EX-10.76 8 t1500098_ex10-76.htm EXHIBIT 10.76

    

Exhibit 10.76

 

[*]: THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

Execution Version

 

Dated 31 October 2014

 

EXPLORER NEW BUILD, LLC

as Borrower

 

- and -

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

 

- and -

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

SOCIÉTÉ GÉNÉRALE

HSBC BANK PLC

KFW IPEX-BANK GMBH

as Joint Mandated Lead Arrangers

 

- and -

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Agent

and SACE Agent

 

- and -

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Security Trustee

 

AMENDMENT AND RESTATEMENT AGREEMENT

 

relating to

a facility agreement originally dated 31 July 2013 for the part financing of the 738 passenger cruise
ship newbuilding Hull No. 6250 at Fincantieri-Cantieri Navali Italiani S.p.A

 

 
 

 

Index

 

Clause   Page
     
1 DEFINITIONS 4
2 AGREEMENT OF THE CREDITOR PARTIES 5
3 CONDITIONS PRECEDENT 5
4 REPRESENTATIONS AND WARRANTIES 5
5 AMENDMENT TO THE FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS 6
6 RELEASE OF THE EXISTING DOCUMENTS 6
7 FEES AND EXPENSES 6
8 COMMUNICATIONS 7
9 SUPPLEMENTAL 7
10 GOVERNING LAW AND JURISDICTION 7
     
Schedules  
   
Schedule 1 Lenders and Commitments 8
Schedule 2 Conditions precedent 9
Schedule 3 Amended and Restated Facility Agreement 10
Schedule 4 Form of Confirmation Notice 11
   
Execution  
   
Execution Pages 1

 

 
 

 

THIS AMENDMENT AND RESTATEMENT AGREEMENT is made on 31 October 2014

 

BETWEEN

 

(1)EXPLORER NEW BUILD, LLC, a limited liability company formed in the state of Delaware whose registered office is at Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808 United States of America as borrower (the "Borrower");

 

(2)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the "Lenders");

 

(3)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, SOCIÉTÉ GÉNÉRALE, KFW IPEX-BANK GMBH and HSBC BANK PLC as joint mandated lead arrangers (the "Joint Mandated Lead Arrangers");

 

(4)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as agent and SACE agent (the "Agent") and (the "SACE Agent"); and

 

(5)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as the security trustee (the "Security Trustee").

 

WHEREAS

 

(A)By a facility agreement dated 31 July 2013 and made between (i) the Borrower, (ii) the Lenders, (iii) the Joint Mandated Lead Arrangers, (iv) the Agent and the SACE Agent and (v) the Security Trustee pursuant to which the Lenders agreed to make available to the Borrower a loan facility of the Dollar Equivalent of up to EUR 299,866,962, for the purpose of (x) reimbursing the Borrower for the first instalment of the SACE premium paid by the Borrower and (y) assisting the Borrower in financing (i) payment under the Shipbuilding Contract of all or part of 80% of the Final Contract Price up to the Eligible Amount and (ii) payment to SACE of 100% of the second instalment of the SACE premium (the "Facility Agreement").

 

(B)Norwegian Cruise Line Holdings Ltd. ("NCLH"), Portland Merger Sub, Inc., an indirect wholly-owned subsidiary of NCLH ("Merger Sub") and Prestige Cruises International, Inc., the direct parent of Prestige Holdings ("PCI") have entered into an agreement and plan of merger dated 2 September 2014 (as amended from time to time) pursuant to which Merger Sub will be merged with and into PCI, with PCI surviving as an indirect subsidiary of NCLH.

 

(C)NCL Corporation Ltd., a direct wholly-owned subsidiary of NCLH and the entity that will become the parent of Prestige Holdings following the merger referred to at (B) above shall enter into a new Guarantee with the Security Trustee pursuant to which NCL Corporation Ltd. as guarantor will guarantee the obligations of the Borrower under the Facility Agreement. The existing Prestige Holdings Guarantee and the existing Seven Seas Guarantee shall be released on the terms set out in this Deed.

 

(D)The Borrower, the New Guarantor, the SACE Agent, the Security Trustee and SACE shall enter into a replacement SACE Reimbursement Agreement pursuant to which each of the Borrower and the New Guarantor will agree, jointly and severally, to indemnify, reimburse and covenant with SACE in respect of payments made by SACE under the SACE insurance policy. The existing SACE Reimbursement Agreement shall be terminated on the terms set out in this Deed.

 

(E)This Deed sets out the terms and conditions on which the parties hereto have, amongst other things, with effect from the Effective Date, agreed to amend and restate the Facility Agreement.

 

3
 

 

IT IS AGREED as follows:

 

1DEFINITIONS

 

1.1Defined terms. In this Agreement, unless the context otherwise requires:

 

"Amended and Restated Facility Agreement" means the Facility Agreement as amended and restated by this Agreement in the form set out in Schedule 3 (Amended and Restated Facility Agreement).

 

"Confirmation Notice" means the Confirmation Notice in the form attached at Schedule 4 to this Agreement.

 

"Effective Date" means the date on which the conditions precedent contained in Clause 3.1 (Conditions Precedent) have been satisfied.

 

"Facility Agreement" means the Facility Agreement more particularly referred to in Recital (A) above.

 

"Merger" means the merger described in Recital (B).

 

"New Guarantor" means NCL Corporation Ltd; a Bermuda Company with its registered office at Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda.

 

"New Guarantee" means the guarantee to be granted by the New Guarantor in favour of the Security Trustee on or before the Effective Date.

 

"New SACE Reimbursement Agreement" means the reimbursement agreement entered into on or before the Effective Date between the Borrower, the New Guarantor, the Agent, the SACE Agent, the Security Trustee and SACE.

 

"Prior Guarantors" means Seven Seas and Prestige Holdings.

 

1.2Defined expressions

 

Defined expressions in the Facility Agreement and the other Finance Documents shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.

 

1.3Application of construction and interpretation provisions of Facility Agreement

 

Clause 1.2 (construction) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.

 

1.4Agreed forms of new, and supplements to, Finance Documents

 

References in Clause 1.1 (Definitions) to any new or supplement to a Finance Document being in "agreed form" are to that Finance Document:

 

(a)in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Agent); or

 

(b)in any other form agreed in writing between the Borrower and the Agent acting with the authorisation of the Majority Lenders or, where clause 30.2 (variations, waivers etc. requiring agreement of all lenders) of the Facility Agreement applies, all the Lenders.

 

1.5Designation as a Finance Document

 

The Borrower and the Agent designate this Agreement as a Finance Document.

 

4
 

 

2AGREEMENT OF THE CREDITOR PARTIES

 

2.1Agreement of the Lenders

 

The Lenders have no objection, subject to and upon the terms and conditions of this Agreement, to the merger referred to in Recital (B) above and agree to the replacement of the Seven Seas Guarantee and the Prestige Holdings Guarantee with the New Guarantee to be issued by the New Guarantor and the consequential amendments to the Facility Agreement as more particularly set out in the Amended and Restated Facility Agreement.

 

2.2Agreement of the Creditor Parties

 

The Creditor Parties agree, subject to and upon the terms and conditions of this Agreement, to the consequential amendment of the Facility Agreement and the other Finance Documents in connection with the matters referred to in Clause 2.1 (Agreement of the Lenders).

 

2.3Effective Date

 

The agreement of the Lenders and the other Creditor Parties contained in Clauses 2.1 (Agreement of the Lenders) and 2.2 (Agreement of the Creditor Parties) shall have effect on and from the Effective Date.

 

3CONDITIONS PRECEDENT

 

3.1Conditions Precedent

 

The agreement of the Lenders and the other Creditor Parties contained in Clause 2.1 (Agreement of the Lenders) and 2.2 (Agreement of the Creditor Parties) is subject to:

 

(a)the Agent having received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent;

 

(b)a copy of the amendment to the SACE Policy confirming that the SACE Policy remains in full force and effect notwithstanding the amendments to the Loan Agreement and the replacement of the Guarantee in form satisfactory to the Lenders; and

 

(c)the Agent receives the Confirmation Notice signed by the Borrower and the New Guarantor confirming that (i) the Merger has taken place, (ii) there is no Default continuing on the Effective Date or resulting from the occurrence of the Effective Date and (iii) the Repeating Representations to be made by each Obligor are true in all material respects on the Effective Date.

 

3.2Confirmation of receipt

 

The Agent agrees to (i) provide prompt notice to the Borrower following receipt of each of the conditions precedent set out in paragraph (a) and (b) of Clause 3.1 (Conditions Precedent) and (ii) notify the Lenders promptly following the occurrence of the Effective Date.

 

4REPRESENTATIONS AND WARRANTIES

 

4.1Repetition of Facility Agreement representations and warranties. The Borrower represents and warrants to each Secured Party that the representations and warranties in clause 11 (Representations and Warranties) of the Amended and Restated Facility Agreement (the "Repeating Representations"), remain true and not misleading if repeated on the date of this Agreement with reference to the circumstances now existing.

 

5
 

 

5AMENDMENT TO THE FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS

 

5.1Amendments to Facility Agreement. With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to be, amended and restated in the form of the Amended and Restated Facility Agreement and, as so amended and restated, the Facility Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

 

5.2Amendments to Finance Documents

 

With effect on and from the Effective Date each of the Finance Documents other than the Facility Agreement, shall be, and shall be deemed by this Agreement to be, amended as follows:

 

(a)the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and restated by this Agreement;

 

(b)by construing references throughout each of the Finance Documents to "this Agreement", "this Deed" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.

 

5.3Finance Documents to remain in full force and effect

 

The Finance Documents shall remain in full force and effect:

 

(a)in the case of the Facility Agreement as amended and restated pursuant to Clause 5.1 (Amendments to the Facility Agreement);

 

(b)in the case of the Finance Documents other than the Facility Agreement as amended and supplemented by the amendments to such Finance Documents contained or referred to in Clause 5.2 (Amendments to Finance Documents); and

 

(c)such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.

 

6RELEASE OF THE EXISTING DOCUMENTS

 

6.1Guarantees and SACE Reimbursement Agreement. The Security Trustee shall:

 

(a)execute a deed of release in respect of the Seven Seas Guarantee and the Prestige Holdings Guarantee; and

 

(b)execute and procure that SACE shall execute a release of the SACE Reimbursement Agreement,

 

and deliver the same to each Prior Guarantor on the Effective Date.

 

7FEES AND EXPENSES

 

7.1Expenses. All costs, fees, charges and expenses incurred (including, without limitation, all legal fees and expenses reasonably incurred) by the Agent and/or the Security Trustee in connection with the preparation, negotiation and execution of this Agreement shall be for the account of the Borrower.

 

6
 

 

8COMMUNICATIONS

 

8.1Communications. The provisions of clause 31 (Notices) of the Amended and Restated Facility Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

 

9SUPPLEMENTAL

 

9.1Counterparts. This Agreement 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 this Agreement.

 

9.2Third party rights. A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement.

 

10GOVERNING LAW AND JURISDICTION

 

10.1Governing law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of England.

 

10.2Jurisdiction. The provisions of clause 35 (Enforcement) of the Facility Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

 

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

 

7
 

 

Schedule 1

 

Lenders and Commitments

 

Lender  Facility Office  Commitment
(%)
 
        
Crédit Agricole Corporate and Investment Bank  9 quai du Président Paul Doumer
92920 Paris La Défense Cedex
France
   [*]%
         
HSBC Bank plc  Level 2, 8 Canada Square
London E14 5HQ
United Kingdom
   [*]%
         
Société Générale  29 Boulevard Haussmann
75009 Paris
France
   [*]%
         
KfW IPEX-Bank GmbH  KfW IPEX-Bank GmbH
Palmengartenstr. 5-9
60325 Frankfurt
Germany
   [*]%

 

8
 

 

Schedule 2

 

Conditions precedent

 

(a)a duly executed original of this Agreement, the New Guarantee and the New SACE Reimbursement Agreement;

 

(b)an officer’s certificate of the New Guarantor:

 

(i)attaching a copy of a resolution of the board of directors (A) approving the terms of, and the transactions contemplated by, and resolving that it will execute the New Guarantee, the New SACE Reimbursement Agreement and any ancillary documentation and (B) authorising a specified person or persons to execute the New Guarantee, the New SACE Reimbursement Agreement and any ancillary documentation on its behalf;

 

(ii)attaching a certified copy of the New Guarantor’s constitutional documents; and

 

(iii)attaching a specimen of the signature of each person authorised by the resolution;

 

(c)an officer’s certificate of the Borrower:

 

(i)attaching a copy of a resolution of the board of directors (A) approving the terms of, and the transactions contemplated by, and resolving that it will execute this Agreement, the New SACE Reimbursement Agreement and any ancillary documentation and (B) authorising a specified person or persons to execute this Agreement, the New SACE Reimbursement Agreement and any ancillary documentation on its behalf;

 

(ii)confirming there have been no changes to the Borrower’s constitutional documents since the date of the Facility Agreement; and

 

(iii)attaching a specimen of the signature of each person authorised by the resolution;

 

(d)favourable legal opinions from lawyers appointed by the Agent (acting on behalf of the Lenders) and SACE on such matters concerning English law, Delaware law and Bermuda law as the Agent (acting on behalf of the Lenders) may reasonably require to include, inter alia, the matters contemplated by Clause 3.2 of the Facility Agreement; and

 

(e)confirmation from EC3 Services Limited that it will act:

 

(i)for the New Guarantor as agent for service of process in England in respect of the New Guarantee, the New SACE Reimbursement Agreement and any other Finance Document to which the New Guarantor is a party; and

 

(ii)for the Borrower in connection with this Agreement and the Amended and Restated Facility Agreement.

 

9
 

 

Schedule 3

 

Amended and Restated Facility Agreement

 

10
 

 

Dated 31 July 2013

 

as amended and restated by an Amendment and Restatement Agreement dated         October 2014

 

EXPLORER NEW BUILD, LLC

as Borrower

 

– and –

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

 

– and –

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

SOCIÉTÉ GÉNÉRALE

HSBC BANK PLC

KFW IPEX-BANK GMBH

as Joint Mandated Lead Arrangers

 

– and–

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Agent

and SACE Agent

 

– and–

 

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Security Trustee

 

AMENDED AND RESTATED LOAN AGREEMENT

 

relating to the part financing of the 738 passenger cruise ship
newbuilding presently designated as
Hull No. 6250 at Fincantieri-Cantieri Navali Italiani S.p.A

 

 
 

  

Index

  

Clause   Page
     
1. Interpretation 2
2. Facility 23
3. Conditions Precedent 25
4. Drawdown 31
5. Repayment 33
6. Interest 34
7. Interest Periods 37
8. SACE Premium and Italian Authorities 37
9. Fees 39
10. Taxes, Increased Costs, Costs and Related Charges 40
11. Representations and Warranties 46
12. General Undertakings 51
13. Ship Undertakings 58
14. Insurance Undertakings 64
15. Security Value Maintenance 68
16. Cancellation, Prepayment and Mandatory Prepayment 69
17. Interest on Late Payments 71
18. Events of Default 72
19. Application of Sums Received 76
20. Indemnities 77
21. Illegality, etc. 79
22. Set-Off 81
23. Changes to the Lenders 82
24. Changes to the Obligors 86
25. Role of the Agent and the Joint Mandated Lead Arrangers 86
26. The Security Trustee 92
27. Conduct of Business by the Creditor Parties 104
28. Sharing Among the Creditor Parties 104
29. Payment Mechanics 105
30. Variations and Waivers 107
31. Notices 109
32. Confidentiality 111
33. Supplemental 114
34. Governing Law 114
35. Enforcement 115

 

Schedule 1 Lenders and Commitments 116
Schedule 2 Form of Drawdown Notice 117
Schedule 3 Documents to be produced by the Builder to the Agent on Delivery 118
Schedule 4 Form of Transfer Certificate 119
Schedule 5 Qualifying Certificate 123
Execution Pages 125

 

 
 

 

THIS AGREEMENT is made 31 July 2013 as amended and restated by the Amendment and Restatement Agreement on       October 2014

 

PARTIES

 

(1)EXPLORER NEW BUILD, LLC, a limited liability company formed in the state of Delaware whose registered office is at Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808 United States of America as borrower (the "Borrower");

 

(2)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the "Lenders");

 

(3)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, SOCIÉTÉ GÉNÉRALE, KFW IPEX-BANK GMBH and HSBC BANK PLC as joint mandated lead arrangers (the "Joint Mandated Lead Arrangers");

 

(4)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as agent and SACE agent (the "Agent") and (the "SACE Agent"); and

 

(5)CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as the security trustee (the "Security Trustee").

 

BACKGROUND

 

(A)By a memorandum of agreement dated October 12th, 2012 (the "MOA") (as amended from time to time) entered into between (i) Fincantieri - Cantieri Navali Italiani SpA, a company incorporated in Italy with registered office in Trieste, via Genova, 1, and having fiscal code 00397130584 (the "Builder") and (ii) Prestige Cruise Holdings, Inc. and a shipbuilding contract dated 21 June 2013 (together with the MOA, the "Shipbuilding Contract") entered into between (i)  the Builder and (ii) the Borrower, the Builder has agreed to design, construct and deliver, and the Borrower has agreed to purchase, a 738 passenger cruise ship currently having hull number 6250 as more particularly described in the Shipbuilding Contract to be delivered on 30 June 2016 subject to any adjustments of such delivery date in accordance with the Shipbuilding Contract.

 

(B)The total price payable by the Borrower to the Builder under the Shipbuilding Contract is EUR 343,000,000 (the "Initial Contract Price") payable on the following terms:

 

(i)as to [*]%, being EUR [*], by an initial payment which is to be within 5 Business Days after the effective date of the Shipbuilding Contract in accordance with Article 10.1(A) of the Shipbuilding Contract;

 

(ii)as to [*]%, being EUR [*], on the later of the date of commencement of steel cutting and the date falling 24 months prior to the Delivery Date;

 

(iii)as to [*]%, being EUR [*], on the later of keel laying and the date falling 12 months prior to the Delivery Date;

 

(iv)as to [*]%, being EUR [*], on the later of float out and the date falling 9 months prior to the Delivery Date; and

 

(v)as to [*]%, being EUR [*], on delivery of the Ship,

 

as each such event is described in the Shipbuilding Contract.

 

(C)The Initial Contract Price may be (i) increased or decreased from time to time under Article 24 of the Shipbuilding Contract in the event that the Borrower requests, and the Builder agrees, modifications to the specification or plans constituting a part of the Shipbuilding

 

 
 

  

Contract or in the event that, subsequent to the date of the Shipbuilding Contract, variations are made to its provisions compliance with which is compulsory, the net cost of all such variations being payable on the Delivery Date (the "Change Orders"); and (ii) decreased at delivery of the Ship under Articles 13, 14, 16, 17, 19 and 20 of the Shipbuilding Contract (in aggregate the "Liquidated Damages") or by mutual agreement between the parties (the Initial Contract Price adjusted as aforesaid being the "Final Contract Price").

 

(D)By a loan agreement dated 31 July 2013 entered into between (i) the Borrower, (ii) the Lenders, (iii) the Joint Mandated Lead Arrangers, (iv) the Agent and the SACE Agent and (v) the Security Trustee, the Lenders have agreed to make available to the Borrower a Dollar loan facility for the purpose of assisting the Borrower in financing, subject to exchange rate fluctuations, up to 80% of the Final Contract Price and 100% of the SACE Premium.

 

(E)By the Amendment and Restatement Agreement, the parties thereto agreed to, among other things, (1) the Guarantor replacing the Prior Guarantors as a guarantor of the obligations of the Borrower under this Agreement and (2) the amending and restating of this Agreement pursuant to the terms set forth herein.

 

OPERATIVE PROVISIONS

 

1.Interpretation

 

1.1Definitions

 

Subject to Clause 1.5 (General Interpretation), in this Agreement:

 

"Affiliate" means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

 

"Affected Lender" has the meaning given in Clause 6.5 (Market disruption).

 

"Agent" means Crédit Agricole Corporate and Investment Bank, a French "société anonyme", having a share capital of EUR 7,254,575,271 and its registered office located at 9, Quai du Président Paul Doumer, 92920 Paris La Défense cedex, France, registered under the n° Siren 304 187 701 at the Registre du Commerce et des Sociétés of Nanterre or any successor of it appointed under Clause 25 (Role of the Agent and the Joint Mandated Lead Arrangers).

 

"Amendment and Restatement Agreement" means the amendment and restatement agreement dated       October 2014 and made between (i) the Borrower, (ii) the Lenders, (iii) the Joint Mandated Lead Arrangers, (iv) the Agent and the SACE Agent and (v) the Security Trustee.

 

"Annex VI"means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997, 2005, 2007, 2008, 2010 and 2012).

 

"Approved Broker" means Clarkson PLC, Barry Rogliano Salles, RS Platou ASA, Fearnleys, Rocca & Partners or such other Shipbroker or ship valuer experienced in valuing cruise ships nominated by the Borrower and approved by the Agent and SACE.

 

"Approved Flag" means the Marshall Islands flag, the Bahamas flag or such other flag as the Agent may, with the authorisation of the Majority Lenders and SACE, approve from time to time.

 

"Approved Manager" means the Borrower, Seven Seas, Prestige Cruise Services Inc., or any other company (whether or not a member of the Group) which the Agent may, with the

 

2
 

  

authorisation of the Majority Lenders, approve from time to time as the manager of the Ship.

 

"Approved Manager's Undertaking" means, in the event that the Approved Manager is a company other than the Borrower (or Seven Seas, as bareboat charterer), a letter of undertaking executed or to be executed by the Approved Manager in favour of the Agent, which will include, without limitation, an agreement by the Approved Manager to subordinate its rights against the Ship and the Borrower to the rights of the Secured Parties under the Finance Documents, in the agreed form.

 

"Availability Period" means the period commencing on the date of this Agreement and ending on:

 

(a)the earlier to occur of (i) the Delivery Date and (ii) 25 February 2017 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower); or

 

(b)if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated.

 

"Base Rate" means one Euro for [*] Dollars.

 

"Builder" has the meaning given in Recital (A).

 

"Business Day" means a day (other than a Saturday or a Sunday) on which banks are open in London, Frankfurt, Rome and Paris and, in relation to any payment to be made to the Builder, Milan and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City.

 

"Certified Copy" means in relation to any document delivered or issued by or on behalf of any company, a copy of such document certified as a true, complete and up-to-date copy of the original by any of the directors or the secretary or assistant secretary or any attorney-in-fact for the time being of that company.

 

"Charged Property" means all of the assets which from time to time are, or are expressed to be, the subject of Security Interests pursuant to the Finance Documents.

 

"CIRR" (Commercial Interest Reference Rate) means 2.13% per annum or any other CIRR rate being the fixed rate for medium and long term export credits in Dollars applicable to the financing of the Ship according to the Organisation for Economic Co-operation and Development rules as determined by the competent Italian Authorities.

 

"CISADA" means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as it applies to non-US persons.

 

"Code" means the United States Internal Revenue Code of 1986.

 

"Commitment" means, in relation to a Lender, the percentage of the Maximum Loan Amount set opposite its name in Schedule 1 (Lenders and Commitments), or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments" means the aggregate of the Commitments of all the Lenders).

 

"Compliance Certificate" has the meaning given to the term "Compliance Certificate" in the Guarantee.

 

"Confidential Information" means all information relating to any Obligor, the Group, the Finance Documents or the Loan of which a Creditor Party becomes aware in its capacity as,

 

3
 

  

or for the purpose of becoming, a Creditor Party or which is received by a Creditor Party in relation to, or for the purpose of becoming a Creditor Party under, the Finance Documents or the Loan from either:

 

(a)any member of the Group or any of its advisers; or

 

(b)another Creditor Party, if the information was obtained by that Creditor Party directly or indirectly from any member of the Group or any of its advisers,

 

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

 

(i)is or becomes public information other than as a direct or indirect result of any breach by that Creditor Party of Clause 32 (Confidentiality)); or

 

(ii)is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

 

(iii)is known by that Creditor Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Creditor Party after that date, from a source which is, as far as that Creditor Party is aware, unconnected with the Group and which, in either case, as far as that Creditor Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

 

"Confidentiality Undertaking" means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrower and the Agent.

 

"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender.

 

"Conversion Rate" means the rate determined by the Agent on the Conversion Rate Fixing Date and notified to the Borrower as being the lower of:

 

(a)the Base Rate; or

 

(b)the FOREX Contracts Weighted Average Rate.

 

"Conversion Rate Fixing Date" means the date falling [*] days before the Intended Delivery Date.

 

"Corresponding Debt" means any amount, other than any Parallel Debt, which an Obligor owes to a Creditor Party under or in connection with the Finance Documents.

 

"Creditor Party" means the Agent, the Security Trustee, the SACE Agent, the Joint Mandated Lead Arrangers or any Lender, whether as at the date of this Agreement or at any later time.

 

"Delivery Date" means the date and time of delivery of the Ship by the Builder to the Borrower as stated in the Protocol of Delivery and Acceptance.

 

"Document of Compliance" has the meaning given to it in the ISM Code.

 

"Dollar Equivalent" means such amount in Dollars as is calculated by the Agent on the Conversion Rate Fixing Date to be the equivalent of an amount in Euro at the Conversion Rate.

 

4
 

  

"Dollars" and "$" means the lawful currency for the time being of the United States of America.

 

"Drawdown Date" means the date on which the Loan is drawn down and applied in accordance with Clause 2 (Facility).

 

"Drawdown Notice" means a notice in the form set out in Schedule 2 (Form of Drawdown Notice) (or in any other form which the Agent approves or reasonably requires).

 

"Earnings" means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or Seven Seas (as bareboat charterer) and which arise out of the use or operation of the Ship, including (but not limited to):

 

(a)all freight, hire, fare and passage moneys, compensation payable to the Borrower or the Agent in the event of requisition of the 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 the Ship;

 

(b)all moneys which are at any time payable under Insurances in respect of loss of earnings; and

 

(c)all moneys which are at any time payable to the Borrower in respect of the general average contribution;

 

(d)if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship.

 

"Effective Date" means the Effective Date defined in the Amendment and Restatement Agreement.

 

"Eligible Amount" means 80% of the lesser of:

 

(a)the Dollar Equivalent of EUR355,005,000; and

 

(b)the Dollar Equivalent of the Final Contract Price.

 

"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.

 

"Environmental Claim" means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

 

"Environmental Incident" means:

 

(a)any release, emission, spill or discharge into the Ship or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from the Ship; or

 

5
 

  

(b)any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or any Obligor and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

(c)any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where any Obligor and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.

 

"Environmental Law" means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

 

"Environmentally Sensitive Material" means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

 

"Euro" and "EUR" means the single currency of the Participating Member States.

 

"Event of Default" means any of the events or circumstances described in Clause 18.1 (Events of Default).

 

"Existing Indebtedness" means (a) Loan Agreement, dated as of July 18, 2008, by and among Marina New Build, LLC, as Borrower, the banks and financial institutions party thereto, Crédit Agricole Corporate and Investment Bank (formerly Calyon) and Société Générale, as Mandated Lead Arrangers, and Crédit Agricole Corporate and Investment Bank, as Agent and as SACE Agent (as amended from time to time); (b) Loan Agreement, dated as of July 18, 2008, by and among Riviera New Build, LLC, as Borrower, the banks and financial institutions party thereto, Crédit Agricole Corporate and Investment Bank (formerly Calyon) and Société Générale, as Mandated Lead Arrangers, and Crédit Agricole Corporate and Investment Bank, as Agent and as SACE Agent (as amended from time to time); (c) Credit Agreement, dated as of July 2, 2013, among Oceania Cruises, Inc., OCI Finance Corp., as Borrowers, the banks and financial institutions party thereto, Deutsche Bank AG, New York Branch, as administrative agent , as collateral agent and as mortgage trustee, Deutsche Bank Securities Inc., Barclays Bank Plc and UBS Securities LLC as co-syndication agents , HSBC Securities (USA) Inc. and Credit Agricole Corporate and Investment Bank as co-documentation agents, Barclays Bank Plc, UBS Securities LLC, HSBC Securities (USA) INC. and Credit Agricole Corporate and Investment Bank, as joint bookrunners, Deutsche Bank Securities Inc., Barclays Bank Plc and Ubs Securities LLC, as joint lead arrangers; (d) Credit Agreement, dated as of August 21, 2012 and amended on February 1, 2013, among Classic Cruises, LLC, Classic Cruises II, LLC, Seven Seas Cruises S. De R.L., a Panamanian sociedad de responsibilidad limitada, SSC Finance Corp., as Borrowers, Deutsche Bank Ag, New York Branch, as Administrative Agent and as Collateral Agent, and each lender from time to time party thereto; (e) $225,000,000 of 9.125% Senior Secured Notes due 2019 and issued under that certain indenture dated as of May 19, 2011, by and among Seven Seas Cruises S. de R.L., as issuer; Celtic Pacific (UK) Two Limited; Supplystill Limited; Prestige Cruise Services (Europe) Limited (f/k/a Regent Seven Seas Cruises UK Limited); Celtic Pacific (UK) Limited; SSC (France) LLC; Mariner, LLC, each of the foregoing (other than the Issuer) as subsidiary guarantors; Wilmington Trust, National

 

6
 

  

Association (successor by merger to Wilmington Trust FSB), as Trustee and Collateral Agent and any secured hedges in connection with the foregoing; (f) Financial Indebtedness referred to in the financial statements of the Guarantor delivered to the Agent prior to the Effective Date; (g) Credit Agreement, dated as of 14 July 2014, by and among Seahawk Two, Ltd., as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, KfW IPEX-Bank GmbH as Hermes agent and KfW IPEX-Bank GmbH as facility agent, as collateral agent and as CIRR agent (as amended from time to time); and (h) Credit Agreement, dated as of 14 July 2014, by and among Seahawk One, Ltd., as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, KfW IPEX-Bank GmbH as Hermes agent and KfW IPEX-Bank GmbH as facility agent, as collateral agent and as CIRR agent (as amended from time to time).

 

"Exporter Declaration" means a declaration in the form required by SIMEST at the relevant time duly signed by an authorised signatory of the Builder.

 

"External Management Agreement" means, in the event that the Approved Manager is not a member of the Group, the management agreement entered or to be entered into between the Borrower and the Approved Manager with respect to the Ship on terms reasonably acceptable to the Majority Lenders.

 

"Facility Office" means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

 

"FATCA" means:

 

(a)sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

 

(b)any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

 

(c)any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

 

"FATCA Application Date" means:

 

(a)in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

(b)in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

 

(c)in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

 

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.

 

7
 

  

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

 

FATCA Protected Lender” means any Lender irrevocably designated as a FATCA Protected Lender by the Borrower by notice to that Lender and the Agent at least six months prior to the earliest FATCA Application Date for a payment by a Party to that Lender (or to the Agent for the account of that Lender).

 

"Fee Letter" means any letter dated on or about the date of this Agreement between the SACE Agent and the Borrower setting out the fees referred to in Clause 9.1(d) (Fees).

 

"Finance Documents" means:

 

(a)this Agreement;

 

(b)any Fee Letter;

 

(c)the Guarantee;

 

(d)the Tripartite General Assignment;

 

(e)the Mortgage;

 

(f)the Post-Delivery Assignment;

 

(g)the Limited Liability Company Interests Security Deed;

 

(h)the Approved Manager's Undertaking;

 

(i)the SACE Reimbursement Agreement;

 

(j)any Transfer Certificate;

 

(k)any other document (whether creating a Security Interest or not) which is executed as security for, or for the purpose of establishing any priority or subordination arrangement in relation to, the Secured Liabilities; and

 

(l)any other document (whether creating a Security Interest or not) which is designated as a Finance Document by agreement between the Borrower, SACE and the Agent.

 

"Final Contract Price" has the meaning given in Recital (C).

 

"Financial Indebtedness" means, in relation to a person (the "debtor"), a liability of the debtor:

 

(a)for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

 

(b)under any loan stock, bond, note or other security issued by the debtor;

 

(c)under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

 

(d)under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

 

8
 

  

(e)under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount;

 

(f)under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person; or

 

(g)receivables sold or discounted (other than receivables to the extent they are sold on a non-recourse basis).

 

"First Instalment" means the first instalment of the SACE Premium as more particularly described in Clause 8.1(a).

 

"Fixed Interest Rate" means, in respect of any Interest Period, the rate per annum determined by the Agent to be the aggregate of:

 

(a)the Margin; and

 

(b)the CIRR.

 

"Floating Interest Rate" means, in respect of any Interest Period, the rate per annum determined by the Agent to be the aggregate of:

 

(a)the Margin; and

 

(b)LIBOR for the relevant period.

 

"FOREX Contracts" means each actual purchase contract, spot or forward contract and any other contract, such as an option or collar arrangement, which is entered into in the foreign exchange markets for the acquisition of Euro intended to pay the delivery instalment under the Shipbuilding Contract, which:

 

(a)matures not later than the Intended Delivery Date, provided that option arrangements may mature up to one month after such date if at the time they are entered into there exists a reasonable uncertainty as to the date on which the Ship will be delivered;

 

(b)is entered into by the Borrower or the Guarantor (or, prior to the Effective Date, the Prior Guarantors) or a combination of the foregoing not later than two (2) days before the Conversion Rate Fixing Date so that the Borrower, directly or through the Guarantor, purchases or may purchase Euro with Dollars at a pre-agreed rate; and

 

(c)is notified to the Agent within twenty (20) days of its execution but in any event no later than the day preceding the Conversion Rate Fixing Date, with a Certified Copy of each such contract being delivered to the Agent at such time.

 

"FOREX Contracts Weighted Average Rate" means the rate determined by the Agent on the Conversion Rate Fixing Date in accordance with the following principles which (inter alia) are intended to take into account any maturity mismatch between the maturity of the FOREX Contracts and the Intended Delivery Date as well as FOREX Contracts that are unwound as part of the hedging strategy of the Borrower:

 

(a)FOREX Contracts that are spot or forward foreign exchange contracts, if any, shall be valued at the contract value (taking into account any rescheduling);

 

9
 

  

(b)the difference between the Euro amount available under (i) above and the Euro amount balance payable to the Builder on the Delivery Date is assumed to be purchased at the official daily fixing rate of the European Central Bank for the purchase of Euro with Dollars as displayed on "Reuters Page ECB 37" (or such other pages as may replace that page on that service or a successor service) at or around 2 p.m. (Paris time) on the Conversion Rate Fixing Date;

 

(c)any FOREX Contract which is an option or collar arrangement and is not unwound at the Conversion Rate Fixing Date will be marked to market and the resulting profit or loss shall reduce or increase the Dollar countervalue of the purchased Euro;

 

(d)any FOREX Contract which is an option or collar arrangement and is sold or purchased back at the time FOREX Contract(s) are entered into for an identical Euro amount shall be accounted for the net premium cost or profit, as the case may be.

 

Any marked to market valuation, as required in (c), shall be performed by Crédit Agricole Corporate and Investment Bank's dedicated desk in accordance with market practices. The Borrower shall have the right to request indicative valuations from time to time prior to the Conversion Rate Fixing Date.

 

"GAAP" means generally accepted accounting principles in the United States of America consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies) including, without limitation, those set forth in the opinion and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board.

 

"Gross Negligence" means any act or omission, whether deliberate or not, which in the circumstances (including both the probability and seriousness of the consequences likely to result) would reasonably be regarded by those familiar with the nature of the activity in question and with the surrounding circumstances, as amounting to the reckless disregard of, or serious indifference to, the consequences, being in any case more than a negligent failure to exercise proper skill and care.

 

"Group" means the Guarantor and its Subsidiaries.

 

"Guarantee" means a guarantee issued on or before the Effective Date by the Guarantor in favour of the Security Trustee in the agreed form.

 

"Guarantor" means NCL Corporation Ltd., a Bermuda company with its registered office at Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda.

 

"Holding Company" means, in relation to a person, any other person in respect of which it is a Subsidiary;

 

"IAPPC" means a valid international air pollution prevention certificate for the Ship issued under Annex VI.

 

"Illicit Origin" means any origin which is illicit, fraudulent or in breach of Sanctions including, without limitation, drug trafficking, corruption, organised criminal activities, terrorism, money laundering or fraud.

 

"Initial Contract Price" has the meaning given in Recital (B).

 

"Insurances" means:

 

10
 

  

(a)all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, which are effected in respect of the Ship, its Earnings or otherwise in relation to it; and

 

(b)all rights and other assets relating to, or derived from any of such policies, contracts or entries, including any rights to a return of a premium.

 

"Intended Delivery Date" means 30 June 2016 (the date on which the Ship will be ready for delivery pursuant to the Shipbuilding Contract as at the date of this Agreement) or any other date notified by the Borrower to the Agent in accordance with Clauses 3.5(a)(i) or 3.7(c) as being the date on which the Builder and the Borrower have agreed that the Ship will be ready for delivery pursuant to the Shipbuilding Contract.

 

"Interest Make-up Agreement" means an interest make up agreement (Capitolato) to be entered into between SIMEST and the Agent on behalf of the Lenders and in form and substance acceptable to the Joint Mandated Lead Arrangers, whereby, inter alia, the return to the Lenders on the Loan made hereunder will be supplemented by SIMEST so that it equals that which the Lenders would have received if interest were payable on the Loan at LIBOR plus the Margin.

 

"Interest Period" means a period determined in accordance with Clause 7 (Interest Periods).

 

"ISM Code" means the International Safety Management Code for the safe operation of ships and for pollution prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended or supplemented from time to time.

 

"ISPS Code" means the International Ship and Port Facility Security (ISPS) Code adopted by the International Maritime Organisation (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.

 

"Italian Authorities" means SACE and/or SIMEST and any other relevant Italian authorities involved in the implementation of the Loan.

 

"Lender" means a bank, financial institution, trust, fund or other entity listed in Schedule 1 (Lenders and Commitments) and acting through its Facility Office or its transferee, successor or assign.

 

"LIBOR" means, in relation to a particular period, the rate determined by the Agent to be that at which deposits of Dollars in amounts comparable with the amount for which LIBOR is to be determined and for a period equivalent to such period are being offered in the London interbank eurocurrency market at or about 11 a.m. (London time) on the Quotation Date for such period as displayed on the "Reuters Page LIBOR 01 or LIBOR 02" of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters (and if such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrower), Provided that if on such date no such rate is so displayed, LIBOR for such period shall be the rate quoted to the Agent by the Lenders at the request of the Agent as the Lenders' offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period to prime banks in the London interbank eurocurrency market at or about 11 a.m. (London time) on the Quotation Date for such period and provided further that, if the rate displayed on the relevant page is less than zero, LIBOR shall be deemed to be zero.

 

"Limited Liability Company Interests Security Deed" means a security pledge in relation to the limited liability company interests of the Borrower executed or to be executed by Seven Seas in favour of the Security Trustee in the agreed form.

 

11
 

  

"Loan" means the principal amount for the time being outstanding under this Agreement.

 

"Majority Lenders" means:

 

(a)before the Loan has been made, Lenders whose Commitments total [*] per cent. of the Total Commitments; and

 

(b)after the Loan has been made, Lenders whose Contributions total [*] per cent. of the Loan.

 

"Margin" means:

 

(a)in relation to the Fixed Interest Rate one point thirty per cent. (1.30%) per annum; and

 

(b)in relation to the Floating Interest Rate two point eighty per cent. (2.80%) per annum.

 

"Maritime Registry" means the maritime registry which the Borrower will specify to the Lenders no later than three (3) months before the Intended Delivery Date, being that of the Marshall Islands, Bahamas or such other registry as the Agent may, with the authorisation of the Majority Lenders and SACE, approve.

 

"Material Adverse Effect" means the occurrence of any event or circumstance which reasonably would be expected to have a material adverse effect on:

 

(a)the business, operations, property, condition (financial or otherwise) of any Obligor or the Group as a whole; or

 

(b)the ability of any Obligor to perform its obligations under any Finance Document; or

 

(c)the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Secured Party under any of the Finance Documents.

 

"Maximum Loan Amount" means the aggregate of:

 

(a)the Dollar Equivalent of Euro 284,004,000;

 

(b)100% of the First Instalment of the SACE Premium to be paid by the Borrower direct to SACE on or before 30 days following the issuance of the SACE Insurance Policy; and

 

(c)100% of the Second Instalment of the SACE Premium payable on the Drawdown Date,

 

Provided that such amount shall not, at any time, exceed US$440,321,649.

 

"Mortgage" means the first priority mortgage on the Ship acceptable for registration on the Approved Flag and, if applicable, deed of covenant, executed or to be executed by the Borrower in favour of the Security Trustee in the agreed form.

 

"Negotiation Period" has the meaning given in Clause 6.8 (Negotiation of alternative rate of interest).

 

"Obligors" means the Borrower, the Guarantor, Seven Seas and (in the event that the Approved Manager is a member of the Group) the Approved Manager.

 

12
 

 

OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

"Overnight LIBOR" means, on any date, the London interbank offered rate, being the day to day rate at which Dollars are offered to prime banks in the London interbank market and published by the British Bankers' Association at or about 11.00 a.m. London time on page LIBOR01 of the Reuters screen. If the agreed page is replaced or the service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower.

 

"Parallel Debt" means any amount which an Obligor owes to the Security Trustee under Clause 26.2 (Parallel Debt (Covenant to pay the Security Trustee)).

 

"Participating Member State" means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

"Party" means a party to this Agreement from time to time.

 

"Permitted Security Interests" means:

 

(a)in the case of the Borrower,

 

(i)any of the Security Interests referred to in paragraph (b)(ii)(A) below, and

 

(ii)any of the Security Interests referred to in paragraphs (b)(ii)(B), (b)(ii)(C), (b)(ii)(E), (b)(ii)(H) and (b)(ii)(I) below if, by reason of any chartering or management arrangements for the Ship approved by the Agent pursuant to the provisions of this Agreement, such Security Interests are created by the Borrower in the case of paragraphs (b)(ii)(C) or (b)(ii)(E) or incurred by the Borrower in the case of paragraphs (b)(ii)(B), (b)(ii)(H) or (b)(ii)(I); and

 

(b)in the case of the Guarantor,

 

(i)any of the Security Interests referred to in paragraphs (ii)(A), (ii)(D), (ii)(F) and (ii)(G) below, and

 

(ii)any of the Security Interests referred to in paragraphs (C), (E), (H) and (I) below if, by reason of any chartering or management arrangements for the Ship approved by the Agent pursuant to the provisions of this Agreement, such Security Interests are created by the Guarantor in the case of paragraphs (C) or (E) or incurred by the Guarantor in the case of paragraphs (H) or (I);

 

(A)any Security Interest created by or pursuant to the Finance Documents and any deposits or other Security Interests placed or incurred in connection with any bond or other surety from time to time provided to the US Federal Maritime Commission in order to comply with laws, regulations and rules applicable to the operators of passenger vessels operating to or from ports in the United States of America;

 

(B)liens on the Ship up to an aggregate amount at any time not exceeding [*] Dollars ($[*]) for current crew's wages and salvage and liens incurred in the ordinary course of trading the Ship;

 

(C)any deposits or pledges up to an aggregate amount at any time not exceeding [*] Dollars ($[*]) to secure the performance of bids,

 

13
 

  

tenders, bonds or contracts required in the ordinary course of business;

 

(D)any other Security Interest including in relation to the Existing Indebtedness over the assets of any Obligor other than the Borrower notified by the Borrower or any of the Obligors to the Agent and SACE and accepted by them prior to the Effective Date;

 

(E)(without prejudice to the provisions of Clause 12.13 (Financial Indebtedness and subordination of indebtedness)) liens on assets leased, acquired or upgraded after the Effective Date or assets newly constructed or converted after the Effective Date provided that (i) such liens secure Financial Indebtedness otherwise permitted under this Agreement, (ii) such liens are incurred at the time of such lease, acquisition, upgrade, construction or conversion and (iii) the Financial Indebtedness secured by such liens does not exceed the cost of such upgrade or the cost of such assets acquired or leased;

 

(F)other liens arising in the ordinary course of business of the Group unrelated to Financial Indebtedness and securing obligations not yet delinquent or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established provided that (i) the aggregate amount of all cash and the fair market value of all other property subject to such liens as are described in this paragraph (F) does not exceed [*] Dollars ($[*]) and (ii) such cash and/or other property is not an asset of the Borrower;

 

(G)subject to the other provisions of this Agreement and the Guarantee, any Security Interest in respect of existing Financial Indebtedness of a person which becomes a Subsidiary of the Guarantor or is merged with or into the Guarantor or any of its subsidiaries;

 

(H)liens in favour of credit card companies on unearned customer deposits pursuant to agreements therewith;

 

(I)liens in favour of customers on unearned customer deposits.

 

"Pertinent Document" means:

 

(a)any Finance Document;

 

(b)any policy or contract of insurance contemplated by or referred to in Clause 12 (General Undertakings) or any other provision of this Agreement or another Finance Document;

 

(c)any other document contemplated by or referred to in any Finance Document; and

 

(d)any document which has been or is at any time sent by or to the Agent in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c).

 

"Pertinent Matter" means:

 

(a)any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

 

14
 

  

(b)any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);

 

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing.

 

"Post-Delivery Assignment" means an assignment of the rights of the Borrower in respect of the post-delivery guarantee liability of the Builder under Article 25 of the Shipbuilding Contract executed or to be executed by the Borrower in favour of the Security Trustee in the agreed form.

 

"Prestige Holdings" means Prestige Cruise Holdings Inc. a Panamanian sociedad anonima domiciled in Panama whose resident agent is Arias, Fabrega & Fabrega at Plaza 2000 Building, 16th Floor, 50th Street, Panama, Republic of Panama.

 

"Prestige Holdings Guarantee" means a guarantee issued by Prestige Holdings in favour of the Security Trustee and terminated on the Effective Date.

 

"Prior Guarantees" means the Seven Seas Guarantee and the Prestige Holdings Guarantee.

 

"Prior Guarantors" means Seven Seas and Prestige Holdings.

 

"Prohibited Payment" means:

 

(a)any offer, gift, payment, promise to pay, commission, fee, loan or other consideration which would constitute bribery or an improper gift or payment under, or a breach of Sanctions, any laws of the Republic of Italy, England and Wales, Panama, the United States of America or any other applicable jurisdiction; or

 

(b)any offer, gift, payment, promise to pay, commission, fee, loan or other consideration which would or might constitute bribery within the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997.

 

"Prohibited Person" means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed.

 

"Protocol of Delivery and Acceptance" means the protocol of delivery and acceptance of the Ship to be signed by the Borrower and the Builder in accordance with Article 8 of the Shipbuilding Contract.

 

"Quotation Date" means, in relation to any Interest Period (or any period for which an interest rate is to be determined under any provision of a Finance Document), the day which is 2 Business Days before the first day of that period, unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Date 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 Date will be the last of those days).

 

"Qualifying Certificate" means the certificate to be issued by the Builder on the Delivery Date and issued to the Agent and copied to the Borrower substantially in the form set out in Schedule 5.

 

"Relevant Interbank Market" means the European Interbank Market.

 

"Relevant Jurisdiction" means, in relation to an Obligor:

 

15
 

  

(a)its jurisdiction of incorporation;

 

(b)any jurisdiction where any asset subject to, or intended to be subject to, any of the Security Interests created, or intended to be created, under the Finance Documents to which it is a party is situated;

 

(c)any jurisdiction where it conducts its business; and

 

(d)the jurisdiction whose laws govern the perfection of any of the Security Interests created, or intended to be created, under the Finance Documents to which it is a party.

 

"Repayment Date" means a date on which a repayment is required to be made under Clause 5 (Repayment).

 

"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss".

 

"SACE" means SACE SpA.

 

"SACE Agent" means Crédit Agricole Corporate and Investment Bank, a French "société anonyme", having a share capital of EUR 7,254,575,271 and its registered office located at 9, Quai du Président Paul Doumer, 92920 Paris La Défense cedex, France, registered under the n° Siren 304 187 701 at the Registre du Commerce et des Sociétés of Nanterre or any successor of it appointed under Clause 25 (Role of the Agent and the Joint Mandated Lead Arrangers).

 

"SACE Insurance Policy" means the insurance policy in respect of this Agreement (which, in all material respects, is not inconsistent with the commercial terms of this Agreement) to be issued by SACE for the benefit of the Lenders in respect of 95% of the Loan in form and substance satisfactory to the Agent and the Lenders.

 

"SACE Premium" means the amount payable by the Borrower to SACE directly or through the Agent in two instalments in respect of the SACE Insurance Policy as set out in Clause 8 (SACE Premium and Italian Authorities).

 

"SACE Reimbursement Agreement" means the reimbursement agreement entered into on or before the Effective Date, as the context may require, between the Borrower, the Guarantor, the Agent and SACE.

 

"SACE Required Documents" means in relation to the Drawdown Notice:

 

(a)a duly completed and executed Qualifying Certificate; and

 

(b)each of the other documents, information and other evidence specified in or required to be enclosed with such Qualifying Certificate.

 

"Sanctions" means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

 

(a)imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or imposed by any member state of the European Union or Switzerland;

 

16
 

  

(b)imposed by CISADA or OFAC; or

 

(c)otherwise imposed by any law or regulation,

 

by which any Obligor is bound or to which it is subject or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of any Obligor.

 

"Second Instalment" means the second instalment of the SACE Premium as more particularly described in Clause 8.1(b).

 

"Secured Liabilities" means all liabilities which the Borrower, the Obligors or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country.

 

"Secured Party" means SACE, the Agent, the Security Trustee, the SACE Agent, the Joint Mandated Lead Arrangers or any Lender whether at the date of this Agreement or any later time.

 

"Security Interest" means:

 

(a)a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien, assignment, hypothecation or any other security interest of any kind or other agreement or arrangement having the effect of conferring security;

 

(b)the security rights of a plaintiff under an action in rem; and

 

(c)any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.

 

"Security Period" means the period commencing on the date of this Agreement and ending on the date on which:

 

(a)all amounts which have become due for payment by the Borrower or any Obligor under the Finance Documents have been paid;

 

(b)no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

 

(c)neither the Borrower nor any other Obligor has any future or contingent liability under Clause 19 (Application of Sums Received) below or any other provision of this Agreement or another Finance Document; and

 

(d)the Agent and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or an Obligor or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document.

 

17
 

  

"Security Property" means:

 

(a)the Security Interests expressed to be granted in favour of the Security Trustee as trustee for the Secured Parties and all proceeds received or recovered by or on behalf of the Security Trustee under or by virtue of any Security Interest including any money or other assets which are received or recovered by it as a result of the enforcement or exercise by it of such a Security Interest or right;

 

(b)all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Secured Liabilities to the Security Trustee as trustee for the Secured Parties and secured by the Security Interests together with all representations and warranties expressed to be given by an Obligor in favour of the Security Trustee as trustee for the Secured Parties;

 

(c)the Security Trustee's interest in any turnover trust created under the Finance Documents;

 

(d)any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Trustee is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,

 

except:

 

(i)rights intended for the sole benefit of the Security Trustee; and

 

(ii)any moneys or other assets which the Security Trustee has transferred to the Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

 

"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 Borrower and the Agent) which is at any relevant time one hundred per cent (100%) of the Loan.

 

"Security Trustee" means Crédit Agricole Corporate and Investment Bank, a French "société anonyme", having a share capital of EUR  7,254,575,271 and its registered office located at 9, Quai du Président Paul Doumer, 92920 Paris La Défense cedex, France, registered under the n° Siren 304 187 701 at the Registre du Commerce et des Sociétés of Nanterre or any successor of it appointed under Clause 26 (The Security Trustee).

 

"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 Borrower and the Agent) which, at any relevant time, is the aggregate of (i) the market value of the Ship as most recently determined in accordance with Clause 13.4 (Valuation of the Ship); and (ii) the market value of any additional security for the time being actually provided to the Agent pursuant to Clause 15 (Security Value Maintenance).

 

"Servicing Party" means the Agent or the Security Trustee.

 

"Seven Seas" means Seven Seas Cruises S. DE R.L., a Panamanian sociédad de responsibilidad limitada domiciled in Panama whose resident agent is Arias, Fabrega & Fabrega at Plaza 2000 Building, 16th Floor, 50th Street, Panama, Republic of Panama.

 

"Seven Seas Charter" means the bareboat charter of the Ship by the Borrower as owner to the Seven Seas as charterer which shall be entered into no later than the Delivery Date in the form of draft approved by the Agent before the date of this Agreement with such reasonable changes thereto as the Agent may, with the authority of the Majority Lenders, approve from time to time.

 

"Seven Seas Guarantee" means a guarantee issued by Seven Seas in favour of the Security Trustee and terminated on the Effective Date.

 

18
 

  

"Ship" means the passenger cruise ship currently designated with Hull No. 6250 (as more particularly described in the Shipbuilding Contract) to be constructed under the Shipbuilding Contract and to be delivered to, and purchased by, the Borrower and registered in its name under an Approved Flag with the name "Explorer".

 

"Shipbuilding Contract" has the meaning given in Recital (A).

 

"SIMEST" means Società Italiana per Le Imprese all'Estero - SIMEST Spa, which grants export subsidies in Italy under and according to the Italian Legislative Decree n. 143/98 and its amendments.

 

"Subsidiary" has the following meaning:

 

A company (S) is a subsidiary of another company (P) if:

 

(i)a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

 

(ii)P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

 

(iii)P has the direct or indirect power to appoint or remove a majority of the directors of S; or

 

(iv)P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

 

and any company of which S is a subsidiary is a parent company of S.

 

"Tax" means any tax, levy, impost, duty, assessment, fee, deduction or other charge or withholding of a similar nature imposed by any governmental authority (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

"Total Loss" means:

 

(a)actual, constructive, compromised, agreed or arranged total loss of the Ship;

 

(b)any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the Borrower's full control;

 

(c)any arrest, capture, seizure or detention of the Ship (including any hijacking or theft) unless it is within 1 month redelivered to the Borrower's full control.

 

"Total Loss Date" means:

 

(a)in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;

 

(b)in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of:

 

19
 

  

(i)the date on which a notice of abandonment is given to the insurers; and

 

(ii)the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the Ship as a total loss; and

 

(c)in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent acting reasonably and in consultation with the Borrower that the event constituting the total loss occurred.

 

"Transaction Documents" means the Finance Documents and the Underlying Documents.

 

"Transfer Certificate" means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.

 

"Tripartite General Assignment" means an assignment of the Seven Seas Charter, the Earnings, the Insurances and any Requisition Compensation, executed or to be executed by the Borrower, Seven Seas (as bareboat charterer) and, in the event that the Approved Manager is not a member of the Group and is named as a co-assured in the Insurances, the Approved Manager in favour of the Security Trustee in the agreed form.

 

"Underlying Documents" means the Shipbuilding Contract, any External Management Agreement, the Seven Seas Charter and any charter and associated guarantee in respect of which a notice of assignment is required to be served under the terms of the Tripartite General Assignment.

 

"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

"VAT" means:

 

(a)any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

(b)any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

 

1.2Construction of certain terms

 

In this Agreement:

 

"Agent", the "SACE Agent", the "Joint Mandated Lead Arranger", the "Security Trustee", any "Creditor Party", any "Secured Party", any "Lender", any "Obligor" or any other "person", shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment.

 

"company" includes any partnership, joint venture and unincorporated association.

 

"consent" includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation.

 

"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained.

 

20
 

  

"date of this Agreement" means 31 July 2013.

 

"document" includes a deed; also a letter, fax or electronic mail.

 

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Taxes including VAT.

 

"including" and "in particular" (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

 

"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;

 

"law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council.

 

"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation.

 

"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise.

 

"months" shall be construed in accordance with Clause 1.4 (Meaning of "month").

 

"parent company" has the meaning given in the definition of "Subsidiary".

 

"person" includes any individual, firm, company, corporation, government, any state, political sub-division of a state and local or municipal authority, agency of a state or any association, trust, joint venture, consortium or partnership; and any international organisation (whether or not having a separate legal personality).

 

"proceedings" means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

 

"regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation.

 

1.3Construction of Insurance Terms

 

"approved" means, for the purposes of Clause 14 (Insurance Undertakings), approved in writing by the Agent.

 

"excess risks" means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims.

 

"obligatory insurances" means all insurances effected, or which the Borrower is obliged to effect, under Clause 14 (Insurance Undertakings)or any other provision of this Agreement or another Finance Document.

 

"policy" in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.

 

"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if

 

21
 

  

any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of Clause 1 of the Institute Time Clauses (Hulls)(1/10/82) or Clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down clause (1/10/71) or any equivalent provision.

 

"war risks" includes the risk of mines and all risks excluded by Clause 23 of the Institute Time Clauses (Hulls)(1/10/83) or clause 24 of the Institute Time Clauses (Hulls) (1/11/1995).

 

1.4Meaning of "month"

 

A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

 

(a)on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

 

(b)on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

 

and "month" and "monthly" shall be construed accordingly.

 

1.5General Interpretation

 

In this Agreement:

 

(a)references in Clause 1.1 (Definitions) to a Finance Document or any other document being an "agreed form" are to the form agreed between the Agent (acting with the authorisation of each of the Creditor Parties) and the Borrower with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires;

 

(b)references to, or to a provision of, a Finance Document or any other document are references to it as amended, amended and restated or supplemented, whether before the date of this Agreement or otherwise;

 

(c)references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

 

(d)any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

 

(e)words denoting the singular number shall include the plural and vice versa; and

 

(f)Clauses 1.1 (Definitions) to 1.5 (General Interpretation) apply unless the contrary intention appears.

 

22
 

  

1.6Headings

 

In interpreting a Finance Document or any provision of a Finance Document, all clauses, sub-clauses and other headings in that and any other Finance Document shall be entirely disregarded.

 

1.7Schedules

 

The schedules form an integral part of this Agreement.

 

1.8Effective Date

 

This Agreement is effective from the Effective Date.

 

2.Facility

 

2.1Amount of facility

 

Subject to the other provisions of this Agreement, the Lenders agree to make available to the Borrower a loan not exceeding the Maximum Loan Amount intended to be applied as follows:

 

(a)in payment to the Builder of all or part of 80% of the Final Contract Price up to the Eligible Amount;

 

(b)in reimbursement to the Borrower of the amount of the First Instalment of the SACE Premium paid by it to SACE on or before 30 days following the issuance of the SACE Insurance Policy; and

 

(c)in payment to SACE of the amount of the Second Instalment of the SACE Premium payable by the Borrower to SACE on the Drawdown Date.

 

2.2Lenders' participations in Loan

 

Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

 

2.3Purpose of Loan

 

The Borrower undertakes with each Secured Party to use the Loan only to pay for:

 

(a)goods and services of Italian origin incorporated in the design, construction or delivery of the Ship;

 

(b)subject to the limits and conditions fixed by the Italian Authorities, goods and services incorporated in the design, construction or delivery of the Ship and originating from countries other than Italy where the provision of such goods or services has been sub-contracted by the Builder and therefore remains the Builder's responsibility under the Shipbuilding Contract;

 

(c)reimbursement to the Borrower of the First Instalment of the SACE Premium paid by the Borrower direct to SACE 30 days following the issuance of the SACE Insurance Policy; and

 

(d)the Second Instalment of the SACE Premium payable on the Drawdown Date.

 

23
 

  

2.4Creditor Parties' rights and obligations

 

(a)The obligations of each Creditor Party under the Finance Documents are several. Failure by a Creditor Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Creditor Party is responsible for the obligations of any other Creditor Party under the Finance Documents.

 

(b)The rights of each Creditor Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Creditor Party from an Obligor shall be a separate and independent debt.

 

(c)A Creditor Party may not, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

 

(d)Notwithstanding any other provision of the Finance Documents and subject to the prior written consent of SACE, a Creditor Party may separately sue for any Unpaid Sum due to it without the consent of any other Creditor Party or joining any other Creditor Party to the relevant proceedings (it being understood that a Creditor Party may file a claim noting the amounts due to it in the event insolvency proceedings are commenced against the Borrower by a third party.)

 

2.5Monitoring

 

No Creditor Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

2.6Obligations of Lenders several

 

The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:

 

(a)the obligations of the other Lenders being increased; nor

 

(b)any Obligor or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document;

 

and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement or any other Finance Document.

 

2.7Independent Repayment Obligations

 

(a)The Borrower's obligations under this Agreement are separate from and are not in any way conditional upon the performance of the Shipbuilding Contract by the Builder or any other person and will not be affected or discharged by any matter affecting the Contract or any other contract or other arrangement between the Builder and any other party to the Contract including, without limitation, the performance, non-performance, frustration or invalidity or the destruction, non-completion, or non-functioning of any of the items to be supplied under the Contract (including those to be supplied by the Builder) or the liquidation or bankruptcy of the Builder.

 

(b)The Borrower's repayment obligations under this Agreement will not be affected in any way by reason of any claim which the Borrower may have or may consider that it has against the Builder or any other person under the Contract.

 

24
 

 

3.Conditions Precedent

 

3.1General

 

The Borrower may only draw under the Loan when the following conditions have been fulfilled to the satisfaction of the Agent and provided no Event of Default shall have occurred and remains unremedied or is likely to occur as a consequence of the drawing of the Loan:

 

3.2No later than the date of this Agreement

 

The Agent shall have received no later than the date of this Agreement:

 

(a)an opinion from legal counsel acceptable to the Secured Parties as to the laws of the state of Delaware in form and substance satisfactory to the Agent and SACE, together with the limited liability company documentation of the Borrower supporting the opinion, including but without limitation the Certificate of Formation and Limited Liability Company Agreement as filed with the competent authorities and a certificate of a competent officer or manager of the Borrower containing specimen signatures of the persons authorised to sign the documents on behalf of the Borrower, including, without limitation:

 

(i)the Borrower has been duly formed and is validly existing as a limited liability company under the laws of the state of Delaware;

 

(ii)this Agreement falls within the scope of the Borrower's limited liability company purpose as defined by its Certificate of Formation and Limited Liability Company Agreement;

 

(iii)the Borrower's representatives were at the date of this Agreement fully empowered to sign this Agreement;

 

(iv)either all administrative requirements applicable to the Borrower (whether in the state of Delaware or elsewhere), concerning the transfer of funds abroad and acquisitions of Dollars to meet its obligations hereunder have been complied with, or that there are no such requirements;

 

(v)no withholding tax or stamp duty implications arise by virtue of the Borrower entering into this Agreement;

 

(vi)a judgment of an English Court in relation to the Agreement and any relevant Finance Documents will be recognised by and acknowledged by the Courts in the State of Delaware; and

 

(vii)this Agreement constitutes the legal, valid and binding obligations of the Borrower enforceable in accordance with its terms,

 

and containing such qualifications and assumptions as are standard for opinions of this type;

 

(b)an opinion from legal counsel to the Creditor Parties as to English law confirming, without limitation, that (i) the obligations of the Borrower under this Agreement and (ii) that the obligations of each Prior Guarantor under the relevant Prior Guarantee are legally valid and binding obligations enforceable by the relevant Creditor Parties;

 

(c)an opinion from legal counsel to SACE as to English law (to be solely addressed to the Italian Authorities) in form and substance satisfactory to SACE;

 

25
 

  

(d)a Certified Copy of the executed Shipbuilding Contract;

 

(e)a confirmation from EC3 Services Limited that it will act for the Borrower as agent for service of process in England in respect of this Agreement and any other Finance Document;

 

(f)an opinion from legal counsel acceptable to the Secured Parties as to Panamanian law in form and substance satisfactory to the Agent and SACE, together with the corporate documentation of each Prior Guarantor supporting the opinion, including but without limitation the Articles of Incorporation and By-laws as filed with the competent authorities and a certificate of a competent officer of each Prior Guarantor containing specimen signatures of the persons authorised to sign the documents on behalf of the Prior Guarantor including without limitation:

 

(i)each Prior Guarantor has been duly organised and is validly existing and in good standing as a Panamanian sociedad anonima or a sociedad de responsibilidad limitada with its domicile in the Republic of Panama and each Prior Guarantor's Resident Agent being Arias Fabrega & Fabrega with address at Plaza 2000 Building, 16th Floor, 50th Street, Panama;

 

(ii)each Prior Guarantee falls within the scope of the relevant Prior Guarantor's corporate purpose as defined by its Articles of Incorporation and By-laws;

 

(iii)each Prior Guarantor's representative was at the date of the Prior Guarantee issued by it fully empowered to sign and duly execute that Prior Guarantee;

 

(iv)either all administrative requirements applicable to each Prior Guarantor (whether in the Republic of Panama) concerning the transfer of funds abroad and acquisitions of Dollars to meet its obligations under the Prior Guarantee issued by it have been complied with, or that there are no such requirements;

 

(v)each Prior Guarantee is the legal, valid and binding obligations of the Prior Guarantor which issued it enforceable in accordance with its terms;

 

(vi)the Limited Liability Company Interests Security Deed falls within the scope of Seven Seas' corporate purpose as defined by its Articles of Incorporation and By-laws; and

 

(vii)the representative of Seven Seas was at the date of the Limited Liability Company Interests Security Deed fully empowered to sign the Limited Liability Company Interests Security Deed.

 

(viii)a judgment of an English Court in relation to the Prior Guarantees will be recognised by and acknowledged by the Courts of Panama; and

 

(ix)none of the undertakings of either Prior Guarantor contained in either Prior Guarantee are contrary to public policy in the Republic of Panama,

 

and containing such qualifications and assumptions as are standard for opinions of this type;

 

(g)duly executed originals of the Guarantees and the Limited Liability Security Deed; and

 

(h)confirmation from EC3 Services Limited that it will act for each Prior Guarantor as agent for service of process in England in respect of the Prior Guarantee issued by that Prior Guarantor and any other Finance Document.

 

26
 

  

3.3No later than ninety (90) days before the Intended Delivery Date

 

The Agent shall have received no later than ninety (90) days before the Intended Delivery Date:

 

(a)notification from the Borrower of its chosen Maritime Registry;

 

(b)the SACE Insurance Policy documentation relating to the transaction contemplated by this Agreement issued on terms whereby the SACE Insurance Policy will enter into full force and effect upon fulfilment of the conditions specified therein to be fulfilled on or before the Drawdown Date;

 

(c)evidence that the Borrower has paid the First Instalment of the SACE Premium to SACE on or before 30 days following the issuance of the SACE Insurance Policy; and

 

(d)notification of the Approved Manager.

 

3.4No later than the date falling ninety (90) days before the Intended Delivery Date and on each subsequent date on which a Compliance Certificate is to be received by the Security Trustee pursuant to clause 11.3(e) of the Guarantee a duly completed Compliance Certificate from the Guarantor.

 

3.5No later than sixty (60) days before the Intended Delivery Date

 

(a)The Agent shall have received from the Borrower no later than sixty (60) days before the Intended Delivery Date:

 

(i)notification of the Intended Delivery Date; and

 

(ii)notification, signed by a duly authorised signatory of the Borrower, specifying which of the Fixed Interest Rate or the Floating Interest Rate shall be applicable to the Loan until the date of payment of the final repayment instalment of the Loan; and in absence of any such notification, the Borrower shall be deemed to have opted for the Floating Interest Rate; and

 

(iii)a US tax opinion from legal counsel to the Creditor Parties in respect of the tax treatment of the entry by the US incorporated Borrower into this Agreement and the other Finance Documents substantially in the form notified to the Borrower on or around the date of this Agreement and updated to reflect any changes in law;

 

(b)The Agent (acting on the instructions of the Lenders) shall notify to the Borrower any documents required under the ISM Code and the ISPS Code which are to be provided at delivery pursuant to Clause 3.10(f) below.

 

3.6No later than fifteen (15) Business Days before the Intended Delivery Date

 

The Agent shall have received no later than fifteen (15) Business Days before the Intended Delivery Date insurance documents in form and substance satisfactory to the Lenders confirming that the Insurances have been effected and will be in full force and effect on the Delivery Date.

 

27
 

  

3.7No later than five (5) Business Days before the Intended Delivery Date

 

The Agent shall have received no later than five (5) Business Days before the Intended Delivery Date:

 

(a)the Drawdown Notice from the Borrower, signed by a duly authorised signatory of the Borrower, specifying the amount of the Loan to be drawn down;

 

(b)a Certified Copy of each of the Change Orders, of any amendments to the Shipbuilding Contract and of the power of attorney pursuant to which the authorised signatory of the Borrower signed the Drawdown Notice and a specimen of his signature;

 

(c)a final confirmation of the Intended Delivery Date signed by a duly authorised signatory of the Borrower, and counter-signed by a duly authorised signatory of the Builder.

 

3.8Examination of documents by the Agent

 

The Agent shall ensure that an officer or employee or other person designated by it as its authorised representative is present at the Builder on the proposed Drawdown Date for the purpose of examining originals (or certified copies) of the SACE Required Documents duly signed by the parties thereto and collecting copies thereof (which copies shall be certified as true copies by an authorised signatory of the Builder and/or the Borrower, as applicable).

 

3.9No later than the Delivery Date

 

The Agent shall have received no later than the Delivery Date:

 

(a)an opinion from legal counsel acceptable to the Secured Parties as to the laws of the state of Delaware in form and substance satisfactory to the Agent and SACE together with the limited liability company documentation of the Borrower and a certificate of a competent officer or manager of the Borrower containing specimen signatures of the persons authorised to sign the documents on behalf of the Borrower, confirming that, without limitation:

 

(i)the Mortgage, the Tripartite General Assignment, the Post-Delivery Assignment and the Seven Seas Charter fall within the scope of the Borrower's limited liability company purpose as defined by its Certificate of Formation and Limited Liability Company Agreement and are binding on it; and

 

(ii)the Borrower's representatives are fully empowered to sign the Protocol of Delivery and Acceptance, the Mortgage, the Tripartite General Assignment, the Post-Delivery Assignment and the Seven Seas Charter.

 

(b)evidence of payment to and receipt by the Builder of:

 

(i)the [*] pre-delivery instalments of the Final Contract Price; and

 

(ii)any other part of the Final Contract Price as at the Delivery Date not being financed hereunder;

 

(c)evidence of payment of all amounts which are due and payable hereunder by the Borrower on or prior to the Delivery Date;

 

28
 

  

(d)a certificate from the Borrower, signed by an authorised representative of the Borrower, confirming that the representations and warranties contained in Clause 11 (Representations and Warranties) are true and correct as of the Delivery Date in consideration of the facts and circumstances existing as of the Delivery Date;

 

(e)an original of the Interest Make-up Agreement relative to the Loan and in full force and effect;

 

(f)a duly executed original of the SACE Reimbursement Agreement;

 

(g)an original of the SACE Insurance Policy;

 

(h)an original or a certified copy of each of the SACE Required Documents and SACE and the Agent shall be satisfied that the SACE Required Documents on their face appear properly completed and comply with the requirements of this Agreement and the requirements of the SACE Insurance Policy; and

 

provided always that the obligations of the Lenders to make the Loan available on the Delivery Date are subject to the Lenders remaining satisfied that each of the SACE Insurance Policy and the Interest Make-up Agreement will cover the Loan following the advance of the Loan, payment of the Second Instalment of the SACE Premium and delivery to the Agent of the documents listed in Schedule 3.

 

3.10At Delivery

 

Immediately prior to the delivery of the Ship by the Builder to the Borrower, the Agent shall have received:

 

(a)evidence that immediately following delivery:

 

(i)the Ship will be registered in the name of the Borrower in the Maritime Registry;

 

(ii)title to the Ship will be held by the Borrower free of all Security Interests other than any maritime lien in respect of crew's wages and trade debts arising out of equipment, consumable and other stores placed on board the Ship prior to or concurrently with delivery, none of which is overdue;

 

(iii)the Mortgage will be duly registered in the Maritime Registry and constitutes a first priority security interest over the Ship and that all taxes and fees payable to the Maritime Registry in respect of the Ship have been paid in full; and

 

(iv)the opinions mentioned in Clauses 3.11 (b), (c) and (d) and the documents mentioned in Clause 3.11(e) will be received by the Agent;

 

(b)a Certified Copy of a classification certificate (or interim classification certificate) showing the Ship to be classed in accordance with Clause 11.3(c).

 

(c)duly executed originals of the Tripartite General Assignment, any Approved Manager's Undertaking and the Post-Delivery Assignment together with relevant notices of assignment and the acknowledgement of the notice of assignment to be issued pursuant to the Tripartite General Assignment and the Post-Delivery Assignment;

 

29
 

  

(d)a duly executed original of the Limited Liability Company Interests Security Deed (and of each document required to be delivered under the Limited Liability Company Interests Security Deed);

 

(e)a Certified Copy of any executed External Management Agreement, the Seven Seas Charter and any time charterparty in respect of the Ship;

 

(f)a Certified Copy of any current certificate of financial responsibility in respect of the Ship issued under OPA, a valid Safety Management Certificate (or interim Safety Management Certificate) issued to the Ship in respect of its management by the Approved Manager pursuant to the ISM Code, a valid Document of Compliance (or interim Document of Compliance) issued to the Approved Manager in respect of ships of the same type as the Ship pursuant to the ISM Code, a valid International Ship Security Certificate issued to the Ship in accordance with the ISPS Code and a valid IAPPC issued to the Ship in accordance with Annex VI and, if entered into, any carrier initiative agreement with the United States' Customs and Border Protection under the Customs-Trade Partnership Against Terrorism (C-TPAT) programme along with any other documents required under the ISM Code and the ISPS Code and notified to the Borrower in accordance with Clause 3.5(b) above;

 

(g)a Certified Copy of the power of attorney pursuant to which the authorised signatory(ies) of the Borrower signed the documents referred to in this Clause 3.10 (At Delivery) and to which the Borrower is a party and a specimen of his or their signature(s);

 

(h)a confirmation from EC3 Services Limited (or any replacement process agent satisfactory to the Agent acting reasonably) that it will act for each of the relevant Obligors as agent for service of process in England in respect of the deed of covenants constituting part of the Mortgage (if applicable), the Tripartite General Assignment and the Post-Delivery Assignment.

 

3.11Immediately following the delivery of the Ship by the Builder to the Borrower, the Agent shall receive:

 

(a)a duly executed original of the Mortgage;

 

(b)an opinion from legal counsel acceptable to the Secured Parties as to the law of the Maritime Registry in form and substance satisfactory to the Agent and SACE confirming:

 

(i)the valid registration of the Ship in the Maritime Registry; and

 

(ii)the Mortgage over the Ship has been validly registered in the Maritime Registry;

 

(c)an opinion from legal counsel to the Agent as to English law confirming, without limitation, that the obligations of the Borrower under the deed of covenants constituting part of the Mortgage (if applicable), the Tripartite General Assignment and the Post-Delivery Assignment are legally valid and binding obligations enforceable by the relevant Creditor Parties in the English courts;

 

(d)an opinion from legal counsel to SACE in relation to, inter alia, the English law Finance Documents to be signed on the Delivery Date (to be addressed solely to SACE) in form and substance satisfactory to SACE;

 

(e)the documents listed in Schedule 3 (Documents to be produced by the Builder to the Agent on Delivery).

 

30
 

  

3.12Waiver of conditions precedent

 

If the Majority Lenders, at their discretion, subject to the prior written consent of SACE, permit the Loan to be borrowed before any of the conditions precedent referred to in Clause 3 (Conditions Precedent) has been satisfied, the Borrower shall ensure that that condition is satisfied within five (5) Business Days after the date (as specified in the relevant part of Clause 3 (Conditions Precedent)) or such later date as the Agent, acting with the authorisation of the Majority Lenders, may agree in writing with the Borrower.

 

3.13Changes to SACE requirements

 

(a)If SACE notifies the Agent in writing of a change to the requirements of the SACE Insurance Policy with the effect that, in the opinion of the Agent, certain documents which the Borrower is or may be required to provide for the purpose of drawing the Loan under this Agreement are no longer necessary to ensure that:

 

(i)such SACE Insurance Policy will apply to the Loan made or to be made under this Agreement; and

 

(ii)any claim which may be made in respect of the Loan under such SACE Insurance Policy will be valid and continue to be issued by SACE,

 

then the Agent shall promptly notify the Borrower of any changes the Agent considers appropriate to be made to this Agreement to reflect such a change in SACE's requirements.

 

(b)If the Agent notifies the Borrower of any proposed changes to this Agreement under paragraph (i) above, and provided that:

 

(i)all the Lenders and the Borrower agree with such changes; and

 

(ii)the Borrower indemnifies and holds harmless the Agent and the Lenders for any reasonable costs that it may incur arising from or in connection with any such amendments (including legal fees),

 

then such changes will be made to this Agreement in accordance with the terms hereof.

 

(c)If, in the opinion of the Lenders, there are any provisions of this Agreement that contradict or conflict with any provision of the SACE Insurance Policy to an extent that the same may have the effect of rendering all or any part of the SACE Insurance Policy void, voidable or otherwise not in full force and effect, this Agreement will be amended to the extent agreed in writing between the Borrower and the Agent (acting on the instructions of the Majority Lenders) to ensure compliance with the terms of the SACE Insurance Policy.

 

4.Drawdown

 

4.1Borrower's irrevocable payment instructions

 

The Lenders shall not be obliged to fulfil their obligation to make the Loan available other than (i) by paying the Builder all or part of 80% of the Final Contract Price up to the Eligible Amount on behalf of and in the name of the Borrower, (ii) by reimbursing the Borrower for the First Instalment of the SACE Premium which was paid by the Borrower to SACE on or before 30 days following the issuance of the SACE Insurance Policy and (iii) by payment to SACE of the Second Instalment of the SACE Premium payable on the Delivery Date. For the avoidance of doubt, the amount of the Loan shall not exceed the Maximum Loan Amount.

 

31
 

  

The Borrower hereby instructs the Lenders in accordance with this Clause 4.1 (Borrower's irrevocable payment instructions):

 

(a)to pay to the Builder all or part of 80% of the Final Contract Price up to the Eligible Amount.

 

(b)to reimburse the Borrower the amount of the First Instalment of the SACE Premium already paid by the Borrower to SACE on or before 30 days following the issuance of the SACE Insurance Policy; and

 

(c)to pay to the Agent on behalf of the Lenders for onward payment to SACE (such payment to SACE to be made for value on the Drawdown Date), by drawing under the Loan, the amount of the Second Instalment of the related SACE Premium.

 

Payment to the Builder of the amount drawn under Clause 4.1(a) above shall be made on the Delivery Date of the Ship during usual banking hours in Italy to the Builder's account as specified by the Builder in accordance with the Shipbuilding Contract after receipt and verification by the Agent of the documents provided under Schedule 3 (Documents to be produced by the Builder to the Agent on Delivery).

 

Save as contemplated in Clause 4.3 (Modification of payment terms) below, the payment instruction contained in this Clause 4.1 (Borrower's irrevocable payment instructions) is irrevocable.

 

4.2Conversion Rate for Loan

 

The Dollar amount to be drawn down under Clause 4.1(a) shall be calculated by the Agent on the Conversion Rate Fixing Date in accordance with the definitions of "Eligible Amount" and "Conversion Rate" in Clause 1.1 (Definitions).

 

4.3Modification of payment terms

 

The Borrower expressly acknowledges that the payment terms set out in this Clause may only be modified with the agreement of the Italian Authorities, Agent, the Security Trustee, the Lenders and the Borrower in the case of Clause 4.1(a) and with the agreement of the Italian Authorities, Agent, the Lenders and the Borrower in the case of Clause 4.1(b) and 4.1(c); Provided that it is the intention of the Borrower, the Lenders, the Security Trustee and the Agent that prior to the Conversion Rate Fixing Date agreement shall be reached with those financial institutions with whom the Borrower has entered into the FOREX Contracts (the "Counterparties") in order that the Euro payments due from the Counterparties under the FOREX Contracts shall be paid to the Agent for holding in escrow and to be released by the Agent simultaneously with (i) the payment in full to the Builder of the balance of the Final Contract Price denominated in Euro at the time of delivery of the Ship and (ii) the payment to the Counterparties of the Dollars due to them under the relevant FOREX Contracts out of the Dollar amount available under Clause 4.1(a), subject only to delivery of the Ship by the Builder to the Borrower taking place as evidenced by the execution and delivery of the Protocol of Delivery and Acceptance and to the Borrower having deposited with the Agent before delivery, if and to the extent required, any Dollar and/or Euro amounts as may be needed to ensure the payment in full of both the balance of the Final Contract Price in Euro and the Dollars owed to the Counterparties under all the relevant FOREX Contracts.

 

4.4Availability and conditions

 

(a)Drawing may not be made under this Agreement (and the Loan shall not be available) after the earlier of the Delivery Date and the expiry of the Availability Period.

 

32
 

  

(b)There will be only one Drawing under this Agreement.

 

(c)The Drawing cannot exceed the Maximum Loan Amount.

 

4.5Notification to Lenders of receipt of a Drawdown Notice

 

The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

 

(a)the amount of the Loan and the Drawdown Date;

 

(b)the amount of that Lender's participation in the Loan; and

 

(c)the duration of the first Interest Period.

 

4.6Lenders to make available Contributions

 

Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent the amount due from that Lender under Clause 2.2 (Lenders' participations in Loan).

 

4.7Disbursement of Loan

 

Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay the amounts which the Agent receives from the Lenders under Clause 4.6 (Lenders to make available Contributions) in the like funds as the Agent received the payments from the Lenders:

 

(a)in the case of the amount referred to in Clause 4.1(a), to the account of the Builder which the Borrower specifies in the Drawdown Notice; and

 

(b)in the case of the amount referred to in Clause 4.1(b) to the account of the Borrower which the Borrower shall specify; and

 

(c)in the case of the amount referred to in Clause 4.1(c) to the account of SACE which the SACE Agent shall specify.

 

4.8Disbursement of Loan to third party

 

The payment by the Agent under Clause 4.7 (Disbursement of Loan) shall constitute the making of the Loan and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.

 

5.Repayment

 

5.1Number of repayment instalments

 

The Borrower shall repay the Loan by twenty-four (24) consecutive six-monthly instalments.

 

5.2Repayment Dates

 

The first instalment shall be repaid on the date falling six (6) months after the Delivery Date and the last instalment on the date falling one hundred and forty four (144) months after the Delivery Date, each date of payment of an instalment being a "Repayment Date".

 

33
 

 

5.3Amount of repayment instalments

 

Each of the twenty-four (24) consecutive six-monthly repayment instalments of the Loan shall be of an equal amount.

 

5.4Final Repayment Date

 

On the final Repayment Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

 

6.Interest

 

6.1Fixed Interest Rate

 

If the Borrower has specified a Fixed Interest Rate pursuant to Clause 3.5(a)(ii), the Loan shall bear interest at the Fixed Interest Rate. Such interest shall accrue on the actual number of days elapsed based upon a 360 day year and shall be paid on each Repayment Date.

 

6.2Floating Interest Rate

 

If:

 

(a)the Borrower has specified a Floating Interest Rate pursuant to Clause 3.5(a)(ii); or

 

(b)the Borrower has specified a Fixed Interest Rate pursuant to Clause 3.5(a)(ii) but thereafter for any reason whatsoever the Interest Make-up Agreement is suspended or otherwise ceases to be in effect; or

 

(c)SIMEST has requested a change of currency pursuant to the Interest Make-Up Agreement and such change of currency is not agreed by the Borrower or Lenders in accordance with Clause 6.15 (Change of currency); or

 

(d)SIMEST has failed to make a net payment of interest to the Lenders pursuant to the Interest Make-Up Agreement,

 

the rate of interest on the Loan in respect of any Interest Period shall be the Floating Interest Rate applicable for that Interest Period and the following provisions of this Clause 6 (Interest) shall apply (in the case of the circumstances referred to in paragraph (b) above, with effect from the date on which the Interest Make-up Agreement ceases to be in effect, with such consequential amendments as shall be necessary to give effect to the switch from a Fixed Interest Rate to a Floating Interest Rate).

 

6.3Payment of Floating Interest Rate

 

Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall accrue on the actual number of days elapsed based upon a 360 day year and shall be paid by the Borrower on the last day of that Interest Period.

 

6.4Notification of Interest Periods and Floating Interest Rate

 

The Agent shall notify the Borrower and each Lender of each Floating Interest Rate and the duration of each Interest Period as soon as reasonably practicable after each is determined and no later than the Quotation Date.

 

34
 

  

6.5Market disruption

 

The following provisions of this Clause 6 (Interest) apply if:

 

(a)No rate is quoted on "Reuters Page LIBOR 01 or LIBOR 02" (or any other page replacing it) and the Lenders do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or

 

(b)at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than [*] per cent. of the Loan (or, if the Loan has not been made, Commitments amounting to more than [*] per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or

 

(c)at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.

 

6.6Notification of market disruption

 

The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 6.5 (Market disruption) which have caused its notice to be given.

 

6.7Suspension of drawdown

 

If the Agent's notice under Clause 6.5 (Market disruption) is served before the Loan is made:

 

(a)in a case falling within Clauses 6.5(a) or 6.5(b), the Lenders' obligations to make the Loan;

 

(b)in a case falling within Clause 6.5(c), the Affected Lender's obligation to participate in the Loan;

 

shall be suspended while the circumstances referred to in the Agent's notice continue.

 

6.8Negotiation of alternative rate of interest

 

If the Agent's notice under Clause 6.6 (Notification of market disruption) is served after the Loan is made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, in consultation with SACE, within the 30 days after the date on which the Agent serves its notice under Clause 6.6 (Notification of market disruption) (the "Negotiation Period"), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.

 

6.9Application of agreed alternative rate of interest

 

Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

 

35
 

  

6.10Alternative rate of interest in absence of agreement

 

If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender (and in consultation with SACE), set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin; and the procedure provided for by this Clause 6.10 (Alternative rate of interest in absence of agreement) shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.

 

6.11Notice of prepayment

 

If the Borrower does not agree with an interest rate set by the Agent under Clause 6.10 (Alternative rate of interest in absence of agreement), the Borrower may give the Agent not less than 15 Business Days', or, if the Fixed Interest Rate has been selected pursuant to Clause 3.5(a)(ii), 30 days, notice of its intention to prepay at the end of the interest period set by the Agent.

 

6.12Prepayment; termination of Commitments

 

A notice under Clause 6.11 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender and, if the Fixed Interest Rate has been selected by the Borrower, SIMEST of the Borrower's notice of intended prepayment; and:

 

(a)on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and

 

(b)on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty subject to the provisions of Clause 20.2 (Breakage costs)) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate (being either the Floating Interest Rate or the Fixed Interest Rate as specified by the Borrower pursuant to Clause 3.5(a)(ii).

 

6.13Application of prepayment

 

The provisions of Clause 16 (Cancellation, ) shall apply in relation to the prepayment.

 

6.14Certain Circumstances

 

Notwithstanding anything to the contrary in this Agreement:

 

(a)in the event of any circumstances falling within Clause 6.5 which might affect the advance of the Loan on the Drawdown Date (the “Relevant Circumstances”):

 

(i)occurring and being continuing on the date falling ninety (90) days before the Intended Delivery Date (the “Relevant Date”), each Lender will notify the Borrower (through the Agent) of the Relevant Circumstances on the Relevant Date or, if the Relevant Date is not a Business Day, on the next following Business Day; and

 

(ii)occurring after the Relevant Date, each Lender will notify the Borrower (through the Agent) immediately each Lender become aware of the Relevant Circumstances;

 

36
 

  

(b)in the event of any Relevant Circumstances falling within Clauses 6.5(a) or (b) (the “Pricing-Related Relevant Circumstances”) occurring before the Loan is made available and notwithstanding the provisions of Clause 6.7, each Lender will fund its respective Contributions by reference to the agreed alternative rate of interest in accordance with Clauses 6.8, 6.9 and 6.10 as if the provisions of such Clauses applied not only in the event that the Pricing-Related Relevant Circumstances have been notified by the Agent to the Borrower after the making of the Loan but also before the making of the Loan.

 

(c)in the event of any Relevant Circumstances falling within 6.5(c) (the “Availability-Related Relevant Circumstances”) occurring before the Loan is made and notwithstanding the provisions of Clause 6.7 of the Loan Agreement, each Lender will enter into good faith discussions with the Borrower for a period not exceeding 10 Business Days in order to discuss a basis on which the Lenders could be able to fund their respective Contributions in Dollars (or, if unavailable in Dollars, then in any available currency). Such discussions shall be without obligation on the Lenders provided that during such discussion period, such circumstances continue.

 

6.15Change of currency

 

(a)In the event that the Agent notifies the Borrower that SIMEST has requested a change in the currency of the Loan in accordance with clause 6.3 of the Interest Make-Up Agreement, the Borrower and the Lenders shall, without obligation, consider such request for a change of currency acting reasonably for a period of not exceeding 10 Business Days. Following such discussions the Agent shall report the decision of the Borrower and the Lenders to SIMEST, providing their reason for any negative decision.

 

(b)In the event that a change of currency is agreed the Parties agree to negotiate in good faith the necessary changes to the Loan Agreement and the Finance Documents in order to document the change in currency.

 

(c)In the event that a change in currency is not acceptable to the Lenders or the Borrower, the provision of Clause 6.2(c) shall apply.

 

7.Interest Periods

 

7.1Commencement of Interest Periods

 

The first Interest Period shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

 

7.2Duration of Interest Periods

 

Each Interest Period shall be 6 months and shall end on the next succeeding Repayment Date.

 

8.SACE Premium and Italian Authorities

 

8.1SACE Premium

 

The estimated SACE Premium is due and payable in two instalments as follows:

 

(a)the first instalment of the SACE Premium (being an amount of US$[*]) (the "First Instalment") shall be paid by the Borrower to SACE (provided the Borrower and the Lenders

 

37
 

  

have been notified by the SACE Agent that the SACE Insurance Policy has been issued) within 30 days of the issuance of the SACE Insurance Policy documentation in accordance with and as required by Clause 3.3(b) of this Agreement; and

 

(b)the second instalment of the SACE Premium shall be such amount in Dollars as is calculated by SACE as being (i) [*]% of the Loan actually advanced on the Drawdown Date LESS (ii) the amount of the First Instalment (the "Second Instalment") and shall be payable on or prior to the Drawdown Date.

 

8.2Reimbursement by the Borrower of the SACE Premium

 

The Borrower irrevocably agrees to pay the First Instalment, and to instruct the Lenders to pay the Second Instalment on behalf of the Borrower, as follows:

 

(a)The Borrower has requested and the Lenders have agreed to reimburse the payment of one hundred per cent. (100%) of the First Instalment to the Borrower on the Drawdown Date, it being agreed that such First Instalment shall be paid to SACE by the Borrower upon notification by the Agent to the Borrower (i) of the issue of the SACE Insurance Policy documentation in the form required by Clause 3.3(b) of this Agreement, and (ii) of the amount of the First Instalment.

 

(b)The Borrower has requested and the Lenders have agreed to finance the payment of one hundred per cent. (100%) of the Second Instalment on the Drawdown Date in accordance with Clause 2.1(c) of this Agreement.

 

Consequently, the Borrower hereby irrevocably instructs the Agent on behalf of the Lenders to pay the Second Instalment to SACE on the Drawdown Date in accordance with Clause 2.1(c) of this Agreement and to reimburse the Borrower by the Borrower drawing under the Loan the amount of the First Instalment in accordance with Clause 2.1(b) of this Agreement.

 

The First Instalment and Second Instalment each financed by the Loan will be repayable in any event by the Borrower to the Lenders in the manner specified in Clause 5 (Repayment) and under any and all circumstances including but without limitation in the event of prepayment or acceleration of the Loan.

 

8.3Italian Authorities

 

(a)The Borrower acknowledges and agrees that the Agent and the Lenders are entitled to provide the Italian Authorities with any information they may have relative to the Loan and the business of the Group, to allow the Italian Authorities to inspect all their records relating to this Agreement and the other Transaction Documents and to furnish them with copies thereof. Any such information relative to the Loan may also be given by any Italian Authorities to international institutions charged with collecting statistical data.

 

(b)The Borrower acknowledges that, in the making of any decision or determination or the exercise of any discretion or the taking or refraining to take any action under this Agreement or any of the other Finance Documents, the Agent and the Lenders shall be deemed to have acted reasonably if they have acted on the instructions of either of the Italian Authorities.

 

(c)Each Party further undertakes not to act in a manner which is inconsistent with the terms of the SACE Insurance Policy and the Interest Make Up Agreement.

 

38
 

  

8.4Refund

 

(a)Provided that no Event of Default has occurred and is then continuing and no loss has occurred under the SACE Insurance Policy, the Borrower shall be entitled to a refund of the First Instalment of the SACE Premium in accordance with the terms of the SACE Insurance Policy exclusively in the event that no disbursements have been made under this Agreement and, as a result thereof, the SACE Insurance Policy has been definitely terminated by mutual consent between the parties thereto.

 

(b)Any refund of the SACE Premium, whether in whole or in part, must be expressly requested from SACE by the Borrower in writing. Under the terms of the SACE Insurance Policy, a fixed amount of [*] per cent. ([*]%) shall be withheld from the amount of the SACE Premium to be refunded. Such withholding, charged as a lump sum to cover administration and management costs for the SACE Insurance Policy, may not, in any event, amount to less than the equivalent of €[*], calculated at the exchange rate as at the date of the refund request.

 

(c)Except as set out in paragraph (a) and (b) above, no part of the SACE Premium is refundable to any Obligor.

 

(d)In no event shall the SACE Agent be liable for any refund of the SACE Premium to be made by SACE.

 

9.Fees

 

9.1Fees

 

The following fees shall be paid to the Agent by the Borrower as required hereunder:

 

(a)for the benefit of the Lenders, an arrangement fee in Euros, computed at the rate of [*] per cent. ([*]%) flat on EUR 299,866,962.31 being the Maximum Loan Amount converted in to Euros at the Base Rate and payable on the date of this Agreement;

 

(b)for the benefit of the Lenders, a commitment fee in Dollars for the period from the date of this Agreement to the Delivery Date of the Ship, or the date of receipt by the Agent of the written cancellation notice sent by the Borrower as described in Clause 15.1 (Security Shortfall), whichever is the earliest, computed at the rate of [*] per cent. ([*]%) per annum and calculated on the undrawn amount of the Maximum Loan Amount and payable in arrears on the date falling six (6) months after the date of this Agreement and on each date falling at the end of each following consecutive six (6) month period, with the exception of the commitment fee due in respect of the last period, which shall be paid on the Drawdown Date, or the date of receipt by the Agent of the written cancellation notice sent by the Borrower as described in Clause 16.1 (Cancellation), whichever is the earliest, such commitment fee to be calculated on the actual number of days elapsed divided by three hundred and sixty (360). For the purpose of the computation of the periodical commitment fee payable to the Lenders, the Maximum Loan Amount is assumed to be $440,321,648.78.

 

(c)for the Agent, an agency fee of $[*] payable on the date of this Agreement and on or before each anniversary date thereof until total repayment of the Loan unless the Total Commitments are terminated pursuant to Clause 16.1 (Cancellation).

 

(d)for the SACE Agent a structuring fee in the amount and payable at the time separately agreed in writing between the SACE Agent and the Borrower;

 

39
 

  

10.Taxes, Increased Costs, Costs and Related Charges

 

10.1Definitions

 

(a)In this Agreement:

 

"Protected Party" means a Secured 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 other than a FATCA Deduction.

 

"Tax Payment" means either the increase in a payment made by an Obligor to a Secured Party under Clause 10.2 (Tax gross-up) or a payment under Clause 10.3 (Tax indemnity).

 

(b)Unless a contrary indication appears, in this Clause 10 (Taxes, Increased Costs, Costs and Related Charges) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

 

10.2Tax gross-up

 

(a)Each Obligor shall make all payments to be made by it under the Finance Documents without any Tax Deduction, unless a Tax Deduction is required by law.

 

(b)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.

 

(c)If a Tax Deduction is required by law to be made by an Obligor, 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.

 

(d)A payment shall not be increased under paragraph (c) above if on the date on which the payment falls due the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender (having been given notice of the documentation requested under Clause 10.7 at least 30 Business Days prior to such payment date) complied with its obligations under Clause 10.7 (Lender Status).

 

(e)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.

 

(f)Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Secured Party entitled to the payment evidence reasonably satisfactory to that Secured

 

40
 

  

Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

10.3Tax indemnity

 

(a)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.

 

(b)Paragraph (a) above shall not apply:

 

(i)with respect to any Tax assessed on a Secured Party:

 

(A)under the law of the jurisdiction in which that Secured Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Creditor Party is treated as resident for tax purposes; or

 

(B)under the law of the jurisdiction in which that Lender’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 Secured Party; or

 

(ii)to the extent a loss, liability or cost is compensated for by an increased payment under Clause 10.2 (Tax gross-up) or would have been compensated for by an increased payment under Clause 10.2 (Tax gross-up) but was not so compensated solely because an exclusion in paragraph (d) of Clause 10.2 (Tax gross-up) applied, or relates to a FATCA Deduction required to be made by a Party; or

 

(iii)with respect to the Taxes in the nature of a branch profits tax imposed by Section 884(a) of the Code that is imposed by any jurisdiction described in paragraph (b)(i)(B) above.

 

(c)A Protected Party making, or intending to make a claim under paragraph (a) above 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.

 

(d)A Protected Party shall, on receiving a payment from an Obligor under this Clause 10.3 (Tax indemnity), notify the Agent.

 

10.4Tax Credit

 

If an Obligor makes a Tax Payment and the relevant Creditor Party determines that:

 

(a)a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

 

(b)that Creditor Party has obtained, retained and utilised that Tax Credit,

 

41
 

  

the Creditor Party shall pay an amount to the Obligor which that Creditor 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.

 

10.5Stamp 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, registration and other similar Taxes payable in respect of any Finance Document.

 

10.6VAT

 

(a)All amounts expressed to be payable under a Finance Document by any Party to a Secured Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Secured Party to any Party under a Finance Document and such Secured Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Secured Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Secured Party must promptly provide an appropriate VAT invoice to that Party).

 

(b)If VAT is or becomes chargeable on any supply made by any Secured Party (the "Supplier") to any other Secured Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

(i)(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

(ii)(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

(c)Where a Finance Document requires any Party to reimburse or indemnify a Secured Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Secured Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Secured Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

(d)Any reference in this Clause 10.6 (VAT) to any Party being required to account to a tax authority for VAT shall, at any time when such Party is treated as a member of a group for VAT purposes, include a reference to another member of that group being required to so account to the relevant tax authority.

 

42
 

  

(e)In relation to any supply made by a Secured Party to any Party under a Finance Document, if reasonably requested by such Secured Party, that Party must promptly provide such Secured Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Secured Party's VAT reporting requirements in relation to such supply.

 

10.7Lender Status

 

(a)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under a Finance Document shall deliver to the Agent and the Borrower, at the time or times reasonably requested by the Agent or the Borrower, such properly completed and executed documentation reasonably requested by the Agent or the Borrower (and which it is reasonable for the Lender to complete and execute) as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Agent or the Borrower, shall deliver such other documentation as prescribed by applicable law and reasonably requested by the Agent or the Borrower as will enable the Agent or the Borrower to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

 

(b)Any Lender shall, to the extent it is legally entitled to do so, deliver to the Agent and the Borrower on or prior to the date on which such Lender becomes a Lender under this Agreement or promptly thereafter (and from time to time thereafter as prescribed by applicable law or upon the request of the Agent or the Borrower), duly executed and properly completed copies of Internal Revenue Service Form W-9 or W-8, as applicable, certifying that it is not subject to U.S. federal backup withholding or establishing an exemption from, or reduction of, U.S. federal withholding Tax.

 

10.8FATCA Deduction

 

(a)Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

 

(b)Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrower, the Agent and the other Secured Parties.

 

10.9FATCA Information

 

(a)Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:

 

(i)confirm to that other Party whether it is:

 

(A)a FATCA Exempt Party; or

 

(B)not a FATCA Exempt Party; and

 

(ii)supply to that other Party such forms (including any applicable W8 BEN-E or W9 or other equivalent form), documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other

 

43
 

  

information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

 

(b)If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

 

(c)Paragraph (a) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of:

 

(i)any law or regulation;

 

(ii)any fiduciary duty; or

 

(iii)any duty of confidentiality.

 

(d)If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then:

 

(i)if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

 

(ii)if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100 per cent.,

 

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

10.10Increased Costs

 

(a)If after the date of this Agreement by reason of (x) any change in law or in its interpretation or administration and/or (y) compliance with any request from or requirement of any central bank or other fiscal, monetary or other authority including but without limitation the Basel Committee on Banking Regulations and Supervisory Practices whether or not having the force of law:

 

(i)any of the Lenders incurs a cost as a result of its performing its obligations under this Agreement and/or its making available its Commitment hereunder; or

 

(ii)there is any increase in the cost to any of the Lenders of funding or maintaining all or any of the advances comprised in a class of advances formed by or including its Commitment advanced or to be advanced by it hereunder; or

 

(iii)any of the Lenders incurs a cost as a result of its having entered into and/or its assuming or maintaining its commitment under this Agreement; or

 

(iv)any of the Lenders becomes liable to make any payment on account of Tax or otherwise (other than Tax on its overall net income) on or calculated by reference to

 

44
 

  

the amount of its Commitment advanced or to be advanced hereunder and/or any sum received or receivable by it hereunder; or

 

(v)any of the Lenders suffers any decrease in its rate of return as a result of any changes in the requirements relating to capital ratios, monetary control ratios, the payment of special deposits, liquidity costs or other similar requirements affecting that Lender,

 

then the Borrower shall on demand pay to the Agent for the account of the relevant Lender or Lenders amounts sufficient to indemnify the relevant Lender or Lenders against, as the case may be, such cost, such increased cost (or such proportion of such increased cost as is in the reasonable opinion of the relevant Lender or Lenders attributable to the funding or maintaining of its or their Commitment(s) hereunder) or such liability.

 

(b)This Clause 10.10 (Increased Costs)does not apply to the extent any Increased Cost is:

 

(i)Attributable to a Tax Deduction required by law to be made by an Obligor;

 

(ii)Attributable to a FATCA Deduction required to be made by a Party;

 

(iii)Compensated for by Clause 10.3 (Tax indemnity) (or would have been compensated for under Clause 10.3 (Tax indemnity) but was not compensated solely because any of the exclusions in Clause 10.3(b) applied); or

 

(iv)Attributable to the wilful breach by the relevant Creditor Party or its Affiliates of any law of regulation.

 

In this Clause 10.10 (Increased Costs), a reference to a “Tax Deduction” has the same meaning given to the term in Clause 10.1 (Definitions).

 

(c)A Lender affected by any provision of this Clause 10.10 (Increased Costs) shall promptly inform the Agent after becoming aware of the relevant change and its possible results (which notice shall be conclusive evidence of the relevant change and its possible results) and the Agent shall, as soon as reasonably practicable thereafter, notify the Borrower of the change and its possible results. Without affecting the Borrower's obligations under this Clause 10.10 (Increased Costs) and in consultation with the Agent and the Italian Authorities, the affected Lender will then take all such reasonable steps as may be open to it to mitigate the effect of the change (for example (if then possible) by changing its Facility Office or transferring some or all of its rights and obligations under this Agreement to another financial institution reasonably acceptable to the Borrower and the Agent and the Italian Authorities). The reasonable costs of mitigating the effect of any such change shall be borne by the Borrower save where such costs are of an internal administrative nature and are not incurred in dealings by any Lender with third parties.

 

10.11Transaction Costs

 

The Borrower undertakes to pay to the Agent, upon demand, all costs and expenses, duties and fees, including but without limitation agreed legal costs (which, for avoidance of doubt are exclusive of VAT and disbursements) out of pocket expenses and travel costs, reasonably incurred by the Italian Authorities, the Joint Mandated Lead Arrangers and the Lenders (but not including any bank which becomes a Lender after the date of this Agreement) in connection with the negotiation, preparation and execution of all agreements, guarantees, security agreements and related documents entered into, or to be entered into, for the purpose of the transaction contemplated hereby as well as all costs and expenses, duties

 

45
 

  

and fees incurred by the Agent or the Lenders in connection with the registration, filing, enforcement or discharge of the said guarantees or security agreements, including without limitation the fees and expenses of legal advisers and insurance experts and the fees and expenses of the Italian Authorities (including the fees and expenses of its legal advisers) payable by the Joint Mandated Lead Arrangers to the Italian Authorities, the cost of registration and discharge of security interests and the related travel and out of pocket expenses; the Borrower further undertakes to pay to the Agent all costs, expenses, duties and fees incurred by the Lenders and the Italian Authorities in connection with any variation of this Agreement and the related documents, guarantees and security agreements, any supplements thereto and waiver given in relation thereto, in connection with the investigation of any potential Event of Default, the enforcement or preservation of any rights under this Agreement and/or the related guarantees and security agreements, including in each case the fees and expenses of legal advisers, and in connection with the consultations or proceedings made necessary or in the opinion of the Agent desirable by the acts of, or failure to act on the part of, the Borrower.

 

10.12Costs of delayed Delivery Date

 

The Borrower undertakes to pay to the Agent, upon demand, any costs incurred by the Lenders and/or the Italian Authorities in funding the Loan in the event that the Delivery Date is later than the Intended Delivery Date unless the Borrower has given the Agent at least three (3) Business Days' notification of such delay in the Delivery Date.

 

10.13SACE obligations

 

To the extent that this Clause 10 (Taxes, Increased Costs, Costs and Related Charges) imposes obligations or restrictions on a Secured Party, such obligations or restrictions shall not apply to SACE and SACE shall have no obligations hereunder nor be constrained by such restrictions.

 

11.Representations and Warranties

 

11.1Timing and repetition

 

The following applies in relation to the time at which representations and warranties are made and repeated:

 

(a)the representations and warranties in Clause 11.2 (Continuing representations and warranties) are made on the date of this Agreement (apart from the representation at Clause 11.2 (dd) and 11.2 (ee) which shall only be made on the date of this Agreement and shall not be repeated) and shall be deemed to be repeated, with reference mutatis mutandis to the facts and circumstances subsisting, as if made on each day until the Borrower has no remaining obligations, actual or contingent, under or pursuant to this Agreement or any of the other Finance Documents; and

 

(b)the representations and warranties in Clause 11.3 (Representations on the Delivery Date) are made on the Delivery Date and shall be deemed to be repeated, with reference mutatis mutandis to the facts and circumstances subsisting, as if made thereafter on each day until the Borrower has no remaining obligations, actual or contingent, under or pursuant to this Agreement or any of the other Finance Documents.

 

11.2Continuing representations and warranties

 

The Borrower represents and warrants to each of the Secured Parties (provided always that the representations in clauses 11.2(t), 11.2(u), 11.2(x) and 11.2(y) below, shall not be made by the Borrower to any Lender which is incorporated in the Federal Republic of Germany

 

46
 

  

(and which has so notified the Agent) to the extent that the enforcement of such provision by a Lender would (x) violate, conflict with or incur liability under EU Regulation (EC) 2271/96 or (y) violate or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) in connection with section 4 paragraph (1)(a)(3) of the Foreign Trade Law (Außenwirtschaftsgesetz) or any similar anti-boycott statute in force in the Federal Republic of Germany) that:

 

(a)each Obligor is a limited liability company or body corporate duly organised, constituted and validly existing under the laws of the country of its formation or (as the case may be) incorporation, possessing perpetual existence, the capacity to sue and be sued in its own name and the power to own and charge its assets and carry on its business as it is now being conducted;

 

(b)the Borrower has an authorised 1000 Common Units all of which have been issued to Seven Seas;

 

(c)the legal title to and beneficial interest in the equity in the Borrower is held free of any Security or any other claim by Seven Seas;

 

(d)none of the equity in the Borrower is subject to any option to purchase, pre-emption rights or similar rights;

 

(e)each Obligor has the power to enter into and perform this Agreement and those of the other Transaction Documents to which it is a party and the transactions contemplated hereby and thereby and has taken all necessary action to authorise the entry into and performance of this Agreement and such other Transaction Documents and such transactions;

 

(f)this Agreement and each other Transaction Document constitutes (or will constitute when executed) legal, valid and binding obligations of each Obligor expressed to be a party thereto enforceable in accordance with their respective terms and in entering into this Agreement and borrowing the Loan, the Borrower is acting on its own account;

 

(g)the entry into and performance of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby do not and will not conflict with:

 

(i)any law or regulation or any official or judicial order; or

 

(ii)the constitutional documents of any Obligor; or

 

(iii)any agreement or document to which any Obligor is a party or which is binding upon such Obligor or any of its assets,

 

nor result in the creation or imposition of any Security Interest on the Borrower or its assets pursuant to the provisions of any such agreement or document, except for Security Interests which qualify as Permitted Security Interests with respect to the Borrower;

 

(h)except for:

 

(i)the filing of UCC-1 Financing Statements against the Borrower in respect of those Financing Documents to which it is a party and which create Security Interests;

 

(ii)the recording of the Mortgage in the office of the Maritime Administrator of the Republic of the Marshall Islands; and

 

47
 

  

(iii)the registration of the Ship under an Approved Flag,

 

all authorisations, approvals, consents, licences, exemptions, filings, registrations, notarisations and other matters, official or otherwise, required in connection with the entry into, performance, validity and enforceability of this Agreement and each of the other Transaction Documents to which any Obligor is a party and the transactions contemplated thereby have been obtained or effected and are in full force and effect except authorisations, approvals, consents, licences, exemptions, filings and registrations required in the normal day to day course of the operation of the Ship and not already obtained by the Borrower;

 

(i)it is disregarded as an entity separate from its owner for U.S. federal Tax purposes;

 

(j)all information furnished by any Obligor relating to the business and affairs of any Obligor in connection with this Agreement and the other Transaction Documents was and remains true and correct in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading;

 

(k)each Obligor has fully disclosed to the Agent all facts relating to each Obligor which it knows or should reasonably know and which might reasonably be expected to influence the Lenders in deciding whether or not to enter into this Agreement;

 

(l)the obligations of the Borrower and the Guarantor under the Finance Documents rank at least pari passu with all its other present unsecured and unsubordinated indebtedness with the exception of any obligations which are mandatorily preferred by law;

 

(m)the Borrower is and shall remain, after the advance to it of the Loan, solvent in accordance with the laws of the state of Delaware and the United Kingdom and in particular with the provisions of the Insolvency Act 1986 (as from time to time amended) and the requirements thereof;

 

(n)neither the Borrower nor any other Obligor has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief) threatened against any of them for the reorganisation, winding-up, dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of any of them or any or all of their assets or revenues nor has it sought any other relief under any applicable insolvency or bankruptcy law;

 

(o)(A) the consolidated audited accounts of both Prior Guarantors for the period ending on 31 December 2012 and 31 December 2013 (which accounts have been prepared in accordance with GAAP) fairly represent the financial condition of each Prior Guarantor as shown in such audited accounts and (B) (in relation to any date on which this representation and warranty is deemed to be repeated pursuant to Clause 11.1(a)) the latest available annual consolidated audited accounts of the Guarantor at the date of repetition (which accounts have been prepared in accordance with GAAP) fairly represent the financial condition of the Guarantor as shown in such audited accounts;

 

(p)none of the Obligors nor any of their respective assets enjoys any right of immunity (sovereign or otherwise) from set-off, suit or execution in respect of their obligations under this Agreement or any of the other Transaction Documents or by any relevant or applicable law;

 

48
 

  

(q)all the membership interest in the Borrower and all shares or membership interest in any Approved Manager which is a member of the Group shall be legally and beneficially owned directly or indirectly by (in the case of the Borrower) Seven Seas and (in the case of such Approved Manager) the Guarantor and such structure shall remain so throughout the Security Period;

 

(r)the copies of the Shipbuilding Contract, any External Management Agreement, any charter and any charter guarantee which require a notice of assignment to be served under the terms of the Tripartite General Assignment (if any)and any other relevant third party agreements including but without limitation the copies of any documents in respect of the Insurances delivered to the Agent are true and complete copies of each such document constituting valid and binding obligations of the parties thereto enforceable in accordance with their respective terms and, subject to Clauses 13.2 (Management and employment) and 12.22 (Shipbuilding Contract), no amendments thereto or variations thereof have been agreed nor has any action been taken by the parties thereto which would in any way render such document inoperative or unenforceable;

 

(s)any borrowing by the Borrower under this Agreement, and the performance of its obligations under this Agreement and the other Transaction Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to "money laundering" as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities; and

 

(t)no Obligor is:

 

(i)a Prohibited Person;

 

(ii)is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person; or

 

(iii)owns or controls a Prohibited Person;

 

(u)no proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly applied in a manner or for a purpose prohibited by Sanctions;

 

(v)the choice of governing law of each Transaction Documents to which it is a party will be recognised and enforced in its Relevant Jurisdictions and any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions;

 

(w)for the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the "Regulation"), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated outside of the European Union and it has no "establishment" (as that term is used in Article 2(h) of the Regulation) in European Union country;

 

(x)no payments made or to be made by the Borrower, Seven Seas or the Guarantor in respect of amounts due under this Agreement or any Finance Document have been or shall be funded out of funds of Illicit Origin and none of the sources of funds to be used by the Borrower, Seven Seas or the Guarantor in connection with the construction of the Ship or its business are of Illicit Origin;

 

49
 

  

(y)to the best of the Borrower's, Seven Seas’ and the Guarantor's knowledge, no Prohibited Payment has been or will be made or provided, directly or indirectly, by (or on behalf of) it, any of its affiliates, its or its officers, directors or any other person acting on its behalf to, or for the benefit of, any authority (or any official, officer, director, agent or key employee of, or other person with management responsibilities in, of any authority) in connection with the Ship, this Agreement and/or the Finance Documents;

 

(z)no event has occurred which constitutes a default under or in respect of any Transaction Document to which any Obligor or the Builder is a party or by which any Obligor or the Builder may be bound (including (inter alia) this Agreement) and no event has occurred which constitutes a default under or in respect of any agreement or document to which any Obligor is a party or by which any Obligor may be bound to an extent or in a manner which might have a material adverse effect on the ability of that Obligor to perform its obligations under the Transaction Documents to which it is a party;

 

(aa)none of the assets or rights of the Borrower is subject to any Security Interest except any Security Interest which (i) qualifies as a Permitted Security Interest with respect to the Borrower or (ii) is permitted by Clause 12.7 of this Agreement;

 

(bb)no litigation, arbitration or administrative proceedings are current or pending or, to its knowledge, threatened, which might, if adversely determined, have a material adverse effect on the ability of an Obligor to perform its obligations under the Transaction Documents to which it is a party;

 

(cc)to the best of its knowledge, each of the Obligors has complied with all taxation laws in all jurisdictions in which it is subject to Taxation and has paid all Taxes due and payable by it;

 

(dd)it is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is a party with respect to any Lender that provides the documentation described in Clause 10.7 (b) indicating that it is not subject to tax withholding;

 

(ee)under the laws of its Relevant Jurisdictions it is not necessary that any stamp or similar taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents;

 

(ff)each member of the Group has good and marketable title to all its assets which are reflected in the audited accounts referred to in Clause 11.2(o);

 

(gg)none of the Obligors has a place of business in any jurisdiction (except as already disclosed) which requires any of the Finance Documents to be filed or registered in that jurisdiction to ensure the validity of the Finance Documents to which it is a party;

 

(hh)each of the Obligors and each member of the Group:

 

(i)is in compliance with all Environmental Laws and Environmental Approvals provided that any non-compliance would not be expected to result in a Material Adverse Effect;

 

(ii)has not received any notice or threat of any Environmental Claim against any member of the Group and no person has claimed that an Environmental Incident has occurred in each case that would reasonably be expected to result in a Material Adverse Effect;

 

50
 

  

(iii)confirms that no Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred in each case that would reasonably be expected to result in a Material Adverse Effect.

 

11.3Representations on the Delivery Date

 

The Borrower further represents and warrants to each of the Secured Parties at Delivery that:

 

(a)the Ship is in its absolute and unencumbered ownership save as contemplated by the Finance Documents;

 

(b)the Ship is registered in its name under the laws and flag of the Maritime Registry;

 

(c)the Ship is classed with the highest classification available for a Ship of its type free of all recommendations and qualifications with Lloyd's Register, RINA or Bureau Veritas;

 

(d)the Ship is operationally seaworthy and in compliance with all relevant provisions, regulations and requirements (statutory or otherwise) applicable to ships registered under the laws and flag of the Maritime Registry;

 

(e)the Ship is in compliance with the ISM Code, the ISPS Code and Annex VI as they relate to the Borrower, any Approved Manager and the Ship;

 

(f)the Ship is insured in accordance with the provisions of Clause 14 (Insurance Undertakings) and in compliance with the requirements therein in respect of such insurances; and

 

(g)the Ship is managed by the Approved Manager and, in the event that the Approved Manager is not a member of the Group, on and subject to the terms set out in the External Management Agreement.

 

(h)there is no agreement or understanding to allow or pay any rebate, premium, inducement, commission, discount or other benefit or payment (however described) to the Borrower or any other member of the Group, the Builder or a third party in connection with the purchase by the Borrower of the Ship, other than as disclosed to the Agent in writing on or before the date of this Agreement.

 

(i)no Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.

 

12.General Undertakings

 

12.1General

 

The Borrower undertakes with each Secured Party to comply with the following undertakings during the Security Period (provided always that the undertakings in clauses 12.2(e), 12.3, 12.4 and 12.24 below, shall not be made by the Borrower to any Lender which is incorporated in the Federal Republic of Germany (and which has so notified the Agent) to the extent that the enforcement of such provision by a Lender would (x) violate, conflict with or incur liability under EU Regulation (EC) 2271/96 or (y) violate or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) in connection with

 

51
 

  

section 4 paragraph (1)(a)(3) of the Foreign Trade Law (Außenwirtschaftsgesetz) or any similar anti-boycott statute in force in the Federal Republic of Germany) that:

 

12.2Information

 

The Borrower will provide to the Agent for the benefit of the Lenders and SACE (or will procure the provision of):

 

(a)as soon as practicable (and in any event within one hundred and twenty (120) days after the close of its financial year) a Certified Copy of the audited consolidated accounts of the Guarantor and its subsidiaries for that year (commencing with accounts made up to 31 December 2014 in the case of the consolidated accounts of the Guarantor);

 

(b)as soon as practicable (and in any event within ninety (90) days of the commencement of each financial year) the budgetary forecast (profit and loss statement, balance sheet statement and cash flow statement) for the two following years for the Guarantor;

 

(c)as soon as practicable (and in any event within forty-five (45) days of the end of the contemplated quarter for the first three quarters in any fiscal year and within 90 days for the final quarter) a copy of the unaudited consolidated quarterly management accounts (including current and year-to-date profit and loss statements and balance sheet compared to the previous year and to budget) of the Guarantor (it being understood that the delivery by the Guarantor of quarterly or annual reports as filed with the Securities and Exchange Commission in respect of the Guarantor and its consolidated subsidiaries shall satisfy all the requirements of this paragraph (c));

 

(d)promptly, such further information in its possession or control regarding the condition or operations of the Ship and its financial condition and operations of the Borrower and those of any company in the Group as the Agent may reasonably request for the benefit of the Secured Parties; and

 

(e)details of any material litigation, arbitration or administrative proceedings (including proceedings relating to any alleged or actual breach of Sanctions, the ISM Code of the ISPS Code) which affect any company in the Group as soon as the same are instituted and served, or, to the knowledge of the Borrower, threatened (and for this purpose proceedings shall be deemed to be material if they involve a claim in an amount exceeding twenty million Dollars or the equivalent in another currency provided that this threshold shall not apply to any proceedings relating to Sanctions).

 

All accounts required under this Clause 12.2 (Information) shall be prepared in accordance with GAAP and shall fairly represent the financial condition of the relevant company.

 

12.3Illicit Payments

 

No payments made by the Borrower, Seven Seas or the Guarantor in respect of amounts due under this Agreement or any Finance Document shall be funded out of funds of Illicit Origin and none of the sources of funds to be used by the Borrower, Seven Seas or the Guarantor in connection with the construction of the Ship or its business shall be of Illicit Origin

 

12.4Prohibited Payments

 

No Prohibited Payment shall be made or provided, directly or indirectly, by (or on behalf of) the Borrower, Seven Seas, the Guarantor or any of their affiliates, officers, directors or any other person acting on its behalf to, or for the benefit of, any authority (or any official,

 

52
 

  

officer, director, agent or key employee of, or other person with management responsibilities in, of any authority) in connection with the Ship, this Agreement and/or the Finance Documents.

 

12.5Notification of default

 

The Borrower will notify the Agent of any Event of Default forthwith upon becoming aware of the occurrence thereof. Upon the Agent's request from time to time the Borrower will issue a certificate stating whether any Obligor is aware of the occurrence of any Event of Default.

 

12.6Consents and registrations

 

The Borrower will procure that (and will promptly furnish Certified Copies to the Agent on the request of the Agent of) all such authorisations, approvals, consents, licences and exemptions as may be required under any applicable law or regulation to enable it or any Obligor to perform its obligations under, and ensure the validity or enforceability of, each of the Transaction Documents are obtained and promptly renewed from time to time and will procure that the terms of the same are complied with at all times. Insofar as such filings or registrations have not been completed on or before the Drawdown Date the Borrower will procure the filing or registration within applicable time limits of each Finance Document which requires filing or registration together with all ancillary documents required to preserve the priority and enforceability of the Finance Documents.

 

12.7Negative pledge

 

The Borrower will not create or permit to subsist any Security Interest on the whole or any part of its present or future assets, except for the following:

 

(a)Security Interests created with the prior consent of the Agent; or

 

(b)Security Interests qualifying as Permitted Security Interests with respect to the Borrower and described in paragraphs (a) and (b) of the definition of "Permitted Security Interests" in Clause 1.1 (Definitions); or

 

(c)Security Interests qualifying as Permitted Security Interests with respect to the Borrower and described in paragraphs (C), (E), (H) or (I) of such definition, provided that insofar as they are enforceable against the Ship they do not prevail over the Mortgage.

 

12.8Disposals

 

Except in the case of a sale of the Ship if the completion of the sale is contemporaneous with prepayment of the Loan in accordance with the provisions of Clause 16.3 (Mandatory prepayment) and except for charters and other arrangements complying with Clause 13.1 (Pooling of earnings and charters) the Borrower shall not without the consent of the Majority Lenders, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily, (i) sell, transfer, lease or otherwise dispose of the Ship or any of the Ship's equipment except in the case of items (a) being replaced (by an equivalent or superior item) or renewed or (b) that are being disposed of in the ordinary course of business provided that in the case of both (a) and (b) the net impact does not reduce the value of the Ship and, in the case of (b), the value of any such disposals during the term of this Agreement do not, in aggregate, exceed US$3,000,000 (ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms; (iii) 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 (iv) enter into any other preferential arrangement having the same effect in circumstances where the arrangement or transaction

 

53
 

  

is entered into primarily as a method of raising financial indebtedness or of financing the acquisition of an asset.

 

12.9Change of business

 

Except with the prior consent of the Agent, the Borrower shall not make or threaten to make any substantial change in its business as presently conducted, namely that of a single ship owning company for the Ship, or carry on any other business which is substantial in relation to its business as presently conducted so as to affect, in the opinion of the Agent, the Borrower's ability to perform its obligations hereunder.

 

12.10Mergers

 

Except with the prior consent of the Lenders and SACE, the Borrower will not enter into any amalgamation, restructure, substantial reorganisation, merger, de-merger or consolidation or anything analogous to the foregoing nor will it acquire any equity, share capital or obligations of any corporation or other entity.

 

12.11Maintenance of status and franchises

 

The Borrower will do all such things as are necessary to maintain its limited liability company existence in good standing and will ensure that it has the right and is duly qualified to conduct its business as it is conducted in all applicable jurisdictions and will obtain and maintain all franchises and rights necessary for the conduct of its business.

 

12.12Financial records

 

The Borrower will keep proper books of record and account, in which proper and correct entries shall be made of all financial transactions and the assets, liabilities and business of the Borrower in accordance with GAAP.

 

12.13Financial Indebtedness and subordination of indebtedness

 

The following restrictions shall apply:

 

(a)otherwise than in the ordinary course of business as owner of the Ship, except as contemplated by this Agreement and except any loan, advance or credit extended by the Guarantor or any member of the Group which is a wholly owned Subsidiary of the Guarantor, the Borrower will not create, incur, assume or allow to exist any financial indebtedness, enter into any finance lease or undertake any material capital commitment (including but not limited to the purchase of any capital asset); and

 

(b)the Borrower shall procure that any and all indebtedness (and in particular with any other Obligor) is at all times fully subordinated to the Finance Documents and the obligations of the Borrower hereunder. Upon the occurrence of an Event of Default, the Borrower shall not make any repayments of principal, payments of interest or of any other costs, fees, expenses or liabilities arising from or representing such indebtedness. In this Clause 12.13(b) "fully subordinated" shall mean that any claim of the lender against the Borrower in relation to such indebtedness shall rank after and be in all respects subordinate to all of the rights and claims of the Secured Parties under this Agreement and the other Finance Documents and that the lender shall not take any steps to enforce its rights to recover any monies owing to it by the Borrower and in particular but without limitation the lender will not institute any legal or quasi-legal proceedings under any jurisdiction at any time against the Ship, her Earnings or Insurances or the Borrower and it will not compete with the

 

54
 

  

Secured Parties or any of them in a liquidation or other winding-up or bankruptcy of the Borrower or in any proceedings in connection with the Ship, her Earnings or Insurances.

 

12.14Investments

 

The Borrower shall not:

 

(a)be the creditor in respect of any loan or any form of credit to any person other than another Obligor and where such loan or form of credit is Permitted Financial Indebtedness;

 

(b)give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which the Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents.

 

(c)enter into any material agreement other than:

 

(i)the Transaction Documents;

 

(ii)any other agreement expressly allowed under any other term of this Agreement; and

 

(d)enter into any transaction on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length; or

 

(e)acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks.

 

12.15Unlawfulness, invalidity and ranking; Security imperilled

 

No Obligor shall do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:

 

(a)make it unlawful for an Obligor to perform any of its obligations under the Transaction Documents;

 

(b)cause any obligation of an Obligor under the Finance Documents to cease to be legal, valid, binding or enforceable if that cessation individually or together with any other cessations materially or adversely affects the interests of the Secured Parties under the Transaction Documents;

 

(c)cause any Transaction Document to cease to be in full force and effect;

 

(d)cause any Security Interest to rank after, or lose its priority to, any other Security Interest; and

 

(e)imperil or jeopardise any Security Interest.

 

12.16Dividends

 

The Borrower shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital other than dividends and distributions that are transferred to Seven Seas or the Guarantor provided that no Event of Default has occurred or is continuing or would result from the payment of any dividend.

 

55
 

  

12.17Loans and guarantees by the Borrower

 

Otherwise than in the ordinary course of business in its ownership and operation of the Ship following the Delivery Date, the Borrower will not make any loan or advance or extend credit to any person, firm or corporation or issue or enter into any guarantee or indemnity or otherwise become directly or contingently liable for the obligations of any other person, firm or corporation.

 

12.18Acquisition of shares

 

The Borrower will not:

 

(a)acquire any equity, share capital, assets or obligations of any corporation or other entity; or

 

(b)permit any of its membership interest to be directly held other than by Seven Seas.

 

12.19Further assurance

 

The Borrower will, from time to time on being required to do so by the Agent, do or procure the doing of all such acts and/or execute or procure the execution of all such documents in a form satisfactory to the Agent as the Agent may reasonably consider necessary for giving full effect to any of the Transaction Documents, the Interest Make-Up Agreement or the SACE Insurance Policy or securing to the Secured Parties the full benefit of the rights, powers and remedies conferred upon the Secured Parties or any of them in any such Transaction Document the Interest Make-Up Agreement or the SACE Insurance Policy.

 

12.20Irrevocable payment instructions

 

The Borrower shall not modify, revoke or withhold the payment instructions set out in Clause 4.1 (Borrower's irrevocable payment instructions) without the agreement of the Builder (in the case of Clause 4.1(a) only), the Agent, SACE and the Lenders.

 

12.21"Know your customer" checks

 

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;

 

(b)any change in the status of the Borrower after the date of this Agreement; or

 

(c)a proposed assignment or transfer by a Lender of any of its rights and 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 Clause 12.21(c), 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 or the Lenders (acting reasonably) require any additional documents to supplement those already provided, 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, in the case of the event described in Clause 12.21(c), on behalf of any prospective new Lender) in order for the Agent and, such Lender or to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

56
 

  

(d)Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

12.22Shipbuilding Contract

 

The Shipbuilding Contract constitutes legal, valid and binding and enforceable obligations of the Builder and the Borrower shall not modify the Shipbuilding Contract, directly or indirectly, if such modifications (in aggregate) would result in (i) a change to the type or class of the Ship or (ii) decrease the value of the Ship by equal to or greater than 5 per cent (in aggregate). The Borrower will, therefore, submit to the Agent any proposals for any such modification and SACE and the Agent on behalf of the Lenders will indicate in a timely manner whether the modification proposed will allow the Loan to be maintained. On or about the last day of each successive period of three (3) months commencing on the date of this Agreement and on the date of the Drawdown Notice, the Borrower undertakes to provide the Agent and SACE with a copy of any Change Order entered into during that three (3) month or other period. The Borrower also undertakes to notify the Agent of any change in the Intended Delivery Date as soon as practicable after each change has occurred.

 

12.23FOREX Contracts

 

The Borrower shall:

 

(a)provide the Agent with a copy of all FOREX Contracts together with all relevant details within twenty (20) days of their execution; and

 

(b)inform the Agent, when requested by the Agent, of its intended hedging policy for purchasing Euro with Dollars.

 

The Agent shall inform the Lenders within ten (10) days of receipt of such information from the Borrower.

 

12.24Compliance with laws etc.

 

The Borrower shall:

 

(a)comply, or procure compliance with:

 

(i)in all material respects, all laws and regulations relating to its business generally; and

 

(ii)in all material respects (except in the case of compliance with Sanctions which must be complied with in all respects), all laws or regulations relating to the Ship, its ownership, employment, operation, management and registration,

 

including the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag;

 

(b)obtain, comply with and do all that is necessary to maintain in full force and effect any Environment Approvals which are applicable to it; and

 

57
 

  

(c)without limiting paragraph (a) above, not employ the Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions.

 

13.Ship Undertakings

 

13.1Pooling of earnings and charters

 

The Borrower will not without the prior written consent of the Agent or SACE enter into in respect of the Ship (such consent for the purposes of Clause 13.1(e) shall not be unreasonably withheld or delayed), nor permit to exist at any time following the Delivery Date:

 

(a)any pooling agreement or other arrangement for the sharing of any of the Earnings or the expenses of the Ship except with a member of the Group and provided that it does not adversely affect the rights of the Secured Parties under the Finance Documents in the reasonable opinion of the Agent; or

 

(b)any demise or bareboat charter (other than the Seven Seas Charter), provided however that such consent shall not be unreasonably withheld in the event that the Borrower wishes to enter into a bareboat charter in a form approved by the Agent with Seven Seas on condition that if so requested by the Agent and without limitation:

 

(i)any such bareboat charterer shall enter into such deeds (including but not limited to a full subordination and assignment deed in respect of its rights under the bareboat charter and its interest in the Insurances and earnings payable to it arising out of its use of the Ship), agreements and indemnities as the Majority Lenders shall require prior to entering into the bareboat charter with the Borrower; and

 

(ii)the Borrower shall assign the benefit of any such bareboat charter and its interest in the Insurances to the Secured Parties by way of further security for the Borrower's obligations under the Finance Documents.; or

 

(c)any charter whereunder two (2) months' charterhire (or the equivalent thereof) is payable in advance in respect of the Ship; or

 

(d)any charter of the Ship or employment which, with the exercise of options for extension, could be for a period longer than [*] months; or

 

(e)any time charter of the Ship with a company outside the Group (other than a time charter entered into in the ordinary course of business which does not exceed two (2) months provided that any such time charter (y) is assigned to the Security Trustee and (z) during the period of such time charter, the Ship continues to be managed by the existing Approved Manager), provided however that such consent shall not be unreasonably withheld in the event that:

 

(i)such time charter is assigned to the Security Trustee and the Borrower agrees to serve a notice of assignment of any time charter, the Earnings therefrom and any guarantee of the charterer's obligations on the time charterer and any time charter guarantor substantially in the form appended to the Tripartite General Assignment;

 

58
 

  

(ii)the Agent and SACE are satisfied that the income from such time charter will be sufficient to cover the expenses of the Ship and to service repayment of the Loan and all other amounts from time to time outstanding under this Agreement; and

 

(iii)during the term of such time charter, the Ship continues to be managed by the existing Approved Manager.

 

13.2Management and employment

 

The Borrower will not as from the Delivery Date:

 

(a)permit any person other than an Approved Manager to be the manager of, including providing crewing services to, the Ship, at all times acting upon terms approved in writing by the Agent and having entered into (in the case of the Approved Manager) an Approved Manager's Undertaking; and

 

(b)permit any amendment to be made to the terms of any External Management Agreement unless the amendment is advised by the Borrower's tax counsel or is deemed necessary by the parties thereto to reflect the prevailing circumstances but provided that the amendment does not imperil the security to be provided pursuant to the Finance Documents or adversely affect the ability of any Obligor to perform its obligations under the Transaction Documents; or

 

(c)permit the Ship to be employed other than within the Seven Seas brand unless the Borrower notifies the Lenders that they intend to employ the Ship within another brand of the Group and the ship remains employed within the Group.

 

13.3Trading with the United States of America

 

The Borrower shall in respect of the Ship take all reasonable precautions as from the Delivery Date to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America (as the same may be amended and/or re-enacted from time to time hereafter) or any similar legislation applicable to the Ship in any other jurisdiction in which the Ship shall trade (a "Relevant Jurisdiction") where the Ship trades in the territorial waters of the United States of America or a Relevant Jurisdiction.

 

13.4Valuation of the Ship

 

The following shall apply in relation to the valuation of the Ship:

 

(a)the Borrower will within 10 Business Days of the anniversary of the delivery of the Ship and at annual intervals thereafter unless an Event of Default has occurred and remains unremedied, at the Borrower's expense, procure that the Ship is valued by an Approved Broker (such valuation to be made without taking into account the benefit or otherwise of any fixed employment relating to the Ship);

 

(b)the Borrower shall procure that forthwith upon the issuance of any valuation obtained pursuant to this Clause 13.4 (Valuation of the Ship) a copy thereof is sent directly to the Agent for review; and

 

(c)in the event that the Borrower fails to procure a valuation in accordance with Clause 13.4(a), the Agent shall be entitled to procure a valuation of the Ship on the same basis.

 

59
 

  

13.5Earnings

 

The Borrower will procure that the Earnings (if any) are paid in full without set off and free and clear of and without deduction for any taxes levies duties imposts charges fees restrictions or conditions of any nature whatsoever.

 

13.6Operation and maintenance of the Ship

 

From the Delivery Date until the end of the Security Period at its own expense the Borrower will keep the Ship in a good and efficient state of repair so as to maintain it to the highest classification notation available for the Ship of its age and type free of all recommendations and qualifications with Lloyd's Register, RINA or Bureau Veritas. On the Delivery Date and annually thereafter, it will furnish to the Agent a statement by such classification society that such classification notation is maintained. It will comply with all recommendations, regulations and requirements (statutory or otherwise) from time to time applicable to the Ship and shall have on board as and when required thereby valid certificates showing compliance therewith and shall procure that all repairs to or replacements of any damaged, worn or lost parts or equipment are carried out (both as regards workmanship and quality of materials) so as not to diminish the value or class of the Ship. It will not make any substantial modifications or alterations to the Ship or any part thereof which would reduce the market and commercial value of the Ship determined in accordance with Clause 13.4 (Valuation of the Ship);

 

13.7Surveys and inspections

 

The Borrower will:

 

(a)submit the Ship to continuous survey in respect of its machinery and hull and such other surveys as may be required for classification purposes and, if so required by the Agent, supply to the Agent copies in English of the survey reports;

 

(b)permit surveyors or agents appointed by the Agent to board the Ship at all reasonable times to inspect its condition or satisfy themselves as to repairs proposed or already carried out and afford all proper facilities for such inspections;

 

13.8ISM Code

 

The Borrower will comply, or procure that the Approved Manager will comply, with the ISM Code (as the same may be amended from time to time) or any replacement of the ISM Code (as the same may be amended from time to time) and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter:

 

(i)hold, or procure that the Approved Manager holds, a valid Document of Compliance duly issued to the Borrower or the Approved Manager (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate duly issued to the Ship pursuant to the ISM Code;

 

(ii)provide the Agent with copies of any such Document of Compliance and Safety Management Certificate as soon as the same are issued; and

 

(iii)keep, or procure that there is kept, on board the Ship a copy of any such Document of Compliance and the original of any such Safety Management Certificate;

 

60
 

  

13.9ISPS Code

 

The Borrower will comply, or procure that the Approved Manager will comply, with the ISPS Code (as the same may be amended from time to time) or any replacement of the ISPS Code (as the same may be amended from time to time) and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISPS Code and at all times thereafter:

 

(i)keep, or procure that there is kept, on board the Ship the original of the International Ship Security Certificate required by the ISPS Code; and

 

(ii)keep, or procure that there is kept, on board the Ship a copy of the ship security plan prepared pursuant to the ISPS Code;

 

13.10Annex VI

 

The Borrower will comply with Annex VI (as the same may be amended from time to time) or any replacement of Annex VI (as the same may be amended from time to time) and in particular, without limitation, to:

 

(i)procure that the Ship's master and crew are familiar with, and that the Ship complies with, Annex VI; and

 

(ii)maintain for the Ship throughout the Security Period a valid and current IAPPC and provide a copy to the Agent; and

 

(iii)notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC;

 

13.11Employment of Ship

 

The Borrower shall:

 

(a)not employ the Ship or permit its employment in any trade or business which is forbidden by any applicable law or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render it liable to condemnation in a prize court or to destruction, seizure or confiscation or that may expose the Ship to penalties. In the event of hostilities in any part of the world (whether war be declared or not) it will not employ the Ship or permit its employment in carrying any contraband goods;

 

(b)promptly provide the Agent with (i) all information which the Agent may reasonably require regarding the Ship, its employment, earnings, position and engagements (ii) particulars of all towages and salvages and (iii) copies of all charters and other contracts for its employment and otherwise concerning it;

 

13.12Provision of information

 

The Borrower shall give notice to the Agent promptly and in reasonable detail upon the Borrower or any other Obligor becoming aware of:

 

(i)accidents to the Ship involving repairs the cost of which will or is likely to exceed [*] Dollars ($[*]);

 

(ii)the Ship becoming or being likely to become a Total Loss;

 

61
 

  

(iii)any recommendation or requirement made by any insurer or classification society or by any competent authority which is not complied with, or cannot be complied with, within any time limit relating thereto and that might reasonably affect the maintenance of either the Insurances or the classification of the Ship;

 

(iv)any writ or claim served against or any arrest of the Ship or the exercise of any lien or purported lien on the Ship, her Earnings or Insurances;

 

(v)the Ship ceasing to be registered under the flag of the Maritime Registry or anything which is done or not done whereby such registration may be imperilled;

 

(vi)it becoming impossible or unlawful for it to fulfil any of its obligations under the Finance Documents; and

 

(vii)anything done or permitted or not done in respect of the Ship by any person which is likely to imperil the security created by the Finance Documents;

 

13.13Payment of liabilities

 

(a)The Borrower shall promptly pay and discharge all debts, damages and liabilities, taxes, assessments, charges, fines, penalties, tolls, dues and other outgoings in respect of the Ship and keep proper books of account in respect thereof provided always that the Borrower shall not be obliged to compromise any debts, damages and liabilities as aforesaid which are being contested in good faith subject always that full details of any such contested debt, damage or liability which, either individually or in aggregate exceeds [*] Dollars ($[*]) shall forthwith be provided to the Agent. As and when the Agent may so require the Borrower will make such books available for inspection on behalf of the Agent and provide evidence satisfactory to the Agent that the wages and allotments and the insurance and pension contributions of the master and crew are being regularly paid, that all deductions of crew's wages in respect of any tax liability are being properly accounted for and that the master has no claim for disbursements other than those incurred in the ordinary course of trading on the voyage then in progress or completed prior to such inspection;

 

(b)promptly pay and discharge all liabilities which have given rise, or may give rise, to liens or claims enforceable against the Ship under the laws of all countries to whose jurisdiction the Ship may from time to time be subject and in particular the Borrower hereby agrees to indemnify and hold the Secured Parties, their successors, assigns, directors, officers, shareholders, employees and agents harmless from and against any and all claims, losses, liabilities, damages, expenses (including attorneys, fees and expenses and consultant fees) and injuries of any kind whatsoever asserted against the Secured Parties, with respect to or as a result of the presence, escape, seepage, spillage, release, leaking, discharge or migration from the Ship or other properties owned or operated by the Borrower of any hazardous substance, including without limitation, any claims asserted or arising under any applicable environmental, health and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder of all governmental agencies, regardless of whether or not caused by or within the control of the Borrower subject to the following:

 

(i)it is the parties' understanding that the Secured Parties do not now, have never and do not intend in the future to exercise any operational control or maintenance over the Ship or any other properties and operations owned or operated by the Borrower, nor in the past, presently, or intend in the future to, maintain an ownership interest in the Ship or any other properties owned or operated by the

 

62
 

 

Borrower except as may arise upon enforcement of the Lenders' rights under the Mortgage;

 

(ii)unless and until an Event of Default shall have occurred and without prejudice to the right of each Lender to be indemnified pursuant to this Clause 13.13(b):

 

(A)each Lender will, if it is reasonably practicable to do so, notify the Borrower upon receiving a claim in respect of which the relevant Lender is or may become entitled to an indemnity under this Clause 13.13(b); and

 

(B)subject to the prior written approval of the relevant Lender which the Lender shall have the right to withhold, the Borrower will be entitled to take, in the name of the relevant Lender, such action as the Borrower may see fit to avoid, dispute, resist, appeal, compromise or defend any such claims, losses, liabilities, damages, expenses and injuries as are referred to above in this Clause 13.13(b) or to recover the same from any third party, subject to the Borrower first ensuring that the relevant Lender is secured to its reasonable satisfaction against all expenses thereby incurred or to be incurred;

 

provided always that the Borrower shall not be obliged to compromise any liabilities as aforesaid which are being contested in good faith subject always that full details of any such contested liabilities which, either individually or in aggregate, exceed [*] Dollars ($[*]) shall be forthwith provided to the Agent. If the Ship is arrested or detained for any reason it will procure its immediate release by providing bail or taking such other steps as the circumstances may require;

 

13.14Certificate as to liabilities

 

The Borrower shall give to the Agent at such times as it may from time to time reasonably require a certificate, duly signed on its behalf, as to the total amount of any debts, damages and liabilities relating to the Ship and details of such of those debts, damages and liabilities as are over a certain amount to be specified by the Agent at the relevant time and, if so required by the Agent, forthwith discharge such of those debts, damages and liabilities as the Agent shall require other than those being contested in good faith.

 

13.15Modifications

 

The Borrower shall maintain the type of the Ship as at the Delivery Date and not put the Ship into the possession of any person for the purpose of work being done on it in an amount exceeding or likely to exceed [*] Dollars ($[*]) unless such person shall first have given to the Agent a written undertaking addressed to the Agent in terms satisfactory to the Agent agreeing not to exercise a lien on the Ship or her Earnings for the cost of such work or for any other reason (or the Borrower is able to demonstrate to the reasonable satisfaction of the Agent that the Borrower or Seven Seas has set aside and will have funds readily available for payment when due of the cost of the work (to the extent not fully covered by insurance proceeds in the case of a partial loss));

 

13.16Registration of Ship

 

The Borrower shall maintain the registration of the Ship under and fly the flag of the Maritime Registry and not do or permit anything to be done whereby such registration may be forfeited or imperilled.

 

63
 

 

13.17Environmental Law

 

The Borrower shall comply with all Environmental Laws, obtain, maintain and ensure compliance with all requisite Environmental Approvals, and implement procedures to monitor compliance with and to prevent liability under any Environmental Law.

 

13.18Notice of Mortgage

 

The Borrower shall keep the Mortgage registered against the Ship as a valid first preferred mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Security Trustee.

 

13.19Environmental claims

 

Each Obligor shall, (through the Guarantor), promptly upon becoming aware of the same, inform the Agent in writing of:

 

(a)any Environmental Claim which is likely to result in a Material Adverse Effect against any member of the Group which is current, pending or threatened; and

 

(b)any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group which is likely to result in a Material Adverse Effect.

 

13.20Trading in war zones

 

In the event of hostilities in any part of the world (whether war is declared or not), the Borrower shall not cause or permit the Ship to enter or trade to any zone which is declared a war zone by the Ship's war risks insurers unless:

 

(a)the prior written consent of the Security Trustee acting on the instructions of the Majority Lenders has been given; and

 

(b)the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee acting on the instructions of the Majority Lenders may require.

 

14.Insurance Undertakings

 

14.1General

 

The undertakings in this Clause 14 (Insurance Undertakings) remain in force on and from the Delivery Date and throughout the rest of the Security Period except as the Agent, acting with the authorisation of the Majority Lenders may otherwise permit.

 

14.2Maintenance of obligatory insurances

 

The Borrower shall insure the Ship in its name and keep the Ship insured on an agreed value basis for an amount in the currency in which the Loan is denominated approved by the Agent but not being less than the greater of (x) [*] per cent. ([*]%) of the amount of the Loan; and (y) the full market and commercial value of the Ship determined in accordance with Clause 13.4 (Valuation of the Ship) from time to time through internationally recognised independent first class insurance companies, underwriters, war risks and protection and indemnity associations acceptable to the Agent in each instance on terms and conditions approved by the Agent including as to deductibles but at least in respect of:

 

64
 

  

(i)fire and marine risks including but without limitation hull and machinery and all other risks customarily and usually covered by first-class and prudent shipowners in the global insurance markets under English or Norwegian marine policies or Agent-approved policies containing the ordinary conditions applicable to similar Ships;

 

(ii)war risks (including terrorism, piracy and protection and indemnity war risks) up to the insured amount;

 

(iii)excess risks that is to say the proportion of claims for general average and salvage charges and under the running down clause not recoverable in consequence of the value at which the Ship is assessed for the purpose of such claims exceeding the insured value;

 

(iv)protection and indemnity risks with full standard coverage as offered by first-class protection and indemnity associations which are a member of the International Group of P&I Association and up to the highest limit of liability available (for oil pollution risk the highest limit currently available is one billion Dollars (USD1,000,000,000) and this to be increased if reasonably requested by the Agent and the increase is possible in accordance with the standard protection and indemnity cover for Ships of its type and is compatible with prudent insurance practice for first class cruise shipowners or operators in waters where the Ship trades from time to time from the Delivery Date until the end of the Security Period);

 

(v)when and while the Ship is laid-up, in lieu of hull insurance, normal port risks; and

 

(vi)such other risks as the Agent may from time to time reasonably require;

 

and in any event in respect of those risks and at those levels covered by first class and prudent owners and/or financiers in the international market in respect of similar tonnage provided that if any of such insurances are also effected in the name of any other person (other than the Borrower and/or a Secured Party) such person shall if so required by the Agent execute a first priority assignment of its interest in such insurances in favour of the Secured Parties in similar terms mutatis mutandis to the relevant provisions of the Tripartite General Assignment;

 

14.3Mortgagee's interest and pollution risks insurances

 

The Agent shall take out mortgagee interest insurance on such conditions as the Agent may reasonably require and mortgagee interest insurance for pollution risks as from time to time agreed each for an amount in the currency in which the Loan is denominated of [*] per cent. ([*]%) of the amount of the Loan, the Borrower having no interest or entitlement in respect of such policies; the Borrower shall upon demand of the Agent reimburse the Agent for the costs of effecting and/or maintaining any such insurance(s);

 

14.4Trading in the United States of America

 

If the Ship shall trade in the United States of America and/or the Exclusive Economic Zone of the United States of America (the "EEZ") as such term is defined in the US Oil Pollution Act 1990 ("OPA"), to comply strictly with the requirements of OPA and any similar legislation which may from time to time be enacted in any jurisdiction in which the Ship presently trades or may or will trade at any time during the existence of this Agreement and in particular before such trade is commenced and during the entire period during which such trade is carried on:

 

65
 

  

(i)to pay any additional premiums required to maintain full standard protection and indemnity cover for oil pollution up to the highest limit available to it for the Ship in the market;

 

(ii)to make all such quarterly or other voyage declarations as may from time to time be required by the Ship's protection and indemnity association and to comply with all obligations in order to maintain such cover, and promptly to deliver to the Agent copies of such declarations;

 

(iii)to submit the Ship to such additional periodic, classification, structural or other surveys which may be required by the Ship's protection and indemnity insurers to maintain cover for such trade and promptly to deliver to the Agent copies of reports made in respect of such surveys;

 

(iv)to implement any recommendations contained in the reports issued following the surveys referred to in Clause 14.4(iii) within the time limit specified therein and to provide evidence satisfactory to the Agent that the protection and indemnity insurers are satisfied that this has been done;

 

(v)in particular strictly to comply with the requirements of any applicable law, convention, regulation, proclamation or order with regard to financial responsibility for liabilities imposed on the Borrower or the Ship with respect to pollution by any state or nation or political subdivision thereof, including but not limited to OPA, and to provide the Agent on demand with such information or evidence as it may reasonably require of such compliance;

 

(vi)to procure that the protection and indemnity insurances do not contain a clause excluding the Ship from trading in waters of the United States of America and the EEZ or any other provision analogous thereto and to provide the Agent with evidence that this is so; and

 

(vii)strictly to comply with any operational or structural regulations issued from time to time by any relevant authorities under OPA so that at all times the Ship falls within the provisions which limit strict liability under OPA for oil pollution;

 

14.5Protections for Secured Parties

 

(a)The Borrower shall give notice forthwith of any assignment of its interest in the Insurances to the relevant brokers, insurance companies, underwriters and/or associations in the form approved by the Agent;

 

(b)The Borrower shall execute and deliver all such documents and do all such things as may be necessary to confer upon the Secured Parties legal title to the Insurances in respect of the Ship and to procure that the interest of the Secured Parties is at all times filed with all slips, cover notes, policies and certificates of entry and to procure (a) that a loss payable clause in the form approved by the Agent shall be filed with all the hull, machinery and equipment and war risks policies in respect of the Ship and (b) that a loss payable clause in the form approved by the Agent shall be endorsed upon the protection and indemnity certificates of entry in respect of the Ship; and

 

(c)In the event of the Borrower making default in insuring and keeping insured the Ship as hereinbefore provided then the Agent may (but shall not be bound to) insure the Ship or enter the Ship in such manner and to such extent as the Agent in its discretion thinks fit and

 

66
 

 

in such case all the cost of effecting and maintaining such insurance together with interest thereon at the Interest Rate shall be paid on demand by the Borrower to the Agent.

 

14.6Copies of polices; letters of undertaking

 

The Borrower will procure that each of the relevant brokers and associations furnishes the Agent with a letter of undertaking in the standard form available in the relevant insurance market or otherwise in such form as may be required by the Agent and waives any lien for premiums or calls except in relation to premiums or calls solely attributable to the Ship;

 

14.7Payment of premiums

 

The Borrower shall punctually pay all premiums, calls, contributions or other sums payable in respect of the Insurances on the Ship and to produce all relevant receipts when so required by the Agent;

 

14.8Renewal of obligatory insurances

 

The Borrower shall notify the Agent of the renewal of the obligatory insurances at least five (5) days before the expiry thereof and shall procure that the relevant brokers or associations shall promptly confirm in writing to the Agent that such renewal is effected it being understood by the Borrower that any failure to renew the Insurances on the Ship at least two (2) days before the expiry thereof or to give or procure the relevant notices of such renewal shall constitute an Event of Default;

 

14.9Guarantees

 

The Borrower shall arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity and/or war risks association;

 

14.10Provision of insurances information

 

The Borrower will furnish the Agent from time to time on request with full information about all Insurances maintained on the Ship and the names of the offices, companies, underwriters, associations or clubs with which such Insurances are placed;

 

14.11Alteration to terms of insurances

 

The Borrower shall not make or agree to any variation in the terms of any of the Insurances on the Ship without the prior approval of the Agent nor to do any act or voluntarily suffer or permit any act to be done whereby any Insurances shall or may be rendered invalid, void, voidable, suspended, defeated or unenforceable and not to suffer or permit the Ship to engage in any voyage nor to carry any cargo not permitted under any of the Insurances without first obtaining the consent of the insurers or reinsurers concerned and complying with such requirements as to payment of extra premiums or otherwise as the insurers or reinsurers may impose;

 

14.12Settlement of claims

 

The Borrower shall not settle, compromise or abandon any claim in respect of any of the Insurances on the Ship other than a claim of less than [*] Dollars ($[*]) or the equivalent in any other currency and not being a claim arising out of a Total Loss;

 

67
 

  

14.13Application of insurance proceeds

 

The Borrower shall apply or ensure the appliance of all such sums receivable in respect of the Insurances on the Ship for the purpose of making good the loss and fully repairing all damage in respect whereof the insurance monies shall have been received;

 

14.14Insurance advisers

 

The Agent shall be entitled, immediately prior to the Delivery Date and thereafter no more frequently than annually on renewals but also additionally at any time when there is a proposed change of underwriters or the terms of any Insurances, to instruct independent reputable insurance advisers for the purpose of obtaining any advice or information regarding any matter concerning the Insurances which the Agent shall deem necessary, it being hereby specifically agreed that the Borrower shall reimburse the Agent on demand for the costs and expenses incurred by the Agent in connection with the instruction of such advisers subject to a limit of ten thousand Euro at the time of delivery of the Ship or in the event of a change of underwriters or of terms of any Insurances and otherwise ten thousand Euro annually thereafter.

 

15.Security Value Maintenance

 

15.1Security Shortfall

 

If, upon receipt of a valuation of the Ship in accordance with Clause 13.4 (Valuation of the Ship), 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 (unless the Ship has become a Total Loss) either:

 

(a)prepay within a period of 30 days of the date of receipt by the Borrower of the Agent's said notice such sum in Dollars as will result in the Security Requirement after such repayment (taking into account any other repayment of the Loan made between the date of the notice and the date of such prepayment) being equal to the Security Value; or

 

(b)within 30 days of the date of receipt by the Borrower of the Agent's said notice constitute to the reasonable satisfaction of the Agent such further security for the Loan as shall be reasonably acceptable to the Agent having a value for security purposes (as determined by the Agent in its 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.

 

Clauses 15.2 (Costs) and 15.4 (Documents and evidence) and Clause 16.2(c) (Voluntary prepayment) shall apply to prepayments under Clause 15.1(a).

 

15.2Costs

 

All costs in connection with the Agent obtaining any valuation of the Ship referred to in Clause 13.4 (Valuation of the Ship), and obtaining 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 15.1(b) shall be borne by the Borrower.

 

15.3Valuation of additional security

 

For the purpose of this Clause 15 (Security Value Maintenance), the market value of any additional security provided or to be provided to the Agent shall be determined by the Agent in its absolute discretion without any necessity for the Agent assigning any reason thereto.

 

68
 

  

15.4Documents and evidence

 

In connection with any additional security provided in accordance with this Clause 15 (Security Value Maintenance), the Agent shall be entitled to receive such evidence and documents of the kind referred to in Clause 3 (Conditions Precedent) in respect of other Finance Documents as may in the Agent's opinion be appropriate.

 

15.5Valuations binding

 

Any valuation under this Clause 15 (Security Value Maintenance) shall be binding and conclusive as regards the Borrower.

 

15.6Provision of information

 

(a)The Borrower shall promptly provide the Agent and any shipbroker acting under this Clause 15 (Security Value Maintenance) with any information which the Agent or the shipbroker may reasonably request for the purposes of the valuation.

 

(b)If the Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Agent considers prudent.

 

16.Cancellation, Prepayment and Mandatory Prepayment

 

16.1Cancellation

 

At any time prior to the delivery of a Drawdown Notice and not less than ninety (90) Business Days prior to the Intended Delivery Date, the Borrower may give notice to the Agent in writing that it wishes to cancel the Total Commitments in their entirety whereupon (without penalty to the Borrower but without prejudice to any liabilities of the Borrower including, without limitation, in respect of fees payable or accrued under this Agreement, arising prior to the date of such cancellation) the Total Commitments shall terminate upon the date specified in such notice.

 

16.2Voluntary prepayment

 

(a)The Borrower may prepay all or part of the Loan (but if in part being an amount that reduces the Loan by a minimum amount of one (1) repayment instalment of principal of the Loan) together with interest thereon without penalty provided that the prepayment is made on the last day of an Interest Period and forty five (45) days prior written notice indicating the intended date of prepayment is given to the Agent and the SACE Agent, but the following amounts shall be payable to the Agent for the account of the Lenders or the Italian Authorities in the sum of:

 

(i)if the Borrower has specified a Floating Interest Rate pursuant to Clause 3.5(a)(ii), the difference (if positive), calculated by the Lenders and notified by them to the Agent, between the actual cost for the Lenders of the funding for the Loan and the rate of interest for the monies to be invested by the Lenders, applied to the amounts so prepaid for the period from the said prepayment until the last day of the Interest Period during which the prepayment occurs (if prepayment does not occur on the last day of that Interest Period), details of any such calculation being supplied to the Borrower by the Agent on behalf of the Lenders; or

 

69
 

 

(ii)if the Borrower has selected the Fixed Interest Rate pursuant to Clause 3.5(a)(ii), the charges (if any) imposed on the Lenders by the Italian Authorities representing funding or breakage costs of the Italian Authorities as more specifically set out in Clause 20 (Indemnities).

 

(b)For the avoidance of doubt, if a voluntary prepayment is made other than on the last day of an Interest Period, the prepayment shall be paid together with such other amounts payable in accordance with Clause 20.1 (Indemnities regarding borrowing and repayment of Loan) and 20.2 (Breakage costs and SIMEST arrangements).

 

(c)If the Borrower has selected the Fixed Interest Rate pursuant to Clause 3.5(a)(ii), the SACE Agent shall give SIMEST thirty (30) days written notice of the intended date of prepayment.

 

16.3Mandatory prepayment – Sale and Total Loss

 

The Borrower shall be obliged to prepay the whole of the Loan if the Ship is sold or becomes a Total Loss:

 

(a)in the case of a sale, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or

 

(b)in the case of a Total Loss, on the earlier of the date falling 120 days after the Total Loss Date and the date of receipt by the Agent of the proceeds of insurance relating to such Total Loss.

 

16.4Mandatory prepayment – SACE Insurance Policy

 

(a)The Borrower shall be obliged to prepay the whole of the Loan if the SACE Insurance Policy is revoked, rescinded, cancelled, terminated, suspended or otherwise becomes unenforceable or ceases to be in full force and effect.

 

(b)In the event that any other event occurs or any other circumstances arise or develop which would have a Material Adverse Effect on SACE’s ability to perform its obligations under the SACE Insurance Policy, the Borrower and the Lenders shall, provided that no Event of Default has occurred and is continuing, negotiate in good faith for a period of not less than 30 days with a view to agreeing such revised terms and conditions as the Lenders may require to enable the Lenders to maintain the entire Loan (and during such 30 day period, no Lender shall be obliged to make available to the Borrower their portion of the Loan to the extent such amounts have not already been drawn). In the event that following such negotiations the Borrower and the Lenders fail to agree on such revised terms, the Borrower shall be obliged to prepay, on demand by the Agent, the outstanding principal amount of the Loan to the extent of the amount covered pursuant to the SACE Insurance Policy. If, during the period while negotiations are on-going pursuant to this Clause 16.4(b) the events described in Clause 16.4(a) should occur, the Borrower shall be obliged to prepay the Loan in full as required by Clause 16.4(a).

 

16.5Mandatory repayment and cancellation of FATCA Protected Lenders

 

If on the date falling six months before the earliest FATCA Application Date for any payment by a Party to a FATCA Protected Lender (or to the Agent for the account of that Lender), that Lender is not a FATCA Exempt Party and, in the opinion of that Lender (acting reasonably), that Party will, as a consequence, be required to make a FATCA Deduction from a payment to that Lender (or to the Agent for the account of that Lender) on or after that FATCA Application Date (a “FATCA Event”);

 

70
 

  

(a)that Lender shall, reasonably promptly after that date, notify the Agent of that FATCA Event and the relevant FATCA Application Date;

 

(b)if, on the date falling one month before such FATCA Application Date, that FATCA Event is continuing:

 

(i)that Lender may, no less than twenty (20) Business Days’ before such FATCA Application Date, notify the Agent;

 

(ii)the Agent shall, by no less than seventeen (17) Business Days’ notice, notify the Borrower and, the Commitment of that Lender will be immediately cancelled upon the expiry of that seventeen (17) Business Days’ notice period; and

 

(iii)the Borrower shall repay that Lender’s participation in the Loan made to the Borrower on the last day of the Interest Period for the Loan occurring after the Agent has notified the Borrower or, if earlier, the last Business Day before the relevant FATCA Application Date.

 

16.6Other amounts

 

Any prepayment of the whole of the Loan shall be made together with all other sums due under this Agreement (including, without limitation, the compensation calculated in accordance with Clause 16.2 (Voluntary prepayment)).

 

16.7Application of partial prepayment

 

Amounts prepaid shall be applied in accordance with Clause 19.1(b).

 

16.8No reborrowing

 

Amounts prepaid may not be reborrowed.

 

17.Interest on Late Payments

 

17.1Default rate of interest

 

Without prejudice to the provisions of Clause 18 (Events of Default) and without this Clause in any way constituting a waiver of terms of payment, all sums due by the Borrower under this Agreement will automatically bear interest on a day to day basis from the date when they are payable until the date of actual payment at a rate per annum equal to the higher of:

 

(a)where the Floating Interest Rate is applicable, the aggregate of:

 

(i)Overnight LIBOR;

 

(ii)the Margin; and

 

(iii)[*] per cent. ([*]%) per annum; or

 

(b)where the Fixed Interest Rate is applicable, the higher of:

 

(i)the Fixed Interest Rate plus [*] per cent. ([*]%) per annum; and

 

(ii)Overnight LIBOR plus the Margin plus [*] per cent. ([*]%) per annum.

 

71
 

 

17.2Compounding of default interest

 

Any such interest will itself bear interest at the above rate if it is due for at least three (3) months and thereafter at three monthly intervals.

 

18.Events of Default

 

18.1Events of Default

 

An Event of Default occurs if any of the events or circumstances described in Clause 18.2 (Non-payment) to 18.20 (Material Adverse Change) occur.

 

18.2Non-payment

 

Any Obligor fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document and such failure is not remedied within three (3) Business Days of the due date or (if payable on demand) within three (3) Business Days of receiving the demand.

 

18.3Non-remediable breaches

 

The Borrower fails to comply with the provisions of Clauses 12.7 (Negative pledge), 12.8 (Disposals), 12.10 (Mergers) or 12.17 (Loans and guarantees by the Borrower).

 

18.4Breach of other obligations

 

(a)Any Obligor fails to comply with any provision of any Finance Document (other than a failure to comply covered by any of the other provisions of Clauses 18.2 (Non-payment) to 18.20 (Material Adverse Change)) and in particular but without limitation the Guarantor fails to comply with the provisions of Clause 11 (Undertakings) of its Guarantee or there is any breach in the opinion of the Majority Lenders of any of the Underlying Documents provided that no Event of Default shall be deemed to have occurred if, in the opinion of the Majority Lenders, such failure or breach is capable of remedy and is remedied within the Relevant Period (as defined below) from the date of its occurrence, if the failure was known to that Obligor, or from the date the relevant Obligor is notified by the Agent of the failure, if the failure was not known to that Obligor, unless in any such case as aforesaid the Majority Lenders consider that the failure or breach is or could reasonably be expected to become materially prejudicial to the interests, rights or position of the Lenders, "Relevant Period" meaning for the purposes of this Clause thirty (30) days in respect of a remedy period commencing under this Clause not later than 30 June 2015 and fifteen (15) days in respect of a remedy period commencing after 30 June 2015; or

 

(b)If there is a repudiation or termination of any Transaction Document or if any of the parties thereto becomes entitled to terminate or repudiate any of them and evidences an intention so to do. For the avoidance of doubt, the termination of the Prior Guarantees shall not be deemed to be a termination of a Transaction Document.

 

18.5Misrepresentation

 

Any representation, warranty or statement made or repeated in, or in connection with, any Transaction Document or the SACE Insurance Policy or in any accounts, certificate, statement or opinion delivered by or on behalf of any Obligor thereunder or in connection therewith is materially incorrect or misleading when made or would, if repeated at any time hereafter by reference to the facts subsisting at such time, no longer be materially correct.

 

72
 

  

18.6Cross default

 

(a)Any event of default occurs under any financial contract or financial document relating to any Financial Indebtedness of the Borrower; or

 

(b)any such Financial Indebtedness or any sum payable in respect thereof is not paid when due (after the expiry of any applicable grace period(s)) whether by acceleration or otherwise; or

 

(c)any other Financial Indebtedness of any member of the Group is not paid when due or is or becomes capable of being declared due prematurely by reason of default or any Security Interest securing the same becomes enforceable by reason of default provided that no Event of Default will arise if the aggregate amount of the relevant Financial Indebtedness and liabilities secured by the relevant Security Interests is less than $[*] or its equivalent in other currencies; and

 

(d)any other Security Interest over any assets of any member of the Group securing any alleged liability that does not qualify as Financial Indebtedness becomes enforceable where the alleged liability is in respect of a sum of, or sum aggregating, $[*] or its equivalent in other currencies, unless the alleged liability is being contested in good faith by appropriate means by the relevant Group member and the Agent is reasonably satisfied that the relevant member of the Group has reasonable grounds for succeeding in its action.

 

18.7Winding-up

 

Any order is made or an effective resolution passed or other action taken for the suspension of payments or reorganisation, dissolution, termination of existence, liquidation, winding-up or bankruptcy of any Obligor.

 

18.8Appointment of liquidators etc.

 

A liquidator, trustee, administrator, receiver, administrative receiver, manager or similar officer is appointed in respect of any Obligor or in respect of all or any substantial part of the assets of any Obligor.

 

18.9Enforcement of any security

 

Any corporate action, legal proceeding or other procedure or step is taken in relation to enforcement of any security interests over any assets of the Borrower.

 

18.10Insolvency

 

(a)An Obligor is unable or admits inability to pay its debts as they fall due, 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.

 

(b)The value of the assets of any Obligor is less than its liabilities (taking into account contingent liabilities).

 

(c)A moratorium in respect of all or any debts of any Obligor or a compromise, composition, assignment or an arrangement with creditors of any Obligor or any similar proceeding or arrangement by which the assets of any Obligor are submitted to the control of its creditors is applied for, ordered or declared or any Obligor commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of all or a

 

73
 

  

significant part of its Financial Indebtedness. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

 

18.11Legal process

 

Any corporate action, legal proceeding, distress, execution, attachment or other process affects the whole or any substantial part of the assets of any Obligor and remains undischarged for a period of thirty (30) days, any step is taken in relation to enforcement of any security interests over any assets of any Obligor (other than the Borrower) or any uninsured judgment which, in each case, is in excess of [*] Dollars ($[*]) following final appeal, remains unsatisfied for a period of ten (10) days.

 

18.12Analogous events

 

Anything analogous to or having a substantially similar effect to any of the events specified in Clauses 18.7 (Winding-up) to 18.11 (Legal process) shall occur under the laws of any applicable jurisdiction.

 

18.13Cessation of business

 

Any Obligor ceases to carry on all or a substantial part of its business.

 

18.14Revocation of consents

 

Any authorisation, approval, consent, licence, exemption, filing, registration or notarisation or other requirement necessary to enable any Obligor to comply with any of its obligations under any of the Transaction Documents is materially adversely modified, revoked or withheld or does not remain in full force and effect and within ninety (90) days of the date of its occurrence such event is not remedied to the satisfaction of the Agent and the Majority Lenders consider that such failure is or might be expected to become materially prejudicial to the interests, rights or position of the Lenders provided that the Borrower shall not be entitled to the aforesaid ninety (90) day period if the modification, revocation or withholding of the authorisation, approval or consent is due to an act or omission of any Obligor and the Majority Lenders are satisfied that the Lenders' interests might reasonably be expected to be materially adversely affected.

 

18.15Unlawfulness

 

At any time it is unlawful or impossible for any Obligor to perform any of its material (to the Secured Parties or any of them) obligations under any Transaction Document to which it is a party or it is unlawful or impossible for the Secured Parties or any Lender to exercise any of their or its rights under any of the Transaction Documents provided that no Event of Default shall be deemed to have occurred where the unlawfulness or impossibility does not relate to the payment obligation of any Obligor under any Transaction Document and is cured within the period of twenty one (21) days of the date of occurrence of the event giving rise to the unlawfulness or impossibility and the affected Obligor performs it obligation within such period.

 

18.16Insurances

 

The Borrower fails to insure the Ship in the manner specified in Clause 14 (Insurance Undertakings) or fails to renew the Insurances at least five (5) days prior to the date of expiry thereof and produce prompt confirmation of such renewal to the Agent provided that if the insurers withdraw their cover an Event of Default shall be deemed to have occurred upon issue of the insurer's notice of withdrawal.

 

74
 

  

18.17Disposals

 

If the Borrower or any other Obligor shall have concealed, removed, or permitted to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or made or suffered a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall have made any transfer of its property to or for the benefit of a creditor with the intention of preferring such creditor over any other creditor.

 

18.18Prejudice to security

 

Anything is done or suffered or omitted to be done by any Obligor which in the reasonable opinion of the Agent would or might be expected to imperil the security created by any of the Finance Documents.

 

18.19Governmental intervention

 

The authority of any Obligor in the conduct of its business is wholly or substantially curtailed by any seizure or intervention by or on behalf of any authority and within ninety (90) days of the date of its occurrence any such seizure or intervention is not relinquished or withdrawn and the Agent reasonably considers that the relevant occurrence is or might be expected to become materially prejudicial to the interests, rights or position of the Lenders provided that the Borrower shall not be entitled to the aforesaid ninety (90) day period if the seizure or intervention executed by any authority is due to an act or omission of any Obligor and the Majority Lenders are satisfied that the Lenders' interest might reasonably be expected to be materially adversely affected.

 

18.20Material Adverse Change

 

Any event or circumstance occurs which results in a Material Adverse Effect.

 

18.21Actions following an Event of Default

 

On, or at any time after, the occurrence of an Event of Default the Agent may, and if so instructed by the Majority Lenders, the Agent shall with the prior consent of SACE:

 

(a)serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are terminated; and/or

 

(b)serve on the Borrower a notice stating that the Loan (including but without limitation the amount representing the financed First Instalment and Second Instalment of the SACE Premium), all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

 

(c)take any other action which, as a result of the Event of Default or any notice served under paragraph (a) or (b), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.

 

18.22Termination of Commitments

 

On the service of a notice under Clause 18.21(a), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall terminate.

 

75
 

 

18.23Acceleration of Loan

 

On the service of a notice under Clause 18.21(b), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Obligor under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

 

18.24Further amounts payable

 

Upon an acceleration of repayment of the Loan following an Event of Default the Borrower shall be liable to pay compensation calculated in accordance with Clause 16.2 (Voluntary prepayment).

 

18.25Multiple notices; action without notice

 

The Agent may serve notices under Clauses 18.21(a) and (b) simultaneously or on different dates and it may take any action referred to in Clause 18.21(c) if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

 

18.26Notification of Secured Parties and Obligors

 

The Agent shall send to the Italian Authorities, each Lender and each Obligor a copy or the text of any notice which the Agent serves on the Borrower under Clause 18.21 (Actions following an Event of Default); but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any Obligor with any form of claim or defence.

 

18.27Lender's rights unimpaired

 

Nothing in this Clause 18 (Events of Default) shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clauses 2.4 (Creditor Parties' rights and obligations) and 2.6 (Obligations of Lenders several).

 

18.28Exclusion of Secured Party liability

 

No Secured Party, and no receiver or manager appointed by the Agent, shall have any liability to an Obligor:

 

(a)for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

 

(b)as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset.

 

19.Application of Sums Received

 

19.1Receipts

 

Except as any Finance Document may otherwise provide, all sums received under this Agreement or any other Finance Document by the Agent, on behalf of the Lenders, or by any of the Lenders for any reason whatsoever will be applied:

 

76
 

 

(a)in priority, to payments of any kind due or in arrears in the order of their due payment dates and first, to fees, charges and expenses, second, to interest payable pursuant to Clause 17 (Interest on Late Payments), third, to interest payable pursuant to Clause 6 (Interest), fourth, to the principal of the Loan payable pursuant to Clause 5 (Repayment) and, fifth, to any other sums due under this Agreement or any other Finance Document and, if relevant, pro rata to each of the Lenders; or

 

(b)if no payments are in arrears or if these payments have been discharged as set out above, then and to sums remaining due under this Agreement or any other Finance Document and, if relevant, pro rata to each of the Lenders and in each case in inverse order of maturity, the interest being recalculated accordingly.

 

20.Indemnities

 

20.1Indemnities regarding borrowing and repayment of Loan

 

The Borrower shall fully indemnify the Agent and each Lender or SIMEST (but without double counting to the extent that a Lender is making a claim in respect of amounts owing to SIMEST) on the Agent's demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Secured Party, or which that Secured Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

 

(a)the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

 

(b)the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

 

(c)any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 17 (Interest on Late Payments)); and

 

(d)the occurrence and/or continuance of an Event of Default and/or the acceleration of repayment of the Loan under Clause 18 (Events of Default).

 

20.2Breakage costs and SIMEST arrangements

 

Without limiting its generality, Clause 20.1 covers:

 

(a)any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount);

 

(b)if the Borrower has selected the Fixed Interest Rate in accordance with Clause 3.5(a)(ii), all of the amounts that SIMEST is entitled to charge, whether for taxes, costs, expenses, indemnities, penalties, losses or liabilities whatsoever, under and in accordance with the Interest Make-up Agreement, including without limitation, as a result of any prepayment of all or any part of the Loan under this Agreement (whether voluntary, mandatory, following acceleration of the Loan or otherwise), as a result of an Interest Make-Up Event or as a result of the Borrower deciding to switch from the Fixed Interest Rate to another interest

 

77
 

 

rate after the Drawdown Date and/or (z) an Interest Make-up Event . Such amounts include, without limitation, (i) breakage costs, (ii) any amount due as a consequence of the close-out of any hedging arrangement entered into by SIMEST in relation to this Agreement, (iii) default interest and penalties (maggiorazioni) whenever applicable, and (iv) all amounts (if any) to be returned by the Agent to SIMEST under and pursuant to the Interest Make-Up Agreement; and

 

(c)any other costs whatsoever or howsoever arising under or in respect of the Interest Make-Up Agreement which are passed to the Agent,

 

any such costs imposed by SIMEST shall be paid by the Borrower to SIMEST through the Agent.

 

For the purposes of this Clause 20.2 (Breakage costs and SIMEST arrangements) "Interest Make-Up Event" means the occurrence of any circumstances which result in the termination, cancellation, revocation, cessation or suspension (in each case, in whole or in part) of the Interest Make-Up Agreement or the Interest Make-Up Agreement otherwise ceases or may cease to be in full force and effect or the Agent notifies the Borrower that the Fixed Interest Rate is not available for any reason, in each case, in accordance with the terms of the Interest Make-Up Agreement.

 

20.3Miscellaneous indemnities

 

The Borrower shall fully indemnify each Secured Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Secured Party, in any country, as a result of or in connection with:

 

(a)any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent or any other Secured Party or by any receiver appointed under a Finance Document;

 

(b)any other Pertinent Matter,

 

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Secured Party concerned.

 

Without prejudice to its generality, this Clause 20.3 (Miscellaneous indemnities) covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code or any Environmental Laws or any Sanctions.

 

20.4Currency indemnity

 

If any sum due from an Obligor to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

 

(a)making or lodging any claim or proof against an Obligor, whether in its liquidation, any arrangement involving it or otherwise; or

 

(b)obtaining an order or judgment from any court or other tribunal; or

 

(c)enforcing any such order or judgment,

 

78
 

 

the Borrower shall indemnify the Secured Party concerned against the loss arising when the amount of the payment actually received by that Secured Party is converted at the available rate of exchange into the Contractual Currency.

 

In this Clause 20.4 (Currency indemnity) the "available rate of exchange" means the rate at which the Secured Party concerned is able at the opening of business (Paris time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

 

This Clause 20.4 (Currency indemnity) creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

 

20.5Certification of amounts

 

A notice which is signed by 2 officers of a Secured Party, which states that a specified amount, or aggregate amount, is due to that Secured Party under this Clause 20 (Indemnities) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

 

20.6Sums deemed due to a Lender

 

For the purposes of this Clause 20 (Indemnities), a sum payable by the Borrower to the Agent for distribution to a Lender shall be treated as a sum due to that Lender.

 

21.Illegality, etc.

 

21.1Illegality

 

This Clause 21 (Illegality, etc.) applies if

 

(a)a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become:

 

(i)unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied, including for the avoidance of doubt in relation to Sanctions; or

 

(ii)contrary to, or inconsistent with, any regulation,

 

for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement; or

 

(b)an Obligor is or becomes a Prohibited Person.

 

Clauses 21.1 (a)(i) and 21.1(b) above shall not apply to any Lender which is incorporated in the Federal Republic of Germany (and which has so notified the Agent) to the extent that the enforcement of such provision by a Lender would (a) violate, conflict with or incur liability under EU Regulation (EC) 2271/96 or (b) violate or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) in connection with section 4 paragraph (1)(a)(3) of the Foreign Trade Law (Außenwirtschaftsgesetz) or any similar anti-boycott statute in force in the Federal Republic of Germany.

 

79
 

 

21.2Notification of illegality

 

(a)The Agent shall promptly notify the Borrower, the Obligors and the other Lenders of the notice under Clause 21.1 (Illegality) which the Agent receives from the Notifying Lender.

 

(b)Upon receipt of the notice under paragraph (a) above and provided that such illegality is not applicable with immediate effect (in which case Clause 21.3(a) (Prepayment; termination of Commitment) will apply immediately and this Clause 21.2(b) (Notification of illegality) will not apply, the Agent shall, where the Borrower has selected the Fixed Interest Rate pursuant to Clause 3.5(a)(ii) inform SIMEST in writing in order to start consultations between themselves (pursuant to clause 6 of the Interest Make-Up Agreement) with a view to exploring any possible solution to mitigate the unlawfulness preventing that Lender from performing any of its obligations under a Finance Document or funding or maintaining its share in the Loan. Any solution agreed between the Agent and SIMEST at the end of the consultation period (which shall last for a period of ten (10) days from the service of such notice on SIMEST) will be binding among themselves and shall be notified by the Agent to each Obligor immediately thereafter (and in any case no later than ten (10) days following such decision). 

 

(c)If at the end of the consultation procedure set out in paragraph (b) above, no solution is agreed between the Agent and SIMEST, the Agent must immediately notify the Lenders and the Obligors.

 

21.3Prepayment; termination of Commitment

 

(a)After notification under paragraph (c) above or (in case the Interest Make-Up Agreement has ceased to be in force and effect or the Fixed Interest Rate has not been selected pursuant to Clause 3.5(a)(ii)) after notification under paragraph (a) above and subject to Clause 21.4 below the Borrower must repay or prepay that Lender’s share in the Loan on the date specified in paragraph (c) below together with any Breakage Costs payable under Clause 20.2 (Breakage Costs and SIMEST Arrangements) and any indemnity payable under Clause 20.2(c) in respect of the Interest Make-Up Agreement;

 

(b)On the Agent notifying the Borrower under Clause 21.2(c) (Notification of illegality), the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 21.1 (Illegality) as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender's Contribution and shall pay compensation to the Notifying Lender calculated in accordance with Clause 16.2 (Voluntary prepayment).

 

(c)The date for repayment or prepayment of a Lender's share in the Loan will be:

 

(i)the date specified by the Agent in the notification under paragraph (b) above; or

 

(ii)in case the Interest Make-Up Agreement has ceased to be in force and effect or the Fixed Interest Rate has not been selected pursuant to Clause 3.5(a)(ii), the last day of the current Interest Period for the Loan or, if earlier, the date specified by the Lender in the notification under paragraph (a) above and which must not be earlier than the last day of any applicable grace period allowed by law.

 

80
 

 

21.4Mitigation

 

(a)Each Secured Party shall, in consultation with the Borrowers, 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 Clause 21 (Illegality, etc.) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

(b)Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

22.Set-Off

 

22.1Application of credit balances

 

Each Creditor Party may without prior notice:

 

(a)apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

 

(b)for that purpose:

 

(i)break, or alter the maturity of, all or any part of a deposit of the Borrower;

 

(ii)convert or translate all or any part of a deposit or other credit balance into Dollars;

 

(iii)enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

 

22.2Existing rights unaffected

 

No Creditor Party shall be obliged to exercise any of its rights under Clause 22.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

 

22.3Sums deemed due to a Lender

 

For the purposes of this Clause 22 (Set-Off), a sum payable by the Borrower to the Agent for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

 

22.4No Security Interest

 

This Clause 22 (Set-Off) gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

 

81
 

 

23.Changes to the Lenders

 

23.1Transfer by a Lender

 

Subject to Clause 23.5 (No transfer without Transfer Certificate), Clause 23.17 (Assignment or transfer to SACE) and Clause 23.14 (Change of Facility Office), a Lender (the "Transferor Lender") may at any time provided they have obtained the prior written consent of the Italian Authorities cause:

 

(a)its rights in respect of all or part of its Contribution; or

 

(b)its obligations in respect of all or part of its Commitment; or

 

(c)a combination of (a) and (b),

 

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, in whole or in part any of its Affiliates or another bank or financial institution or 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 (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

 

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the provisions of Clause 25 (Role of the Agent and the Joint Mandated Lead Arrangers) and 26 (The Security Trustee) respectively.

 

23.2Conditions of assignment or transfer

 

(a)The consent of the Borrower is required at all times (subject to the provisions of Clause 23.5 (No transfer without Transfer Certificate) and 23.17 (Assignment or transfer to SACE) for an assignment or transfer by an Existing Lender, unless (i) there is an Event of Default or (ii) the assignment or transfer is to another Lender or an Affiliate of a Lender.

 

(b)The consent of the Borrower to an assignment or transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent ten (10) Business Days after the Existing Lender has requested it unless consent is expressly refused by that Borrower within that time.

 

(c)The assignment or transfer must be with respect to a minimum Commitment of [*] Dollars ($[*]) or, if less, the Existing Lender's full Commitment.

 

23.3Transfer Certificate, delivery and notification

 

As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

 

(a)sign the Transfer Certificate on behalf of itself, the Borrower, any other Obligors, the Security Trustee and each of the other Lenders;

 

(b)on behalf of the Transferee Lender, send to the Borrower and each Obligor letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and

 

(c)send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,

 

82
 

 

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee 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 that Transferee Lender.

 

23.4Effective Date of Transfer Certificate

 

A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under Clause 23.3 (Transfer Certificate, delivery and notification) on or before that date.

 

23.5No transfer without Transfer Certificate

 

Except as provided in Clause 23.16 (Security over Lenders' rights), no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Obligor, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

 

23.6Lender re-organisation; waiver of Transfer Certificate

 

However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

 

23.7Effect of Transfer Certificate

 

A Transfer Certificate takes effect in accordance with English law as follows:

 

(a)to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Obligor had against the Transferor Lender;

 

(b)the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

 

(c)the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

 

(d)the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

 

(e)any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Obligor against the Transferor Lender had not existed;

 

83
 

 

(f)the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 6.5 (Market disruption) and Clause 9 (Fees), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

 

(g)in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

 

The rights and equities of the Borrower or any Obligor referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

 

23.8Maintenance of register of Lenders

 

During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the Facility Office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 23.4 (Effective Date of Transfer Certificate)) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days' prior notice.

 

23.9Reliance on register of Lenders

 

The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

 

23.10Authorisation of Agent to sign Transfer Certificates

 

The Borrower, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

 

23.11Fees and Costs

 

In respect of any Transfer Certificate:

 

(a)the Agent shall be entitled to recover a registration fee of EUR 5,000 from the Transferor Lender or (at the Agent's option) the Transferee Lender;

 

(b)the Transferee Lender shall pay to the Agent, upon demand, all reasonable costs and expenses, duties and fees, including but without limitation legal costs and out of pocket expenses, incurred by the Agent or the Lenders in connection with any necessary amendment to or supplementing of the Transaction Documents or any of them or the SACE Insurance Policy as a consequence of the assignment or transfer; and

 

(c)the Transferee Lender shall pay to the Agent, upon demand, such amount as is payable to the Italian Authorities to cover its costs of giving its approval under Clause 23.1 (Transfer by a Lender).

 

84
 

 

23.12Sub-participation; subrogation assignment

 

A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower, any Obligor, the Agent or the Security Trustee but with the prior written consent of SACE.

 

23.13Disclosure of information

 

A Lender may disclose to a potential Transferee Lender or sub participant any information which the Lender has received in relation to the Borrower, any Obligor or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

 

23.14Change of Facility Office

 

Subject to the prior written consent of SACE, a Lender may change its Facility Office by giving notice to the Agent and the change shall become effective on the later of:

 

(a)the date on which the Agent receives the notice; and

 

(b)the date, if any, specified in the notice as the date on which the change will come into effect, provided that if (i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office, and (ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment or an increased payment to the new Lender or Lender acting through its new Facility Office under Clause 10 (Taxes, Increased Costs, Costs and Related Charges), then the new Lender or Lender acting through its new Facility Office is only entitled to receive payment under that Clause 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.

 

23.15Notification

 

On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the Facility Office of which the Agent last had notice.

 

23.16Security over Lenders' rights

 

In addition to the other rights provided to Lenders under this Clause 23 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from the Borrower or any Obligor but subject to the prior written consent of SACE, at any time charge, assign or otherwise create a Security Interest 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 (i) to the benefit of any Affiliate and/or (ii) within the framework of its, or its Affiliates, direct or indirect funding operations including, without limitation:

 

(a)any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

 

(b)in the case of any Lender which is a fund, any charge, assignment or other Security Interest 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;

 

85
 

 

except that no such charge, assignment or Security Interest shall:

 

(i)release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

 

(ii)alter the obligations of the Obligor or require any payments to be made by the Borrower or any 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.

 

23.17Assignment or transfer to SACE

 

Notwithstanding the above provisions of this Clause 23 (Changes to the Lenders):

 

(a)each Lender and the Agent shall, if so instructed by SACE in accordance with the provisions of the SACE Insurance Policy and without any requirement for the consent of the Borrower, assign its rights or (as the case may be) transfer its rights and obligations to SACE (but for the avoidance of doubt, SACE will not assume any of the Lenders’ obligations pursuant to clause 10 (Taxes, Increased Costs, Costs and Related Charges) or 32 (Confidentiality) of this Agreement), which assignment or transfer shall take effect upon the date stated in the relevant documentation;

 

(b)the Agent shall promptly notify the Borrower of any such assignment or transfer to SACE and the Borrower shall pay to the Agent, upon demand, all reasonable costs and expenses, duties and fees, including but without limitation legal costs and out of pocket expenses, incurred by the Agent or the Lenders in connection with any such assignment or transfer;

 

(c)the Borrower and the Agent agree that SACE will be subrogated to the rights of the Lenders to the extent of any payment made by or on behalf of SACE under the SACE Insurance Policy.

 

24.Changes to the Obligors

 

24.1No change without consent

 

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

25.Role of the Agent and the Joint Mandated Lead Arrangers

 

25.1Appointment of the Agent

 

(a)Each other Creditor Party appoints the Agent to act as its agent under and in connection with this Agreement and the other Finance Documents, the SACE Insurance Policy and the Interest Make Up Agreement.

 

(b)Each other Creditor Party 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.

 

25.2Duties of the Agent

 

(a)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.

 

86
 

 

(b)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.

 

(c)If the Agent receives notice from a Party referring to this Agreement, describing an Event of Default and stating that the circumstance described is an Event of Default, it shall promptly notify the other Secured Parties.

 

(d)If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Secured Party (other than the Agent or a Joint Mandated Lead Arranger) under this Agreement it shall promptly notify the other Creditor Parties.

 

(e)The Agent's duties under the Finance Documents are solely administrative in nature.

 

25.3Role of the Joint Mandated Lead Arrangers

 

None of the Joint Mandated Lead Arrangers has any obligations of any kind to any other Party under or in connection with any Transaction Document, the Interest Make-Up Agreement or the SACE Insurance Policy.

 

25.4No fiduciary duties

 

(a)Nothing in this Agreement constitutes the Agent or any of the Joint Mandated Lead Arrangers as a trustee or fiduciary of any other person.

 

(b)Neither the Agent nor any of the Joint Mandated Lead Arrangers 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.

 

25.5Business with the Guarantor

 

The Agent and each of the Joint Mandated Lead Arrangers may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Affiliate or Subsidiary of the Guarantor.

 

25.6Rights and discretions of the Agent

 

(a)The Agent may rely on:

 

(i)any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

(ii)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.

 

(b)The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

 

(i)no Event of Default has occurred (unless it has actual knowledge of an Event of Default); and

 

(ii)any right, power, authority or discretion vested in any Party or the Lenders has not been exercised.

 

87
 

 

(c)The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

 

(d)The Agent may act in relation to the Finance Documents through its personnel and agents.

 

(e)The Agent may disclose to any other Party any information it reasonably believes it has received as the Agent under this Agreement.

 

(f)Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor any of the Joint Mandated Lead Arrangers 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.

 

25.7Lenders' instructions

 

(a)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 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 the 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.

 

(b)Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Creditor Parties.

 

(c)The Agent may refrain from acting in accordance with the instructions of the Majority 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.

 

(d)In the absence of instructions from the Majority Lenders the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

 

(e)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.

 

(f)Notwithstanding anything to the contrary, the Lenders agree that if the Agent (acting in its sole discretion) is of the opinion that or if any Lender notifies the Agent that it is of the opinion that, the prior approval of the Italian Authorities should be obtained in relation to the exercise or non-exercise by the Agent or the Lenders of any power, authority or discretion specifically given to them under or in connection with the Finance Documents or in relation to any other incidental rights, powers, authorities or discretions, then the Agent shall seek such approval of the Italian Authorities prior to such exercise or non-exercise.

 

25.8Responsibility for documentation

 

The Agent is not responsible for:

 

(a)the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, a Joint Mandated Lead Arranger, an Obligor or any other person

 

88
 

 

given in or in connection with any Transaction Document, the SACE Insurance Policy or the Interest Make-Up Agreement; nor for

 

(b)the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document the SACE Insurance Policy or the Interest Make-Up Agreement or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Transaction Document, the SACE Insurance Policy or the Interest Make-Up Agreement.

 

25.9Exclusion of liability

 

(a)Without limiting Clause 25.9(b), the Agent will not be liable for any action taken by it under or in connection with any Finance Document, the SACE Insurance Policy or the Interest Make-Up Agreement, unless directly caused by its Gross Negligence or wilful misconduct.

 

(b)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, the SACE Insurance Policy or the Interest Make-Up Agreement and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 33.4 (Third party rights) and the provisions of the Third Parties Rights Act.

 

(c)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, the SACE Insurance Policy or the Interest Make-Up Agreement 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.

 

(d)Nothing in this Agreement shall oblige the Agent or a Joint Mandated Lead 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 Joint Mandated Lead Arrangers 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 a Joint Mandated Lead Arranger.

 

25.10Lenders' indemnity to the Agent

 

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 (3) 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).

 

25.11Resignation of the Agent

 

(a)The Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Creditor Parties, the Borrower and SACE and with the consent of SACE.

 

89
 

 

(b)Alternatively the Agent may resign by giving notice to the other Creditor Parties and the Borrower, in which case the Lenders (after consultation with the Borrower) may appoint a successor Agent.

 

(c)If the Lenders have not appointed a successor Agent in accordance with Clause 25.11(b) within thirty (30) days after notice of resignation was given, the Agent (after consultation with the Borrower) may appoint a successor Agent.

 

(d)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.

 

(e)The Agent's resignation notice shall only take effect upon the appointment of a successor.

 

(f)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 25 (Role of the Agent and the Joint Mandated Lead Arrangers). 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.

 

(g)After consultation with the Italian Authorities, the Majority Lenders may subject to the prior consent of the Italian Authorities, by notice to the Agent, require it to resign in accordance with Clause 25.11(b). In this event, the Agent shall resign in accordance with Clause 25.11(b) but the cost referred to in paragraph (d) above shall be for the account of the Borrower.

 

25.12Confidentiality

 

(a)In acting as agent for the Creditor 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.

 

(b)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.

 

25.13Relationship with the Lenders

 

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 (5) Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

 

25.14Credit 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 each of the Joint Mandated Lead Arrangers 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:

 

(a)the financial condition, status and nature of the Guarantor and each Subsidiary of the Guarantor;

 

90
 

 

(b)the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

(c)whether that Lender 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 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;

 

(d)the adequacy, accuracy and/or completeness of any 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

 

(e)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 Security Interests or the existence of any Security Interest affecting the Charged Property.

 

25.15Deduction 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.

 

25.16Full freedom to enter into transactions

 

Notwithstanding any rule of law or equity to the contrary, the Agent shall be absolutely entitled:

 

(a)to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)to deal in and enter into and arrange transactions relating to:

 

(i)any securities issued or to be issued by any Obligor or any other person; or

 

(ii)any options or other derivatives in connection with such securities; and

 

(c)to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, the Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its

 

91
 

 

own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

25.17SACE Agent, SACE Insurance Policy and Interest Make-Up Agreement

 

(a)Where the context permits, references to the Agent shall include the SACE Agent. The Agent and the SACE Agent shall be the same entity throughout the Security Period.

 

(b)With the prior written consent of each of the Lenders, the SACE Agent may amend or modify the SACE Insurance Policy and the Interest Make-Up Agreement provided that such amendments are not inconsistent with the commercial terms of this Agreement, otherwise, the SACE Agent undertakes not to amend or modify the SACE Insurance Policy or the Interest Make-Up Agreement.

 

25.18Resignation of the Agent in relation to FATCA

 

The Agent shall resign in accordance with Clause 25.11 (Resignation of the Agent) (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) of Clause 25.11) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

 

(i)the Agent fails to respond to a request under Clause 10.9 (FATCA Information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

(ii)the information supplied by the Agent pursuant to Clause 10.9 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

 

(iii)the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and  that Lender, by notice to the Agent, requires it to resign.

 

26.The Security Trustee

 

26.1Trust

 

(a)The Security Trustee declares that it shall hold the Security Property on trust for the Secured Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 26 (The Security Trustee) and the other provisions of the Finance Documents.

 

(b)Each of the parties to this Agreement agrees that the Security Trustee shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Finance Documents (and no others shall be implied).

 

92
 

 

(c)The Security Trustee shall not have any liability to any person in respect of its duties, obligations and responsibilities under this Agreement or the other Finance Documents except as expressly set out in paragraph (a) of Clause 26.1 (Trust) and as excluded or limited by this Clause 26 (The Security Trustee) including in particular Clause 26.8 (Instructions to Security Trustee and exercise of discretion), Clause 26.13 (Responsibility for documentation), Clause 26.14 (Exclusion of liability), Clause 26.16 (Lenders' indemnity to the Security Trustee), Clause 26.23 (Business with the Group) and Clause 26.29 (Full freedom to enter into transactions).

 

26.2Parallel Debt (Covenant to pay the Security Trustee)

 

(a)Each Obligor irrevocably and unconditionally undertakes to pay to the Security Trustee its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.

 

(b)The Parallel Debt of an Obligor:

 

(i)shall become due and payable at the same time as its Corresponding Debt;

 

(ii)is independent and separate from, and without prejudice to, its Corresponding Debt.

 

(c)For purposes of this Clause 26.2 (Parallel Debt (Covenant to pay the Security Trustee)), the Security Trustee:

 

(i)is the independent and separate creditor of each Parallel Debt;

 

(ii)acts in its own name and not as agent, representative or trustee of the Secured Parties and its claims in respect of each Parallel Debt shall not be held on trust; and

 

(iii)shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

 

(d)The Parallel Debt of an Obligor shall be:

 

(i)decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and

 

(ii)increased to the extent that its Corresponding Debt has increased,

 

and the Corresponding Debt of an Obligor shall be:

 

(A)decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and

 

(B)increased to the extent that its Parallel Debt has increased,

 

in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.

 

(e)All amounts received or recovered by the Security Trustee in connection with this Clause 26.2 (Parallel Debt (Covenant to pay the Security Trustee)) to the extent permitted by applicable law, shall be applied in accordance with Clause 19 (Application of Sums Received).

 

93
 

 

(f)This Clause 26.2 (Parallel Debt (Covenant to pay the Security Trustee)) shall apply, with any necessary modifications, to each Finance Document.

 

26.3No independent power

 

The Secured Parties shall not have any independent power to enforce, or have recourse to, any Security Interest created by any of the Finance Documents or to exercise any rights or powers arising under the Finance Documents creating the Security Interest except through the Security Trustee.

 

26.4Application of receipts

 

(a)Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Trustee receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 26 (The Security Trustee), the "Recoveries") shall be transferred to the Agent for application in accordance with Clause 19 (Application of Sums Received).

 

(b)Paragraph (a) above is without prejudice to the rights of the Security Trustee, any receiver:

 

(i)under Clause 25.10 (Lenders' indemnity to the Agent) to be indemnified out of the Charged Property; and

 

(ii)under any Finance Document to credit any moneys received or recovered by it to any suspense account.

 

(c)Any transfer by the Security Trustee to the Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Trustee.

 

(d)The Security Trustee is under no obligation to make the payments to the Agent under paragraph (a) of this Clause 26.4 (Application of receipts) in the same currency as that in which the obligations and liabilities owing to the relevant Secured Party are denominated.

 

26.5Deductions from receipts

 

(a)Before transferring any moneys to the Agent under Clause 26.4 (Application of receipts), the Security Trustee may, in its discretion:

 

(i)deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Trustee or any receiver and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;

 

(ii)set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and

 

(iii)pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Trustee under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

 

94
 

 

(b)For the purposes of paragraph (a)(i) above, if the Security Trustee has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.

 

26.6Prospective liabilities

 

Following acceleration of any Security Interest, the Security Trustee may, in its discretion, or at the request of the Agent, hold any recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Trustee with such financial institution (including itself) and for so long as the Security Trustee shall think fit (the interest being credited to the relevant account) for later payment to the Agent for application in accordance with Clause 19 (Application of Sums Received) in respect of:

 

(a)any sum to the Security Trustee, any receiver; and

 

(b)any part of the Secured Liabilities,

 

that the Security Trustee or, in the case of paragraph (b) only, the Agent, reasonably considers, in each case, might become due or owing at any time in the future.

 

26.7Investment of proceeds

 

Prior to the payment of the proceeds of the recoveries to the Agent for application in accordance with Clause 19 (Application of Sums Received) the Security Trustee may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Trustee with such financial institution (including itself) and for so long as the Security Trustee shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Trustee's discretion in accordance with the provisions of this 26.7 (Investment of proceeds).

 

26.8Instructions to Security Trustee and exercise of discretion

 

(a)Subject to paragraph (d) below, the Security Trustee shall act in accordance with any instructions given to it by the Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) or, if so instructed by the Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)), refrain from exercising any right, power, authority or discretion vested in it as Security Trustee and shall be entitled to assume that:

 

(i)any instructions received by it from the Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) are duly given in accordance with the terms of the Finance Documents; and

 

(ii)unless it has received actual notice of revocation, that those instructions or directions have not been revoked.

 

(b)The Security Trustee shall be entitled to request instructions, or clarification of any direction, from the Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Trustee may refrain from acting unless and until those instructions or clarification are received by it.

 

95
 

 

(c)Any instructions given to the Security Trustee by the Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) shall override any conflicting instructions given by any other Party.

 

(d)Paragraph (a) above shall not apply:

 

(i)where a contrary indication appears in this Agreement;

 

(ii)where this Agreement requires the Security Trustee to act in a specified manner or to take a specified action;

 

(iii)in respect of any provision which protects the Security Trustee 's own position in its personal capacity as opposed to its role of Security Trustee for the Creditor Parties including, without limitation, the provisions set out in Clauses 26.10 (Security Trustee's discretions) to Clause 26.29 (Full freedom to enter into transactions); and

 

(iv)in respect of the exercise of the Security Trustee 's discretion to exercise a right, power or authority under any of Clause 26.5 (Deductions from receipts) and Clause 26.6 (Prospective liabilities).

 

26.9Security Trustee's Actions

 

Without prejudice to the provisions of Clause 26.4 (Application of receipts), the Security Trustee may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

 

26.10Security Trustee's discretions

 

(a)The Security Trustee may:

 

(i)assume (unless it has received actual notice to the contrary from the Agent) that (i) no Event of Default has occurred and no Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by any Finance Document in any person has not been exercised;

 

(ii)assume that any notice or request made by the Borrower (other than the Drawdown Notice) is made on behalf of and with the consent and knowledge of all the Obligors;

 

(iii)if it receives any instructions or directions to take any action in relation to a Security Interest under the Finance Documents, assume that all applicable conditions under the Finance Documents for taking that action have been satisfied;

 

(iv)engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether obtained by the Security Trustee or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or desirable;

 

(v)act in relation to the Finance Documents through its personnel and agents;

 

(vi)disclose to any other Party any information it reasonably believes it has received as Security Trustee under this Agreement;

 

96
 

 

(vii)rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Secured Party or an Obligor, upon a certificate signed by or on behalf of that person; and

 

(viii)refrain from acting in accordance with the instructions of any Party (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.

 

(b)Notwithstanding any other provision of any Finance Document to the contrary, the Security Trustee is not 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.

 

26.11Security Trustee's obligations

 

The Security Trustee shall promptly:

 

(a)copy to the Agent the contents of any notice or document received by it from any Obligor under any Finance Document;

 

(b)forward to a Party the original or a copy of any document which is delivered to the Security Trustee for that Party by any other Party provided that, except where a Finance Document expressly provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party; and

 

(c)inform the Agent of the occurrence of any Event of Default or any default by an Obligor in the due performance of or compliance with its obligations under any Finance Document of which the Security Trustee has received notice from any other party to this Agreement.

 

26.12Excluded obligations

 

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Trustee shall not:

 

(a)be bound to enquire as to (i) whether or not any Event of Default has occurred or (ii) the performance, default or any breach by an Obligor of its obligations under any of the Finance Documents;

 

(b)be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;

 

(c)be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;

 

(d)have or be deemed to have any relationship of trust or agency with, any Obligor.

 

97
 

 

26.13Responsibility for documentation

 

None of the Security Trustee, any receiver shall accept responsibility or be liable for:

 

(a)the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Trustee or any other person in or in connection with any Finance Document or the transactions contemplated in 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;

 

(b)the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

 

(c)any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents, the Security Property or otherwise, whether in accordance with an instruction from the Agent or otherwise unless directly caused by its Gross Negligence or wilful misconduct;

 

(d)the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Security Property; or

 

(e)any shortfall which arises on the enforcement or realisation of the Security Property.

 

26.14Exclusion of liability

 

(a)Without limiting Clause 26.15 (No proceedings), none of the Security Trustee or any receiver will be liable for any action taken by it or not taken by it under or in connection with any Finance Document or any Security Interest, unless directly caused by its Gross Negligence or wilful misconduct.

 

(b)The Security Trustee 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 it if it 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 it for that purpose.

 

(c)Nothing in this Agreement shall oblige the Security Trustee 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 Security Trustee 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 Security Trustee.

 

26.15No proceedings

 

No Party (other than the Security Trustee or that receiver) may take any proceedings against any officer, employee or agent of the Security Trustee or a receiver in respect of any claim it might have against the Security Trustee or a receiver in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Security Property and any officer, employee or agent of the Security Trustee or a receiver may rely on

 

98
 

 

this Clause subject to Clause 33.4 (Third party rights) and the provisions of the Third Parties Rights Act.

 

26.16Lenders' indemnity to the Security Trustee

 

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 Security Trustee and every receiver within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Security Trustee 's or receiver's Gross Negligence or wilful misconduct) in acting as Security Trustee or receiver under the Finance Documents (unless the relevant Security Trustee or receiver has been reimbursed by an Obligor pursuant to a Finance Document).

 

26.17Own responsibility

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Creditor Party confirms to the Security Trustee 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:

 

(a)the financial condition, status and nature of each member of the Group;

 

(b)the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Security Property 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 Security Property;

 

(c)whether that Creditor 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 Security Property, 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 or the Security Property;

 

(d)the adequacy, accuracy and/or completeness of any information provided by the Security Trustee or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

(e)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 Security Interests created by the Finance Documents or the existence of any Security Interest affecting the Charged Property,

 

and each Creditor Party warrants to the Security Trustee that it has not relied on and will not at any time rely on the Security Trustee in respect of any of these matters.

 

26.18No responsibility to perfect Security Interests

 

The Security Trustee shall not be liable for any failure to:

 

(a)require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;

 

99
 

 

(b)obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or any Security Interest;

 

(c)register, file or record or otherwise protect any Security Interests (or the priority of any of Security Interest) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of any Security Interest;

 

(d)take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render any Security Interest effective or to secure the creation of any ancillary Security under the laws of any jurisdiction; or

 

(e)require any further assurances in relation to any of the Finance Documents creating the Security Interests.

 

26.19Insurance by Security Trustee

 

(a)The Security Trustee shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents. The Security Trustee shall not be responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.

 

(b)Where the Security Trustee is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Agent shall have requested it to do so in writing and the Security Trustee shall have failed to do so within fourteen (14) days after receipt of that request.

 

26.20Custodians and nominees

 

The Security Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Trustee may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Trustee shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

 

26.21Acceptance of title

 

The Security Trustee shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors may have to any of the Charged Property and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.

 

26.22Refrain from illegality

 

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Trustee may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any jurisdiction and the Security Trustee may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

 

100
 

 

26.23Business with the Group

 

The Security Trustee may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

 

26.24Winding up of trust

 

If the Security Trustee, with the approval of the Agent determines that (a) all of the Secured Liabilities and all other obligations secured by the Finance Documents creating the Security Interests have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents:

 

(a)the trusts set out in this Agreement shall be wound up and the Security Trustee shall release, without recourse or warranty, all of the Security Interests and the rights of the Security Trustee under each of the Finance Documents creating the Security Interests; and

 

(b)any Retiring Security Trustee shall release, without recourse or warranty, all of its rights under each of the Finance Documents creating the Security Interests.

 

26.25Perpetuity period

 

The trusts constituted by this Agreement are governed by English law and the perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall be the period of 125 years from the date of this Agreement.

 

26.26Powers supplemental

 

The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Trustee by general law or otherwise.

 

26.27Trustee division separate

 

(a)In acting as trustee for the Secured Parties, the Security Trustee shall be regarded as acting through its trustee division which shall be treated as a separate entity from any of its other divisions or departments.

 

(b)If information is received by another division or department of the Security Trustee, it may be treated as confidential to that division or department and the Security Trustee shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

 

26.28Disapplication

 

In addition to its rights under or by virtue of this Agreement and the other Finance Documents, the Security Trustee shall have all the rights conferred on a trustee by the Trustee Act 1925, the Trustee Delegation Act 1999, the Trustee Act 2000 and by general law or otherwise, provided that:

 

(a)section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Trustee in relation to the trusts constituted by this Agreement and the other Finance Documents; and

 

(b)where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this

 

101
 

 

Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, such provisions shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

 

26.29Full freedom to enter into transactions

 

Notwithstanding any rule of law or equity to the contrary, the Security Trustee shall be absolutely entitled:

 

(a)to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security trustee for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);

 

(b)to deal in and enter into and arrange transactions relating to:

 

(i)any securities issued or to be issued by any Obligor or any other person; or

 

(ii)any options or other derivatives in connection with such securities; and

 

(c)to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

 

and, in particular, each Servicing Party shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

 

26.30Resignation of the Security Trustee

 

(a)The Security Trustee may resign and appoint one of its affiliates as successor by giving notice to the Borrower and each Secured Party.

 

(b)Alternatively the Security Trustee may resign by giving notice to the other Parties in which case the Majority Lenders may appoint a successor Security Trustee.

 

(c)If the Majority Lenders have not appointed a successor Security Trustee in accordance with paragraph (b) above within 30 days after the notice of resignation was given, the Security Trustee (after consultation with the Agent) may appoint a successor Security Trustee.

 

(d)The retiring Security Trustee (the "Retiring Security Trustee") shall, at its own cost, make available to the successor Security Trustee such documents and records and provide such assistance as the successor Security Trustee may reasonably request for the purposes of performing its functions as Security Trustee under the Finance Documents.

 

(e)The Security Trustee 's resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer, by way of a document expressed as a deed, of all of the Security Property to that successor.

 

102
 

 

(f)Upon the appointment of a successor, the Retiring Security Trustee shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 26.24 (Winding up of trust) and under paragraph (d) above) but shall, in respect of any act or omission by it whilst it was the Security Trustee, remain entitled to the benefit of Clause 26 (The Security Trustee), Clause 26.5 (Deductions from receipts), Clause 26.16 (Lenders' indemnity to the Security Trustee) and any other provisions of a Finance Document which are expressed to limit or exclude its liability in acting as Security Trustee. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if that successor had been an original Party.

 

(g)The Majority Lenders may, by notice to the Security Trustee, require it to resign in accordance with paragraph (b) above. In this event, the Security Trustee shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.

 

(h)The consent of the Borrower (or any other Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Trustee.

 

26.31Delegation

 

(a)Each of the Security Trustee or any receiver may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.

 

(b)That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Trustee or that receiver (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties and it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate or sub delegate.

 

26.32Additional Security Trustee

 

(a)The Security Trustee may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

 

(i)if it considers that appointment to be in the interests of the Secured Parties; or

 

(ii)for the purposes of conforming to any legal requirements, restrictions or conditions which the Security Trustee deems to be relevant; or

 

(iii)for obtaining or enforcing any judgment in any jurisdiction,

 

and the Security Trustee shall give prior notice to the Borrower and the Agent of that appointment.

 

(b)Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Trustee by this Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.

 

(c)The remuneration that the Security Trustee may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its

 

103
 

 

functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Trustee.

 

27.Conduct of Business by the Creditor Parties

 

27.1No provision of this Agreement will:

 

(a)interfere with the right of any Creditor Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit;

 

(b)oblige any Creditor Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

(c)oblige any Creditor Party to disclose any information relating to its affairs (Tax or otherwise) or any computations in respect of Tax.

 

28.Sharing Among the Creditor Parties

 

28.1Payments to Creditor Parties

 

If a Creditor Party (a "Recovering Creditor Party") receives or recovers any amount from an Obligor other than in accordance with Clause 28 (Sharing Among the Creditor Parties) and applies that amount to a payment due under the Finance Documents then:

 

(a)the Recovering Creditor Party shall, within three (3) Business Days, notify details of the receipt or recovery to the Agent;

 

(b)the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Creditor Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 19 (Application of Sums Received) and Clause 29 (Payment Mechanics)), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

 

(c)the Recovering Creditor Party shall, within three (3) 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 determines may be retained by the Recovering Creditor Party as its share of any payment to be made, in accordance with Clause 19 (Application of Sums Received) and Clause 29 (Payment Mechanics).

 

28.2Redistribution of payments

 

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Creditor Parties (other than the Recovering Creditor Party) in accordance with Clause 19 (Application of Sums Received) and Clause 29 (Payment Mechanics).

 

28.3Recovering Creditor Party's rights

 

(a)On a distribution by the Agent under Clause 28.2 (Redistribution of payments), the Recovering Creditor Party will, if possible under the relevant applicable laws, be subrogated to the rights of the Creditor Parties which have shared in the redistribution.

 

104
 

 

(b)If and to the extent that the Recovering Creditor Party is not able to rely on its rights under Clause 28.3(a), the relevant Obligor shall be liable to the Recovering Creditor Party for a debt equal to the Sharing Payment which is immediately due and payable.

 

28.4Reversal of redistribution

 

If any part of the Sharing Payment received or recovered by a Recovering Creditor Party becomes repayable and is repaid by that Recovering Creditor Party, then:

 

(a)each Lender which has received a share of the relevant Sharing Payment pursuant to Clause 28.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent for account of that Recovering Creditor 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 Creditor Party for its proportion of any interest on the Sharing Payment which that Recovering Creditor Party is required to pay); and

 

(b)that Recovering Creditor Party's rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Creditor Party for the amount so reimbursed.

 

28.5Exceptions

 

(a)This Clause 28 (Sharing Among the Creditor Parties) shall not apply to the extent that the Recovering Creditor Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.

 

(b)A Recovering Creditor Party is not obliged to share with any other Creditor Party any amount which the Recovering Creditor Party has received or recovered as a result of taking legal or arbitration proceedings, if:

 

(i)it notified that other Creditor Party of the legal or arbitration proceedings; and

 

(ii)that other Creditor 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.

 

29.Payment Mechanics

 

29.1Payments to the Agent

 

(a)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.

 

(b)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.

 

(c)Payment shall be made before 11.00 a.m. New York time or 11.00 a.m. Paris time (in the case of a payment in Euro).

 

105
 

 

(d)For each payment by the Borrower, it shall notify the Agent on the third Business Day prior to the due date for payment that it will issue to its bank (which shall be named in such notification) to make the payment.

 

29.2Distributions by the Agent

 

Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 29.3 (Distributions to an Obligor), Clause 29.4 (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 (5) 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).

 

29.3Distributions to an Obligor

 

The Agent may in accordance with Clause 22 (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.

 

29.4Clawback

 

(a)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.

 

(b)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 to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

 

29.5No 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.

 

29.6Business Days

 

(a)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).

 

(b)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.

 

29.7Currency of account

 

(a)Subject to Clauses 29.7(b) and 29.7(c) Dollars is the currency of account and payment for any sum from an Obligor under any Finance Document.

 

106
 

 

(b)Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or taxes are incurred.

 

(c)Any amount expressed to be payable in a currency other than Dollars shall be paid in that other currency.

 

29.8Change of currency

 

(a)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:

 

(i)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 Lenders and the Borrower); and

 

(ii)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).

 

(b)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 Lenders and 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.

 

29.9Distributions under the Interest Make-Up Agreement

 

Each payment received by the Agent under the Interest Make-Up Agreement for a Lender shall be made available by the Agent as soon as practicable after receipt to the Lender entitled to receive such payment in accordance with this Agreement (for the account of its Facility Office), to such account as that Lender may notify to the Agent by not less than five (5) 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.Variations and Waivers

 

30.1Variations, waivers etc. by Majority Lenders

 

Subject to Clause 30.2 and Clause 30.4, a document shall be effective to vary, waive, amend, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which an Obligor is party, by an Obligor (provided that no amendment or variation may be made to this Agreement or any other Finance Document without the consent of the Italian Authorities); provided, further, that no amendment or variation may be made before the date falling ten Business Days after the terms of that amendment or variation have been notified by the Agent to the Lenders, unless each Lender is a FATCA Protected Lender. The Agent shall notify the Lenders reasonably promptly of any amendments or variations proposed by the Borrower.

 

107
 

 

30.2Variations, waivers etc. requiring agreement of all Lenders

 

However, as regards the following, Clause 30.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:

 

(a)a reduction in the Margin;

 

(b)a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, commission or other sum payable under this Agreement;

 

(c)an increase in or extension of any Lender's Commitment or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Loan;

 

(d)a change to the definition of “Majority Lenders”;

 

(e)a change to Clause 2 (Facility), Clause 6 (Interest), Clause 23 (Changes to the Lenders) or this Clause 30 (Variations and Waivers);

 

(f)any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

 

(g)any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.

 

30.3Exclusion of other or implied variations

 

Except for a document which satisfies the requirements of Clauses 30.1 and 30.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

 

(a)a provision of this Agreement or another Finance Document; or

 

(b)an Event of Default; or

 

(c)a breach by the Borrower or an Obligor of an obligation under a Finance Document or the general law; or

 

(d)any right or remedy conferred by any Finance Document or by the general law,

 

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

 

30.4Other exceptions – FATCA

 

(a)If the Agent or a Lender reasonably believes that an amendment or waiver may constitute a “material modification” for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and the Agent accordingly, that amendment or waiver may,

 

108
 

 

subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender (as the case may be).

 

(b)The consent of a Lender shall not be required pursuant to paragraph (a) above if that Lender is a FATCA Protected Lender.

 

31.Notices

 

31.1General

 

Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

 

31.2Addresses for communications

 

A notice shall be sent:

 

(a) to the Borrower: 8300 NW 33rd Street #308
     
    Miami FL33122, USA
     
    Fax No: (00) 1 305 514 2297
     
(b) to a Lender: At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
     
(c) to the Agent or the SACE 9 quai du Président Paul Doumer
     
  Agent: 92920 Paris La Défense Cedex
    Paris
     
    Fax No: (33) 1 41 89 29 87
    Attn: Shipping Group - Mr Jerome Leblond
     
    and
     
    Fax No. (33) 1 41 89 19 34
    Attn: Shipping Middle Office – Ms Sylvie Godet-Couery

 

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent, the Borrower and the Lenders.

 

31.3Effective date of notices

 

Subject to Clauses 31.4 (Service outside business hours) and 31.5 (Electronic communication):

 

(a)a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

 

(b)a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

 

109