue Code of 1986, as amended.
"COLLATERAL GUARANTEE" means, in relation to each Collateral Ship and its
Collateral Owner, the corporate guarantee executed or (as the context may
require) to be executed by the relevant Collateral Owner in favour of the
Security Agent or (as the case may be) the Secured Parties and "COLLATERAL
GUARANTEES" means any or all of them.
"COLLATERAL OWNER" means each Existing Collateral Owner, each Additional
Collateral Owner and any other registered owner of a Collateral Ship.
"COLLATERAL SHIP" means each Existing Collateral Ship, each Additional
Collateral Ship (but only following the Utilisation Date of the Facility
relating to such Additional Collateral Ship) and each other Owned Ship
which is or is to be pursuant to the terms of this Agreement, subject to a
Security in favour of the Security Agent or, as the case may be, the
Secured Parties as security for the repayment of moneys owing under the
Finance Documents and "COLLATERAL SHIPS" means any or all of them.
"COLLATERAL SHIP CHARTER ASSIGNMENT" means, in relation to a Collateral
Ship, the specific assignment of a charterparty of such Collateral Ship, in
the agreed form, executed or (as the context may require) to be executed by
the relevant Collateral Owner in favour of the Security Agent and
"COLLATERAL SHIP CHARTER ASSIGNMENTS" means any or all of them.
"COLLATERAL SHIP INSURANCE PROCEEDS" has the meaning given to it in clause
8.1 (Total Loss/ Sale).
"COMMITMENT" means a Facility A Commitment or a Facility B1 Commitment or a
Facility B2 Commitment or a Facility B3 Commitment or a Facility C1
Commitment or a Facility C2 Commitment or a Facility C3 Commitment or a
Facility C4 Commitment or a Facility C5 Commitment or a Facility C6
Commitment or a Facility D1 Commitment or a Facility D2 Commitment or a
Facility D3 Commitment or a Facility D4 Commitment (as the context may
require).
"COMPLETION" means the completion of the Acquisition in accordance with
section 9 of the Acquisition Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form set
out in Schedule 8 (Form of Compliance Certificate).
"COMPULSORY ACQUISITION" means requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation,
forfeiture or confiscation for any reason of a Ship or the Terminal by any
Government Entity or other competent authority, whether de jure or de
facto, but shall exclude requisition for use of hire not involving
requisition of title.
"CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking
substantially in a recommended form of the LMA as set out in Schedule 9
(LMA Form of Confidentiality Undertaking) or in any other form agreed
between the Borrower and the Agent.
"CONFIRMATION" means the deed of confirmation from the Borrower
substantially in the form set out in Part VI of Schedule 3 (Form of Deed of
Confirmation in relation to ISE-Navios Merger).
"CONSTITUTIONAL DOCUMENTS" means in respect of a person (other than a
natural person), such person's memorandum and articles of association,
articles of incorporation, certificate of incorporation, by-laws, extracts
from public registers, company statute or other organisational or
constitutive instruments or governance rules, including those relating to
an Obligor delivered pursuant to Schedule 3 (Conditions Precedent).
"CONTRACT OF AFFREIGHTMENT" means each of the contracts of affreightment
listed in schedule 3.16 to the Acquisition Agreement and any other
contracts of affreightment in existence at the date of this Agreement, each
having a term which exceeds or by virtue of any optional extension therein
contained may exceed 11 months from the Closing Date or the first
Utilisation Date, and any other contract of affreightment entered into
after the date of this Agreement having a term which exceeds or by virtue
of
6
any optional extension therein contained may exceed 11 months and which is
entered into by any member of the Group from time to time and "CONTRACTS OF
AFFREIGHTMENT" means any or all of them.
"CONTROL" means in relation to a body corporate:
(a) the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise) to:
(i) cast, or control the casting of, more than 50 per cent. of the
maximum number of votes that might be cast at a general meeting
of such body corporate; or
(ii) appoint or remove all, or the majority, of the directors or other
equivalent officers of such body corporate; or
(iii) give directions with respect to the operating and financial
policies of such body corporate with which the directors or other
equivalent officers of such body corporate are obliged to comply;
and/or
(b) the holding beneficially of more than 50 per cent. of the issued share
capital of such body corporate (excluding any part of that issued
share capital that carries no right to participate beyond a specified
amount in a distribution of either profits or capital),
and "CONTROLLED" shall be construed accordingly.
"CORE ACTIVITIES" means the operation of an international maritime business
focusing on:
(a) the transportation and handling of bulk dry cargoes through the
ownership, operation and chartering of vessels and the trading of
freight derivatives; and
(b) the right to the operation of the port and transfer station at the
Nueva ▇▇▇▇▇▇▇ Free Trade Zone.
"DEBT COVER" has the meaning given to that term in clause 22.1 (Financial
definitions).
"DEBT SERVICE" has the meaning given to that term in clause 22.1 (Financial
definitions).
"DEFAULT" means an Event of Default or any event or circumstance specified
in clause 24 (Events of Default) which would (with the expiry of a grace
period, the giving of notice, the making of any determination under the
Finance Documents or any combination of any of the foregoing) be an Event
of Default.
"DELEGATE" means any delegate, agent, attorney or co-trustee appointed by
the Security Agent.
"DNB OPERATING ACCOUNT" means the Navimax Corporation DnB Operating
Account, the Navios Handybulk DnB Operating Account, the Navios
International DnB Operating Account and the Navios Corporation DnB
Operating Account and "DNB OPERATING ACCOUNTS" means any or all of them.
"DOC" means a document of compliance issued to an owner of a Ship in
accordance with rule 13 of the ISM Code.
"DOLLARS" and "US$" means the lawful currency for the time being of the
United States of America.
"DORMANT SUBSIDIARY" means a member of the Group which does not trade (for
itself or as agent for any person) and does not own, legally or
beneficially, assets (including indebtedness owed to it) which in aggregate
have a value of $100,000 or more or its equivalent in other currencies.
"EARNINGS" means, in relation to an Owned Ship, all moneys whatsoever from
time to time due and payable to the relevant member of the Group arising
out of the use or operation of such Owned Ship including all freight, hire
and passage moneys, income arising under pooling arrangements, compensation
payable to such member in the event of requisition of such Owned Ship for
hire, remuneration for salvage and towage services, demurrage and detention
moneys, and damages for breach (or payments for variation or termination)
of any charterparty or other contract for the employment of such Owned
Ship.
7
"EBITDA" has the meaning given to that term in clause 22.1 (Financial
definitions).
"ENVIRONMENTAL CLAIM" means:
(a) any and all enforcement, clean-up, removal or other governmental or
regulatory action or order or claim instituted or made pursuant to any
Environmental Law or resulting from a Spill; or
(b) any claim made by any other person relating to a Spill.
"ENVIRONMENTAL INCIDENT" means any Spill:
(a) from any Relevant Vessel; or
(b) from any other vessel in circumstances where:
(i) any Relevant Vessel or its owner, operator or manager may be
liable for Environmental Claims arising from the Spill (other
than Environmental Claims arising and fully satisfied before the
date of this Agreement); and/or
(ii) any Relevant Vessel may be arrested or attached in connection
with any such Environmental Claims.
"ENVIRONMENTAL LAW" means any applicable law or regulation which relates
to:
(a) the pollution or protection of the environment;
(b) harm to or the protection of human health; or
(c) any emission or substance capable of causing harm to any living
organism or the environment.
"ENVIRONMENTAL PERMITS" means any permit and other Authorisation and the
filing of any notification, report or assessment required under any
Environmental Law for the operation of the business of any member of the
Group conducted on or from the properties owned or used by any member of
the Group.
"ERISA" means the Employee Retirement Income Security Act of 1974 of the
United States, as amended, or any successor statute, as interpreted by the
rules and regulations thereunder, all as the same may be in effect from
time to time.
"ERISA AFFILIATE" means an entity, whether or not incorporated, which is
under common control with the Borrower and any of its Subsidiaries within
the meaning of Section 4001(a)(14) of ERISA, or is a member of a group
which includes the Borrower and any of its Subsidiaries and which is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code.
"ERISA EVENT" means (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA), (b) the withdrawal of the Borrower or
any of its Subsidiaries or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan, (c) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA, (d) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA, (e) any event or condition which might reasonably constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, (f) the complete or
partial withdrawal of the Borrower or any of its Subsidiaries or any ERISA
Affiliate from a Multiemployer Plan, (g) the conditions for imposition of a
lien under Section 302(f) of ERISA exist with respect to any Plan or (h)
the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
"EVENT OF DEFAULT" means any event or circumstance specified as such in
clause 24 (Events of Default).
8
"EXCHANGE ACT" means the Securities Exchange Act of 1934 of the United
States, as amended, and the rules and regulations promulgated thereunder.
"EXCLUDED EXISTING ACCOUNTS" means those bank accounts of members of the
Group as at the date of this Agreement notified by the Agent to the
Borrower in writing as being "Excluded Existing Accounts" on or prior to
the submission of the first Utilisation Request.
"EXCESS CASH" means, in relation to each Financial Quarter, the amount
(calculated pursuant to clause 8.1.8(Total Loss/Sale)) which is equal to:
(a) the Free Liquid Assets of the Group as at the Excess Cash Calculation
Date in relation to such Financial Quarter, minus
(b) $40,000,000, minus
(c) only in the case of each of (i) the Financial Quarter ending 31
December 2005, (ii) the Financial Quarters of the Financial Year
ending 31 December 2006 and (iii) the first three Financial Quarters
of the Financial Year ending 31 December 2007, the Relevant Amount for
the relevant Financial Quarter.
"EXCESS CASH CALCULATION DATE" means, in relation to each Financial
Quarter, the date falling one month (or such other later date agreed in
writing by the Agent in its sole discretion following a request by the
Borrower in writing) after the end of that Financial Quarter and "EXCESS
CASH CALCULATION DATES" means any or all of them.
"EXISTING COLLATERAL OWNER" means each registered owner of an Existing
Collateral Ship and "EXISTING COLLATERAL OWNERS" means any or all of them.
"EXISTING COLLATERAL SHIP" means each of the motor vessels (being, on the
date of this Agreement, Owned Ships) listed in rows 1 to 6 (inclusive) of
Schedule 2 (The Ships), indicated as owned by the member of the Group
specified opposite such Existing Collateral Ship's name and "EXISTING
COLLATERAL SHIPS" means any or all of them.
"EXISTING FINANCIAL INDEBTEDNESS" means the Financial Indebtedness of the
Group as at the date of this Agreement (including the Existing HSH Debt)
notified by the Agent to the Borrower as being "Existing Financial
Indebtedness" on or prior to the submission of a Utilisation Request.
"EXISTING HSH DEBT" means the aggregate principal amount owing by the
Borrower under the Existing Loan Agreement at any relevant time.
"EXISTING LOAN AGREEMENT" means the facilities agreement dated 12 July 2005
(as amended by an amendment letter dated 25 August 2005) and made between
(inter alios) ISE as borrower and HSH Nordbank AG as mandated lead
arranger, agent and security agent, as amended and supplemented, in respect
of loan facilities of (originally) $520,000,000.
"FACILITY" means Facility A or Facility B1 or Facility B2 or Facility B3 or
Facility C1 or Facility C2 or Facility C3 or Facility C4 or Facility C5 or
Facility C6 or Facility D1 or Facility D2 or Facility D3 or Facility D4 (as
the context requires) and, in relation to an Additional Collateral Ship, it
means the Facility specified opposite such Ship's name in the relevant
column of Schedule 2 (The Ships) and "FACILITIES" means all of them.
"FACILITY A" means the term loan facility made available under this
Agreement as described in paragraph (a) of clause 2.1.1 (The Facilities).
"FACILITY A COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility A Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
A Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
A Commitment transferred to it under this Agreement,
9
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY A LOAN" means a loan made or to be made under Facility A or the
principal amount outstanding for the time being of that loan.
"FACILITY A REPAYMENT DATE" means each date set out in clause 6.1.1
(Repayment of Loans).
"FACILITY B LOAN" means a Facility B1 Loan or a Facility B2 Loan or a
Facility B3 Loan, as the context requires and "FACILITY B LOANS" means all
of them.
"FACILITY B REPAYMENT DATE" means each date for repayment of Facility B1,
Facility B2 and Facility B3 as set out in clause 6.1.2 (Repayment of
Loans).
"FACILITY B1" means the term loan facility made available under this
Agreement as described in paragraph (b) of clause 2.1.1 (The Facilities).
"FACILITY B1 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility B1 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
B1 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
B1 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B1 LOAN" means a loan made or to be made under Facility B1 or the
principal amount outstanding for the time being on that loan.
"FACILITY B2" means the term loan facility made available under this
Agreement as described in paragraph (c) of clause 2.1.1 (The Facilities).
"FACILITY B2 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility B2 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
B2 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
B2 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B2 LOAN" means a loan made or to be made under Facility B2 or the
principal amount outstanding for the time being of that loan.
"FACILITY B3" means the term loan facility made available under this
Agreement as described in paragraph (d) of clause 2.1.1 (The Facilities).
"FACILITY B3 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility B3 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
B3 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
B3 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
10
"FACILITY B3 LOAN" means the loan made or to be made under Facility B3 or
the principal amount outstanding for the time being of that loan.
"FACILITY C LOAN" means a Facility C1 Loan or a Facility C2 Loan or a
Facility C3 Loan or a Facility C4 Loan or a Facility C5 Loan or a Facility
C6 Loan, as the context requires and "FACILITY C LOANS" means all of them.
"FACILITY C REPAYMENT DATE" means each date for repayment of Facility C1,
Facility C2, Facility C3, Facility C4, Facility C5 and Facility C6 as set
out in clause 6.1.3 (Repayment of Loans).
"FACILITY C1" means the term loan facility made available under this
Agreement as described in paragraph (e) of clause 2.1.1 (The Facilities).
"FACILITY C1 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C1 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C1 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C1 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C1 LOAN" means a loan made or to be made under Facility C1 or the
principal amount outstanding for the time being on that loan.
"FACILITY C2" means the term loan facility made available under this
Agreement as described in paragraph (f) of clause 2.1.1 (The Facilities).
"FACILITY C2 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C2 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C2 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C2 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C2 LOAN" means a loan made or to be made under Facility C2 or the
principal amount outstanding for the time being on that loan.
"FACILITY C3" means the term loan facility made available under this
Agreement as described in paragraph (g) of clause 2.1.1 (The Facilities).
"FACILITY C3 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C3 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C3 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C3 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C3 LOAN" means a loan made or to be made under Facility C3 or the
principal amount outstanding for the time being on that loan.
11
"FACILITY C4" means the term loan facility made available under this
Agreement as described in paragraph (h) of clause 2.1.1 (The Facilities).
"FACILITY C4 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C4 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C4 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C4 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C4 LOAN" means a loan made or to be made under Facility C4 or the
principal amount outstanding for the time being on that loan.
"FACILITY C5" means the term loan facility made available under this
Agreement as described in paragraph (i) of clause 2.1.1 (The Facilities).
"FACILITY C5 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C5 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C5 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C5 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C5 LOAN" means a loan made or to be made under Facility C5 or the
principal amount outstanding for the time being on that loan.
"FACILITY C6" means the term loan facility made available under this
Agreement as described in paragraph (j) of clause 2.1.1 (The Facilities).
"FACILITY C6 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility C6 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
C6 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
C6 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY C6 LOAN" means a loan made or to be made under Facility C6 or the
principal amount outstanding for the time being on that loan.
"FACILITY D LOAN" means a Facility D1 Loan or a Facility D2 Loan or a
Facility D3 Loan or a Facility D4 Loan, as the context requires and
"FACILITY D LOANS" means all of them.
"FACILITY D REPAYMENT DATE" means each date for repayment of Facility D1,
Facility D2, Facility D3 and Facility D4, as set out in clause 6.1.4
(Repayment of Loans).
"FACILITY D1" means the term loan facility made available under this
Agreement as described in paragraph (k) of clause 2.1.1 (The Facilities).
12
"FACILITY D1 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility D1 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
D1 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
D1 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY D1 LOAN" means a loan made or to be made under Facility D1 or the
principal amount outstanding for the time being on that loan.
"FACILITY D2" means the term loan facility made available under this
Agreement as described in paragraph (l) of clause 2.1.1 (The Facilities).
"FACILITY D2 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility D2 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
D2 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
D2 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY D2 LOAN" means a loan made or to be made under Facility D2 or the
principal amount outstanding for the time being on that loan.
"FACILITY D3" means the term loan facility made available under this
Agreement as described in paragraph (m) of clause 2.1.1 (The Facilities).
"FACILITY D3 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility D3 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
D3 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
D3 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY D3 LOAN" means a loan made or to be made under Facility D3 or the
principal amount outstanding for the time being on that loan.
"FACILITY D4" means the term loan facility made available under this
Agreement as described in paragraph (n) of clause 2.1.1 (The Facilities).
"FACILITY D4 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in dollars set opposite
its name under the heading "Facility D4 Commitment" in Part II of
Schedule 1 (The Original Parties) and the amount of any other Facility
D4 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in dollars of any Facility
D4 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
13
"FACILITY D4 LOAN" means a loan made or to be made under Facility D4 or the
principal amount outstanding for the time being on that loan.
"FACILITY OFFICE" means:
(a) in respect of a Lender, the office or offices notified by such Lender
to the Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five Business Days' prior
written notice) as the office or offices through which it will perform
its obligations under this Agreement; or
(b) in respect of any other person, any relevant jurisdiction in which it
is resident for tax purposes.
"FEE LETTER" means the letter dated on or about the date of this Agreement
between (inter alios) the Agent and the Borrower setting out any of the
fees referred to in clause 13 (Fees).
"FFA" means a forward freight derivative transaction.
"FFA TRADING STATEMENT" means a statement of earnings and cash receipts
from forward freight derivatives including a schedule of existing FFAs
(whether closed or not) for the immediately preceding Financial Quarter of
the Group and a short commentary specifying the current trading positions,
significant changes from the preceding Financial Quarter, expected trading
and any changes in trading policy.
"FINANCE DOCUMENT" means this Agreement, the Offer Letter, any Compliance
Certificate, the Fee Letter, any Hedge Agreement, any Resignation Letter,
any Selection Notice, any Transaction Security Document, any Utilisation
Request, the Intra-Group Loan Agreement and any other document designated
as a "Finance Document" by the Agent and the Borrower.
"FINANCE LEASE" has the meaning given to that term in clause 22.1
(Financial definitions).
"FINANCE PARTY" means the Agent, the Arranger, the Security Agent, a Lender
or any Hedge Counterparty.
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:
(a) monies borrowed;
(b) any amount raised by acceptance under any acceptance credit facility
or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue
of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with the Accounting Principles, be
treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);
(f) any Treasury Transaction (and, when calculating the value of that
Treasury Transaction, only the marked to market value shall be taken
into account);
(g) any counter-indemnity obligation in respect of a guarantee, bond,
standby or documentary letter of credit or any other instrument issued
by a bank or financial institution;
(h) any amount of any liability under an advance or deferred purchase
agreement if (a) one of the primary reasons behind entering into the
agreement is to raise finance or (b) the agreement is in respect of
the supply of assets or services and payment is due more than 90 days
after the date of supply;
14
(i) any arrangement pursuant to which an asset sold or otherwise disposed
of by that person may be re-acquired by a member of the Group (whether
following the exercise of an option or otherwise);
(j) any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a
borrowing; and
(k) the amount of any liability in respect of any guarantee for any of the
items referred to in paragraphs (a) to (j) above,
and so that where the amount of Financial Indebtedness falls to be
calculated, no amount shall be taken into account more than once in the
same calculation and, where the amount is to be calculated on a
consolidated basis in respect of a corporate group, monies borrowed or
raised, or other indebtedness, as between members of such group shall be
excluded provided that the debtor is a wholly-owned subsidiary of the
Borrower.
"FINANCIAL QUARTER" has the meaning given to that term in clause 22.1
(Financial definitions).
"FINANCIAL QUARTER DAY" has the meaning given to that term in clause 22.1
(Financial definitions).
"FINANCIAL YEAR" has the meaning given to that term in clause 22.1
(Financial definitions).
"FLAG STATE" means:
(a) the Republic of Panama; or
(b) in relation to the Existing Collateral Ships only, the Hellenic
Republic or, following the Borrower's compliance with clause 23.52.1
(Conditions Subsequent), the ▇▇▇▇▇▇▇▇ Islands or the Republic of
Panama,
or, in each such case, such other state or territory approved in writing by
the Agent, at the request of a member of the Group, as being the "Flag
State" of the Ship owned by such member whether, in the case of a
Collateral Ship, for the purposes of the relevant Transaction Security
Documents or, in the case of any other Owned Ship, for any other purpose.
"FLEET BOOK VALUE" has the meaning given to that term in clause 22.1
(Financial definitions).
"FLEET MARKET VALUE" has the meaning given to that term in clause 22.1
(Financial definitions).
"FOREIGN PLAN" means any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into
with, the Borrower or any of its Subsidiaries with respect to employees
employed outside the United States.
"FOREIGN PLAN UNDERFUNDING" means an excess of the present value of the
accrued benefit liabilities (whether or not vested) under a Foreign Plan,
determined as of the end of the most recently ended fiscal year of the
Borrower or any of its Subsidiaries (based on the actuarial assumptions
used for purposes of the applicable jurisdiction's financial reporting
requirements), over the current value of the assets of such Foreign Plan.
"FORM S-4" means the form S-4 Registration Statement filed with the United
States Securities and Exchange Commission by ISE in connection with the
Acquisition and the ISE-Navios Merger.
"FREE LIQUID ASSETS" has the meaning given to that term in clause 22.1
(Financial definitions).
"GENERAL ASSIGNMENT" means, in relation to a Collateral Ship, the general
assignment collateral to the Mortgage for such Collateral Ship, in the
agreed form, executed or (as the context may require) to be executed by the
relevant Collateral Owner in favour of the Security Agent or (as the case
may be) the Secured Parties and "GENERAL ASSIGNMENTS" means any or all of
them;
"GREEK ACCOUNT PLEDGES" means, together (a) the account pledge executed by
the Manager in favour of HSH Nordbank AG in respect of two bank accounts of
the Manager held with Alpha Bank A.E. in Greece and (b) the account pledge
executed by Navios Corporation in favour of HSH Nordbank AG in
15
respect of two bank accounts of Navios Corporation held with Alpha Bank
A.E. in Greece and "GREEK ACCOUNT PLEDGE" means either of them.
"GOVERNMENT ENTITY" means and includes (whether having a distinct legal
personality or not) any national, local or supranational government or
governmental authority, regulatory body, board, commission, department,
division, organ, instrumentality, court or agency and any association,
organisation or institution of which any of the foregoing is a member or to
whose jurisdiction any of the foregoing is subject or in whose activities
any of the foregoing is a participant.
"GROUP" means the Borrower and each of its Subsidiaries from time to time
during the term of this Agreement.
"GROUP STRUCTURE CHART" means the group structure chart in the agreed form.
"HEDGE AGREEMENT" means any master agreement, confirmation, schedule or
other agreement in agreed form entered into or to be entered into by the
Borrower and a Hedge Counterparty (including the HSH ISDA Agreement) for
the purpose of hedging interest rate liabilities in relation to the
Facilities in accordance with the Hedge Strategy Letter.
"HEDGE COUNTERPARTY" means the Original Hedge Counterparty and each Lender
or Affiliate of a Lender which, in accordance with and for the purposes of
clause 25.8 (Hedge Counterparties) acts as an interest rate hedging
counterparty and has executed and delivered a Hedge Counterparty Accession
Letter.
"HEDGE COUNTERPARTY ACCESSION LETTER" means a document duly executed by a
Hedge Counterparty substantially in the form set out in Schedule 12 (Form
of Hedge Counterparty Accession Letter).
"HEDGE STRATEGY LETTER" means a letter delivered to the Agent in accordance
with clause 5.6 (Hedge Transactions) between the Agent and the Borrower
describing the hedging arrangements entered into or to be entered into in
respect of the interest rate liabilities of the Borrower under this
Agreement.
"HESTIA GUARANTEE" means the guarantee, in the agreed form, executed or (as
the context may require) to be executed by Hestia Shipping Ltd. in favour
of the Security Agent.
"HESTIA OPERATING ACCOUNT" means an interest bearing dollar account of
Hestia Shipping Ltd. opened or (as the context may require) to be opened
with the London branch of the Security Agent designated the Hestia Shipping
Ltd. Operating Account and includes any other account designated in writing
by the Agent to be a Hestia Shipping Ltd. Operating Account for the
purposes of this Agreement.
"HOLDING ACCOUNT" means an interest bearing account:
(a) held in Hamburg by the Borrower with the Agent or Security Agent;
(b) identified in a letter between the Borrower and the Agent as a Holding
Account; and
(c) subject to Security in favour of the Security Agent which Security is
in form and substance satisfactory to the Agent,
(as the same may be redesignated, substituted or replaced from time to
time).
"HOLDING COMPANY" means, in relation to a company or corporation, any other
company or corporation in respect of which it is a Subsidiary.
"HSH ACCOUNTS" means the Holding Account, the Operating Accounts (other
than any CNSA Account which is an Operating Account), the Retention Account
and the Working Capital Account and includes any sub-accounts thereof.
"HSH HAMBURG ACCOUNT PLEDGE" means the first priority account pledge, in
the agreed form, executed or (as the context may require) to be executed by
the Borrower in favour of the Security Agent in respect of the Holding
Account, the Retention Account and the Working Capital Account.
16
"HSH ISDA AGREEMENT" means the 1992 ISDA Master Agreement (including a
schedule thereto) dated as of 4 October 2005 entered into between the
Borrower and the Original Hedge Counterparty, including any Confirmations
(as defined therein) executed pursuant thereto and any Transactions (as
defined therein) entered into thereunder.
"HSH LONDON ACCOUNT CHARGE" means the first priority account charge, in the
agreed form, executed or (as the context may require) to be executed by
CNSA, Navios International Inc., Navimax Corporation, Navios Handybulk
Inc., Hestia Shipping Ltd., Navios ShipManagement Inc., each Existing
Collateral Owner, each Additional Collateral Owner and any other relevant
member of the Group in favour of the Security Agent.
"INFORMATION MEMORANDUM" means the document in the form approved by the
Borrower concerning the Target Group which, at the request of the Borrower
and on its behalf is or is to be prepared in relation to this transaction,
approved by the Borrower and distributed by the Arranger prior to the
Syndication Date in connection with the syndication of the Facilities.
"INFORMATION PACKAGE" means the Reports, the Base Case Model and the
Business Plan.
"INSURANCE REPORT" means an insurance opinion in the agreed form prepared
by BankServe Insurance Services Ltd and dated on or before the first
Utilisation Date and addressed to, and/or capable of being relied upon by,
the Arranger and the other Secured Parties.
"INTELLECTUAL PROPERTY" means:
(a) any patents, trade marks, service marks, designs, business names,
copyrights, design rights, software rights, domain names, moral
rights, inventions, confidential information, knowhow and other
intellectual property rights and interests, whether registered or
unregistered; and
(b) the benefit of all applications and rights to use such assets of each
member of the Group.
"INTEREST" has the meaning given to that term in clause 22.1 (Financial
definitions).
"INTEREST PAYABLE" has the meaning given to that term in clause 22.1
(Financial definitions).
"INTEREST PERIOD" means, in relation to a Loan, each period determined in
accordance with clause 11 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with clause 10.4 (Default
interest).
"INTEREST RECEIVABLE" has the meaning given to that term in clause 22.1
(Financial definitions).
"INTRA-GROUP LOAN AGREEMENT" means the intra-group loan agreement, in the
agreed form, between the Borrower and others as borrowers, the Borrower and
others as lenders and the Security Agent.
"INTRA-GROUP LOAN ASSIGNMENT" means the loan assignment, in the agreed
form, executed or (as the context may require) to be executed by the
Borrower and others in favour of the Security Agent.
"INTRA-GROUP LOANS" means loans made by:
(a) the Borrower to a Security Provider;
(b) one Security Provider to another Security Provider where neither such
Security Provider is a Purchase Option Subsidiary; or
(c) a member of the Group to a Purchase Option Subsidiary for the sole
purpose of assisting such Purchase Option Subsidiary to acquire a
Purchase Option Ship, provided that such Purchase Option Ship is
acquired in accordance with clause 23.43 (Purchase Option
Subsidiaries);
(d) the Borrower to a New Share Issue Subsidiary for the sole purpose of
assisting such New Share Issue Subsidiary to acquire a Permitted NSIS
Asset, provided that the acquisition is made subject to the provisions
of clause 23.44 (New Share Issue Subsidiaries); or
(e) a Purchase Option Subsidiary or a New Share Issue Subsidiary to the
Borrower,
17
where the parties to such loans are parties to the Intra-Group Loan
Agreement.
"ISE" means, as of prior to the ISE-Navios Merger, International Shipping
Enterprises, Inc. a corporation then incorporated in Delaware (now merged
into the Borrower).
"ISE-NAVIOS MERGER" means the merger (completed on 25 August 2005) of ISE
with the Target such that the resulting entity was the Borrower.
"ISE-NAVIOS MERGER STEPS PAPER" means the steps paper in the agreed form
entitled "ISE/Navios Merger Steps Paper".
"ISM CODE" means the International Management Code for the Safe Operation
of Ships and for Pollution Prevention constituted pursuant to Resolution A.
741 (18) of the International Maritime Organisation and incorporated into
the International Convention for the Safety of Life at Sea 1974 and
includes any amendments or extensions thereto and any regulation issued
pursuant thereto.
"ISPS CODE" means the International Ship and Port Facility Security Code
constituted pursuant to Resolution A. 924(22) of the International Maritime
Organisation and incorporated into the International Convention for the
Safety of Life at Sea 1974 and includes any amendments or extensions
thereto and any regulation issued pursuant thereto.
"ISSC" means an International Ship Security Certificate issued in respect
of a Ship under the provisions of the ISPS Code.
"JOINT VENTURE" means any joint venture entity, whether a company,
unincorporated firm, undertaking, association or partnership or any other
entity.
"KEY PERSONNEL" means each and all of ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and any person
appointed as a replacement for any such persons in accordance with clause
23.26.2 (Service Contracts).
"LEASE" means the lease agreement (or agreement for use) dated 27 September
1956, as amended and/or supplemented and/or modified by the lease agreement
(or agreement for use) dated 4 December 1995, each made between (a) the
State of the Oriental Republic of Uruguay acting through certain of its
Government Entities and (b) Navios Corporation of the Republic of Liberia
(now incorporated into Navios Corporation) acting through its Uruguayan
branch, each in respect of the Terminal and/or the Project, as amended
and/or supplemented and/or modified by an amendment and extension agreement
dated 15 June 1998, as transferred and/or assigned to CNSA under and
pursuant to a contract of transfer dated 24 September 1999, and as the same
may be amended and/or supplemented from time to time.
"LEGAL DUE DILIGENCE REPORT" means the legal due diligence report in the
agreed form dated 24 March 2005 as supplemented by a memorandum dated 6 May
2005 prepared by ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ P.C. relating to
the Acquisition and addressed to, and/or capable of being relied upon by,
the Arranger and the other Secured Parties.
"LEGAL RESERVATIONS" means:
(a) the principle that equitable remedies may be granted or refused at the
discretion of a court and the limitation of enforcement by laws
relating to insolvency, reorganisation and other laws generally
affecting the rights of creditors;
(b) the time barring of claims under the Limitation Acts, the possibility
that an undertaking to assume liability for or indemnify a person
against non-payment of UK stamp duty may be void and defences of
set-off or counterclaim; and
(c) similar principles, rights and defences under the laws of any Relevant
Jurisdiction.
18
"LENDER" means:
(a) any Original Lender; and
(b) any bank, financial institution, trust, fund or other entity which has
become a Party in accordance with clause 25 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
"LIBOR" means in relation to a particular period:
(a) the rate per annum for deposits of dollars for a period equivalent to
such period at the Specified Time on the Quotation Day for such period
as displayed on Reuters BBA page LIBOR01 (and, for the purposes of
this Agreement, "REUTERS BBA PAGE LIBOR01" means the display
designated as "Reuters BBA page LIBOR01" on the Telerate Service or
such other page as may replace "Reuters BBA page LIBOR01" on the
Telerate Service for the purpose of displaying rates comparable to
that rate or on such other service as may be nominated by the British
Bankers' Association for the purpose of displaying BBA Interest
Settlement Rates (as defined in the British Bankers' Association's
Recommended Terms and Conditions ("BBAIRS" terms) dated August, 1996)
for dollars); or
(b) if on such date no such rate is displayed, LIBOR for such period shall
be the rate per annum determined by the Agent to be the arithmetic
mean of the rates per annum (rounded upward if necessary to the
nearest one sixteenth (1/16th) of one per cent) quoted to the Agent by
the Reference Banks at the request of the Agent as the Reference
Banks' offered rate for deposits in dollars in an amount comparable
with the amount in relation to which LIBOR is to be determined and for
a period equal to the relevant period to prime banks in the London
interbank market at or about the Specified Time on the Quotation Day
for such period.
"LMA" means the Loan Market Association.
"LOAN" means a Facility A Loan or a Facility B1 Loan or a Facility B2 Loan
or a Facility B3 Loan or a Facility C1 Loan or a Facility C2 Loan or a
Facility C3 Loan or a Facility C4 Loan or a Facility C5 Loan or a Facility
C6 Loan or a Facility D1 Loan or a Facility D2 Loan or a Facility D3 Loan
or a Facility D4 Loan (as the context may require).
"LONG-STOP DATE" means 30 April 2006 or such other later date (falling in
any event not later than 31 May 2006) as the Agent (acting on the
instructions of the Majority Lenders) may, following the Borrower's request
in writing, agree in writing in its absolute discretion and, if such
consent is given, on such conditions as the Agent (acting on the
instructions of the Majority Lenders) may impose.
"MAJORITY LENDERS" means a Lender or Lenders whose Commitments aggregate
more than 66(2)/3 per cent. of the Total Commitments (or, if the Total
Commitments have been reduced to zero, aggregated more than 66(2)/3 per
cent. of the Total Commitments immediately prior to that reduction).
"MANAGEMENT AGREEMENT" means, in relation to each Collateral Ship:
(a) the agreement made or (as the context may require) to be made, in the
agreed form, between the relevant Collateral Owner and the Manager
providing for the Manager to manage such Collateral Ship; and
(b) the agreement dated 2 June 2004 between the Manager as head manager
and Navimax Corporation as commercial sub-manager of such Collateral
Ship (as amended and supplemented from time to time),
and "MANAGEMENT AGREEMENTS" means any or all of them.
"MANAGER" means Navios ShipManagement, Inc. and/or any other person
appointed by the relevant Collateral Owner, with the prior written consent
of the Agent, as the manager of any of the Collateral Ships and includes
its successors in title and assignees.
19
"MANAGER'S UNDERTAKING" means, in relation to each Collateral Ship, an
undertaking and assignment, in the agreed form, executed or (as the context
may require) to be executed by the Manager in favour of the Security Agent
as a condition precedent to the approval of the Management Agreements
relating to such Collateral Ship (as the case may be) and "MANAGER'S
UNDERTAKINGS" means any or all of them.
"MANDATORY COST" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 5 (Mandatory Cost Formula).
"MARGIN" means:
(a) in relation to the Facility A Loan, the Facility C Loans and the
Facility D Loans, 1.50 per cent. per annum;
(b) in relation to the Facility B1 Loan, 2.25 per cent. per annum;
(c) in relation to the Facility B2 Loan, 2.50 per cent. per annum;
(d) in relation to the Facility B3 Loan, 2.75 per cent. per annum;
(e) in relation to any Unpaid Sum relating or referable to a Facility, the
rate per annum specified above for that Facility; and
(f) in relation to any other Unpaid Sum, the highest rate specified above.
"MATERIAL ADVERSE EFFECT" means in the reasonable opinion of the Agent a
material adverse effect on:
(a) the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Group taken as a whole; or
(b) the ability of an Obligor to perform its obligations under the Finance
Documents; or
(c) the validity or enforceability of, or the effectiveness or ranking of
any Transaction Security or the rights or remedies of any Finance
Party under any of the Finance Documents.
"MATERIAL CONTRACT" means each of the material contracts identified in
schedule 3.16 of the Acquisition Agreement and any other Charters and
Contracts of Affreightment save for:
(a) any contract of affreightment having a term of less than 11 months as
at the Closing Date and which does not contain any optional extension
by virtue of which its term may exceed 11 months as from the Closing
Date; and
(b) any charterparty having a term of less than 11 months as at the
Closing Date and which does not contain any optional extension by
virtue of which its term may exceed 11 months as from the Closing
Date.
"MERGER AGREEMENT" means the merger agreement dated 25 August 2005 and
entered into between ISE and the Target setting out the plan for and basis
upon which they merged into one entity (being the Borrower).
"MOA" means, in relation to a MOA Ship, the memorandum of agreement made or
(as the context may require) to be made between the relevant Seller and the
relevant Additional Collateral Owner, in relation to the sale by the
relevant Seller, and the purchase by the relevant Additional Collateral
Owner, of such MOA Ship, as such memorandum of agreement may be amended
and/or supplemented from time to time with the prior written consent of the
Agent (acting on the instructions of the Majority Lenders) and "MOAS" means
any or all of them.
"MOA SHIP" means each of the motor vessels listed in rows 27 to 30
(inclusive) of Schedule 2 (The Ships) indicated as a ship to be purchased
under a MOA in the relevant column opposite such MOA Ship's name, and "MOA
SHIPS" means any or all of them.
20
"MORTGAGE" means, in relation to each Collateral Ship, the first preferred
mortgage of such Collateral Ship, in the agreed form, executed or (as the
context may require) to be executed by the relevant Collateral Owner in
favour of the Security Agent or (as the case may be) the Secured Parties
and "MORTGAGES" means any or all of them.
"MULTIEMPLOYER PLAN" means at any time a Plan covered by Title IV of ERISA
which is a Multiemployer Plan as defined in Section 3(37) or 4001(a)(3) of
ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan covered by Title IV of ERISA, other
than a Multiemployer Plan, of which the Borrower or any of its Subsidiaries
or any ERISA Affiliate and at least one employer other than the Borrower or
any of its Subsidiaries or any ERISA Affiliate are contributing sponsors.
"NAVIMAX CORPORATION ASSIGNMENT OF INSURANCES" means the assignment, in the
agreed form, executed (or as the context may require) to be executed by
Navimax Corporation in favour of the Security Agent in respect of its
rights under certain insurances of which it has the benefit.
"NAVIMAX CORPORATION CHARTER ASSIGNMENT" means a first priority assignment,
in the agreed form, executed or (as the context may require) to be executed
by Navimax Corporation in favour of the Security Agent in respect of all
Charters or Contracts of Affreightment to which Navimax Corporation is a
party.
"NAVIMAX CORPORATION DNB OPERATING ACCOUNT" means the interest bearing
dollar account of Navimax Corporation held with DnB Nor Bank in New York.
"NAVIMAX CORPORATION GUARANTEE" means the guarantee, in the agreed form,
executed or (as the context may require) to be executed by Navimax
Corporation in favour of the Security Agent.
"NAVIMAX CORPORATION OPERATING ACCOUNT" means an interest bearing dollar
account of Navimax Corporation opened or (as the context may require) to be
opened with the London branch of the Security Agent designated the Navimax
Corporation Operating Account and includes any other account designated in
writing by the Agent to be a Navimax Corporation Operating Account for the
purposes of this Agreement.
"NAVIOS CORPORATION ASSIGNMENT OF INSURANCES" means the assignment, in the
agreed form, executed (or as the context may require) to be executed by
Navios Corporation in favour of the Security Agent in respect of its rights
under certain insurances of which it has the benefit.
"NAVIOS CORPORATION CHARTER ASSIGNMENT" means a first priority assignment,
in the agreed form, executed (or as the context may require) to be executed
by Navios Corporation in favour of the Security Agent in respect of all
Charters or Contracts of Affreightment to which Navios Corporation is a
party.
"NAVIOS CORPORATION DNB OPERATING ACCOUNT" means the interest bearing
dollar account of Navios Corporation held with DnB Nor Bank in New York
with such account details as have been notified by the Borrower to the
Agent.
"NAVIOS CORPORATION GUARANTEE" means the guarantee, in the agreed form,
executed or (as the context may require) to be executed by Navios
Corporation in favour of the Security Agent.
"NAVIOS CORPORATION OPERATING ACCOUNT" means an interest bearing dollar
account of Navios Corporation opened (or as the context may require) to be
opened with the London branch of the Security Agent and designated as the
Navios Corporation Operating Account and includes any other account
designated in writing by the Agent to be a Navios Corporation Operating
Account for the purposes of this Agreement.
"NAVIOS HANDYBULK ASSIGNMENT OF INSURANCES" means the assignment, in the
agreed form, executed (or as the context may require) to be executed by
Navios Handybulk Inc. in favour of the Security Agent in respect of its
rights under certain insurances of which it has the benefit.
"NAVIOS HANDYBULK CHARTER ASSIGNMENT" means a first priority assignment, in
the agreed form, executed or (as the context may require) to be executed by
Navios Handybulk Inc. in favour of the
21
Security Agent in respect of all Charters or Contracts of Affreightment to
which Navios Handybulk Inc. is a party.
"NAVIOS HANDYBULK DNB OPERATING ACCOUNT" means the interest bearing dollar
account of Navios Handybulk Inc. held with DnB Nor Bank in New York.
"NAVIOS HANDYBULK GUARANTEE" means the guarantee, in the agreed form,
executed or (as the context may require) to be executed by Navios Handybulk
Inc. in favour of the Security Agent.
"NAVIOS HANDYBULK OPERATING ACCOUNT" means an interest bearing dollar
account of Navios Handybulk Inc. opened or (as the context may require) to
be opened with the London branch of the Security Agent and designated the
Navios Handybulk Operating Account and includes any other account
designated in writing by the Agent to be a Navios Handybulk Operating
Account for the purposes of this Agreement.
"NAVIOS INTERNATIONAL ASSIGNMENT OF INSURANCES" means the assignment, in
the agreed form, executed or (as the context may require) to be executed by
Navios International Inc. in favour of the Security Agent in respect of its
rights under certain insurances of which it has the benefit.
"NAVIOS INTERNATIONAL CHARTER ASSIGNMENT" means a first priority
assignment, in the agreed form, executed or (as the context may require) to
be executed by Navios International Inc. in favour of the Security Agent in
respect of all Charters or Contracts of Affreightment to which Navios
International Inc. is a party.
"NAVIOS INTERNATIONAL DNB OPERATING ACCOUNT" means the interest bearing
dollar account of Navios International Inc. held with DnB Nor Bank in New
York.
"NAVIOS INTERNATIONAL GUARANTEE" means the guarantee, in the agreed form,
executed or (as the context may require) to be executed by Navios
International Inc. in favour of the Security Agent.
"NAVIOS INTERNATIONAL OPERATING ACCOUNT" means an interest bearing dollar
account of Navios International Inc. opened or (as the context may require)
to be opened with the London branch of the Security Agent and designated
the Navios International Operating Account and includes any other account
designated in writing by the Agent to be a Navios International Operating
Account for the purposes of this Agreement.)
"NAVIOS SHIPMANAGEMENT ASSIGNMENT OF INSURANCES" means the assignment, in
the agreed form, executed or (as the context may require) to be executed by
Navios ShipManagement Inc. in favour of the Security Agent in respect of
its rights under certain insurances of which it has the benefit.
"NAVIOS SHIPMANAGEMENT GUARANTEE" means the guarantee, in the agreed form,
executed or (as the context may require) to be executed by Navios
ShipManagement Inc. in favour of the Security Agent.
"NAVIOS SHIPMANAGEMENT OPERATING ACCOUNT" means an interest bearing dollar
account of Navios ShipManagement Inc. opened or (as the context may
require) to be opened with the Security Agent and designated the Navios
ShipManagement Operating Account and includes any other account designated
in writing by the Agent to be a Navios ShipManagement Operating Account for
the purposes of this Agreement.
"NEW SHARE ISSUE SHIP" means an Owned Ship which is owned by a New Share
Issue Subsidiary.
"NEW SHARE ISSUE SUBSIDIARY" means:
(a) a Subsidiary of the Borrower which is incorporated or acquired for the
sole purpose of carrying out an acquisition of a Permitted NSIS Asset;
and
(b) any company which is incorporated or acquired for the sole purpose of
being the Holding Company of a Subsidiary or Subsidiaries (as the case
may be) of the Borrower referred to in paragraph (a) of this
definition, provided that any Obligor which is the Holding Company of
a Subsidiary of the Borrower referred to in paragraph (a) of this
definition shall not be a New Share Issue Subsidiary merely by virtue
of being such a Holding Company.
22
"OBLIGOR" means the Borrower or a Security Provider and any other member of
the Group party to a Finance Document (save that if such member of the
Group is only party to the Intra-Group Loan Agreement it shall not be an
Obligor).
"OFFER LETTER" means the offer letter dated 16 December 2005 between HSH
Nordbank AG and the Borrower.
"OPERATING ACCOUNT" means the Navimax Corporation Operating Account, the
Navios Handybulk Operating Account, the Navios International Operating
Account, the Hestia Operating Account, the Navios ShipManagement Operating
Account, the Navios Corporation Operating Account and the CNSA Account held
with the Agent in London and "OPERATING ACCOUNTS" means any or all of them.
"ORIGINAL FINANCIAL STATEMENTS" means the consolidated audited financial
statements of the Target for its Financial Year ended 31 December 2004.
"ORIGINAL OBLIGOR" means the Borrower or an Original Security Provider.
"ORIGINAL SECURITY PROVIDER" means the companies listed in Part 1 of
Schedule 1 (the Original Parties) as original Security Providers.
"OWNED SHIP" means each motor vessel registered in the ownership of a
member of the Group from time to time and for the purposes of clause 22.1
(Financial definitions) and clause 23.37 (Valuation of Owned Ships) also
includes any motor vessels the book value of which is included in the
balance sheet of a Group member and "OWNED SHIPS" means any or all of them.
"PARTICIPATING MEMBER STATE" means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency in
accordance with legislation of the European Community relating to Economic
and Monetary Union.
"PARTY" means a party to this Agreement.
"PATRIOT ACT" has the meaning given to it in clause 20.36 (Anti-Terrorism
Laws).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any entity succeeding to any or all
of its functions under ERISA.
"PERMITTED ACQUISITION" means:
(a) an acquisition by an Obligor of an asset sold, leased, transferred or
otherwise disposed of by another Obligor in circumstances constituting
a Permitted Disposal;
(b) an acquisition of securities which are Cash Equivalent Investments so
long as those Cash Equivalent Investments become subject to the
Transaction Security as soon as is reasonably practicable;
(c) an acquisition of shares pursuant to a Permitted Share Issue;
(d) an acquisition of a Purchase Option Ship by a Purchase Option
Subsidiary made in accordance with clause 23.43 (Purchase Option
Subsidiaries);
(e) the acquisition or formation of a Purchase Option Subsidiary or a New
Share Issue Subsidiary provided that, in the case of a Purchase Option
Subsidiary, prior to such acquisition or formation such Purchase
Option Subsidiary has not traded or incurred any liabilities or
commitments (actual or contingent, present or future).
(f) an acquisition by a New Share Issue Subsidiary of a Permitted NSIS
Asset;
(g) an acquisition of an asset required for or relating to the Core
Activities of the Borrower and which acquisition is entirely or (in
the case of a Permitted NSIS Asset only) partially funded out of the
proceeds of a Permitted Share Issue and which:
(i) is provided for in the Quarterly Budget; and
23
(ii) when made would not result in a Default;
(h) the acquisition of the Additional Collateral Ships by the Additional
Collateral Owners pursuant to the MOAs and the Purchase Option MOAs
(as the case may be); or
(i) any other acquisition made with the prior written consent of the
Lenders.
"PERMITTED DISPOSAL" means any sale, lease, licence, transfer or other
disposal which is on arm's length terms:
(a) of cash made by any member of the Group in the ordinary course of
trading of the disposing entity;
(b) of any asset by a member of the Group (the "DISPOSING COMPANY") to
another member of the Group (the "ACQUIRING COMPANY"), but if:
(i) the Disposing Company is an Obligor, the Acquiring Company must
also be an Obligor;
(ii) the Disposing Company had given Security over the asset, the
Acquiring Company must give at least equivalent Security over
that asset; and
(iii) the Disposing Company is a Security Provider, the Acquiring
Company must be a Security Provider guaranteeing at all times an
amount no less than that guaranteed by the Disposing Company;
(c) of assets (other than shares, the Terminal, any Charter, any Material
Contract, businesses, Real Property or Intellectual Property) in
exchange for other assets comparable or superior as to type, value or
quality;
(d) of obsolete or redundant vehicles, plant and equipment for cash;
(e) of Cash Equivalent Investments for cash or in exchange for other Cash
Equivalent Investments;
(f) constituted by a licence of intellectual property rights permitted by
clause 23.28 (Intellectual Property);
(g) to a Joint Venture, to the extent permitted by clause 23.9 (Joint
ventures);
(h) arising as a result of any Permitted Security;
(i) made with the prior written consent of the Agent;
(j) of an Existing Collateral Ship or an Additional Collateral Ship or any
other Purchase Option Ship, provided that (i) the net proceeds arising
from such disposal are not less than the amount specified in clause
8.1.4(b) or clause 8.1.5 (Total Loss/Sale) (as applicable) with
reference to the relevant date of disposal (where, for the purposes of
this paragraph (j) the relevant date of disposal shall be the date of
transfer of title of the relevant Existing Collateral Ship, Additional
Collateral Ship or Purchase Option Ship) and (ii) such proceeds are
applied in accordance with clause 8.1.4 or clause 8.1.5 (Total
Loss/Sale) (as applicable);
(k) of any Purchase Option to a Purchase Option Subsidiary;
(l) of the Earnings, Insurances and Requisition Compensation of a Purchase
Option Subsidiary in so far as such disposal is required under the
terms of any arrangements with a Third Party Financier;
(m) of any Permitted NSIS Asset (including the Earnings, Insurances and
Requisition Compensation of any New Share Issue Ship); and
(n) of assets (other than shares or receivables) for cash where the higher
of the market value and net consideration receivable (when aggregated
with the higher of the market value and net consideration receivable
for any other sale, lease, licence, transfer or other disposal not
allowed
24
under the preceding paragraphs or as a Permitted Transaction) does not
exceed US$7,500,000 (or its equivalent) in total during the term of
this Agreement and does not exceed US$1,000,000 (or its equivalent) in
any Financial Year of the Borrower,
but it shall not be a Permitted Disposal:for any member of the Group to
dispose of any shares in a Subsidiary (other than a New Share Issue
Subsidiary) or for Navios Corporation to dispose of its shares in Acropolis
Chartering & Shipping Inc..
"PERMITTED DISTRIBUTION" means:
(a) the payment of a lawful dividend to the Borrower or any of its
wholly-owned Subsidiaries (provided that such wholly owned Subsidiary
is not a Purchase Option Subsidiary or a New Share Issue Subsidiary),
but if the company paying the dividend is a Security Provider the
wholly-owned subsidiary receiving the dividend must also be a Security
Provider; and
(b) the payment of a lawful dividend by the Borrower to its shareholders
provided that:
(i) any such dividend shall be declared and distributed in relation
to a Financial Quarter;
(ii) no such dividend shall be distributed during the Financial Year
ending 31 December 2005 in respect of any Financial Quarter
thereof;
(iii) no dividend shall be declared in respect of the Financial
Quarter ending 31 December 2005, in excess of $3,000,000;
(iv) no dividend shall be declared or distributed in respect of any of
(A) the Financial Quarter ending 31 December 2005 or (B) the
first three Financial Quarters of the Financial Year ending 31
December 2006, which, when aggregated with the dividend declared
or distributed in relation to the other such Financial Quarters
referred to in this paragraph (iv), shall be in excess of
$12,000,000 in aggregate, inclusive of the aggregate Relevant
Amount(s) (if any) notified by the Borrower to the Agent pursuant
to clause 8.1.8(Total Loss/Sale) in relation to each such
Financial Quarter;
(v) no dividend shall be declared or distributed in respect of any of
(A) the Financial Quarter ending 31 December 2006 or (B) the
first three Financial Quarters of the Financial Year ending 31
December 2007, which, when aggregated with the dividend declared
or distributed in relation to the other such Financial Quarters
referred to in this paragraph (v), shall be in excess of
$12,000,000 in aggregate, inclusive of the aggregate Relevant
Amount(s) (if any) notified by the Borrower to the Agent pursuant
to clause 8.1.8(Total Loss/Sale) in relation to each such
Financial Quarter
(vi) no dividend (in excess of any Relevant Amount(s) (if applicable)
for any relevant Financial Quarters) shall be declared or
distributed in respect of the Financial Quarters of a Financial
Year which in total exceeds 50% of the aggregate Excess Cash
(calculated pursuant to clause 8.1.8(Total Loss/Sale)) as of the
Excess Cash Calculation Dates falling during such Financial Year;
(vii) at both the date of declaration and the date of payment of such
dividend no Default shall have occurred and be continuing or
would result from the payment of the proposed dividend; and
(viii) no less than 30 days before the proposed payment date, the
Borrower has provided to the Agent pro forma financial statements
and such other information as the Agent may request showing
compliance with clauses 22.2.4 (Minimum Liquidity) and 8.1.8
(Total Loss/Sale) at the proposed payment date and for the two
full Financial Quarters immediately following such proposed
payment date.
"PERMITTED EXISTING ACCOUNTS" means those accounts of members of the Group
in existence at the date of this Agreement notified by the Agent to the
Borrower in writing as being "Permitted Existing Accounts".
25
"PERMITTED FFA" means any FFA which:
(a) is made by a team experienced in trading in FFAs, the senior members
of which are Key Personnel;
(b) is made in accordance with the proper risk management procedures as
specified in the Accountants' Report; and
(c) complies with the requirements of the Forward Freight Agreement
Brokers Association or any other equivalent person.
"PERMITTED FINANCIAL INDEBTEDNESS" means Financial Indebtedness:
(a) arising under any Intra-Group Loans and subject always to the terms of
this Agreement;
(b) arising under a foreign exchange transaction for spot or forward
delivery entered into in connection with protection against
fluctuation in currency rates where that foreign exchange exposure
arises in the ordinary course of trade but not a foreign exchange
transaction for investment or speculative purposes;
(c) arising under a Permitted Loan or a Permitted Guarantee;
(d) of any person acquired by a member of the Group after the date of this
Agreement which is incurred under arrangements in existence at the
date of acquisition, but not incurred or increased or its maturity
date extended in contemplation of, or since, that acquisition, and
outstanding only for a period of six months following the date of
acquisition;
(e) under finance or capital leases of vehicles, plant, equipment or
computers, provided that the aggregate capital value of all such items
so leased or financed under outstanding leases or finance transactions
by members of the Group does not exceed US$1,000,000 (or its
equivalent in other currencies) at any time;
(f) incurred by a New Share Issue Subsidiary in connection with an
acquisition permitted in accordance with clause 23.44.1 (New Share
Issue Subsidiaries).
(g) incurred in the exercise of a Purchase Option in accordance with
clause 23.43.2 (Purchase Option Subsidiaries);
(h) arising under any Permitted FFA; and
(i) not permitted by the preceding paragraphs or as a Permitted
Transaction and the outstanding amount of which does not exceed
US$2,000,000 (or its equivalent) in aggregate for the Group at any
time.
"PERMITTED GUARANTEE" means:
(a) the endorsement of negotiable instruments in the ordinary course of
trade;
(b) guarantees granted by a Security Provider in respect of the
obligations (not being Financial Indebtedness) of any other Security
Provider under any contract entered into in the ordinary course of
trade;
(c) guarantees granted by a non-Security Provider in respect of the
obligations (not being Financial Indebtedness) of any other Group
member under any contract entered into in the ordinary course of
trading;
(d) any guarantee of a Joint Venture to the extent permitted by clause
23.9 (Joint ventures);
(e) any guarantee permitted under clause 23.21 (Financial Indebtedness);
(f) any guarantee given in respect of the netting or set-off arrangements
permitted pursuant to paragraph (b) of the definition of Permitted
Security;
26
(g) guarantees comprising Existing Financial Indebtedness; or
(h) any guarantees granted in addition to those permitted under
sub-paragraphs (a) to (g) above, of an aggregate amount not exceeding
US$2,000,000.
"PERMITTED LOAN" means:
(a) Financial Indebtedness which is referred to in the definition of, or
otherwise constitutes, Permitted Financial Indebtedness (except under
paragraph (c) of that definition);
(b) an Intra-Group Loan; and
(c) a loan made by a member of the Group to an employee or director of any
member of the Group if the amount of that loan when aggregated with
the amount of all other loans to employees and directors by members of
the Group does not exceed US$750,000 (or its equivalent) at any time,
so long as in the case of paragraph (b) above the creditor of such
Financial Indebtedness shall (if it is an Obligor and has not already done
so pursuant to a Transaction Security Document) grant security over its
rights in respect of such Financial Indebtedness in favour of the Lenders
on terms acceptable to the Agent.
"PERMITTED NSIS ASSET" means a New Share Issue Ship or any other asset or
assets required or relating to the Core Activities:
(a) where the Borrower has provided the Agent with reasonable notice of
its acquisition prior to such acquisition;
(b) the acquisition of which would not result in a Default;
(c) where at least 20 per cent. of the funding required for the
acquisition of such asset or assets is directly sourced from the
proceeds of a Permitted Share Issue by the Borrower and which have
been directly on-loaned to the relevant New Share Issue Subsidiary;
and
(d) where the balance of funding (over and above the funding referred to
in paragraph (c)) required for the acquisition of such asset or assets
is not sourced from the Borrower or any other Obligor.
"PERMITTED SECURITY" means:
(a) any lien arising by operation of law and in the ordinary course of
trading (including any lien on a Ship for master's, officer's or
crew's wages outstanding in the ordinary course of trading, any lien
for salvage and any ship repairer's or outfitter's possessory lien)
and not as a result of any default or omission by any member of the
Group in aggregate for a sum not exceeding US$1,500,000;
(b) any netting or set-off arrangement entered into by any member of the
Group in the ordinary course of its banking arrangements for the
purpose of netting debit and credit balances of members of the Group
but only so long as (i) such arrangement does not permit credit
balances of Obligors to be netted or set off against debit balances of
members of the Group which are non-Security Providers and (ii) such
arrangement does not give rise to other Security over the assets of
Obligors in support of liabilities of members of the Group which are
non-Security Providers;
(c) any margin, netting or set-off or other security arrangement arising
out of any Permitted FFA or any Hedge Agreement;
(d) any Security or Quasi-Security over or affecting any asset acquired by
a member of the Group after the date of this Agreement if:
(i) the Security or Quasi-Security was not created in contemplation
of the acquisition of that asset by a member of the Group;
27
(ii) the principal amount secured has not been increased in
contemplation of or since the acquisition of that asset by a
member of the Group; and
(iii) the Security or Quasi-Security is removed or discharged within
three months of the date of acquisition of such asset;
(e) any Security or Quasi-Security over or affecting any asset of any
company which becomes a member of the Group after the date of this
Agreement, where the Security or Quasi-Security is created prior to
the date on which that company becomes a member of the Group; if
(i) the Security or Quasi-Security was not created in contemplation
of the acquisition of that company;
(ii) the principal amount secured has not increased in contemplation
of or since the acquisition of that company; and
(iii) the Security or Quasi-Security is removed or discharged within
three months of that company becoming a member of the Group;
(f) any Security arising under any retention of title, hire purchase or
conditional sale arrangement or arrangements having similar effect in
respect of goods supplied to a member of the Group in the ordinary
course of trading and on the supplier's standard or usual terms and
not arising as a result of any default or omission by any member of
the Group;
(g) any Quasi-Security arising as a result of a disposal which is a
Permitted Disposal;
(h) any Security or Quasi-Security arising as a consequence of any finance
lease permitted pursuant to paragraph (e) of the definition of
"Permitted Financial Indebtedness";
(i) any Security arising under a standard form contract over goods,
documents of title to goods and related documents and insurances and
their proceeds, in each case in respect of documentary credit
transactions in the ordinary course of trade;
(j) any Security and any negative covenant for the benefit of a Third
Party Financier granted by a Purchase Option Subsidiary in accordance
with clause 23.43 (Purchase Option Subsidiaries);
(k) any Security and any negative covenant granted by a New Share Issue
Subsidiary for the benefit of a Third Party Financier; or
(l) any Security securing indebtedness the outstanding principal amount of
which (when aggregated with the outstanding principal amount of any
other indebtedness which has the benefit of Security given by any
member of the Group other than any permitted under paragraphs (a) to
(h) above) does not exceed US$1,500,000 (or its equivalent in other
currencies).
but in no case shall any Security over any shares in a Subsidiary of the
Borrower or over any Account (other than the Excluded Existing Accounts),
any Charter (other than a Charter entered into by a New Share Issue
Subsidiary or a Purchase Option Subsidiary where Security has been granted,
in the case of a Purchase Option Subsidiary, on a first priority basis or,
in the case of New Share Issue Subsidiary on any basis, to a Third Party
Financier), the Terminal, any Material Contract (other than a Material
Contract entered into by a New Share Issue Subsidiary or a Purchase Option
Subsidiary where Security has been granted, in the case of a Purchase
Option Subsidiary, on a first priority basis or, in the case of New Share
Issue Subsidiary on any basis, to a Third Party Financier), any CNSA Asset
or any Owned Ship (other than a Purchase Option Ship or a New Share Issue
Ship) constitute a Permitted Security other than any such Security created
under the Finance Documents.
"PERMITTED SHARE ISSUE" means an issue of:
(a) shares by the Borrower to its shareholders, paid for in full in cash
upon issue (provided that, for the purposes or this paragraph (a) the
issue of securities on the basis described in the section headed
"Description of Securities" in the Form S-4 shall be deemed to satisfy
this
28
requirement) and which by their terms are not redeemable and where no
Default has occurred and is continuing or would result from the
proposed share issue;
(b) shares by a member of the Group which is a Subsidiary to its immediate
Holding Company where (i) (if the existing shares of the Subsidiary
are the subject of the Transaction Security) the newly-issued shares
also become subject to the Transaction Security on the same terms,
(ii) if the Subsidiary is a Security Provider then the Holding Company
must also be a Security Provider and (iii) the Holding Company is not
a Purchase Option Subsidiary or a New Share Issue Subsidiary; or
(c) shares by the Borrower to any Seller as part of the purchase price of
the MOA Ships payable to the relevant Seller pursuant to the relevant
MOAs.
"PERMITTED TRANSACTION" means:
(a) any disposal required, Financial Indebtedness incurred, guarantee,
indemnity or Security or Quasi-Security given, or other transaction
arising, under the Finance Documents;
(b) the solvent liquidation or reorganisation of any member of the Group
which is not an Obligor so long as any payments or assets distributed
as a result of such liquidation or reorganisation are distributed to
other members of the Group; or
(c) transactions (other than the granting or creation of Security or the
incurring or permitting to subsist of Financial Indebtedness)
conducted in the ordinary course of trading on arm's length terms.
"PLAN" means at any time any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower or any of its Subsidiaries or any ERISA Affiliate is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.
"POLLUTANT" means and includes oil and its products, any other polluting,
toxic or hazardous substance and any other substance whose release into the
environment is regulated or penalised by Environmental Laws.
"PORT REPORTS" means the Uniconsult Universal Transport Consulting GmbH
technical assessment of the Navios Grain Terminal Nueva ▇▇▇▇▇▇▇, Uruguay
dated 1 February 2005 and the ▇▇▇▇▇▇ and ▇▇▇▇▇▇ report in connection with
the Navios Terminal at Nueva ▇▇▇▇▇▇▇, Uruguay dated 22 February 2005 each
addressed to, and/or capable of being relied upon by, the Arranger and the
other Secured Parties.
"PURCHASE OPTION" means each of the options contained in certain of the
charters listed in schedule 3.16 to the Acquisition Agreement pursuant to
which the members of the Group being party to such charters have, either
directly or through nominees, the right to purchase under certain terms and
conditions the Chartered Ships relevant to such charters.
"PURCHASE OPTION MOA" means, in relation to an Additional Collateral Ship
(other than a MOA Ship), each memorandum of agreement made or (as the
context may require) to be made between the relevant Seller and the
relevant Additional Collateral Owner, in relation to the sale by the
relevant Seller, and the purchase by the relevant Additional Collateral
Owner, of such Additional Collateral Ship (other than a MOA Ship), as such
memorandum of agreement may be amended and/or supplemented from time to
time with the prior written consent of the Agent (acting on the
instructions of the Majority Lenders) and "PURCHASE OPTION MOAS" means any
or all of them.
"PURCHASE OPTION SHIP" means a Chartered Ship which is the subject of a
Purchase Option which has been exercised by its rightful owner and
consequently acquired by the relevant Purchase Option Subsidiary.
"PURCHASE OPTION SUBSIDIARY" means a member of the Group which is formed or
acquired for the sole purpose of acquiring a Purchase Option Ship (other
than a New Share Issue Subsidiary) but such entity shall only be a Purchase
Option Subsidiary if (a) any amount remains owing to a Third Party
29
Financier or (b) any Security or Quasi-Security continues to be granted by
such Purchase Option Subsidiary to a Third Party Financier.
"QUARTERLY BUDGET" means the quarterly budget required to be delivered by
the Borrower pursuant to clause 21.4.2 (Budget).
"QUASI-SECURITY" has the meaning given to that term in clause 23.15
(Negative pledge).
"QUOTATION DAY" means, in relation to any period for which an interest rate
is to be determined two Business Days before the first day of that period,
unless market practice differs in the Relevant Interbank Market, in which
case the Quotation Day will be determined by the Agent in accordance with
market practice in the Relevant Interbank Market (and if quotations would
normally be given by leading banks in the Relevant Interbank Market on more
than one day, the Quotation Day will be the last of those days).
"REAL PROPERTY" means:
(a) any freehold or leasehold real property or immovable property; and
(b) any buildings, fixtures, fittings, fixed plant or machinery from time
to time situated on or forming part of that freehold, leasehold real
or immovable property.
"RECEIVER" means a receiver or receiver and manager or administrative
receiver of the whole or any part of the Charged Property.
"REFERENCE BANKS" means the principal London offices of the Lenders and
such other prime banks in the London banking market as may be selected and
appointed by the Agent.
"REGISTRATION REQUIREMENTS" means the making of appropriate registrations,
filings, recordings and/or notifications of a Finance Document that are
required to be made by law, to ensure the validity, effectiveness,
enforceability and/or admissibility in evidence of such Finance Documents
in any Relevant Jurisdiction.
"REGISTRY" means such registrar, commissioner or representative of the
relevant Flag State who is duly authorised and empowered to register an
Owned Ship, the relevant Group member's title to such Owned Ship and the
relevant Mortgage (if any) under the laws and flag of the relevant Flag
State.
"REGULATION O, T, U OR X" means Regulation O, T, U or X, respectively, of
the Board of Governors of the Federal Reserve System of the United States
as amended, or any successor regulation.
"RELEVANT AMOUNT" means:
(a) in relation to each of (i) the Financial Quarter ending 31 December
2005 and (ii) the first three Financial Quarters of the Financial Year
ending 31 December 2006, an amount notified by the Borrower to the
Agent in writing pursuant to clause 8.1.8(Total Loss/Sale), which,
when aggregated with the amounts so notified by the Borrower in
respect of the preceding Financial Quarters referred to in this
paragraph (a), shall not exceed $3,000,000 in aggregate; or
(b) in relation to each of (i) the Financial Quarter ending 31 December
2006 and (ii) the first three Financial Quarters of the Financial Year
ending 31 December 2007, an amount notified by the Borrower to the
Agent in writing pursuant to clause 8.1.8(Total Loss/Sale), which,
when aggregated with the amounts so notified by the Borrower in
respect of the preceding Financial Quarters referred to in this
paragraph (b), shall not exceed $3,000,000 in aggregate.
"RELEVANT INTERBANK MARKET" means the London interbank market.
"RELEVANT JURISDICTION" means, in relation to an Obligor:
(a) its jurisdiction of incorporation or establishment;
(b) any jurisdiction where any asset subject to or intended to be subject
to the Transaction Security to be created by it is situated;
30
(c) any jurisdiction where it conducts its business; and
(d) the jurisdiction whose laws govern the perfection of any of the
Transaction Security Documents entered into by it.
"RELEVANT PERIOD" has the meaning given to that term in clause 22.1
(Financial definitions).
"RELEVANT VESSEL" means the Ships and any other vessel operated, managed or
crewed by any member of the Group.
"REPAYMENT DATE" means a Facility A Repayment Date or a Facility B
Repayment Date or a Facility C Repayment Date or a Facility D Repayment
Date.
"REPAYMENT INSTALMENT" means in relation to a Facility, each repayment
instalment in respect of that Facility due under clause 6 (Repayment).
"REPEATING REPRESENTATIONS" means each of the representations set out in
clause 20.2 (Status) to clause 20.7 (Governing law and enforcement)
(inclusive), clause 20.11 (No default), clause 20.12.7 (No misleading
information), clause 20.13.5 to clause 20.13.7 (Original Financial
Statements), clause 20.19 (Ranking) to clause 20.21 (Legal and beneficial
ownership), clause 20.27 (Acquisition Documents, disclosures and other
Documents) and clause 20.31 (Pensions) to clause 20.36 (Anti-Terrorism
Laws).
"REPORTS" means the Accountants' Report, the Charters and COAs Report, the
Legal Due Diligence Report, the Insurance Report, the Port Reports, the Tax
Report and the ISE-Navios Merger Steps Paper.
"REQUISITION COMPENSATION" means, in respect of a Ship, all sums of money
or other compensation received from time to time by reason of the
Compulsory Acquisition of such Ship.
"RESIGNATION LETTER" means a letter substantially in the form set out in
Schedule 7 (Form of Resignation Letter).
"RETENTION ACCOUNT" means an interest-bearing dollar account:
(a) held in Hamburg in the Federal Republic of Germany by the Borrower
with the Agent or Security Agent;
(b) identified in a letter between the Borrower and the Agent as the
Retention Account;
(c) subject to Security in favour of the Security Agent which Security is
in form and substance satisfactory to the Agent; and
(d) from which no withdrawals may be made by any members of the Group
except as contemplated by this Agreement,
(as the same may be redesignated, substituted or replaced from time to
time).
"RETENTION AMOUNT" means, in relation to any Retention Date, such sum as
shall be the aggregate of:
(a) one-third ((1)/3rd) of the Repayment Instalment falling due for
payment pursuant to clause 6.1 (Repayment of Loans) (as the same may
have been reduced by any prepayment or any reduction of a Repayment
Instalment in accordance with clauses 6.1.5, 6.1.6 and 6.1.7
(Repayment of Loans)) on the next Repayment Date for the relevant Loan
after the relevant Retention Date; and
(b) the applicable fraction (as hereinafter defined) of the aggregate
amount of interest falling due for payment in respect of each part of
the relevant Loan during and at the end of each Interest Period for
such Loan current at the relevant Retention Date and, for this
purpose, the expression "APPLICABLE FRACTION" in relation to each
Interest Period shall mean a fraction having a numerator of one and a
denominator equal to the number of Retention Dates falling within the
relevant Interest Period for such Loan.
31
"RETENTION DATE" means, in relation to each Facility and a Repayment Date
(the "RELEVANT REPAYMENT DATE") thereof (other than the last Repayment Date
thereof), each of:
(a) the date falling ten(10) Business Days after the first day of the
first month commencing immediately after the Relevant Repayment Date;
(b) the first day of the second month commencing immediately after the
Relevant Repayment Date; and
(c) the first day of the third month commencing immediately after the
Relevant Repayment Date,
and "RETENTION DATES" means any or all of them. For the purposes of this
definition, a "Relevant Repayment Date" shall be deemed to be the relevant
set date as specified in the relevant tables of clause 6.1 (Repayment of
Loans), and clause 30.7 (Business Days) shall not apply thereto.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇ ▇▇▇▇ of the United
States, as amended, and the rules and regulations promulgated thereunder.
"SECOND SECURITY COLLATERAL SHIP" means a Purchase Option Ship which is
subject to second ranking Security in favour of the Security Agent or, as
the case may be, the Finance Parties.
"SECURED PARTIES" means each Finance Party from time to time party to this
Agreement and any Receiver or Delegate.
"SECURITIES ACT" means the Securities Act of 1933 of the United States, as
amended, and the rules and regulations promulgated thereunder.
"SECURITY" means:
(a) any mortgage, charge, pledge, lien, hypothecation, assignment by way
of security, trust arrangement for the purpose of providing security
or other security interest of any kind in any jurisdiction;
(b) any proprietary interest over an asset, or any contractual arrangement
in relation to an asset, in each case created in relation to the
obligation of any person and which has the same commercial effect as
if security had been created over it; or
(c) any right of set-off created by agreement.
"SECURITY PROVIDER" means an Original Security Provider or an Additional
Security Provider being in each case a person that is from time to time
party to one or more Transaction Security Documents and a "NON-SECURITY
PROVIDER" is a member of the Group which is not a Security Provider.
"SECURITY REQUIREMENT" means the amount in dollars (as certified by the
Agent whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Parties) which, at any relevant time, is One
hundred and twenty five per cent. (125%) of the total amount of the
Facility A Loan, the Facility C Loans and the Facility D Loans outstanding
at such time.
"SECURITY VALUE" means the amount in dollars (as certified by the Agent
whose certificate shall, in the absence of manifest error, be conclusive
and binding on the Parties) which, at any relevant time, is the aggregate
of (i) the market value of the Collateral Ships as most recently determined
in accordance with clause 23.53(b) and (ii) the market value of any
additional security for the time being actually provided to the Finance
Parties pursuant to clause 23.53(a)(ii) as most recently determined in
accordance with clause 23.53(e).
"SELECTION NOTICE" means a notice substantially in the form set out in Part
II of Schedule 4 (Selection Notice) given in accordance with clause 11
(Interest Periods) in relation to a Facility.
"SELLER" means, in relation to an Additional Collateral Ship, the
registered owner of such Additional Collateral Ship as of the date of this
Agreement, as specified opposite the relevant Additional Collateral Ship's
name in Schedule 2 (The Ships) and "SELLERS" means any or all of them;
32
"SERVICE CONTRACT" means a service contract of each member of Key Personnel
in agreed form.
"SHIP INSURANCES" means such contracts of insurance a member of the Group
maintains in respect of an Owned Ship.
"SHIPS" means the Chartered Ships and the Owned Ships or any of them, as
the context requires and "SHIP" means any of them.
"SILO" means the horizontal silo no. 7 identified in the Uniconsult
Universal Transport Consulting GmbH technical assessment of the Navios
Grain Terminal Nueva ▇▇▇▇▇▇▇, Uruguay, constructed at the Terminal.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"SMC" means a safety management certificate issued in respect of a Ship in
accordance with rule 13 of the ISM Code.
"SPECIFIED TIME" means a time determined in accordance with Schedule 10
(Timetables).
"SPILL" means any actual or threatened emission, spill, release or
discharge of a Pollutant into the environment.
"SUB-MANAGER'S UNDERTAKING" means, in relation to each Collateral Ship, an
undertaking and assignment in the agreed form executed or (as the context
may require) to be executed by Navimax Corporation in favour of the
Security Agent as a condition precedent to the approval of the Management
Agreements relating to such Collateral Ship (as the case may be) and
"SUB-MANAGER'S UNDERTAKINGS" means any or all of them.
"SUBSIDIARY" of a person means: (a) any other person directly or indirectly
Controlled by such person; or (b) whose dividends or distributions on
ordinary voting share capital that person is entitled to receive more than
50 per cent; or (c) any entity (whether or not so Controlled) treated as a
subsidiary in the financial statements of that person from time to time.
"SYNDICATION DATE" means the day on which the Arranger confirms that the
primary syndication of the Facilities has been completed.
"TANGIBLE NET WORTH" has the meaning given to that term in clause 22.1
(Financial definitions).
"TARGET" means, as of prior to the ISE-Navios Merger, Navios Maritime
Holdings Inc., a corporation incorporated under the laws of the ▇▇▇▇▇▇▇▇
Islands with corporation number 8116 (now incorporated into the Borrower).
"TARGET GROUP" means the Target and its Subsidiaries being, as of
immediately prior to the ISE-Navios Merger, the companies listed in
Schedule 11 (The Group including the Target Group), except for those
companies marked therein with an asterisk.
"TARGET SHARES" means all of the shares of the Target, which were acquired
by ISE in the context of the ISE-Navios Merger.
"TAX" means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the same) imposed by
a Government Entity regardless of whether disputed.
"TAX REPORT" means the tax report in the agreed form prepared by ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ P.C..
"TERMINAL" means the port, transfer and storage terminal for the loading,
unloading, transhipment, handling and storage of grain, soy beans,
fertilizers, manganese ore, other raw material or commodities and general
cargo, as more precisely described in the Lease presently occupying
approximately 15 hectares of land and having two docks, one of 240 meters
long and another of 170 meters long, situate at the Free Zone of Nueva
▇▇▇▇▇▇▇, Colonia, Uruguay (and including all buildings,
33
silos and equipment located at the relevant area), as the same may from
time to time be further developed, refurbished, redesigned, expanded or
improved.
"TERMINAL EARNINGS" means, in relation to the Terminal, all moneys
whatsoever from time to time due and payable to CNSA arising out of the use
of the Terminal.
"TERMINAL INSURANCE PROCEEDS" has the meaning given to it in clause 8.1
(Total Loss/Sale).
"THIRD PARTY FINANCIER" means any bank or financial institution which
provides financing to a Purchase Option Subsidiary or a New Share Issue
Subsidiary for the purpose of:
(a) financing the acquisition by a Purchase Option Subsidiary of a
Purchase Option Ship; or
(b) financing the acquisition of a Permitted NSIS Asset by a New Share
Issue Subsidiary; or
(c) refinancing the financing referred to in paragraphs (a) and (b).
"THIRD PARTY INTERCREDITOR AGREEMENT" means an intercreditor agreement
and/or priority agreement entered into or (as the context may require) to
be entered into between, among others, the Security Agent and a Third Party
Financier in form and substance satisfactory to each Third Party Financier
and the Security Agent.
"TOTAL COMMITMENTS" means the aggregate of the Total Facility A
Commitments, the Total Facility B1 Commitments, the Total Facility B2
Commitments, the Total Facility B3 Commitments, the Total Facility C1
Commitments, the Total Facility C2 Commitments, the Total Facility C3
Commitments, the Total Facility C4 Commitments, the Total Facility C5
Commitments, the Total Facility C6 Commitments, the Total Facility D1
Commitments, the Total Facility D2 Commitments, the Total Facility D3
Commitments and the Total Facility D4 Commitments, being a maximum of
US$649,000,000 at the date of this Agreement.
"TOTAL DEBT" has the meaning given to that term in clause 22.1 (Financial
definitions).
"TOTAL FACILITY A COMMITMENTS" means the aggregate of the Facility A
Commitments, being US$125,000,000 at the date of this Agreement.
"TOTAL FACILITY B1 COMMITMENTS" means the aggregate of the Facility B1
Commitments, being US$175,400,000 at the date of this Agreement.
"TOTAL FACILITY B2 COMMITMENTS" means the aggregate of the Facility B2
Commitments, being US$40,800,000 as at the date of this Agreement.
"TOTAL FACILITY B3 COMMITMENTS" means the aggregate of the Facility B3
Commitments, being US$93,800,000 at the date of this Agreement.
"TOTAL FACILITY C1 COMMITMENTS" means the aggregate of the Facility C1
Commitments, being US$20,254,000 at the date of this Agreement.
"TOTAL FACILITY C2 COMMITMENTS" means the aggregate of the Facility C2
Commitments, being US$21,775,000 at the date of this Agreement.
"TOTAL FACILITY C3 COMMITMENTS" means the aggregate of the Facility C3
Commitments, being US$24,451,000 at the date of this Agreement.
"TOTAL FACILITY C4 COMMITMENTS" means the aggregate of the Facility C4
Commitments, being US$22,100,000 at the date of this Agreement.
"TOTAL FACILITY C5 COMMITMENTS" means the aggregate of the Facility C5
Commitments, being US$23,725,000 at the date of this Agreement.
"TOTAL FACILITY C6 COMMITMENTS" means the aggregate of the Facility C6
Commitments, being US$19,695,000 at the date of this Agreement.
34
"TOTAL FACILITY D1 COMMITMENTS" means the aggregate of the Facility D1
Commitments, being US$26,550,000 at the date of this Agreement.
"TOTAL FACILITY D2 COMMITMENTS" means the aggregate of the Facility D2
Commitments, being US$18,000,000 at the date of this Agreement.
"TOTAL FACILITY D3 COMMITMENTS" means the aggregate of the Facility D3
Commitments, being US$16,900,000 at the date of this Agreement.
"TOTAL FACILITY D4 COMMITMENTS" means the aggregate of the Facility D4
Commitments, being US$20,550,000 at the date of this Agreement.
"TOTAL LOSS" means:
(a) in relation to a Ship:
(i) the actual, constructive, compromised or arranged total loss of
such Ship; or
(ii) the Compulsory Acquisition of such Ship; or
(iii) the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of such Ship (other than where the same
amounts to the Compulsory Acquisition of such Ship) by any
Government Entity, or by persons acting or purporting to act on
behalf of any Government Entity, unless such Ship be released and
restored to its relevant registered owner from such hijacking,
theft, condemnation, capture, seizure, arrest, detention or
confiscation within 45 days after the occurrence thereof; and
(b) in relation to the Terminal:
(i) the actual, constructive, compromised or arranged total loss of
the Terminal; or
(ii) the Compulsory Acquisition of the Terminal and/or the other CNSA
Assets or any of them; or
(iii) the confiscation of the Terminal and/or the other CNSA Assets or
any of them (other than where the same amounts to Compulsory
Acquisition) by any Government Entity unless the Terminal and/or
the relevant CNSA Assets are released and restored to CNSA from
such confiscation within ten days after the occurrence thereof;
or
(iv) the Lease is repudiated, suspended, cancelled or terminated for
any reason whatsoever.
"TRANSACTION DOCUMENTS" means the Finance Documents, the Acquisition
Documents, the Management Agreements, the MOAs, the Purchase Option MOAs,
the Lease, the Charters, the Contracts of Affreightment, the Material
Contracts, the Constitutional Documents and the Merger Agreement and any
other documents designated as such by the Borrower and the Agent.
"TRANSACTION SECURITY" means the Security created or expressed to be
created in favour of the Security Agent or, as the case may be, the Finance
Parties, pursuant to the Transaction Security Documents.
"TRANSACTION SECURITY DOCUMENTS" means each of the documents listed as
being a Transaction Security Document in paragraph 3.4 of Part I or
paragraph 2.1 Part II of Schedule 3 (Conditions Precedent) and any document
required to be delivered to the Agent under paragraph 2 of Part III of
Schedule 3 (Conditions Precedent) together with any other document entered
into by any Obligor creating or expressed to create any guarantee or any
Security over all or any part of its assets in respect of the obligations
of any of the Obligors under any of the Finance Documents.
"TRANSFER CERTIFICATE" means a certificate substantially in one of the
forms set out in Schedule 6 (Form of Transfer Certificates) or any other
form agreed between the Agent and the Borrower.
35
"TRANSFER DATE" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer Certificate; and
(b) the date on which the Agent executes the Transfer Certificate.
"TREASURY TRANSACTIONS" means any derivative transaction entered into in
connection with protection against or benefit from fluctuation in any rate
or price (including any FFA).
"TRUST DEED" means a trust deed in the form, or substantially in the form,
set out in Schedule 13 (Form of Trust Deed).
"TRUST PROPERTY" means, collectively, (i) the security, powers, rights,
titles, benefits and interests (both present and future) constituted by,
and conferred on the Security Agent under, the Transaction Security
Documents, any other Finance Document, any Transaction Document, any Report
or any other document in connection with the transactions contemplated by
the Finance Documents and/or the Transactions Documents (including any
legal opinion addressed to the Security Agent) (together the "TRUST
DOCUMENTS"), (ii) all assets paid or transferred to or vested in the
Security Agent or its agent or received or recovered by the Security Agent
or its agent in connection with any of the Trust Documents whether from any
Security Provider or any other person and (iii) all rights, benefits,
interests and other assets at any time representing or deriving from any of
the foregoing, including all interest, income and other sums at any time
received or receivable by the Security Agent or its agent in respect of the
same (or any part thereof).
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor under
the Finance Documents.
"U.S." and "UNITED STATES" means the United States of America, its
territories, possessions and other areas subject to the jurisdiction of the
United States of America.
"US GAAP" means accounting principles, concepts, bases and policies
generally adopted and accepted in the United States.
"UTILISATION DATE" means, in relation to a Loan under a Facility, the date
on which the relevant Facility is utilised by the drawing of that Loan and
"UTILISATION DATES" means any or all of them.
"UTILISATION REQUEST" means a notice substantially in the relevant form set
out in Part I of Schedule 4 (Requests).
"VAT" means value added tax as provided for in the Value Added Tax ▇▇▇ ▇▇▇▇
and any other tax of a similar nature and analogous taxes in any other
relevant jurisdiction.
"VENDORS" means the shareholders listed in exhibit A of the Acquisition
Agreement.
"WACHOVIA ACCOUNTS" means, together, the four interest bearing dollar
accounts of Navios Corporation held with Wachovia Bank, National
Association in Connecticut as notified in writing by the Borrower to the
Agent prior to the date of this Agreement.
"WACHOVIA DEPOSIT ACCOUNT CONTROL AGREEMENTS" means, together, the control
agreements, in the agreed form, executed or (as the context may require) to
be executed by Navios Corporation, the Security Agent and Wachovia Bank,
National Association in respect of the Wachovia Accounts and "WACHOVIA
DEPOSIT ACCOUNT CONTROL AGREEMENT" means any of them.
"WACHOVIA DEPOSIT ACCOUNT SECURITY AGREEMENTS" means, together, the
security agreements, in the agreed form, executed or (as the context may
require) to be executed by Navios Corporation in favour of the Security
Agent in respect of the Wachovia Accounts and "WACHOVIA DEPOSIT ACCOUNT
SECURITY AGREEMENT" means any of them.
"WORKING CAPITAL ACCOUNT" means an interest bearing dollar account of the
Borrower, opened or (as the context may require) to be opened with the
Security Agent in Hamburg and designated the Working Capital Account and
includes any other account designated in writing by the Agent to be a
Working Capital Account for the purposes of this Agreement.
36
1.2 CONSTRUCTION
1.2.1 Unless a contrary indication appears, a reference in this Agreement to:
(a) the "AGENT", the "ARRANGER", any "FINANCE PARTY", any "LENDER", any
"OBLIGOR", any "PARTY", any "SECURED PARTY", any "SECURITY PROVIDER",
the "SECURITY AGENT" or any other person shall be construed so as to
include its successors in title, permitted assigns and permitted
transferees and, in the case of the Security Agent, any person for the
time being appointed as Security Agent or Security Agents in
accordance with the Finance Documents;
(b) a document in "AGREED FORM" is a document which is previously agreed
in writing by or on behalf of the Borrower and the Agent or, if not so
agreed, is in the form specified by the Agent;
(c) "ASSETS" includes present and future properties, revenues and rights
of every description;
(d) "DISPOSAL" or "DISPOSE" means a sale, lease, licence, transfer or loan
(but not including by way of loan of money) or other disposal by a
person of any asset, undertaking or business (whether by a voluntary
or involuntary single transaction or series of transactions);
(e) the "EQUIVALENT" of an amount specified in a particular currency (the
"SPECIFIED CURRENCY AMOUNT") shall be construed as a reference to the
amount of the other relevant currency which can be purchased with the
specified currency amount in the London foreign exchange market at or
about 11 a.m. on the date the calculation falls to be made for spot
delivery, as conclusively determined by the Agent;
(f) (or to any provision of) a "FINANCE DOCUMENT" or a "TRANSACTION
DOCUMENT" or any other agreement or instrument is a reference to that
Finance Document or Transaction Document, that provision or other
agreement or instrument as in force for the time being and as from
time to time amended, restated, supplemented or novated (however
fundamentally including by any increase in amounts owing or available
to be utilised under such document or any change to the parties
thereto) and (where such consent is, by the terms of this Agreement or
the relevant document, required to be obtained as a condition to such
amendment being permitted) with the prior written consent of the Agent
and/or any other Finance Parties;
(g) "GUARANTEE" means any guarantee, letter of credit, bond, indemnity or
similar assurance against loss including a third party security
arrangement, or any obligation, direct or indirect, actual or
contingent, to purchase or assume any indebtedness of any person or to
make an investment in or loan to any person or to purchase assets of
any person where, in each case, such obligation is assumed in order to
maintain or assist the ability of such person to meet its
indebtedness;
(h) "INCLUDING" means including without limitation;
(i) "INDEBTEDNESS" includes any obligation (whether incurred as principal
or as surety) for the payment or repayment of money, whether present
or future, actual or contingent;
(j) "MONTH" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar
month, except that:
(i) if the numerically corresponding day is not a Business Day, that
period shall end on the next Business Day in that calendar month
in which that period is to end if there is one, or if there is
not, on the immediately preceding Business Day; and
(ii) if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end on
the last Business Day in that calendar month.
The above rules will only apply to the last month of any period.
"MONTHLY" shall be construed accordingly.
(k) something being in the "ORDINARY COURSE OF BUSINESS" or the "ORDINARY
COURSE OF TRADE" of a person means something that is in the ordinary
course of that person's trading or other
37
ordinary operational business and not merely anything which that
person is entitled to do under its Constitutional Documents;
(l) "PAY", "PREPAY" or "REPAY" in clause 23 (General Undertakings)
includes by way of set-off, combination of accounts or otherwise;
(m) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or
partnership (whether or not having separate legal personality) of two
or more of the foregoing;
(n) a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but one
with which it is customary for companies undertaking similar
activities to comply) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory
or other authority or organisation;
(o) "RIGHTS" include all rights, whether actual or contingent, present or
future, arising under contract or law, or in equity;
(p) "SPOT RATE OF EXCHANGE" shall include any premium and costs of
exchange payable in connection with the purchase of a currency;
(q) "TRUSTEE", "FIDUCIARY" and "FIDUCIARY DUTY" has in each case the
meaning given to such term under applicable law;
(r) (i) to the "WINDING UP", "DISSOLUTION", or "ADMINISTRATION" of a
person or (ii) to a "RECEIVER" or "ADMINISTRATIVE RECEIVER" or
"ADMINISTRATOR" in the context of insolvency proceedings or security
enforcement actions in respect of a person shall be construed so as to
include any equivalent or analogous proceedings or any equivalent and
analogous person or appointee (respectively) under the law of the
jurisdiction in which such person is established or incorporated or
any jurisdiction in which such person carries on business including
(in respect of proceedings) the seeking or occurrence of liquidation,
winding-up, reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors;
(s) "WHOLLY-OWNED SUBSIDIARY" or "WHOLLY-OWNED SUBSIDIARY" has the meaning
given to that term in section 736 of the Act;
(t) a provision of law is a reference to that provision as amended or
re-enacted;
(u) a time of day is a reference to Central European time (CET); and
(v) words importing the plural shall include the singular and vice versa.
1.2.2 Section, clause and Schedule headings are for ease of reference only.
1.2.3 Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in this
Agreement.
1.2.4 A Default (other than an Event of Default) is "continuing" if it has not
been remedied or waived and an Event of Default is "CONTINUING" if it has
not been remedied or waived.
1.3 THIRD PARTY RIGHTS
1.3.1 Unless expressly provided to the contrary in a Finance Document, a person
who is not a Party has no right under the Contracts (Rights of Third
Parties) Act 1999 (the "THIRD PARTIES ACT") to enforce or enjoy the benefit
of any term of this Agreement.
1.3.2 Notwithstanding any term of any Finance Document, the consent of any
person who is not a Party is not required to rescind or vary this Agreement
at any time.
38
1.4 THE OFFER LETTER
In the event of any conflict between the terms of the Offer Letter and the
terms of this Agreement, the provisions of this Agreement shall prevail.
39
SECTION 2: THE FACILITIES
2 THE FACILITIES
2.1 THE FACILITIES
2.1.1 Subject to clause 2.1.2 and the other terms of this Agreement, the Lenders
make available:
(a) a dollar term loan facility in an aggregate amount equal to the Total
Facility A Commitments;
(b) a dollar term loan facility in an aggregate amount equal to the Total
Facility B1 Commitments;
(c) a dollar term loan facility in an aggregate amount equal to the Total
Facility B2 Commitments;
(d) a dollar term loan facility in an aggregate amount equal to the Total
Facility B3 Commitments;
(e) a dollar term loan facility in an aggregate amount equal to the Total
Facility C1 Commitments;
(f) a dollar term loan facility in an aggregate amount equal to the Total
Facility C2 Commitments;
(g) a dollar term loan facility in an aggregate amount equal to the Total
Facility C3 Commitments;
(h) a dollar term loan facility in an aggregate amount equal to the Total
Facility C4 Commitments;
(i) a dollar term loan facility in an aggregate amount equal to the Total
Facility C5 Commitments;
(j) a dollar term loan facility in an aggregate amount equal to the Total
Facility C6 Commitments;
(k) a dollar term loan facility in an aggregate amount equal to the Total
Facility D1 Commitments;
(l) a dollar term loan facility in an aggregate amount equal to the Total
Facility D2 Commitments;
(m) a dollar term loan facility in an aggregate amount equal to the Total
Facility D3 Commitments; and
(n) a dollar term loan facility in an aggregate amount equal to the Total
Facility D4 Commitments.
2.1.2 In the event that the first utilisation under this Agreement has not
occurred by 30 December 2005, then on 30 December 2005:
(a) the Total Facility A Commitments shall be immediately reduced by
$7,500,000; and
(b) the Total Facility B1 Commitments shall be immediately reduced by
$22,600,000; and
(c) the Total Facility B2 Commitments shall be immediately reduced by
$5,300,000; and
(d) the Total Facility B3 Commitments shall be immediately reduced by
$12,000,000,
and the relevant Facilities shall thereafter be available for utilisation
to the extent of such reduced Commitments, respectively. In the event of
such reduction, each Lender's Available Commitment in an Available Facility
shall (as applicable) be reduced pro rata to its then Available Commitment
in respect of such Available Facility.
2.1.3 Each Facility will be made available to the Borrower and paid to the
Borrower or, if the Borrower so requests in the case of any Facility C Loan
or any Facility D Loan, the relevant Loan may be paid directly to the
relevant Seller.
40
2.2 FINANCE PARTIES' RIGHTS AND OBLIGATIONS
2.2.1 The obligations of each Finance Party under the Finance Documents are
several. Failure by a Finance Party to perform its obligations under the
Finance Documents does not affect the obligations of any other party under
the Finance Documents. No Finance Party is responsible for the obligations
of any other Finance Party under the Finance Documents.
2.2.2 The rights of each Finance Party under or in connection with the Finance
Documents are separate and independent rights and any debt arising under
the Finance Documents to a Finance Party from an Obligor shall be a
separate and independent debt.
2.2.3 A Finance Party may, except as otherwise stated in the Finance Documents
including clause 27.25 (All enforcement action through the Security Agent),
separately enforce its rights under the Finance Documents.
3 PURPOSE
3.1 PURPOSE
3.1.1 The Borrower shall apply all amounts borrowed by it under Facility A,
Facility B1, Facility B2 and Facility B3 towards refinancing in full of the
Existing HSH Debt. To the extent that any part of the Existing HSH Debt
(the "WORKING CAPITAL PORTION") had been borrowed by the Borrower for the
general corporate and working capital purpose of the Group and has not, as
of the first Utilisation Date, been so applied by the Borrower and/or the
Group (whether because it is standing to the credit of the Working Capital
Account (as defined in the Existing Loan Agreement) or otherwise), the
Borrower shall ensure that a part of Facility A equal to the Working
Capital Portion shall be used for general corporate and working capital
purposes of the Group provided that such amounts are used to finance the
Core Activities of the Group.
3.1.2 The Borrower shall apply all amounts borrowed by it under each of Facility
C1, Facility C2, Facility C3, Facility C4, Facility C5, Facility C6,
Facility D1, Facility D2, Facility D3 and Facility D4 towards:
(a) payment to the relevant Seller of the purchase price of the Additional
Collateral Ship relevant to such Facility pursuant to the relevant
Purchase Option MOA or the relevant MOA; and/or
(b) refinancing the Group's equity in such Additional Collateral Ship.
3.2 MONITORING
No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.
4 CONDITIONS OF UTILISATION
4.1 INITIAL CONDITIONS PRECEDENT
4.1.1 The Lenders will only be obliged to comply with clause 5.4 (Lenders'
participation) in relation to any Facility A Loan or Facility B Loan, if on
or before the proposed Utilisation Date for the Facility A Loan and the
Facility B Loans, the Agent has received all of the documents and other
evidence listed in Part I of Schedule 3 (Conditions Precedent) in form and
substance satisfactory to the Agent. The Agent shall notify the Borrower
and the Lenders promptly upon being so satisfied.
4.1.2 The Lenders will only be obliged to comply with clause 5.4 (Lenders'
participation) in relation to any Facility C Loan or any Facility D Loan,
if on or before the proposed Utilisation Date for the relevant Loan, the
Agent has received all of the documents and other evidence listed in Part
II of Schedule 3 (Conditions Precedent) in connection with the Additional
Collateral Ship relating to such Facility C Loan or (as the case may be)
Facility D Loan, in form and substance satisfactory to the Agent. The Agent
shall notify the Borrower and the Lenders promptly upon being so satisfied.
41
4.2 FURTHER CONDITIONS PRECEDENT
The Lenders will only be obliged to comply with clause 5.4 (Lenders'
participation) in relation to any Loan if on the date of the relevant
Utilisation Request and on the proposed Utilisation Date for such Loan:
(a) no Default is continuing or would result from the making of the
proposed Loan; and
(b) all the representations and warranties in clause 20 (Representations)
are true.
42
SECTION 3: UTILISATION
5 UTILISATION
5.1 DELIVERY OF A UTILISATION REQUEST
The Borrower may utilise a Facility by delivery to the Agent of a duly
completed Utilisation Request not later than the Specified Time.
5.2 COMPLETION OF A UTILISATION REQUEST
Each Utilisation Request is irrevocable and will not be regarded as having
been duly completed unless:
(a) it identifies the Facility to be utilised;
(b) the proposed Utilisation Date is a Business Day within the
Availability Period applicable to that Facility;
(c) the currency and amount of the proposed Loan comply with clause 5.3
(Currency and amount); and
(d) the proposed Interest Period complies with clause 11 (Interest
Periods).
5.3 CURRENCY AND AMOUNT
5.3.1 Each Facility shall be borrowed in full, in one amount, in cash on its
Utilisation Date and shall be applied in accordance with clause 3.1
(Purpose).
5.3.2 The currency specified in a Utilisation Request must be dollars.
5.3.3 The aggregate amount of the proposed Loans under Facility A, Facility B1,
Facility B2 and Facility B3 shall not exceed the lower of (a) $435,000,000
and (b) the amount of the Existing HSH Debt outstanding on the Utilisation
Date for such Facilities.
5.3.4 The amount of the proposed Loan of each Facility must be:
(a) for Facility A, an amount equal to US$125,000,000 or, if less, the
Available Facility for Facility A; or
(b) for Facility B1, an amount equal to US$175,400,000 or, if less, the
Available Facility for Facility B1; or
(c) for Facility B2, an amount equal to US$40,800,000 or, if less, the
Available Facility for Facility B2; or
(d) for Facility B3, an amount equal to US$93,800,000 or, if less, the
Available Facility for Facility B3; or
(e) for Facility C1, an amount equal to the lower of (i) US$20,254,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C1 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C1; or
(f) for Facility C2, an amount equal to the lower of (i) US$21,775,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C2 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C2; or
43
(g) for Facility C3, an amount equal to the lower of (i) US$24,451,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C3 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C3; or
(h) for Facility C4, an amount equal to the lower of (i) US$22,100,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C4 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C4; or
(i) for Facility C5, an amount equal to the lower of (i) US$23,725,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C5 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C5; or
(j) for Facility C6, an amount equal to the lower of (i) US$19,695,000 and
(ii) the amount in dollars which is equal to 68% of the market value
of the Additional Collateral Ship relevant to Facility C6 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
C6; or
(k) for Facility D1, an amount equal to the lower of (i) US$26,550,000 and
(ii) the amount in dollars which is equal to 64% of the market value
of the Additional Collateral Ship relevant to Facility D1 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
D1; or
(l) for Facility D2, an amount equal to the lower of (i) US$18,000,000 and
(ii) the amount in dollars which is equal to 64% of the market value
of the Additional Collateral Ship relevant to Facility D2 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
D2; or
(m) for Facility D3, an amount equal to the lower of (i) US$16,900,000 and
(ii) the amount in dollars which is equal to 64% of the market value
of the Additional Collateral Ship relevant to Facility D3 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
D3; or
(n) for Facility D4, an amount equal to the lower of (i) US$20,550,000 and
(ii) the amount in dollars which is equal to 64% of the market value
of the Additional Collateral Ship relevant to Facility D4 (as
determined by the valuation of such Ship obtained pursuant to clause
4.1 (Initial Conditions Precedent) and Part II of Schedule 3
(Conditions Precedent)) and (iii) the Available Facility for Facility
D4.
5.4 LENDERS' PARTICIPATION
5.4.1 If the conditions set out in this Agreement have been met, each Lender
shall make its participation in each Loan available by the relevant
Utilisation Date through its Facility Office.
5.4.2 The amount of each Lender's participation in each Loan will be equal to
the proportion borne by its Available Commitment to the Available Facility
in respect of the Facility under which such Loan is to be made immediately
prior to making such Loan.
5.4.3 The Borrower irrevocably authorises and directs the Agent to remit the
proceeds of each Loan as follows:
44
(a) in the case of a Loan to be applied for refinancing the Existing HSH
Debt, to such account of the Agent (in its capacity as agent under the
Existing Loan Agreement) as specified by the Borrower in the relevant
Utilisation Request and agreed by the Agent;
(b) in the case of a Loan or part thereof to be applied in financing the
acquisition of an Additional Collateral Ship, to such account of the
Seller of such Additional Collateral Ship as specified by the Borrower
in the relevant Utilisation Request; and
(c) in the case of a Loan or part thereof to be applied in refinancing the
Group's equity in an Additional Collateral Ship, to such account of
the Borrower as specified by it in the relevant Utilisation Request,
and the Borrower acknowledges that such payments by the Agent that are not
made directly to the Borrower shall constitute the making of a Loan to the
Borrower by the Lenders (and the Agent shall obtain a good discharge
thereof upon receipt in the relevant bank accounts).
5.5 LIMITATIONS ON UTILISATIONS
Save as otherwise expressly agreed between the Lenders and the Borrower:
5.5.1 each of Facility A, Facility B1, Facility B2 and Facility B3 shall be
utilised simultaneously; and
5.5.2 no other Facility shall be utilised unless each of Facility A, Facility
B1, Facility B2 and Facility B3 have already been utilised.
5.6 HEDGE TRANSACTIONS
5.6.1 The Borrower undertakes with each of the Finance Parties that it shall, by
no later than the date specified in the Hedge Strategy Letter delivered by
the Borrower to the Original Hedge Counterparty in accordance with clause
4.1 (Initial conditions precedent), enter into such interest rate hedging
transactions as are required in the Hedge Strategy Letter so as to limit
its exposure under this Agreement to interest rate fluctuations.
5.6.2 Any swap or hedging transaction or instrument shall be entered into on the
basis of a Hedge Agreement and pursuant to the strategy set out in the
Hedge Strategy Letter and shall be concluded (a) with the Original Hedge
Counterparty and/or (b) with any other Hedge Counterparty and/or (c) with
the prior written consent of the Lenders, with any other counterparty,
Provided however that no such transaction or instrument shall be concluded
or entered into by the Borrower with a counterparty other than the Original
Hedge Counterparty, unless the Borrower shall have first given the Original
Hedge Counterparty the opportunity to make an offer for the same or an
equivalent transaction or instrument and (i) the Original Hedge
Counterparty has declined or failed to provide such an offer (in full or
for any part thereof, as the case may be) or (ii) the Original Hedge
Counterparty has made such an offer and the Borrower (acting reasonably)
has declined the offer of the Original Hedge Counterparty.
5.6.3 The Parties acknowledge that (a) the Borrower has already entered into the
HSH ISDA Agreement with the Original Hedge Counterparty, (b) the Borrower
and the Original Hedge Counterparty have entered and may enter into
Transactions (as defined therein) pursuant to the HSH ISDA Agreement and
(c) in doing so, the Borrower is in compliance with the strategy set out in
the Hedge Strategy Letter and is not in breach of this clause 5.6.
45
SECTION 4: REPAYMENT, PREPAYMENT AND CANCELLATION
6 REPAYMENT
6.1 REPAYMENT OF LOANS
6.1.1 The Borrower shall repay the Facility A Loan in instalments by repaying on
each Facility A Repayment Date the amount set out opposite that Facility A
Repayment Date below:
FACILITY A REPAYMENT
REPAYMENT DATE INSTALMENT (US$)
----------------- ----------------
31 December 2005 7,500,000
31 March 2006 1,798,500
30 June 2006 1,798,500
30 September 2006 1,798,500
31 December 2006 1,798,500
31 March 2007 1,798,500
30 June 2007 1,798,500
30 September 2007 1,798,500
31 December 2007 1,798,500
31 March 2008 1,798,500
30 June 2008 1,798,500
30 September 2008 1,798,500
31 December 2008 1,798,500
31 March 2009 1,798,500
30 June 2009 1,798,500
30 September 2009 1,798,500
31 December 2009 1,798,500
31 March 2010 1,798,500
30 June 2010 1,798,500
30 September 2010 1,798,500
31 December 2010 1,798,500
31 March 2011 1,798,500
30 June 2011 1,798,500
30 September 2011 1,798,500
31 December 2011 1,798,500
31 March 2012 1,798,500
30 June 2012 1,798,500
30 September 2012 1,798,500
31 December 2012 1,798,500
46
FACILITY A REPAYMENT
REPAYMENT DATE INSTALMENT (US$)
----------------- ----------------
31 March 2013 1,798,500
30 June 2013 1,798,500
30 September 2013 1,798,500
31 December 2013 1,798,500
31 March 2014 1,798,500
30 June 2014 1,798,500
30 September 2014 1,798,500
31 December 2014 1,798,500
31 March 2015 1,798,500
30 June 2015 1,798,500
30 September 2015 1,798,500
31 December 2015 47,358,500
6.1.2 The Borrower shall repay the aggregate Facility B Loans in instalments by
repaying on each Facility B Repayment Date the amounts set out opposite
that Facility B Repayment Date below in relation to each relevant Facility:
REPAYMENT INSTALMENT (US$)
FACILITY B ---------------------------------------
REPAYMENT DATE FACILITY B1 FACILITY B2 FACILITY B3
----------------- ----------- ----------- -----------
31 December 2005 22,600,000 5,300,000 12,100,000
31 March 2006 5,457,143 1,267,858 2,917,858
30 June 2006 5,457,143 1,267,858 2,917,858
30 September 2006 5,457,143 1,267,858 2,917,858
31 December 2006 5,457,143 1,267,858 2,917,858
31 March 2007 5,457,143 1,267,858 2,917,858
30 June 2007 5,457,143 1,267,858 2,917,858
30 September 2007 5,457,143 1,267,858 2,917,858
31 December 2007 5,457,143 1,267,858 2,917,858
31 March 2008 5,457,143 1,267,858 2,917,858
30 June 2008 5,457,143 1,267,858 2,917,858
30 September 2008 5,457,143 1,267,858 2,917,858
31 December 2008 5,457,143 1,267,858 2,917,858
31 March 2009 5,457,143 1,267,858 2,917,858
30 June 2009 5,457,143 1,267,858 2,917,858
30 September 2009 5,457,143 1,267,858 2,917,858
31 December 2009 5,457,143 1,267,858 2,917,858
47
REPAYMENT INSTALMENT (US$)
FACILITY B ---------------------------------------
REPAYMENT DATE FACILITY B1 FACILITY B2 FACILITY B3
----------------- ----------- ----------- -----------
31 March 2010 5,457,143 1,267,858 2,917,858
30 June 2010 5,457,143 1,267,858 2,917,858
30 September 2010 5,457,143 1,267,858 2,917,858
31 December 2010 5,457,143 1,267,858 2,917,858
31 March 2011 5,457,143 1,267,858 2,917,858
30 June 2011 5,457,143 1,267,858 2,917,858
30 September 2011 5,457,143 1,267,858 2,917,858
31 December 2011 5,457,143 1,267,858 2,917,858
31 March 2012 5,457,143 1,267,858 2,917,858
30 June 2012 5,457,143 1,267,858 2,917,858
30 September 2012 5,457,143 1,267,858 2,917,858
31 December 2012 5,457,139 1,267,834 2,917,834
6.1.3 The Borrower shall repay the aggregate Facility C Loans in instalments by
repaying on each Facility C Repayment Date the amounts set out opposite
that Facility C Repayment Date below in relation to each relevant Facility:
REPAYMENT INSTALMENT (US$)
FACILITY C ---------------------------------------------------------------------------------
REPAYMENT DATE FACILITY C1 FACILITY C2 FACILITY C3 FACILITY C4 FACILITY C5 FACILITY C6
----------------- ----------- ----------- ----------- ----------- ----------- -----------
31 March 2006 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2006 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2006 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2006 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2007 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2007 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2007 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2007 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2008 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2008 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2008 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2008 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2009 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2009 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2009 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2009 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2010 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2010 298,000 320,000 382,000 307,000 395,500 308,000
48
REPAYMENT INSTALMENT (US$)
FACILITY C ----------------------------------------------------------------------------
REPAYMENT DATE FACILITY C1 FACILITY C2 FACILITY C3 FACILITY C4 FACILITY C5 FACILITY C6
----------------- ----------- ----------- ----------- ----------- ----------- -----------
30 September 2010 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2010 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2011 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2011 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2011 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2011 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2012 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2012 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2012 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2012 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2013 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2013 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2013 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2013 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2014 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2014 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2014 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2014 298,000 320,000 382,000 307,000 395,500 308,000
31 March 2015 298,000 320,000 382,000 307,000 395,500 308,000
30 June 2015 298,000 320,000 382,000 307,000 395,500 308,000
30 September 2015 298,000 320,000 382,000 307,000 395,500 308,000
31 December 2015 8,632,002 9,295,016 9,553,005 10,127,000 8,300,500 7,682,985
6.1.4 The Borrower shall repay the aggregate Facility D Loans in instalments by
repaying on each Facility D Repayment Date the amounts set out opposite
that Facility D Repayment Date below in relation to each relevant Facility:
REPAYMENT INSTALMENT (US$)
FACILITY D -----------------------------------------------------
REPAYMENT DATE FACILITY D1 FACILITY D2 FACILITY D3 FACILITY D4
----------------- ----------- ----------- ----------- -----------
31 March 2006 454,500 537,500 552,778 522,000
30 June 2006 454,500 537,500 552,778 522,000
30 September 2006 454,500 537,500 552,778 522,000
31 December 2006 454,500 537,500 552,778 522,000
31 March 2007 454,500 537,500 552,778 522,000
30 June 2007 454,500 537,500 552,778 522,000
30 September 2007 454,500 537,500 552,778 522,000
31 December 2007 454,500 537,500 552,778 522,000
49
REPAYMENT INSTALMENT (US$)
FACILITY D -----------------------------------------------------
REPAYMENT DATE FACILITY D1 FACILITY D2 FACILITY D3 FACILITY D4
----------------- ----------- ----------- ----------- -----------
31 March 2008 454,500 537,500 552,778 522,000
30 June 2008 454,500 537,500 552,778 522,000
30 September 2008 454,500 537,500 552,778 522,000
31 December 2008 454,500 537,500 552,778 522,000
31 March 2009 329,500 412,500 427,778 397,000
30 June 2009 329,500 412,500 427,778 397,000
30 September 2009 329,500 412,500 427,778 397,000
31 December 2009 329,500 412,500 427,778 397,000
31 March 2010 329,500 412,500 427,778 397,000
30 June 2010 329,500 412,500 427,778 397,000
30 September 2010 329,500 412,500 427,778 397,000
31 December 2010 329,500 412,500 427,778 397,000
31 March 2011 329,500 412,500 427,778 397,000
30 June 2011 329,500 412,500 427,778 397,000
30 September 2011 329,500 412,500 427,778 397,000
31 December 2011 329,500 412,500 427,778 397,000
31 March 2012 329,500 412,500 427,778 397,000
30 June 2012 329,500 412,500 427,778 397,000
30 September 2012 329,500 412,500 427,778 397,000
31 December 2012 329,500 412,500 427,778 397,000
31 March 2013 329,500 412,500 427,778 397,000
30 June 2013 329,500 412,500 427,778 397,000
30 September 2013 329,500 412,500 427,778 397,000
31 December 2013 329,500 412,500 427,778 397,000
31 March 2014 329,500 412,500 427,778 397,000
30 June 2014 329,500 412,500 427,778 397,000
30 September 2014 329,500 412,500 427,778 397,000
31 December 2014 329,500 412,500 427,770 397,000
31 March 2015 329,500 412,500 0/N/A 397,000
30 June 2015 329,500 412,500 0/N/A 397,000
30 September 2015 329,500 412,500 0/N/A 397,000
31 December 2015 12,199,500 412,500 0/N/A 3,567,000
50
6.1.5 In the event that clause 2.1.2 (The Facilities) applies and the amount of
the Total Facility A Commitments, the Total Facility B1 Commitments, the
Total Facility B2 Commitments and the Total Facility B3 Commitments are
reduced as provided therein, the Repayment Instalments of each of Facility
A, Facility B1, Facility B2 and Facility B3 falling due on the first
Repayment Dates for each such Facility (as shown in the relevant table for
each such Facility in this clause 6.1 (Repayment of Loans)) shall be
immediately cancelled and no longer due and, from that day, the first
Repayment Instalment due under each such Facility shall be that specified
to be due on the second Repayment Date for the relevant Facility (as shown
in the same table).
6.1.6 In the event that any of Facility C1, Facility C2, Facility C3, Facility
C4, Facility C5, Facility D1, Facility D2, Facility D3 or Facility D4 has
not been utilised by 30 March 2006, the Repayment Instalment of the
relevant Facility due on the first Repayment Date thereof (as shown in the
relevant table for such Facility in this clause 6.1 (Repayment of Loans))
shall be no longer due on such first Repayment Date. Assuming that the
relevant Facility is subsequently utilised pursuant to the terms of this
Agreement, such Repayment Instalment shall be added proportionately to, and
shall be due and payable with, each of the Repayment Instalments of such
Facility due on the second, third and fourth Repayment Dates for such
Facility (as shown in the same table) and the amounts of such Repayment
Instalments shall be increased accordingly. In the event that this clause
applies, each portion of the relevant first Repayment Instalment of such
Facility added to the relevant second, third and fourth Repayment
Instalments of such Facility, respectively, shall thereafter be deemed to
constitute part of the relevant second, third and fourth Repayment
Instalments of such Facility, respectively.
6.1.7 In the event that Facility C6 has not been utilised by 30 March 2006, the
Repayment Instalment of Facility C6 due on the first Repayment Date thereof
(as shown in the table of clause 6.1.3 (Repayment of Loans)) shall be no
longer due on such first Repayment Date. Assuming that Facility C6 is
subsequently utilised pursuant to the terms of this Agreement, such first
Repayment Instalment of Facility C6 shall be added to the final Repayment
Instalment of Facility C6 (as shown in the same table) and the amount of
such final Repayment Instalment shall be increased accordingly. In the
event that this clause applies, the amount of the first Repayment
Instalment of Facility C6 added to the final Repayment Instalment of
Facility C6 shall thereafter be deemed to constitute part of the final
Repayment Instalment of Facility C6.
6.1.8 The Borrower may not re-borrow any part of a Facility which is repaid.
6.2 EFFECT OF CANCELLATION AND PREPAYMENT ON SCHEDULED REPAYMENTS
6.2.1 If the Borrower cancels the whole or any part of the Commitment of a
Lender under any Facility in accordance with clause 7.4 (Right of
cancellation and repayment in relation to a single Lender) or if the
Commitment of any Lender under any Facility is reduced under clause 7.1
(Illegality), then the amount of the Repayment Instalments of the relevant
Facility for each Repayment Date thereof falling after that cancellation
will reduce pro rata by the amount cancelled.
6.2.2 If the Borrower cancels the whole or any part of the Commitments under any
Facility in accordance with clause 7.2 (Voluntary cancellation), then the
amount of the Repayment Instalments of the relevant Facility for each
Repayment Date thereof falling after that cancellation will reduce in
inverse chronological order by the amount cancelled.
6.2.3 If any Loan is prepaid in accordance with clause 7.4 (Right of
cancellation and repayment in relation to a single Lender) or clause 7.1
(Illegality), then the amount of the Repayment Instalments of the relevant
Facility for each Repayment Date thereof falling after that prepayment will
reduce pro rata by the amount of the relevant Loan prepaid.
6.2.4 If any Loan is prepaid in accordance with clause 7.3 (Voluntary prepayment
of Loans), 8.1.6 (Total Loss/Sale) or clause 8.3 (Application of mandatory
prepayments), then the amount of the Repayment Instalments of the relevant
Facility for each Repayment Date thereof falling after that prepayment will
reduce in inverse chronological order by the amount of the relevant Loan
prepaid.
51
7 ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION
7.1 ILLEGALITY
If it becomes unlawful in any applicable jurisdiction for a Lender to
perform any of its obligations as contemplated by this Agreement or to
fund, issue or maintain its participation in any Loan:
7.1.1 that Lender, shall promptly notify the Agent upon becoming aware of that
event;
7.1.2 upon the Agent notifying the Borrower, the Commitment of that Lender will
be immediately cancelled; and
7.1.3 the Borrower shall repay that Lender's participation in the Loans on the
last day of the Interest Period for each Loan occurring after the Agent has
notified the Borrower or, if earlier, the date specified by the Lender in
the notice delivered to the Agent (being no earlier than the last day of
any applicable grace period permitted by law).
7.2 VOLUNTARY CANCELLATION
The Borrower may, if it gives the Agent not less than ten Business Days'
(or such shorter period as the Agent may agree) prior notice, cancel the
whole or any part (being a minimum amount of US$1,000,000) of an Available
Facility. Any cancellation under this clause 7.2 shall reduce the
Commitments of the Lenders under that Facility rateably.
7.3 VOLUNTARY PREPAYMENT OF LOANS
7.3.1 Subject to clause 7.3.3 the Borrower may, if it gives the Agent not less
than ten Business Days' prior notice, prepay the whole or any part of a
Loan (but, if in part, being an amount that reduces the amount of that Loan
by a minimum amount of US$1,000,000).
7.3.2 A Loan may only be prepaid after the last day of the Availability Period
of the relevant Facility (or, if earlier, the day on which the applicable
Available Facility is zero).
7.3.3 Any voluntary prepayment shall be applied in reducing the Repayment
Instalments in respect of Facility A, Facility C1, Facility C2, Facility
C3, Facility C4, Facility C5, Facility C6, Facility D1, Facility D2,
Facility D3 and Facility D4, pro rata as between such Facilities, and when
such Facilities have been prepaid in full, in reducing the Repayment
Instalments of Facility B1 and, when Facility B1 has been prepaid in full,
in reducing the Repayment Instalments of Facility B2 and, when Facility B2
has been prepaid in full, in reducing the Repayment Instalments of Facility
B3. Such voluntary prepayments of the Facilities shall be applied against
the relevant Repayment Instalments in accordance with clause 6.2.4 (Effect
of cancellation and prepayment on scheduled repayments).
7.4 RIGHT OF CANCELLATION AND REPAYMENT IN RELATION TO A SINGLE LENDER
7.4.1 If:
(a) any sum payable to any Lender by an Obligor is required to be
increased under clause 14.2.3 (Tax gross-up); or
(b) any Lender claims indemnification from the Borrower or an Obligor
under clause 14.3 (Tax indemnity) or clause 15.1 (Increased costs),
the Borrower may, whilst the circumstance giving rise to the requirement or
indemnification continues, give the Agent notice of cancellation of the
Commitments of that Lender and its intention to procure the repayment of
that Lender's participation in the Loans.
7.4.2 On receipt of a notice referred to in clause 7.4.1 in relation to a
Lender, the Commitments of that Lender shall immediately be reduced to
zero.
7.4.3 On the last day of each Interest Period for a Loan which ends after the
Borrower has given notice under clause 7.4.1 in relation to a Lender (or,
if earlier, the date specified by the Borrower in that
52
notice), the Borrower shall repay that Lender's participation in that Loan
together with all interest and other amounts accrued under the Finance
Documents.
7.5 MANDATORY CANCELLATION
If a Facility is not utilised by the last day of the Availability Period
for that Facility, the relevant Facility shall then be immediately
cancelled.
8 MANDATORY PREPAYMENT
8.1 TOTAL LOSS/SALE
8.1.1 For the purposes of this clause 8.1 and clause 8.2:
"COLLATERAL SHIP INSURANCE PROCEEDS" means the proceeds of any insurance
claim received in relation to any Collateral Ship by any member of the
Group and after deducting any reasonable expenses in relation to that claim
which are incurred by any member of the Group to persons who are not
members of the Group.
"TERMINAL INSURANCE PROCEEDS" means the proceeds of any insurance claim
received in relation to the Terminal by any member of the Group and after
deducting any reasonable expenses in relation to that claim which are
incurred by any member of the Group to persons who are not members of the
Group.
8.1.2 On the date falling 120 days after that on which a Collateral Ship (other
than a Second Security Collateral Ship) became a Total Loss or, if earlier,
on the date upon which the Collateral Ship Insurance Proceeds in respect of
such Total Loss are, or Requisition Compensation is, received by the
relevant Collateral Owner (or the Security Agent or, as the case may be the
Secured Parties, pursuant to the relevant Transaction Security Documents)
(as the case may be), the Borrower shall prepay to the Agent for the
account of the Lenders an amount equal to any Collateral Ship Insurance
Proceeds or any Requisition Compensation (as the case may be) or, in the
case of an Existing Collateral Ship or an Additional Collateral Ship (if
higher than the relevant Collateral Ship Insurance Proceeds or Requisition
Compensation), the amount specified in the table below opposite the name of
the relevant Collateral Ship by reference to the actual date of the Total
Loss:
YEAR TOTAL LOSS OCCURS
Collateral Ship 2005 2006 2007 2008 2009 2010
--------------- ---------- ---------- ---------- ---------- ---------- ----------
Navios Achilles 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Navios Apollon 29,066,918 26,644,675 21,315,740 17,924,599 15,017,908 12,111,216
Navios Herakles 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Navios Hios 32,521,635 29,811,499 23,849,199 20,055,008 16,802,845 13,550,681
Navios Ionian 29,066,918 26,644,675 21,315,740 17,924,599 15,017,908 12,111,216
Navios Kypros 32,521,635 29,811,499 23,849,199 20,055,008 16,802,845 13,550,681
Navios Meridian 29,683,832 27,210,179 21,768,143 18,305,030 15,336,646 12,368,263
Navios Mercator 30,331,591 27,803,959 22,243,167 18,704,481 15,671,322 12,638,163
Navios Arc 32,048,668 29,377,945 23,502,356 19,763,345 16,558,478 13,353,612
Navios Horizon 28,665,924 26,277,097 21,021,678 17,677,320 14,810,727 11,944,135
Navios Galaxy 31,359,781 28,746,466 22,997,172 19,338,531 16,202,553 13,066,575
Navios Magellan 30,331,591 27,803,959 22,243,167 18,704,481 15,671,322 12,638,163
Alegria 35,770,714 32,789,821 26,231,857 22,058,607 18,481,535 14,904,464
Collateral Ship 2011 2012 2013 2014 2015
--------------- ---------- ---------- ---------- ---------- ----------
Navios Achilles 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
Navios Apollon 10,657,870 10,173,421 9,688,973 9,204,524 8,720,075
Navios Herakles 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
Navios Hios 11,924,599 11,382,572 10,840,545 10,298,518 9,756,490
Navios Ionian 10,657,870 10,173,421 9,688,973 9,204,524 8,720,075
Navios Kypros 11,924,599 11,382,572 10,840,545 10,298,518 9,756,490
Navios Meridian 10,884,072 10,389,341 9,894,611 9,399,880 8,905,150
Navios Mercator 11,121,583 10,616,057 10,110,530 9,605,004 9,099,477
Navios Arc 11,751,178 11,217,034 10,682,889 10,148,745 9,614,600
Navios Horizon 10,510,839 10,033,073 9,555,308 9,077,543 8,599,777
Navios Galaxy 11,498,586 10,975,923 10,453,260 9,930,597 9,407,934
Navios Magellan 11,121,583 10,616,057 10,110,530 9,605,004 9,099,477
Alegria 13,115,928 12,519,750 11,923,571 11,327,393 10,731,214
53
Libra II 25,293,462 23,185,674 18,548,539 15,597,635 13,068,289 10,538,943
Navios Gemini S 23,545,540 21,583,412 17,266,730 14,519,750 12,165,196 9,810,642
Navios Felicity 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Libra II 9,274,270 8,852,712 8,431,154 8,009,596 7,588,039
Navios Gemini S 8,633,365 8,240,939 7,848,513 7,456,088 7,063,662
Navios Felicity 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
in each case in the manner contemplated by clause 8.3 (Application of
mandatory prepayments).
8.1.3 On the date falling 120 days after that on which a Second Security
Collateral Ship became a Total Loss or, if earlier on the date upon which
the Collateral Ship Insurance Proceeds in respect of such Total Loss are,
or Requisition Compensation is, received by the relevant Collateral Owner
(or the Security Agent or, as the case may be, the Secured Parties,
pursuant to the relevant Transaction Security Documents) (as the case may
be), the Borrower shall prepay to the Agent for the account of the Lenders
the amount specified in the table below by reference to the actual date of
the Total Loss:
YEAR TOTAL LOSS OCCURS PREPAYMENT AMOUNT (US$)
---------------------- -----------------------
2005 7,000,000
2006 7,000,000
2007 7,000,000
2008 4,000,000
2009 4,000,000
2010 4,000,000
2011 1,500,000
2012 1,500,000
2013 Nil
2014 Nil
2015 Nil
8.1.4 In the event that an Existing Collateral Ship or an Additional Collateral
Ship is sold or is otherwise disposed of (in accordance with the terms of
clause 23.16 (Disposals)) then on the date on which such a Collateral Ship
is disposed of, the Borrower shall prepay an amount equal to the higher of:
(a) the market value of such Collateral Ship (as most recently calculated
pursuant to valuations obtained in accordance with clause 23.37
(Valuation of Owned Ships) and/or 23.53(b)(Security value
maintenance)); and
(b) the amount specified in the table below opposite the name of the
relevant Collateral Ship with reference to the relevant date of
disposal (where, for the purposes of this clause 8.1.4, the relevant
date of disposal shall be the date of transfer of title of the
relevant Collateral Ship:
54
YEAR DISPOSAL OCCURS
Collateral Ship 2005 2006 2007 2008 2009 2010
--------------- ---------- ---------- ---------- ---------- ---------- ----------
Navios Achilles 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Navios Apollon 29,066,918 26,644,675 21,315,740 17,924,599 15,017,908 12,111,216
Navios Herakles 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Navios Hios 32,521,635 29,811,499 23,849,199 20,055,008 16,802,845 13,550,681
Navios Ionian 29,066,918 26,644,675 21,315,740 17,924,599 15,017,908 12,111,216
Navios Kypros 32,521,635 29,811,499 23,849,199 20,055,008 16,802,845 13,550,681
Navios Meridian 29,683,832 27,210,179 21,768,143 18,305,030 15,336,646 12,368,263
Navios Mercator 30,331,591 27,803,959 22,243,167 18,704,481 15,671,322 12,638,163
Navios Arc 32,048,668 29,377,945 23,502,356 19,763,345 16,558,478 13,353,612
Navios Horizon 28,665,924 26,277,097 21,021,678 17,677,320 14,810,727 11,944,135
Navios Galaxy 31,359,781 28,746,466 22,997,172 19,338,531 16,202,553 13,066,575
Navios Magellan 30,331,591 27,803,959 22,243,167 18,704,481 15,671,322 12,638,163
Alegria 35,770,714 32,789,821 26,231,857 22,058,607 18,481,535 14,904,464
Libra II 25,293,462 23,185,674 18,548,539 15,597,635 13,068,289 10,538,943
Navios Gemini S 23,545,540 21,583,412 17,266,730 14,519,750 12,165,196 9,810,642
Navios Felicity 29,930,597 27,436,381 21,949,105 18,457,202 15,464,142 12,471,082
Collateral Ship 2011 2012 2013 2014 2015
--------------- ---------- ---------- ---------- ---------- ----------
Navios Achilles 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
Navios Apollon 10,657,870 10,173,421 9,688,973 9,204,524 8,720,075
Navios Herakles 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
Navios Hios 11,924,599 11,382,572 10,840,545 10,298,518 9,756,490
Navios Ionian 10,657,870 10,173,421 9,688,973 9,204,524 8,720,075
Navios Kypros 11,924,599 11,382,572 10,840,545 10,298,518 9,756,490
Navios Meridian 10,884,072 10,389,341 9,894,611 9,399,880 8,905,150
Navios Mercator 11,121,583 10,616,057 10,110,530 9,605,004 9,099,477
Navios Arc 11,751,178 11,217,034 10,682,889 10,148,745 9,614,600
Navios Horizon 10,510,839 10,033,073 9,555,308 9,077,543 8,599,777
Navios Galaxy 11,498,586 10,975,923 10,453,260 9,930,597 9,407,934
Navios Magellan 11,121,583 10,616,057 10,110,530 9,605,004 9,099,477
Alegria 13,115,928 12,519,750 11,923,571 11,327,393 10,731,214
Libra II 9,274,270 8,852,712 8,431,154 8,009,596 7,588,039
Navios Gemini S 8,633,365 8,240,939 7,848,513 7,456,088 7,063,662
Navios Felicity 10,974,552 10,475,709 9,976,866 9,478,022 8,979,179
in each case in the manner contemplated by clause 8.3 (Application of
Mandatory Prepayments).
8.1.5 In the event that a Second Security Collateral Ship is sold or is
otherwise disposed of in accordance with the terms of clause 23.16
(Disposals) then on the date on which such Second Security Collateral Ship
is disposed of, the Borrower shall prepay the amount specified in the table
below by reference to the actual date of the disposal (where for purposes
of this clause 8.1.5 the relevant date of disposal shall be the date of
transfer of title of the relevant Second Security Collateral Ship):
YEAR TOTAL LOSS OCCURS PREPAYMENT AMOUNT (US$)
---------------------- -----------------------
2005 7,000,000
2006 7,000,000
2007 7,000,000
2008 4,000,000
2009 4,000,000
2010 4,000,000
2011 1,500,000
2012 1,500,000
2013 Nil
2014 Nil
2015 Nil
55
in each case in the manner contemplated by clause 8.3 (Application of
Mandatory Prepayments).
8.1.6 If the Terminal (i) becomes a Total Loss or (ii) suffers damage or is
involved in an incident which in the opinion of the Agent may result in the
Terminal subsequently becoming a Total Loss (each such event being a
"TERMINAL EVENT"), the Borrower shall, on the date falling 120 days after
that on which the Terminal suffered such damage or became a Total Loss or
was involved in such incident (as the case may be) or, if earlier, on the
date upon which the Terminal Insurance Proceeds in respect of such damage
or, as the case may be, Total Loss are received by CNSA (or the Security
Agent pursuant to the relevant Transaction Security Documents) (as the case
may be), prepay to the Agent for the account of the Lenders an amount equal
to ten per cent. of the outstanding Facilities at the time of the Terminal
Event (the "TERMINAL PREPAYMENT AMOUNT"). The Terminal Prepayment Amount
shall be paid in the following instalments:
(a) an immediate payment of an instalment being the higher of (i) 60 per
cent. of the Terminal Prepayment Amount and (ii) any Terminal
Insurance Proceeds paid in respect of the relevant Terminal Event (the
"IMMEDIATE PREPAYMENT AMOUNT"); and
(b) to the extent that the amount paid as the Immediate Prepayment Amount
pursuant to (a) above is less than the Terminal Prepayment Amount, the
difference will be paid to the Agent for the account of the Lenders in
equal instalments over the remaining tenor of the Facility B2 Loan
(the "INSTALMENT PREPAYMENT AMOUNTS"). Payments of any Instalment
Prepayment Amounts will fall due on each Facility B Repayment Date,
shall be made in addition to the Facility B repayment amount then
falling due under clause 6.1.2 (Repayment of Loans) in respect of
Facility B2 and shall be applied in inverse chronological order
against each Repayment Instalment falling due after the making of such
Instalment Prepayment Amount (as provided in clause 6.2.4).
8.1.7 For the purposes of clauses 8.1.2, 8.1.3 and 8.1.6 above, a Total Loss
shall be deemed to have occurred:
(a) in the case of an actual total loss of a Collateral Ship on the actual
date and at the time such Collateral Ship was lost or, if such date is
not known, on the date on which a Collateral Ship was last reported;
(b) in the case of a constructive total loss of a Collateral Ship, upon
the date and at the time notice of abandonment of such Collateral Ship
is given to the insurers of such Collateral Ship for the time being;
(c) in the case of a compromised or arranged total loss of a Collateral
Ship, on the date upon which a binding agreement as to such
compromised or arranged total loss has been entered into by the
insurers of such Collateral Ship;
(d) in the case of Compulsory Acquisition of a Collateral Ship or the
Terminal and/or the other CNSA Assets, on the date upon which the
relevant requisition of title or other compulsory acquisition occurs;
(e) in the case of hijacking, theft, condemnation, capture, seizure,
arrest, detention or confiscation of such Collateral Ship (other than
where the same amounts to Compulsory Acquisition of such Collateral
Ship) by any Government Entity, or by persons purporting to act on
behalf of any Government Entity, which deprives the relevant
Collateral Owner of the use of such Collateral Ship for more than 60
days, upon the expiry of the period of 60 days after the date upon
which the relevant hijacking, theft, condemnation, capture, seizure,
arrest, detention or confiscation occurred;
(f) in the case of an actual total loss of the Terminal on the actual date
and at the time the Terminal was lost;
(g) in the case of a constructive total loss of the Terminal, upon the
date and at the time notice of abandonment of the Terminal or notice
that the Terminal is not economic to repair or reinstate is given to
the insurers of the Terminal for the time being;
56
(h) in the case of a compromised or arranged total loss of the Terminal,
on the date upon which a binding agreement as to such compromised or
arranged total loss has been entered into by the insurers of the
Terminal;
(i) if the Lease of the Terminal is repudiated, suspended, cancelled or
terminated on the date and at the time such repudiation, suspension,
cancellation or termination is made or done, notwithstanding that
there may be a grace or notice period prior to which any repudiation,
suspension, cancellation or termination cannot take place; and
(j) in the case of confiscation of the Terminal and/or the other CNSA
Assets or any of them (other than where the same amounts to Compulsory
Acquisition) by any Government Entity, or by persons purporting to act
on behalf of any Government Entity, which deprives CNSA of the use of
the Terminal and/or the CNSA Assets or any of them for more than 30
days, upon the expiry of the period of 30 days after the date upon
which the relevant confiscation occurred.
8.1.8 No later than five Banking Days prior to each Excess Cash Calculation
Date, the Borrower shall notify the Agent in writing of:
(a) the amount of dividend (which shall qualify as a Permitted
Distribution), if any, which it intends to declare and distribute;
(b) the Relevant Amount (if applicable); and
(c) the amount of Excess Cash,
in each case, for the Financial Quarter to which such Excess Cash
Calculation Date relates.
The Borrower shall not advise the Agent of a Relevant Amount (and such
Relevant Amount shall not be taken into account in the calculation of
Excess Cash pursuant to clause 1.2), unless (i) the Borrower has previously
notified the Agent in writing that it intends to distribute in respect of
the relevant Financial Quarter, a dividend equal to or in excess of such
Relevant Amount and (ii) any such dividend would otherwise constitute a
Permitted Distribution.
Each notification of Excess Cash by the Borrower to the Agent (A) shall be
signed by the Chief Financial Officer and a Director of the Borrower, (B)
shall set out in detail the calculations and method of computation of the
amount of Excess Cash advised to the Agent (each of which shall be made in
accordance with the Accounting Principles) and (C) shall be accompanied by
appropriate documents evidencing the accuracy of the information and
computations contained therein and, if the Agent shall so request, the
Borrower shall provide the Agent forthwith with such further information
and documents relating thereto as the Agent may in its sole discretion
require. The Agent shall be entitled to re-calculate the amount of the
Excess Cash in respect of a Financial Quarter, by reference to the
documents and information supplied to it by the Borrower or otherwise
available to it and, if there is any difference between the amount of
Excess Cash notified by the Borrower to the Agent and the amount of Excess
Cash re-calculated by the Agent for the same period, the amount calculated
by the Agent shall be deemed to be the amount of Excess Cash for such
period for the purposes of this Agreement.
Within ten Banking Days after each such notification (or, if applicable,
recalculation) of Excess Cash in respect of a Financial Quarter (other than
the fourth Financial Quarters of each Financial Year) and provided such
Excess Cash is a positive figure, the Borrower shall prepay to the Agent
for the account of the Lenders a part of the Loans equal to (i) the amount
of dividend which the Borrower notified the Agent pursuant to clause
8.1.8(Total Loss/Sale) that it intends to declare in respect of such
Financial Quarter minus (if applicable) (ii) any Relevant Amount which the
Borrower notified the Agent pursuant to the same clause (and to the extent
it was entitled to do so thereunder) in respect of such Financial Quarter.
Within ten Banking Days after each such notification (or, if applicable,
recalculation) of Excess Cash in respect of the fourth Financial Quarter of
a Financial Year and provided such Excess Cash is a positive figure, the
Borrower shall prepay to the Agent for the account of the Lenders a part of
the Loans equal to (i) the amount of that Excess Cash minus (ii) the amount
of dividend which the Borrower notified the Agent pursuant to clause
8.1.8(Total Loss/Sale) that it intends to declare in respect of such
Financial Quarter.
57
Any prepayment made under this clause 8.1.8(Total Loss/Sale) shall be
applied in reducing the Repayment Instalments in respect of Facility B1,
Facility B2 and Facility B3 in inverse chronological order (and pro rata as
between such Facilities) until such three Facilities have been repaid in
full and, thereafter, shall be applied in reducing the Repayment
Instalments in respect of Facility A, Facility C1, Facility C2, Facility
C3, Facility C4, Facility C5, Facility C6, Facility D1, Facility D2,
Facility D3 and Facility D4 in inverse chronological order (and pro rata as
between such Facilities).
8.1.9 Subject to clause 8.1.11, in the event that a member of the Group seeks to
exercise its rights under a Purchase Option but is for any reason unable to
acquire the ship pursuant to such Purchase Option, the Borrower shall pay
to the Agent on the earlier of the date when such Purchase Option would
otherwise have been exercised or on the final date when such Purchase
Option was stated as being capable of exercise an amount equal to 0.84 per
cent. of the total Loans under Facility A, Facility B1, Facility B2 and
Facility B3 outstanding at such time. Any such prepayment shall be applied
in reducing the Repayment Instalments in respect of Facility B1 in inverse
chronological order until Facility B1 has been prepaid in full and,
thereafter, shall be applied in reducing the Repayment Instalments in
respect of Facility B2 and Facility B3 in inverse chronological order (and
pro rata as between Facility B2 and Facility B3) until such two Facilities
have been repaid in full and, thereafter, shall be applied in reducing the
Repayment Instalments in respect of Facility A, Facility C1, Facility C2,
Facility C3, Facility C4, Facility C5, Facility C6, Facility D1, Facility
D2, Facility D3 and Facility D4 in inverse chronological order (and pro
rata as between such Facilities).
8.1.10 Subject to clause 8.1.11, in the event that a Chartered Ship is withdrawn
from charter or any Charter is terminated prior to the expiration of its
term (except in the case of a termination of a ▇▇▇▇▇▇ of a Purchase Option
Ship as a result of the acquisition of such Purchase Option Ship by a
member of the Group pursuant to the relevant Purchase Option), the Borrower
shall pay to the Agent within ten days of such withdrawal or termination an
amount equal to:
(a) in respect of a Chartered Ship where the relevant Charter does not
contain a Purchase Option, two per cent.; and
(b) in respect of a Chartered Ship where the relevant Charter does contain
a Purchase Option, 2.84 per cent.,
(in each case) of the total Loans under Facility A, Facility B1, Facility
B2 and Facility B3 outstanding at such time. Any such prepayment shall be
applied in reducing the Repayment Instalments in respect of Facility B1 in
inverse chronological order until Facility B1 has been prepaid in full and,
thereafter, shall be applied in reducing the Repayment Instalments in
respect of Facility B2 and Facility B3 in inverse chronological order (and
pro rata as between Facility B2 and Facility B3) until such two Facilities
have been repaid in full and, thereafter, shall be applied in reducing the
Repayment Instalments in respect of Facility A, Facility C1, Facility C2,
Facility C3, Facility C4, Facility C5, Facility C6, Facility D1, Facility
D2, Facility D3 and Facility D4 in inverse chronological order (and pro
rata as between such Facilities).
8.1.11 If either of the circumstances in clauses 8.1.9 and/or 8.1.10 apply but
the Borrower has procured the replacement of the relevant Purchase Option,
Chartered Ship or Charter (as the case may be) with an adequate alternative
(as determined by the Agent, acting reasonably, but taking into
consideration the terms of the relevant Purchase Option or Charter and the
proposed replacement(s)) within 60 days of (a) the date the Purchase Option
would otherwise have been exercised or on the final date when the relevant
Purchase Option was stated as being capable of exercise (in the case of a
Purchase Option) or (b) the date of withdrawal or termination (in the case
of a Chartered Ship or Charter) then no such prepayment pursuant to clause
8.1.9 and/or 8.1.10 shall be required provided that in each case the
Borrower has provided full details (to the satisfaction of the Agent,
acting reasonably) relating to such replacement 5 Business Days prior to
the date a prepayment would otherwise be required to have been made under
clauses 8.1.9 and/or 8.1.10 in the absence of any adequate replacement.
8.2 DISPOSAL PROCEEDS, INSURANCE PROCEEDS AND ACQUISITION PROCEEDS
8.2.1 For the purposes of this clause 8.2, clause 8.3 (Application of mandatory
prepayments) and clause 8.4 (Retention Account and Holding Account -
mandatory prepayment):
"ACQUISITION ADJUSTMENT PROCEEDS" means any amount that may fall due from
the Vendors to the Borrower under section B(b) of schedule 2.2 of the
Acquisition Agreement.
58
"ACQUISITION PROCEEDS" means (i) any Acquisition Adjustment Proceeds and
(ii) the proceeds of a claim (a "RECOVERY CLAIM") against the Vendors or
any of their Affiliates (or any employee, officer or adviser) in relation
to the Acquisition Documents or against the provider of any Report (in its
capacity as a provider of that Report), and after deducting:
(a) any reasonable expenses which are incurred by any member of the Group
to persons who are not members of the Group; and
(b) any Tax incurred and required to be paid by a member of the Group (as
reasonably determined by the relevant member of the Group on the basis
of existing rates and taking into account any available credit,
deduction or allowance),
in each case in relation to that Recovery Claim (such proceeds net of such
deductions being "NET PROCEEDS" of such Recovery Claim),
except for Excluded Acquisition Proceeds.
"DISPOSAL PROCEEDS" means the consideration receivable by any member of the
Group (including any amount receivable in repayment of intercompany debt)
for any disposal made by any member of the Group and after deducting:
(a) reasonable expenses incurred by any member of the Group to persons who
are not members of the Group; and
(b) any Tax incurred and required to be paid by the seller (as reasonably
determined by the seller, on the basis of existing rates and taking
account of any available credit, deduction or allowance),
in each case with respect to or in connection with that disposal (such
consideration receivable net of such deductions being "NET PROCEEDS" of
such disposal),
except for Excluded Disposal Proceeds.
For the purposes of this definition of Disposal Proceeds:
"CONSIDERATION RECEIVABLE" shall, in addition to consideration directly
attributable to such disposal, include any amount owing to and set-off by
the relevant purchaser that does not relate to such disposal.
"REASONABLE EXPENSES" shall include any provision in respect of the
relevant disposal for indemnities or contingent liabilities in respect of
warranty claims payable under the terms of the relevant disposal, arising
directly in respect of such disposal provided that such provisions deducted
shall be considered to be consideration received relating to the relevant
disposal to the extent such provision is released without payment of the
relevant liability.
"EXCLUDED ACQUISITION PROCEEDS" means:
(a) any net proceeds of a Recovery Claim which are less than US$1,000,000
(or its equivalent in other currencies) which are received at any time
when no Default has occurred and is continuing (an "EXCLUDED RECOVERY
CLAIM"); or
(b) in relation to a Recovery Claim not being an excluded Recovery Claim:
(i) if the Borrower gives written notice to the Agent of its
intention to apply the net proceeds of the relevant Recovery
Claim in a permitted application prior to the date falling 15
Business Days after receipt of such net proceeds, those net
proceeds of that Recovery Claim are then applied, or legally
committed to be applied (under a binding contract subject only to
conditions typical for contracts of such type), within three
months after the date of such receipt (or, where so committed to
be applied, are then actually so applied within six months after
the date of such receipt) in a permitted application (and, in
each case, such net proceeds not so applied will be deemed to be
Acquisition Proceeds received for the purposes of clause 8.3.2
(Application of mandatory prepayments) at the end of the
applicable three or six month period, as the case may be); or
59
(ii) where no such notice is given, those net proceeds of the relevant
Recovery Claim which are applied within five Business Days of
receipt in a permitted application (and such net proceeds not so
applied will be deemed to be Acquisition Proceeds received for
the purposes of clause 8.3.2 (Application of mandatory
prepayments) at the end of such five Business Days period),
provided that if the Borrower has made a payment or payments in
respect of a cost or loss the subject of an insurance claim and the
proceeds received in connection with such claim are used to compensate
for a permitted application which has already been made then the
amount of such proceeds received shall be deemed to have been applied
at the date of receipt to the extent of the compensated permitted
application.
For the purposes of this definition of Excluded Acquisition Proceeds a
"PERMITTED APPLICATION" means at any time when no Default has occurred and
is continuing any proceeds of a Recovery Claim which are applied:
(a) to satisfy (or reimburse a member of the Group which has discharged)
any liability, charge or claim upon a member of the Group by a person
which is not a member of the Group; or
(b) in the replacement, reinstatement and/or repair of assets of members
of the Group which have been lost, destroyed or damaged; or
(c) in compensating any member of the Group for any liability or loss
(including loss of tax relief) or to make good any shortfall in assets
(including working capital),
in each case as a result of the events or circumstances giving rise to that
Recovery Claim.
"EXCLUDED DISPOSAL PROCEEDS" means:
(a) the proceeds of a disposal as is referred to in paragraphs (a), (b),
(c), (e), (h), (i) (to the extent such disposal relates to an Owned
Ship), (j), (l) or (m) of the definition of Permitted Disposal or a
disposal of an asset with a book value and market value of less than
US$500,000 (or its equivalent in other currencies) which in the case
of paragraphs (a) to (i) and (j) (to the extent it relates to an
Existing Collateral Ship or an Additional Collateral Ship) of the
definition of Permitted Disposal are received when no Default has
occurred and is continuing (each an "EXCLUDED DISPOSAL"); or
(b) in relation to a disposal not being (a) an excluded disposal or (b)
the disposal of a Collateral Ship:
(i) if the Borrower gives the Agent written notice of its intention
to reinvest the net proceeds of that relevant disposal in a
permitted application prior to the later of (xx) the date which
is five Business Days after the date of that relevant disposal or
(yy) the receipt of such proceeds, those net proceeds of that
relevant disposal are then applied, or legally committed to be
applied (under a binding contract subject only to conditions
typical for contracts of such type), within three months after
the date of that relevant disposal (or where so committed to be
applied, are then actually so applied within six months after the
date of that relevant disposal) in a permitted application (and,
in each case, such net proceeds not so applied will be deemed to
be Disposal Proceeds received for the purposes of clause 8.3.2
(Application of mandatory prepayments) at the end of the
applicable three or six month period as the case may be); or
(ii) where no such notice is given, those net proceeds of that
relevant disposal which are applied within five Business Days
following the later of (xx) date of that relevant disposal or
(yy) the receipt of such proceeds, in a permitted application
(and such net proceeds not so applied will be deemed to be
Disposal Proceeds received for the purposes of clause 8.3.2
(Application of mandatory prepayments) at the end of such five
Business Days period).
For the purposes of this definition of Excluded Disposal Proceeds, a
"PERMITTED APPLICATION" means at any time when no Default has occurred
and is continuing in respect of a disposal of an asset or intellectual
property right, the re-investment of the net proceeds of such disposal
in the acquisition by a member of the Group (being a Security Provider
if the seller was a Security Provider) of an asset or (as the case may
be) intellectual property right similar in type and of comparable or
superior value and quality to that asset or (as the case may be)
intellectual property right the subject of any relevant disposal.
60
"EXCLUDED INSURANCE PROCEEDS" means:
(a) the Collateral Ship Insurance Proceeds;
(b) the Terminal Insurance Proceeds;
(c) the net proceeds of an insurance claim which are less than US$500,000
(or its equivalent in other currencies);
(d) the proceeds of an insurance claim relating to business interruption
or loss of profit only;
(e) the proceeds of an insurance claim relating to any Purchase Option
Ship owned by any Purchase Option Subsidiary;
(f) the proceeds of an insurance claim relating to any New Share Issue
Ship,
in the case of paragraphs (c) to (e) (inclusive) above at any time
when no Default has occurred and is continuing (each an "EXCLUDED
CLAIM"); or
(g) in relation to an insurance claim not being an excluded claim:
(i) if the Borrower gives written notice to the Agent of its
intention to apply the net proceeds of the relevant insurance
claim in a permitted application prior to the date 15 Business
Days after receipt of such net proceeds, those net proceeds of
that insurance claim are then applied, or legally committed to be
applied (under a binding contract subject only to conditions
typical for contracts of such type), within three months after
the date of such receipt (or, where so committed to be applied,
are then actually so applied within six months after the date of
such receipt) in a permitted application (and, in each case, such
net proceeds not so applied will be deemed to be Insurance
Proceeds received for the purposes of clause 8.3.2 (Application
of mandatory prepayments) at the end of the applicable three or
six month period, as the case may be); or
(ii) where no such notice is given, those net proceeds of the relevant
insurance claim which are applied within 15 Business Days of
receipt in a permitted application (and such net proceeds not so
applied will be deemed to be Insurance Proceeds received for the
purposes of clause 8.3.2 (Application of mandatory prepayments)
at the end of such 15 Business Days period).
For the purposes of this definition of Excluded Insurance Proceeds, a
"PERMITTED APPLICATION" means at any time when no Default has occurred and
is continuing:
(a) to the replacement, reinstatement and/or repair of the assets in
respect of which the relevant insurance claim was made; or
(b) in relation to an insurance claim relating to third party liability,
to satisfy (or reimburse a member of the Group which has discharged)
any liability, charge or claim upon a member of the Group by a person
which is not a member of the Group; or
(c) where the Group member concerned is obliged as a landlord or tenant to
apply the proceeds of the insurance claim in accordance with any lease
of any Real Property (then only to the extent that it is so required
and does so apply such proceeds).
"INSURANCE PROCEEDS" means the proceeds of any insurance claim received by
any member of the Group and after deducting any reasonable expenses in
relation to that claim which are incurred by any member of the Group to
persons who are not members of the Group (such proceeds net of such
deductions being "NET PROCEEDS" of such insurance claim) except for
Excluded Insurance Proceeds.
8.2.2 The Borrower shall prepay Loans in the following amounts at the times and
in the order of application contemplated by clause 8.3 (Application of
mandatory prepayments):
(a) the amount of Acquisition Proceeds;
(b) the amount of Disposal Proceeds; and
61
(c) the amount of Insurance Proceeds.
8.3 APPLICATION OF MANDATORY PREPAYMENTS
8.3.1 A prepayment made under clauses 8.1 (Total Loss/Sale) or 8.2 (Disposal
Proceeds, Insurance Proceeds and Acquisition Proceeds) shall be applied in
prepayment of the Loans as contemplated in clauses 8.3.2 to 8.3.5.
8.3.2 Unless the Borrower makes an election under clause 8.3.4, it shall prepay
Loans at the following times:
(a) in the case of any prepayment relating to an amount received under
clauses 8.1.2 to 8.1.6, 8.1.8to 8.1.10(Total Loss/Sale) and
23.53(a)(i)(Security value maintenance), at the time specified and in
accordance with the procedure set out in such clause; and
(b) in the case of any prepayment relating to the amounts of Acquisition
Proceeds, Disposal Proceeds or Insurance Proceeds, promptly upon
receipt of those proceeds.
8.3.3 Save as provided in clauses 8.1.6(b), 8.1.8, 8.1.9, 8.1.10 (Total
Loss/Sale), 23.53(a)(i) (Security Value Maintenance) and in this clause
8.3.3, a prepayment under clauses 8.1 (Total Loss/Sale) and 8.2 (Disposal
Proceeds, Insurance Proceeds and Acquisition Proceeds) (other than a
prepayment of Acquisition Adjustment Proceeds) shall be applied in reducing
the Repayment Instalments in respect of Facility A, Facility C1, Facility
C2, Facility C3, Facility C4, Facility C5, Facility C6, Facility D1,
Facility D2, Facility D3 and Facility D4, pro rata as between such
Facilities, and when such Facilities have been prepaid in full, in reducing
the Repayment Instalments of Facility B1 and, when Facility B1 has been
prepaid in full, in reducing the Repayment Instalments of Facility B2 and,
when Facility B2 has been prepaid in full, in reducing the Repayment
Instalments of Facility B3. Such mandatory prepayments of the Facilities
shall be applied against the relevant Repayment Instalments in accordance
with clause 6.2.4 (Effect of cancellation and prepayment on scheduled
repayments). Any prepayment made in respect of any Acquisition Adjustment
Proceeds shall be applied in reduction of the Repayment Instalments in
respect of Facility A, Facility B1, Facility B2 and Facility B3 in
chronological order (and pro rata as between such Facilities), taking into
account the provisions of clause 6.1.5 (Repayment of Loans).
8.3.4 Subject to clause 8.3.5, the Borrower may elect that any prepayment of a
Loan required under clauses 8.1 (Total Loss/Sale) or 8.2 (Disposal
Proceeds, Insurance Proceeds and Acquisition Proceeds) be applied in
prepayment of that Loan on the last day of the Interest Period relating to
that Loan provided that the remaining term of such Interest Period is less
than three months and that pending prepayment the moneys falling to be
applied under clause 8.1 (Total Loss/Sale) or 8.2 (Disposal Proceeds,
Insurance Proceeds and Acquisition Proceeds) shall be deposited in the
Retention Account. If the Borrower makes that election then a proportion of
that Loan equal to the amount of the relevant prepayment will be due and
payable (by way of prepayment) on the last day of its Interest Period.
8.3.5 If the Borrower has made an election under clause 8.3.4 but a Default has
occurred and is continuing, that election shall no longer apply and a
proportion of the Loan in respect of which the election was made equal to
the amount of the relevant prepayment shall be immediately due and payable
(unless the Agent otherwise agrees in writing).
8.4 RETENTION ACCOUNT AND HOLDING ACCOUNT - MANDATORY PREPAYMENT
8.4.1 The Borrower shall ensure that:
(a) Amounts received as prepayments under clauses 8.1 (Total Loss/Sale) or
8.2 (Disposal Proceeds, Insurance Proceeds and Acquisition Proceeds),
in respect of which the Borrower has made an election under clause
8.3.4 (Application of mandatory prepayments) are paid into the
Retention Account promptly upon receipt by a member of the Group; and
(b) Excluded Disposal Proceeds, Excluded Insurance Proceeds and/or
Excluded Acquisition Proceeds, which are not the proceeds of an
excluded disposal, excluded claim or excluded Recovery Claim, are paid
into the Holding Account promptly upon receipt by a member of the
Group. Pending the giving of any notice or expiry of any specified
period (as set out in the
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relevant definition of Excluded Acquisition Proceeds, Excluded
Disposal Proceeds or Excluded Insurance Proceeds), relevant proceeds
in respect of which the Borrower has not complied with clause 8.4.1(a)
shall be paid into the Holding Account.
8.4.2 The Borrower irrevocably authorises the Agent to apply:
(a) amounts credited to the Retention Account; and
(b) amounts credited to the Holding Account which are intended to be used
for a permitted application within a specified period (as set out in
the relevant definition of Excluded Acquisition Proceeds, Excluded
Disposal Proceeds or Excluded Insurance Proceeds) but which are not so
used within the relevant specified period, (or such longer time period
as the Agent may agree),
to pay amounts due and payable under clauses 8.1 (Total Loss/Sale), 8.2
(Disposal Proceeds, Insurance Proceeds and Acquisition Proceeds) and 8.3
(Application of mandatory prepayments) and otherwise under the Finance
Documents. The Borrower further irrevocably authorises the Agent to so
apply amounts credited to the Holding Account whether or not the relevant
specified period has elapsed if a Default has occurred and is continuing.
The Borrower also irrevocably authorises the Agent to transfer any amounts
credited to the Holding Account referred to in this clause 8.4.2 to the
Retention Account pending payment of amounts due and payable under the
Finance Documents (but if all such amounts have been paid any such amounts
remaining credited to the Retention Account may (unless a Default has
occurred) be transferred back to the Holding Account).
8.4.3 The Security Agent or Agent with which the Retention Account, the Working
Capital Account and/or the Holding Account is held acknowledges and agrees
that (i) interest shall accrue at normal commercial rates on amounts
credited to those accounts and that the account holder shall be entitled to
receive such interest (which shall be paid in accordance with the mandate
relating to such account) unless a Default is continuing and (ii) each such
account is subject to the Transaction Security. None of the Finance Parties
shall have any responsibility to any member of the Group for any loss
occasioned as a consequence of the application of the amounts credited to
those accounts prior to the last day of any deposit period, where such
application is permitted by the terms of the Finance Documents.
8.5 EXCLUDED PROCEEDS
Where Excluded Acquisition Proceeds, Excluded Disposal Proceeds and
Excluded Insurance Proceeds include amounts which are intended to be used
for a permitted application within a specified period (as set out in the
relevant definition of Excluded Acquisition Proceeds, Excluded Disposal
Proceeds or Excluded Insurance Proceeds), the Borrower shall ensure that
those amounts are used for that purpose and shall promptly deliver a
certificate to the Agent at the time of such application and at the end of
such period confirming the amount (if any) which has been so applied within
the requisite time periods provided for in the relevant definition.
9 RESTRICTIONS
9.1 NOTICES OF CANCELLATION OR PREPAYMENT
Any notice of cancellation or prepayment given by any Party under clause 7
(Illegality, Voluntary Prepayment and Cancellation) or clause 8 (Mandatory
Prepayment) shall be irrevocable and, unless a contrary indication appears
in this Agreement, shall specify the date or dates upon which the relevant
cancellation or prepayment is to be made and the amount of that
cancellation or prepayment.
9.2 INTEREST AND OTHER AMOUNTS
Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.
9.3 NO REBORROWING OF FACILITIES
The Borrower may not re-borrow any part of a Facility which is prepaid.
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9.4 PREPAYMENT IN ACCORDANCE WITH AGREEMENT
The Borrower shall not repay or prepay all or any part of the Loans or
cancel all or any part of the Commitments except at the times and in the
manner expressly provided for in this Agreement.
9.5 NO REINSTATEMENT OF COMMITMENTS
No amount of the Total Commitments cancelled under this Agreement may be
subsequently reinstated.
9.6 AGENT'S RECEIPT OF NOTICES
If the Agent receives a notice under clause 7 (Illegality, Voluntary
Prepayment and Cancellation) or clause 8 (Mandatory Prepayment) it shall
promptly forward a copy of that notice to either the Borrower or the
affected Lender(s), as appropriate.
9.7 NOTICE OF PREPAYMENT TO LENDERS
The Agent shall notify the Lenders as soon as possible of any proposed
prepayment of any Loan under clause 7.3 (Voluntary prepayment of Loans),
8.1 (Total Loss/Sale) or 8.2 (Disposal Proceeds, Insurance Proceeds and
Acquisition Proceeds).
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SECTION 5: COSTS OF UTILISATION
10 INTEREST
10.1 CALCULATION OF INTEREST
Subject to clause 10.2 (Alternative calculation of interest), the rate of
interest on each Loan for each Interest Period is the percentage rate per
annum which is the aggregate of the applicable:
10.1.1 Margin;
10.1.2 LIBOR; and
10.1.3 Mandatory Cost, if any.
10.2 ALTERNATIVE CALCULATION OF INTEREST
Should all the Lenders agree to an interest period in excess of 12 months
pursuant to clause 11.1.4 (Selection of Interest Periods and Terms), the
rate of interest on the relevant Loan for such Interest Period shall be the
percentage rate per annum which is the aggregate of the applicable:
10.2.1 Margin; and
10.2.2 the rate notified by the Agent to the Borrower as the appropriate cost of
funds agreed by all the Lenders and the Agent.
10.3 PAYMENT OF INTEREST
The Borrower shall pay accrued interest on each Loan on the last day of
each Interest Period (and, if an Interest Period is longer than six months,
on the dates falling at six monthly intervals after the first day of such
Interest Period).
10.4 DEFAULT INTEREST
10.4.1 If the Borrower fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount from
the due date up to the date of actual payment (both before and after
judgment) at a rate which, subject to clause 10.4.3, is two per cent.
higher than the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted a Loan in the currency
of the overdue amount for successive Interest Periods, each of a duration
selected by the Agent (acting reasonably). Any interest accruing under this
clause 10.4 shall be immediately payable by the Borrower on demand by the
Agent.
10.4.2 For the avoidance of doubt, any overdue amount which is not a Loan shall
accrue interest as if such amount was a Loan for successive Interest
Periods, each of a duration selected by the Agent (acting reasonably) at
the rate equal to two per cent. plus the applicable Margin.
10.4.3 If any overdue amount consists of all or part of a Loan which became due
on a day which was not the last day of an Interest Period relating to that
Loan:
(a) the first Interest Period for that overdue amount shall have a
duration equal to the unexpired portion of the current Interest Period
relating to that Loan; and
(b) the rate of interest applying to the overdue amount during that first
Interest Period shall be two per cent. higher than the rate which
would have applied if the overdue amount had not become due.
10.4.4 Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
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10.5 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the Lenders and the Borrower of the
determination of a rate of interest under this Agreement.
11 INTEREST PERIODS
11.1 SELECTION OF INTEREST PERIODS AND TERMS
11.1.1 The Borrower may select an Interest Period for a Loan in the Utilisation
Request for that Loan or (if the Loan has already been borrowed) in a
Selection Notice.
11.1.2 Each Selection Notice for a Loan is irrevocable and must be delivered to
the Agent by the Borrower not later than the Specified Time.
11.1.3 If the Borrower fails to deliver a Selection Notice to the Agent in
accordance with clause 11.1.2, the relevant Interest Period will, subject
to clause 11.2 (Changes to Interest Periods), be one month.
11.1.4 Subject to this clause 11, the Borrower may select an Interest Period of
one, three, six or twelve months or any other period agreed between the
Borrower and the Agent (acting on the instructions of the Lenders).
11.1.5 An Interest Period for a Loan shall not extend beyond the last Repayment
Date applicable to its Facility.
11.1.6 Each Interest Period for a Loan shall start on the Utilisation Date of
that Loan or (if already made) on the last day of its preceding Interest
Period.
11.1.7 Prior to the earlier of 30 June 2006 and the Syndication Date, Interest
Periods shall be one month or such other period as the Agent and the
Borrower may agree and any Interest Period which would otherwise end during
the calendar month preceding or extend beyond the Syndication Date shall
end on the Syndication Date.
11.1.8 On or at any time after the making of a declaration under clause 24.29
(Acceleration), notwithstanding the previous provisions in this clause 11,
the Agent shall be entitled, to the exclusion of the Borrower, to select
the duration of Interest Periods.
11.1.9 It is hereby acknowledged that the Existing HSH Debt (which shall be
refinanced by Facility A Loan and Facility B Loans) is sub-divided into
"Facility A", "Facility B1", "Facility B2" and "Facility B3" and that such
facilities correspond to Facility A, Facility B1, Facility B2 and Facility
B3, respectively, of this Agreement. At the request of the Borrower, the
Parties have agreed that the interest periods and interest rates applicable
on the date of the first Utilisation Date to the Facilities (as defined in
the Existing Facilities Agreement) of the Existing HSH Debt shall apply to
their "corresponding" Facility A Loan and Facility B Loans (as the case may
be) as from the first Utilisation Date, and the Interest Periods in respect
of each such Loan shall be determined accordingly. At the end of such
Interest Periods, the normal interest rate fixing provisions of this
Agreement shall apply to such Loans.
11.2 CHANGES TO INTEREST PERIODS
11.2.1 Prior to determining the interest rate for a Loan, the Agent may shorten
an Interest Period for any Loan to ensure there are sufficient Loans (with
an aggregate amount equal to or greater than the relevant Repayment
Instalment) which have an Interest Period ending on a relevant Repayment
Date for the Borrower to make the Repayment Instalment due on that date.
11.2.2 If the Agent makes any of the changes to an Interest Period referred to
in this clause 11.2, it shall promptly notify the Borrower and the Lenders.
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11.3 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period will instead end on the next Business Day in that
calendar month (if there is one) or the preceding Business Day (if there is
not).
12 CHANGES TO THE CALCULATION OF INTEREST
12.1 ABSENCE OF QUOTATIONS
Subject to clause 12.2 (Market disruption), if LIBOR is to be determined by
reference to the Reference Banks but a Reference Bank does not supply a
quotation by the Specified Time on the Quotation Day, the applicable LIBOR
shall be determined on the basis of the quotations of the remaining
Reference Banks.
12.2 MARKET DISRUPTION
12.2.1 If a Market Disruption Event occurs in relation to a Loan for any
Interest Period, then the rate of interest on each Lender's share of that
Loan for the Interest Period shall be the rate per annum which is the sum
of:
(a) the Margin;
(b) the rate notified to the Agent by that Lender as soon as practicable
and in any event before interest is due to be paid in respect of that
Interest Period, to be that which expresses as a percentage rate per
annum the cost to that Lender of funding its participation in that
Loan from whatever source it may reasonably select; and
(c) the Mandatory Cost, if any, applicable to that Lender's participation
in the Loan.
12.2.2 In this Agreement "MARKET DISRUPTION EVENT" means:
(a) at or about noon on the Quotation Day for the relevant Interest Period
LIBOR is not available and none or only one of the Reference Banks
supplies a rate to the Agent to determine LIBOR for the relevant
currency and Interest Period; or
(b) before close of business in London on the Quotation Day for the
relevant Interest Period, the Agent receives notifications from a
Lender or Lenders (whose participations in a Loan exceed 33(1)/3 per
cent. of that Loan) that the cost to it of obtaining matching deposits
in the Relevant Interbank Market would be in excess of LIBOR.
12.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
12.3.1 If a Market Disruption Event occurs and the Agent or the Borrower so
requires, the Agent and the Borrower shall enter into negotiations (for a
period of not more than 15 days) with a view to agreeing a substitute basis
for determining the rate of interest.
12.3.2 Any alternative basis agreed pursuant to clause 12.3.1 shall, with the
prior consent of all the Lenders and the Borrower, be binding on all
Parties.
12.4 BREAK COSTS
12.4.1 The Borrower shall, within three Business Days of demand by a Finance
Party, pay to that Finance Party its Break Costs attributable to all or any
part of a Loan or Unpaid Sum being paid by the Borrower on a day other than
the last day of an Interest Period for that Loan or Unpaid Sum.
12.4.2 Each Lender shall, as soon as reasonably practicable after a demand by
the Agent, provide a certificate confirming the amount of its Break Costs
for any Interest Period in which they accrue.
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13 FEES
13.1 COMMITMENT FEE
13.1.1 The Borrower shall pay to the Agent (for the account of each Lender) a
commitment fee in dollars computed at the rate of:
(a) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C1 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C1 and (ii) the end of the
Availability Period applicable to Facility C1;
(b) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C2 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C2 and (ii) the end of the
Availability Period applicable to Facility C2;
(c) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C3 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C3 and (ii) the end of the
Availability Period applicable to Facility C3;
(d) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C4 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C4 and (ii) the end of the
Availability Period applicable to Facility C4;
(e) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C5 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C5 and (ii) the end of the
Availability Period applicable to Facility C5;
(f) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility C6 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility C6 and (ii) the end of the
Availability Period applicable to Facility C6;
(g) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility D1 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility D1 and (ii) the end of the
Availability Period applicable to Facility D1;
(h) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility D2 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility D2 and (ii) the end of the
Availability Period applicable to Facility D2;
(i) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility D3 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility D3 and (ii) the end of the
Availability Period applicable to Facility D3; and
(j) 0.45 per cent. per annum on that Lender's Available Commitment under
Facility D4 for the period from 19 December 2005 to the earlier of (i)
the Utilisation Date relating to Facility D4 and (ii) the end of the
Availability Period applicable to Facility D4.
13.1.2 The accrued commitment fee referred to in clause 13.1.1 shall be payable
in respect of each Facility (a) on the earlier of (i) the Utilisation Date
for the relevant Facility and (ii) 31 March 2006, and (b) on the last day
of the Availability Period for the relevant Facility and on the cancelled
amount of the relevant Lender's Commitment at the time the cancellation is
effective.
13.2 ARRANGEMENT AND RESTRUCTURING FEE
The Borrower shall pay to the Arranger (for its own account) an arrangement
and restructuring fee in the amount and at the times agreed in the Fee
Letter.
13.3 UNDERWRITING FEE
The Borrower shall pay the Arranger (for its own account) an underwriting
fee in an amount and at the times agreed in the Fee Letter.
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SECTION 6: ADDITIONAL PAYMENT OBLIGATIONS
14 TAX GROSS UP AND INDEMNITIES
14.1 DEFINITIONS
14.1.1 In this Agreement:
"PROTECTED PARTY" means a Finance Party which is or will be subject to any
liability or required to make any payment for or on account of Tax in
relation to a sum received or receivable (or any sum deemed for the
purposes of Tax to be received or receivable) under a Finance Document.
"TAX CREDIT" means a credit against, relief or remission for, or repayment
of, any Tax.
"TAX DEDUCTION" means a deduction or withholding for or on account of Tax
from a payment under a Finance Document.
"TAX PAYMENT" means either the increase in a payment made by an Obligor to
a Finance Party under clause 14.2 (Tax gross-up) or a payment under clause
14.3 (Tax indemnity).
Unless a contrary indication appears, in this clause 14 a reference to
"DETERMINES" or "DETERMINED" means a determination made in the absolute
discretion of the person making the determination.
14.2 TAX GROSS-UP
14.2.1 The Borrower shall procure that each Obligor shall make all payments to
be made by it without any Tax Deduction, unless a Tax Deduction is required
by law.
14.2.2 The Borrower shall promptly upon becoming aware that an Obligor must make
a Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall
notify the Agent on becoming so aware in respect of a payment payable to
that Lender. If the Agent receives such notification from a Lender it shall
notify the Borrower and that Obligor.
14.2.3 If a Tax Deduction is required by law to be made by an Obligor, the
Borrower shall procure that the amount of the payment due from that Obligor
shall be increased to an amount which (after making any Tax Deduction)
leaves an amount equal to the payment which would have been due if no Tax
Deduction had been required.
14.2.4 The Borrower shall procure that if an Obligor is required to make a Tax
Deduction, that Obligor shall make that Tax Deduction and any payment
required in connection with that Tax Deduction within the time allowed and
in the minimum amount required by law.
14.2.5 Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Borrower shall procure
that the Obligor making that Tax Deduction shall deliver to the Agent for
the Finance Party entitled to the payment evidence reasonably satisfactory
to that Finance Party that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.
14.3 TAX INDEMNITY
14.3.1 The Borrower shall (within three Business Days of demand by the Agent)
pay to a Protected Party an amount equal to the loss, liability or cost
which that Protected Party determines will be or has been (directly or
indirectly) suffered for or on account of Tax by that Protected Party in
respect of a Finance Document.
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14.3.2 clause 14.3.1 shall not apply:
(a) with respect to any Tax assessed on a Finance Party:
(i) under the law of the jurisdiction in which that Finance Party is
incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as resident
for tax purposes; or
(ii) under the law of the jurisdiction in which that Finance Party's
Facility Office is located in respect of amounts received or
receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income
received or receivable (but not any sum deemed to be received or
receivable) by that Finance Party; or
(b) to the extent a loss, liability or cost is compensated for by an
increased payment under clause 14.2 (Tax gross-up).
14.3.3 A Protected Party making, or intending to make a claim under clause
14.3.1 shall promptly notify the Agent of the event which will give, or has
given, rise to the claim, following which the Agent shall notify the
Borrower.
14.3.4 A Protected Party shall, on receiving a payment from an Obligor under
this clause 14.3, notify the Agent.
14.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party determines
that:
14.4.1 a Tax Credit is attributable either to an increased payment of which that
Tax Payment forms part or to that Tax Payment; and
14.4.2 that Finance Party has obtained, utilised and retained that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance
Party determines will leave it (after that payment) in the same after-Tax
position as it would have been in had the Tax Payment not been required to
be made by the Obligor.
14.5 STAMP TAXES
The Borrower shall pay and, within three Business Days of demand, indemnify
each Secured Party against any cost, loss or liability that Secured Party
incurs in relation to all stamp duty, stamp duty land tax, registration and
other similar Taxes payable in respect of any Finance Document.
14.6 VALUE ADDED TAX
14.6.1 All amounts set out, or expressed to be payable under a Finance Document
by any party to a Finance Party which (in whole or in part) constitute the
consideration for VAT purposes shall be deemed to be exclusive of any VAT
which is chargeable on such supply, and accordingly, subject to clause
14.6.3, if VAT is chargeable on any supply made by any Finance Party to any
party under a Finance Document, the Borrower shall procure that that party
shall pay to the Finance Party (in addition to and at the same time as
paying the consideration) an amount equal to the amount of the VAT (and
such Finance Party shall promptly provide an appropriate VAT invoice to
such party).
14.6.2 If VAT is chargeable on any supply made by any Finance Party (the
"SUPPLIER") to any other Finance Party (the "RECIPIENT") under a Finance
Document, and any party (the "RELEVANT PARTY") is required by the terms of
any Finance Document to pay an amount equal to the consideration for such
supply to the Supplier (rather than being required to reimburse the
Recipient in respect of that consideration), the Borrower shall procure
that such party shall also pay to the Supplier (in addition to and at the
same time as paying such amount) an amount equal to the amount of such VAT.
The Recipient will promptly pay to the Relevant Party an amount equal to
any credit or repayment from the relevant tax authority which it reasonably
determines relates to the VAT chargeable on that supply.
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14.6.3 Where a Finance Document requires any party to reimburse a Finance Party
for any costs or expenses, the Borrower shall procure that that party shall
also at the same time pay and indemnify the relevant Finance Party against
all VAT incurred by such Finance Party in respect of the costs or expenses
to the extent that the relevant Finance Party reasonably determines that
neither it nor any other member of any group of which it is a member for
VAT purposes is entitled to credit or repayment from the relevant tax
authority in respect of the VAT.
15 INCREASED COSTS
15.1 INCREASED COSTS
15.1.1 Subject to clause 15.3 (Exceptions) the Borrower shall, within three
Business Days of a demand by the Agent, pay for the account of a Finance
Party the amount of any Increased Costs incurred by that Finance Party or
any of its Affiliates as a result of (i) the introduction of or any change
in (or in the interpretation, administration or application of) any law or
regulation or (ii) compliance with any law or regulation made after the
date of this Agreement.
15.1.2 In this Agreement "INCREASED COSTS" means:
(a) a reduction in the rate of return from a Facility or on a Finance
Party's (or its Affiliate's) overall capital;
(b) an additional or increased cost; or
(c) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates
to the extent that it is attributable to that Finance Party having entered
into its Commitment or funding or performing its obligations under any
Finance Document.
15.2 INCREASED COST CLAIMS
15.2.1 A Finance Party intending to make a claim pursuant to clause 15.1
(Increased costs) shall notify the Agent of the event giving rise to the
claim, following which the Agent shall promptly notify the Borrower.
15.2.2 Each Finance Party shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased Costs.
15.3 EXCEPTIONS
15.3.1 Clause 15.1 (Increased costs) does not apply to the extent any Increased
Cost is:
(a) attributable to a Tax Deduction required by law to be made by an
Obligor;
(b) compensated for by clause 14.3 (Tax indemnity) (or would have been
compensated for under clause 14.3 (Tax indemnity) but was not so
compensated solely because any of the exclusions in clause 14.3.2 (Tax
indemnity) applied);
(c) compensated for by the payment of the Mandatory Cost; or
(d) attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.
15.3.2 In this clause 15.3 reference to a "TAX DEDUCTION" has the same meaning
given to the term in clause 14.1 (Definitions).
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16 OTHER INDEMNITIES
16.1 CURRENCY INDEMNITY
16.1.1 If any sum due from an Obligor under the Finance Documents (a "SUM"), or
any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the "FIRST CURRENCY") in which that Sum is
payable into another currency (the "SECOND CURRENCY") for the purpose of:
(a) making or filing a claim or proof against that Obligor; or
(b) obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,
the Borrower shall (and shall procure that the relevant Obligor shall) as
an independent obligation, within three Business Days of demand, indemnify
the Security Agent and each other Secured Party to whom that Sum is due
against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (A) the rate of exchange used
to convert that Sum from the First Currency into the Second Currency and
(B) the rate or rates of exchange available to that person at the time of
its receipt of that Sum.
16.1.2 The Borrower waives (and shall procure that any relevant Obligor waives)
any right it may have in any jurisdiction to pay any amount under the
Finance Documents in a currency or currency unit other than that in which
it is expressed to be payable.
16.1.3 The Borrower shall indemnify the Agent for any cost or loss suffered by
the Agent in effecting the conversion into the Denominated Currency in
accordance with clause 19.1.4 (Accounts).
16.2 OTHER INDEMNITIES
16.2.1 The Borrower shall (or shall procure that an Obligor shall), within three
Business Days of demand, indemnify the Arranger and each other Secured
Party against any cost, loss or liability incurred by it as a result of:
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a Finance Document
on its due date, including any cost, loss or liability arising as a
result of clause 29 (Sharing Among the Finance Parties);
(c) funding, or making arrangements to fund, its participation in a Loan
requested by the Borrower in a Utilisation Request but not made by
reason of the operation of any one or more of the provisions of this
Agreement (other than by reason of default or negligence by that
Finance Party alone);
(d) a Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment given by the Borrower;
(e) any provision of any Finance Document for any reason being ineffective
to impose on any Obligor the obligations contemplated by such
provision to be imposed on that Obligor; or
(f) any breach of Environmental Law or Environmental Claim relating to any
member of the Group.
16.2.2 The Borrower shall (or shall procure that a relevant Obligor shall)
promptly indemnify each Finance Party, each Affiliate of a Finance Party
and each officer or employee of a Finance Party or its Affiliate, against
any cost, loss or liability incurred by that Finance Party or its Affiliate
(or officer or employee of that Finance Party or Affiliate) in connection
with or arising out of the Acquisition or the funding of the Acquisition or
any other transaction contemplated by this Agreement (including those
incurred in connection with any litigation, arbitration, alternative
dispute resolution or administrative proceedings or regulatory enquiry
concerning the Acquisition or any other transaction contemplated by this
Agreement), unless such loss or liability is caused by the gross negligence
or wilful
72
misconduct of that Finance Party or its Affiliate (or employee or officer
of that Finance Party or Affiliate). Any Affiliate or any officer or
employee of a Finance Party or its Affiliate may rely on this clause 16.2
subject to clause 1.3 (Third party rights) and the provisions of the Third
Parties Act.
16.3 INDEMNITY TO THE AGENT
The Borrower shall promptly indemnify the Agent against any cost, loss or
liability incurred by the Agent (acting reasonably) as a result of:
16.3.1 investigating any event which it reasonably believes is a Default;
16.3.2 entering into or performing any foreign exchange contract for the
purposes of clause 30.9.2 (Change of currency); or
16.3.3 acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately authorised.
16.4 INDEMNITY TO THE SECURITY AGENT
16.4.1 The Borrower shall (and shall procure that each Obligor shall) promptly
indemnify the Security Agent and every Receiver and Delegate against any
cost, loss or liability incurred by any of them as a result of:
(a) the taking, holding, protection or enforcement of the Transaction
Security,
(b) the exercise of any of the rights, powers, discretions and remedies
vested in the Security Agent and each Receiver and Delegate by the
Finance Documents or by law; and
(c) any default by any Obligor in the performance of any of the
obligations expressed to be assumed by it in the Finance Documents.
16.4.2 The Security Agent may, in priority to any payment to the Secured
Parties, indemnify itself out of the Trust Property in accordance with
clause 27.27 (Indemnity from Trust Property) in respect of, and pay and
retain, all sums necessary to give effect to the indemnity in this clause
16.4 and shall have a lien on the Transaction Security and the proceeds of
the enforcement of the Transaction Security for all monies payable to it.
16.5 FAX INDEMNITY
The Borrower shall indemnify each Finance Party against any cost, claim,
loss, expense (including legal fees) or liability together with any VAT
thereon which any of the Finance Parties may sustain or incur as a
consequence of any telefax communication purporting to originate from an
Obligor to the Agent being made or delivered fraudulently (unless such
cost, claim, loss, expense or liability is caused by the gross negligence
or wilful misconduct of such Finance Party). For avoidance of doubt, the
Borrower shall only be liable under this indemnity in respect of telefax
communications originating or purportedly originating from it.
17 MITIGATION BY THE FINANCE PARTIES
17.1 MITIGATION
17.1.1 Each Finance Party shall, in consultation with the Borrower, take all
reasonable steps to mitigate any circumstances which arise and which would
result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of clause 7.1 (Illegality), clause 14 (Tax Gross Up and
Indemnities), clause 15 (Increased Costs) or paragraph 3 of Schedule 5
(Mandatory Cost Formula) including transferring its rights and obligations
under the Finance Documents to another Affiliate or Facility Office.
17.1.2 Clause 17.1.1 does not in any way limit the obligations of any Obligor
under the Finance Documents.
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17.2 LIMITATION OF LIABILITY
17.2.1 The Borrower shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of steps
taken by it under clause 17.1 (Mitigation).
17.2.2 A Finance Party is not obliged to take any steps under clause 17.1
(Mitigation) if, in the opinion of that Finance Party (acting reasonably),
to do so might be prejudicial to it.
18 COSTS AND EXPENSES
18.1 TRANSACTION EXPENSES
The Borrower shall promptly on demand pay the Agent, the Arranger and the
Secured Parties the amount of all costs and expenses (including legal fees)
reasonably incurred by any of them (and, in the case of the Security Agent,
by any Receiver or Delegate) in connection with the negotiation,
preparation, printing, execution, syndication and perfection of:
18.1.1 this Agreement and any other documents referred to in this Agreement and
the Transaction Security; and
18.1.2 any other Finance Documents executed after the date of this Agreement.
18.2 AMENDMENT COSTS
If (a) the Borrower requests an amendment, waiver or consent or (b) an
amendment is required pursuant to clause 30.9 (Change of currency), the
Borrower shall, within three Business Days of demand, reimburse each of the
Agent and the Secured Parties for the amount of all costs and expenses
(including legal fees) reasonably incurred by the Agent and the Secured
Parties (and, in the case of the Security Agent, by any Receiver or
Delegate) in responding to, evaluating, negotiating or complying with that
request or requirement.
18.3 SECURITY AGENT'S ONGOING COSTS
18.3.1 In the event of (i) a Default or (ii) the Security Agent considering it
necessary or expedient or (iii) the Security Agent being requested by an
Obligor or the Majority Lenders to undertake duties which the Security
Agent and the Borrower agree to be of an exceptional nature and/or outside
the scope of the normal duties of the Security Agent under the Finance
Documents, the Borrower shall pay to the Security Agent any additional
remuneration that may be agreed between them.
18.3.2 If the Security Agent and the Borrower fail to agree upon the nature of
the duties or upon any additional remuneration, that dispute shall be
determined by an investment bank (acting as an expert and not as an
arbitrator) selected by the Security Agent and approved by the Borrower or,
failing approval, nominated (on the application of the Security Agent) by
the President for the time being of the Law Society of England and Wales
(the costs of the nomination and of the investment bank being payable by
the Borrower) and the determination of any investment bank shall be final
and binding upon the parties to this Agreement.
18.4 ENFORCEMENT AND PRESERVATION COSTS
The Borrower shall, within three Business Days of demand, pay to the
Arranger and each other Secured Party the amount of all costs and expenses
(including legal fees) incurred by it in connection with the enforcement of
or the preservation of any rights under any Finance Document and the
Transaction Security and any proceedings instituted by or against the
Security Agent or any other Finance Party as a consequence of taking or
holding the Transaction Security or enforcing these rights.
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SECTION 7: ACCOUNTS
19 ACCOUNTS
19.1 GENERAL
19.1.1 The Borrower undertakes with the Finance Parties that it shall procure
that:
(a) on or prior to the date of this Agreement the relevant HSH Accounts
are all opened by the relevant Obligors;
(b) all moneys payable to a Collateral Owner in respect of the Earnings of
such Collateral Owner's Ship (other than a Purchase Option Ship)
shall, unless and until the Agent directs to the contrary, be paid to
the Navios ShipManagement Operating Account and/or the DnB Operating
Accounts and/or any other Operating Account, as designated by the
Borrower;
(c) subject to clause 19.1.3, all moneys payable to each Charter Company
in respect of the Charter Earnings of each Charter Company or
otherwise (including, for the avoidance of doubt, in respect of FFAs)
shall, unless and until the Agent directs to the contrary, be paid to
such Charter Company's Operating Account;
(d) all moneys payable to CNSA in respect of the Terminal Earnings shall,
unless and until the Agent directs to the contrary, be paid to the
CNSA Account held with the Agent in London; and
(e) all moneys payable to the Borrower for whatever reason (which, for the
avoidance of doubt, includes dividends paid to the Borrower by its
Subsidiaries) shall, unless and until the Agent directs to the
contrary, be paid to the Working Capital Account.
19.1.2 Subject to clause 19.1.3, the Borrower undertakes with the Finance
Parties that it shall (and shall procure that each relevant member of the
Group shall):
(a) close all bank accounts other than the Accounts within one month of
the date of this Agreement, unless the Agent otherwise agrees; and
(b) transfer immediately prior to the closing of all accounts required to
be closed pursuant to clause 19.1.2(a), all credit balances of such
accounts to the Working Capital Account.
19.1.3 The Borrower undertakes with the Finance Parties that, notwithstanding
clauses 19.1.1 and 19.1.2, it shall procure that:
(a) for the period of a maximum of one month beginning from the first
Utilisation Date until each Charter Company closes its DnB Operating
Account in accordance with clause 19.1.3(b), all moneys payable to
each Charter Company in respect of the Charter Earnings of each
Charter Company or otherwise (including, for the avoidance of doubt,
in respect of FFAs) shall, unless the Agent directs to the contrary,
be paid to such Charter Company's DnB Operating Account;
(b) each Charter Company shall close and transfer all credit balances on
its DnB Operating Account to its Operating Account within one month of
the first Utilisation Date; and
(c) from the earlier of the date falling one month after the first
Utilisation Date and the date on which each Charter Company closes its
DnB Operating Account in accordance with clause 19.1.3(b) above, each
Charter Company will manage all expenditure and financial transactions
relating to its operations through such Charter Company's Operating
Account and clause 19.1.1(c) shall apply.
19.1.4 If any of the moneys paid into any of the HSH Accounts pursuant to
clauses 19.1.1(b) to (e) (inclusive), 19.1.2(b) and 19.1.3(b) (inclusive),
is in a currency other than the currency in which such account is
denominated (the "DENOMINATED CURRENCY"), the Agent shall convert such
moneys into the Denominated Currency at the Agent's spot rate of exchange
at the relevant time for the purchase of Denominated Currency with such
currency.
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19.2 OPERATING ACCOUNTS: WITHDRAWALS
Unless the Agent otherwise agrees in writing, the Borrower shall procure
that no moneys are withdrawn from the Operating Accounts or the DnB
Operating Accounts at any time from the date of this Agreement save that,
unless and until a Default shall occur and be continuing, withdrawals may
be made from the Operating Accounts and the DnB Operating Accounts for the
following purposes:
19.2.1 to transfer to the Retention Account on each Retention Date all or part
of the Retention Amount for such Retention Date;
19.2.2 to pay any amount to the Agent in or towards payments of any instalments
of interest or principal or any other amounts then payable pursuant to the
Transaction Security Documents;
19.2.3 to pay the day-to-day operating expenses and other costs of administering
the affairs of the relevant members of the Group in the ordinary course of
trade provided such expenses and costs relate to Core Activities; and
19.2.4 to pay a Permitted Distribution under paragraph (a) of such definition.
19.3 RETENTION ACCOUNT AND HOLDING ACCOUNT: CREDITS AND WITHDRAWALS
19.3.1 The Borrower hereby undertakes with the Finance Parties that it shall,
from the date of this Agreement, on each Retention Date pay to the Security
Agent for credit to the Retention Account, the Retention Amount for such
Retention Date provided however that, to the extent that there are moneys
standing to the credit of the Operating Accounts and/or the DnB Operating
Accounts (or any of them) as at the relevant Retention Date, such moneys
shall, up to an amount equal to the Retention Amount, be transferred
between the Operating Accounts and/or the DnB Operating Accounts (or any of
them) to the Retention Account on that Retention Date (and in respect of
the Operating Accounts (other than the CNSA Account held with the Agent in
London) the Borrower hereby irrevocably authorises the Security Agent to
effect each such transfer) and to that extent the Borrower's obligations to
make the payments referred to in this clause 19.3.1 shall have been
fulfilled upon such transfer being effected.
19.3.2 Unless and until there shall occur an Event of Default (whereupon the
provisions of clause 19.5 (Application of Accounts) shall apply), all
Retention Amounts credited to the Retention Account together with interest
from time to time accruing or at any time accrued thereon shall be applied
as directed by the Agent (and the Borrower hereby irrevocably authorises
the Security Agent so to apply the same) in the following manner:
(a) upon each Repayment Date, and on each day that interest is payable
pursuant to clause 10.3 (Payment of interest), in or towards payment
to the Lenders of the instalments then falling due for repayment or
(as the case may be) the amount of interest then due. Each such
application by the Agent shall constitute a payment in or towards
satisfaction of the Borrower's corresponding payment obligations under
this Agreement but shall be strictly without prejudice to the
obligations of the Borrower to make any such payment to the extent
that the application by the Security Agent pursuant to this clause
19.3.2(a) is insufficient to meet the same; and
(b) following any application by the Agent pursuant to clause 19.3.2(a),
in transfer to the Working Capital Account of any moneys standing to
the credit of the Retention Account to the extent that such moneys do
not constitute Retention Amounts previously transferred to the
Retention Account pursuant to clause 19.3.1.
19.3.3 Unless the Lenders otherwise agree in writing and subject to clause
19.3.2, the Borrower shall not be entitled to withdraw any moneys from the
Retention Account at any time from the date of this Agreement.
19.3.4 Unless the Lenders otherwise agree in writing, the Borrower shall not be
entitled to withdraw any moneys from the Holding Account at any time from
the date of this Agreement other than for the purposes specified in, and in
compliance with, clause 8.4.
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19.4 WORKING CAPITAL ACCOUNT: WITHDRAWALS
Unless the Agent otherwise agrees in writing, the Borrower shall not be
entitled to withdraw any moneys from the Working Capital Account at any
time from the date of this Agreement save that, unless and until a Default
shall occur and the Agent shall direct to the contrary, the Borrower may,
subject to the delivery by the Borrower to the Agent of a Quarterly Budget,
withdraw moneys from the Working Capital Account for the following
purposes:
19.4.1 to pay any amount in or towards payment of any instalments of interest or
principal in respect of the Loans or any other amounts then payable
pursuant to the Finance Documents;
19.4.2 to make advances by way of Intra-Group Loans;
19.4.3 to finance Core Activities; and
19.4.4 to assist a Purchase Option Subsidiary in financing the purchase of a
Purchase Option Ship in accordance with clause 23.43.1 (Purchase Option
Subsidiaries).
19.5 APPLICATION OF ACCOUNTS
At any time after the occurrence of an Event of Default which is
continuing, the Agent may, with prior notice to the Borrower, instruct the
Security Agent or the relevant Finance Party to apply all moneys then
standing to the credit of the HSH Accounts (together with interest from
time to time accruing or accrued thereon) in or towards satisfaction of any
sums due to the Finance Parties under the Finance Documents in the manner
specified in clause 27.22 (Order of application).
19.6 NEW ACCOUNTS
19.6.1 The Borrower shall procure that no member of the Group (other than a
Purchase Option Subsidiary or a New Share Issue Subsidiary) shall open any
new accounts without the prior written consent of the Agent, save for any
account opened in connection with Permitted Financial Indebtedness and
provided that the Borrower shall give (or shall procure that the relevant
member of the Group gives) the Agent notice that it has opened an account
in connection with Permitted Financial Indebtedness within five Business
Days of opening such an account.
19.6.2 In the event that a Purchase Option Subsidiary or a New Share Issue
Subsidiary opens any new account, the Borrower shall, or shall procure that
such Purchase Option Subsidiary or New Share Issue Subsidiary shall, give
the Agent notice that it has opened the account within five Business Days
of opening such an account.
19.7 SECURITY OVER THE ACCOUNTS
19.7.1 The HSH Accounts, the Wachovia Accounts, the CNSA Accounts and the
Permitted Existing Accounts (other than the Excluded Existing Accounts) and
all amounts from time to time standing to the credit thereof shall be
subject to the security constituted and the rights conferred by the Account
Pledges and any other Transaction Security Document.
19.7.2 The Borrower shall procure that unless otherwise agreed in writing by the
Agent any new accounts opened in accordance with the terms of clause 19.6.1
(New accounts) shall be subject to a first priority account pledge in
favour of the Security Agent or, as the case may be, the Secured Parties
save (a) (but without prejudice to the provisions of clauses 23.43.3(b)
(Purchase Option Subsidiaries)) in respect of an account which has been
pledged, on a first priority basis, to a Third Party Financier and (b) for
an account of a New Share Issue Subsidiary.
77
SECTION 8: REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
20 REPRESENTATIONS
20.1 GENERAL
20.1.1 The Borrower makes the representations and warranties set out in this
clause 20 to each Finance Party.
20.1.2 In relation to the representations and warranties made on the date of
this Agreement and any other date, it is assumed that the Borrower has (and
had at all relevant times prior to the Closing Date) the knowledge of Key
Personnel.
20.2 STATUS
20.2.1 It and each of its Subsidiaries is a corporation, duly incorporated,
validly existing and in good standing under the law of its jurisdiction of
incorporation.
20.2.2 It and each of its Subsidiaries has the corporate power to own its assets
and carry on its business as it is being conducted.
20.3 BINDING OBLIGATIONS
Subject to the Legal Reservations, and in the case of the Transaction
Security Documents, to the Registration Requirements:
20.3.1 the obligations expressed to be assumed by it and each other Obligor in
each Transaction Document are legal, valid, binding and enforceable
obligations in accordance with their terms; and
20.3.2 (without limiting the generality of clause 20.3.1), each Transaction
Security Document creates the security interests which that Transaction
Security Document purports to create and those security interests are valid
and effective.
20.4 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it and each other Obligor of, and the
transactions contemplated by, the Transaction Documents and the granting of
the Transaction Security do not and will not conflict with:
20.4.1 any law or regulation applicable to it or such other Obligors;
20.4.2 the Constitutional Documents of any member of the Group; or
20.4.3 any agreement or instrument binding upon it or any member of the Group or
any of its or any member of the Group's assets or constitute a default or
termination event (however described) under any such agreement or
instrument.
20.5 POWER, AUTHORITY AND PURPOSE
20.5.1 It and each other Obligor has the power to enter into, perform and
deliver, and has taken all necessary action to authorise its entry into,
performance and delivery of, the Transaction Documents to which it is or
will be a party and the transactions contemplated by those Transaction
Documents.
20.5.2 No limit on its and any other Obligor's powers will be exceeded as a
result of the borrowing, grant of security or giving of guarantees or
indemnities contemplated by the Transaction Documents.
20.5.3 Any part of the Existing HSH Debt borrowed by the Borrower for the
general corporate and working capital purposes of the Group and which has
already been used by the Borrower and/or the Group (whether by withdrawals
from the Working Capital Account (as defined in the Existing Loan
Agreement) or otherwise), has been used for such purpose and in order to
finance the Core Activities of the Group.
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20.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE
20.6.1 All Authorisations required or desirable:
(a) to enable it and each other Obligor lawfully to enter into, exercise
their respective rights and comply with their respective obligations
in the Transaction Documents to which it is a party;
(b) to make the Transaction Documents admissible in evidence in their
respective Relevant Jurisdictions; and
(c) to enable the Borrower to complete the Acquisition,
have been obtained or effected and are in full force and effect except any
Authorisation forming a Registration Requirement, which Authorisations will
be promptly obtained or effected after the date of this Agreement.
20.6.2 All Authorisations necessary for the conduct of the business, trade and
ordinary activities of members of the Group have been obtained or effected
and are in full force and effect.
20.7 GOVERNING LAW AND ENFORCEMENT
20.7.1 The choice of English or, as the case may be, Uruguayan, ▇▇▇▇▇▇▇▇
Islands, Greek, German, Panamanian, New York and Connecticut law as the
governing law of the Finance Documents (as applicable) will be recognised
and enforced in its Relevant Jurisdictions.
20.7.2 Subject to any reservations or qualifications contained in any legal
opinion delivered to the Agent pursuant to clause 4.1 (Initial conditions
precedent), any judgment obtained in England or, as the case may be,
Uruguay, the ▇▇▇▇▇▇▇▇ Islands, the Hellenic Republic, the Federal Republic
of Germany, the Republic of Panama, New York or Connecticut in relation to
a Finance Document will be recognised and enforced in its Relevant
Jurisdictions.
20.8 INSOLVENCY
No:
20.8.1 corporate action, legal proceeding or other procedure or step described
in clause 24.7.1 (Insolvency proceedings); or
20.8.2 creditors' process described in clause 24.8 (Creditors' process),
has been taken or, to the knowledge of the Borrower, threatened in relation
to a member of the Group; and none of the circumstances described in clause
24.6 (Insolvency) applies to a member of the Group.
20.9 NO FILING OR STAMP TAXES
Under the laws of its Relevant Jurisdictions it is not necessary that any
Finance Document be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration, notarial or
similar Taxes or fees be paid on or in relation to the Finance Documents or
the transactions contemplated by the Finance Documents except the
Registration Requirements in relation to any Finance Documents which
registrations, filings, taxes and fees will be made and paid promptly after
the date of the relevant Finance Document.
20.10 DEDUCTION OF TAX
It and each other Obligor is not required to make any deduction for or on
account of Tax from any payment it may make under any Finance Document.
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20.11 NO DEFAULT
20.11.1 No Event of Default and, on the date of this Agreement and each
Utilisation Date, no Default is continuing or is reasonably likely to
result from the making of any Loan or the entry into, the performance of,
or any transaction contemplated by, any Transaction Document.
20.11.2 No other event or circumstance is outstanding which constitutes (or,
with the expiry of a grace period, the giving of notice, the making of any
determination or any combination of any of the foregoing, would constitute)
a default or termination event (however described) under any other
agreement or instrument which is binding on it or any of its Subsidiaries
or to which its (or any of its Subsidiaries') assets are subject which has
or is reasonably likely to have a Material Adverse Effect.
20.12 NO MISLEADING INFORMATION
20.12.1 Any factual information contained in the Information Memorandum or the
Information Package was true and accurate in all material respects as at
the date of the relevant report or document containing the information or
(as the case may be) as at the date the information is expressed to be
given.
20.12.2 The Base Case Model has been prepared in accordance with the Accounting
Principles as applied to the Original Financial Statements, and the
financial projections contained in the Base Case Model have been prepared
on the basis of recent historical information, are fair and based on
reasonable assumptions and have been approved by two members of the board
of directors of the Borrower.
20.12.3 Any financial projection or forecast contained in the Information
Memorandum or the Information Package has been prepared on the basis of
recent historical information and on the basis of reasonable assumptions
and was fair (as at the date of the relevant report or document containing
the projection or forecast) and arrived at after careful consideration.
20.12.4 The expressions of opinion or intention provided by or on behalf of an
Obligor for the purposes of the Information Memorandum or the Information
Package were made after careful consideration and were fair and based on
reasonable grounds.
20.12.5 No event or circumstance has occurred or arisen and no information has
been omitted from the Information Memorandum or the Information Package and
no information has been given or withheld that results in the information,
opinions, intentions, forecasts or projections contained in the Information
Memorandum or the Information Package being untrue or misleading in any
material respect.
20.12.6 All material information provided to a Finance Party by or on behalf of
the Borrower in connection with the Acquisition and/or the Target Group on
or before the date of this Agreement and not superseded before that date
(whether or not contained in the Information Package) is accurate and not
misleading in any material respect and all projections provided to any
Finance Party on or before the date of this Agreement have been prepared in
good faith on the basis of assumptions which were reasonable at the time at
which they were prepared and supplied.
20.12.7 All other written information provided by any member of the Group
(including its advisers) to a Finance Party or the provider of any Report
was true, complete and accurate in all material respects as at the date it
was provided and is not misleading in any respect.
20.13 ORIGINAL FINANCIAL STATEMENTS
20.13.1 The Original Financial Statements were prepared in accordance with the
Accounting Principles consistently applied.
20.13.2 The Original Financial Statements give a true and fair view of the
Target's consolidated financial condition and results of operations during
the relevant financial year.
20.13.3 There has been no material adverse change in its assets, business or
financial condition (or the assets, business or consolidated financial
condition of the Group, in the case of the Borrower)
80
since the date of the Accountant's Report and the Original Financial
Statements nor since the Closing Date.
20.13.4 The Original Financial Statements do not consolidate the results, assets
or liabilities of any person or business which does not form part of the
Target Group.
20.13.5 Its most recent financial statements delivered pursuant to clause 21.1
(Financial statements):
(a) have been prepared in accordance with the Accounting Principles as
applied to the Original Financial Statements and the Base Case Model;
and
(b) give a true and fair view of (if audited) or fairly present (if
unaudited) its consolidated financial condition as at the end of, and
consolidated results of operations for, the period to which they
relate.
20.13.6 The budgets and forecasts supplied under this Agreement were arrived at
after careful consideration and have been prepared in good faith on the
basis of recent historical information and on the basis of assumptions
which were reasonable as at the date they were prepared and supplied.
20.13.7 Since the date of the most recent financial statements delivered
pursuant to clause 21.1 (Financial statements) there has been no material
adverse change in the business, assets or financial condition of the Group
taken as a whole.
20.14 NO PROCEEDINGS PENDING OR THREATENED
Save as disclosed in schedule 3.12 of the Acquisition Agreement no
litigation, arbitration or administrative proceedings or investigations of,
or before, any court, arbitral body or Government Entity which, if
adversely determined, are likely to have a Material Adverse Effect have (to
the best of its knowledge and belief (having made due and careful enquiry))
been started or threatened against it or any of its Subsidiaries.
20.15 NO BREACH OF LAWS
20.15.1 It has not (and none of its Subsidiaries has) breached any law or
regulation which breach has or is likely to have a Material Adverse Effect.
20.15.2 No labour disputes are current or, to the best of its knowledge and
belief (having made due and careful enquiry), threatened against any member
of the Group which have or are likely to have a Material Adverse Effect.
20.16 ENVIRONMENTAL LAWS
Save as expressly disclosed in the Acquisition Agreement:
20.16.1 Each member of the Group is in compliance with clause 23.3
(Environmental compliance) and no circumstances have occurred which would
prevent such compliance in a manner or to an extent which has or is likely
to have a Material Adverse Effect.
20.16.2 No Environmental Claim has been commenced or (to the best of its
knowledge and belief (having made due and careful enquiry)) is threatened
against any member of the Group where that claim has or is reasonably
likely, if determined against that member of the Group, to have a Material
Adverse Effect.
20.16.3 There has been no Environmental Incident.
20.17 TAXATION
20.17.1 It is not (and none of its Subsidiaries is) materially overdue in the
filing of any Tax returns and it is not (and none of its Subsidiaries is)
overdue in the payment of any amount in respect of Tax of US$250,000 (or
its equivalent in any other currency) or more.
81
20.17.2 No material claims or investigations are being, or are reasonably likely
to be, made or conducted against it (or any of its Subsidiaries) with
respect to Taxes.
20.17.3 To the best of its knowledge and belief and based on the advice
contained in the Tax Report, the Borrower is resident for Tax purposes only
in the jurisdiction of its incorporation.
20.18 SECURITY AND FINANCIAL INDEBTEDNESS
20.18.1 No Security or Quasi-Security exists over all or any of the present or
future assets of any member of the Group other than as permitted by this
Agreement.
20.18.2 No member of the Group has any Financial Indebtedness outstanding other
than as permitted by this Agreement.
20.19 RANKING
20.19.1 The Transaction Security has or will have the ranking in priority which
it is expressed to have in the Transaction Security Documents and it is not
subject to any prior ranking or pari passu ranking Security (save in
respect of any Transaction Security granted by a Purchase Option Subsidiary
or a New Share Issue Subsidiary, where the Transaction Security will rank
in accordance with a Third Party Intercreditor Agreement).
20.19.2 It is in compliance with the undertaking in clause 23.13 (Pari passu
ranking).
20.20 GOOD TITLE TO ASSETS
20.20.1 It and each of its Subsidiaries has a good, valid and marketable title
to, or valid leases or licences of, and all appropriate Authorisations to
use, the assets necessary to carry on its business as presently conducted.
20.20.2 Each Owned Ship is:
(a) in the absolute ownership of the relevant member of the Group who is
the sole, legal and beneficial owner of such Owned Ship;
(b) permanently registered through the offices of the relevant Registry as
a Ship under the laws and flag of the relevant Flag State;
(c) operationally seaworthy and in every way fit for service; and
(d) classed with the relevant Classification free of all requirements and
recommendations of the relevant Classification Society.
20.20.3 Save for any Charters or Contracts of Affreightment disclosed in writing
by the Borrower to the Agent, and acknowledged in writing by the Agent,
prior to the date of this Agreement, no Ship is subject to any charter or
contract or to any agreement to enter into any charter or contract which,
if entered into after the date of this Agreement, would have required the
consent of the Agent under clause 23.36.1 (Future Charters and Contracts of
Affreightment) and there will not be any agreement or arrangement whereby
the Earnings of such Owned Ship or, as the case may be, the Charter
Earnings of such Chartered Ship may be shared with any other person.
20.20.4 Each Charter Company has established appropriate quality and risk
management procedures along with a systematic ship vetting system for use,
in each case, when fixing any Chartered Ship under any employment
arrangement to ensure that such Charter Company effectively manages its
liability risk exposure in connection with the chartering, operating and
employment of any Chartered Ship.
20.20.5 CNSA has the benefit of such unconditional rights of access and egress
as are required for the maintenance, promotion and operation and
development of the Terminal and there are vested in CNSA (under the Lease
or otherwise) all leasehold rights, licences, easements and other rights
necessary for the maintenance, promotion and operation and development of
the Terminal.
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20.20.6 The construction of the Silo has been completed.
20.21 LEGAL AND BENEFICIAL OWNERSHIP
20.21.1 It and each of its Subsidiaries is the sole legal and beneficial owner
of the respective assets over which it purports to grant Security.
20.21.2 All the Target Shares were, once Completion occurred, legally and
beneficially owned by ISE free from any claims, third party rights or
competing interests other than, in the case of Target Shares only,
Permitted Security permitted under clause 23.15 (Negative Pledge).
20.22 SHARES
20.22.1 Prior to submission of a Utilisation Request the shares of any member of
the Group which are subject to the Transaction Security are fully paid,
non-assessable and not subject to any option to purchase or similar rights.
20.22.2 The Constitutional Documents of companies whose shares are subject to
the Transaction Security do not and could not restrict or inhibit any
transfer of those shares on creation or enforcement of the Transaction
Security.
20.22.3 Save in respect of the Borrower (as disclosed by the Borrower under the
heading "Description of Securities" in the Form S-4), there are no
agreements in force which provide for the issue or allotment of, or grant
any person the right to call for the issue or allotment of, any share or
loan capital of any member of the Group or member of the Target Group
(including any option or right of pre-emption or conversion).
20.23 INTELLECTUAL PROPERTY
It and each of its Subsidiaries:
20.23.1 is the sole legal and beneficial owner of or has licensed to it all the
Intellectual Property which is material in the context of its business (the
"MATERIAL INTELLECTUAL PROPERTY") and which is required by it in order to
carry on its business as it is being conducted and as contemplated in the
Base Case Model;
20.23.2 does not (nor does any of its Subsidiaries), in carrying on its
businesses, infringe any Intellectual Property of any third party in any
respect; and
20.23.3 has taken all formal or procedural actions (including payment of fees)
required to maintain any Material Intellectual Property owned by it.
20.24 GROUP STRUCTURE CHART
20.24.1 The Group Structure Chart delivered to the Agent pursuant to Part I of
Schedule 3 (Conditions Precedent) is true, complete and accurate and shows
the following information:
(a) all members of the Group, including current name and company
registration or corporation number (as the case may be), its
jurisdiction of incorporation and/or establishment, a list of
shareholders and indicating whether a company is a Dormant Subsidiary
or is not a company with limited liability;
(b) all minority interests in any member of the Group (other than the
Borrower) and any person in which any member of the Group holds shares
in its issued share capital or equivalent ownership interest of such
person.
20.24.2 All necessary intra-Group loans, transfers, share exchanges and other
steps resulted in the final Group structure are set out in the Group
Structure Chart and have been taken in compliance with all relevant laws
and regulations and all requirements of relevant regulatory authorities.
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20.25 OBLIGORS
Each Subsidiary of the Borrower (other than a Dormant Subsidiary) is or
will be an Obligor on the first Utilisation Date.
20.26 ACCOUNTING REFERENCE DATE
The Accounting Reference Date of each member of the Group is 31 December.
20.27 ACQUISITION DOCUMENTS, DISCLOSURES AND OTHER DOCUMENTS
20.27.1 The Acquisition Documents contain all the terms of the Acquisition.
20.27.2 There is no disclosure made to the Acquisition Documents which has or
may have an adverse effect on any of the information, opinions, intentions,
forecasts and projections contained or referred to in the Information
Package.
20.27.3 To the best of its knowledge no representation or warranty given by any
party to the Acquisition Documents is untrue or misleading in any material
respect.
20.27.4 The Service Contracts and the Constitutional Documents of the Borrower
(as amended to the extent permitted under this Agreement) contain all the
material terms of all the agreements and arrangements between Key
Personnel, the Borrower and any member of the Group.
20.28 NO ADVERSE CONSEQUENCES
20.28.1 It is not necessary under the laws of its Relevant Jurisdictions:
(a) in order to enable any Finance Party to enforce its rights under any
Finance Document; or
(b) by reason of the execution of any Finance Document or the performance
by it of its obligations under any Finance Document,
that any Finance Party should be licensed, qualified or otherwise entitled
to carry on business in any of its Relevant Jurisdictions.
20.28.2 No Finance Party is or will be deemed to be resident, domiciled or
carrying on business in its Relevant Jurisdictions by reason only of the
execution, performance and/or enforcement of any Finance Document.
20.29 HOLDING AND DORMANT SUBSIDIARIES
20.29.1 Except as may arise under the Transaction Documents and for Acquisition
Costs, before the Closing Date the Borrower has not traded or incurred any
liabilities or commitments (actual or contingent, present or future) other
than in the case of ISE, pursuant to its listing of shares on the OTC
Bulletin Board on 16 December 2004.
20.29.2 Aegean Shipping Corporation Inc. is a Dormant Subsidiary and there are
no other Dormant Subsidiaries in the Group.
20.30 NO IMMUNITY
Neither it nor any other Obligor nor any of their respective assets are
immune to any legal action or proceeding.
20.31 PENSIONS
Save as expressly disclosed in the Accountants Report, the Group is fully
in compliance with the undertakings in clause 23.24 (Pensions).
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20.32 INSURANCE
Save as expressly disclosed in the Insurance Report, the Group is fully in
compliance with the undertakings in clause 23.23 (Insurance).
20.33 FEDERAL REGULATIONS
20.33.1 The Borrower is not engaged in the business of extending credit for the
purpose of "purchasing" or "carrying" "margin stock" within the respective
meanings of each of the quoted terms under Regulation U, and none of the
transactions contemplated by this Agreement will violate or result in the
violation of the Securities Act, the Exchange Act or Regulation T, U or X.
At no time would the obligations of the Borrower be directly or "indirectly
secured" by assets of the Borrower or its consolidated Subsidiaries that
are "margin stock" (pursuant to, and as such quoted terms are defined in,
Section 221.2(g) of Regulation U), which represents more than 25 per cent.
of the value of the assets of the Borrower and its consolidated
Subsidiaries. To the extent applicable and if requested by the Agent or any
Lender, the Borrower will furnish to the Agent and each Lender a statement
to the foregoing effect in conformity with the requirements of FR Form G-3
or FR Form U-1 referred to in said Regulation U.
20.33.2 Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935 of the
United States or the Federal Power Act of the United States or the
Investment Company Act of 1940 of the United States, each as amended. In
addition, neither the Borrower nor any of its Subsidiaries is (a) an
"investment company" registered or required to be registered under the
Investment Company Act of 1940 of the United States, as amended, (b)
controlled by such a company, or (c) a "holding company", a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company"
or of a "subsidiary" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935 of the United States, as
amended.
20.33.3 No director, executive officer or principal holder of capital stock of
the Borrower or any of its Subsidiaries is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof, the terms
"director", "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O.
20.33.4 The Borrower and its Subsidiaries are current with all material reports
and documents, if any, required to be filed with any U.S. federal or state
securities commission or similar agency and are in compliance in all
material respects with all applicable rules and regulations of such
commissions.
20.34 ERISA
20.34.1 During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and
no event or condition has occurred or exists as a result of which any ERISA
Event could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in material compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other applicable
United States federal or state laws; and (iv) no lien in favour of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
20.34.2 The actuarial present value of all "benefit liabilities" (as defined in
Section 4001(a)(16) of ERISA), whether or not vested, under each Single
Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case,
in accordance with Financial Accounting Standards Board Statements 87 or
132, as applicable), did not exceed as of such valuation date the fair
market value of the assets of such Plan.
20.34.3 Neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate
has incurred, or could be reasonably expected to incur, any withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
The Borrower or any of its Subsidiaries or any ERISA Affiliate would not
become subject to any withdrawal liability under ERISA if the Borrower or
any of its Subsidiaries or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation
is made or deemed made. Neither the Borrower nor any of its Subsidiaries
nor any
85
ERISA Affiliate has received any notification that any Multiemployer Plan
is in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer
Plan is reasonably expected to be in reorganization, insolvent or
terminated.
20.34.4 No prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or could be reasonably
expected to subject the Borrower or any of its Subsidiaries to any material
liability under Section 406, 409, 502(i) or 502(l) of ERISA or Section 4975
of the Code, or under any agreement or other instrument pursuant to which
the Borrower or any of its Subsidiaries or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
20.34.5 Neither the Borrower nor any of its Subsidiaries has any material
liability with respect to "expected post-retirement benefit obligations"
within the meaning of the United States Financial Accounting Standard Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601 through 609 of ERISA and Section 4980B
of the Code apply has been administered in compliance in all material
respects of such sections.
20.34.6 Neither the execution and delivery of this Agreement nor the
consummation of the financing transactions contemplated hereunder will
involve any transaction which is subject to the prohibitions of Sections
404, 406 or 407 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code.
20.34.7 With respect to any Foreign Plan, none of the following events or
conditions exists and is continuing that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect: (a)
substantial non-compliance with its terms and with the requirements of any
and all applicable Laws; (b) a failure to be in good standing with
applicable regulatory authorities; (c) an obligation by the Borrower or any
Subsidiary in connection with the termination of or withdrawal from any
Foreign Plan; (d) for any Foreign Plan that is funded, a Foreign Plan
Underfunding; or (e) for any Foreign Plan that is not funded, a failure to
properly accrue or insure the obligations of such Foreign Plan.
20.35 COMPLIANCE
20.35.1 Neither the Borrower nor any of its Subsidiaries has made any unlawful
domestic or foreign political contributions or engaged in any conduct
(including payments and/or provisions of services) in each case, that would
constitute a violation of (a) Foreign Corrupt Practices Act of 1977 of the
United States, as currently in effect, or (b) any similar applicable U.S.
or foreign law. The Borrower and its Subsidiaries have adopted management
procedures that are reasonably appropriate in its determination in
accordance with the Foreign Corrupt Practices Act of 1977 of the United
States). The Borrower and its Subsidiaries are familiar with, have
implemented and not violated such procedures. None of the employees or
customers or vendors of the Borrower or its Subsidiaries are listed on any
list of Specially Designated Nationals and Blocked Persons maintained by
the Office of Foreign Assets Control of the United States Department of the
Treasury (OFAC List).
20.36 ANTI-TERRORISM LAWS
20.36.1 None of the Obligors or, to the knowledge of any of the Obligors, any of
their Affiliates, is in violation of any laws relating to terrorism or
money laundering ("ANTI-TERRORISM LAWS"), including the United States
Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the "EXECUTIVE ORDER"), and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, Public Law ▇▇▇-▇▇ (▇▇▇ "▇▇▇▇▇▇▇ ▇▇▇").
20.36.2 No Obligor or, to the knowledge of any of the Obligors, any of their
Affiliates, or their respective brokers or other agents, is any of the
following:
(a) a person or entity that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
(b) a person or entity owned or controlled by, or acting for or on behalf
of, any person or entity that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
86
(c) a person or entity that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order; or
(d) a person or entity that is named as a "specially designated national
and blocked person" on the most current list published by the Office
of Foreign Asset Control of the United States Department of Treasury
at its official website or any replacement website or other
replacement official publication of such list.
20.36.3 No Obligor or, to the knowledge of any Obligor, any of its brokers or
other agents acting in any capacity in connection with the Facilities (i)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any person described in
paragraph (b) above, (ii) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.
20.37 TIMES WHEN REPRESENTATIONS MADE
20.37.1 All the representations and warranties in this clause 20 are made by the
Borrower on the date of this Agreement except for the representations and
warranties set out in clause 20.12 (No misleading information) which are
deemed to be made by the Borrower (i) with respect to the Information
Memorandum, on the date the Information Memorandum is approved by the
Borrower, (ii) with respect to the Information Package, on the date of this
Agreement and on the Closing Date and (iii) with respect to the Information
Package (other than the Base Case Model), on the date of this Agreement and
on any later date on which the Information Package (or part of it) is
released for distribution in connection with syndication and on the
Syndication Date.
20.37.2 All the representations and warranties in this clause 20 are also deemed
to be made on the date of each Utilisation Request.
20.37.3 The Repeating Representations are deemed to be made by the Borrower on
the date of each Utilisation Request, on each Utilisation Date and on the
first day of each Interest Period (except that those contained in clauses
20.13.1 to 20.13.4 (Original Financial Statements) will cease to be so made
once subsequent financial statements have been delivered under this
Agreement).
20.37.4 All the representations and warranties in this clause 20 except clause
20.12 (No misleading information), clause 20.24 (Group Structure Chart),
clause 20.27 (Acquisition Documents, disclosures and other documents) and
clause 20.29 (Holding and Dormant Companies) are deemed to be made by each
Additional Security Provider on the day on which it becomes (or it is
proposed that it becomes) an Additional Security Provider.
20.37.5 Each representation or warranty deemed to be made after the date of this
Agreement shall be deemed to be made by reference to the facts and
circumstances existing at the date the representation or warranty is deemed
to be made.
21 INFORMATION UNDERTAKINGS
The undertakings in this clause 21 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
In this clause 21 and clause 22 (Financial Covenants):
"ANNUAL FINANCIAL STATEMENTS" means the financial statements for a
Financial Year delivered pursuant to clause 21.1.1 (Financial statements).
"QUARTERLY FINANCIAL STATEMENTS" means the financial statements delivered
pursuant to clause 21.1.2 (Financial statements).
21.1 FINANCIAL STATEMENTS
The Borrower shall supply to the Agent in sufficient copies for all the
Lenders:
87
21.1.1 as soon as they are available, but in any event within 120 days after the
end of each of its Financial Years its audited consolidated financial
statements for that Financial Year.
21.1.2 as soon as they are available, but in any event within 60 days after the
end of each Financial Quarter of each of its Financial Years its
consolidated unaudited financial statements for that Financial Quarter; and
21.1.3 within ten days following the earlier of (i) the acquisition by the
Additional Collateral Owners of all Additional Collateral Ships and (ii)
the last day of the last Availability Period to elapse, a pro-forma balance
sheet for the Group.
21.2 PROVISION AND CONTENTS OF COMPLIANCE CERTIFICATE
21.2.1 The Borrower shall supply a Compliance Certificate to the Agent with each
set of its consolidated Annual Financial Statements and each set of its
Quarterly Financial Statements.
21.2.2 The Compliance Certificate shall, amongst other things, set out (in
reasonable detail) computations as to compliance with clause 22 (Financial
Covenants).
21.2.3 Each Compliance Certificate shall be signed by the Chief Financial
Officer and one member of the board of directors of the Borrower.
21.2.4 The Agent may consult with the Auditors about any certificate delivered
under this clause 21.2 and, if reasonable grounds exist for believing that
it was not correct when delivered, require them to give a written opinion
to the Agent on such certificate (and, if any such certificate is
established to be incorrect by the Auditors, the cost of such opinion will
be borne by the Borrower and, in any event, the cost of one such requested
opinion in any Financial Year shall be borne by the Borrower).
21.3 REQUIREMENTS AS TO FINANCIAL STATEMENTS
21.3.1 The Borrower shall procure that each set of Annual Financial Statements
and Quarterly Financial Statements includes a balance sheet, profit and
loss account and cashflow statement. In addition the Borrower shall procure
that:
(a) each set of Annual Financial Statements shall be audited by the
Auditors;
(b) each set of Quarterly Financial Statements is accompanied by a
statement by the directors of the Borrower commenting on the
performance of the Group for the Financial Quarter to which the
financial statements relate and the Financial Year to date and any
material developments or proposals affecting the Group or its
business;
(c) each set of Quarterly Financial Statements includes a schedule showing
all Ships together with such additional information in respect of such
Ships as the Agent may reasonably request; and
(d) each set of Quarterly Financial Statements is accompanied by a CNSA
Quarterly Report.
21.3.2 Each set of financial statements delivered pursuant to clauses 21.1.1 and
21.1.2 (Financial statements):
(a) shall be certified by the chief financial officer as giving a fair
presentation of its financial condition and operations as at the date
as at which those financial statements were drawn up and, in the case
of the Annual Financial Statements, shall be accompanied by any letter
addressed to the management of the Borrower by the Auditors and
accompanying those Annual Financial Statements;
(b) in the case of consolidated financial statements of the Group, shall
be accompanied by a statement by the chief financial officer comparing
actual performance for the period to which the financial statements
relate to:
(i) the projected performance for that period set out in the Budget;
and
88
(ii) the actual performance for the corresponding period in the
preceding Financial Year of the Group; and
(c) shall be prepared using the Accounting Principles, accounting
practices and financial reference periods consistent with those
applied in the case of the Borrower, in the preparation of the Base
Case Model unless, in relation to any set of financial statements, the
Borrower notifies the Agent that there has been a change in the
Accounting Principles or the accounting practices and its Auditors
deliver to the Agent:
(i) a description of any change necessary for those financial
statements to reflect the Accounting Principles or accounting
practices upon which the Base Case Model was prepared; and
(ii) sufficient information, in form and substance as may be
reasonably required by the Agent, to enable the Lenders to
determine whether clause 22 (Financial Covenants) has been
complied with and to make an accurate comparison between the
financial position indicated in those financial statements and
the Base Case Model.
Any reference in this Agreement to any financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Base Case Model was prepared.
(d)
(i) If the Borrower notifies the Agent of a change in accordance with
clause 21.3.2(c) above then the Borrower and the Agent shall
enter into negotiations in good faith (each acting reasonably)
with a view to agreeing:
(A) whether or not the change might result in any material
alteration in the commercial effect of any of the terms of
this Agreement; and
(B) if so, any amendments to this Agreement and the Base Case
Model which may be necessary to ensure that the change does
not result in any material alteration in the commercial
effect of those terms,
and if any amendments are agreed they shall take effect and be
binding on each of the Parties in accordance with their terms.
(ii) If no such agreement is reached within 30 days of that
notification of change, the Agent shall (if so requested by the
Majority Lenders and at the cost of the Borrower (such costs to
be reasonable)) instruct the Auditors to determine any amendment
to clause 22 (Financial Covenants) which the Auditors (acting as
experts and not arbitrators) consider appropriate to ensure the
change does not result in any material alteration in the
commercial effect of the terms of this Agreement. Those
amendments shall take effect when so determined by the Auditors.
21.3.3 If there is an Event of Default or if the Agent (acting reasonably)
believes that an Event of Default is likely to occur, and in such
circumstances, the Agent wishes to discuss the financial position of any
member of the Group with the Auditors, the Agent may notify the Borrower,
stating the questions or issues which the Agent wishes to discuss with the
Auditors. In this event, the Borrower must ensure that the Auditors are
authorised (at the expense of the Borrower):
(a) to discuss the financial position of each member of the Group with the
Agent on request from the Agent; and
(b) to disclose to the Agent for the Finance Parties any information which
the Agent may reasonably request.
21.4 BUDGET
The Borrower shall supply to the Agent in sufficient copies for all the
Lenders:
89
21.4.1 as soon as the same become available but in any event within 30 days
before the start of each of its Financial Years, an annual Budget for that
Financial Year; and
21.4.2 as soon as the same shall become available but in any event within 15
days before the start of each Financial Quarter of its Financial Year, a
Budget for that Financial Quarter, provided that the first such Budget
shall be delivered within 15 days of the date of this Agreement.
21.4.3 The Borrower shall ensure that each Budget:
(a) is in a form reasonably acceptable to the Agent and includes detailed
projections in relation to expenses expected to be incurred in
carrying out Core Activities and other activities of the Group
including, but not limited to, a projected consolidated profit and
loss, balance sheet and cashflow forecast statement for the Group,
projected calculations in respect of the covenants in clause 22
(Financial Covenants), a schedule of proposed Capital Expenditure, an
FFA Trading Statement, an update of the employment of the Ships
(including charter-in and charter-out rates), a forecast of the Excess
Cash and a commentary;
(b) is prepared in accordance with the Accounting Principles and the
accounting practices and financial reference periods applied to
financial statements under clause 21.1 (Financial statements); and
(c) in the case of the annual Budget, has been approved by the board of
directors of the Borrower and signed by two directors and, in the case
of a quarterly Budget, has been approved and signed by the Borrower's
chief financial officer.
21.4.4 If the Borrower updates or changes the Budget, it shall promptly deliver
to the Agent, in sufficient copies for each of the Lenders, such updated or
changed Budget together with a written explanation of the main changes in
that Budget.
21.5 PRESENTATIONS
Once in every financial year, or more frequently if requested to do so by
the Agent if the Agent reasonably suspects a Default has occurred and is
continuing or may have occurred or may occur, at least two directors of the
Borrower (one of whom shall be the chief financial officer) must give a
presentation to the Finance Parties about:
21.5.1 the on-going business and financial performance of the Group; and
21.5.2 any other matter which a Finance Party may reasonably request.
21.6 YEAR-END
21.6.1 The Borrower shall procure that each Financial Year-end of each member of
the Group falls on 31 December.
21.6.2 The Borrower shall procure that each quarterly accounting period and each
Financial Quarter of each member of the Group ends on a Financial Quarter
Day.
21.7 INFORMATION: MISCELLANEOUS
The Borrower shall (and shall procure that each other Obligor shall) supply
to the Agent (in sufficient copies for all the Lenders, if the Agent so
requests):
21.7.1 at the same time as they are dispatched, copies of all documents
dispatched by the Borrower or any Obligor to its shareholders generally (or
any class of them) or dispatched by the Borrower or any Obligor to its
creditors generally (or any class of them);
21.7.2 promptly upon becoming aware of them, the details of any litigation,
arbitration, other alternative dispute resolution or administrative
proceedings which are current, threatened or pending against any member of
the Group, and which, if adversely determined, are reasonably likely to
have a Material Adverse Effect or which would involve a liability, or a
potential or alleged liability, exceeding US$1,500,000 (or its equivalent
in other currencies);
90
21.7.3 promptly upon becoming aware of a Total Loss of a Ship or the Terminal or
the incurrence of damage to a Ship or the Terminal in excess of US$500,000,
the details of such Total Loss or damage and details of any insurance
proceeds or Requisition Compensation due to a member of the Group in
connection with the same;
21.7.4 ten Business Days before the date of any proposed Permitted Share Issue,
details of such Permitted Share Issue;
21.7.5 promptly upon becoming aware of the relevant claim, the details of any
claim which is current, threatened or pending against the Vendors or any
other person in respect of the Acquisition Documents and details of any
disposal or insurance claim which will require a prepayment under clause
8.2 (Disposal Proceeds, Insurance Proceeds and Acquisition Proceeds);
21.7.6 promptly, such information as the Security Agent or, as the case may be,
the Agent may reasonably require about the Charged Property and compliance
of the Obligors with the terms of any Transaction Security Documents;
21.7.7 promptly on request, such further information regarding the financial
condition, assets and operations of the Group and/or any member of the
Group (including any computations necessary in order to establish
compliance with the financial covenants in clause 22 (Financial Covenants),
any requested amplification or explanation of any item in the financial
statements, budgets or other material provided by any Obligor under this
Agreement or any other Finance Document, any changes to the management of
the Group, an up to date copy of its shareholders' register (or equivalent
in its jurisdiction of incorporation), any information regarding the Ships,
their employment, position and engagements, particulars of all towages and
salvages and copies of all charters and other contracts for their
employment or otherwise howsoever concerning such Ships) as any Finance
Party through the Agent may request;
21.7.8 promptly on request, such additional information as required by any
Finance Party under any applicable banking supervisory law; and
21.7.9 promptly after exercising a Purchase Option, the details of such Purchase
Option including the proposed date of acquisition of the relevant Purchase
Option Ship.
21.8 NOTIFICATION OF DEFAULT AND CERTAIN EVENTS RELATING TO CHARTERED SHIPS
21.8.1 The Borrower shall (and shall procure that each other Obligor shall)
notify the Agent of any Default (and the steps, if any, being taken to
remedy it) promptly upon becoming aware of its occurrence (unless that
Obligor is aware that a notification has already been provided by another
Obligor).
21.8.2 Promptly upon a request by the Agent, the Borrower shall supply to the
Agent a certificate signed by two of its directors or senior officers on
its behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken to
remedy it).
21.8.3 The Borrower shall (or shall procure that the relevant Charter Company
shall) notify the Agent forthwith by fax (thereafter confirmed by letter)
of any:
(a) damage to a Chartered Ship requiring repairs the cost of which will or
might result in such Chartered Ship being placed off-hire for a period
longer than 14 days;
(b) requisition of a Chartered Ship for hire; or
(c) arrest or detention of a Chartered Ship for a period longer than 5
days or any exercise or purported exercise of a lien or other claim on
a Chartered Ship or any earnings of the Chartered Ships or any part
thereof.
21.9 "KNOW YOUR CUSTOMER" CHECKS
21.9.1 If:
(a) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the
date of this Agreement;
91
(b) any change in the status of an Obligor or the composition of the
shareholders of an Obligor after the date of this Agreement; or
(c) a proposed assignment or transfer by a Lender of any of its rights
and/or obligations under this Agreement to a party that is not a
Lender prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of paragraph (c) above,
any prospective new Lender) to comply with "know your customer" or similar
identification procedures in circumstances where the necessary information
is not already available to it, the Borrower shall (and shall procure that
each other Obligor shall) promptly upon the request of the Agent or any
Lender supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent (for itself or on behalf
of any Lender) or any Lender (for itself or, in the case of the event
described in paragraph (c) above, on behalf of any prospective new Lender)
in order for the Agent, such Lender or, in the case of the event described
in paragraph (c) above, any prospective new Lender to carry out and be
satisfied with the results of all necessary "know your customer" or other
similar checks under all applicable laws and regulations pursuant to the
transactions contemplated in the Finance Documents.
21.9.2 Each Lender shall promptly upon the request of the Agent supply, or
procure the supply of, such documentation and other evidence as is required
by the Agent (for itself) in order for the Agent to carry out and be
satisfied with the results of all necessary "know your customer" or other
similar checks under all applicable laws and regulations pursuant to the
transactions contemplated in the Finance Documents.
21.9.3 If the Borrower is obliged to procure that a member of the Group becomes
an Additional Security Provider pursuant to clause 23.32 (Security
Providers), if the accession of such Additional Security Provider obliges
the Agent or any Lender to comply with "know your customer" or similar
identification procedures in circumstances where the necessary information
is not already available to it, the Borrower shall promptly upon the
request of the Agent or any Lender supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by the Agent
(for itself or on behalf of any Lender) or any Lender (for itself or on
behalf of any prospective new Lender) in order for the Agent or such Lender
or any prospective new Lender to carry out and be satisfied with the
results of all necessary "know your customer" or other similar checks under
all applicable laws and regulations pursuant to the accession of such
Subsidiary to this Agreement as an Additional Security Provider.
21.9.4 The Borrower confirms that it is the beneficiary (within the meaning of
section 8 of the German Money Laundering Act (Gesetz uber das Aufspuren von
Gewinnen aus schweren Straftaten (Geldwaschegesetz)) for each Loan made or
to be made available to it. It shall promptly inform the Lenders (by
written notice to the Agent) if it ceases to be, the beneficiary (within
the meaning of section 8 of the German Money Laundering Act (Gesetz uber
das Aufspuren von Gewinnen aus schweren Straftaten (Geldwaschegesetz)) for
each Loan made or to be made available to it and shall provide in writing
to the Agent the name and the address of the beneficiary (within the
meaning of section 8 of the German Money Laundering Act (Gesetz uber das
Aufspuren von Gewinnen aus schweren Straftaten (Geldwaschegesetz)) in
respect of such Loan.
21.10 POST-COMPLETION ADJUSTMENT
Within 10 days after the date of this Agreement, the Borrower shall deliver
to the Agent, with sufficient copies for the Lenders if the Agent so
requests, the statement produced by Investments & Finance setting out the
Final EBITDA Adjustment (as defined in the Acquisition Agreement) together
with details of the proposed purchase price adjustment and upon receipt or
generation of the same, any documentation, notices or correspondence in
respect of the acquisition price adjustment pursuant to section 2.2 of the
Acquisition Agreement.
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22 FINANCIAL COVENANTS
22.1 FINANCIAL DEFINITIONS
For the purposes of this clause 22.1 the following expressions shall have
the following meanings:
"BORROWINGS" means Financial Indebtedness save for any indebtedness for or
in respect of the items set out in paragraphs (f) or (k) (to the extent it
relates to a guarantee of any of the items referred to in paragraph (f) of
the definition) of the definition of Financial Indebtedness.
"CAPITAL EXPENDITURE" means any expenditure which, in accordance with the
Accounting Principles, should be treated as capital expenditure in the
audited consolidated financial statements of the Group.
"CURRENT ASSETS" means, at any relevant time of computation and in respect
of any relevant period, the aggregate (calculated on a consolidated basis)
of the stock in trade and work in progress, marketable securities, cash and
bank balances of the Group and moneys owing to the Group (other than moneys
due or to become due from the Borrower or another member of the Group)
payable on demand or within one year from the relevant date of computation.
"CURRENT LIABILITIES" means, at any relevant time of computation and in
respect of any relevant period, the aggregate (calculated on a consolidated
basis) of the obligations including contingent obligations of the Group to
pay money (other than money due or to become due to the Borrower or another
member of the Group) on demand or within one year from the relevant date of
computation (including one fourth of the current portion of long-term
debt).
"CURRENT RATIO" means the ratio of Current Assets to Current Liabilities.
"DEBT COVER" means the ratio of Total Debt to EBITDA.
"DEBT SERVICE" means, in respect of any period and the Group, the
aggregated:
(a) Interest Payable for such period;
(b) the total amount of all scheduled (but not voluntary or mandatory)
repayments of the Facilities made by the Borrower or which fell due
during such period;
(c) the total amount of all scheduled (but not voluntary or mandatory)
repayments of principal under the terms of any other Financial
Indebtedness (save for any revolving, overdraft or ancillary facility
that is available for simultaneous re-drawing according to its terms)
made by the members of the Group or which fell due during such period,
including the principal element of scheduled rental payments which
under the Accounting Principles should be treated as a finance lease
or otherwise capitalised on the books of such person, in accordance
with such principles; and
(d) dividends accrued, declared or paid during that period.
"EBITDA" means, in respect of any period, the consolidated profit on
ordinary activities of the Group for such period:
(a) excluding any exceptional items and extraordinary items;
(b) after deducting (to the extent otherwise included) any gain over book
value arising in favour of a member of the Group, and after adding
back (to the extent otherwise deducted) any loss against book value
incurred by a member of the Group, on:
(i) a disposal of an asset (not being an asset disposed of in the
ordinary course of trading); and/or
(ii) a revaluation of an asset.
(c) after adding back (to the extent otherwise deducted) Acquisition Costs
and the amortisation of such Acquisition Costs;
93
(d) after adding back (to the extent otherwise deducted) amortisation of
goodwill and other intangible assets;
(e) after adding back (to the extent otherwise deducted) depreciation and
impairment charges;
(f) after adding back any deduction for Interest Payable and any other
Interest (to the extent payable in cash) for which any member of the
Group is liable;
(g) after deducting (to the extent included) Interest Receivable;
(h) after adding back any deduction of Tax;
(i) after deducting the applicable share of any profit (except to the
extent received by a member of the Group in cash) or after adding back
the applicable loss of any joint venture or any other person which is
not a member of the Group; and
(j) after deducting (to the extent otherwise included) profits (or adding
back losses) attributable to minority interests in members of the
Group (other than the Borrower),
in each case for such period.
"FINANCE LEASE" means any lease under which a member of the Group is the
lessee which is or should be treated as a finance lease under the
Accounting Principles (and includes any hire purchase contract or other
arrangement which is similarly treated).
"FINANCIAL QUARTER" means each period of approximately three months
commencing on the day after a Financial Quarter Day and ending on the next
following Financial Quarter Day.
"FINANCIAL QUARTER DAY" means 31 March, 30 June, 30 September and 31
December in any year.
"FINANCIAL YEAR" means the annual accounting period of the Group ending on
31 December in each year.
"FLEET BOOK VALUE" means, at the end of a Relevant Period, the aggregate
book value of the Owned Ships less depreciation as stated in the most
recent financial statements delivered pursuant to clause 21.1 (Financial
Statements).
"FLEET MARKET VALUE" means, at the date of calculation, the aggregate of
the values of each of the Owned Ships as last determined in accordance with
clause 23.37 (Valuation of Owned Ships).
"FREE LIQUID ASSETS" means, at any given time, all cash and Cash Equivalent
Investments held by the Group (including amounts standing to the credit of
the Accounts) less an amount equal to the amount standing to the credit of
the Retention Account.
"INTEREST" means, in respect of any specified Borrowings, all continuing
regular or periodic costs, charges and expenses incurred in effecting,
servicing or maintaining such Borrowings including:
(a) gross interest, commitment fees, discount and acceptance fees and
guarantee, fronting and ancillary facility fees payable or incurred on
any form of such Borrowings;
(b) repayment and prepayment premiums payable or incurred in repaying or
prepaying such Borrowings; and
(c) the interest element of Finance Leases,
but excluding, in respect of such Borrowings, agency and arrangement fees
or other up-front fees.
"INTEREST PAYABLE" means, in respect of any period, the aggregate
(calculated on a consolidated basis) of:
(a) the amounts charged and posted as a current accrual accrued during
such period in respect of members of the Group by way of Interest on
all Borrowings, but excluding any amount accruing
94
as interest in-kind (and not as cash pay) to the extent capitalised as
principal during such period; and
(b) net payments in relation to any hedging arrangements in respect of
Borrowings (after deducting net income in relation to such hedging
arrangements).
"INTEREST RECEIVABLE" means, in respect of any period, the amount of
Interest accrued on cash balances of members of the Group with any Lender
(including the amount of interest accrued on the HSH Accounts, to the
extent that the account holder is entitled to receive such interest) during
such period.
"RELEVANT PERIOD" means each rolling period of 12 months ending on a
Financial Quarter Day.
"TANGIBLE NET WORTH" means, at any relevant time and in relation to any
Relevant Period, the aggregate of the amount paid-up or credited as paid-up
on the Borrower's issued share capital and the amount of the consolidated
capital and revenue reserves of the Group (including any share premium
account, capital redemption reserve fund and any credit balance on the
consolidated profit and loss account of the Group) all as shown by the then
latest consolidated balance sheet and profit and loss account of the Group
delivered under this Agreement but after:
(a) deducting any debit balance on such consolidated profit and loss
account unless it has already been deducted from the consolidated
capital and revenue reserves of the Group;
(b) deducting an amount equal to the positive amount (if any) determined
by deducting (i) the accumulated depreciation amounts taken from the
latest audited financial statements of the Borrower from (ii) the
corresponding accumulated minimum depreciation amounts specified in
the table below, in respect of the relevant Financial Year and the
relevant assets of the Borrower:
2005 2006 2007 2008 2009 2010
Financial Year (MILLION) (MILLION) (MILLION) (MILLION) (MILLION) (MILLION)
-------------- --------- --------- --------- --------- --------- ---------
Intangible 3.433 13.486 13.486 13.486 13.486 13.486
Vessels 4.724 15.140 16.228 16.228 16.228 16.228
Deferred costs 1.351 1.351 1.351 1.351 1.351 1.351
Port (incl.
Intangibles) 1.418 2.354 2.354 2.354 2.354 2.354
------ ------ ------ ------ ------ ------
Total 10.925 32.330 33.419 33.419 33.419 33.419
------ ------ ------ ------ ------ ------
2011 2012 2013 2014 2015
Financial Year (MILLION) (MILLION) (MILLION) (MILLION) (MILLION)
-------------- --------- --------- --------- --------- ---------
Intangible 13.486 13.486 5.441 5.441 5.441
Vessels 16.883 17.423 18.574 18.574 19.474
Deferred costs 1.351 0 0 0 0
Port (incl.
Intangibles) 2.354 2.354 2.354 2.354 2.354
------ ------ ------ ------ ------
Total 34.073 33.263 26.370 26.370 26.370
------ ------ ------ ------ ------
(c) deducting (i) (so far as not otherwise excluded as attributable to
minority interests) a sum equal to the aggregate of the amount by
which the book value of any tangible or intangible assets of any
member of the Group has been written up after the date of the
ISE-Navios Merger (as reflected in the opening balance sheet to be
provided pursuant to clause 21.1.3 (Financial statements)) (or, in the
case of a company becoming a Subsidiary after that date, the date on
which that company became a Subsidiary) by way of revaluation, (where,
for the purposes of this paragraph (c) any increase in the book value
of any tangible or intangible asset resulting from its transfer by one
member of the Group to another member of the Group shall be deemed to
result from a writing up of its book value by way of revaluation) and
(ii) the difference between the book values at the date of the
ISE-Navios Merger (as reflected in the opening balance sheet to be
provided pursuant to clause 21.1.3 (Financial statements)) and the
values shown in the Form S-4 dated 27 May 2005 unless the difference
is less than two per cent. and (iii) the positive amount (if any)
determined by deducting US$70,000,000 from the amount of goodwill
shown in the then latest audited financial statements of the Borrower;
(d) deducting the amount by which the Fleet Book Value as at the end of
the Relevant Period exceeds the Fleet Market Value and after adding
the amount by which the Fleet Market Value exceeds the Fleet Book
Value as at the end of the Relevant Period;
95
(e) excluding any amounts set aside for taxation as at the date of such
balance sheet and making such adjustments as may be appropriate in
respect of any significant additional taxation expected to result from
transactions carried out by any member of the Group after such date
and not reflected in that balance sheet;
(f) deducting all amounts attributable to minority interests in
Subsidiaries of which 100% of the assets and liabilities are included
in the then latest consolidated balance sheet of the Group;
(g) making such adjustments as may be appropriate in respect of any
variation in the amount of such paid-up share capital or any such
reserves after the date of the relevant balance sheet (but so that no
such adjustment shall be made in respect of any variation in profit
and loss account except to the extent of any profit or loss,
calculated on a cumulative basis, recorded in the then latest
consolidated profit and loss account of the Group delivered to the
Agent before the date of this Agreement, or under clause 21.1
(Financial statements), in respect of any subsequent period);
(h) making such adjustments as may be appropriate in respect of any
distribution declared, recommended or made by any member of the Group
(otherwise than attributable directly or indirectly to the Borrower)
out of profits earned up to and including the date of the latest
audited balance sheet of that member of the Group to the extent that
such distribution is not provided for in that balance sheet;
(i) making such adjustments as may be appropriate in respect of any
variation in the interests of the Borrower in its Subsidiaries and the
other members of the Group since the date of the latest published
audited consolidated balance sheet of the Group;
(j) if the calculation is required for the purpose of or in connection
with a transaction under or in connection with which any company is to
become or cease to be a Subsidiary of the Borrower or a member of the
Group, making all such adjustments as would be appropriate if that
transaction had been carried into effect;
(k) making such adjustments as may be appropriate in the opinion of the
Agent in order that the above amounts are calculated in accordance
with the Accounting Principles;
(l) making such adjustments as may be appropriate in respect of variations
in shareholder's equity (including such variations arising from the
issuance of shares and/or the exercise of warrants); and
(m) deducting such amounts as may be appropriate in respect of any of the
issued share capital of the Borrower which has been acquired by the
Borrower (including pursuant to the conversion and appraisal rights in
connection with the ISE-Navios Merger),
in each case, during such period.
"TOTAL DEBT" means, at any time, the aggregate outstanding principal,
capital or nominal amount of all Borrowings of the Group calculated on a
consolidated basis, less the amount standing to the credit of the Retention
Account, at that time.
22.2 FINANCIAL CONDITION
The Borrower shall ensure that:
22.2.1 MINIMUM NET WORTH: Tangible Net Worth shall, at all times for each of the
periods specified in column 1 below, be or exceed the amount set out in
column 2 below opposite the applicable period.
96
COLUMN 1 COLUMN 2
PERIOD AMOUNT (US$)
---------------------------------------------------------------- -------------
Closing Date to 31 December 2005 200,000,000
1 January 2006 to 31 March 2006 207,500,000
1 April 2006 to 30 June 2006 215,000,000
1 July 2006 to 30 September 2006 222,500,000
1 October 2006 to 31 December 2006 230,000,000
1 January 2007 to 31 March 2007 235,000,000
1 April 2007 to 30 June 2007 240,000,000
1 July 2007 to 30 September 2007 245,000,000
1 October 2007 to 31 December 2007 250,000,000
1 January 2008 to 31 March 2008 256,250,000
1 April 2008 to 30 June 2008 262,250,000
1 July 2008 to 30 September 2008 268,750,000
1 October 2008 to 31 December 2008 275,000,000
1 January 2009 to 31 March 2009 281,250,000
1 April 2009 to 30 June 2009 287,500,000
1 July 2009 to 30 September 2009 293,750,000
1 October 2009 to 31 December 2009 300,000,000
1 January 2010 to 31 December 2010 325,000,000
1 January 2011 to the last Repayment Date under clause 6.1
(Repayment of the Loans) 340,000,000
22.2.2 SOLVENCY: the percentage that Tangible Net Worth is of the aggregate of
Tangible Net Worth and Total Debt shall not at any time for each of the
periods specified in column 1 below be less than the percentage figure set
out in column 2 below opposite the applicable period.
COLUMN 1 COLUMN 2
PERIOD PERCENTAGE (%)
--------------------------------------------------------------- --------------
Closing Date to 31 December 2005 25
1 January 2006 to 31 December 2006 27
1 January 2007 to 31 December 2007 30
1 January 2008 to 31 December 2008 33
1 January 2009 to 31 December 2009 35
1 January 2010 to the last Repayment Date under clause 6.1
(Repayment of Loans) 40
22.2.3 DEBT COVER: Debt Cover in respect of any Relevant Period ending during
the periods specified in column 1 below shall not exceed the ratio set out
in column 2 below opposite the applicable period.
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COLUMN 1 COLUMN 2
PERIOD RATIO
--------------------------------------------------------------- --------------
Closing Date to 31 December 2007 6.50:1
1 January 2008 to 31 December 2008 6.00:1
1 January 2009 to 31 December 2009 5.50:1
1 January 2010 to 31 December 2010 5.00:1
1 January 2011 to 31 December 2011 4.50:1
1 January 2012 to 31 December 2012 4.00:1
1 January 2013 to 31 December 2013 3.50:1
1 January 2014 to 31 December 2014 3.00:1
1 January 2015 to the last Repayment Date under clause 6.1
(Repayment of Loans) 2.50:1
22.2.4 MINIMUM LIQUIDITY: the Group shall, at all times from the date of this
Agreement and in respect of any relevant period during the term of this
Agreement, maintain Free Liquid Assets in an amount of not less than
$40,000,000.
22.2.5 CAPITAL EXPENDITURE: the Group shall not overspend or underspend the
planned Capital Expenditure specified in the Budget delivered pursuant to
clause 21.4.1 (Budget) by an amount greater than 10 per cent. without the
prior written consent of the Agent.
22.2.6 CURRENT RATIO: the Current Ratio shall, at all times from the date of
this Agreement and in respect of any relevant period during the term of
this Agreement, be higher than 1.00:1.
22.3 FINANCIAL TESTING
22.3.1 The covenants in clauses 22.2.1 (Minimum Net Worth) to 22.2.4 (Minimum
Liquidity) (inclusive) and clause (Current Ratio) shall be tested on the
last day of each Financial Quarter (save that the covenants in clauses
22.2.1 (Minimum Net Worth) to 22.2.3 (Debt Cover) and clause 22.2.6
(Current Ratio) shall first be tested on 31 December 2005) and the covenant
in clause 22.2.5 (Capital Expenditure) shall be tested at the end of each
Financial Year. Details of compliance (or non-compliance) shall be provided
to the Agent in accordance with clause 21.2 (Provision and contents of
Compliance Certificate).
22.3.2 In the event that a Default (a) has occurred and is outstanding or (b)
the Agent, acting reasonably, believes a Default has occurred, the Agent
shall be entitled to test the covenants in clauses 22.2.1 (Minimum Net
Worth) to 22.2.6 (Current Ratio) inclusive as at that date. The Agent shall
notify the Borrower if it proposes to exercise its rights under this clause
22.3.2.
22.3.3 Following the giving of notice pursuant to clause 22.3.2 above, the
Borrower shall deliver to the Agent such further financial information as
the Agent may require to test the covenants referred to in clause 22.3.2
within five days of such request.
23 GENERAL UNDERTAKINGS
The undertakings in this clause 23 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
AUTHORISATIONS AND COMPLIANCE WITH LAWS
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23.1 AUTHORISATIONS
The Borrower shall (and shall ensure that each member of the Group shall)
promptly:
23.1.1 obtain, comply with and do all that is necessary to maintain in full
force and effect; and
23.1.2 supply certified copies to the Agent of,
any Authorisation required under any law or regulation of a Relevant
Jurisdiction to:
(a) enable it to perform its obligations under the Finance Documents and
the Acquisition Documents;
(b) ensure the legality, validity, enforceability or admissibility in
evidence of any Finance Document or Acquisition Document; and
(c) carry on its business where failure to do so has or is reasonably
likely to have a Material Adverse Effect.
23.2 COMPLIANCE WITH LAWS
The Borrower shall (and shall ensure that each member of the Group shall)
comply in all respects with all laws to which it may be subject, if failure
so to comply has or is reasonably likely to have a Material Adverse Effect.
23.3 ENVIRONMENTAL COMPLIANCE
The Borrower shall (and shall ensure that each member of the Group shall):
23.3.1 comply with all Environmental Laws;
23.3.2 obtain, maintain and ensure compliance with all requisite Environmental
Permits; and
23.3.3 implement procedures to monitor compliance with and to prevent liability
under any Environmental Law.
23.4 ENVIRONMENTAL CLAIMS
The Borrower shall (and shall ensure that each member of the Group shall),
promptly upon becoming aware of the same, inform the Agent in writing of:
23.4.1 any Environmental Claim against any member of the Group which is current,
pending or threatened; and
23.4.2 any facts or circumstances which are reasonably likely to result in any
Environmental Claim being commenced or threatened against any member of the
Group,
where the claim, if determined against that member of the Group, has or is
reasonably likely to result in any member of the Group incurring a
liability in excess of US$500,000 or its equivalent.
23.5 TAXATION
23.5.1 The Borrower shall (and shall ensure that each member of the Group shall)
pay and discharge all Taxes imposed upon it or its assets within the time
period allowed without incurring penalties unless and only to the extent
that:
(a) such payment is being contested in good faith;
(b) adequate reserves are being maintained for those Taxes and the costs
required to contest them which have been disclosed in the latest
financial statements delivered to the Agent under clause 21.1
(Financial statements); and
99
(c) such payment can be lawfully withheld.
23.5.2 No member of the Group may change its residence for Tax purposes.
RESTRICTIONS ON BUSINESS FOCUS
23.6 MERGER
The Borrower shall not (and shall ensure that no other member of the Group
shall) enter into any amalgamation, demerger, merger, consolidation,
corporate reconstruction or redomiciliation (for the avoidance of doubt
only, other than the ISE-Navios Merger which has been completed).
23.7 CHANGE OF BUSINESS
The Borrower shall procure that no substantial change is made to the
general nature of the business of the Borrower, the Obligors or the Group
taken as a whole from that carried on by the Target Group, immediately
prior to the Completion.
23.8 ACQUISITIONS
23.8.1 Except as permitted under clause 23.8.2, the Borrower shall not (and
shall ensure that no other member of the Group shall):
(a) acquire a company or any shares or securities or a business or
undertaking (or, in each case, any interest in any of them); or
(b) incorporate a company.
23.8.2 Clause 23.8.1 does not apply to an acquisition of a company, of shares,
securities or a business or undertaking (or, in each case, any interest in
any of them) or the incorporation of a company which is:
(a) a Permitted Acquisition; or
(b) a Permitted Transaction.
23.9 JOINT VENTURES
The Borrower shall not (and shall ensure that no member of the Group
shall):
(a) enter into, invest in or acquire (or agree to acquire) any shares,
stocks, securities or other interest in any Joint Venture (other than
Acropolis Chartering and Shipping Inc.); or
(b) transfer any assets or lend to or guarantee or give an indemnity for
or give Security for the obligations of a Joint Venture or maintain
the solvency of or provide working capital to any Joint Venture (or
agree to do any of the foregoing).
23.10 HOLDING COMPANIES
The Borrower shall not trade, carry on any business, own any assets or
incur any liabilities except for:
23.10.1 the provision of administrative services (excluding treasury services)
to other members of the Group of a type customarily provided by a holding
company to its Subsidiaries;
23.10.2 ownership of shares in its Subsidiaries, intra-Group debit balances and
credit balances in bank accounts, cash, Cash Equivalent Investments and
Group insurance policies but only if those shares, credit balances, cash,
Cash Equivalent Investments and insurance policies are subject to the
Transaction Security; and
23.10.3 any liabilities under the Transaction Documents to which it is a party
and professional fees and administration costs in the ordinary course of
business as a holding company,
100
and the restrictions in this clause 23.10 shall override any other part of
this clause 23 which would otherwise permit the Borrower to do anything
prohibited by this clause 23.10.
23.11 DORMANT SUBSIDIARIES
The Borrower shall not (and shall ensure no member of the Group shall)
cause or permit any member of the Group which is a Dormant Subsidiary to
commence trading or cease to satisfy the criteria for a Dormant Subsidiary
unless such Dormant Subsidiary becomes an Additional Security Provider in
accordance with clause 26.2 (Additional Security Providers).
RESTRICTIONS ON DEALING WITH ASSETS AND SECURITY
23.12 PRESERVATION OF ASSETS
The Borrower shall (and shall ensure that each member of the Group shall)
maintain in a good state of repair and in good working order and condition
(ordinary wear and tear excepted) all of its assets necessary or desirable
in the conduct of its business.
23.13 PARI PASSU RANKING
The Borrower shall (and shall ensure that each other Obligor shall) ensure
that at all times any unsecured and unsubordinated claims of a Finance
Party or Hedge Counterparty against it under the Finance Documents rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors except those creditors whose claims are
mandatorily preferred by laws of general application to companies.
23.14 ACQUISITION DOCUMENTS
23.14.1 The Borrower shall promptly pay all amounts payable to the Vendors under
the Acquisition Documents as and when they become due (except to the extent
that any such amounts are being contested in good faith by a member of the
Group and where adequate reserves are set aside for any such payment).
23.14.2 The Borrower shall (and shall procure that each relevant member of the
Group shall) take all reasonable and practical steps to preserve and
enforce its rights (or the rights of any other member of the Group) and
pursue any claims and remedies arising under any Acquisition Documents.
23.14.3 The Borrower shall not finally agree or settle the amount of any
purchase price adjustment (to the extent it has discretion to do so)
without the consent of the Agent.
23.15 NEGATIVE PLEDGE
In this clause 23.15 "QUASI-SECURITY" means a transaction described in
clause 23.15.2.
Except as permitted under clause 23.15.3:
23.15.1 The Borrower shall not (and shall ensure that no other member of the
Group shall) create or permit to subsist any Security over any of its
assets.
23.15.2 The Borrower shall not (and shall ensure that no other member of the
Group shall):
(a) sell, transfer or otherwise dispose of any of its assets on terms
whereby they are or may be leased to or re-acquired by an Obligor or
any other member of the Group;
(b) sell, transfer or otherwise dispose of any of its receivables on
recourse terms;
(c) enter into any arrangement under which money or the benefit of a bank
or other account may be applied, set-off or made subject to a
combination of accounts; or
(d) enter into any other preferential arrangement having a similar effect,
101
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing the
acquisition of an asset.
23.15.3 Clauses 23.15.1 and 23.15.2 do not apply to any Security or (as the case
may be) Quasi-Security, which is:
(a) Permitted Security; or
(b) a Permitted Transaction.
23.16 DISPOSALS
23.16.1 Except as permitted under clause 23.16.2, the Borrower shall not (and
shall ensure that no member of the Group shall) enter into a single
transaction or a series of transactions (whether related or not) and
whether voluntary or involuntary to sell, lease, transfer or otherwise
dispose of any asset.
23.16.2 Clause 23.16.1 does not apply to any sale, lease, transfer or other
disposal which is:
(a) a Permitted Disposal; or
(b) a Permitted Transaction.
23.17 ARM'S LENGTH BASIS
23.17.1 Except as permitted by clause 23.17.2, the Borrower shall not (and shall
ensure no member of the Group shall) enter into any transaction with any
person except on arm's length terms and for full market value.
23.17.2 Subject to clause 23.42 (Ring fencing), the following transactions shall
not be a breach of this clause 23.17:
(a) Intra-Group Loans;
(b) fees, costs and expenses payable under the Transaction Documents in
the amounts set out in the Transaction Documents delivered to the
Agent under clause 4.1 (Initial conditions precedent) or agreed by the
Agent; and
(c) any Permitted Transactions.
RESTRICTIONS ON MOVEMENT OF CASH - CASH OUT
23.18 LOANS OR CREDIT
23.18.1 Except as permitted under clause 23.18.2, the Borrower shall not (and
shall ensure that no member of the Group shall) be a creditor in respect of
any Financial Indebtedness.
23.18.2 Subject to clause 23.42 (Ring fencing), clause 23.18.1 does not apply
to:
(a) a Permitted Loan; or
(b) a Permitted Transaction.
23.19 NO GUARANTEES OR INDEMNITIES
23.19.1 Except as permitted under clause 23.19.2, the Borrower shall not (and
shall ensure that no member of the Group shall) incur or allow to remain
outstanding any guarantee in respect of any obligation of any person.
23.19.2 Subject to clause 23.42 (Ring fencing), clause 23.19.1 does not apply to
a guarantee which is:
(a) a Permitted Guarantee; or
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(b) a Permitted Transaction.
23.20 DIVIDENDS AND SHARE REDEMPTION
23.20.1 Except as permitted under clause 23.20.2, the Borrower shall ensure that
no member of the Group shall:
(a) declare, make or pay any dividend, charge, fee or other distribution
(or interest on any unpaid dividend, charge, fee or other
distribution) (whether in cash or in kind) on or in respect of its
share capital (or any class of its share capital) or any warrants for
the time being in issue;
(b) repay or distribute any dividend or share premium reserve or capital
redemption or any undistributable reserve;
(c) pay or allow any member of the Group to pay any management, advisory
or other fee to or to the order of any of the shareholders or other
Affiliates (other than a member of the Group) of the Borrower; or
(d) redeem, repurchase, defease, retire or repay any of its share capital
or any warrants for the time being in issue or resolve to do so.
23.20.2 Subject to clause 23.42 (Ring fencing), clause 23.20.1 does not apply
to:
(a) a Permitted Distribution;
(b) a Permitted Transaction (other than one referred to in paragraph (c)
of the definition of that term); or
(c) fees payable by the Borrower to its managers or advisers which are on
an arm's length basis and are of the kind and the amount payable in
the market by prudent companies engaged in business similar to that of
the Borrower.
RESTRICTIONS ON MOVEMENT OF CASH - CASH IN
23.21 FINANCIAL INDEBTEDNESS
23.21.1 Except as permitted under clause 23.21.2, the Borrower shall not (and
shall ensure that no member of the Group shall) incur or allow to remain
outstanding any Financial Indebtedness.
23.21.2 Clause 23.21.1 does not apply to Financial Indebtedness which is:
(a) Permitted Financial Indebtedness; or
(b) a Permitted Transaction.
23.22 SHARE CAPITAL
The Borrower shall not (and shall ensure no member of the Group shall)
issue any shares or other equity interests except pursuant to:
23.22.1 a Permitted Share Issue; or
23.22.2 a Permitted Transaction.
MISCELLANEOUS
23.23 INSURANCE
23.23.1 The Borrower shall (and shall ensure that each member of the Group
shall) maintain insurances on and in relation to its business and assets
against those risks and to the extent as is usual for companies carrying on
the same or substantially similar business and, without prejudice to the
103
generality of the foregoing, each Collateral Owner shall maintain the Ship
Insurances in relation to its Collateral Ship in accordance with the
Mortgage for such Collateral Ship.
23.23.2 All insurances must be with reputable independent insurance companies or
underwriters.
23.23.3 Where insurances and risks have been identified in the Insurance Report,
the Borrower shall ensure the insurances maintained provide cover at least
in respect of the business and assets and against the risks and to the
extent recommended in the Insurance Report.
23.23.4 If requested by the Agent, the Borrower shall, within ten Business Days
of receipt of such request, supply to it proof of cover in respect of each
insurance policy required to be taken out and maintained pursuant to this
clause 23.23 and shall use its best endeavours to procure that any
insurance broker then appointed by the Group undertakes to the Agent to
notify the Agent should any renewal fee or other sum payable by any member
of the Group in relation to any insurance policies arranged by that broker
not be paid when due.
23.24 PENSIONS
23.24.1 The Borrower shall ensure that the pension schemes for the time being
operated by the Group (if any) are funded in accordance with their rules
and to the extent required by law or otherwise comply with the requirements
of any law applicable in the jurisdiction in which the relevant pension
scheme is maintained.
23.24.2 The Borrower shall deliver to the Agent on demand at such times as those
reports are prepared in order to comply with the then current statutory or
auditing requirements (as applicable either to the trustees of any relevant
schemes or to the Borrower), actuarial reports in relation to all pension
schemes mentioned in clause 23.24.1 above.
23.24.3 The Borrower shall promptly notify the Agent of any material change in
the rate of contributions to any pension schemes mentioned in clause
23.24.1 above paid or recommended to be paid (whether by the scheme actuary
or otherwise) or required (by law or otherwise).
23.25 ACCESS
The Borrower shall (and shall ensure that each member of the Group shall)
(not more than once in every Financial Year unless the Agent reasonably
suspects a Default has occurred and is continuing or may occur) permit the
Agent and/or the Security Agent and/or accountants or other professional
advisers and contractors of the Agent or Security Agent free access at all
reasonable times and on reasonable notice at the risk and cost of the
Obligor to (a) the premises, assets, books, accounts and records of each
member of the Group and (b) meet and discuss matters with Key Personnel.
23.26 SERVICE CONTRACTS
23.26.1 The Borrower must ensure that there is in place in respect of each
Obligor qualified management with appropriate skills.
23.26.2 Without prejudice to clause 24.13 (Change of management) if any of the
Key Personnel ceases (whether by reason of death, retirement at normal
retiring age or through ill health or otherwise) to perform his or her
duties (as required under his or her Service Contract), the Borrower must
promptly:
(a) notify the Agent;
(b) find and appoint an adequately qualified replacement for him or her as
promptly as practicable; and
(c) ensure that such replacement enters into a Service Contract.
23.26.3 The Borrower shall ensure that no member of the Group amends, varies,
waives, novates, supplements or replaces any term of a Service Contract in
a way which is or is reasonably likely to be materially prejudicial to the
interests of the Finance Parties.
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23.27 DIRECTOR'S FEES
The Borrower shall not (and shall procure that no other member of the Group
shall) remunerate its directors and/or officers in excess of the amounts
disclosed to the Agent or, if such directors or officers are Key Personnel
the amounts provided for in the Service Contracts (each in their respective
forms as at the date of this Agreement) provided always, in each case, that
such amounts shall not be in excess of amounts payable in the market by
prudent companies engaged in business similar to that of the Borrower.
23.28 INTELLECTUAL PROPERTY
23.28.1 The Borrower shall procure that each Group member shall:
(a) preserve and maintain the subsistence and validity of the Intellectual
Property necessary for the business of the relevant Group member (the
"MATERIAL INTELLECTUAL PROPERTY");
(b) use reasonable endeavours to prevent any infringement in any material
respect of the Material Intellectual Property;
(c) make registrations and pay all registration fees and taxes necessary
to maintain the Material Intellectual Property in full force and
effect and record its interest in that Material Intellectual Property;
(d) not use or permit the Material Intellectual Property to be used in a
way or take any step or omit to take any step in respect of that
Material Intellectual Property which may materially and adversely
affect the existence or value of the Material Intellectual Property or
imperil the right of any member of the Group to use such property; and
(e) not discontinue the use of the Material Intellectual Property.
23.29 AMENDMENTS
The Borrower shall ensure that no member of the Group shall amend, vary,
novate, supplement, supersede, waive or terminate any term of a Transaction
Document or any other document delivered to the Agent pursuant to clauses
4.1 (Initial conditions precedent) or clause 26 (Matters concerning the
Obligors) or enter into any agreement with any shareholders of the Borrower
or any of their Affiliates which is not a member of the Group except in
writing:
23.29.1 in accordance with the provisions of clause 36 (Amendments and Waivers);
or
23.29.2 in a way which could not be reasonably expected materially and adversely
to affect the interests of the Lenders.
23.29.3 The Borrower shall promptly supply to the Agent a copy of any document
relating to any of the matters referred to in clauses 23.29.1 and 23.29.2
above.
23.29.4 The reference to waiving any term of a Transaction Document in this
clause 23.29 includes (i) any waiver (in whole or in part) of any condition
precedent (however described) under the Transaction Documents or (ii) any
waiver (in whole or in part) of any breach (including any
misrepresentation) of, or non-compliance with, any term of the Transaction
Documents which would entitle such Obligor to terminate its obligations (in
whole or in part) under such Transaction Document or (iii) any
determination or acceptance that any such condition precedent is satisfied
when it is not actually satisfied or (iv) declaring or accepting that any
such Transaction Document is unconditional if any such condition precedent
is not fulfilled or any such breach or non-compliance has occurred.
23.30 FINANCIAL ASSISTANCE
The Borrower shall (and shall procure that each member of the Group shall)
comply in all respects with Sections 151 to 158 of the Act and any
equivalent legislation in other jurisdictions including in relation to the
execution of the Transaction Security Documents and payment of amounts due
under this Agreement.
105
23.31 TREASURY TRANSACTIONS
23.31.1 The Borrower shall procure that no Obligor shall enter into any Treasury
Transaction, other than:
(a) the hedging transactions contemplated by the Hedge Strategy Letter and
documented by the Hedge Agreements;
(b) spot and forward delivery foreign exchange contracts entered into in
the ordinary course of business and not for speculative purposes;
(c) Permitted FFAs; and
(d) any other Treasury Transaction entered into for the hedging of actual
or projected real exposures arising in the ordinary course of trading
activities of a member of the Group for a period of not more than six
months and not for speculative purposes.
23.31.2 The Borrower shall ensure that all hedging arrangements contemplated by
the Hedge Strategy Letter are implemented in accordance with the terms of
the Hedge Strategy Letter and clause 5.6 (Hedge transactions) and that such
arrangements are not terminated, varied or cancelled, save (in the case of
arrangements documented by the Hedge Agreements) as permitted by this
clause 23.31.
23.31.3 Each Hedge Counterparty agrees with the Lenders (but not with any member
of the Group) that it will not terminate any Hedge Agreement except:
(a) as a result of the non-payment by the relevant member of the Group of
any indebtedness under that Hedge Agreement which has fallen due for
payment in the currency and manner stipulated in the relevant Hedge
Agreement before the expiry of any applicable cure period (or, if no
cure period is prescribed in the relevant Hedge Agreement, three
Business Days);
(b) as a result of the repudiation of that Hedge Agreement by the relevant
member of the Group;
(c) upon the issue by the Agent of a notice under clause 24.29
(Acceleration);
(d) upon:
(i) it becoming unlawful for the relevant member of the Group or such
Hedge Counterparty to perform its payment obligations in respect
of that Hedge Agreement or such obligations become invalid or
unenforceable against that member of the Group; or
(ii) any termination provision of any Hedge Agreement to which that
Hedge Counterparty is a party (including the calculation of or
obligation to pay amounts upon such termination) becoming invalid
or unenforceable against the relevant member of the Group;
(e) upon any exchange control, foreign currency or other Authorisation
required by the relevant member of the Group in connection with the
entry into, validity, enforceability or admissibility in evidence of
any Hedge Agreement or the performance of its payment obligations
under the same being modified in a manner unacceptable to such Hedge
Counterparty or not being granted, being revoked or otherwise ceasing
to be in full force and effect;
(f) upon the making of an order for the winding-up of, or the
administration of, or the appointment of a receiver in respect of any
part of the assets and/or undertaking of, or the dissolution of, the
relevant member of the Group (or any analogous provision in any other
jurisdiction); or
(g) with the prior written consent of the Agent.
23.31.4 Each Hedge Agreement (other than the HSH ISDA Agreement which is in a
form approved by the Parties) shall be on the terms of the International
Swaps & Derivatives Association, Inc. 2002 or 1992 Master Agreement
(Multicurrency-Cross Border) under which:
(a) in the case of the 1992 Master, "Second Method" shall be specified as
the applicable payment method and "Market Quotation" as the applicable
payment measure;
106
(b) no additional rights of set-off beyond those contained in this
Agreement shall be specified; and
(c) the governing law is English law.
23.31.5 Each Hedge Counterparty and the Borrower agrees that any termination or
other payment payable by a Hedge Counterparty to the Borrower or any
Obligor in respect of any Hedge Agreement shall be payable in full without
any set-off or counterclaim (irrespective of any amounts that may at such
time be due from the relevant member of the Group to that Hedge
Counterparty under this Agreement or any other Finance Document) to the
Working Capital Account with the Security Agent.
23.31.6 Any termination or other payment received by the Borrower or any other
member of the Group in respect of a Treasury Transaction (other than a
Hedge Agreement with a Hedge Counterparty) shall be paid immediately on
receipt to the relevant Obligor's Operating Account or, if the relevant
Obligor does not have an Operating Account, the Working Capital Account.
23.32 SECURITY PROVIDERS
23.32.1 Subject to clause 23.32.3, the Borrower shall procure that:
(a) upon the acquisition or formation of a new Subsidiary of the Borrower
(other than (i) a New Share Issue Subsidiary or (ii) a Purchase Option
Subsidiary which has financed the acquisition of a Purchase Option
Ship from funds provided by a Third Party Financier in accordance with
clause 23.21 (Financial Indebtedness) (in which case clause 23.43
(Purchase Option Subsidiaries) shall apply) or (iii) each Additional
Collateral Owner (in which case the general provisions of this
Agreement shall apply with respect to Security to be provided pursuant
to this Agreement (including, without limitation, the provisions of
clause 4.1 (Initial Conditions Precedent)) and the Transaction
Security Documents); or
(b) upon the re-activation of a Dormant Subsidiary which is not providing
security pursuant to the Transaction Security Documents; or
(c) upon any such Subsidiary which is not providing security pursuant to
the Transaction Security Documents commencing, carrying on or
materially extending its trading activity, or acquiring, or holding
(legally or beneficially) a material asset; or
(d) upon any Purchase Option Subsidiary ceasing to be a Purchase Option
Subsidiary provided that it is not already a Security Provider,
such former Purchase Option Subsidiary, Subsidiary or Dormant Subsidiary,
as the case may be, shall become an Additional Security Provider and (i)
grant Security, in form and substance satisfactory to the Agent,
incorporating provisions substantially the same as the Transaction Security
Documents and (ii) provide the documents and evidence listed in Part III of
Schedule 3 (Conditions Precedent) to the Agent, in form and substance
satisfactory to the Agent.
23.32.2 The Borrower shall procure that any additional Security requested by the
Agent shall be granted by the Borrower or any other member of the Group.
23.32.3 The Borrower need not perform its obligations under clauses 23.32.1 and
23.32.2 in relation to a member of the Group, to the extent that execution
and delivery of the required security by such member of the Group would in
the opinion of the Agent (acting reasonably and having consulted with the
Borrower):
(a) be unavoidably unlawful;
(b) result in a material restructuring of the Group;
(c) be prohibited by statute or be beyond the corporate power of the
company or corporation concerned (and then only if such corporate
power cannot be modified or extended to allow such execution and
delivery); or
107
(d) result in a benefit to the Finance Parties which is disproportionately
minor in comparison with the cost thereby caused to the Group.
23.32.4 The Agent shall notify the Borrower and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to it)
all the documents and evidence listed in clause 23.32.1 in relation to an
Additional Security Provider.
23.33 FURTHER ASSURANCE
23.33.1 The Borrower shall (and provided that the same are not prohibited by any
obligations typically granted to a Third Party Financier, shall procure
that each member of the Group shall) promptly do all such acts or execute
all such documents (including assignments, transfers, mortgages, charges,
notices and instructions) as the Security Agent or, as the case may be, the
Secured Parties or, as the case may be the Agent may reasonably specify
(and in such form as the Security Agent or, as the case may be, the Agent
may reasonably require in favour of the Security Agent or, as the case may
be, the Secured Parties or its/their nominee(s)):
(a) to perfect the Security created or intended to be created under or
evidenced by the Transaction Security Documents (which may include the
execution of a mortgage, pledge, charge, assignment or other Security
over all or any of the assets which are, or are intended to be, the
subject of the Transaction Security) or for the exercise of any
rights, powers and remedies of the Security Agent or the Secured
Parties provided by or pursuant to the Finance Documents or by law;
(b) to confer on the Security Agent or confer on the Finance Parties
Security over any property and assets of that Obligor located in any
jurisdiction equivalent or similar to the Security intended to be
conferred by or pursuant to the Transaction Security Documents; and/or
(c) to facilitate the realisation of the assets which are, or are intended
to be, the subject of the Transaction Security.
23.33.2 The Borrower shall and shall procure that each member of the Group shall
take all such action as is available to it (including making all filings
and registrations) as may be necessary for the purpose of the creation,
perfection, protection or maintenance of any Security conferred or intended
to be conferred on the Security Agent or any of the other Finance Parties
by or pursuant to the Finance Documents.
23.33.3 The Borrower authorises the Security Agent to file any Uniform
Commercial Code financing statements it believes are either necessary or
desirable in connection with the Transaction Security Documents.
23.34 SYNDICATION
The Borrower shall provide reasonable assistance to the Arranger in the
preparation of the Information Memorandum and the primary syndication of
the Facilities (including, without limitation, by making Key Personnel
available for the purpose of making presentations to, or meeting, potential
lending institutions) and shall comply with all reasonable requests for
information from potential syndicate members prior to completion of
syndication.
23.35 CHIEF EXECUTIVE OFFICER
Without prejudice to clause 24.13 (Change of Management), the Borrower
shall ensure that ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ remains at all times its Chief
Executive Officer.
23.36 FUTURE CHARTERS AND CONTRACTS OF AFFREIGHTMENT
23.36.1 The Borrower shall not (and shall procure that no other member of the
Group (other than a Purchase Option Subsidiary or New Share Issue
Subsidiary) shall) without the prior written consent of the Agent (which
the Agent shall have full liberty to withhold) and, if such consent is
given, subject to such conditions as the Agent may impose (including, for
the avoidance of doubt, those included in clause 23.36.3), take on charter
or sub-charter or, as the case may be, charter to a third party, in each
case a Ship:
108
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which exceeds or
which by virtue of any optional extensions therein contained might
exceed 11 months duration;
(c) on terms whereby more than two months' hire (or the equivalent) is
payable in advance;
(d) below the market rate prevailing at the time when such Ship is fixed
or other than on arm's length terms;
(e) on terms that provide for a purchase option in relation to such Ship;
or
(f) in the case of a Chartered Ship, when the relevant contract is not
entered into by a Charter Company.
23.36.2 The Borrower shall not (and shall procure that no Obligor shall) enter
into a contract of affreightment which exceeds or which by virtue of any
optional extensions therein contained might exceed 11 months duration,
without the prior written consent of the Agent.
23.36.3 If the Agent consents to the entry into of a time charter or contract of
affreightment in accordance with clauses 23.36.1(b) and 23.36.2
respectively, the Borrower shall:
(a) procure that the relevant Obligor executes an assignment (in such form
as the Agent may require, the Agent hereby acknowledging that where
the Ship is subject to Security in favour of a third party which is
permitted pursuant to this Agreement, such assignment shall be on a
second ranking basis) of such charter or contract of affreightment and
following receipt of a request from the Security Agent (which may be
delivered at any time in the sole discretion of the Security Agent
whether acting on the instructions of the Lenders or otherwise)
promptly procure that a related notice of assignment is served on the
relevant counterparty and the acknowledgement thereof is given by the
relevant counterparty; and
(b) pay all legal and other costs incurred by the Agent, the Security
Agent and any other Finance Party in connection with such charter
assignment.
23.37 VALUATION OF OWNED SHIPS
23.37.1 Without prejudice to the rights of the Agent under clause 23.53(b)
(Security Value Maintenance) to obtain valuations of the Collateral Ships
at any time, the Borrower shall deliver to the Agent twice in each
Financial Year, at the same time as delivering to the Agent:
(a) its audited annual consolidated financial statements for the
immediately preceding Financial Year, pursuant to clause 21.1.1
(Financial statements); and
(b) its unaudited consolidated financial statements for the second
Financial Quarter of that Financial Year, pursuant to clause 21.1.1
(Financial statements),
a valuation (in dollars) dated no earlier than 30 days prior to the
delivery of such financial statements of each of the Owned Ships. Such
valuation shall be made by two Approved Brokers approved by the Agent (each
such valuation to be made with or without physical inspection (as the
Lenders may reasonably require), and on the basis of a sale for prompt
delivery for cash at arm's length on normal commercial terms as between a
willing buyer and a willing seller without taking into account the benefit
of any charterparty or other engagement concerning the relevant Owned
Ship). The mean of the two valuations shall constitute the value of the
relevant Owned Ship. In the event that the valuations obtained in respect
of any Owned Ship differ by more than 15 per cent. a third valuation shall
be obtained from one of the remaining Approved Brokers approved by the
Lenders and the mean of all three valuations shall constitute the value of
the relevant Owned Ship in such a case.
23.37.2 The value of the Owned Ships determined in accordance with the
provisions of this clause 23.37 shall be binding upon the Parties until
such time as any further such valuations shall be obtained.
109
23.37.3 The Borrower undertakes to the Finance Parties to supply to the Finance
Parties and to any Approved Brokers such information concerning each Owned
Ship and its condition as such Approved Brokers may reasonably require for
the purpose of making any valuation.
23.37.4 All costs in connection with the Agent obtaining any valuation of each
Owned Ship referred to in clause 23.37 shall be borne by the Borrower.
23.38 COMPLIANCE WITH ISM CODE
The Borrower shall procure that any relevant member of the Group shall
comply with and ensure that each Owned Ship complies with the requirements
of the ISM Code, including (but not limited to) the maintenance and renewal
of valid certificates pursuant thereto.
23.39 WITHDRAWAL OF DOC AND SMC
The Borrower shall procure that any relevant member of the Group shall
immediately inform the Agent if there is any threatened or actual
withdrawal of such member's DOC or the SMC in respect of any of the Owned
Ships.
23.40 ISSUANCE OF DOC AND SMC
The Borrower shall procure that any relevant member of the Group shall
promptly inform the Agent upon the issue to any such member of a DOC and to
any of the Owned Ships of an SMC or the receipt by any such member of
notification that its application for the same has been refused.
23.41 COMPLIANCE WITH ISPS CODE
The Borrower shall procure that any relevant member of the Group shall
comply with and ensure that each Owned Ship complies with the requirements
of the ISPS Code including (but not limited to) the maintenance and renewal
of the ISSC for each such Ship pursuant to the ISPS Code and shall
immediately inform the Agent if there is any actual or threatened
withdrawal of the ISSC for any such Ship.
23.42 RING FENCING
The Borrower shall procure that:
23.42.1 no Security Provider shall enter into, or permit to subsist, any
transaction or relationship with a non-Security Provider which is not at
least as favourable in all respects to the relevant Security Provider as an
arm's length transaction, nor shall such Security Provider pay any
management charge or similar inter-company item to a non-Security Provider.
23.42.2 This clause 23.42 shall not prohibit the execution and performance by
the Borrower or any other Obligor of any Finance Document or Transaction
Document to which it is party.
23.43 PURCHASE OPTION SUBSIDIARIES
23.43.1 Subject to clause 23.43.5, the Borrower shall procure that no Purchase
Option shall be exercised which is funded (directly or indirectly, wholly
or partly) from a drawing from the Working Capital Account without the
prior consent of the Agent.
23.43.2 The Borrower shall procure that no Financial Indebtedness shall be
incurred by a Purchase Option Subsidiary (other than by the relevant
Purchase Option Subsidiary incurring Financial Indebtedness under the
Facilities in accordance with clause 23.43.1), unless:
(a) the Borrower and the relevant Purchase Option Subsidiary have (i)
first given the Arranger the opportunity to make an offer to finance
the purchase by such Purchase Option Subsidiary of the relevant
Purchase Option Ship, (ii) the Arranger has made such an offer and
(iii) the Borrower (acting reasonably) has declined the offer of the
Arranger; and
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(b) the Financial Indebtedness incurred to acquire the relevant Purchase
Option Ship is not more than an amount equal to 80 per cent. of the
value of such Ship as determined in accordance with the procedure set
out in clause 23.37.1 (Valuation of Owned Ships)).
23.43.3 The Borrower shall procure that a Purchase Option Subsidiary shall:
(a) deliver the valuations referred to in clause 23.43.2(b) to the Agent
not less than 30 days prior to the exercise of the relevant Purchase
Option;
(b) at the date of acquisition of the relevant Purchase Option Ship, grant
a second-ranking guarantee and mortgage, in form and substance
satisfactory to the Agent, over such Purchase Option Ship and such
other assets of the Purchase Option Subsidiary as the Agent shall
require, in each case, in favour of the Security Agent or, as the case
may be, the Secured Parties;
(c) ensure that all its cashflow that is not (i) mandatorily required to
be used in meeting payments of fees, interest and principal and other
expenses in respect of the Permitted Financial Indebtedness incurred
to acquire the relevant Purchase Option Ship or (ii) for the general
maintenance of such Purchase Option Subsidiary as a going concern, are
loaned or distributed to the Borrower by payment to the Working
Capital Account (subject to subordination undertakings from such
Purchase Option Subsidiary satisfactory to the Security Agent being
given prior to such loan or distribution being made) as soon and as
frequently as practicable;
(d) ensure that following the exercise of a Purchase Option by a Purchase
Option Subsidiary, such Purchase Option Subsidiary shall not own more
than one ship; and
(e) use reasonable endeavours to ensure that any Third Party Financier
enters into a Third Party Intercreditor Agreement provided that a
Third Party Intercreditor Agreement is agreed.
23.43.4 The Borrower shall procure that only a Purchase Option Subsidiary shall
own a Purchase Option Ship.
23.43.5 Nothing in this clause 23.43 shall be construed in such a way as to
prohibit (a) the Borrower from providing financing to the relevant Purchase
Option Subsidiary under the relevant Purchase Option from funds credited to
the Working Capital Account or (b) the relevant Purchase Option Subsidiary
from incurring Permitted Financial Indebtedness in connection with the
purchase of the relevant Purchase Option Ship from any Third Party
Financier.
23.43.6 The Security Agent or, as the case my be the Secured Parties, undertakes
each time clause 23.43.2 or clause 23.43.7 (Purchase Option Subsidiaries)
applies and Permitted Financial Indebtedness is incurred in relation
thereto to enter into a Third Party Intercreditor Agreement on behalf of
the Lenders provided that a Third Party Intercreditor Agreement is agreed.
23.43.7 A Purchase Option Subsidiary which has incurred Permitted Financial
Indebtedness in relation to the purchase of a Purchase Option Ship may,
with the consent of the Agent, refinance such Permitted Financial
Indebtedness provided that:
(a) the Borrower and the relevant Purchase Option Subsidiary have (i)
first given the Arranger the opportunity to make an offer of
refinancing of such Permitted Financial Indebtedness, (ii) the
Arranger has made such an offer or declined to do so, and (iii) the
Borrower (acting reasonably) has declined the offer of the Arranger;
(b) the second-ranking security granted pursuant to clause 23.43.3(b) is
not affected by such refinance or is replaced by equivalent Security
to the satisfaction of the Agent; and
(c) to the extent that any refinancing of third party Permitted Financial
Indebtedness by a Purchase Option Subsidiary results in such Purchase
Option Subsidiary being in possession of additional earnings or funds,
the Borrower shall procure that such Purchase Option Subsidiary shall
ensure that such additional earnings or funds are applied in
accordance with clause 23.43.3(c).
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23.44 NEW SHARE ISSUE SUBSIDIARIES
23.44.1 The Borrower shall procure that no New Share Issue Subsidiary shall
incur Financial Indebtedness, unless:
(a) such Financial Indebtedness is required to be incurred for a New Share
Issue Subsidiary to acquire a Permitted NSIS Asset; and
(b) the Financial Indebtedness required to be incurred for a New Share
Issue Subsidiary to acquire the relevant Permitted NSIS Asset is not
more than an amount equal to 80 per cent. of the value (as determined
by the Agent) of such Permitted NSIS Asset.
23.44.2 A New Share Issue Subsidiary which has incurred Permitted Financial
Indebtedness in relation to the purchase of a Permitted NSIS Asset may
freely refinance such Permitted Financial Indebtedness provided that the
Financial Indebtedness which results from such refinancing complies with
clause 23.44.1(b).
23.44.3 The Borrower undertakes to notify the Agent within 30 Business Days of
incorporating a New Share Issue Subsidiary of the fact that it has
incorporated such New Share Issue Subsidiary and details of any proposed
acquisitions such New Share Issue Subsidiary intends to make. The Borrower
also undertakes to notify the Agent of any proposed acquisition of any
Permitted NSIS Asset.
23.44.4 The Borrower shall procure that no New Share Issue Subsidiary shall
conduct any business or activity which has or is likely to have a
detrimental effect on the financial performance of any Obligor, including
any business or activity which replicates or replaces all or part of any
business or activity which is or had previously been undertaken or
conducted by an Obligor.
23.45 USE OF PROCEEDS
The Borrower shall use the proceeds of Loans under the Facilities
exclusively for the respective purposes specified in clause 3 (Purpose);
23.46 LANDLORD AND OTHER CONSENTS
The Borrower shall (and shall procure that each Security Provider shall) at
all times obtain and maintain all consents and other authorisations
(whether of a landlord or otherwise) necessary for the creation and
perfection of the Security contemplated by the Transaction Security
Documents.
23.47 EMPLOYMENT OF CHARTERED SHIPS
The Borrower shall not (and shall procure that no member of the Group
shall) employ any Chartered Ships or permit any Chartered Ship's employment
in any manner, trade or business which is forbidden by law or which is
otherwise unlawful or illicit under the law of any relevant jurisdiction,
or in carrying illicit or prohibited goods and not to employ any Chartered
Ship or permit its employment in carrying any contraband goods.
23.48 SHARING OF EARNINGS OF CHARTERED SHIPS
The Borrower shall not (and shall procure that no other member of the Group
shall) without the prior written consent of the Agent (and then only
subject to such conditions as the Agent may impose) enter into any
agreement or arrangement whereby the earnings with respect to a Chartered
Ship may be shared with any other person.
23.49 CHARTERS
The Borrower shall not (and shall procure that no other member of the Group
shall) commit a breach of any Charter or conduct itself in such a way as to
cause or potentially cause, whether through action or inaction, a breach of
a Charter which would entitle the other party to the Charter to terminate
or otherwise determine the Charter.
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23.50 REPORTS
The Borrower undertakes that:
23.50.1 in the event that the Agent notifies the Borrower that the Agent is
unable to make a claim and take legal proceedings against the provider of a
Report but the Borrower is able to make a claim and take legal proceedings
against the relevant Report provider, the Borrower shall take such action
and make any such claim against the provider of the Report as the Agent may
direct; and
23.50.2 subject to clause 23.50.1, it shall pursue any available claim and take
legal proceedings against a provider of a Report unless the costs
associated with making such claim and taking such legal proceedings
outweigh the benefit of such claim (if successful), in each case as
determined by the Agent.
23.51 ACQUISITION AGREEMENT
The Borrower shall pursue any available claim and take legal proceedings
against any party to the Acquisition Agreement unless the costs associated
with making such claim and taking such legal proceedings outweigh the
benefit of such claim (if successful), in each case as determined by the
Agent.
23.52 CONDITIONS SUBSEQUENT
23.52.1 The Borrower shall procure that:
(a) the deletion of each Existing Collateral Ship listed in Schedule 2
(The Ships) from the flag of the Hellenic Republic and the relevant
Registry and registration of each such Existing Collateral Ship under
another Flag State through the relevant Registry shall take place
within 60 days of the first Utilisation Date; and
(b) on the date of such registration of an Existing Collateral Ship listed
in Schedule 2 (The Ships) under another Flag State through the
relevant Registry, the Borrower shall provide the Agent with the
documents and evidence specified in Part I of Schedule 3 (Conditions
Precedent) in respect of that Existing Collateral Ship in form and
substance satisfactory to the Agent.
23.52.2 The Borrower shall:
(a) not later than 31 March 2006, provide to the Agent its professional
risk management procedures as required under section 404 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; and
(b) provide confirmation to the Agent that all members of the Group are in
compliance with such procedures on the due date for compliance under
section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
23.52.3 The Borrower shall, within one month of the first Utilisation Date,
supply to the Agent evidence (in form and substance satisfactory to the
Agent) that any unsatisfactory (as determined by the Agent) insurance
policies effected in relation to the Terminal have been terminated and that
appropriate insurance policies to replace such terminated policies have
been placed in such terms, amounts and with such underwriters as the Agent
may require and so that the Borrower is in compliance with its obligation
to procure that the Group has adequate insurance cover under the relevant
Transaction Documents. Upon the putting into place of such insurances, the
relevant Group member shall forthwith grant Security to the Security Agent
in respect of such policy or policies.
23.52.4 The Borrower shall, as soon as possible, but in any event within 120
days of the ISE-Navios Merger, advise the Agent of (a) the number of
shareholders in ISE who have filed a petition in the Delaware Court of
Chancery demanding that the Chancery Court determine the fair value of
their shares and (b) the number of shares in ISE held by such shareholders.
23.52.5 In the event that, following the filing of any petition in the Delaware
Court of Chancery referred to in clause 23.52.4, the finding of the
Chancery Court requires the Borrower to make a payment to its shareholders
of a sum in excess of US$5,000,000, the Borrower shall, as soon as
possible, but in any event within 30 days of the date such payment is
required to be made raise funds in an amount not less than the amount
specified by the Chancery Court by way of:
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(a) a Permitted Share Issue of the Borrower; and/or
(b) the borrowing of a subordinated loan from a person who is not a member
of the Group provided such subordinated loan has a maturity date of
not less than six years from the date it is made and is subordinated
on terms satisfactory to the Agent.
23.52.6 The Borrower shall, within 60 days of the first Utilisation Date and in
consultation with the Agent, remedy (to the extent specified by the Agent)
those Charters identified in the Charters and COAs Report which the Agent
notifies the Borrower as being unsatisfactory.
23.52.7 The Borrower shall, within 10 days of the Utilisation Date of the
Facility relating to an Additional Collateral Ship, deliver to the Agent a
copy of a certificate of financial responsibility for the relevant
Additional Collateral Ship complying with the requirements of the United
States Oil Pollution Act 1990 together with evidence of approval thereof by
the relevant regulatory authority.
23.52.8 The Borrower shall, within 30 days of the first Utilisation Date, ensure
that (a) the Operating Accounts are closed and (b) new accounts (the "NEW
ACCOUNTS") have been opened in the name of the relevant members of the
Group with the Agent in Hamburg in substitution of the Operating Accounts,
(c) any balances then standing to the credit of an Operating Account shall
be transferred forthwith to the corresponding New Account of the relevant
member of the Group, (d) the New Accounts have become subject to Security
in favour of the Security Agent or the other Secured Parties in the same
manner as the Operating Accounts are subject to Security pursuant to the
relevant Account Pledges, (e) the Finance Documents are amended in such
manner as the Agent may require in its absolute discretion in connection
with the matters referred to in this clause 23.52.8 and (f) forthwith
following a demand made by the Agent, it shall reimburse the Agent or any
other Finance Party in connection with any costs and expenses (including
legal fees and expenses) incurred by it, in connection with the matters
referred to in this clause 23.52.8.
23.53 SECURITY VALUE MAINTENANCE
(a) If at any time the Security Value shall be less than the Security
Requirement, the Agent may give notice to the Borrower requiring that
such deficiency be remedied and then the Borrower shall either:
(i) prepay within a period of fourteen (14) days of the date of
receipt by the Borrower of the Agent's said notice, such part of
the total amount of the Facility A Loan, the Facility C Loans and
the Facility D Loans outstanding at such time, as will result in
the Security Requirement after such prepayment (taking into
account any other repayment of the Loans made between the date of
the notice and the date of such prepayment) being equal to or
higher than the Security Value; or
(ii) within fourteen (14) days of the date of receipt by the Borrower
of the Agent's said notice, constitute to the satisfaction of the
Agent (acting on the instructions of the Majority Lenders) such
further security (in the form of Security) for the Loans (and any
amounts outstanding under any Hedge Agreements) as shall be
acceptable to Agent (acting on the instructions of the Majority
Lenders) having a value for security purposes (as determined by
the Majority Lenders in their absolute discretion) at the date
upon which such further security shall be constituted which, when
added to the Security Value, shall not be less than the Security
Requirement as at such date.
(b) Each of the Collateral Ships shall, for the purposes of this clause
23.53, be valued as and when the Agent shall require and, as to the
manner of valuation, in accordance with the provisions of clause
23.37(Valuation of Owned Ships). The value of any of the Collateral
Ships determined in accordance with the provisions of clause
23.37(Valuation of Owned Ships) shall be binding upon the Parties
until such time as any further such valuation shall be obtained for
such Collateral Ship pursuant to this clause 23.53(b) or clause
23.37(Valuation of Owned Ships).
(c) All costs in connection with the Agent obtaining any valuation of any
of the Collateral Ships referred to in this clause 23.53 and in
Schedule 3, and any valuation either of any additional security for
the purposes of ascertaining the Security Value at any time or
necessitated by the Borrower electing to constitute additional
security pursuant to clause 23.53(a)(ii), shall be borne by the
Borrower.
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(d) For the purposes of this clause 23.53, the value of any additional
security provided or to be provided to the Agent shall be determined
by the Majority Lenders in their discretion.
(e) In connection with any additional security provided in accordance with
this clause 23.53, the Agent shall be entitled to receive such
evidence and documents as may in the Agent's reasonable opinion be
appropriate (which shall include evidence and documents of the kind
referred to in Schedule 3) and such legal opinions (being in form and
substance satisfactory to the Agent) as the Agent shall in its
absolute discretion require.
(f) Any prepayment made under clause 23.53(a)(i) shall be applied in
reducing the Repayment Instalments in respect of Facility A, Facility
C1, Facility C2, Facility C3, Facility C4, Facility C5, Facility C6,
Facility D1, Facility D2, Facility D3 and Facility D4 in inverse
chronological order (and pro rata as between such Facilities).
24 EVENTS OF DEFAULT
Each of the events or circumstances set out in clause 24.1 up to but not
including clause 24.29 (Acceleration) is an Event of Default (whether or
not caused by any reason whatsoever outside the control of the Borrower or
any other member of the Group (or any other person)).
24.1 NON-PAYMENT
An Obligor does not pay on the due date any amount payable pursuant to a
Finance Document at the place at and in the currency in which it is
expressed to be payable unless:
24.1.1 its failure to pay is caused by administrative or technical error in the
transmission of funds; and
24.1.2 payment is made within two Business Days of its due date.
24.2 FINANCIAL COVENANTS AND OTHER OBLIGATIONS
Any requirement of clause 22 (Financial Covenants) is not satisfied or the
Borrower does not comply with the provisions of clause 21.1 (Financial
statements), 21.2 (Provision and contents of Compliance Certificate), 21.3
(Requirements as to financial statements), 21.4 (Budget), 21.8
(Notification of default and certain events relating to Chartered Ships),
23.6 (Merger), 23.7 (Change of business), 23.8 (Acquisitions), 23.9 (Joint
ventures), 23.10 (Holding Companies), 23.15 (Negative pledge), 23.16
(Disposals), 23.17 (Arm's length basis), 23.18 (Loans or credit), 23.19 (No
guarantees or indemnities), 23.20 (Dividends and share redemption), 23.21
(Financial Indebtedness), 23.22 (Share capital), 23.50 (Conditions
subsequent), 23.42 (Ring fencing), 23.43 (Purchase Option Subsidiaries) or
23.44 (New Share Issue Subsidiaries).
24.3 OTHER OBLIGATIONS
24.3.1 An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in clause 24.1 (Non-payment) and clause 24.2
(Financial covenants and other obligations)).
24.3.2 No Event of Default under clause 24.3.1 will occur if the failure to
comply is capable of remedy and is remedied within ten Business Days of the
Agent giving notice to the Borrower or relevant Obligor or the Borrower or
an Obligor becoming aware of the failure to comply.
24.4 MISREPRESENTATION
Any representation or statement made or deemed to be made by an Obligor in
the Finance Documents or any other document delivered by or on behalf of
any Obligor under or in connection with any Finance Document is or proves
to have been incorrect or misleading in any material respect when made or
deemed to be made.
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24.5 CROSS DEFAULT
24.5.1 Any Financial Indebtedness of any member of the Group is not paid when
due nor within any originally applicable grace period.
24.5.2 Any Financial Indebtedness of any member of the Group is declared to be
or otherwise becomes due and payable prior to its specified maturity as a
result of an event of default (however described).
24.5.3 Any commitment for any Financial Indebtedness of any member of the Group
is cancelled or suspended by a creditor of any member of the Group as a
result of an event of default (however described).
24.5.4 The counterparty to a Treasury Transaction entered into by a member of
the Group becomes entitled to terminate that Treasury Transaction early as
a result of an event of default (however described).
24.5.5 Any creditor of any member of the Group becomes entitled to declare any
Financial Indebtedness of any member of the Group due and payable prior to
its specified maturity as a result of an event of default (however
described).
24.5.6 No Event of Default will occur under this clause 24.5 if (i) the
aggregate amount of Financial Indebtedness or commitment for Financial
Indebtedness falling within clauses 24.5.1 to 24.5.5 is less than
US$2,000,000 (or its equivalent in any other currency or currencies) or
(ii) the Agent is, in its sole discretion, satisfied that the relevant
event referred to in this clause 24.5 will not affect or prejudice in any
way the Borrower's or any other Obligor's ability to duly perform its
obligations under the Transaction Documents.
24.6 INSOLVENCY
24.6.1 A member of the Group is unable or admits inability to pay its debts as
they fall due or is deemed to or declared to be unable to pay its debts
under applicable law, suspends or threatens to suspend making payments on
any of its debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors with
a view to rescheduling any of its indebtedness.
24.6.2 The value of the consolidated assets of the Group is less than its
consolidated liabilities (taking into account contingent and prospective
liabilities but not including liabilities under the Intra-Group Loan
Agreement).
24.6.3 A moratorium is declared in respect of any indebtedness of any member of
the Group. If a moratorium occurs, the ending of the moratorium will not
remedy any Event of Default caused by that moratorium.
24.7 INSOLVENCY PROCEEDINGS
24.7.1 Any corporate action, legal proceedings or other procedure or step is
taken in relation to:
(a) the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of any
member of the Group other than a solvent liquidation or reorganisation
of any member of the Group which is not an Obligor;
(b) a composition, compromise, assignment or arrangement with any creditor
of any member of the Group;
(c) the appointment of a liquidator (other than in respect of a solvent
liquidation of a member of the Group which is not an Obligor),
receiver, administrative receiver, administrator, compulsory manager
or other similar officer in respect of any member of the Group or any
of its assets (including the directors of any Group member requesting
a person to appoint any such officer in relation to it or any of its
assets); or
116
(d) enforcement of any Security over any assets of any member of the
Group,
or any analogous procedure or step is taken in any jurisdiction.
24.7.2 Clause 24.7.1 shall not apply to:
(a) any winding-up petition which the Borrower can demonstrate, by
providing opinion of leading Counsel to that effect, to the reasonable
satisfaction of the Agent, is frivolous or vexatious and such
winding-up petition is discharged, stayed or dismissed within ten days
of commencement or, if earlier, the date on which it is advertised; or
(b) any step or procedure contemplated by paragraph (b) of the definition
of Permitted Transaction.
24.8 CREDITORS' PROCESS
24.8.1 Any expropriation, attachment, sequestration, forfeiture, distress or
execution or any analogous process in any jurisdiction affects any asset or
assets of a member of the Group having an aggregate value of US$2,000,000
and is not discharged within ten days.
24.8.2 Any judgment or order for an amount in excess of US$2,000,000 is made
against any member of the Group and is not stayed or complied with within
ten days.
24.9 UNLAWFULNESS AND INVALIDITY
24.9.1 It is or becomes unlawful for an Obligor to perform any of its
obligations under the Finance Documents or any Transaction Security created
or expressed to be created or evidenced by the Transaction Security
Documents ceases to be effective or any subordination created under any
Finance Document is or becomes unlawful.
24.9.2 Any obligation or obligations of any Obligor under any Finance Documents
are not (subject to the Legal Reservations) or cease to be legal, valid,
binding or enforceable and the cessation individually or cumulatively
materially and adversely affects the interests of the Lenders under the
Finance Documents.
24.9.3 Any Finance Document ceases to be in full force and effect or any
Transaction Security or any subordination created under the Finance
Documents ceases to be legal, valid, binding, enforceable or effective or
is alleged by a party to it (other than a Finance Party) to be ineffective.
24.10 CESSATION OF BUSINESS
Any member of the Group suspends or ceases to carry on (or threatens to
suspend or cease to carry on) all or a material part of its business except
as a result of a disposal which is a Permitted Disposal or a Permitted
Transaction.
24.11 CHANGE OF OWNERSHIP
An Obligor (other than the Borrower) ceases to be a wholly-owned Subsidiary
of the Borrower except as a result of a disposal which is a Permitted
Disposal or a Permitted Transaction.
24.12 AMENDING CONSTITUTIONAL DOCUMENTS
24.12.1 The Borrower or a Security Provider amends, varies, supplements,
supersedes, waives or terminates its Constitutional Documents without the
prior written consent of the Agent (which consent shall not be unreasonably
withheld).
24.12.2 Any other member of the Group amends, varies, supplements, supersedes,
waives or terminates its Constitutional Documents without the prior written
consent of the Agent where the Agent reasonably believes such action has or
is reasonably likely to have a Material Adverse Effect.
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24.13 CHANGE OF MANAGEMENT
24.13.1 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases (for whatever reason) to be actively
involved in the business, trade and offices of the Group or ceases (for
whatever reason) to be the Chief Executive Officer of the Borrower.
24.13.2 Any two members of the Key Personnel cease (for whatever reason) to be
both an officer and an employee of the Group or to devote substantially all
of their time to the management of the Group and no adequate replacement is
found and announced within a period of 60 days.
24.14 AUDIT QUALIFICATION - DIVIDENDS
24.14.1 The Auditors of the Group qualify the audited annual consolidated
financial statements of the Borrower.
24.14.2 The Borrower advises the Agent pursuant to clause 8.1.8(a)(Total
Loss/Sale) of the amount of dividend it intends to declare in respect of a
Financial Quarter and the aggregate amount of dividend actually declared or
distributed pursuant to such Financial Quarter is less than such amount.
24.14.3 The Borrower advises the Agent pursuant to clause 8.1.8(b)(Total
Loss/Sale) of a Relevant Amount in respect of a Financial Quarter and the
aggregate amount of dividend actually declared or distributed by the
Borrower in respect of such Financial Quarter is less than such Relevant
Amount.
24.15 EXPROPRIATION
The authority or ability of any member of the Group to conduct its business
is limited or wholly or substantially curtailed by any seizure,
expropriation, nationalisation, intervention, restriction or other action
by or on behalf of any governmental, regulatory or other authority or other
person in relation to any member of the Group or any of its assets.
24.16 REPUDIATION AND RESCISSION OF AGREEMENTS
24.16.1 An Obligor (or any other relevant party) rescinds or purports to rescind
or repudiates or purports to repudiate a Finance Document or any of the
Transaction Security or evidences an intention to rescind or repudiate a
Finance Document or any Transaction Security.
24.16.2 Any party to the Acquisition Documents rescinds or purports to rescind
or repudiates or purports to repudiate any of those agreements or
instruments in whole or in part where to do so has or is, in the reasonable
opinion of the Agent, likely to have a material adverse effect on the
interests of the Lenders under the Finance Documents.
24.17 LITIGATION
Any litigation, alternative dispute resolution, arbitration,
administrative, governmental, regulatory or other investigations,
proceedings or disputes are commenced or threatened in relation to the
Transaction Documents or the transactions contemplated in the Transaction
Documents or against any member of the Group or its assets which has or is
reasonably likely to have a Material Adverse Effect.
24.18 ENVIRONMENTAL MATTERS
24.18.1 Any member of the Group fails to comply with any Environmental Law or
any Environmental Permit or an Environmental Claim is made against any
member of the Group and as a result a Material Adverse Effect occurs or is
reasonably likely to occur in the opinion of the Lenders.
24.18.2 As a result of any Environmental Law any of the claims and rights of any
Finance Party in respect of any Finance Document becomes subordinated to an
extent considered material by the Agent to an Environmental Claim.
24.18.3 Any Finance Party becomes subject to any actual or potential liability
or obligation in relation to any property owned, occupied or used by any
member of the Group.
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24.19 CHANGE OF CONTROL
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases to hold a minimum of 20 per cent. of the issued
share capital of the Borrower.
24.20 MATERIAL ADVERSE CHANGE
Any event or circumstance occurs which the Agent reasonably believes has or
is reasonably likely to have a Material Adverse Effect.
24.21 ARREST
Any Ship is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory
lien or other claim or otherwise taken from the possession of the owner of
such Ship and the owner of such Ship shall fail to procure the release of
such Ship within a period of ten Business Days thereafter.
24.22 ADDITIONAL COLLATERAL SHIPS AND REGISTRATION
24.22.1 (a) An Additional Collateral Ship is not delivered to the relevant
Additional Collateral Owner pursuant to the relevant Purchase Option MOA
and/or MOA or otherwise and/or (b) the Facility relevant to such Additional
Collateral Ship has not been utilised and/or (c) the conditions precedent
regarding such Facility and such Additional Collateral Ship required under
clause 4.1.2 (Initial Conditions Precedent) have not been satisfied by the
Borrower, in any such case (a), (b) or (c), by the Long-Stop Date.
24.22.2 The registration of any Collateral Ship under the laws and flag of the
relevant Flag State is cancelled or terminated without the prior written
consent of the Lenders or if such registration of such Collateral Ship is
not renewed at least 45 days prior to the expiry of such registration.
24.23 UNREST
The Flag State of any Collateral Ship becomes involved in hostilities or
civil war or there is a seizure of power in such Flag State by
unconstitutional means and such event could, in the opinion of the Agent
reasonably be expected to have a Material Adverse Effect on the Security
constituted by any of the Transaction Security Documents and the Borrower
fails to (a) procure the registration of the relevant Collateral Ship by
the relevant Collateral Owner under the flag of another state which is
acceptable to the Agent in its sole discretion, (b) procure the execution
in favour of the Security Agent or, as the case may be, the Finance Parties
and, where necessary, the registration, of a new mortgage over the relevant
Collateral Ship, a new general assignment in respect of the Earnings, the
Ship Insurances and the Requisition Compensation of such Collateral Ship
and a manager's undertaking from the Manager of the relevant Collateral
Ship, in each case in such form as the Agent shall in its absolute
discretion require and always of the same priority as the previous such
Security and (c) provide the Agent or its duly authorised representative
with such documents and evidence as the Agent may in its sole discretion
require, in each case within ten Business Days following the written
request of the Agent to the Borrower to do so.
24.24 P&I AND THIRD PARTY LIABILITY INSURANCES
Either a Collateral Owner or the Manager or any other person fails or omits
to comply with any requirements of the protection and indemnity association
or other insurer with which such Collateral Owner is entered for insurance
or insured against protection and indemnity risks (including oil pollution
risks) to the effect that any cover (including, without limitation, any
cover in respect of liability for Environmental Claims arising in
jurisdictions where such Collateral Ship operates or trades) is or may be
liable to cancellation, qualification or exclusion at any time.
24.25 MANAGER
Any Collateral Ship ceases to be technically managed and commercially
managed by the Manager in accordance with the relevant Management
Agreement.
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24.26 LEASE
Any cause for cancellation (as described in the Lease) occurs under the
Lease and/or the Lease is repudiated, suspended, cancelled or terminated
for any reason other than by effluxion of time.
24.27 RIGHT OF WAY
Any person interferes with or prevents the exercise of any material right
of way in relation to the Terminal and the same is not cured within 30 days
and, in the opinion of the Agent, such event is reasonably likely to have a
Material Adverse Effect.
24.28 BREACH OF MINISTERIAL DECISION
If the Flag State in relation to a Collateral Ship is the Hellenic
Republic, the relevant Collateral Owner commits any breach of or cancels
the Ministerial Decision for such Ship (as defined in the Mortgage relevant
to such Ship) or varies the Ministerial Decision for such Ship without the
previous written consent of the Agent (which consent the Agent shall not
unreasonably withhold).
24.29 ACCELERATION
On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority Lenders,
by notice to the Borrower:
24.29.1 cancel the Total Commitments at which time they shall immediately be
cancelled;
24.29.2 declare that all or part of the Loans, together with accrued interest,
and all other amounts accrued or outstanding under the Finance Documents be
immediately due and payable, at which time they shall become immediately
due and payable;
24.29.3 declare that all or part of the Loans be payable on demand, at which
time they shall immediately become payable on demand by the Agent;
24.29.4 exercise or direct the Security Agent or, as the case may be, the
Secured Parties, to exercise any or all of its rights, remedies, powers or
discretions under the Finance Documents; and/or
24.29.5 declare that any Hedge Agreement between any member of the Group and a
Hedge Counterparty shall forthwith be terminated and such member of the
Group and such Hedge Counterparty shall from such time treat such relevant
Hedge Agreement as terminated by reason of cross-default.
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SECTION 9: CHANGES TO THE PARTIES
25 CHANGES TO THE LENDERS
25.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
Subject to this clause 25, a Lender (the "EXISTING LENDER") may:
25.1.1 assign any of its rights; or
25.1.2 subject to clause 25.2.5, transfer by novation any of its rights and
obligations,
under any Finance Document to another bank or financial institution or to a
trust, fund or other entity which is regularly engaged in or established
for the purpose of making, purchasing or investing in loans, securities or
other financial assets (the "NEW LENDER").
25.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
25.2.1 An Existing Lender must consult with the Borrower for no more than ten
days before it may make an assignment or transfer in accordance with clause
25.1 (Assignments and transfers by the Lenders) unless the assignment or
transfer is:
(a) part of primary syndication;
(b) to another Lender or an Affiliate of a Lender;
(c) to a fund or other investment vehicle within the same investor group
as the fund or other investment vehicle which is the Existing Lender;
or
(d) made at a time when an Event of Default has occurred and is
continuing.
25.2.2 An assignment will only be effective on:
(a) receipt by the Agent of written confirmation from the New Lender (in
form and substance satisfactory to the Agent) that the New Lender will
assume the same obligations to the other Finance Parties and the other
Secured Parties as it would have been under if it was an Original
Lender; and
(b) the performance by the Agent of all "know your customer" or other
checks relating to any person that it is required to carry out in
relation to such assignment to a New Lender, the completion of which
the Agent shall promptly notify to the Existing Lender and the New
Lender.
25.2.3 A transfer will only be effective if the Agent has confirmed that a
transfer is appropriate pursuant to clause 25.2.5 and the procedure set out
in clause 25.5 (Procedure for transfer) is complied with and:
(a) transfers of each of the Facilities may be made separately;
(b) where an Existing Lender transfers part of its rights and obligations
in respect of a Facility pursuant to clause 25.5 (Procedure for
transfer), that Existing Lender must transfer equal fractions of its
Commitment and participation in the Loans (if any) under the relevant
Facility;
(c) if at the time when a transfer takes effect more than one Loan is
outstanding under a Facility, the transfer of an Existing Lender's
participation in the Loans (if any) under the relevant Facility shall
take effect in respect of the same fraction of each such Loan; and
(d) no transfer shall be effected if as a result of such transfer
(together with any other transfers to take place at or about the same)
as at the date such transfer(s) take effect:
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(i) the Total Commitments of an Existing Lender would be less than
US$20,000,000, or such other amount as the Agent may determine,
unless resulting from a transfer of all of an Existing Lender's
Commitments;
(ii) a New Lender would have Total Commitments of less than
US$10,000,000, or such other amount as the Agent may determine,
unless resulting from a transfer of all of an Existing Lender's
Commitments; or
(iii) the aggregate amount of Commitments transferred by an Existing
Lender would be less than US$15,000,000, or such other amount as
the Agent may determine, unless the transfer is of all an
Existing Lender's Commitments.
25.2.4 If:
(a) a Lender assigns or transfers any of its rights or obligations under
the Finance Documents or changes its Facility Office; and
(b) as a result of circumstances existing at the date the assignment,
transfer or change occurs, an Obligor would be obliged to make a
payment to the New Lender or Lender acting through its new Facility
Office under clause 14 (Tax Gross Up and Indemnities) or clause 15
(Increased Costs),
then the New Lender or Lender acting through its new Facility Office is
only entitled to receive payment under those clauses to the same extent as
the Existing Lender or Lender acting through its previous Facility Office
would have been if the assignment, transfer or change had not occurred
unless the assignment, transfer or change is made by the Lender with the
Borrower's agreement to mitigate any circumstances giving rise to the Tax
Payment or increased cost, or a right to be prepaid and/or cancelled by
reason of illegality.
25.2.5 An Existing Lender shall not transfer any of its rights and obligations
under this Agreement pursuant to this clause 25.2 (Conditions of assignment
or transfer) unless the Agent has confirmed that such proposed transfer is
appropriate. The Agent shall (a) act reasonably in making such
determination, but shall have, among other things, regard to the
preservation of rights of the Finance Parties under the Finance Documents
and (b) respond as soon as is reasonably practicable (although the Agent
shall not be required to respond while it is seeking legal advice as to
whether a transfer is appropriate). In the event the Agent specifies that a
transfer is not appropriate the relevant Existing Lender shall be entitled
to assign its rights in accordance with clause 25.2.2.
25.2.6 If any Lender assigns any of its rights under this Agreement in
accordance with this clause 25.2 (Conditions of assignment or transfer),
the Borrower undertakes to procure that immediately on being requested to
do so by the Agent, that each relevant member of the Group shall enter into
such documents or instruments as shall be necessary or desirable to
transfer to a New Lender all or the relevant part of the Existing Lender's
interest in the Transaction Security Documents.
25.3 ASSIGNMENT OR TRANSFER FEE
Unless the Agent otherwise agrees and excluding an assignment or transfer
to an Affiliate of a Lender or made in connection with primary syndication
of the Facilities, the New Lender shall, on the date upon which an
assignment or transfer takes effect, pay to the Agent (for its own account)
a fee of US$5,000.
25.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
25.4.1 Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender
for:
(a) the legality, validity, effectiveness, adequacy or enforceability of
the Transaction Documents, the Transaction Security or any other
documents;
(b) the financial condition of any Obligor;
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(c) the performance and observance by any Obligor or any other member of
the Group of its obligations under the Transaction Documents or any
other documents; or
(d) the accuracy of any statements (whether written or oral) made in or in
connection with any Transaction Document or any other document,
and any representations or warranties implied by law are excluded.
25.4.2 Each New Lender confirms to the Existing Lender, the other Finance
Parties and the Secured Parties that it:
(a) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and affairs of
each Obligor and its related entities in connection with its
participation in this Agreement and has not relied exclusively on any
information provided to it by the Existing Lender or any other Finance
Party in connection with any Transaction Document or the Transaction
Security; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst any
amount is or may be outstanding under the Finance Documents or any
Commitment is in force.
25.4.3 Nothing in any Finance Document obliges an Existing Lender to:
(a) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this clause 25; or
(b) support any losses directly or indirectly incurred by the New Lender
by reason of the non-performance by any Obligor of its obligations
under the Transaction Documents or otherwise.
25.5 PROCEDURE FOR TRANSFER
25.5.1 Subject to the conditions set out in clause 25.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with clause
25.5.4 when (a) the Agent executes an otherwise duly completed Transfer
Certificate delivered to it by the Existing Lender and the New Lender and
(b) an addendum to each of the Mortgages and any other relevant Transaction
Security Document which has been granted in favour of the Secured Parties
has been executed and registered in accordance with clause 25.5.3. The
Agent shall, subject to clause 25.2.2, as soon as reasonably practicable
after receipt by it of a duly completed Transfer Certificate appearing on
its face to comply with the terms of this Agreement and delivered in
accordance with the terms of this Agreement, execute that Transfer
Certificate.
25.5.2 The Agent shall only be obliged to execute a Transfer Certificate
delivered to it by the Existing Lender and the New Lender once it is
satisfied it has complied with all necessary "know your customer" or other
similar checks under all applicable laws and regulations in relation to the
transfer to such New Lender.
25.5.3 Simultaneously with the execution of a Transfer Certificate as provided
in clause 25.5.1, the Borrower shall procure that each Obligor which has
executed a Mortgage in favour of the Secured Parties shall immediately upon
being requested to do so by the Agent and at its own expense, execute and
deliver to the New Lender an addendum to each Mortgage and any other
relevant Transaction Security Document to which it is a party in such form
as the New Lender shall require to the effect and purpose that the New
Lender shall have the same rights as the Existing Lender had under the
Mortgage and other relevant Transaction Security Documents and so that the
rights of the other Secured Parties remain unaffected. References in the
Transaction Security Documents to a Mortgage (or relevant Transaction
Security Document) shall thereupon be deemed to include any such addendum
and/or new Mortgage (or relevant Transaction Security Document).
25.5.4 On the Transfer Date:
(a) to the extent that in the Transfer Certificate the Existing Lender
seeks to transfer by novation its rights and obligations under this
Agreement, each of the Obligors and the Existing Lender shall be
released from further obligations towards one another under this
Agreement and their
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respective rights against one another under this Agreement shall be
cancelled (being the "DISCHARGED RIGHTS AND OBLIGATIONS");
(b) each of the Obligors and the New Lender shall assume obligations
towards one another and/or acquire rights against one another which
differ from the Discharged Rights and Obligations only insofar as that
Obligor or other member of the Group and the New Lender have assumed
and/or acquired the same in place of that Obligor and the Existing
Lender;
(c) the Agent, the Arranger, the Security Agent, the New Lender and the
other Lenders shall acquire the same rights and assume the same
obligations between themselves and by reason of the security trust
established in relation to the Transaction Security Documents in
respect of the Trust Property as they would have acquired and assumed
had the New Lender been an Original Lender with the rights, and/or
obligations acquired or assumed by it as a result of the transfer and
to that extent the Agent, the Arranger, the Security Agent and the
Existing Lender shall each be released from further obligations to
each other under the Finance Documents; and
(d) the New Lender shall become a Party as a "Lender" for the purposes of
all the Finance Documents.
25.6 COPY OF TRANSFER CERTIFICATE TO BORROWER
The Agent shall, as soon as reasonably practicable after it has executed a
Transfer Certificate, send to the Borrower a copy of that Transfer
Certificate.
25.7 DISCLOSURE OF INFORMATION
25.7.1 Any Lender may disclose to any of its Affiliates and any other person:
(a) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under the Finance Documents;
(b) with (or through) whom that Lender enters into (or may potentially
enter into) any sub-participation in relation to, or any other
transaction under which payments are to be made by reference to, the
Finance Documents or any Obligor; or
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation; or
(d) for whose benefit that Lender charges, assigns or otherwise creates a
Security (or may do so) pursuant to clause 25.9 (Security over
Lenders' rights); and
25.7.2 any Finance Party may disclose to a rating agency or its professional
advisers, or (with the consent of the Borrower) any other person,
any information about any Obligor, the Group and the Finance Documents as
that Lender or other Finance Party shall consider appropriate if in
relation to paragraphs (a) and (b) of clause 25.7.1, the person to whom the
information is to be given has entered into a Confidentiality Undertaking.
Any Confidentiality Undertaking signed by a person pursuant to this clause
25.7 shall supersede any prior confidentiality undertaking signed by such
person for the benefit of any member of the Group.
25.8 HEDGE COUNTERPARTIES
25.8.1 Any Lender or Affiliate of a Lender which becomes a Hedge Counterparty
shall accede to this Agreement as a Hedge Counterparty by delivery to the
Security Agent of a duly completed Hedge Counterparty Accession Letter.
25.8.2 Where this Agreement or any other Finance Document imposes an obligation
on a Hedge Counterparty and the relevant Hedge Counterparty is an Affiliate
of a Lender and is not a party to that document, the relevant Lender shall
ensure that the obligation is performed by its Affiliate.
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25.8.3 If a Lender which transfers all of its rights and obligations as provided
in this clause 25 is a Hedge Counterparty at the time of such transfer, it
shall, notwithstanding such transfer, remain a Hedge Counterparty in
respect of those Hedge Agreements which it entered into while it was Lender
and shall remain a Party to this Agreement in such capacity until such time
as there are no such Hedge Agreements remaining in effect.
25.9 SECURITY OVER LENDERS' RIGHTS
In addition to the other rights provided to Lenders under this clause 25,
each Lender may without consulting with or obtaining consent from any
Obligor, at any time charge, assign or otherwise create Security in or over
(whether by way of collateral or otherwise) all or any of its rights under
any Finance Document to secure obligations of that Lender including,
without limitation:
25.9.1 any charge, assignment or other Security to secure obligations to a
federal reserve or central bank; and
25.9.2 in the case of any Lender which is a fund, any charge, assignment or
other Security granted to any holders (or trustee or representatives of
holders) of obligations owed, or securities issued, by that Lender as
security for those obligations or securities,
except that no such charge, assignment or Security shall:
(a) release a Lender from any of its obligations under the Finance
Documents or substitute the beneficiary of the relevant charge,
assignment or Security for the Lender as a party to any of the Finance
Documents; or
(b) require any payments to be made by an Obligor or grant to any person
any more extensive rights than those required to be made or granted to
the relevant Lender under the Finance Documents.
25.10 SUB-PARTICIPATION
A Lender may sub-participate all or any part of its rights and/or
obligations under the Finance Documents without the consent of, or notice
to, the Borrower.
26 MATTERS CONCERNING THE OBLIGORS
26.1 ASSIGNMENT AND TRANSFERS BY OBLIGORS
The Borrower shall not and shall procure that no Obligor or any other
member of the Group may assign any of its rights or transfer any of its
rights or obligations under the Finance Documents.
26.2 ADDITIONAL SECURITY PROVIDERS
26.2.1 Subject to compliance with the provisions of clauses 21.9.2 and 21.9.3
("Know your customer" checks), the Borrower may request that any of its
Subsidiaries which is not a Security Provider or which was a Dormant
Subsidiary becomes a Security Provider.
26.2.2 Upon acceptance by the Security Agent of the Borrower's request referred
to in clause 26.2.1, the Borrower shall procure that any other member of
the Group which is not a Security Provider or which was a Dormant
Subsidiary shall, as soon as possible after becoming a member of the Group
(or ceasing to be a Dormant Subsidiary), become an Additional Security
Provider and grant such guarantees and Security as the Agent may require.
26.2.3 A member of the Group shall become an Additional Security Provider
pursuant to this clause 26 if the Agent has received all of the documents
and other evidence listed in Part III of Schedule 3 (Conditions Precedent)
in relation to that Additional Security Provider, each in form and
substance satisfactory to the Agent.
26.2.4 The Agent shall notify the Borrower and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to it)
all the documents and other evidence listed in Part III of Schedule 3
(Conditions precedent).
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26.3 RESIGNATION OF A SECURITY PROVIDER
26.3.1 The Borrower may request that a Security Provider (other than the
Borrower) ceases to be a Security Provider by delivering to the Agent a
Resignation Letter if:
(a) that Security Provider is being disposed of to a person which is not a
member of the Group where that disposal is permitted under clause
23.16 (Disposals) or made with the approval of the Agent (a "THIRD
PARTY DISPOSAL) and the Borrower has confirmed this is the case; or
(b) all the Lenders have consented to the resignation of that Security
Provider.
26.3.2 The Agent shall accept a Resignation Letter and notify the Borrower and
the Lenders of its acceptance if:
(a) the Borrower has confirmed that no Default is continuing or would
result from the acceptance of the Resignation Letter;
(b) no payment is due from the Security Provider under any Transaction
Security Document;
(c) the Borrower has confirmed that it shall ensure that the Disposal
Proceeds will be applied in accordance with clause 8.3 (Application of
mandatory prepayments).
26.3.3 The resignation of that Security Provider shall not be effective until
the date of the relevant Third Party Disposal at which time that company
shall cease to be a Security Provider and shall have no further rights or
obligations under the Finance Documents as a Security Provider.
26.4 RESIGNATION AND RELEASE OF SECURITY ON DISPOSAL
If a Security Provider is or is proposed to be the subject of a Third Party
Disposal then:
26.4.1 where the Security Provider created Transaction Security over any of its
assets or business in favour of the Security Agent or, as the case may be,
the Finance Parties, or Transaction Security in favour of the Security
Agent or, as the case may be, the Finance Parties was created over the
shares (or equivalent) of the Security Provider, the Security Agent or, as
the case may be, the Finance Parties may, at the cost and request of the
Borrower, release those assets, business or shares (or equivalent) and
issue certificates of non-crystallisation;
26.4.2 the resignation of the Security Provider and related release of
Transaction Security referred to in clause 26.4.1 shall not become
effective until the date of that disposal; and
26.4.3 if the disposal of the Security Provider is not made, the Resignation
Letter of the Security Provider and the related release of Transaction
Security referred to in clause 26.4.1 shall have no effect and the
obligations of the Security Provider and the Transaction Security created
or intended to be created by or over the Security Provider shall continue
in full force and effect.
26.5 OBLIGATIONS UNCONDITIONAL
26.5.1 The obligations of each Obligor under this Agreement and the other
Finance Documents to which it is a party are unconditional and irrevocable
(subject to the express provisions of this Agreement or any other Finance
Document) and shall not be in any way affected or discharged by reason of
any matter affecting or occurring in connection with the Transaction
Documents.
26.5.2 The Borrower acknowledges that any authorisation given under this
Agreement or any other Finance Document by a Finance Party in relation to
the Transaction Documents shall not constitute any representation or
warranty by such (or any) Finance Party as to the adequacy or effectiveness
of such documents, the purchase consideration payable in relation to the
Acquisition, the commercial advisability of any Obligor entering into the
arrangements contemplated by the Transaction Documents or otherwise.
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26.6 OBLIGATIONS SEVERAL
Without prejudice to the express provisions of any Transaction Security
Document providing that the obligations of certain Obligors are joint and
several, the obligations of each Obligor under this Agreement and the other
Finance Documents to which it is party are several. The failure of any
Obligor to perform such obligations shall not release any other Obligor
from its obligations under this Agreement or any other Finance Document.
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SECTION 10: THE FINANCE PARTIES
27 ROLE OF THE AGENT, THE ARRANGER AND OTHERS
27.1 APPOINTMENT OF THE AGENT
27.1.1 Each of the Arranger and the Lenders appoints the Agent to act as its
agent under and in connection with the Finance Documents.
27.1.2 Each of the Arranger and the Lenders authorises the Agent to exercise the
rights, powers, authorities and discretions specifically given to the Agent
under or in connection with the Finance Documents together with any other
incidental rights, powers, authorities and discretions.
27.2 DUTIES OF THE AGENT
27.2.1 The Agent shall promptly forward to a Party the original or a copy of any
document which is delivered to the Agent for that Party by any other Party.
27.2.2 Except where a Finance Document specifically provides otherwise, the
Agent is not obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another Party.
27.2.3 If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a
Default, it shall promptly notify the other Finance Parties.
27.2.4 If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party (other than the
Agent, the Arranger or the Security Agent) under this Agreement it shall
promptly notify the other Finance Parties.
27.2.5 The Agent's duties under the Finance Documents are solely mechanical and
administrative in nature.
27.3 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party under or in connection with
any Finance Document or the Acquisition.
27.4 NO FIDUCIARY DUTIES
27.4.1 Nothing in this Agreement constitutes the Agent or the Arranger as a
trustee or fiduciary of any other person.
27.4.2 None of the Agent, the Security Agent or the Arranger shall be bound to
account to any Lender for any sum or the profit element of any sum received
by it for its own account.
27.5 BUSINESS WITH THE GROUP
The Agent, the Security Agent and the Arranger may accept deposits from,
lend money to and generally engage in any kind of banking or other business
with any member of the Group.
27.6 RIGHTS AND DISCRETIONS
27.6.1 The Agent may rely on:
(a) any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and
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(b) any statement made by a director, authorised signatory or employee of
any person regarding any matters which may reasonably be assumed to be
within his knowledge or within his power to verify.
27.6.2 The Agent may assume (unless it has received notice to the contrary in
its capacity as agent for the Lenders) that:
(a) no Default has occurred (unless it has actual knowledge of a Default
arising under clause 24.1 (Non-payment));
(b) any right, power, authority or discretion vested in any Party or the
Majority Lenders has not been exercised; and
(c) any notice or request made by the Borrower (other than a Utilisation
Request or Selection Notice) is made on behalf of and with the consent
and knowledge of all the Obligors.
27.6.3 The Agent may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
27.6.4 The Agent may act in relation to the Finance Documents through its
personnel and agents.
27.6.5 The Agent may disclose to any other Party any information it reasonably
believes it has received as agent under this Agreement.
27.6.6 Notwithstanding any other provision of any Finance Document to the
contrary, neither of the Agent nor the Arranger is obliged to do or omit to
do anything if it would or might in its reasonable opinion constitute a
breach of any law or regulation or a breach of a fiduciary duty or duty of
confidentiality.
27.7 MAJORITY LENDERS' INSTRUCTIONS
27.7.1 Unless a contrary indication appears in a Finance Document, the Agent
shall (i) exercise any right, power, authority or discretion vested in it
as Agent (including giving instructions to the Security Agent) in
accordance with any instructions given to it by the Majority Lenders (or,
if so instructed by the Majority Lenders, refrain from exercising any
right, power, authority or discretion vested in it as Agent) and (ii) not
be liable for any act (or omission) if it acts (or refrains from taking any
action) in accordance with an instruction of the Majority Lenders.
27.7.2 Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders to the Agent (in relation to any
right, power, authority or discretion vested in it as Agent) will be
binding on all the Finance Parties other than the Security Agent.
27.7.3 The Agent may refrain from acting in accordance with the instructions of
the Majority Lenders (or, if appropriate, the Lenders) until it has
received such security as it may require for any cost, loss or liability
(together with any associated VAT) which it may incur in complying with the
instructions.
27.7.4 In the absence of, or while awaiting, instructions from the Majority
Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain
from taking action) as it considers to be in the best interest of the
Finance Parties.
27.7.5 The Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender's consent) in any legal or arbitration proceedings
relating to any Finance Document. This clause 27.7.5 shall not apply to any
legal or arbitration proceeding relating to the perfection, preservation or
protection of rights under the Transaction Security Documents or
enforcement of the Transaction Security or Transaction Security Documents.
27.8 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor the Arranger:
27.8.1 is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, the Arranger,
an Obligor or any other person given in or in
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connection with any Finance Document or the Information Memorandum or the
Reports or the transactions contemplated in the Finance Documents;
27.8.2 is responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or the Transaction Security or
Transaction Document or any other agreement, arrangement or document
entered into, made or executed in anticipation of or in connection with any
Finance Document or the Transaction Security or Transaction Document;
27.8.3 is responsible to ascertain whether all deeds and documents which should
have been deposited with it (or the Security Agent) under or pursuant to
any of the Transaction Security Documents have been so deposited;
27.8.4 is responsible to investigate or make any enquiry into the title of any
Security Provider to any of the Security;
27.8.5 is responsible for the failure to register any of the Transaction
Security Documents with the Registry or any other public office;
27.8.6 is responsible for the failure to register any of the Transaction
Security Documents in accordance with the provisions of the documents of
title of any Security Provider to any of the Security;
27.8.7 is responsible for the failure to effect or procure the registration of
any floating charge created by any of the Transaction Security Documents by
registering under the Land Registration ▇▇▇ ▇▇▇▇ any notice or restriction
pursuant to the provisions of the Land Registration Act 2002 against any
land for the time being forming part of the security;
27.8.8 is responsible for the failure to take or require the Borrower or any
other Security Provider to take any steps to render any of the Transaction
Security Documents effective or to secure the creation of any ancillary
charge under the laws of the jurisdiction concerned;
27.8.9 is responsible (save as otherwise provided in this clause 27) for taking
or omitting to take any other action under or in relation to the
Transaction Security Documents; or
27.8.10 is responsible on account of the failure of the Security Agent to
perform or discharge any of its duties or obligations under the Transaction
Security Documents.
27.9 EXCLUSION OF LIABILITY
27.9.1 Without limiting clause 27.9.2, the Agent will not be liable for any
action taken by it under or in connection with any Finance Document or the
Transaction Security, unless directly caused by its gross negligence or
wilful misconduct.
27.9.2 No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent, in respect of any claim it might
have against the Agent or in respect of any act or omission of any kind by
that officer, employee or agent in relation to any Finance Document or any
Transaction Document and any officer, employee or agent of the Agent may
rely on this clause subject to clause 1.3 (Third party rights) and the
provisions of the Third Parties Act.
27.9.3 The Agent will not be liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance Documents
to be paid by the Agent if the Agent has taken all necessary steps as soon
as reasonably practicable to comply with the regulations or operating
procedures of any recognised clearing or settlement system used by the
Agent for that purpose.
27.9.4 Nothing in this Agreement shall oblige the Agent or the Arranger to carry
out any "know your customer" or other checks in relation to any person on
behalf of any Lender and each Lender confirms to the Agent and the Arranger
that it is solely responsible for any such checks it is required to carry
out and that it may not rely on any statement in relation to such checks
made by the Agent or the Arranger.
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27.10 LENDERS' INDEMNITY TO THE AGENT
27.10.1 Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) indemnify the
Agent, within three Business Days of demand, against any cost, loss or
liability incurred by the Agent (otherwise than by reason of the Agent's
gross negligence or wilful misconduct) in acting as Agent under the Finance
Documents (unless the Agent has been reimbursed by an Obligor pursuant to a
Finance Document).
27.10.2 The Borrower shall counter-indemnify the Lenders against all payments
made by them under this clause 27.10.
27.11 RESIGNATION OF THE AGENT
27.11.1 The Agent may resign and appoint one of its Affiliates acting through an
office in the Federal Republic of Germany as successor by giving notice to
the Lenders and the Borrower.
27.11.2 Alternatively the Agent may resign by giving notice to the Lenders and
the Borrower, in which case the Majority Lenders (after consultation with
the Borrower) may appoint a successor Agent.
27.11.3 If the Majority Lenders have not appointed a successor Agent in
accordance with clause 27.11.2 within 30 days after notice of resignation
was given, the Agent (after consultation with the Borrower) may appoint a
successor Agent.
27.11.4 The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance as
the successor Agent may reasonably request for the purposes of performing
its functions as Agent under the Finance Documents.
27.11.5 The Agent's resignation notice shall only take effect upon the
appointment of a successor.
27.11.6 Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance Documents
but shall remain entitled to the benefit of this clause 27. Its successor
and each of the other Parties shall have the same rights and obligations
amongst themselves as they would have had if such successor had been an
original Party.
27.11.7 After consultation with the Borrower, the Majority Lenders may, by
notice to the Agent, require it to resign in accordance with clause
27.11.2. In this event, the Agent shall resign in accordance with clause
27.11.2.
27.12 CONFIDENTIALITY
27.12.1 In acting as agent for the Finance Parties, the Agent shall be regarded
as acting through its agency division which shall be treated as a separate
entity from any other of its divisions or departments.
27.12.2 If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department and
the Agent shall not be deemed to have notice of it.
27.12.3 Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Arranger are obliged to disclose to any
other person (i) any confidential information or (ii) any other information
if the disclosure would or might in its reasonable opinion constitute a
breach of any law or a breach of a fiduciary duty.
27.13 RELATIONSHIP WITH THE LENDERS
27.13.1 The Agent may treat each Lender as a Lender, entitled to payments under
this Agreement and acting through its Facility Office unless it has
received not less than five Business Days prior notice from that Lender to
the contrary in accordance with the terms of this Agreement.
27.13.2 Each Lender shall supply the Agent with any information required by the
Agent in order to calculate the Mandatory Cost in accordance with Schedule
5 (Mandatory Cost Formula).
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27.13.3 Each Lender shall supply the Agent with any information that the
Security Agent may reasonably specify (through the Agent) as being
necessary or desirable to enable the Security Agent to perform its
functions as Security Agent. Each Lender shall deal with the Security Agent
exclusively through the Agent and shall not deal directly with the Security
Agent.
27.14 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms to the Agent and the Arranger that it has been, and
will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection
with any Finance Document including but not limited to:
27.14.1 the financial condition, status and nature of each member of the Group;
27.14.2 the legality, validity, effectiveness, adequacy or enforceability of any
Finance Document and the Transaction Security and any other agreement,
arrangement or document entered into, made or executed in anticipation of,
under or in connection with any Finance Document or the Transaction
Security;
27.14.3 whether that Secured Party has recourse, and the nature and extent of
that recourse, against any Party or any of its respective assets under or
in connection with any Finance Document, the Transaction Security, the
transactions contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in anticipation of,
under or in connection with any Finance Document;
27.14.4 the adequacy, accuracy and/or completeness of the Information
Memorandum, the Reports and any other information provided by the Agent,
any Party or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents or any
other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document; and
27.14.5 the right or title of any person in or to, or the value or sufficiency
of any part of the Charged Property, the priority of any of the Transaction
Security or the existence of any Security affecting the Charged Property.
27.15 AGENT'S MANAGEMENT TIME
Any amount payable to the Agent under clause 16.3 (Indemnity to the Agent),
clause 18 (Costs and Expenses) and clause 27.10 (Lenders' indemnity to the
Agent) shall include the cost of utilising the Agent's management time or
other resources and will be calculated on the basis of such reasonable
daily or hourly rates as the Agent may notify to the Borrower and the
Lenders, and is in addition to any fee paid or payable to the Agent under
clause 13 (Fees).
27.16 DEDUCTION FROM AMOUNTS PAYABLE BY THE AGENT
If any Party owes an amount to the Agent under the Finance Documents the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as having
received any amount so deducted.
27.17 RELIANCE AND ENGAGEMENT LETTERS
Each Finance Party and Secured Party confirms that each of the Arranger and
the Agent has authority to accept on its behalf (and ratifies the
acceptance on its behalf of any letters or reports already accepted by the
Arranger or Agent) the terms of any reliance letter or engagement letters
relating to the Reports or any reports or letters provided by accountants
in connection with the Finance Documents or the transactions contemplated
in the Finance Documents and to bind it in respect of those Reports,
reports or letters and to sign such letters on its behalf and further
confirms that it accepts the terms and qualifications set out in such
letters.
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27.18 COMMON PARTIES
Notwithstanding that the Agent and the Security Agent may from time to time
be the same entity, the Agent and the Security Agent have entered into the
Finance Documents (to which they are party) in their separate capacities as
agent for the Finance Parties or (as appropriate) security agent and
trustee for the Finance Parties provided that, where any Finance Document
provides for the Agent or Security Agent to communicate with or provide
instructions to the other, while the two parties in question are the same
entity, it will not be necessary for there to be any such formal
communication or instructions notwithstanding that the Finance Documents
provide in certain cases for the same to be in writing.
27.19 SECURITY AGENT
27.19.1 Each other Finance Party appoints the Security Agent to act as its
trustee under and in connection with the Transaction Security Documents.
27.19.2 Each other Finance Party authorises the Security Agent:
(a) to exercise the rights, powers, authorities and discretions
specifically given to the Security Agent under or in connection with
the Finance Documents together with any other incidental rights,
powers, authorities and discretions;
(b) to execute each of the Transaction Security Documents and all other
documents that may be approved by the Agent and/or the Majority
Lenders for execution by it.
27.19.3 The Security Agent accepts its appointment under clause 27.19 (Security
Agent) as trustee of the Trust Property with effect from the date of this
Agreement to hold the Trust Property on trust for itself and the other
Finance Parties (for so long as they are Finance Parties) on and subject to
the terms set out in clauses 27.19 - 27.28 and the Transaction Security
Documents to which it is a party.
27.20 APPLICATION OF CERTAIN CLAUSES TO SECURITY AGENT
27.20.1 Clauses 27.6 (Rights and discretions), 27.8 (Responsibility for
documentation) other than clause 27.8.10, 27.9 (Exclusion of liability),
27.10 (Lenders' indemnity to the Agent), 27.11 (Resignation of the Agent),
27.12 (Confidentiality), 27.13 (Relationship with the Lenders), 27.14
(Credit appraisal by the Lenders) and 27.16 (Deduction from amounts payable
by the Agent) shall each extend so as to apply to the Security Agent in its
capacity as such and for that purpose each reference to the "Agent" in
these clauses shall extend to include in addition a reference to the
"Security Agent" in its capacity as such.
27.20.2 In addition clause 27.11 (Resignation of the Agent) shall have the
following additional sub-clause:
27.11.8 At any time after the appointment of a successor, the retiring
Security Agent shall do and execute all acts, deeds and documents
reasonably required by its successor to transfer to it (or its
nominee, as it may direct) any property, assets and rights previously
vested in the retiring Security Agent pursuant to the Transaction
Security Documents and which shall not have vested in its successor by
operation of law. All such acts, deeds and documents shall be done or,
as the case may be, executed at the cost of the retiring Security
Agent.
27.21 INSTRUCTIONS TO SECURITY AGENT
27.21.1 Unless a contrary indication appears in a Finance Document, the Security
Agent shall (a) exercise any right, power, authority or discretion vested
in it as Security Agent in accordance with any instructions given to it by
the Agent (or, if so instructed by the Agent, refrain from exercising any
right, power, authority or discretion vested in it as Security Agent) and
(b) not be liable for any act (or omission) if it acts (or refrains from
taking any action) in accordance with such an instruction of the Agent (the
Agent in each case acting on the instructions of the Majority Lenders or,
if appropriate pursuant to clause 36.2.1 (Exceptions) the Lenders).
27.21.2 Unless a contrary indication appears in a Finance Document, any
instructions given by the Agent to the Security Agent in accordance with
clause 27.21.1 will be binding on the Finance Parties.
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27.21.3 The Security Agent may refrain from acting in accordance with the
instructions of the Agent until it has received such security as it may
require for any cost, loss or liability (together with any associated VAT)
which it may incur in complying with the instructions.
27.21.4 In the absence of, or while awaiting, instructions from the Agent,
(including in exceptional circumstances where time does not permit the
Agent obtaining instructions from the Lenders and urgent action is
required) the Security Agent may act (or refrain from taking action) as it
considers to be in the best interest of the Finance Parties.
27.21.5 The Security Agent is not authorised to act on behalf of a Finance Party
(without first obtaining that Finance Party's consent) in any legal or
arbitration proceedings relating to any Finance Document but this is
without prejudice to clauses 27.21.1 and 27.21.4, including without
prejudice to the right to enforce the Transaction Security Documents in
accordance with these clauses.
27.22 ORDER OF APPLICATION
27.22.1 The Security Agent agrees to apply the Trust Property in accordance with
the following respective claims:
(a) FIRST, as to a sum equivalent to the amounts payable to the Security
Agent under the Finance Documents (other than any Hedge Agreement)
(excluding any amounts received by the Security Agent pursuant to
clause 27.10 (Lenders' indemnity to the Agent) as extended to the
Security Agent pursuant to clause 27.20 (Application of certain
clauses to Security Agent)) for the Security Agent absolutely;
(b) SECONDLY, as to a sum equivalent to the aggregate amount owing to the
Finance Parties actually or contingently (other than the Security
Agent) under the Finance Documents (other than any Hedge Agreement);
(c) THIRDLY, as to a sum equivalent to amounts payable to a Hedge
Counterparty under any Hedge Agreement;
(d) FOURTHLY, to such other persons (if any) as are legally entitled
thereto in priority to the Obligors; and
(e) FIFTHLY, as to the balance (if any) for the Obligors absolutely
pro-rata to the respective amounts paid, received or recovered from
each of them always.
27.22.2 The Security Agent shall make each application as soon as is practicable
after the relevant moneys are received by, or otherwise become available
to, it save that (without prejudice to any other provision contained in any
of the Transaction Security Documents) the Security Agent (acting on the
instructions of the Agent) or any receiver or administrator may credit any
moneys received by it to a suspense account for so long and in such manner
as the Security Agent or such receiver or administrator may from time to
time determine with a view to preserving the rights of the Finance Parties
or any of them to prove for the whole of their respective claims against
the Borrower or any other person liable.
27.22.3 The Security Agent shall obtain a good discharge in respect of the
amounts expressed to be due to the Finance Parties (other than itself) as
referred to in clause 27.22 by paying such amounts to the Agent for
distribution in accordance with clause 30 (Payment Mechanics).
27.23 PERPETUITIES
27.23.1 The trusts constituted or evidenced in or by the Transaction Security
Documents and the Trust Deed shall remain in full force and effect until
whichever is the earlier of:
(a) the expiration of a period of 80 years from the date of this
Agreement; and
(b) the first date after both of (i) receipt by the Security Agent, at any
time when it is satisfied that all of the Security Providers are
solvent, of confirmation in writing from the Agent that there is no
longer outstanding any indebtedness (actual or contingent (other than
any contingent indebtedness which is fully cash collateralised to the
satisfaction of the relevant Finance
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Party), and no obligation on any Finance Party to make available any
indebtedness, which is secured or guaranteed by or under any of the
Transaction Security Documents and (ii) all of the Transaction
Security Documents have been released in accordance with their terms,
and the parties to this Agreement declare that the perpetuity period
applicable to the Transaction Security Documents and the trusts declared by
the Trust Deed shall for the purposes of the Perpetuities and Accumulations
▇▇▇ ▇▇▇▇ be the period of 80 years from the date of this Agreement.
27.24 POWERS AND DUTIES OF THE SECURITY AGENT AS TRUSTEE OF THE SECURITY
27.24.1 In its capacity as trustee in relation to the Transaction Security
Documents, the Security Agent:
(a) Powers generally: shall, without prejudice to any of the powers,
discretions and immunities conferred upon trustees by law (and to the
extent not inconsistent with the provisions of this Agreement or any
of the Transaction Security Documents), have all the same powers and
discretions as a natural person acting as the beneficial owner of such
property and/or as are conferred upon the Security Agent by this
Agreement and/or any Transaction Security Document but so that the
Security Agent may only exercise such powers and discretions to the
extent that it is authorised to do so by the provisions of this
Agreement;
(b) Power to invest: shall (subject to clause 27.22 (Order of
application)) be entitled (in its own name or in the names of
nominees) to invest moneys from time to time forming part of the Trust
Property or otherwise held by it as a consequence of any enforcement
of the security constituted by the Transaction Security Documents
which, in the reasonable opinion of the Security Agent, it would not
be practicable to distribute immediately by placing the same on
deposit in the name or under the control of the Security Agent as the
Security Agent may think fit without being under any duty to diversify
the same and the Security Agent shall not be responsible for any loss
due to interest rate or exchange rate fluctuations except for any loss
arising from the Security Agent's gross negligence or wilful
misconduct;
(c) Power to engage agents: may, in the conduct of its obligations under
and in respect of the Transaction Security Documents, (otherwise than
in relation to its right to make any declaration, determination or
decision), instead of acting personally, employ and pay any agent
(whether being a lawyer, chartered accountant or any other person) to
transact or concur in transacting any business and to do or concur in
doing any acts required to be done by the Security Agent (including
the receipt and payment of money) and on the basis that (i) any such
agent engaged in any profession or business shall be entitled to be
paid all usual professional and other charges for business transacted
and acts done by him or any partner or employee of his in connection
with such employment and (ii) the Security Agent shall not be bound to
supervise, or be responsible for any loss incurred by reason of any
act or omission of, any such agent if the Security Agent shall have
exercised reasonable care in the selection of such agent; and
(d) Deposit of documents: may place all deeds, certificates and other
documents relating to the property and assets subject to the
Transaction Security Documents which are from time to time deposited
with it pursuant to the Transaction Security Documents in any safe
deposit, safe or receptacle selected by the Security Agent exercising
reasonable care or with any firm of solicitors selected by the
Security Agent exercising reasonable care and may make any such
arrangements as it thinks fit for allowing the Borrower access to, or
its solicitors or auditors possession of, such documents when
necessary or convenient and the Security Agent shall not be
responsible for any loss incurred in connection with any such deposit,
access or possession if it has exercised reasonable care in the
selection of a safe deposit, safe, receptacle or firm of solicitors.
27.25 ALL ENFORCEMENT ACTION THROUGH THE SECURITY AGENT
27.25.1 Save as provided in clause 27.25.2, none of the other Finance Parties
shall have any independent power to enforce any of the Transaction Security
Documents or to exercise any rights, discretions or powers or to grant any
consents or releases under or pursuant to any of the Transaction Security
Documents or otherwise have direct recourse to the security and/or
guarantees constituted by any of the Transaction Security Documents except
through the Security Agent.
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27.25.2 The Secured Parties agree that, in respect of any Transaction Security
which is granted directly in favour of the Secured Parties (and not the
Security Agent only) they shall co-operate in respect of such Transaction
Security by:
(a) taking such enforcement action;
(b) exercising any rights, discretions or powers; or
(c) granting consents or releases,
in each case as the Security Agent directs. In such circumstances the
Security Agent shall instruct the Secured Parties on the basis of the
instructions that the Security Agent receives in accordance with clause
27.21 (Instructions to Security Agent). No Secured Party shall be obliged
to take enforcement or other action where it is not permitted to do so
under the terms of the relevant Transaction Security Document or any
applicable law.
27.25.3 Each Secured Party agrees that it shall, for the purposes of this clause
27.25, be a "Recovering Finance Party" (as defined in clause 29.1 (Payments
to Finance Parties)) and that all proceeds recovered by it following
enforcement of Transaction Security referred to in clause 27.25.2 shall be
retained by it and/or paid to the Agent in accordance with clause 29
(Sharing Among the Finance Parties).
27.25.4 In respect of all liabilities, costs, claims, charges or expenses for
which the Obligors are liable under this Agreement, each Secured Party and
every employee, officer, agent or other person appointed by it in
connection with the Transaction Security Documents shall be entitled to be
indemnified out of the proceeds recovered pursuant to clause 27.25.2 in
respect of all liabilities, damages, costs, claims, charges or expenses
whatsoever properly incurred or suffered by such party:
(a) as a result of any breach by a member of the Group of any of its
obligations under any relevant Transaction Security Document; and
(b) in respect of any Environmental Claim made or asserted against an
Indemnified Party (as defined in clause 27.27.1 (Indemnity from Trust
Property)) which would not have arisen if the relevant Transaction
Security Documents had not been executed.
27.25.5 The rights conferred by this clause 27.25 are without prejudice to any
provision of the relevant Transaction Security Documents entitling the
Secured Party to an indemnity in respect of, and/or reimbursement of, any
liabilities, damages, costs, claims, charges or expenses incurred or
suffered by it in connection with any of the Transaction Security Documents
or the performance of any duties under any of the Transaction Security
Documents. Nothing contained in this clause 27.25 shall entitle a Secured
Party to be indemnified in respect of any liabilities, damages, costs,
claims, charges or expenses to the extent that the same arise from such
Secured Party's own gross negligence or wilful misconduct.
27.26 CO-OPERATION TO ACHIEVE AGREED PRIORITIES OF APPLICATION
The other Finance Parties shall co-operate with each other and with the
Security Agent and any receiver or administrator under the Transaction
Security Documents in realising the property and assets subject to the
Transaction Security Documents and in ensuring that the net proceeds
realised under the Transaction Security Documents after deduction of the
expenses of realisation are applied in accordance with clause 27.22 (Order
of application).
27.27 INDEMNITY FROM TRUST PROPERTY
27.27.1 In respect of all liabilities, costs, claims, charges or expenses for
which the Obligors are liable under this Agreement, the Security Agent and
every employee, officer, agent or other person appointed by it in
connection with its appointment under the Transaction Security Documents
(each an "INDEMNIFIED PARTY") shall be entitled to be indemnified out of
the Trust Property in respect of all liabilities, damages, costs, claims,
charges or expenses whatsoever properly incurred or suffered by an
Indemnified Party:
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(a) in the execution or exercise or bona fide purported execution or
exercise of the trusts, rights, powers, authorities, discretions and
duties created or conferred by or pursuant to the relevant Transaction
Security Documents;
(b) as a result of any breach by a member of the Group of any of its
obligations under any relevant Transaction Security Document;
(c) in respect of any Environmental Claim made or asserted against an
Indemnified Party which would not have arisen if the relevant
Transaction Security Documents had not been executed; and
(d) in respect of any matter or thing done or omitted in any way in
accordance with the terms of the Finance Documents relating to the
Trust Property or the provisions of any of the relevant Transaction
Security Documents.
27.27.2 The rights conferred by this clause 27.27 are without prejudice to any
right to indemnity by law given to trustees generally and to any provision
of the relevant Transaction Security Documents entitling the Security Agent
or any other person to an indemnity in respect of, and/or reimbursement of,
any liabilities, damages, costs, claims, charges or expenses incurred or
suffered by it in connection with any of the Transaction Security Documents
or the performance of any duties under any of the Transaction Security
Documents. Nothing contained in this clause 27.27 shall entitle the
Security Agent or any other person to be indemnified in respect of any
liabilities, damages, costs, claims, charges or expenses to the extent that
the same arise from such person's own gross negligence or wilful
misconduct.
27.28 FINANCE PARTIES TO PROVIDE INFORMATION
The Finance Parties shall provide the Security Agent with such written
information as it may reasonably require for the purposes of carrying out
its duties and obligations under the Transaction Security Documents and, in
particular, with such necessary directions in writing so as to enable the
Security Agent to make the calculations and applications contemplated by
clause 27.22 (Order of application) and to apply amounts received under,
and the proceeds of realisation of, the relevant Transaction Security
Documents as contemplated by such Transaction Security Documents, clause
30.5 (Partial payments) and clause 27.22 (Order of application).
27.29 RELEASE TO FACILITATE ENFORCEMENT AND REALISATION
Each Finance Party acknowledges that pursuant to any enforcement action by
the Security Agent (or a Receiver) carried out on the instructions of the
Agent it may be desirable for the purpose of such enforcement and/or
maximising the realisation of the Charged Property being enforced against,
that any rights or claims of or by the Security Agent (for the benefit of
the Finance Parties) and/or any Finance Parties against any Obligor and/or
any Security over any assets of any Obligor (in each case) as contained in
or created by any Transaction Security Document, other than such rights or
claims or security being enforced, be released in order to facilitate such
enforcement action and/or realisation and, notwithstanding any other
provision of the Finance Documents, each Finance Party hereby irrevocably
authorises the Security Agent (acting on the instructions of the Agent) to
grant any such releases to the extent necessary to fully effect such
enforcement action and realisation including, without limitation, to the
extent necessary for such purposes to execute release documents in the name
of and on behalf of the Finance Parties. Where the relevant enforcement is
by way of disposal of shares in a member of the Group, the requisite
release shall include releases of all claims (including under guarantees)
of the Finance Parties and/or the Security Agent against such member of the
Group or any of its Subsidiaries and of all Security over the assets of
such member of the Group or any of its Subsidiaries.
28 CONDUCT OF BUSINESS BY THE FINANCE PARTIES
28.1 FINANCE PARTIES TAX AFFAIRS
No provision of this Agreement will:
28.1.1 interfere with the right of any Finance Party to arrange its affairs (tax
or otherwise) in whatever manner it thinks fit;
137
28.1.2 oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of
any claim; or
28.1.3 oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.
28.2 MAJORITY LENDERS
28.2.1 Where any Finance Document provides for any matter to be determined by
reference to the opinion of the Majority Lenders or to be subject to the
consent or request of the Majority Lenders or for any action to be taken on
the instructions of the Majority Lenders, such opinion, consent, request or
instructions shall (as between the Lenders) only be regarded as having been
validly given or issued by the Majority Lenders if all the Lenders shall
have received prior notice of the matter on which such opinion, consent,
request or instructions are required to be obtained and the relevant
majority of Lenders shall have given or issued such opinion, consent,
request or instructions. However (as between the Obligors and the Finance
Parties) the Obligors shall each be entitled (and bound) to assume that
such notice shall have been duly received by each Lender and that the
relevant majority shall have been obtained to constitute Majority Lenders
when notified to this effect by the Agent whether or not this is the case.
28.2.2 If, within ten Business Days of the Agent despatching to each Lender a
notice requesting instructions (or confirmation of instructions) from the
Lenders or the agreement of the Lenders to any amendment, modification,
waiver, variation or excuse of performance for the purposes of, or in
relation to, any of the Finance Documents, the Agent has not received a
reply specifically giving or confirming or refusing to give or confirm the
relevant instructions or, as the case may be, approving or refusing to
approve the proposed amendment, modification, waiver, variation or excuse
of performance, then (irrespective of whether such Lender responds at a
later date) the Agent shall treat any Lender which has not so responded as
having indicated a desire to be bound by the wishes of 662/3 per cent. of
those Lenders (measured in terms of the total Commitments of those Lenders)
which have so responded.
28.2.3 For the purposes of clause 28.2.2, any Lender which notifies the Agent of
a wish or intention to abstain on any particular issue shall be treated as
if it had not responded.
28.2.4 Clauses 28.2.2 and 28.2.3 shall not apply in relation to those matters
referred to in, or the subject of, clause 36.2 (Exceptions).
28.3 CONFLICTS
28.3.1 The Borrower acknowledges that the Arranger and its respective parent
undertakings, subsidiary undertakings and fellow subsidiary undertakings
(together the "ARRANGER GROUP") may be providing debt finance, equity
capital or other services (including financial advisory services) to other
persons with which the Borrower may have conflicting interests in respect
of the Facilities or otherwise.
28.3.2 No member of the Arranger Group shall use confidential information from
the Borrower by virtue of the Facilities or its relationships with the
Borrower in connection with their performance of services for other
persons. This shall not, however, affect any obligations that any member of
the Arranger Group has as Agent in respect of the Finance Documents. The
Borrower also acknowledges that no member of the Arranger Group has any
obligation to use or furnish to the Borrower information obtained from
other persons for their benefit.
28.3.3 The terms "PARENT UNDERTAKING", "SUBSIDIARY UNDERTAKING" and "FELLOW
SUBSIDIARY UNDERTAKING" when used in this clause have the meaning given to
them in sections 258 and 259 of the Act.
29 SHARING AMONG THE FINANCE PARTIES
29.1 PAYMENTS TO FINANCE PARTIES
If a Finance Party (a "RECOVERING FINANCE PARTY") receives or recovers any
amount from an Obligor other than in accordance with clause 30 (Payment
Mechanics) and applies that amount to a payment due under the Finance
Documents then:
138
29.1.1 the Recovering Finance Party shall, within two Business Days, notify
details of the receipt or recovery, to the Agent;
29.1.2 the Agent shall exclusively determine whether the receipt or recovery is
in excess of the amount the Recovering Finance Party would have been paid
had the receipt or recovery been received or made by the Agent and
distributed in accordance with clause 30 (Payment Mechanics), without
taking account of any Tax which would be imposed on the Agent in relation
to the receipt, recovery or distribution; and
29.1.3 the Recovering Finance Party shall, within two Business Days of demand by
the Agent, pay to the Agent an amount (the "SHARING PAYMENT") equal to such
receipt or recovery less any amount which the Agent exclusively determines
may be retained by the Recovering Finance Party as its share of any payment
to be made, in accordance with clause 30.5 (Partial payments).
29.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other than
the Recovering Finance Party) in accordance with clause 30.5 (Partial
payments).
29.3 RECOVERING FINANCE PARTY'S RIGHTS
29.3.1 On a distribution by the Agent under clause 29.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the rights of
the Finance Parties which have shared in the redistribution.
29.3.2 If and to the extent that the Recovering Finance Party is not able to
rely on its rights under clause 29.3.1, the Borrower shall procure that the
relevant Obligor shall be liable to the Recovering Finance Party for a debt
equal to the Sharing Payment which is immediately due and payable.
29.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a Recovering
Finance Party becomes repayable and is repaid by that Recovering Finance
Party, then:
29.4.1 each Finance Party which has received a share of the relevant Sharing
Payment pursuant to clause 29.2 (Redistribution of payments) shall, upon
request of the Agent, pay to the Agent for account of that Recovering
Finance Party an amount equal to the appropriate part of its share of the
Sharing Payment (together with an amount as is necessary to reimburse that
Recovering Finance Party for its proportion of any interest on the Sharing
Payment which that Recovering Finance Party is required to pay); and
29.4.2 that Recovering Finance Party's rights of subrogation in respect of any
reimbursement shall be cancelled and the Borrower shall procure that the
relevant Obligor will be liable to the reimbursing Finance Party for the
amount so reimbursed.
29.5 EXCEPTIONS
29.5.1 This clause 29 shall not apply to the extent that the Recovering Finance
Party would not, after making any payment pursuant to this clause, have a
valid and enforceable claim against the relevant Obligor in respect of such
payment.
29.5.2 A Recovering Finance Party is not obliged to share with any other Finance
Party any amount which the Recovering Finance Party has received or
recovered as a result of taking legal or arbitration proceedings, if:
(a) it notified the other Finance Party of the legal or arbitration
proceedings; and
(b) the other Finance Party had an opportunity to participate in those
legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.
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SECTION 11: ADMINISTRATION
30 PAYMENT MECHANICS
30.1 PAYMENTS TO THE AGENT
30.1.1 On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document that Obligor or Lender shall make the same
available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds specified
by the Agent as being customary at the time for settlement of transactions
in the relevant currency in the place of payment.
30.1.2 Payment shall be made to such account in the principal financial centre
of the country of that currency (or, in relation to euro, in a principal
financial centre in a Participating Member State or London) with such bank
as the Agent specifies.
30.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Finance Documents for another
party shall, subject to clause 30.3 (Distributions to an Obligor) and
clause 30.4 (Clawback) be made available by the Agent as soon as
practicable after receipt to the party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account of
its Facility Office), to such account as that party may notify to the Agent
by not less than five Business Days' notice with a bank in the principal
financial centre of the country of that currency (or, in relation to euro,
in the principal financial centre of a Participating Member State or
London).
30.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent may (with the consent of the Obligor or in accordance with clause
31 (Set-off)) apply any amount received by it for that Obligor in or
towards payment (on the date and in the currency and funds of receipt) of
any amount due from that Obligor under the Finance Documents or in or
towards purchase of any amount of any currency to be so applied.
30.4 CLAWBACK
30.4.1 Where a sum is to be paid to the Agent under the Finance Documents for
another party, the Agent is not obliged to pay that sum to that other party
(or to enter into or perform any related exchange contract) until it has
been able to establish to its satisfaction that it has actually received
that sum.
30.4.2 If the Agent pays an amount to another party and it proves to be the case
that the Agent had not actually received that amount, then the party to
whom that amount (or the proceeds of any related exchange contract) was
paid by the Agent shall on demand refund the same within two Business Days
to the Agent together with interest on that amount from the date of payment
to the date of receipt calculated by the Agent to reflect its cost of
funds.
30.5 PARTIAL PAYMENTS
30.5.1 If the Agent receives a payment for application against amounts due in
respect of any Finance Documents that is insufficient to discharge all the
amounts then due and payable by an Obligor under those Finance Documents,
the Agent shall apply that payment towards the obligations of that Obligor
under those Finance Documents in the following order:
(a) FIRST, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent and the Security Agent under those Finance
Documents (other than any Hedge Agreement);
(b) SECONDLY, in or towards payment to the Lenders pro rata of any amount
owing to the Lenders under clause 27.10 (Lenders' indemnity to the
Agent) or any amount resulting from the indemnity to the Security
Agent under clause 27.20 (Application of certain clauses to Security
Agent);
140
(c) THIRDLY, in or towards payment pro rata of any accrued interest, fee
or commission due but unpaid under those Finance Documents (other than
any Hedge Agreement);
(d) FOURTHLY, in or towards payment pro rata of any principal due but
unpaid under those Finance Documents (other than any Hedge Agreement);
(e) FIFTHLY, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents (other than any Hedge Agreement);
and
(f) SIXTHLY, in or towards payment pro rata to the Original Hedge
Counterparty or any other Hedge Counterparty of any sums owing to it
under any Hedge Agreement.
30.5.2 The Agent shall, if so directed by the Majority Lenders, vary the order
set out in paragraphs (b) to (f) of clause 30.5.1.
30.5.3 Clauses 30.5.1 and 30.5.2 will override any appropriation made by an
Obligor.
30.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.
30.7 BUSINESS DAYS
30.7.1 Any payment which is due to be made on a day that is not a Business Day
shall be made on the next Business Day in the same calendar month (if there
is one) or the preceding Business Day (if there is not).
30.7.2 During any extension of the due date for payment of any principal or
Unpaid Sum under this Agreement interest is payable on the principal or
Unpaid Sum at the rate payable on the original due date.
30.8 CURRENCY OF ACCOUNT
30.8.1 Subject to clauses 30.8.2 to 30.8.5, the dollar is the currency of
account and payment for any sum due from an Obligor under any Finance
Document.
30.8.2 A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum
shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.
30.8.3 Each payment of interest shall be made in the currency in which the sum
in respect of which the interest is payable was denominated when that
interest accrued.
30.8.4 Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
30.8.5 Any amount expressed to be payable in a currency other than the dollar
shall be paid in that other currency.
30.9 CHANGE OF CURRENCY
30.9.1 Unless otherwise prohibited by law, if more than one currency or currency
unit are at the same time recognised by the central bank of any country as
the lawful currency of that country, then:
(a) any reference in the Finance Documents to, and any obligations arising
under the Finance Documents in, the currency of that country shall be
translated into, or paid in, the currency or currency unit of that
country designated by the Agent (after consultation with the
Borrower); and
(b) any translation from one currency or currency unit to another shall be
at the official rate of exchange recognised by the central bank for
the conversion of that currency or currency unit into the other,
rounded up or down by the Agent (acting reasonably).
141
30.9.2 If a change in any currency of a country occurs, this Agreement will, to
the extent the Agent (acting reasonably and after consultation with the
Borrower) specifies to be necessary, be amended to comply with any
generally accepted conventions and market practice in the Relevant
Interbank Market and otherwise to reflect the change in currency.
31 SET-OFF
A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party to
that Obligor, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.
32 NOTICES
32.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax or registered letter.
32.2 ADDRESSES
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:
32.2.1 in the case of the Borrower, that identified with its name below;
32.2.2 in the case of each Lender or any other Obligor, that notified in writing
to the Agent on or prior to the date on which it becomes a party; and
32.2.3 in the case of the Agent or the Security Agent, that identified with its
name below,
or any substitute address, fax number or department or officer as the party
may notify to the Agent (or the Agent may notify to the other parties, if a
change is made by the Agent) by not less than five Business Days' notice.
32.3 DELIVERY
32.3.1 Any communication or document made or delivered by one person to another
under or in connection with the Finance Documents will only be effective:
(a) if by way of fax, when received in legible form; or
(b) if by way of registered letter, when it has been left at the relevant
address or five Business Days after being deposited in the post
postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its
address details provided under clause 32.2 (Addresses), if addressed to
that department or officer.
32.3.2 Any communication or document to be made or delivered to the Agent or the
Security Agent will be effective only when actually received by the Agent
or Security Agent and then only if it is expressly marked for the attention
of the department or officer identified with the Agent's or Security
Agent's signature below (or any substitute department or officer as the
Agent or Security Agent shall specify for this purpose).
32.3.3 All notices from or to an Obligor shall be sent through the Agent.
32.3.4 Any communication or document made or delivered to the Borrower in
accordance with this clause 32.3 will be deemed to have been made or
delivered to each of the Obligors.
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32.4 NOTIFICATION OF ADDRESS AND FAX NUMBER
Promptly upon receipt of notification of an address or fax number or change
of address or fax number pursuant to clause 32.2 (Addresses) or changing
its own address or fax number, the Agent shall notify the other Parties.
32.5 ELECTRONIC COMMUNICATION
32.5.1 Any communication to be made between the Agent or the Security Agent and
a Lender under or in connection with the Finance Documents may be made by
electronic mail or other electronic means, if the Agent, the Security Agent
and the relevant Lender:
(a) agree that, unless and until notified to the contrary, this is to be
an accepted form of communication;
(b) notify each other in writing of their electronic mail address and/or
any other information required to enable the sending and receipt of
information by that means; and
(c) notify each other of any change to their address or any other such
information supplied by them.
32.5.2 Any electronic communication made between the Agent and a Lender or the
Security Agent will be effective only when actually received in readable
form and in the case of any electronic communication made by a Lender to
the Agent or the Security Agent only if it is addressed in such a manner as
the Agent or Security Agent shall specify for this purpose.
32.6 USE OF WEBSITES
32.6.1 The Borrower may satisfy its obligation under this Agreement to deliver
any information in relation to those Lenders (the "WEBSITE LENDERS") who
accept this method of communication by posting this information onto an
electronic website designated by the Borrower and the Agent (the
"DESIGNATED WEBSITE") if:
(a) the Agent expressly agrees (after consultation with each of the
Lenders) that it will accept communication of the information by this
method;
(b) both the Borrower and the Agent are aware of the address of and any
relevant password specifications for the Designated Website; and
(c) the information is in a format previously agreed between the Borrower
and the Agent.
If any Lender (a "PAPER FORM LENDER") does not agree to the delivery of
information electronically then the Agent shall notify the Borrower
accordingly and the Borrower shall at its own cost supply the information
to the Agent (in sufficient copies for each Paper Form Lender) in paper
form. In any event the Borrower shall at its own cost supply the Agent with
at least one copy in paper form of any information required to be provided
by it.
32.6.2 The Agent shall supply each Website Lender with the address of and any
relevant password specifications for the Designated Website following
designation of that website by the Borrower and the Agent.
32.6.3 The Borrower shall promptly upon becoming aware of its occurrence notify
the Agent if:
(a) the Designated Website cannot be accessed due to technical failure;
(b) the password specifications for the Designated Website change;
(c) any new information which is required to be provided under this
Agreement is posted onto the Designated Website;
(d) any existing information which has been provided under this Agreement
and posted onto the Designated Website is amended; or
143
(e) the Borrower becomes aware that the Designated Website or any
information posted onto the Designated Website is or has been infected
by any electronic virus or similar software.
If the Borrower notifies the Agent under paragraphs (a) or (e) above, all
information to be provided by the Borrower under this Agreement after the
date of that notice shall be supplied in paper form unless and until the
Agent and each Website Lender is satisfied that the circumstances giving
rise to the notification are no longer continuing.
32.6.4 Any Website Lender may request, through the Agent, one paper copy of any
information required to be provided under this Agreement which is posted
onto the Designated Website. The Borrower shall at its own cost comply with
any such request within ten Business Days.
32.7 ENGLISH LANGUAGE
32.7.1 Any notice given under or in connection with any Finance Document must be
in English.
32.7.2 All other documents provided under or in connection with any Finance
Document must be:
(a) in English; or
(b) if not in English, and if so required by the Agent, accompanied by a
certified English translation and, in this case, the English
translation will prevail unless the document is a constitutional,
statutory or other official document.
32.8 NO PERSONAL LIABILITY
If an individual signs a certificate on behalf of any member of the Group
and the certificate proves to be incorrect, the individual will incur no
personal liability as a result, unless the individual acted fraudulently in
giving the certificate. In this case any liability of the individual will
be determined in accordance with applicable law.
33 CALCULATIONS AND CERTIFICATES
33.1 FINANCE PARTY ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
33.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount
under any Finance Document is, in the absence of manifest error, conclusive
evidence of the matters to which it relates.
33.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number
of days elapsed and a year of 360 days or, in any case where the practice
in the Relevant Interbank Market differs, in accordance with that market
practice.
34 PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be
affected or impaired.
35 REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party or Secured Party, any right or remedy under the Finance
Documents shall operate as a waiver, nor shall any single or
144
partial exercise of any right or remedy prevent any further or other
exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
36 AMENDMENTS AND WAIVERS
36.1 REQUIRED CONSENTS
36.1.1 Subject to clause 36.2 (Exceptions) any term of this Agreement may be
amended or waived only with the consent of the Majority Lenders and the
Borrower and any such amendment or waiver will be binding on all Parties.
36.1.2 The Agent may (or in the case of Transaction Security Documents, instruct
the Security Agent to) effect, on behalf of any Finance Party, any
amendment or waiver permitted by this clause 36.
36.2 EXCEPTIONS
36.2.1 An amendment or waiver that has the effect of changing or which relates
to:
(a) the definition of "Majority Lenders" in clause 1.1 (Definitions);
(b) an extension to the date of payment of any amount under the Finance
Documents;
(c) a reduction in the Margin or a reduction in the amount of any payment
of principal, interest, fees or commission payable;
(d) a change in currency of payment of any amount under the Finance
Documents;
(e) an increase in or an extension of any Commitment or the Total
Commitments;
(f) release of any Security Provider other than in accordance with clause
26 (Matters concerning the Obligors);
(g) any provision which expressly requires the consent of all the Lenders;
(h) clause 2.2 (Finance Parties' rights and obligations), clause 8
(Mandatory Prepayment), clause 25 (Changes to the Lenders) or this
clause 36;
(i) the nature or scope of the Charged Property (other than resulting from
a Permitted Disposal or Permitted Transaction or Third Party Disposal
(as defined in clause 26.3 (Resignation of a Security Provider)) or
resulting from the enforcement of the Transaction Security Documents)
or the manner in which the proceeds of enforcement of the Transaction
Security are distributed;
(j) the release of any Transaction Security unless (i) permitted or
required under this Agreement or any other Finance Document, (ii)
pursuant to or in connection with any enforcement of the Transaction
Security Documents including, pursuant to clause 27.29 (Release to
facilitate enforcement and realisation) or (iii) relating to a sale or
disposal of an asset which is the subject of the Transaction Security
where such sale or disposal is a Permitted Disposal or Permitted
Transaction or Third Party Disposal (as defined in clause 26.3
(Resignation of a Security Provider)) or is otherwise expressly
permitted under this Agreement or any other Finance Document,
shall not be made without the prior written consent of all the Lenders.
36.2.2 An amendment or waiver which relates to the rights or obligations of the
Agent, the Arranger or the Security Agent in each case in its capacity as
such may not be effected without the consent of the Agent, the Arranger or
the Security Agent.
36.2.3 Without prejudice to clause 26.4 (Resignation and release of security on
disposal) where any asset that is permitted to be disposed of by this
Agreement is subject to a specific Security created by any Transaction
Security Document, the consent of the Agent and/or the Security Agent (but
145
without prejudice to any other requisite consent requirement) shall not be
refused provided that no Default shall have occurred and be continuing (and
the Agent is irrevocably authorised by the Finance Parties to grant such
consent or, as appropriate, to instruct the Security Agent to grant such
consent or to direct such consent and the Security Agent and any other
relevant Secured Party may, at the cost and request of the Borrower, do
everything it considers necessary to release those assets from the
Transaction Security without, in any case, reference to them) and to the
extent required, hereby released from the restriction of section 181 of the
German Civil Code (BGB).
36.2.4 Notwithstanding clauses 36.2.1 to 36.2.3, the Agent may make technical
amendments to the Finance Documents arising out of manifest errors on the
face of the Finance Documents, where such amendments would not prejudice or
otherwise be adverse to the interests of any Finance Party without any
reference or consent of the Finance Parties.
37 COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.
38 PUBLICITY
The Borrower and all other Parties agree to any reasonable request by the
Arranger to publicise, and for the Arranger to be included in all publicity
relating to, the Acquisition.
39 PATRIOT ACT NOTICE
Each Lender and the Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that, pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower and its Subsidiaries, which information includes
the name and address of the Borrower and its Subsidiaries and other
information that will allow the Agent and each Lender to identify the
Borrower and its Subsidiaries in accordance with the Patriot Act, and the
Borrower agrees to provide such information from time to time to the Agent
or any Lender upon reasonable request to the extent such information is not
accessible by the relevant Lender or the Agent.
146
SECTION 12: GOVERNING LAW AND ENFORCEMENT
40 GOVERNING LAW
This Agreement is governed by English law.
41 JURISDICTION
41.1 The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including a dispute
regarding the existence, validity or termination of this Agreement) (a
"DISPUTE").
41.2 The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to
the contrary.
41.3 This clause 41 is for the benefit of the Finance Parties and Secured
Parties only. As a result, no Finance Party or Secured Party shall be
prevented from taking proceedings relating to a Dispute in any other courts
with jurisdiction. To the extent allowed by law, the Finance Parties and
Secured Parties may take concurrent proceedings in any number of
jurisdictions.
42 SERVICE OF PROCESS
42.1 Without prejudice to any other mode of service allowed under any relevant
law, the Borrower:
42.1.1 irrevocably appoints and undertakes to procure that each Obligor appoints
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇'▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇) as
its agent for service of process in relation to any proceedings before the
English courts in connection with any Finance Document; and
42.1.2 agrees that failure by a process agent to notify it or any relevant
Obligor of the process will not invalidate the proceedings concerned.
42.2 If any person appointed as process agent is unable for any reason to act as
agent for service of process, the Borrower (on behalf of all the Obligors)
must immediately (and in any event within ten days of such event taking
place) appoint another agent on terms acceptable to the Agent. Failing
this, the Agent may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of
this Agreement.
147
SCHEDULE 1
THE ORIGINAL PARTIES
PART I
THE ORIGINAL OBLIGORS
JURISDICTION
NAME OF BORROWER OF INCORPORATION CORPORATION NUMBER ADDRESS
---------------------------------------- ---------------- ------------------- ----------------------------------
Navios Maritime Holdings Inc. ▇▇▇▇▇▇▇▇ Islands 8116 Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ Islands
Attention: chief executive officer
REGISTRATION OR
CORPORATION NUMBER
JURISDICTION (OR OTHER
NAME OF ORIGINAL SECURITY PROVIDER OF INCORPORATION EQUIVALENT, IF ANY) ADDRESS
---------------------------------------- ---------------- ------------------- ----------------------------------
Achilles Shipping Corporation ▇▇▇▇▇▇▇▇ Islands 9882 Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ Islands
Alegria Shipping Corporation ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ Islands
Anemos Maritime Holdings Inc. ▇▇▇▇▇▇▇▇ Islands 9902 Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro,
MH96960, ▇▇▇▇▇▇▇▇ Islands
148
SIGNATURES
THE BORROWER
NAVIOS MARITIME HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Attorney-in-fact
Address: c/o Navios ShipManagement Inc.
143-145 ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇
THE ARRANGER
HSH NORDBANK AG
By: /s/ Yianni Cheilas, Attorney-in-fact
Address: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
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Attention: Shipping; Greek Clients
THE AGENT
HSH NORDBANK AG
By: /s/ Yianni Cheilas, Attorney-in-fact
Address: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
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Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping; Greek Clients
THE SECURITY AGENT
HSH NORDBANK AG
By: /s/ Yianni Cheilas, Attorney-in-fact
Address: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
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Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping; Greek Clients
187
ORIGINAL HEDGE COUNTERPARTY
HSH NORDBANK AG
By: /s/ Yianni Cheilas, Attorney-in-fact
Address: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
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Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping; Greek Clients
THE LENDERS
HSH NORDBANK AG
By: /s/ Yianni Cheilas, Attorney-in-fact
Address: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
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Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Shipping; Greek Clients
188
