EXECUTION COPY
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MILLENIUM SEACARRIERS, INC.
12% First Priority Ship Mortgage Notes Due 2005
the
SUBSIDIARY
GUARANTORS
named herein
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INDENTURE
Dated as of July 15, 1998
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THE FIRST NATIONAL BANK OF MARYLAND
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a) ..............................7.10
310(b) ..............................7.10
310(b)(1) ..............................7.10
311(a) ..............................7.06
(b) ..............................7.06
312(b) ..............................14.03
(c) ..............................14.03
313(a) ..............................7.06
(b) ..............................7.06
314(a) ..............................N.A.
(b) ..............................11.12
(c) ..............................N.A.
(d) ..............................11.12, 12.06
315(a) ..............................N.A.
(b) ..............................N.A.
316(a) ..............................N.A.
(b) ..............................N.A.
317(a) ..............................N.A.
(b) ..............................N.A.
318(a) ..............................N.A.
318(b) ..............................N.A
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
INDENTURE dated as of July 24, 1998, among
Millenium Seacarriers, Inc., a Cayman Islands
corporation (the "Company" or "Millenium"), each of
the Company's subsi diaries that owns a Mortgaged
Vessel (as defined) on the Closing Date (as defined)
or thereafter, as identified on the signature page to
this Indenture or to a Guarantee Agreement(the
"Subsidiary Guarantors"), and The First National Bank
of Maryland, a national banking association (the
"Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 12%
First Priority Ship Mortgage Notes Due 2005 (the "Initial Securities") and, if
and when issued pursuant to a registered exchange for Initial Securities, the
Company's 12% First Priority Ship Mortgage Notes Due 2005 (the "Exchange
Securities") and if and when issued pursuant to a private exchange for Initial
Securities, the Company's 12% First Priority Ship Mortgage Notes Due 2005 (the
"Private Exchange Securities", together with the Exchange Securities and the
Initial Securities, the "Securities").
The Securities will be fully and unconditionally guaranteed on
a senior secured basis by the Subsidiary Guarantors. The Securities will
initially be secured by a pledge of all capital stock of the Subsidiary
Guarantors and by first priority ship mortgages on 16 vessels, five of which are
currently owned by certain of the Subsidiary Guarantors (the "Existing Vessels")
and 11 of which are committed to be acquired by certain of the Subsidiary
Guarantors on or shortly after the date the Notes are issued (the "Committed
Vessels"). The Company will enter into an escrow agreement (the "Escrow
Agreement") with the First National Bank of Maryland, as escrow agent, and will
deposit with such agent amounts, as determined in and pursuant to the provisions
of the Escrow Agreement, in cash or Treasury Securities (as defined in the
Escrow Agreement), until such amounts are used to acquire additional vessels
(the "Additional Vessels") (such cash and Treasury Securities, together with the
interest, dividends and distribution thereof, "Escrowed Proceeds"):
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accreted Value" means, as of any date (the "Specified Date"),
the amount provided below for each $1,000 principal amount at maturity of the
Securities:
(i) if the Specified Date occurs on one of the following dates
(each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRUAL DATE ACCRETED
VALUE
Issue Date..................................................... $965.93
January 15, 1999............................................... 967.51
July 15, 1999.................................................. 969.20
January 15, 2000............................................... 970.98
July 15, 2000.................................................. 972.88
January 15, 2001............................................... 974.90
July 15, 2001.................................................. 977.06
January 15, 2002............................................... 979.34
July 15, 2002.................................................. 981.78
January 15, 2003............................................... 984.36
July 15, 2003.................................................. 987.12
January 15, 2004............................................... 990.05
July 15, 2004.................................................. 993.16
January 15, 2005............................................... 996.47
July 15, 2005.................................................. $1,000.00
(ii) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the Accreted Value will equal the sum of (a) the
Accreted Value for the SemiAnnual Accrual Date immediately preceding
such Specified Date and (b) an amount equal to the product of (1) the
Accreted Value for the immediately following Semi-Annual Accrual Date
less the Accreted Value for the immediately preceding Semi-Annual Date
multiplied
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by (2) a fraction, the numerator of which is the number of the days
elapsed from the immediately preceding Semi-Annual Accrual Date to the
Specified Date, using a 360 day year of twelve 30 day months, and the
denominator of which is 180 (or, if the Semi-Annual Accrual Date
immediately preceding the Specified Date is the Issue Date, the number
of days from the Issue Date to the next Semi-Annual Accrual Date).
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) in a Shipping Business; (ii) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisi tion of such Capital Stock by the Company or another Restricted
Subsidiary; or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; PROVIDED, HOWEVER, that any
such Restricted Subsidiary described in clauses (ii) or (iii) above is primarily
engaged in a Shipping Business.
"Advisory Agreement" means the Advisory Agreement between the
Company and Millenium Advisors, dated July 24, 1998.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.05, 4.07 and 4.09 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Appraisal Date" means each date as of which the Appraised
Value of the Mortgaged Vessels has been determined.
"Appraised Value" means the average of the fair market sale
values as of a specified date of a specified asset that would be obtained in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined by two Appraisers selected by Millenium and, in the event either
of such Appraisers is
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not a Designated Appraiser, reasonably acceptable to the Trustee. If the Trustee
does not accept an Appraiser (other than a Designated Appraiser) selected by
Millenium within 10 days of the first giving of notice by Millenium to the
Trustee requesting a determination of an Appraised Value (the "Appraisal Request
Date"), such Appraised Value shall be determined by a panel of three Appraisers,
one of whom shall be selected by Millenium, another of whom shall be selected by
the Trustee and the third of whom shall be selected by such other two Appraisers
or, if such Appraisers shall be unable to agree upon a third Appraiser within
five days of the selection date of the second of such two Appraisers, by an
arbitrator mutually acceptable to Millenium and the Trustee; PROVIDED, HOWEVER,
that, if either party shall not select its Appraiser within 20 days after the
Appraisal Request Date, such Appraised Value shall be determined solely by the
Appraiser selected by the other party. The Appraiser or Appraisers appointed
pursuant to the foregoing procedure shall be instructed to determine such
Appraised Value within 25 days after the final appointment of any Appraiser
pursuant hereto, and such determination shall be final and binding upon the
parties. If three Appraisers shall be appointed, (a) if the median of the
determinations of the Appraisers shall equal the average of such determinations,
such average shall constitute the determination of the Appraisers; otherwise (b)
the determination of the Appraiser that shall differ most from the other two
Appraisers shall be excluded, the remaining two determinations shall be averaged
and such average shall constitute the determination of the Appraisers. For this
purpose, the purchase price (including, if applicable, the value of any upgrades
thereto made by Millenium in connection with or within six (6) months after the
acquisition of a Mortgaged Vessel) of any Mortgaged Vessel acquired after the
most recent Appraisal Date shall constitute that Vessel's Appraised Value.
"Appraiser" means each of Fearnleys A.S., Oslo Shipbrokers
A.S., X.X. Xxxxxx Shipbrokers A.S., Bassoe A.S., Associated Shipbrokers S.A., X.
Xxxxxxxx Ltd., Xxxxxxx Xxxxxx Xxxxx Ltd., Axis Shipbrokers Ltd., Xxxxxxx Xxxxx
Xxxxx & Xxxxx, Inc., X.X. Xxxxxxx, Inc., Nestun A.S., Xxxxxxxxx Stemoco
Shipbrokers A.S., Braemar Shipbrokers Ltd., Seabrokers, Inc., Seascope Shipping
Ltd., Xxxxx Xxxxxxxx Salles, Poten & Partners, Inc., Xxxxxx Xxxxxxxxxx
Shipbrokers Limited and Equator Shipbroking Ltd. (each a "Designated Appraiser")
(and each successor thereto), together with any other Person not affiliated with
Millenium engaged in the business of appraising ocean-going vessels, including
bulk carriers.
"Asset Sale" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers
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or dispositions) (excluding the granting of Liens) by Millenium or any
Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition") in one transaction or a series of related
transactions, of (i) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than Millenium or a Restricted Subsidiary), (ii) any
Vessel, (iii) all or substantially all the assets of any division or line of
business of Millenium or any Restricted Subsidiary or (iv) any other assets of
Millenium or any Restricted Subsidiary outside of the ordinary course of
business of Millenium or such Restricted Subsidiary (other than, in the case of
(i), (ii), (iii) and (iv) above, (I) the exchange of assets for other non-cash
assets that (a) are useful in the Shipping Business and (b) have a fair market
value at least equal to the fair market value of the assets being exchanged (as
determined by the Board of Directors or the board of directors of the Restricted
Subsidiary which owns such assets in good faith), (II) the sale, lease, transfer
or other disposition of all or substantially all the assets of Millenium or its
Restricted Subsidiaries (which will be governed by the provisions of Section
5.01 and not by the provisions of Section 4.07), (III) a disposition by a
Restricted Subsidiary to Millenium or by Millenium or a Restricted Subsidiary to
a Restricted Subsidiary, (IV) for purposes of Section 4.07 only, a disposition
that constitutes a Permitted Investment or a Restricted Payment permitted by
Section 4.05 and (V) a disposition of assets with a fair market value of less
than $500,000).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determina tion, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multi plied by the amount of such payment by (ii) the sum of all
such payments.
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"Board of Directors" means the Board of Directors of Millenium
or any committee thereof duly authorized to act on behalf of such Board of
Directors.
"Business Day" means each day which is not a Saturday, Sunday
or a day on which banking institutions are authorized or permitted to close in
the States of New York and Maryland.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Change of Control" means the occurrence of any of
the following events:
(i) prior to the earlier to occur of (A) the first public
offering of common stock of Parent or (B) the first public offering of
common stock of the Company, the Permitted Holders cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority in the aggregate
of the total voting power of the Voting Stock of the Company, whether
as a result of issuance of securities of the Parent or the Company, any
merger, consolidation, liquidation or dissolution of the Parent or the
Company, any direct or indirect transfer of securities by Parent or
otherwise (for purposes of this clause (i) and clause (ii) below, the
Permitted Holders shall be deemed to beneficially own any Voting Stock
of a corporation (the "specified corporation") held by any other
corporation (the "parent corporation") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in the
aggregate a majority of the voting power of the Voting Stock of the
parent corporation);
(ii) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other
7
than one or more Permitted Holders, is or becomes the beneficial owner
(as defined in clause (i) above, except that for purposes of this
clause (ii) such person shall be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Company; PROVIDED, HOWEVER, that the
Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company than such other
person and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the Board
of Directors (for the purposes of this clause (ii), such other person
shall be deemed to beneficially own any Voting Stock of a specified
corporation held by a parent corporation, if such other person is the
beneficial owner (as defined in this clause (ii)), directly or
indirectly, of more than 35% of the voting power of the Voting Stock of
such parent corporation and the Permitted Holders beneficially own (as
defined in clause (i) above), directly or indirectly, in the aggregate
a lesser percentage of the voting power of the Voting Stock of such
parent corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the board of directors of such parent corporation);
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 66-2/3% of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office; or
(iv) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company to another Person (other than a Person that is controlled by
the Permitted Holders), and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power
8
of the Voting Stock of the Company are changed into or exchanged for
cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving
corporation.
"Charter" means each charterparty between a Subsidiary
Guarantor and any third party with respect to such Subsidiary Guarantor's
Mortgaged Vessel, and as the same may be amended from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means, in each case as pledged and assigned to
the Trustee or the Collateral Agent pursuant to the Security Agreements: (1) all
the issued and outstanding capital stock of each Subsidiary Guarantor owned,
directly or indirectly, by Millenium, pledged in favor of the Trustee pursuant
to this Indenture; (2) all cash held by the Trustee or the Escrow Agent pursuant
to this Indenture or the Security Agreements (including all Escrowed Property
(as described in the Escrow Agreement) held pursuant to the Escrow Agreement);
(3) each Subsidiary Guarantor's right, title and interest in and to (i) its
respective Mortgaged Vessel, pursuant to a Mortgage issued by such Subsidiary
Guarantor in favor of the Collateral Agent; (ii) the Charters, if any, relating
to its Mortgaged Vessel, including the right to receive all monies due and to
become due under such Charters or in respect of such Mortgaged Vessel and all
claims for damages arising under such Charters or relating to such Mortgaged
Vessel; (iii) the freights and hires relating to its Mortgaged Vessel; (iv) all
its policies and contracts of insurance taken out from time to time in respect
of its Mortgaged Vessel; and (v) all proceeds of any of the foregoing.
"Collateral Agency Agreement" means the Collateral Agency and
Intercreditor Agreement dated as of July 1, 1998, among the Trustee, the
Collateral Agent, The Bank of New York, Millenium and the Subsidiary Guarantors.
"Collateral Agent" means The First National Bank of Maryland,
as collateral agent, under the Collateral Agency Agreement.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the weighted average maturity of the remaining
9
term of the Securities outstanding that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to such weighted
average maturity of the Securities.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending prior to the date of such
determina tion for which internal financial statements are available to (ii)
Consolidated Interest Expense for such four fiscal quarters; PROVIDED, HOWEVER,
that
(1) if Millenium or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains
outstanding on the date of determi nation or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repur chased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period,
(2) if Millenium or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on
the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense
for such period shall be calculated on a pro forma basis as if such
discharge had occurred on the first day of such period and as if
Millenium or such Restricted Subsidiary had not earned the interest
income actually earned during such period in respect of
10
cash or Temporary Cash Investments used to repay, repurchase, defease
or otherwise discharge such Indebtedness,
(3) if since the beginning of such period Millenium or any
Restricted Subsidiary shall have made any Asset Sale, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets which are the subject of
such Asset Sale for such period, or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of Millenium or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to Millenium
and its continuing Restricted Subsidiaries in connection with such
Asset Sale for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary
to the extent Millenium and its continuing Restricted Subsidiaries are
no longer liable for such Indebtedness after such sale),
(4) if since the beginning of such period Millenium or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction
requiring a calculation to be made hereunder, which constitutes all or
substan tially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the
first day of such period and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsi diary or was merged with or into
Millenium or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Sale, any Investment or acquisition
of assets that would have required an adjustment pursuant to clause (3)
or (4) above if made by Millenium or a Restricted Subsidiary during
such period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma
11
effect thereto as if such Asset Sale, Investment or acquisition
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
Asset Sale, to an Investment, to the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or to an acquisition of assets and the
amount of income or earnings relating thereto, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
Millenium. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest of such Indebted ness shall be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agree ment
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months). For purposes of this definition, whenever pro
forma effect is to be given to an acquisition of a Vessel or the financing
thereof, Millenium may (i) if the Vessel is to be subject to a time charter of
at least one year's duration by Millenium, apply pro forma EBITDA for such
Vessel based on such new time charter or (ii) if the Vessel is to be subject to
hire on a voyage charter basis by Millenium, apply EBITDA for such Vessel based
upon historical earnings of the most comparable Vessel of Millenium or any of
its Subsidiaries (as determined in good faith by the Board of Directors) during
such period, or if there is no such comparable Vessel, based upon industry
average earnings for comparable vessels (as determined in good faith by the
Board of Directors).
"Consolidated Interest Expense" means, for any period, the
total interest expense of Millenium and its Restricted Subsidiaries on a
consolidated basis, plus, to the extent not included in such total interest
expense, and to the extent incurred by Millenium or its Restricted Subsidiaries,
without duplication, (i) interest expense attributable to capital leases and the
interest expense attributable to leases constituting part of a Sale/Leaseback
Transaction, (ii) amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) noncash interest expense, (v) commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (vi) net costs associated with Hedging Obligations
(including amortization of fees), (vii) Preferred Stock dividends in respect of
all Preferred Stock held by Persons other than Millenium or a Wholly Owned
Subsidiary to the extent paid in cash in such period, (viii) interest incurred
in connection with Investments in discontinued operations, (ix) interest
accruing on any Indebtedness of any other Person to the extent such Indebtedness
is Guaranteed by (or secured by the assets of)
12
Millenium or any Restricted Subsidiary and (x) the cash contributions to any
employee stock ownership plan or similar trust to the extent such contributions
are used by such plan or trust to pay interest or fees to any Person (other than
Millenium) in connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net
income of Millenium and its Subsidiaries on a consolidated basis; PROVIDED,
HOWEVER, that there shall not be included in such Consolidated Net Income:
(i) any net income (or loss) of any Person (other than
Millenium) if such Person is not a Restricted Subsidiary, except that
subject to the exclusion contained in clause (iv) below, Millenium's
equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such period to
Millenium or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause
(iii) below);
(ii) any net income (or loss) of any Person acquired by
Millenium or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if at the
date of determination such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to Millenium, except that (A) subject to the exclusion
contained in clause (iv) below, Millenium's equity in the net income of
any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during such
period to Millenium or another Restricted Subsidiary as a dividend or
other distribution (sub ject, in the case of a dividend or other
distribution paid to another Restricted Subsidiary, to the limita tion
contained in this clause) and (B) Millenium's equity in a net loss of
any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any assets of Millenium or its Subsidiaries on a
consolidated basis (including
13
pursuant to any sale-and-leaseback arrangement) which are not sold or
otherwise disposed of in the ordinary course of business and any gain
(but not loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(v) subject to clause (iv), extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section 4.05 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
Millenium or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under Section
4.05(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of Millenium and its Subsidiaries, determined on a
consolidated basis in accor dance with GAAP, as of the end of the most recent
fiscal quarter of Millenium for which internal financial statements are
available prior to the taking of any action for the purpose of which the
determination is being made, as (i) the par or stated value of all outstanding
Capital Stock of Millenium plus (ii) paid-in capital or capital surplus relating
to such Capital Stock plus (iii) any retained earnings or earned surplus less
(A) any accumulated deficit and (B) any amounts attributable to Disqualified
Stock.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Designated Appraiser" has the meaning assigned to it under
the definition of "Appraiser".
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in
14
whole or in part, in each case on or prior to the 91st day of the Stated
Maturity of the Securities; PROVIDED, HOWEVER, that any Capital Stock that would
not constitute Disquali fied Stock but for provisions thereof giving holders
thereof the right to require such Person to repurchase or redeem such Capital
Stock upon the occurrence of an "asset sale" or "change of control" occurring
prior to the 91st day of the Stated Maturity of the Securities shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are not more favorable to the
holders of such Capital Stock than the provisions of Sections 4.07 and 4.13.
"EBITDA" for any period means the sum of Consolidated Net
Income plus the sum of the following expenses of Millenium and its Restricted
Subsidiaries on a consolidated basis, to the extent deducted in calculating such
Consolidated Net Income: (a) all United States Federal, state and local, and all
foreign income tax expense, (b) Consolidated Interest Expense, (c) depreciation
expense, (d) amortization expense (including in respect of intangibles)
(excluding amortization expense attributable to a prepaid cash item that was
paid in a prior period) and (e) all other noncash charges (excluding any such
noncash charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period), in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and noncash charges of, a
Restricted Subsidiary shall be added to Consolidated Net Income to compute
EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be dividended to Millenium by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.
"Event of Loss" means any of the following events: (a) the
actual or constructive total loss of a Vessel or the agreed or compromised total
loss of a Vessel, (b) the destruction of a Vessel, (c) damage to a Vessel to an
extent, determined in good faith by the Board of Directors within 90 days after
the occurrence of such damage (and evidenced by an Officers' Certificate to such
effect delivered to the Trustee, within such 90-day period), as shall make
repair thereof uneconomical or shall render such Vessel permanently unfit for
normal use (other than obsol escence) or (d) the condemnation, confiscation,
requisition, seizure, forfeiture or other taking of title to or use of a
15
Vessel that shall not be revoked within six months. An Event of Loss shall be
deemed to have occurred: (i) in the event of the destruction or other actual
total loss of a Vessel, on the date of such loss; (ii) in the event of a
constructive, agreed or compromised total loss of a Vessel, on the date of the
determination of such total loss pursuant to the relevant insurance policy;
(iii) in the case of any event referred to in clause (c) above, upon the
delivery of Millenium's Officers' Certificate to the Trustee; or (iv) in the
case of any event referred to in clause (d) above, on the date six months after
the occurrence of such event.
"Event of Loss Proceeds" means all compensation, damages and
other payments (including insurance proceeds other than certain liability
insurance proceeds) received by Millenium, any Subsidiary Guarantor, the Trustee
or the Collateral Agent, jointly or severally, from any Person, including any
governmental authority, with respect to or in connection with an Event of Loss.
"Excess Proceeds" means the amount of excess Net Available
Cash from Asset Sales not applied (or committed to be applied) pursuant to
Section 4.07(b)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Sections 13 or 15(d) of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obliga tion of such Person (whether
arising by virtue of partner ship arrangements, or by agreements to keep-well,
to purchase assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or
16
otherwise) or (ii) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); PROVIDED,
HOWEVER, that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Guarantee Agreement" means a supplemental indenture, in a
form satisfactory to a Trustee, pursuant to which a Subsidiary Guarantor becomes
subject to the applicable terms and conditions of this Indenture.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incidental Asset" means any equipment, outfit, furniture,
furnishings, appliances, spare or replacement parts or stores owned by Millenium
or a Subsidiary Guarantor that have become obsolete or unfit for use or no
longer useful, necessary or profitable in the conduct of the business of
Millenium or such Subsidiary Guarantor, as the case may be. In no event shall
the term "Incidental Asset" include a Vessel or a Mortgaged Vessel.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning. The accretion of principal
of a non-interest bearing or other discount security shall be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(i) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due
and payable;
17
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered
into by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding accounts payable arising in the
ordinary course of business);
(iv) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
clauses (i) through (iii) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following payment on
the letter of credit);
(v) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, the
liquidation preference with respect to, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured; and
(viii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
18
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent Investment Banker" means a Reference Treasury
Dealer appointed by the Trustee after consultation with Millenium.
"Insurance Assignment" means the Insurance Assignment between
a Subsidiary Guarantor and the Collateral Agent.
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary", the definition of "Restricted Payment"
and Section 4.05, (i) "Investment" shall include the portion (proportionate to
Millenium's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of Millenium at the time that such Subsidiary is
designated an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, Millenium shall be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) Millenium's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to Millenium's equity interest in such Subsidiary) of the
fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Securities are
originally issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including
19
any conditional sale or other title retention agreement or lease in the nature
thereof).
"Loan To Value Ratio" means, at any time, the ratio of
(x) the aggregate Accreted Value of the then outstanding
Securities (less the amount of any Collateral, including Escrowed
Proceeds, consisting of cash or Temporary Cash Investments at such
time) to
(y) the aggregate Appraised Value of all Mortgaged Vessels at
such time.
If the Loan To Value Ratio is required to be calculated or adjusted at a time
prior to a Proceeds Receipt Date (as defined in Section 4.17(a) or when cash is
on deposit with the Trustee as part of the Collateral in connection with the
sale of a Mortgaged Vessel or the occurrence of an Event of Loss with respect to
a Mortgaged Vessel, the then most recent Appraised Value of such Lost Mortgaged
Vessel (in the event such determination is to be made prior to the Proceeds
Receipt Date (as defined in Section 4.17(a)) or the amount of such cash on
deposit, as the case may be, shall be deemed to be the Appraised Value of the
Vessel giving rise to such cash on deposit and such Vessel shall be deemed to be
a Mortgaged Vessel for purposes of such computation or adjustment of the Loan To
Value Ratio.
"Mortgage" means a mortgage and the related deed of covenant,
if any, on a Vessel substantially in the form of and to the effect set forth as
Exhibit D in the Escrow Agreement.
"Mortgaged Collateral" means (i) the Mortgaged Vessels (or any
Qualified Substitute Vessels), pursuant to a Mortgage issued by the Subsidiary
Guarantor which owns such Vessel in favor of the Collateral Agent, (ii) the
Charters, if any, relating to the Mortgaged Vessels, including the collateral
right to receive all moneys due and to become due under the Charters or in
respect of the Mortgaged Vessels and all claims for damages arising under the
Charters or relating to the Mortgaged Vessels, (iii) the freights and hires
relating to the Mortgaged Vessels and (v) all policies and contracts of
insurance taken out from time to time in respect of the Mortgaged Vessels
pursuant to the Insurance Assignment.
"Mortgaged Vessels" means the Vessels owned by the Subsidiary
Guarantors from time to time, including the following Vessels (which are the
Existing Vessels and the Committed Vessels), as follows:
20
SUBSIDIARY OFFICIAL YEAR
VESSEL GUARANTOR FLAG NUMBER BUILT
------ --------- ---- ------ -----
Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx 00000 1973
Shipping &
Trading
Limited
Clipper Harmony Rapid Panama 7703546 1978
Ocean
Carriers
Inc.
Clipper Golden Ivy Liberia 10245 1978
Hind Navigation
Ltd.
Clipper Pacific Topscale Cyprus 708918 1976
Shipping
Company
Limited
Clipper Atlantic Conifer Cyprus 708620 1975
Shipping
Company
Limited
Millenium Millenium Cayman * 1988
Xxxxxxxxxx Xxxxxxxxxx Islands
, Inc.
Millenium Elmar Millenium Cayman * 0000
Xxxxx, Xxxxxxx
Inc.
Millenium Leader Millenium Cayman * 1984
III, Inc. Islands
Millenium Hawk Millenium Cayman * 1984
II, Inc. Islands
Millenium Eagle Millenium Cayman * 1983
VII, Inc. Islands
Millenium Osprey Millenium Cayman * 1984
VI, Inc. Islands
Millenium Falcon Millenium Cayman * 1981
V, Inc. Islands
Millenium Condor Millenium Cayman * 1981
IV, Inc. Islands
Millenium Millenium Bahamas * 1978
Amethyst Amethyst,
Inc.
Millenium Yama Millenium Bahamas * 1979
Yama, Inc.
Millenium
Millenium Majestic,
Majestic Inc. Bahamas * 1979
----------------------
* Not yet available
If one of such Vessels shall be sold pursuant to the terms of this Indenture,
such Vessel shall cease to be a Mortgaged Vessel from and after such sale date.
A Qualified Substitute Vessel may be substituted for a Mortgaged Vessel in
certain circumstances and such substituted Vessel shall
21
become a Mortgaged Vessel upon substitution in accordance with the terms of this
Indenture.
"Net Available Cash" from an Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of (i) all legal, title
and recording tax expenses, commissions and other fees and expenses (including
commissions under the New Management Agreement), and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Sale, in
accordance with the terms of any Lien upon or other security agreement of any
kind with respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Sale, or by applicable law, be repaid
out of the proceeds from such Asset Sale, (iii) all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Sale and (iv) the deduction of
appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities (including indemnification liabilities) associated
with the property or other assets disposed in such Asset Sale and retained by
Millenium or any Restricted Subsidiary after such Asset Sale.
"Net Cash Proceeds" means, with respect to any issuance or
sale of Capital Stock or capital contribution, the cash proceeds and Temporary
Cash Investments proceeds of such issuance or sale (or, in the event the
consideration of such issuance or sale or contribution is other than cash, the
cash proceeds and Temporary Cash Investments proceeds actually received upon the
disposition of such other consideration) net of attorneys' fees, accountants'
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees actually incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof.
"Net Event of Loss Proceeds" means, with respect to any Event
of Loss, the Event of Loss Proceeds from such Event of Loss net of related fees
and expenses and payments made to repay related Indebtedness or any other
related obligation outstanding at the time of such Event of Loss;
22
PROVIDED, HOWEVER, that such Indebtedness or other obliga tion is either (A)
secured by a Lien on the property or assets that suffered the Event of Loss or
(B) required to be paid as a result of such Event of Loss.
"New Management Agreement" means (i) the agreement entered
into on the Issue Date among the Subsidiary Guaran tors and MMI with respect to
the Existing Vessels and the Committed Vessels on the Issue Date, (ii) any
agreements replacing or amending such agreements and (iii) agreements entered
into subsequent to the Issue Date with respect to Committed Vessels, Additional
Vessels or any Qualified Substitute Vessels; PROVIDED, HOWEVER, that with
respect to clauses (ii) and (iii), such agreements shall be on substantially the
same terms as the terms in effect on the Issue Date contained in the agreement
described in clause (i).
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secre tary of Millenium.
"Officers' Certificate" means a certificate signed by two
Officers.
"OID" means original issue discount.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to Millenium or the Trustee.
"Parent" means any Person that, directly or indirectly, owns
all the Voting Stock of Millenium.
"Permitted Excess Cash Use" means (i) the repayment of
unsubordinated Indebtedness of Millenium or of a Subsidiary Guarantor (in each
case other than Indebtedness owed to an Affiliate of Millenium) or (ii) the
investment in Additional Assets.
"Permitted Holders" means (i) the members of MMI's management
and their respective affiliates as of the Issue Date and (ii) Millenium
Investment and Millenium Advisors, together with any Affiliates of either of
such Persons as of the Issue Date or of Xxxxxxx Capital Corporation.
"Permitted Investment" means an Investment by Millenium or any
Restricted Subsidiary in (i) Millenium, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
PROVIDED, HOWEVER, that the primary business of such Restricted Subsidiary is a
Shipping Business; (ii) another
23
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, Millenium or a Restricted Subsidiary; PROVIDED, HOWEVER, that such
Person's primary business is a Shipping Business; (iii) Temporary Cash
Investments; (iv) receivables owing to Millenium or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER, that
such trade terms may include such concessionary trade terms as Millenium or any
such Restricted Subsidiary deems reasonable under the circum stances; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans or
advances to employees made in the ordinary course of business consistent with
past practices of Millenium or such Restricted in an aggregate amount not to
exceed $100,000 outstanding at any time; (vii) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to Millenium or any Restricted Subsidiary or in satisfaction of judgments
or received in connection with condemnation proceedings; (viii) any Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
made in compliance with this Indenture; (ix) Investments made pursuant to
Hedging Obligations to the extent permitted by Section 4.03; and (x) Investments
in Persons primarily engaged in a Shipping Business; PROVIDED, HOWEVER, that any
such Investment, when added together with all other Investments made pursuant to
this clause (x) and then outstanding, does not exceed the sum of (A) $5.0
million plus (B) 75% of the cumulative amount of Net Available Cash attributable
to Sold Mortgaged Vessels to the extent such Net Available Cash remains after
Millenium and its Restricted Subsidiaries have complied with Section 4.17 or
Section 4.18 to redeem Securities or to tender a Qualified Substitute Vessel
with respect to such Sold Mortgaged Vessels.
"Permitted Liens" means, with respect to any
Person,
(a) Liens securing obligations under this Indenture, the
Securities and the Mortgages;
(b) Liens existing on the Issue Date;
(c) Liens granted after the Issue Date in favor of the
Trustee, the Collateral Agent or the Holders;
(d) Liens with respect to the assets of a Restricted
Subsidiary (other than a Subsidiary
24
Guarantor) granted by such Restricted Subsidiary to Millenium to secure
Indebtedness owing to Millenium by such Restricted Subsidiary;
(e) Liens for crews' wages (including the wages of a master
and the wages of stevedores employed directly by a Vessel) and pledges
or deposits by such Person under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for
the payment of Indebtedness) or leases to which such Person is a party,
or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security
for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business;
(f) Liens imposed by law, such as carriers', warehousemen's
and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other
proceedings for review;
(g) Liens for property taxes not yet subject to penalties for
non-payment or which are being contested in good faith and by
appropriate proceedings;
(h) Liens in favor of issuers of surety bonds or letters of
credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; PROVIDED, HOWEVER, that
such letters of credit do not constitute Indebtedness;
(i) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not Incurred in
connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially
impair their use in the operation of the business of such Person;
(j) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or
additions to, property of such
25
Person; PROVIDED, HOWEVER, that the Lien may not extend to any other
property owned by such Person or any of its Subsidiaries at the time
the Lien is Incurred, and the Indebtedness (other than any interest
thereon) secured by the Lien may not be Incurred more than 180 days
after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property
subject to the Lien;
(k) Liens on receivables of Millenium and its Restricted
Subsidiaries or on the Mortgaged Collateral to secure Indebtedness
permitted under Section 4.03 (b)(1) and Section 4.04(6);
(l) Liens on property or shares of Capital Stock of another
Person (other than a Subsidiary Guarantor) at the time such other
Person becomes a Subsidiary of such Person; PROVIDED, HOWEVER, that
such Liens are not created, incurred or assumed in connection with, or
in contemplation of, such other Person becoming such a Subsidiary;
PROVIDED FURTHER, HOWEVER, that such Lien may not extend to any other
property owned by such Person or any of its Subsidiaries;
(m) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means
of a merger or consolidation with or into such Person or a Subsidiary
of such Person; PROVIDED, HOWEVER, that such Liens are not created,
incurred or assumed in connection with, or in contemplation of, such
acquisition; PROVIDED FURTHER, HOWEVER, that the Liens may not extend
to any other property owned by such Person or any of its Subsidiaries;
(n) Liens securing Hedging Obligations so long as such Hedging
Obligations relate to Indebtedness that is, and is permitted to be
under this Indenture, secured by a Lien on the same property securing
such Hedging Obligations;
(o) any Lien which arises in favor of an unpaid seller in
respect of goods, plant or equipment sold and delivered to Millenium in
the ordinary course of business until payment of the purchase price for
such goods or plant or equipment or any other goods, plant or equipment
previously sold and delivered by that seller (except to the extent that
such Lien secures Indebtedness or arises otherwise than due to
deferment of payment of purchase price);
26
(p) any Lien or pledge created or subsisting in the ordinary
course of business over documents of title, insurance policies or sale
contracts in relation to commercial goods to secure the purchase price
thereof;
(q) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any Indebted ness secured by
any Lien referred to in the foregoing clauses (b), (j), (l) and (m);
PROVIDED, HOWEVER, that (x) such new Lien shall be limited to all or
part of the same property that secured the original Lien (plus
improvements to or on such property) and (y) the Indebtedness secured
by such Lien at such time is not increased to any amount greater than
the sum of (A) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clause (b), (j),
(l) or (m) at the time the original Lien became a Permitted Lien and
(B) an amount necessary to pay any fees and expenses, including
premiums, related to such Refinancing;
(r) Charters, leases or subleases granted to others in the
ordinary course of business that are subject to the relevant Mortgage
and that do not materially interfere with the ordinary course of
business of Millenium and its Restricted Subsidiaries, taken as a
whole;
(s) (A) Liens in favor of Millenium or any Restricted
Subsidiary, (B) Liens arising from the rendering of a final judgment or
order against such Person that does not give rise to an Event of
Default and (C) Liens securing reimbursement obligations with respect
to letters of credit that encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(t) Liens in favor of customers and revenue authorities
arising as a matter of law to secure payment of custom duties in
connection with the importation of goods;
(u) Liens for salvage;
(v) any Lien or pledge which arises in favor of Parent in the
ordinary course of business in connection with the performance of its
duties and obligations under the New Management Agreement as in effect
on the Issue Date;
(w) Liens on the Capital Stock of an Unrestricted Subsidiary
to the extent such Liens secure obligations
27
of such Unrestricted Subsidiary or the Guarantee of Millenium of the
obligations of such Unrestricted Subsidiary; and
(x) Liens securing Indebtedness if the Indebted ness secured
by such Lien, plus all other Indebtedness secured by Liens described in
this clause (x) at the time of determination, does not exceed $1
million.
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clause (j), (l) or (m) above to the extent such Lien applies to any
Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to Section 4.07. For purposes of this definition, the term
"Indebtedness" shall be deemed to include accrued and unpaid interest on such
Indebtedness.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Primary Treasury Dealer" means a primary U.S. Government
securities dealer in New York City.
"principal" of a Security means the Accreted Value of the
Security plus the premium, if any, payable on the Security which is due or
overdue or is to become due at the
relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of Millenium pursuant to an effective registration
statement under the Securities Act.
"Public Market" means any time after (x) a Public Equity
Offering has been consummated and (y) at least 15% of the total issued and
outstanding common stock of Millenium has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act.
"Qualified Preferred Stock" of a Restricted Subsidiary means a
series of Preferred Stock of such
28
Restricted Subsidiary which (i) has a fixed liquidation preference that is no
greater in the aggregate than the sum of (x) the fair market value (as
determined in good faith by the Board of Directors at the time of the issuance
of such series of Preferred Stock) of the consideration received by such
Restricted Subsidiary for the issuance of such series of Preferred Stock and (y)
accrued and unpaid dividends to the date of liquidation, (ii) has a fixed annual
dividend and has no right to share in any dividend or other distribu tions based
on the financial or other similar performance of such Restricted Subsidiary and
(iii) does not entitle the holders thereof to vote in the election of directors,
managers or trustees of such Restricted Subsidiary unless such Restricted
Subsidiary has failed to pay dividends on such series of Preferred Stock for a
period of at least 12 consecutive calendar months.
"Qualified Proceeds" means any of the following or any
combination of the following: (i) cash, (ii) Temporary Cash Investments, (iii)
assets that are used or useful in a Shipping Business and (iv) the Capital Stock
of any Person primarily engaged in a Shipping Business if, in connection with
the receipt by Millenium or any Restricted Subsidiary of Millenium of such
Capital Stock, (a) such Person becomes a Restricted Subsidiary of Millenium or
of any Restricted Subsidiary of Millenium or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, Millenium or any Restricted
Subsidiary of Millenium.
"Qualified Restricted Subsidiary" means a Restricted
Subsidiary in which no Affiliate of Millenium (other than another Qualified
Restricted Subsidiary) holds any Investment except through its beneficial
ownership of Capital Stock of Millenium.
"Qualified Substitute Vessel" means in respect of any
Mortgaged Vessel which has been sold or was the subject of an Event of Loss, as
of any date, one or more Vessels, (i) none of which is a Mortgaged Vessel as of
such date, (ii) which will be, upon acquisition thereof, wholly owned by a
Wholly Owned Subsidiary of Millenium, (iii) each of which is registered under
the laws of the Republic of Liberia, the Commonwealth of the Bahamas, Panama,
Cyprus, the Cayman Islands or such other jurisdiction which at the time is
generally deemed acceptable by institutional lenders to the shipping industry,
as determined in good faith by the Board of Directors and (iv) each of which has
or which together have an Appraised Value at the Vessel Tender Date at least
equal to (x) the product of (A) the Vessel Percen tage of the Vessel(s) for
which it is or they are being substituted, multiplied by (B) the Accreted Value
of the Securities outstanding on such date, assuming compliance by
29
the applicable Subsidiary Guarantor with all the terms of this Indenture and the
applicable Mortgage or (y) with respect to a Sold Mortgaged Vessel, if the Loan
To Value Ratio (calculated to include in the numerator thereof the then
outstanding amount of Indebtedness under any working capital facility to the
extent such Indebtedness is secured by a prior Lien on the Mortgaged Vessels)
would be less than 0.8 to 1.0 after giving effect to the disposition of such
Sold Mortgaged Vessel and the tender of one or more Vessels having an Appraised
Value at the Vessel Tender Date at least equal to the lesser of (I) the product
calculated under the foregoing clause (x) and (II) the Appraised Value of such
Sold Mortgaged Vessel, then such lesser amount.
"Reference Treasury Dealers" means each of Credit Suisse First
Boston Corporation, Xxxxxxxxx Xxxxxx Xxxxxxxx Securities Corporation and their
respective successors; PROVIDED, HOWEVER, that if either of the foregoing shall
cease to be a Primary Treasury Dealer, Millenium shall substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
any Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
(New York City time) on the third business day preceding such redemption date.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of Millenium or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or
30
committed (plus fees and expenses, including any premium and defeasance costs)
under the Indebtedness being Refinanced; PROVIDED FURTHER, HOWEVER, that
Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary that
Refinances Indebtedness of the Company or (y) Indebtedness of Millenium or a
Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement among the Company, the Subsidiary Guarantors and the Initial
Purchasers dated July 20, 1998.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to Millenium or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of Millenium held by any Person or
of any Capital Stock of a Restricted Subsidiary held by any Affiliate of
Millenium (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock), (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase, or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) the making of any
Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of Millenium that
is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby Millenium or a Restricted
Subsidiary transfers such property to a Person and Millenium or a Restricted
Subsidiary leases it from such Person.
31
"SEC" means the Securities and Exchange Commis sion.
"Secured Indebtedness" means any Indebtedness of Millenium
secured by a Lien.
"Security Agreements" means the Collateral Agency Agreement,
the Escrow Agreement, Mortgages, Insurance Assignments, and any other
instruments or documents entered into or delivered in connection with any of the
foregoing, as such agreements, instruments or documents may from time to time be
amended in accordance with the terms hereof and thereof.
"Securities" means the Securities issued under this Indenture.
"Senior Indebtedness" of any Person means (i) Indebtedness of
such Person, whether outstanding on the Issue Date or thereafter Incurred, and
(ii) accrued and unpaid interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such
Person to the extent post-filing interest is allowed in such proceeding) in
respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable unless, in the
case of (i) and (ii), in the instrument creating or evidencing the same or
pursuant to which the same is outstanding it is provided that such obligations
are subordinate in right of payment to the Securities; PROVIDED, HOWEVER, that
Senior Indebtedness shall not include (1) any obligation of such Person to any
Subsidiary, (2) any liability for Federal, state, local or other taxes owed or
owing by such Person, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness of
such Person (and any accrued and unpaid interest in respect thereof) which is
subordinate or junior in any respect to any other Indebtedness or other
obligation of such Person or (5) that portion of any Indebtedness which at the
time of Incurrence is Incurred in violation of this Indenture.
"Shipping Business" means the ownership or operation of
vessels and any activities within the ship owning and shipping industries and
all businesses which are complementary, incidental, related or ancillary to any
such activities.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of
32
Millenium within the meaning of Rule 1-02 under Regulation S-X promulgated by
the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of Millenium
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of Millenium,
whether now owned or hereafter formed, which (i) owns a Mortgaged Vessel on the
Issue Date, (ii) acquires a Vessel with Escrowed Proceeds, (iii) acquires a
Qualified Substitute Vessel, or (iv) shall execute and deliver a Subsidiary
Guarantee.
"Subsidiary Guarantee" means a Guarantee of Millenium's
obligations with respect to the Securities issued by a Subsidiary of Millenium.
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations of the United States of America or any
agency thereof or obligations guaranteed by the United States of America or any
agency thereof; (ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 360 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000 (or
the foreign currency equivalent thereof) and has outstanding
33
debt which is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor; (iii) repurchase
obligations with a term of not more than thirty (30) days for underlying
securities of the types described in clause (i) above entered into with a bank
meeting the qualifications described in clause (ii) above; (iv) investments in
commercial paper, maturing not more than six (6) months after the date of
acquisition, issued by a corporation (other than an Affiliate of Millenium)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-2" (or higher) according
to Xxxxx'x Investors Service, Inc. or "A-2" (or higher) according to Standard &
Poor's Ratings Group; (v) investments in securities with maturities of six (6)
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc. and
(vi) any mutual fund the portfolio of which is limited to investments of types
specified in the preceding clauses (i) through (v), including any proprietary
mutual fund of the Trustee for which such bank or an affiliate thereof is
investment advisor or to which such bank provides other services and receives
reasonable compensation therefor.
"Treasury Rate" means, with respect to any redemp tion date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
34
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of
Millenium that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsi diary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of Millenium (including any newly acquired or newly formed
Subsidiary of Millenium) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or
holds any Lien on any property of, Millenium or any other Subsidiary of
Millenium that is not a Subsi diary of the Subsidiary to be so designated;
PROVIDED, HOWEVER, that either (A) the Subsidiary to be so designated has total
assets of $1,000 or less or (B) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.05(b). The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED, HOWEVER, that immediately after giving effect to such
designation (x) Millenium could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (y) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obliga tions (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Vessel" means a bulk carrier owned or leased by Millenium or
any Subsidiary of Millenium.
"Vessel Percentage" means, as of and after the Issue Date and
prior to any subsequent adjustment as provided below, for each of the initial
Mortgaged Vessels (including the Committed Vessels) and the Escrowed Proceeds,
35
the percentage set forth below opposite such Mortgaged Vessel:
VESSEL PERCENTAGE
------ ----------
(1) Xxxxxx Xxxxxxx 3.2%
(2) Clipper Harmony 4.5%
(3) Clipper Golden Hind 3.8%
(4) Clipper Pacific 1.5%
(5) Clipper Atlantic 1.4%
(6) Millenium Xxxxxxxxxx 7.6%
(7) Millenium Elmar 7.0%
(8) Millenium Leader 7.0%
(9) Millenium Hawk 6.2%
(10) Millenium Eagle 5.9%
(11) Millenium Osprey 6.2%
(12) Millenium Falcon 4.9%
(13) Millenium Condor 4.9%
(14) Millenium Amethyst 2.6%
(15) Millenium Yama 3.1%
(16) Millenium Majestic 2.7%
Escrowed Proceeds 27.5%
-----
Total 100.0%
=====
PROVIDED, HOWEVER, that each Vessel Percentage shall be adjusted in each case
upon the occurrence of, and after giving effect to, (i) the acquisition of a
Vessel with Escrowed Proceeds (other than a Committed Vessel) and the delivery
of a Mortgage with respect to such Vessel, (ii) the delivery of any Qualified
Substitute Vessel as part of the Collateral pursuant to the terms of this
Indenture, (iii) the delivery of any other Vessel as part of the Collateral,
(iv) an Event of Loss with respect to any Mortgaged Vessel, or (v) the sale of
any Mortgaged Vessel (or the termination of any Acquisition Contract in respect
of a Committed Vessel prior to the acquisition thereof by the Company), in each
case effected in accordance with the terms of this Indenture, to be, for each
Vessel that constitutes a Mortgaged Vessel after such an occurrence, the
percentage that the most recently calculated Appraised Value of such Mortgaged
Vessel bears to the sum of such aggregate Appraised Value of the remaining
Mortgaged Vessels and after giving effect to such occurrence plus the amount of
Escrowed Proceeds then remaining as part of the Collateral. Notwithstanding the
foregoing, if any Vessel Percentage is required to be calculated or adjusted at
a time when cash is on deposit with the Trustee as part of the Collateral as a
result of the sale of a Mortgaged Vessel or the occurrence of an Event of Loss
with respect to a Mortgaged Vessel, the amount of such cash on deposit shall be
deemed to be the Appraised Value of such Vessel giving rise to such cash on
deposit and such Vessel shall be deemed to remain a
36
Mortgaged Vessel for purposes of such computation or adjustment of Vessel
Percentage.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Warrant Agreement" means the Warrant Agreement between
Millenium and ChaseMellon Shareholder Services, L.L.C., as warrant agent, dated
as of July 15, 1998, as in effect on the Issue Date.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
Millenium or one or more Wholly Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Additional Amounts".................... 4.19
"Additional Vessel" .................... Preamble
"Affiliate Transaction" ................ 4.08
"Appendix".............................. 2.01
"Bankruptcy Law" ....................... 6.01
"Committed Vessel" ..................... Preamble
"Custodian" ............................ 6.01
"Escrowed Proceeds"..................... Preamble
"Event of Default" ..................... 6.01
"Excess Proceeds Offer"................. 4.07(c)
"Excess Proceeds Payment"............... 4.07
"Excluded Holder"....................... 2.01
"Existing Vessel" ...................... Preamble
"Extended Tender Date".................. 4.18
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 14.08
"Loss Date"............................. 4.17(b)
"Loss Redemption Price"................. 4.17(b)
"Lost Mortgaged Vessel"................. 4.17(a)
"Mortgaged Vessel Asset"................ 4.07
"New Subsidiary Guarantor".............. 4.14
"Notification Date"..................... 4.17(a)
"Obligation"............................ 10.01
"Offer Amount".......................... 4.07
"Offer Period".......................... 4.07
"Paying Agent" ......................... 2.03
"Pledged Collateral".................... 11.01(a)
"Pledged Securities".................... 11.13
37
"Pledged Shares"........................ 11.01(a)
"Proceeds Receipt Date"................. 4.17(a)
"Purchase Date" ........................ 4.07(d)(1)
"Redemption Amount"..................... 4.17(b)
"Registrar"............................. 2.03
"Release Notice"........................ 12.04
"Sale Date"............................. 4.17(a)
"Sale Redemption Price"................. 4.17(b)
"Sold Mortgaged Vessel"................. 4.17(a)
"Successor Company" .................... 5.01
"Taxes"................................. 4.19
"Tendered Vessel Owner"................. 4.18
"Trust Moneys".......................... 13.01
"Vessel Tender Date".................... 4.18
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
38
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater;
(9) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were originally
issued; and
(10) whenever in this Indenture or in the Securities there is
mentioned, in any context, (i) the payment of principal, (ii) purchase
prices in connection with the purchase of the Securities, (iii)
interest, (iv) Accreted Value or (v) any other amount payable on or
with respect to any of the Securities, or any payment pursuant to the
Subsidiary Guarantees, such mention shall be deemed to include mention
of the payment of Additional Amounts (as defined) to the extent that,
in such context, Additional Amounts are, were or would be payable in
respect thereof.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The initial Securities and the Trustee's certificate of
authentication shall be substan tially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this
39
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in the Appendix and
Exhibit A are part of the terms of this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee xxxxxxxx xxxxx the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be con clusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount at maturity of $100,000,000,
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount at maturity of the Securities to be authenticated
and the date on which the original issue of Securities is to be authenticated.
The aggregate principal amount at maturity of Securities outstanding at any time
may not exceed that amount except as provided in Section 2.06.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of
40
their transfer and exchange. The Company may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provi sions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.07.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities and Banque Generale Du Luxembourg
S.A. as the Paying Agent and Transfer Agent in Luxembourg.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve
in as current a form as is reasonably prac ticable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee is
not the Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
41
SECTION 2.06. REPLACEMENT SECURITIES. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar or co-paying agent from any
loss which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.07. OUTSTANDING SECURITIES. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.08. TEMPORARY SECURITIES. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Secur ities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.09. CANCELATION. The Company at any time may deliver
Securities to the Trustee for cancelation.
42
The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel and destroy (subject to the record reten
tion requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancelation and deliver a
certificate of such destruction to the Company unless the Company directs the
Trustee to deliver canceled Securities to the Company. The Company may not issue
new Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancelation.
SECTION 2.10. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.11. CUSIP NUMBERS. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities or is required to
redeem Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the aggregate principal amount at
maturity of Securities to be redeemed and the paragraph of the Securities
pursuant to which the redemption will occur.
If the Company is required to redeem Securities pursuant to
paragraph 6 of the Securities, it may reduce the
43
principal amount at maturity of Securities required to be redeemed to the extent
it is permitted a credit by the terms of the Securities and it notifies the
Trustee of the amount of the credit and the basis for it. If the reduction is
based on a credit for redeemed or canceled Securities that the Company has not
previously delivered to the Trustee for cancelation, it shall deliver such
Securities with the notice.
The Company shall give each notice to the Trustee provided for
in this Section at least sixty (60) days before the redemption date unless the
Trustee consents in writing to a shorter period. Such notice shall be
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of Securities the Trustee selects
shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least thirty (30) days
but not more than sixty (60) days before a date for redemption of Securities,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
44
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemp tion price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and Accreted Value of the particular
Securities to be redeemed and if any Security is being redeemed in
part, the portion of the principal amount at maturity of such Security
to be redeemed and that after the redemption date and upon surrender of
such Security a new Security or Securities will be issued having a
principal amount at maturity equal to the principal amount at maturity
of the Security surrendered less the principal amount at maturity of
the portion of the Security redeemed;
(6) that, unless the Company defaults in making such
redemption payment, interest on Securities (or portion thereof) called
for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's sole cost and expense. In
such event, the Company shall provide the Trustee with the information required
by this Section and advance to it all costs to be Incurred in connection
therewith.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued inter-
45
est on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by the
Company to the Trustee for cancelation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount at maturity to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. Notwithstanding that the Company
may not be required to remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act applicable to a "foreign private issuer" (as
such term is defined in Rule 3b-4 under the Exchange Act), the Company shall
file with the SEC and furnish to the Trustee, Holders or prospective Holders,
upon request, (i) commencing with respect to the fiscal year ended December 31,
1998, within 120 days after the end of each fiscal year, an annual report on
Form 20-F (or any successor form) containing the information required to be
contained therein for such fiscal year, and (ii) commencing with respect to the
fiscal quarter ended September 30, 1998, within 45 days after the end of each of
the first three quarters in each fiscal year, quarterly reports on Form 6-K
consisting of unaudited financial statements (including a balance sheet and
statement of income, changes in stockholders' equity and cash flows) and
Management's Discussion and Analysis of Financial Condition and Results of
Operations for and as of the end of each of such quarters (with comparable
financial statements for such quarter of the immediately preceding fiscal year).
46
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; PROVIDED, HOWEVER, that the Company may Incur
Indebtedness if, on the date of such Incurrence and after giving effect thereto,
(i) the Consolidated Coverage Ratio exceeds 2 to 1 and (ii) the Loan to Value
Ratio (as of the most recent Appraisal Date occurring not more than 30 days
prior to the date of such Incurrence) does not exceed .85 to 1.
(b) In addition, without regard to compliance with the
foregoing paragraph (a), the Company and the Restricted Subsidiaries may Incur
any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to a working capital line
of credit in an amount which, when added together with the amount of
all other Indebtedness Incurred pursuant to this clause (1) and then
out standing, does not exceed $7 million; PROVIDED, HOWEVER, that the
proceeds of such working capital line of credit will be used solely for
working capital requirements, the payment of operating expenses and
interest on the Securities;
(2) Indebtedness owed to and held by a Wholly Owned
Subsidiary; PROVIDED, HOWEVER, that any subsequent issuance or transfer
of any Capital Stock which results in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of
such Indebtedness (other than to another Wholly Owned Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the Company;
(3) the Securities;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section
4.03(b));
(5) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (3), (4) or
this clause (5) of this paragraph (b);
(6) Hedging Obligations consisting of Interest Rate Agreements
or Currency Agreements directly related to Indebtedness permitted to be
Incurred by the Company pursuant to this Indenture;
(7) Indebtedness Incurred pursuant to Section 5.04(b) or
5.04(c) of the Warrant Agreement;
47
(8) Guarantees of any Indebtedness of a Restricted Subsidiary
permitted by Section 4.04; and
(9) Indebtedness in an aggregate amount which, together with
all other Indebtedness of the Company outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (1) through
(8) above or Section 4.03(a)) does not exceed $2 million.
(c) Notwithstanding the foregoing, the Company shall not Incur
any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section
4.03, (i) in the event that an item of Indebted ness meets the criteria of more
than one of the types of Indebtedness described herein, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses and
(ii) an item of Indebtedness may be divided and classified in more than one of
the types of Indebtedness described herein.
SECTION 4.04. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK
OF RESTRICTED SUBSIDIARIES. The Company shall not permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred Stock
except that a Restricted Subsidiary may Incur the following Indebtedness or
Preferred Stock:
(1) Indebtedness or Preferred Stock issued to and held by a
Wholly Owned Subsidiary or the Company; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock which results in
any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebted ness or
Preferred Stock (other than to the Company or another Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the Incurrence
of such Indebtedness or Preferred Stock by the Restricted Subsidiary;
(2) Guarantees of the Securities;
(3) Indebtedness or Preferred Stock outstanding on the Issue
Date (other than Indebtedness or Preferred Stock described in clauses
(1) or (2) of this Section 4.04);
48
(4) Refinancing Indebtedness in respect of Indebtedness or
Preferred Stock Incurred pursuant to clause (2), (3) or this clause (4)
of this Section 4.04;
(5) Indebtedness or Preferred Stock for the purpose of
acquiring additional Vessels; PROVIDED, HOWEVER, that, at the date of
such Incurrence and after giving effect thereto, (i) no Default or
Event of Default shall have occurred and be continuing, (ii) the
Consolidated Coverage Ratio shall be at least 2 to 1 and (iii) the Loan
to Value Ratio (as of the most recent Appraisal Date occurring not more
than 30 days prior to the date of such Incurrence) does not exceed .85
to 1; and
(6) Guarantees in respect of Indebtedness Incurred pursuant to
Section 4.03(b)(1).
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not able to Incur an additional $1.00 of
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Securities are originally
issued to the end of the most recent fiscal quarter for which
internal financial statements are available prior to the date
of such Restricted Payment (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the
Company from contributions to the Company's capital and the
issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than (i) in respect
of the Committed Vessels, (ii) an issuance or sale to a
Subsidiary of the Company and (iii) an issuance or sale to an
employee stock ownership plan or to a
49
trust established by the Company or any of its Subsidiaries
for the benefit of their employees to the extent such issuance
or sale is financed with proceeds of debt provided by the
Company or any of its Subsidiaries);
(C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion
or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the
Company convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of
any cash, or the fair value of any other property, distributed
by the Company upon such conversion or exchange); and
(D) an amount equal to the net reduction in
Investments in Persons after the Issue Date who are not
Restricted Subsidiaries (other than Permitted Investments)
resulting from (x) Qualified Proceeds received as a dividend,
repayment of a loan (including interest) or advances or other
transfer of assets (valued at the fair market value thereof),
in each case to the Company or any Restricted Subsidiary from
such Persons, (y) Qualified Proceeds received upon the sale or
liquidation of such Investment and (z) the redesignation of
Unrestricted Subsidiaries whose assets are used or useful in,
or which are engaged in, a Shipping Business as Restricted
Subsidiaries (valued (proportionate to the Company's direct or
indirect equity interest in such Subsidiary) at the fair
market value of the net assets of such Subsidiary at the time
of such redesignation) not to exceed, in the case of clauses
(x), (y) and (z), the amount of Investments previously made by
the Company or any Restricted Subsidiary in such Person, which
amount was a Restricted Payment.
(b) The provisions of Section 4.05(a) shall not prohibit:
(i) any acquisition of Capital Stock (including the
acquisition of Capital Stock deemed to occur upon exercise of stock
options if such Capital Stock represents a portion of the exercise
price of such options) or any purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to
a
50
Subsidiary of the Company or an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the
benefit of their employees to the extent such sale to such plan or
trust is financed with proceeds of debt provided by the Company or any
Subsidiary of the Company); PROVIDED, HOWEVER, that (A) such purchase,
repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under Section
4.05(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeas ance or
other acquisition or retirement for value of Subordinated Obligations
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company which is permitted to
be Incurred pursuant to Section 4.03; PROVIDED, HOWEVER, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount
of Restricted Payments;
(iii) any acquisition of the Warrants or Warrant Shares (as
such terms are defined in the Warrant Agreement) made in exchange for
Subordinated Obligations of the Company issued pursuant to the
indenture attached as an exhibit to the Warrant Agreement as described
in Section 5.04 of the Warrant Agreement; PROVIDED, HOWEVER, that no
Default or Event of Default shall have occurred and be continuing;
PROVIDED FURTHER, HOWEVER, that such acquisition shall be excluded from
the calculation of the amount of Restricted Payments;
(iv) dividends paid within sixty (60) days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.05; PROVIDED, HOWEVER, that at the
time of payment of such dividend, no other Default shall have occurred
and be continuing (or result therefrom); PROVIDED FURTHER, HOWEVER,
that the declaration of such dividend shall be included in the
calculation of the amount of Restricted Payments;
(v) the repurchase, redemption or other acquisition of shares
of, or options to purchase shares of, Capital Stock of the Company or
any of its Subsidiaries from employees, former employees, directors or
former directors of the Company or any of its Subsidiaries (or
permitted transferees of such employees, former employees, directors or
former directors), or amounts paid to Parent on account of any such
repurchase,
51
redemption or other acquisition or retirement for value of any Capital
Stock of Parent held by any present or former employees or directors of
Parent or the Company pursuant to the terms of agreements (including
employ ment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell or
are granted the option to purchase or sell, shares of such Capital
Stock; PROVIDED, HOWEVER, that the aggregate amount of such repurchases
and other acquisitions shall not exceed $500,000 in any calendar year
(PROVIDED that to the extent that less than $500,000 of such Capital
Stock is so repurchased, redeemed or acquired in a given year, the
difference between $500,000 and such amount shall be added to the
amount available to Parent, the Company and its Subsidiaries for
repurchases, redemptions and acquisitions in future years (subject to a
maximum in any calendar year of $1.0 million)); PROVIDED FURTHER,
HOWEVER, that such repurchases, redemptions and other acquisitions
shall be excluded in the calculation of the amount of Restricted
Payments;
(vi) payments by the Company's Subsidiaries (whether in
existence on the Issue Date or subsequently acquired or formed) to the
Parent pursuant to the terms of the New Management Agreement; PROVIDED,
HOWEVER, that such payments shall be excluded in the calculation of the
amount of Restricted Payments; PROVIDED FURTHER, HOWEVER, that no
Default or Event of Default shall have occurred and be continuing;
(vii) payments to the Parent pursuant to the Advisory
Agreement; PROVIDED, HOWEVER, that such payments shall be excluded in
the calculation of the amount of Restricted Payments; PROVIDED FURTHER,
HOWEVER, that no Default or Event of Default shall have occurred and be
continuing;
(viii) payments to Parent to enable Parent to pay foreign,
federal, state or local tax liabilities to the appropriate taxing
authorities, not to exceed the amount of any tax liabilities that would
otherwise be payable by the Company and its Subsidiaries on a
consolidated basis if they filed separate tax returns, to the extent
that Parent has an obligation to pay such tax liabilities relating to
the operations, assets or capital of the Company or its Subsidiaries;
PROVIDED, HOWEVER, that such payments shall be included in the
calculation of the amount of Restricted Payments; or
(ix) the payment of dividends on the Company's common stock,
following the first Public Equity Offering, (A) of up to 6% per annum
of the Net Cash
52
Proceeds received by the Company from such public offering of its
common stock or (B) in an amount to enable Parent to pay dividends on
its capital stock of up to 6% per annum of the Net Cash Proceeds
actually received by the Company from such public offering of Parent's
common stock as common equity or preferred equity (other than
Disqualified Stock), PROVIDED, HOWEVER, that no Default or Event of
Default shall have occurred and be continuing immediately after any
such payment of dividends; and PROVIDED, FURTHER, HOWEVER, that such
Restricted Payment shall be included in the calculation of the amount
of Restricted Payments.
SECTION 4.06. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness or Preferred Stock Incurred by such Restricted Subsidiary
on or prior to the date on which such Restricted Subsidiary became a
Restricted Subsidiary or acquired by the Company (other than
Indebtedness or Preferred Stock Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and out standing on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness or Preferred Stock Incurred
pursuant to an agreement referred to in clause (i) or (ii) of this
Section 4.06 or this clause (iii) or contained in any amendment to an
agreement referred to in clause (i) or (ii) of this Section 4.06 or
this clause (iii); PROVIDED, HOWEVER, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
any such refinancing agreement or amendment are no less favorable
53
to the Securityholders than encumbrances and restrictions with respect
to such Restricted Subsidiary contained in such predecessor agreements;
(iv) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(v) in the case of clause (c) above, restrictions contained in
(A) security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary or (B) joint venture or similar agreements to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages or joint venture agreements or
require the assignment of earnings attributable to such property; and
(vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or
disposition.
SECTION 4.07. LIMITATION ON SALES OF ASSETS; EXCESS PROCEEDS
OFFERS. (a) The Company shall not, and shall not permit any Subsidiary Guarantor
to, sell, assign, convey, transfer or otherwise dispose of a Mortgaged Vessel or
any other portion of the Collateral (other than an Incidental Asset); PROVIDED,
HOWEVER, that a Subsidiary Guarantor may sell a Mortgaged Vessel (at the option
of such Subsidiary Guarantor, together with the applicable Charters, freights
and hires and other related agreements) or the Company may sell all the Capital
Stock of a Subsidiary Guarantor (any such asset proposed to be sold is referred
to herein as a "Mortgaged Vessel Asset") if such sale of a Mortgaged Vessel
Asset shall be made in compliance with each of the following conditions:
(i) no Default shall have occurred and be continuing;
(ii) the sale or transfer shall be effected in a commercially
reasonable manner as determined by the Board of Directors and evidenced
by a board resolution;
(iii) 80% of such consideration for such sale shall be cash or
Temporary Cash Investments or the assumption of Senior Indebtedness of
the Company or a Restricted Subsidiary (PROVIDED that the Company or
such Restricted Subsidiary is released from all liabilities
thereunder),
54
which aggregate consideration shall be not less than the Appraised
Value of such Mortgaged Vessel Asset; PROVIDED, HOWEVER, that 100% of
such consideration shall be used to calculate "Net Available Cash" for
purposes of clause (iv) below; PROVIDED FURTHER, HOWEVER, that any
securities, notes or other obligations received by the Company or any
Subsidiary Guarantor from the transferee of the Mortgaged Vessel Asset
that are promptly converted by the Company or such Subsidiary Guarantor
into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this clause (iii);
(iv) funds in an amount equal to the Net Available Cash shall
be paid in full directly to the Trustee as Collateral and shall be
received by the Trustee free of any Lien (other than the Lien of this
Indenture and the Security Agreements) but shall not constitute
Escrowed Proceeds; and
(v) the Company shall have complied with the other provisions
of this Indenture and the Security Agreements applicable to such sale.
The Company shall apply the proceeds from such sale as
described above under Section 4.17 and Section 4.18.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any Asset Sales (other than Asset Sales
permitted by paragraph (a) above) unless (x) (A) such Asset Sale is by the
Company (other than the Capital Stock of a Subsidiary Guarantor) or by a
Restricted Subsidiary that is not a Subsidiary Guarantor or (B) such Asset Sale
is the sale of an Incidental Asset and (y) in the event and to the extent that
the Net Available Cash received by the Company or any of its Restricted
Subsidiaries from one or more of such Asset Sales occurring on or after the
Closing Date in any period of 12 consecutive months exceeds $10 million, then
the Company shall, or shall cause a Restricted Subsidiary to, within 30 days
after the date Net Available Cash so received exceeds $10 million in any period
of 12 consecutive months, apply an amount equal to such Net Available Cash
either (i) toward a Permitted Excess Cash Use or (ii) treat (no later than the
end of such 30-day period) such excess Net Available Cash (to the extent not
applied pursuant to clause (i) above) as Excess Proceeds.
(c) If, as of the first day of any calendar month, the
aggregate amount of Excess Proceeds not theretofore subject to an Excess
Proceeds Offer (as defined below), totals at least $10 million, the Company
shall, not later than the fifteenth Business Day of such month, make an offer (a
"Excess Proceeds Offer") to purchase from the holders
55
pursuant to and subject to the conditions contained in Section 4.07(d) on a pro
rata basis an aggregate Accreted Value of Securities equal to the Excess
Proceeds available on such first day of the month, at a purchase price equal to
100% of their Accreted Value, plus, in each case, accrued interest (if any) to
the date of purchase (an "Excess Proceeds Payment").
(d) (1) Promptly, and in any event within 15 calendar days
after the Company becomes obligated to make an Excess Proceeds Offer, the
Company shall be obligated to deliver to the Trustee and send, by first-class
mail to each Holder, a written notice stating that the Holder may elect to have
his Securities purchased by the Company either in whole or in part (subject to
prorating as hereinafter described in the event such Offer is oversubscribed) in
integral multiples of $1,000 of principal amount at maturity, at the Accreted
Value. The notice shall specify a purchase date not less than 30 days nor more
than 60 days after the date of such notice (the "Purchase Date") and shall
contain such information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum will include (i) the most recently filed Annual
Report on Form 20-F (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Current Report on Form 6-K of the
Company, other than Current Reports describing Asset Sales otherwise described
in the offering materials (or corresponding successor reports), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such Reports, and (iii) if material, appropriate pro forma
financial information) and all instructions and materials necessary to tender
Securities pursuant to the Offer, together with the information contained in
clause (3).
(2) Not later than the date upon which written notice of an
Excess Proceeds Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Excess Proceeds Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Offer is being made
and (iii) the compliance of such allocation with the provisions of this
Indenture. By not later than 4:00 p.m. (New York time) on such date, the Company
shall also irrevocably deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust) in Temporary Cash
Investments, maturing on the last day prior to the Purchase Date or by 9:00 a.m.
(New York time) on the Purchase Date if funds are immediately available by open
of business, an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section. Upon the
56
expiration of the period for which the Excess Proceeds Offer remains open (the
"Offer Period"), the Company shall deliver to the Trustee for cancelation, by no
later than 10:00 a.m. (New York time) on the next Business Day, the Securities
or portions thereof which have been properly tendered to and are to be accepted
by the Company. The Paying Agent shall, on the Purchase Date, mail or deliver
payment to each tendering Holder in the amount of the purchase price. In the
event that the aggregate purchase price of the Securities delivered by the
Company to the Paying Agent is less than the Offer Amount, the Paying Agent
shall deliver the excess to the Company immediately after the expiration of the
Offer Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appro priate form duly completed, to
the Company at the address specified in the notice at least three (3) Business
Days prior to the Purchase Date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount at maturity of the Security
which was delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Security purchased. If at the
expiration of the Offer Period the aggregate Accreted Value of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part shall be issued new Securities equal in
princi pal amount at maturity to the unpurchased portion of the Securities
surrendered.
(4) At the time the Company notifies the Trustee which
Securities are to be accepted for purchase and delivers the same to the Trustee,
the Company shall also deliver an Officers' Certificate stating that such
Securities (or portions thereof) are to be accepted by the Company pursuant to
and in accordance with the terms of this Section. A Security shall be deemed to
have been accepted for purchase at the time the Paying Agent, mails or delivers
payment therefor to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the purchase of Securities pursuant to an
Excess Proceeds Offer. To the extent that the provisions of any securities laws
or regulations conflict with provisions
57
of this Section 4.07, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.07 by virtue thereof.
SECTION 4.08. LIMITATION ON LINES OF BUSINESS. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, engage in
any business other than the Shipping Business.
SECTION 4.09. LIMITATION ON AFFILIATE TRANS ACTIONS. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with any Affiliate of the Company (an "Affiliate Transaction")
unless the terms thereof (i) are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an Affiliate,
(ii) if such Affiliate Transaction involves an amount in excess of $1 million,
(1) are set forth in writing and (2) have been approved by a majority of the
members of the Board of Directors having no personal stake in such Affiliate
Transaction and (iii) if such Affiliate Transaction involves an amount in excess
of $5 million, have been determined by a reasonably appropriate independent
qualified Appraiser, given the size and nature of the transaction, to be fair,
from a financial standpoint, to Millenium and its Restricted Subsidiaries
(which, in the case of an Affiliate Transaction or series of Affiliate
Transactions involving the purchase or sale of a Mortgaged Vessel by the Company
or a Restricted Subsidiary in exchange for consideration in which $2 million or
less consists of non-cash consideration, may be satisfied by delivery of a
certificate of an Appraiser stating that (x) in the case of the purchase of a
Mortgaged Vessel, the consideration paid does not exceed the Appraised Value of
such Mortgaged Vessel or (y) in the case of the sale of a Mortgaged Vessel, the
consideration received is at least equal to the Appraised Value of such
Mortgaged Vessel; PROVIDED, HOWEVER, that any securities, notes or other
obligations received by Millenium or any Subsidiary Guarantor from the
transferee of the Mortgaged Vessel Asset that are promptly converted by the
Company or such Subsidiary Guarantor into cash (to the extent of the cash
received), shall be deemed to constitute cash consideration for purposes of this
provision).
(b) The provisions of Section 4.09(a) shall not prohibit (i)
any Permitted Investment or Restricted Payment permitted to be paid pursuant to
Section 4.05, (ii) any issuance of securities or other customary employee
benefits pursuant to employment arrangements approved by the Board of
58
Directors, (iii) the grant of stock options or similar rights to employees and
directors of the Company pursuant to plans approved by the Board of Directors,
(iv) loans or advances to employees in the ordinary course of business in
accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed $100,000 in the aggregate
outstanding at any one time, (v) the payment of reasonable fees and other
benefits to directors of the Company and its Restricted Subsidiaries, (vi) any
Affiliate Transaction between the Company and a Qualified Restricted Subsidiary
or between Qualified Restricted Subsidiaries, (vii) entering into and the
performance of the New Management Agreement and (viii) entering into and the
performance of the Advisory Agreement.
SECTION 4.10. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES. The Company shall not sell or otherwise
dispose of any Capital Stock (other than Qualified Preferred Stock) of a
Restricted Subsidiary, and shall not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell or otherwise dispose of any of its Capital Stock
except (i) to the Company or a Wholly Owned Subsidiary, (ii) if, immediately
after giving effect to such issuance, sale or other disposition, neither the
Company nor any of its Subsidiaries own any Capital Stock of such Restricted
Subsidiary or (iii) if, immediately after giving effect to such issuance, sale
or other disposition, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after giving
effect thereto would have been permitted to be made under Section 4.05 if made
on the date of such issuance, sale or other disposition, (iv) to directors or
other Persons of qualifying shares of common stock of any Restricted Subsidiary,
to the extent mandated by applicable law, (v) the issuance or sale of Capital
Stock of a Subsidiary Guarantor that has a class of equity security registered
under Section 12 of the Exchange Act pursuant to an employee stock option plan
approved by the Board of Directors, (vi) other than with respect to shares of
Capital Stock of a Subsidiary Guarantor, to management employees of Millenium or
a Restricted Subsidiary pursuant to the exercise of stock options or stock
appreciation rights; and (vii) other than with respect to shares of Capital
Stock of a Subsidiary Guarantor, to Persons who are entering into joint ventures
or other similar business relationships with Millenium or any Subsidiary other
than a Subsidiary Guarantor.
SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
permit to exist any Lien of any nature whatsoever on any of its properties
(including Capital Stock of a Restricted Subsidiary), whether owned at
59
the Issue Date or thereafter acquired, other than Permitted Liens, without
effectively providing that the Securities shall be secured equally and ratably
with (or prior to) the obligations so secured for so long as such obligations
are so secured; PROVIDED, HOWEVER, that no Lien that secures Indebtedness (other
than the Securities and Indebtedness Incurred pursuant to Section 4.03(b)(1) and
Section 4.04(6)) may be Incurred or permitted to exist on any of the Collateral.
SECTION 4.12. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
any Sale/Leaseback Transaction with respect to any property unless (i) the
Company or such Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 4.03 or Section 4.04 and (B) create a Lien on
such property securing such Attributable Debt without equally and ratably
securing the Securities pursuant to Section 4.11, (ii) the net proceeds received
by the Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair value (as determined
by the Board of Directors) of such property and (iii) the Company applies the
proceeds of such transaction in compliance with Section 4.07.
SECTION 4.13. CHANGE OF CONTROL. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
repurchase such Holder's Securities at a purchase price in cash equal to 101% of
the Accreted Value thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest on the relevant interest payment date), in accordance
with the terms contemplated in Section 4.13(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the Accreted
Value thereof plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant
record date to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control (including information with
60
respect to pro forma historical income, cash flow and capitalization,
each after giving effect to such Change of Control);
(3) the repurchase date (which shall be no earlier than 30
days nor later than sixty (60) days from the date such notice is
mailed); and
(4) the instructions determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appro priate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount at maturity of the Security
which was delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Trustee for cancelation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto. Upon surrender of a Security that is
repurchased under this Section in part, the Company shall execute and the
Trustee shall authenticate for the Holder thereof (at the Company's expense) a
new Security having a principal amount at maturity equal to the principal amount
at maturity of the Security surrendered less the portion of the principal amount
at maturity of the Security purchased.
(e) Notwithstanding the foregoing provisions of this Section,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in Section
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.
(f) The Company shall comply, to the extent appli cable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section,
61
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
SECTION 4.14. FUTURE SUBSIDIARY GUARANTORS. To the extent
that, after the Issue Date, the Company acquires the Committed Vessels or the
Additional Vessels with the Escrowed Proceeds, each such Committed Vessel or
Additional Vessel shall be acquired by a newly formed Wholly Owned Subsidiary
(the "New Subsidiary Guarantor") and the Company shall cause such New Subsidiary
Guarantor prior to or contemporaneously with the acquisition of such Committed
Vessel or Additional Vessel, as the case may be, to execute and deliver to the
Trustee a Guarantee Agreement pursuant to which such New Subsidiary Guarantor
will Guarantee payment of the Securities on the same terms and conditions as
those set forth in this Indenture, to execute a Mortgage in favor of the
Collateral Agent or the Trustee pursuant to which such acquired Committed Vessel
or Additional Vessel shall thereafter be a Mortgaged Vessel for all purposes
under this Indenture, to execute an Insurance Assignment (each substantially in
the form attached as an Exhibit to the Escrow Agreement) in favor of the Trustee
and to satisfy such other conditions set forth in the Escrow Agreement.
SECTION 4.15. IMPAIRMENT OF SECURITY INTEREST. The Company
shall not, and shall not permit any Subsidiary Guarantor to, take or knowingly
or negligently omit to take, any action which action or omission might or would
have the result of materially impairing the security interest with respect to
the Collateral for the benefit of the Trustee and the Securityholders, and the
Company shall not, and shall not permit any Restricted Subsidiary to, grant to
any Person other than the Trustee, for the benefit of the Trustee and the
Securityholders, and other than the holder of Indebted ness Incurred and
outstanding pursuant to Section 4.03(b)(i) and Section 4.04(6), any interest
whatsoever in any of the Collateral.
SECTION 4.16. AMENDMENTS TO SECURITY AGREEMENTS. The Company
shall not, and shall not permit any Subsidiary Guarantor to, amend, modify or
supplement, or permit or consent to any amendment, modification or supplement
of, the Security Agreements in any way that would be adverse to the
Securityholders.
SECTION 4.17. APPLICATION OF PROCEEDS UPON SALE OR LOSS OF A
MORTGAGED VESSEL. (a) If either:
(1) a Mortgaged Vessel or the Capital Stock of a Subsidiary
Guarantor is sold in compliance with Section 4.07(a) (the Mortgaged
Vessel so sold or owned
62
by the Subsidiary Guarantor whose Capital Stock is so sold being the
"Sold Mortgaged Vessel"), or
(2) an Event of Loss occurs at any time with respect to a
Mortgaged Vessel (the Mortgaged Vessel suffering such Event of Loss
being the "Lost Mortgaged Vessel"),
then within sixty (60) days after the date title of the Mortgaged Vessel passes
to the buyer (such date being the "Sale Date"), in the case of a sale, or within
60 days after the date such Event of Loss was deemed to have occurred (the "Loss
Date"), the Company shall give written notice (such date of notice being the
"Notification Date") to the Trustee whether it elects to redeem Securities in
connection with such sale or Event of Loss; PROVIDED, HOWEVER, that if a Default
shall have occurred and be continuing on the Notification Date, the Company
shall redeem Securities in accordance with Section 4.17(c).
Upon the receipt by the Company or a Subsidiary Guarantor of
the Net Available Cash attributable to a Sold Mortgaged Vessel or of the Net
Event of Loss Proceeds attributable to a Lost Mortgaged Vessel, such amounts
shall be deposited with the Trustee pursuant to Article 13 and shall constitute
Collateral pending application in accordance with Section 4.17(c).
(b) If the Company elects to (or is required to) redeem
Securities, the Company shall apply Net Available Cash or Net Event of Loss
Proceeds, as the case may be, not later than 60 days after the date (the
"Proceeds Receipt Date") of the receipt of such funds in an amount (the
"Redemption Amount") at least equal to the Vessel Percentage applicable to the
Sold Mortgaged Vessel as of the Sale Date or the Lost Mortgaged Vessel as of the
Loss Date, as the case may be, multiplied by the Accreted Value of the
Securities outstanding on the Sale Date or the Loss Date, as the case may be
(PROVIDED HOWEVER, that if a Default shall have occurred and be continuing on
the Notification Date, the amount required to be applied by the Company to
redeem Securities shall equal the greater of such Redemption Amount and such Net
Available Cash or Net Event of Loss Proceeds, as the case may be; PROVIDED
FURTHER, HOWEVER, that if the Loan to Value Ratio (calculated to include in the
numerator thereof the then outstanding amount of Indebtedness under any working
capital facility to the extent such Indebtedness is secured by a prior Lien on
the Mortgaged Vessels) would be less than 0.8 to 1.0 after giving effect to the
disposition of such Sold Mortgaged Vessel and the redemption of Securities using
the lesser of the Redemption Amount and the Net Available Cash, then the amount
required to be applied by the Company to redeem Securities shall equal the
lesser of
63
the Redemption Amount and such Net Available Cash), to redeem as much principal
amount of Securities as can be redeemed at the Sale Redemption Price (as defined
below) or the Loss Redemption Price (as defined below), as the case may be.
The "Sale Redemption Price" means, per $1,000 principal amount at
maturity of Security, the sum of (a) the greater of (i) 100% of the Accreted
Value of such Security and (ii)(x) if such redemption date is on or after July
15, 2003, the redemption price then applicable as described in paragraph 5 of
the Securities or (y) if such redemption date is prior to July 15, 2003, the sum
of (1) the remaining scheduled payments of interest on such Security through
July 15, 2003 and (2) the redemption price of such Security on July 15, 2003 as
described in paragraph 5 of the Securities, in each case as discounted to their
present values to the redemption date on a semiannual basis (assuming a 360-day
year consisting of 12 30-day months) at a rate equal to the Treasury Rate plus
50 basis points, and (b) accrued and unpaid interest on such Security to the
redemption date.
The "Loss Redemption Price" means, per $1,000 principal amount at
maturity of Security, the sum of (a) 100% of the Accreted Value of such Security
and (b) accrued and unpaid interest on such Security to the redemption date.
(c) On the redemption date attributable to a Sold Mortgaged
Vessel or a Lost Mortgaged Vessel, the Trustee shall apply the applicable Net
Available Cash or the applicable Net Event of Loss Proceeds then on deposit with
it pursuant to Article 13 (together with any funds the Company delivers to the
Trustee to the extent necessary to pay the Sale Redemption Price or the Loss
Redemption Price for the Securities to be redeemed) to pay the Sale Redemption
Price or the Loss Redemption Price to the holders of Securities being redeemed.
To the extent that after the Sale Redemption Price or the Loss Redemption Price
has been paid with respect to all Securities to be redeemed in respect of such
Sold Mortgaged Vessel or Lost Mortgaged Vessel, as the case may be, any Net
Available Cash or Net Event of Loss Proceeds remains on deposit with the Trustee
and no Default has occurred and is continuing, such Net Available Cash or Net
Event of Loss Proceeds shall be released to the Company upon its written
request, free of the lien of this Indenture and the Mortgages and such funds
may, at the option of the Company, be used by the Company for any purpose not
otherwise prohibited by this Indenture, including the making of Restricted
Payments.
SECTION 4.18. TENDER OF A QUALIFIED SUBSTITUTE VESSEL. In the
event that the Company elects, with respect to a Sold Mortgaged Vessel or a Lost
Mortgaged Vessel, not to redeem Securities as described under Section 4.17, then
64
within seven months after the Proceeds Receipt Date, the Company shall tender to
the Trustee (or the Collateral Agent) as part of the Collateral a Qualified
Substitute Vessel; PROVIDED, HOWEVER, that if Net Available Cash attributable to
a Sold Mortgaged Vessel or Net Event of Loss Proceeds attributable to a Lost
Mortgaged Vessel is less than $5 million, the Company or such Restricted
Subsidiary, at its option, may defer the tender of a Qualified Substitute Vessel
until the date (the "Extended Tender Date") that is three months after the
aggregate of all such amounts not applied to tender Qualified Substitute Vessels
equals or exceeds $5 million, at which time the Company or such Restricted
Subsidiary shall use the unused Net Available Cash or Net Event of Loss Proceeds
to tender a Qualified Substitute Vessel on or before the Extended Tender Date;
and PROVIDED, FURTHER, that if, at any time prior to the date on which the
Company or a Restricted Subsidiary enters into a binding agreement with respect
to the purchase of a Qualified Substitute Vessel, a Default shall occur, the
Company shall thereupon instead become obligated to redeem Securities in
accordance with the provisions of Section 4.17. Net Available Cash or Net Event
of Loss Proceeds, as the case may be, attributable to such Sold Mortgaged Vessel
or such Lost Mortgaged Vessel, as the case may be, shall be made available to
the Company or any Restricted Subsidiary pursuant to the terms, and subject to
the conditions, of this Indenture and the Security Agreements to make any
deposits in respect of, or to consummate the purchase of, the Qualified
Substitute Vessel, and to pay related fees and expenses and make upgrades and
repairs thereon. To the extent that any such Net Available Cash or Net Event of
Loss Proceeds remain on deposit with the Trustee after the tender of the
Qualified Substitute Vessel and no default shall have occurred and be
continuing, such funds shall be released to the Company upon its written
request, free of the Lien of this Indenture and the Security Agreements, and
such funds, at the option of the Company, may be used by the Company for any
purpose not otherwise prohibited by this Indenture, including the making of
Restricted Payments.
On the date on which a Qualified Substitute Vessel is tendered to the
Trustee or the Collateral Agent, as the case may be as part of the Collateral (a
"Vessel Tender Date") following a sale of or an Event of Loss with respect to, a
Mortgaged Vessel, the Company shall deliver to the Trustee or the Collateral
Agent, as the case may be, or shall cause the owner of such Qualified Substitute
Vessel, which shall be a Wholly Owned Subsidiary of the Company (the "Tendered
Vessel Owner"), to deliver to the Trustee or the Collateral Agent, as the case
may be, the following documents and certificates:
(i) a Guarantee Agreement substantially in the form attached
to the Escrow Agreement;
65
(ii) a Mortgage (or a preliminary registration thereof,
pending delivery of a copy of the Mortgage) with respect to such
Qualified Substitute Vessel dated the Vessel Tender Date in favor of
the Trustee (or the Collateral Agent) and an Insurance Assignment, each
substantially in the form attached to the Escrow Agreement (such
Mortgage having been duly received for recording in the appropriate
registry office), together with appropriate legal opinions with respect
to such Mortgage and the Insurance Assignment substantially in the form
attached to the Escrow Agreement; and
(iii) written appraisals by two independent Appraisers of the
value of such Qualified Substitute Vessel as of a date within 60 days
prior to the Vessel Tender Date.
SECTION 4.19. ADDITIONAL AMOUNTS. (a) If the Company or any
Subsidiary Guarantor (or any successor of either), as applicable, is required by
law or by the interpretation or administration thereof by the relevant
government authority or agency to withhold or deduct any amount for or on
account of any present or future tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and other liabilities related
thereto) imposed or levied by or on behalf of the Cayman Islands, Liberia,
Cyprus or any other jurisdiction in which the Company or any of its Subsidiary
Guarantors is incorporated or resident for tax purposes or by any authority or
agency therein or thereof having power to tax (or the jurisdiction of
incorporation of any successor of the Company or any Subsidiary Guarantor)
(hereinafter "Taxes") from any payment made under or with respect to the
Securities or any Subsidiary Guarantee, as applicable, unless the Company or the
Subsidiary Guarantors, as applicable, are required to withhold or deduct Taxes
by law or by interpretation or administration thereof by the relevant government
authority or agency, the Company or such Subsidiary Guarantor (or any successor
of either), as applicable shall pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder
(including Additional Amounts) after such withholding or deduction will not be
less than the amount the Holder would have received if such Taxes had not been
withheld or deducted; PROVIDED, HOWEVER, that no Additional Amounts shall be
payable with respect to payments made to a Holder (an "Excluded Holder") in
respect of a beneficial owner (i) which is subject to such Taxes by reason of
its being connected with the Cayman Islands, Liberia, Cyprus or any jurisdiction
in which the Company or any of its Subsidiary Guarantors is incorporated or
resident for tax purposes otherwise than by the mere holding of Securities or
the receipt of payments thereunder (or under the related Subsidiary Guarantee),
(ii) which presents any Security for
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payment of principal more than 60 days after the later of (x) the date on which
payment first became due and (y) if the full amount payable has not been
received by the Trustee on or prior to such due date, the date on which, the
full amount payable having been so received, notice to that effect shall have
been given to the Holders by the Trustee, except to the extent that the Holder
would have been entitled to such Additional Amounts on presenting such Security
for payment on any day during the applicable 60-day period, including the last
day of the applicable 60-day period, (iii) which failed to duly and timely
comply with a reasonable, timely request of the Company to provide information,
documents or other evidence concerning the Holder's nationality, residence,
entitlement to treaty benefits, identity or connection with Cayman Islands,
Liberia, Cyprus or any jurisdiction in which the Company or any of its
Subsidiary Guarantors is incorporated or resident for tax purposes or any
political subdivision or authority thereof, if and to the extent that due and
timely compliance with such request would have reduced or eliminated any Taxes
as to which Additional Amounts would have otherwise been payable to such Holder
but for this clause (iii), (iv) on account of any estate, inheritance, gift,
sale, transfer, personal property or other similar Tax, (v) which is a
fiduciary, a partnership or not the beneficial owner of any payment on a
Security or the Subsidiary Guarantees, if and to the extent that any beneficiary
or settlor of such fiduciary, any partner in such partnership or the beneficial
owner of such payment (as the case may be) would not have been entitled to
receive Additional Amounts with respect to such payment if such beneficiary,
settlor, partner or beneficial owner had been the Holder of such Security or
(vi) any combination of the foregoing numbered clauses of this proviso. The
Company or the Subsidiary Guarantors (or any successor of either), as
applicable, shall make such withholding or deduction and remit the full amount
deducted or withheld to the relevant authority as and when required in
accordance with applicable law.
(b) The Company or the Subsidiary Guarantors (or any successor
of either), as applicable, shall furnish to the Trustee, within 30 days after
the date the payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by the Company or the Subsidiary
Guarantors (or any successor of either), as applicable, in such form as provided
in the normal course by the taxing authority imposing such Taxes and in such
form as is legally sufficient to obtain foreign tax credits for United States
Federal income tax purposes. The Trustee shall make such evidence available to
the Holders upon request. The Company or the Subsidiary Guarantors (or any
successor of either), as applicable, shall upon written request of each Holder
(other than an Excluded Holder),
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reimburse each such Holder for the amount of (i) any Taxes so levied or imposed
and paid by such Holder as a result of payments made under or with respect to
the Securities or the Subsidiary Guarantees, as applicable, and (ii) any Taxes
imposed with respect to any such reimbursement under the immediately preceding
clause (i), but excluding any such Taxes on such Holder's net income, so that
the net amount received by such Holder after such reimbursement will not be less
than the net amount the Holder would have received if Taxes (other than such
Taxes on such Holder's net income) on such reimbursement had not been imposed.
(c) Whenever in this Indenture there is mentioned, in any
context, (a) the payment of principal, (b) purchase prices in connection with a
purchase of Securities, (c) interest or (d) any other amount payable on or with
respect to any of the Securities, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in this section to the
extent that, in such context, Additional Amounts are, were or would be pay able
in respect thereof.
(d) The Company or the Subsidiary Guarantors (or any successor
of either) shall pay any present or future stamp, court or documentary taxes or
any other excise or property taxes, charges or similar levies that arise in any
jurisdiction from the execution, delivery, enforcement or registration of the
Securities or any other document or instrument in relation thereto, or the
receipt of any payments with respect to the Securities or the Subsidiary
Guarantees, excluding such taxes, charges or similar levies imposed by any
jurisdiction outside of the Cayman Islands, Liberia, Cyprus or any jurisdiction
in which the Company or any of the Subsidiary Guarantors is incorporated or
resident for tax purposes, the jurisdiction of incorporation of any successor of
the Company or any jurisdiction in which a paying agent is located, and hereby
indemnifies the Holders for any such taxes paid by such Holders. The foregoing
obligations shall survive any termination, defeasance or discharge of this
Indenture.
SECTION 4.20. COMPLIANCE CERTIFICATE. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
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SECTION 4.21. FURTHER INSTRUMENTS AND ACTS. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. (a)
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one trans action or a series of transactions, all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under (a)
the laws of the United States of America, any State thereof or the
District of Columbia, (b) the laws of Cyprus, Liberia or the Cayman
Islands or (c) the laws of any other jurisdiction which at the time is
generally deemed acceptable by institutional lenders to the shipping
industry, as determined in good faith by the Board of Directors, and
the Successor Company (if not the Company) shall expressly assume, by
an indenture supplemental thereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all the
obligations of the Company under the Securities, this Indenture and the
Security Agreements;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary thereof as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at
the time of such transaction), no Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction,
either (a) the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 4.03(a) or (B) the
Consolidated Coverage Ratio of the Successor Company is equal to or
greater than that of the Company immediately prior to such transaction;
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that
is not less than the Consolidated Net Worth of the Company immediately
prior to such transaction;
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(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture; and
(vi) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such transaction and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such transaction had not occurred.
Notwithstanding the foregoing clauses (ii) through (iv), (a)
any Wholly Owned Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Company and (b) the Company may merge
with an Affiliate incorporated solely for the purpose of reincorporating the
Company in another jurisdiction.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, but the predecessor Company in the
case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all its assets to
any Person (other than the Company or another Subsidiary Guarantor) unless:
(i) except in the case of a Subsidiary Guarantor that has been
disposed of in its entirety to another Person, whether through a
merger, consolidation or sale of Capital Stock or assets, if in
connection therewith the Company provides an Officer's Certificate to
the Trustee to the effect that the Company will comply with its
obligations under Section 4.07 in respect of such disposition and
deliver such documents as are reasonably requested by the Trustee, the
resulting, surviving or transferee Person (if not such Subsidiary
Guarantor) shall be a Person organized and existing under the laws of
the jurisdiction under which such Subsidiary was organized or under the
laws of (a) the United States of America, or any State thereof or the
District of Columbia, (b) the Republic of Liberia, (c) the
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Commonwealth of The Bahamas, (d) Cyprus, (e) the Republic of Panama or
(f) the laws of any other jurisdiction which at the time is generally
deemed acceptable by institutional lenders to the shipping industry, as
determined in good faith by the Board of Directors, and such Person
shall expressly assume, by a Guarantee Agreement, in a form
satisfactory to the Trustee, all the obligations of such Subsidiary, if
any, under its Subsidiary Guarantee and under the Security Agreements;
(ii) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person
as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be
continuing; and
(iii) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such Guarantee Agreement, if any,
complies with this Indenture.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, and such default
continues for a period of 30 days;
(2) the Company (i) defaults in the payment of the principal
of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, required purchase, declaration or
otherwise, or (ii) fails to redeem or purchase Securities when required
pursuant to this Indenture or the Securities.
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18 or 4.19 (other than a failure to purchase Securities when
required under Section 4.07 or 4.13) and such failure continues for 30
days after the notice specified below;
(5) the Company fails to comply with any of its agreements in
this Indenture (other than those referred to in clause (1), (2), (3) or
(4) above) or in the
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Security Agreements, or the occurrence of an event of default under a
Mortgage after the lapse of any applicable grace period and such
failure continues for 60 days after the notice specified below;
(6) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $5
million, or its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any applicable Bankruptcy Law or:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $5 million or its foreign currency equivalent at the time is entered
against the Company or any Significant Subsidiary, remains outstanding
for a
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period of 60 days following the entry of such judgment or decree and is
not discharged, waived or the execution thereof stayed within 10 days
after the notice specified below;
(10) a Subsidiary Guarantee ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary
Guarantee) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guarantee; or
(11) the security interest under the Security Agreements
shall, at any time, cease to be in full force and effect for any reason
other than the satisfaction in full of all obligations under this
Indenture and discharge of this Indenture or any security interest
created thereunder shall be declared invalid or unenforceable or the
Company or any Subsidiary Guarantor shall assert, in any pleading in
any court of competent jurisdiction, that any such security interest is
invalid or unenforceable.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE,
or any similar law having jurisdiction over the Company, for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount at
maturity of the outstanding Securities notify the Company of the Default and the
Company does not cure such Default within the time specified after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) or (10) or (11) and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (4), (5) or (9), its status and what action the Company is taking
or proposes to take with respect thereto.
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SECTION 6.02. ACCELERATION. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount at maturity of the Securities by
notice to the Company and the Trustee, may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company occurs, the principal of and interest on all the Securities shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a majority
in principal amount at maturity of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a
majority in principal amount at maturity of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security (ii) a Default
arising from the failure to redeem or purchase any Security when required
pursuant to this Indenture or (iii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
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SECTION 6.05. CONTROL BY MAJORITY. Holders of a majority in
principal amount at maturity of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount at
maturity of the Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount at maturity
of the Securities do not give the Trustee a direction inconsistent with
the request during such 60- day period.
(6) a Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or
priority over another Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the
75
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal (equal to Accreted Value) and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and interest,
respectively; and
THIRD: to the Company or to whomsoever shall be entitled
thereto.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
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SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Inden ture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount at maturity of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatso ever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the
Security Documents and no implied covenants or obligations shall be
read into this Indenture and the Security Documents against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the
77
Trustee and conforming generally to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
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(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it here under
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Secur ities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as it in
good faith determines that withholding the notice is in the interests of
Securityholders.
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SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15, beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall
pay to the Trustee from time to time upon demand reasonable compensation for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon demand for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify and hold harmless the Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
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SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount at maturity of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount at maturity of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07, and thereupon shall be relieved of all further
obligations and duties hereunder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount at maturity of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appoint ment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with
TIAss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIAss. 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIAss. 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURI TIES;
DEFEASANCE. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.06) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company
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irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Securities, including interest thereon to
maturity or such redemption date (other than Securities replaced pursuant to
Section 2.06), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 8.01(c),
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15, 4.16, 4.17, 4.18 and 4.19 and the operation of Sections 6.01(4), 6.01(6),
6.01(7), 6.01(8) and 6.01(9) 6.01(10) and 6.01(11) (but, in the case of Sections
6.01(7) and (8), with respect only to Significant Subsidiaries) and the
limitations contained in Sections 5.01(a)(iii) and (iv) and 5.01(b) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9) 6.01(10) and
6.01(11)(but, in the case of Sections 6.01(7) and (8), with respect only to
Significant Subsidiaries) or because of the failure of the Company to comply
with Section 5.01(a)(iii) or (iv) and Section 5.01(b). If the Company exercises
its legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor, if any, shall be released from all its obligations with respect to
its Subsidiary Guarantee and the Security Agreements.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
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SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certifi cate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvest ment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Secur ities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Security holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant
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defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Offi cers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGA TIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the princi pal and interest received on such U.S. Government Obliga tions.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8;
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PROVIDED, HOWEVER, that, if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Sec tion 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to provide additional security for the Securities.
(5) to add guarantees with respect to the Secur ities,
including any Subsidiary Guarantees, or to secure the Securities;
(6) to add to the covenants of the Company or the Subsidiary
Guarantors for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall
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not impair or affect the validity of an amendment under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in principal amount at maturity of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Securities). However, without the consent of each
Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may or shall be
redeemed in accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any changes in the Security Agreements or in Articles
10, 11, 12 or 13 that adversely affect the Holders or would terminate
the Lien of this Indenture of any Security Agreement on any property
subject thereto or deprive the Holder of the security afforded by the
Lien of this Indenture or the Security Agreements; or
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subse xxxxx Xxxxxx of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURI TIES. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying
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upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. GUARANTEES. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture, the Security
Agreements and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture, the Security Agreements and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under this Article 10
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpay ment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Securities or any other agreement or otherwise; (b) any extension or renewal
of any thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder
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or the Trustee for the Obligations or any of them; (e) the failure of any Holder
or the Trustee to exercise any right or remedy against any other guarantor of
the Obligations; or (f) any change in the ownership of such Subsidiary
Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Except as expressly set forth in Sections 8.01(b), 10.02 and
10.06, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the fore going, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid
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amount of such Obligations, (ii) accrued and unpaid interest on such Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Company to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Obligations Guaranteed hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 10.02. LIMITATION ON LIABILITY. Any term or provision
of this Indenture to the contrary notwith standing, the maximum, aggregate
amount of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 10.03. SUCCESSORS AND ASSIGNS. This Article 10 shall
be binding upon each Subsidiary Guarantor and its successors and assigns and
shall enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04. NO WAIVER. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may
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have under this Article 10 at law, in equity, by statute or otherwise.
SECTION 10.05. MODIFICATION. No modification, amendment or
waiver of any provision of this Article 10, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 10.06. RELEASE OF SUBSIDIARY GUARANTOR. Upon the sale
or other disposition (including by way of consolidation or merger) of a
Subsidiary Guarantor or the sale or disposition of all or substantially all the
assets of such Subsidiary Guarantor (in each case other than to the Company or
an Affiliate of the Company) in compliance with the terms of this Indenture,
such Subsidiary Guarantor shall be deemed released from all obligations under
this Article 10 without any further action required on the part of the Trustee
or any Holder. At the request and sole cost and expense of the Company, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 11
PLEDGED COLLATERAL
SECTION 11.01. GRANT OF SECURITY INTEREST. (a) To secure the
full and punctual payment when due and the full and punctual performance of the
Obligations, the Company hereby grants to the Trustee, for the benefit of the
Trustee and the Holders, a security interest in all its right, title and
interest in and to the following, other than such of the following which are
released from the Lien of this Indenture pursuant to Section 11.05 (the "Pledged
Collateral"):
(i) all shares of Capital Stock of the Subsidiary Guarantors
now owned or hereafter acquired by the Company, which on the date
hereof are identified on Schedule I hereto (collectively, the "Pledged
Shares");
(ii) all certificates representing any of the Pledged Shares;
and
(iii) all dividends, cash, instruments and other property and
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any of the foregoing.
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(b) To secure the full and punctual payment when due and the
full and punctual performance of the Obligations, the Subsidiary Guarantors
hereby grant to the Trustee, for the benefit of the Holders, a security interest
in all their rights, titles and interests in and to the Mortgaged Collateral.
SECTION 11.02. DELIVERY OF COLLATERAL. Any and all cash,
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to and held by or on behalf of the Trustee and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Trustee. The Trustee shall have the right, at any time after
the occur rence and during the continuance of an Event of Default, in its
discretion and without notice to the Company, to transfer to or to register in
the name of the Trustee or any of its nominees any or all the Pledged
Collateral. In addition, the Trustee shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of different denominations.
The Company shall use its best efforts to ensure that the
certificates representing the Pledged Shares are registered in the name of the
Trustee with the appropriate authorities having jurisdiction over the Company or
any of the Subsidiary Guarantors.
SECTION 11.03. REPRESENTATIONS AND WARRANTIES. The Company
hereby represents and warrants on the Issue Date as follows:
(a) the Company is the record and beneficial owner of the
applicable Pledged Shares described on Schedule I, free and clear of
any Lien, except for the Lien created by this Indenture;
(b) the Company has full corporate power, authority and legal
right to pledge all the Pledged Collateral pledged by it pursuant to
this Indenture;
(c) the Pledged Shares described on Schedule I have been duly
authorized and are validly issued, fully paid and nonassessable;
(d) the pledge in accordance with the terms of this Indenture
creates a valid and perfected first priority Lien on the Pledged
Collateral securing the payment and performance of the Obligations;
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(e) the shares described in Schedule I hereto represent 100.0%
of the shares of Capital Stock of the Subsidiary Guarantors; and
(f) there are no existing options, warrants, calls or
commitments of any character relating to any author ized and unissued
Capital Stock of any Subsidiary Guarantor.
SECTION 11.04. FURTHER ASSURANCES. The Company agrees that at
any time and from time to time, at the expense of the Company, the Company will
promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or that the Trustee may reasonably request
in order to perfect and protect any Lien granted or purported to be granted
hereby or to enable the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral. Without limiting the
foregoing, the Company shall, (i) at the time of the issuance by a Subsidiary
Guarantor of any shares of Capital Stock after the Issue Date, deliver 100.0% of
such shares to the Trustee as Pledged Collateral and provide to the Trustee a
revised Schedule I, and (ii) at the time of any release of Pledged Shares
pursuant to Section 11.05, provide to the Trustee a revised Schedule I. Any such
revised Schedule shall reflect any changes made necessary by the applicable
acquisition or release, at which time the Company shall be deemed to make their
representations and warranties set forth in paragraphs (a) through (f) of
Section 11.03 with respect to such Schedule, as so revised.
SECTION 11.05. DIVIDENDS; VOTING RIGHTS; RELEASE OF
COLLATERAL. (a) As long as no Default shall have occurred and be continuing and
until written notice thereof from the Trustee to the Company, the Company shall
be entitled to receive and retain all dividends and other distributions paid in
respect of the Pledged Shares owned by the Company; PROVIDED, HOWEVER, that the
provisions of this Indenture, including Section 4.05, shall in all respects
govern the Company's use or other disposition of such cash or other property.
Any cash dividends or distributions delivered to or otherwise held by the
Trustee pursuant to this Section 11.05, and any other cash constituting
Collateral delivered to the Trustee, shall be invested, at the written direction
of the Company, by the Trustee in Temporary Cash Investments.
(b) Upon the occurrence and during the continuance of a
Default and upon written notice thereof from the Trustee to the Company, the
Trustee shall be entitled to receive and retain as Collateral all dividends paid
and distributions made in respect of the Pledged Shares, whether so paid or made
before or after any Default. Any such dividends shall,
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if received by the Company, be received in trust for the benefit of the Trustee,
be segregated from the other property or funds of the Company, and be forthwith
delivered to the Trustee as Collateral in the same form as so received (with any
necessary endorsement).
(c) As long as no Default shall have occurred and be
continuing and until written notice thereof from the Trustee to the Company, the
Company shall be entitled to exercise any and all voting and other consensual
rights relating to Pledged Shares or any part thereof for any purpose; PROVIDED,
HOWEVER, that no vote shall be cast, and no consent, waiver or ratification
given or action taken, which would be inconsistent with or violate any provision
of this Indenture, the Security Agreements or the Securities.
(d) Upon the occurrence and during the continuance of a
Default, all rights of the Company to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to Section
11.05(c) shall cease upon notice from the Trustee to the Company and upon the
giving of such notice all such rights shall thereupon be vested in the Trustee
who shall thereupon have the sole right to exercise such voting and other
consensual rights.
(e) In order to permit the Trustee to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
11.05(d), and to receive all dividends and distributions which it may be
entitled to receive under Section 11.05(b), the Company shall, if necessary,
upon written notice of the Trustee, from time to time execute and deliver to the
Trustee such instruments as the Trustee may reasonably request.
(f) Notwithstanding anything to the contrary in this Article
11, upon satisfaction by the Company of the conditions set forth in Article 8 to
its legal defeasance option, its covenant defeasance option or to the discharge
of this Indenture, the Lien of this Indenture on all the Collateral shall
terminate and all the Pledged Collateral shall be released without any further
action on the part of the Trustee or any other Person. In addition, in
connection with any release of a Subsidiary Guarantor pursuant to Section 10.06,
the pledge of the Capital Stock of such Subsidiary Guarantor pursuant to this
Article 11 shall be released and the security interest in the Mortgaged
Collateral shall be released without any further action required on the part of
the Trustee or any Holder. At the request of the Company, the Trustee shall
execute and deliver appropriate instruments evidencing any release pursuant to
this Section 11.05(f).
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SECTION 11.06. TRUSTEE APPOINTED Attorney-in-Fact. The Company
hereby appoints the Trustee as its attorney-in-fact, with full authority in the
place and stead of the Company, and in the name of the Company or otherwise,
from time to time in the Trustee's discretion but only after the occurrence and
during the continuance of an Event of Default, to take any action and to execute
any instrument which the Trustee may deem necessary or advisable in order to
accomplish the purposes of this Article 11, including to receive, endorse and
collect all instruments made payable to the Company representing any dividend,
interest payment or other distribution in respect of the Pledged Collateral or
any part thereof and to give full discharge for the same. This power, being
coupled with an interest, is irrevocable.
SECTION 11.07. TRUSTEE MAY PERFORM. If the Company fails to
perform any agreement contained in this Article 11, the Trustee may itself (but
shall not be obligated to) perform, or cause performance of, such agreement, and
the expenses of the Trustee incurred in connection therewith shall be payable by
the Company under Section 7.07.
SECTION 11.08. TRUSTEE'S DUTIES. The powers conferred on the
Trustee under this Article 11 are solely to protect its interest in the Pledged
Collateral and Mortgaged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Pledged Collateral
and Mortgaged Collateral in its possession and the accounting for moneys
actually received by it under this Article 11, the Trustee shall have no duty as
to any Pledged Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Pledged
Collateral and Mortgaged Collateral.
SECTION 11.09. REMEDIES UPON EVENT OF DEFAULT. If any Event of
Default shall have occurred and be continuing, the Trustee may exercise in
respect of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
provided a secured party upon the default of a debtor under the Uniform
Commercial Code at that time, and the Trustee may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Trustee's offices or else where, for cash, on credit or for future delivery,
upon such terms as the Trustee may determine to be commercially reasonable, and
the Trustee or any Securityholder may be the purchaser of any or all the Pledged
Collateral so sold and thereafter hold the same, absolutely, free from any right
or claim of whatsoever kind. The Company agrees that, to the
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extent notice of sale shall be required by law, at least 10 days' notice to the
Company of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. The Trustee shall incur no liability as a result of the sale
of the Pledged Collateral, or any part thereof, at any private sale conducted in
a commercially reasonable manner. The Company hereby waives any claims against
the Trustee arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Trustee accepts the
first offer received and does not offer such Pledged Collateral to more than one
offeree.
The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Trustee may be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distribu tion or resale thereof. The Company acknowledges
and agrees that any such sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions and, notwithstanding such circum stances, agree that any such sale
shall be deemed to have been made in a commercially reasonable manner. The
Trustee shall be under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit the Company to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the Company would agree to do so.
SECTION 11.10. APPLICATION OF PROCEEDS. Upon the occurrence
and during the continuance of an Event of Default and after the acceleration of
the Securities pursuant to Section 6.02 (so long as such acceleration has not
been rescinded), any cash held by the Trustee as Pledged Collateral and all cash
proceeds received by the Trustee in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral, shall be
applied by the Trustee in the manner specified in Section 6.10.
SECTION 11.11. CONTINUING LIEN. Except as provided in Section
11.05, this Indenture shall create a
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continuing Lien on the Pledged Collateral that shall (i) remain in full force
and effect until payment in full of the Securities, (ii) be binding upon the
Company and its successors and assigns and (iii) enure to the benefit of the
Trustee and its successors, transferees and assigns.
SECTION 11.12. CERTIFICATES AND OPINIONS. The Company shall
comply with (a) TIAss. 314(b), relating to Opinions of Counsel regarding the
Lien of this Indenture and (b) TIAss. 314(d), relating to the release of Pledged
Collateral from the Lien of this Indenture and Officers' Certificates or other
documents regarding fair value of the Pledged Collateral, to the extent such
provisions are applicable. Any certificate or opinion required by TIAss. 314(d)
may be executed and delivered by an Officer of the Company to the extent
permitted by TIAss. 314(d).
SECTION 11.13. ADDITIONAL AGREEMENTS. The Company agrees that,
upon the occurrence and during the continuance of a Default hereunder, it will,
at any time and from time to time, upon the written request of the Trustee, use
its best efforts to take or to cause the issuer of the Pledged Shares and any
other securities distributed in respect of the Pledged Shares (collectively with
the Pledged Shares, the "Pledged Securities") to take such action and prepare,
distribute or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Trustee to permit the public sale of such
Pledged Securities. The Company further agrees to indemnify, defend and hold
harmless the Trustee, each Holder, any underwriter and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including reasonable fees and
expenses of legal counsel to the Trustee), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to the Company or the issuer of such Pledged
Securities by the Trustee or any Holder expressly for use therein. The Company
further agrees, upon such written request referred to above, to use its best
efforts to qualify, file or register, or cause the issuer of such Pledged
Securities to qualify, file or register, any of the Pledged Securities under the
Blue Sky or other securities laws of such states as may be requested by the
Trustee and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations.
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The Company will bear all costs and expenses of carrying out its obligations
under this Section 11.13. The Company acknowledges that there is no adequate
remedy at law for failure by it to comply with the provisions of this Section
11.13 and that such failure would not be adequately compensable in damages, and
therefore agree that their agreements contained in this Section 11.13 may be
specially enforced.
ARTICLE 12
SECURITY AGREEMENTS
SECTION 12.01. COLLATERAL AND SECURITY Agreements. (a) To
secure the due and punctual payment of the Obliga tions, the Company, the
Subsidiary Guarantors, the Collateral Agent and the Trustee have entered or will
enter, into the Security Agreements. The Trustee and the Company hereby
acknowledge and agree that the Trustee or the Collateral Agent, as the case may
be, holds the Collateral in trust for the benefit of the Trustee and the
Holders, in each case pursuant to the terms of the Security Agreements. Each
Holder, by accepting a Security, shall be deemed to have agreed to all the terms
and provisions of the Security Agreements.
(b) As set forth in the Security Agreements, the holders of
Secured Debt (as such term is defined in the Collateral Agency Agreement) have
rights in and to the Mortgaged Collateral that are prior to the rights of the
Holders of the Securities. As among the Holders of the Securities, the Mortgaged
Collateral shall be held for the equal and ratable benefit of such holders
without preference, priority or distinction of any thereof over any other.
(c) The Company, the Trustee, The Bank of New York, as lender,
and the Collateral Agent have entered into the Collateral Agency Agreement. By
their acceptance of the Securities, the Holders of the Securities shall be
deemed (i) to have authorized the Trustee to enter into such Collateral Agency
Agreement and (ii) to be bound thereby. The Trustee has appointed the Collateral
Agent as its agent under the Collateral Agreement, and the Collateral Agent is
thereby authorized to act on behalf of the Trustee, with full authority and
powers of the Trustee thereunder.
SECTION 12.02. RECORDING; ANNUAL OPINIONS. (a) The Company and
the Subsidiary Guarantors will take or cause to be taken all action required to
maintain, preserve and protect the Lien on the Mortgaged Collateral granted by
the Security Agreements, including causing the Mortgages and any other Security
Agreement, instruments of further assur-
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ance and all amendments or supplements thereto, to be promptly recorded,
registered and filed and at all times to be kept recorded, registered and filed,
and will execute and file statements and cause to be issued and filed
statements, all in such manner and in such places and at such times as are
prescribed in the Escrow Agreement or in this Indenture as may be required by
law fully to preserve and protect the rights of the Holders and the Trustee
under this Indenture and the Security Agreements to the Collateral.
The Company and the Subsidiary Guarantors will from time to
time promptly pay and discharge all recording or filing fees, charges and taxes
relating to the filing or registration of this Indenture and the Security
Agreements, any amendments thereto and any other instruments of further
assurance.
(b) The Company and the Subsidiary Guarantors shall furnish to
the Collateral Agent or the Trustee:
(i) on the Issue Date or as soon as practicable after the
execution and delivery of this Indenture, an Opinion of Counsel either
(a) to the effect that, in the opinion of such Counsel, this Indenture
and the assignment of the Collateral intended to be made by the
Security Agreements and all other instruments of further assurance or
assignment have been properly recorded, registered and filed (or proper
provision has been made for such recording, registration and filing) to
the extent necessary to make effective the Lien created by such
Security Agreements and reciting the details of such action, and
stating that as to the Lien created pursuant to such Security
Agreements, such recordings, registerings and filings are the only
recordings, registerings and filings necessary to give notice thereof
and that no re-recordings, re-registerings or refilings are necessary
to maintain such notice (other than as stated in such opinion), and
further stating that all statements have been executed and filed (or
proper provision has been made for such filing) that are necessary
fully to preserve and protect the rights of the Holders and the Trustee
with respect to the Lien under this Indenture and such Security
Agreements, or (b) to the effect that, in the opinion of such counsel,
no such action is necessary to perfect such Lien; and
(ii) on or before July 15 in each year beginning with July 15,
1999, an Opinion of Counsel, dated as of such date, either (a) to the
effect that, in the opinion of such counsel, such action has been taken
with respect to the recordings, registerings, filings, re-recordings,
re-registerings and re-filings of this Indenture, the Security
Agreements and all financing statements,
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continuation statements or other instruments of further assurance as is
necessary to maintain the Lien of this Indenture and the Security
Agreements and reciting with respect to such Lien the details of such
action or referencing to prior Opinions of Counsel in which such
details are given, and stating that all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the rights of the Holders and the Trustee
hereunder and under the Security Agreements with respect to such Lien,
or (b) to the effect that, in the opinion of such Counsel, no such
action is necessary to maintain such Lien.
SECTION 12.03. DISPOSITION OF COLLATERAL WITHOUT RELEASE. (a)
Notwithstanding the provisions of Section 12.04, so long as no Event of Default
shall have occurred and be continuing, the Company and the Subsidiary
Guarantors, as appropriate, may, without any release or consent by the
Collateral Agent or the Trustee:
(i) sell or otherwise dispose of any machinery, equipment,
furniture, apparatus, tools or implements, materials or supplies or
other similar property subject to the Lien of this Indenture and the
Security Agree ments, which may have become worn out or obsolete, not
exceeding in aggregate value in any one calendar year $500,000, or
which may constitute an Incidental Asset, upon substituting for the
same other machinery, equip ment, furniture, apparatus, tools or
implements, materials or supplies or other similar property not
necessarily of the same character but of at least equal value to the
Company as, and costing not less than the amount realized from, the
Collateral disposed of, which shall forthwith become, without further
action, subject to the Lien of this Indenture and the Security
Agreements;
(ii) grant rights-of-way and easements over or in respect of
the real property; PROVIDED, HOWEVER, that such grant will not, in the
reasonable opinion of the Board of Directors, materially impair the
usefulness of such property in the conduct of the Company's business
and will not be prejudicial to the Holders of the Securities;
(iii) abandon, terminate, cancel, release or make alterations
in or substitutions of any contracts subject to the Lien of this
Indenture and any of the Security Agreements; PROVIDED, HOWEVER, that
any altered or substituted contracts shall forthwith, without further
action, be subject to the Lien of this Indenture and the
101
Security Agreements to the same extent as those previously existing;
(iv) surrender or modify any franchise, license or permit
subject to the Lien of this Indenture and any of the Security
Agreements which it may own or under which it may be operating;
PROVIDED, HOWEVER, that, after the surrender or modification of any
such franchise, license or permit, the Company or the applicable
Subsidiary Guarantor shall still, in the reasonable opinion of the
Board of Directors of the Company, be entitled, under some other or
without any franchise, license or permit, to conduct its business as it
was operating immediately prior to such surrender or modification;
(v) alter, repair, replace, change the location or position of
and add to its plants, structures, machinery, systems, equipment,
fixtures and appurtenances; PROVIDED, HOWEVER, that such alteration,
repair or replacement shall comply with the terms of the Security
Agreements and will not, in the reasonable opinion of the Board of
Directors, be prejudicial to the interests of the Holders of the
Securities; or
(vi) demolish, dismantle, tear down, abandon or scrap any
portion of the Collateral (other than land or interests in land (other
than leases) and other than the Mortgaged Vessels), if in the good
faith opinion of the Board of Directors, as evidenced by a Board
Resolution, such demolition, dismantling, tearing down, abandoning or
scrapping is in the best interests of the Company and the fair market
value and utility of the Collateral as an entirety, and the security
for the Securities, will not thereby be impaired;
(b) In the event that the Company or a Subsidiary Guarantor
has sold, exchanged or otherwise disposed of or proposes to sell, exchange or
otherwise dispose of any portion of the Collateral which under the provisions of
this Section 12.03 may be sold, exchanged or otherwise disposed of by the
Company without any release or consent of the Trustee, and the Company requests
the Trustee to furnish a written disclaimer, release or quitclaim of any
interest in such property under this Indenture and the Security Agreements, the
Trustee, at the Company's expense, shall execute such an instrument upon
delivery to the Trustee of (i) an Officers' Certificate by the Company reciting
the sale, exchange or other disposition made or proposed to be made and
describing in reasonable detail the property affected thereby, and stating that
such property is property which by the provisions of this Section 12.03 may be
sold, exchanged or otherwise disposed of or dealt with by the Company without
any release or consent of the Trustee and (ii) an Opinion of
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Counsel stating that the sale, exchange or other disposition made or proposed to
be made was duly taken by the Company or the Subsidiary Guarantor in conformity
with a designated subsection of Section 12.03(a) (specifying which subsection)
and that the execution of such written disclaimer, release or quitclaim is
appropriate to confirm the propriety of such sale, disposition or other
disposition under this Section 12.03.
SECTION 12.04. RELEASE OF COLLATERAL. In addition to its
rights under Section 12.03, the Company shall have the right, at any time and
from time to time, to sell, exchange or otherwise dispose of any of the
Collateral (other than Trust Moneys, which are subject to release from the Lien
of this Indenture and the Security Agreements as provided under Article 13),
upon compliance with the requirements and conditions of this Section 12.04,
Section 4.07 and Section 4.17, and the Trustee, at the Company's sole cost and
expense, shall release the same from the Lien of this Indenture and the Security
Agreements upon receipt by the Trustee of a Release Notice requesting such
release and describing the property to be so released, together with:
(a) If the property to be released has a book value of at
least $2,000,000, a Board Resolution requesting such release and
authorizing an application to the Trustee therefor.
(b) An Officers' Certificate, dated not more than 30 days
prior to the date of the application for such release, and signed also,
in the case of the following clauses (ii), (iv), (v) and (viii), by an
Appraiser, in each case stating in substance as follows:
(i) that, in the opinion of the signers, the security
afforded by this Indenture and the Security Agreements will
not be impaired by such release in contravention of the
provisions of this Indenture, and that if the Mortgaged
Collateral to be released is not being replaced by comparable
property, such Collateral has a book value equal to or less
than $500,000 and is not necessary for the efficient operation
of the Company's remaining property or in the conduct of the
business of the Company;
(ii) that the Company or a Subsidiary Guarantor has
disposed of or will dispose of the Collateral so to be
released for a consideration representing, in the opinion of
the signers, its fair value, which consideration may consist
of any one or more of the following, to the extent otherwise
permitted by this Indenture: (A) cash or cash equivalents,
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(B) obligations secured by a purchase money Lien upon the
property so to be released and (C) any other property or
assets that, except as provided in Section 12.04(d), upon
acquisition thereof by the Company or a Subsidiary Guarantor
would be subject to the Lien of this Indenture and the
Security Agreements, and subject to no Lien other than
Permitted Liens which, under the applicable provisions of the
Security Agreements relating thereto, are permitted to be
superior to the Lien of the Trustee herein and therein, all of
such consideration to be briefly described in the certificate;
(iii) that no Event of Default has occurred and
is continuing;
(iv) the fair value, in the opinion of the signers,
of the property to be released at the date of such application
for release; PROVIDED, HOWEVER, that it shall not be necessary
under this clause (iv) to state the fair value of any property
whose fair value is certified in a certificate of an Appraiser
under Section 12.04(c);
(v) whether the aggregate fair value of all
Collateral to be released and of all other Collateral released
from the Lien of this Indenture and the Security Agreements
pursuant to this Section 12.04 since the commencement of the
then current calendar year is 10% or more of the aggregate
principal amount at maturity of the Securities outstanding on
the date of the application and whether said fair value of the
property to be released is at least $100,000 and at least 1%
of the aggregate principal amount at maturity of the
Securities outstanding on the date of the application, and if
such is the case, that a certificate of an Appraiser as to the
fair value of the property to be released will be furnished
under Section 12.04(c);
(vi) that if the Collateral to be released is only a
portion of a Mortgaged Vessel, following such release, that
the fair value of the Vessel (exclusive of the fair value of
the released Collateral) shall not be less than the fair value
of such Vessel (exclusive of the fair value of the released
Collateral) prior to such release;
(vii) that all conditions precedent herein provided
for relating to the release of the Collateral in question have
been complied with.
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(c) If (i) the fair value of the property to be released and
of all other property released from the Lien of this Indenture and the
Security Agreements pursuant to this Section 12.04 since the
commencement of the then current calendar year, as shown by the
certificate required by Section 12.04(b)(v), is 10% or more of the
aggregate principal amount at maturity of the Securities outstanding on
the date of the application, and (ii) the fair value of the Collateral
to be so released, as shown by the certificate filed pursuant to
Section 12.04(b)(v), is at least $100,000 and at least 1% of the
aggregate principal amount at maturity of the Securities outstanding on
the date of the application, a certificate of an Appraiser stating:
(1) the then fair value, in the opinion of the
signer, of the property to be released; and
(2) that such release, in the opinion of the signer,
will not impair the Lien of this Indenture or the Security
Agreements in contravention of its terms.
(d) The Net Available Cash, which will be paid to the Trustee
(except Net Available Cash from any Asset Sale which is not required,
or cannot be required through the passage of time or otherwise, to be
used to repurchase or redeem or to make an offer to repurchase
Securities hereunder); and, if any property other than cash, cash
equivalents or obligations is included in the consideration received in
connection with such Asset Sale, such instruments of conveyance,
assignment and transfer, if any, as may be necessary, in the Opinion of
Counsel to be given pursuant to Section 12.04(e), to subject to the
Lien of this Indenture and the Security Agreements all the right, title
and interest of the Company or the applicable Subsidiary Guarantor in
and to such property.
(e) An Opinion of Counsel substantially to the effect (i) that
any obligation included in the consider ation for any property so to be
released and to be received by the Trustee pursuant to Section 12.04(d)
is a valid and binding obligation enforceable in accordance with its
terms and is effectively pledged under the Security Agreements, (ii)
that any Lien granted by a purchaser to secure a purchase money
obligation is a fully perfected Lien and such instrument granting such
Lien is enforceable in accordance with its terms, (iii) either (x) that
such instruments of conveyance, assignment and transfer as have been or
are then delivered to the Trustee are sufficient to subject to the Lien
of this Indenture and the applicable Security
105
Agreements all the right, title and interest of the Company or the
applicable Subsidiary Guarantor in and to any property, other than
cash, cash equivalents and obligations, that is included in the
consideration for the Collateral so to be released and is to be
received by the Trustee pursuant to Section 12.04(d), subject to no
Lien other than Permitted Liens or (y) that no instruments of
conveyance, assignment or transfer are necessary for such purpose, (iv)
that the Company or the applicable Subsidiary Guarantor has corporate
power to own all property included in the consideration for such
release, and (v) that all conditions precedent herein and under the
Security Agreements relating to the release of such Collateral have
been complied with.
(f) If the Collateral to be released is only a portion of a
Mortgaged Vessel, an Opinion of Counsel relating to the Mortgaged
Vessel confirming that after such release, the Lien of the Mortgage
continues unimpaired as a perfected Lien upon the Mortgaged Vessel
subject only to Permitted Liens.
In connection with any release, the Company shall (i) execute,
deliver and record or file and obtain such instruments as the Trustee may
reasonably require, including amendments to the Security Agreements and this
Indenture, and (ii) deliver to the Trustee such evidence of the satisfaction of
the conditions included in this Indenture and the Security Agreements as the
Trustee may reasonably require.
The Company shall exercise its rights under this Section by
delivery to the Trustee of a notice (each, a "Release Notice"), which shall
refer to this Section, describe with particularity the items of property
proposed to be covered by the release and be accompanied by a counterpart of the
instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee and
in form for execution by the Trustee. Upon such compliance, the Company shall
direct the Trustee to execute, acknowledge (if applicable) and deliver to the
Company such counterpart within 10 Business Days after receipt by the Trustee of
a Release Notice and the satisfaction of the requirements of this Section.
In case an Event of Default shall have occurred and be
continuing, the Company or a Subsidiary Guarantor, while in possession of the
Collateral (other than cash, cash equivalents, securities and other personal
property held by, or required to be deposited or pledged with, the Trustee or
the Collateral Agent, as the case may be, hereunder or under any Security
Agreement or with the trustee, mortgagee or other holder of a Permitted Lien),
may do any of the things
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enumerated in this Section 12.04, if the Trustee in its discretion, or the
Holders of a majority in aggregate principal amount at maturity of the
Securities outstanding, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under this Section shall omit
the statement to the effect that no Event of Default has occurred and is
continuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.01(1) or 6.01(2).
All cash or cash equivalents received by the Trustee pursuant
to this Section 12.04 shall be held by the Trustee, for the benefit of the
Holders, as Trust Moneys under Article 13 subject to application as therein
provided. All purchase money and other obligations received by the Trustee
pursuant to this Section 12.04 shall be held by the Trustee for the benefit of
the Holders as Mortgaged Collateral.
SECTION 12.05. EMINENT DOMAIN, EXPROPRIATION AND OTHER
GOVERNMENTAL TAKINGS. If any of the Collateral is taken by eminent domain,
expropriation or other similar governmental taking (including a requisition for
hire which is not revoked within six months (and in all events prior to July 15,
2005) or a requisition for title) or is sold pursuant to the exercise by any
governmental authority of any right which it may then have to purchase, or to
designate a purchaser or to order a sale of, all or any part of the Collateral,
the Trustee shall release the property so taken or purchased, but only upon
receipt by the Trustee, and the Collateral Agent in the case involving Mortgaged
Collateral, of the following:
(a) an Officers' Certificate stating that such property has
been taken by eminent domain, expropriation or other similar
governmental taking and the amount of the award therefor, or that such
property has been sold pursuant to a right vested in a governmental
authority to purchase, or to designate a purchaser, or order a sale of
such property and the amount of the proceeds of such sale, that the
amount of the proceeds of the property so sold is not less than the
amount to which the Company or the applicable Subsidiary Guarantor is
legally entitled under the terms of such right to pur chase or
designate a purchaser, or under the order or orders directing such
sale, as the case may be, and that all conditions precedent herein
provided for relating to such release have been complied with;
(b) to hold as Trust Moneys, subject to the disposition
thereof pursuant to Article 13 hereof, the
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award for such property or the proceeds of such sale to the extent
provided under the Security Agreements; and
(c) an Opinion of Counsel substantially to the effect that:
(1) such property has been taken by eminent domain,
expropriation or other similar governmental taking (including
a requisition for hire which is not revoked within six months
or prior to July 15, 2005 or a requisition for title) or has
been sold pursuant to the exercise of a right vested in a
governmental authority to purchase, or to designate a
purchaser or order a sale of, such property; and
(2) the instruments and the award or proceeds of such
sale which have been or are therewith delivered to and
deposited with the Trustee or the Collateral Agent, as the
case may be, conform to the requirements of this Indenture and
the Security Agreements and that, upon the basis of such
application, the Trustee or the Collateral Agent, as the case
may be, is permitted by the terms hereof and of the Security
Agreements to execute and deliver the release requested, and
that all conditions precedent herein provided for relating to
such release have been complied with.
In any proceedings for the taking or purchase or sale of any
part of the Collateral, by eminent domain, expropriation or other similar
governmental taking or by virtue of any such right to purchase or designate a
purchaser or to order a sale, the Trustee or the Collateral Agent, as the case
may be, may be represented by counsel who may be counsel, at the Company's
expense, for the Company.
All cash received by the Trustee or the Collateral Agent, as
the case may be, pursuant to this Section 12.05 shall be held by the Trustee as
Trust Moneys under Article 13 subject to application as therein provided. All
purchase money and other obligations received by the Trustee pursuant to this
Section 12.05 shall be held by the Trustee or the Collateral Agent, as the case
may be, as Mortgaged Collateral subject to application as provided in Section
12.10.
SECTION 12.06. PERMITTED RELEASES NOT TO IMPAIR LIEN; TRUST
INDENTURE ACT REQUIREMENTS. The release of any Collateral from the terms hereof
and of the Security Agreements or the release of, in whole or in part, the Liens
created by the Security Agreements, will not be deemed to impair the Lien on the
Collateral in contravention of the provisions hereof if and to the extent the
Collateral or Liens are released pursuant to the applicable Security
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Agreements and pursuant to the terms of this Article 12. The Trustee and each of
the Holders acknowledge that a release of Collateral or a Lien strictly in
accordance with the terms of the Security Agreements and of this Article 12 will
not be deemed for any purpose to be an impairment of the Lien on the Mortgaged
Collateral in contravention of the terms of this Indenture. To the extent
applicable, the Company and each obligor on the Securities shall cause ss.
314(d) of the TIA relating to the release of property or securities from the
Lien hereof and of the Security Agreements to be complied with. Any certificate
or opinion required by ss. 314(d) of the TIA may be made by an officer of the
Company, except in cases which ss. 314(d) of the TIA requires that such
certificate or opinion be made by an independent person.
SECTION 12.07. SUITS TO PROTECT THE COLLATERAL. Subject to the
provisions of the Security Agreements, the Trustee shall have power to institute
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Agreements or this Indenture, and such suits
and proceedings as the Trustee, in its sole discretion, may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Lien on the Collateral or be prejudicial to the interests of
the Holders or the Trustee).
SECTION 12.08. PURCHASER PROTECTED. In no event shall any
purchaser in good faith of any property purported to be released hereunder be
bound to ascertain the authority of the Trustee to execute the release or to
inquire as to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights permitted by this
Article 12 to be sold be under obligation to ascertain or inquire into the
authority of the Company or the applicable Subsidiary Guarantor to make any such
sale or other transfer.
SECTION 12.09. POWERS EXERCISABLE BY RECEIVER OR TRUSTEE. In
case the Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article 12 upon the Company or
a Subsidiary Guarantor with respect to the release, sale or other disposition of
such property may be exercised by such receiver or trustee, and an instrument
signed by such
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receiver or trustee shall be deemed the equivalent of any similar instrument of
the Company or a Subsidiary Guarantor or of any officer or officers thereof
required by the provisions of this Article 12; and if the Trustee shall be in
the possession of the Collateral under any provision of this Indenture, then
such powers may be exercised by the Trustee.
SECTION 12.10. DISPOSITION OF OBLIGATIONS RECEIVED. All
purchase money and other obligations received by the Trustee or the Collateral
Agent under this Article shall be held by the Trustee or the Collateral Agent,
as the case may be, as a part of the Collateral. Upon payment in cash or cash
equivalents by or on behalf of the Company to the Trustee or the Collateral
Agent of the entire unpaid principal amount at maturity of any such obligation,
to the extent not constituting Net Available Cash which may be required, through
the passage of time or otherwise, to be used to redeem or repurchase or to make
an offer to redeem or repurchase Securities, the Trustee or the Collateral
Agent, as appropriate, shall release and transfer such obligation and any
mortgage securing the same upon receipt of any documentation that the Trustee or
the Collateral Agent may reasonably require. Any cash or cash equivalents
received by the Trustee or the Collateral Agent in respect of the principal of
any such obligations shall be held by the Trustee or the Collateral Agent, as
the case may be, as Trust Moneys under Article 13 subject to application as
therein provided and as provided in the Security Agreements. Until the
Securities are accelerated pursuant to Section 6.02, all interest and other
income on any such obligations, when received by the Trustee shall be paid to
the Company from time to time in accordance with Section 13.08. If the
Securities have been accelerated pursuant to Section 6.02, any such interest or
other income not theretofore paid, when collected by the Trustee, shall be
applied by the Trustee in accordance with Section 6.10.
SECTION 12.11. DETERMINATIONS RELATING TO COLLATERAL. In the
event (i) the Trustee shall receive any written request from the Company, a
Subsidiary Guarantor or the Collateral Agent under any Security Agreement for
consent or approval with respect to any matter or thing relating to any
Collateral or the Company's or a Subsidiary Guarantor's obligations with respect
thereto or (ii) there shall be due to or from the Trustee or the Collateral
Agent under the provisions of any Security Agreement any material performance or
the delivery of any material instrument or (iii) the Trustee shall become aware
of any material nonperformance by the Company or a Subsidiary Guarantor of any
covenant or any material breach of any representation or warranty of the Company
or a Subsidiary Guarantor set forth in any Security Agreement, then, in each
such event, the Trustee shall be entitled to hire, at the sole reasonable cost
and expense of
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the Company, experts, consultants, agents and attorneys to advise the Trustee on
the manner in which the Trustee should respond, or direct the Collateral Agent
to respond, to such request or render any requested performance or response to
such nonperformance or breach. The Trustee shall be fully protected in
accordance with Article 7 hereof in the taking of any action recommended or
approved by any such expert, consultant, agent or attorney and by
indemnification provided in accordance with Section 6.05 and other sections of
this Indenture if such action is agreed to by Holders of a majority in principal
amount at maturity of the Securities pursuant to Section 6.05 and, the Trustee
may, in its sole discretion, prior to taking such action if such action could
subject it to environmental liabilities or taxation, require (i) direction from
the Holders of a majority in principal amount at maturity of the Securities in
accordance with Section 6.05 hereof and (ii) indemnification in accordance with
Section 6.05.
SECTION 12.12. RELEASE UPON TERMINATION OF THE COMPANY'S
OBLIGATIONS. In the event that the Company delivers to the Trustee, in form and
substance acceptable to it, an Officers' Certificate certifying that all the
obligations under this Indenture, the Securities and the Security Agreements
have been satisfied and discharged by complying with the provisions of Article 8
and Section 7.07 or by the payment in full of the Company's obligations under
the Securities, this Indenture and the Security Agreements, and all such
obligations have been so satisfied, the Trustee shall deliver to the Company and
the Collateral Agent a notice stating that the Trustee, on behalf of the
Holders, disclaims and gives up any and all rights it has in or to the Mortgaged
Collateral, and any rights it has under the Security Agreements, and upon
receipt by the Collateral of such notice, the Collateral Agent shall not be
deemed to hold a Lien in the Mortgaged Collateral on behalf of the Trustee.
SECTION 12.13. COLLATERAL AGENT'S DUTIES. The Collateral
Agent, acting in its capacity as such, shall have only such duties with respect
to the Collateral as are set forth in the Collateral Agency Agreement.
ARTICLE 13
APPLICATION OF TRUST MONEYS
SECTION 13.01. "TRUST MONEYS" DEFINED. All cash or cash
equivalents received by the Trustee or the Collateral Agent on behalf of the
Trustee:
(a) upon the release of property from the Lien of this
Indenture and the Security Agreements, including
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all moneys received in respect of the principal of all purchase money,
governmental and other obligations; or
(b) as compensation for, or proceeds of sale of, any part of
the Mortgaged Collateral taken by eminent domain or purchased by, or
sold pursuant to an order of, a governmental authority or otherwise
disposed of; or
(c) as proceeds of insurance upon any part of the Mortgaged
Collateral (other than any liability insurance proceeds payable to the
Trustee or the Collateral Agent for any loss, liability or expense
incurred by it); or
(d) for application under this Article as elsewhere provided
in this Indenture or any Security Agreement, or whose disposition is
not elsewhere otherwise specifically provided for herein or in any
Security Agreement;
(all such moneys being herein sometimes called "Trust Moneys"), shall be held by
the Trustee (or the Collateral Agent as the agent of the Trustee) for the
benefit of the Holders of Securities as a part of the Collateral, shall be held
in United States dollars or U.S. dollar denominated obligations, and, upon any
entry upon or sale of the Collateral or any part thereof pursuant to Article 6,
said Trust Moneys shall be applied in accordance with Section 6.10; but, prior
to any such entry or sale, all or any part of the Trust Moneys may be withdrawn,
and shall be released, paid or applied by the Trustee or the Collateral Agent,
as appropriate, from time to time as provided in Sections 13.02 to 13.05,
inclusive, may be applied by the Trustee as provided in Section 13.07(b) and, if
applicable, shall be released pursuant to Section 4.19.
SECTION 13.02. RETIREMENT OF SECURITIES. The Trustee shall, or
shall direct, as appropriate, the Collateral Agent to deliver to the Trustee
Trust Moneys to, apply Trust Moneys from time to time to the payment of the
principal of and interest on any Securities, at final matu rity or to the
redemption thereof or the purchase thereof upon tender or in the open market or
at private sale or upon any exchange or in any one or more of such ways,
including pursuant to a redemption under Article 3 or a required repurchase
pursuant to Section 4.07 or 4.13, as the Company shall request, upon receipt by
the Trustee of the following:
(a) a resolution of the Board of Directors directing the
application pursuant to this Section of a specified amount of Trust
Moneys (denominated in U.S. dollars) and in case any such moneys are to
be applied to payment, designating any Securities, so to be paid and,
in case any such moneys are to be applied to the
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purchase of any Securities, prescribing the method of purchase, the
price or prices to be paid and the maximum principal amount at maturity
of any Securities, to be purchased and any other provisions of this
Indenture governing such purchase;
(b) additional cash (denominated in U.S. dollars) to the
extent necessary to fund the entire payment amount or purchase price
purchase, which cash shall be held by the Trustee in trust for such
purpose;
(c) an Officers' Certificate, dated not more than five days
prior to the date of the relevant application, stating
(i) that no Default exists; and
(ii) that all conditions precedent and covenants
herein provided for relating to such application of Trust
Moneys have been complied with; and
(d) an Opinion of Counsel stating that the docu ments and the
cash or cash equivalents, if any, which have been or are therewith
delivered to and deposited with the Trustee conform to the requirements
of this Indenture and that all conditions precedent herein provided for
relating to such application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section,
the Trustee shall apply Trust Moneys available therefor as directed and
specified by such resolution, up to, but not exceeding, the principal amount at
maturity of the Securities to be so paid, redeemed or purchased.
A resolution of the Board of Directors expressed to be
irrevocable directing the application of Trust Moneys under this Section to the
payment of the principal of par ticular Securities shall for all purposes of
this Indenture be deemed the equivalent of the deposit of money with the Trustee
in trust for such purpose. Such Trust Moneys and any cash deposited with the
Trustee pursuant to subsection (b) of this Section shall not, after compliance
with the foregoing provisions of this Section, be deemed to be part of the
Collateral or Trust Moneys.
SECTION 13.03. WITHDRAWALS OF INSURANCE PROCEEDS AND
CONDEMNATION AWARDS. To the extent that any Trust Moneys consist of either (a)
the proceeds of insurance upon any part of the Mortgaged Collateral or (b) any
award for or the proceeds from any of the Collateral being taken by eminent
domain, expropriation or other similar governmental taking
113
(including a requisition for hire which is not revoked within six months (and in
all events prior to July 15, 2005) or a requisition for title) or sold pursuant
to the exercise by any governmental authority of any right which it may then
have to purchase, or to designate a purchaser or to order a sale of any part of
the Collateral, such Trust Moneys may be withdrawn by the Company or the
applicable Subsidiary Guarantor and shall be paid by the Trustee upon a request
by the Company to the Trustee by the proper officer or officers of the Company
or the applicable Subsidiary Guarantor to reimburse the Company or the
applicable Subsidiary Guarantor for expenditures made, or to pay costs incurred,
by the Company or the applicable Subsidiary Guarantor to repair, rebuild or
replace the property destroyed, damaged or taken (including the acquisition of a
Qualified Substitute Vessel), upon receipt by the Trustee of the following:
(a) an Officers' Certificate dated not more than 30 days prior
to the date of the application for the withdrawal and payment of such
Trust Moneys and signed also in the case of the following clauses (i),
(iv) and (vi), by an Appraiser, setting forth:
(i) that expenditures have been made, or costs
incurred, or will be incurred simultaneous with such
withdrawal of Trust Moneys, by the Company or the applicable
Subsidiary Guarantor in a specified amount for the purpose of
making certain repairs, rebuildings and replacements of the
Mortgaged Collateral (including the acquisition of a Qualified
Substitute Vessel), which shall be briefly described, and
stating the fair value thereof to the Company at the date of
the acquisi tion thereof by the Company, except that it shall
not be necessary under this paragraph to state the fair value
of any of such repairs, rebuildings or replacements that are
separately described pursuant to paragraph (vi) of this
subsection and whose fair value is stated in the Appraiser's
certificate under the following subsection (b) of this
Section;
(ii) that no part of such expenditures, in any
previous or then pending application, has been or is being
made the basis for the withdrawal of any Trust Moneys pursuant
to this Section 13.03;
(iii) that no part of such expenditures or costs has
been paid out of either the proceeds of insurance upon any
part of the Mortgaged Collateral not required to be paid to
the Trustee or the Collateral Agent, as appropriate, under the
Mortgage or any award for or the proceeds from any of the
Mortgaged Collateral being taken not
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required to be paid to the Trustee or the Collateral Agent
under Section 12.05 hereof, as the case may be;
(iv) that there is no outstanding indebtedness or
other obligation, other than costs for which payment is being
requested, known to the Company, after due inquiry, for the
purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in
connection with the making thereof, which, if unpaid, might
become the basis of a vendor's, mechanics', laborer's,
materialmen's, statutory or other similar Lien upon any of
such repairs, rebuildings or replacement, which Lien might, in
the opinion of the signers of such certificate, materially
impair the security afforded by such repairs, rebuildings or
replacement;
(v) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of the
Company's or Subsidiary Guarantors' business;
(vi) whether any part of such repairs, rebuild ings
or replacements, within six months before the date of
acquisition thereof by the Company or a Subsidiary Guarantor,
has been used or operated by others other than the Company or
a Subsidiary Guarantor in a business similar to that in which
such property has been or is to be used or operated by the
Company or a Subsidiary Guarantor, and whether the fair value
to the Company or a Subsidiary Guarantor, at the date of such
acquisi tion, of such part of such repairs, rebuildings or
replacement is at least $100,000 and 1% of the aggregate
principal amount at maturity of the out standing Securities;
and, if all such facts are present, such part of said repairs,
rebuildings or replacements shall be separately described, and
it shall be stated that an Appraiser's certificate as to the
fair value to the Company of such separately described
repairs, rebuildings or replacements will be furnished under
the following subsection (b) of this Section 13.03;
(vii) that no Default or Event of Default shall
have occurred and be continuing;
(viii) that the Trust Moneys that will remain
after such withdrawal will be sufficient to
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complete the repair, rebuilding or replacement of the property
destroyed, damaged or taken; and
(ix) that all conditions precedent herein provided
for relating to such withdrawal and payment have been complied
with.
(b) In case any part of such repairs, rebuildings or
replacements is separately described pursuant to the foregoing
paragraph (vi) of subsection (a) of this Section, a certificate of an
Appraiser stating the fair value to the Company or the Subsidiary
Guarantors, in such Appraiser's opinion, of such separately described
repairs, rebuildings or replacements at the date of the acquisition
thereof by the Company or the Subsidiary Guarantors.
(c) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are
therewith delivered to the Trustee conform to the requirements
of this Indenture or the Security Agreements, and that, upon
the basis of such Company request and the accompanying
documents specified in this Section 13.03, all conditions
precedent herein provided for relating to such withdrawal and
payment have been complied with, and the Trust Moneys whose
withdrawal is then requested may be lawfully paid over under
this Section 13.03;
(ii) that the Company or the applicable Subsidiary
Guarantor has acquired title to said repairs, rebuildings and
replacements at least the equivalent to its title to the
property destroyed, damaged or taken, and that the same and
every part thereof are free and clear of all Liens prior to
the Lien of this Indenture and the Security Agreements, except
Permitted Liens to which the property so destroyed, damaged or
taken shall have been subject at the time of such destruction,
damage or taking; and
(iii) that all the Company's or the applicable
Subsidiary Guarantor's right, title and interest in and to
said repairs, rebuilding or replacements, or combination
thereof, are then subject to the Lien of this Indenture and
the Security Agreements.
Upon compliance with the foregoing provisions of this Section,
the Trustee shall pay on Company request an amount of Trust Moneys of the
character aforesaid equal to the amount of the expenditures or costs stated in
the Officers' Certificate required by paragraph (i) of
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subsection (a) of this Section 13.03, or the fair value to the Company or the
applicable Subsidiary Guarantor of such repairs, rebuildings and replacements
stated in such Officers' Certificate (and in such Appraiser's certificate, if
required by subsection (b) of this Section 13.03), which ever is less. Unless
the Collateral Agent and Trustee shall otherwise agree, all insurance must name
the Collateral Agent and Trustee as an insured, but without liability for
premiums, calls or assessments, and all amounts of whatsoever nature payable
under any insurance must be payable to the Collateral Agent and Trustee for
distribution, first to itself and thereafter to the Relevant Subsidiary
Guarantor, as Owner of such Vessel or others as their interests may appear. All
amounts payable under any insurance with respect to the Vessel involving any
damage to the Vessel not constituting an actual or constructive or an agreed or
compromised total loss, the insurers may pay direct for the repair, salvage or
other charges involved or, if the relevant Subsidiary Guarantor shall have first
fully repaired the damage or paid all of the salvage or other charges, may pay
the relevant Subsidiary Guarantor as reimbursement therefore; PROVIDED, HOWEVER,
that if such amounts (including any franchise or deductible) are in excess of
One Million United States Dollars ($1,000,000), the insurers shall make such
payment to the Collateral Agent and Trustee. All payments of insurance shall be
made to the Collateral Agent and the Trustee if an Event of Default shall have
occurred or any event which with the giving of notice or the lapse of time, or
both, would constitute an Event of Default.
SECTION 13.04. POWERS EXERCISABLE NOTWITHSTANDING EVENT OF
DEFAULT. In case an Event of Default shall have occurred and shall be
continuing, the Company, while in possession of the Mortgaged Collateral (other
than cash, cash equivalents, securities and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder or under the
Security Agreements), may do any of the things enumerated in Sections 13.02 and
13.03 if the Trustee in its discretion, or the Holders of a majority in
aggregate principal amount at maturity of the outstanding Securities, by
appropriate action of such Holders, shall consent to such action, in which event
any certificate filed under any of such Sections shall omit the statement to the
effect that no Event of Default has occurred and is continuing. This Section
13.04 shall not apply, however, during the continuance of an Event of Default of
the type specified in Section 6.01(1) or 6.01(2).
SECTION 13.05. POWERS EXERCISABLE BY TRUSTEE OR RECEIVER. In
case the Mortgaged Collateral (other than any cash, cash equivalents, securities
and other personal property held by, or required to be deposited or pledged
with, the Trustee hereunder or under the Security Agreements)
117
shall be in the possession of a receiver or trustee lawfully appointed, the
powers hereinbefore in this Article 13 conferred upon the Company and the
Subsidiary Guarantors with respect to the withdrawal or application of Trust
Moneys may be exercised by such receiver or trustee, in which case a certificate
signed by such receiver or trustee shall be deemed the equivalent of any
Officers' Certificate required by this Article 13. If the Trustee shall be in
possession of any of the Mortgaged Collateral hereunder or under the Security
Documents, such powers may be exercised by the Trustee in its sole discretion.
SECTION 13.06. DISPOSITION OF SECURITIES RETIRED. All
Securities received by the Trustee and for whose purchase Trust Moneys are
applied under this Article 13, if not other wise canceled, shall be promptly
canceled and destroyed by the Trustee. Upon destruction of any Securities, the
Trustee shall issue a certificate of destruction to the Company.
SECTION 13.07. INVESTMENT AND USE OF TRUST Moneys. (a) All or
any part of any Trust Moneys held by the Trustee hereunder (except such as may
be held for the account of any particular Securities), shall from time to time
at the direction of the Company be invested or reinvested by the Trustee in
Temporary Cash Investments. Unless a Default occurs and is continuing, any
interest on such Temporary Cash Investments (in excess of any accrued interest
paid at the time of purchase) which may be received by the Trustee or the
Collateral Agent, as appropriate, shall be paid periodically to the Company.
Such Temporary Cash Investments shall be held by the Trustee as a part of the
Mortgaged Collateral, subject to the same provisions hereof as the cash used by
it to purchase such cash equivalents. The Trustee shall not be liable or
responsible for any loss resulting from such investments or sales except only
for its own grossly negligent action, its own grossly negligent failure to act
or its own willful misconduct in complying with this Section 13.07.
(b) If the Company or any Subsidiary Guarantor shall fail to
perform any of its covenants in this Indenture or under any Security Agreement,
the Trustee may (but shall not be required to), direct the Collateral Agent to,
at any time and from time to time, use, apply and advance any Trust Moneys held
by it under this Article 13 or make advances to effect performance of any such
covenant on behalf of the Company or such Subsidiary Guarantor as contemplated
by this Indenture or the Security Agreements; PROVIDED, HOWEVER, that the
Trustee or the Collateral Agent, as appropriate, shall not be required to make
any such advances from its own funds; PROVIDED, FURTHER, HOWEVER, that all
moneys so used or advanced by the Trustee, together (in the case of funds
advanced by the Trustee) with interest at the rate borne by
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the Securities shall be repaid by the Company or the applicable Subsidiary
Guarantor upon demand and such advances shall be secured under the Mortgages
prior to the Securities. For repayment of all such advances the Trustee shall
have the right to use and apply any Trust Moneys at any time held by it under
Article 13 but no such use of Trust Moneys or advance shall relieve the Company
or such Subsidiary Guarantor from any Default.
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. TRUST INDENTURE ACT CONTROLS. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 14.02. NOTICES. Any notice or communica
tion shall be in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Company or any Subsidiary Guarantor:
x/x Xxxxxx xxx Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands, British West Indies
Attention of: Xxxxxx Xxxxxxxxx, Esq.
if to the Trustee:
The First National Bank of Maryland
Corporate Trust Division
16th Floor, Mail Code 101-591
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention of: Corporate Trust Division
The Company or the Trustee by notice to the other may
designate additional or different addresses for subse quent notices or
communications.
Any notice or communication mailed to a Security holder shall
be mailed to the Securityholder at the Secu rityholder's address as it appears
on the registration books
119
of the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 14.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 14.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 14.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condi tion;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investi gation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
120
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 14.06. WHEN SECURITIES DISREGARDED. In determining
whether the Holders of the required principal amount at maturity of Securities
have concurred in any direc tion, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or con trolled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 14.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 14.08. LEGAL HOLIDAYS. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institu tions are not required to
be open in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
SECTION 14.09. GOVERNING LAW. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 14.10. NO RECOURSE AGAINST OTHERS. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 14.11. SUCCESSORS. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
121
SECTION 14.12. MULTIPLE ORIGINALS. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 14.13. TABLE OF CONTENTS; HEADINGS. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
122
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
MILLENIUM SEACARRIERS, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
RAPID OCEAN CARRIERS INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
IVY NAVIGATION LIMITED
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
OAKMONT SHIPPING AND TRADING
LIMITED
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
TOPSCALE SHIPPING COMPANY
LIMITED
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
123
CONIFER SHIPPING COMPANY
LIMITED
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM MAJESTIC, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM YAMA, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM AMETHYST, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM ELMAR, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
124
MILLENIUM XXXXXXXXXX, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM II, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM III, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM IV, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM V, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
125
MILLENIUM VI, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
MILLENIUM VII, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
THE FIRST NATIONAL BANK OF
MARYLAND
by /s/ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxx
Title:Assistant Vice President
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..................................................................................2
SECTION 1.02. Other Definitions...........................................................................37
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.............................................................................37
SECTION 1.04. Rules of Construction.......................................................................37
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating.............................................................................38
SECTION 2.02. Execution and Authentication................................................................39
SECTION 2.03. Registrar and Paying Agent..................................................................39
SECTION 2.04. Paying Agent To Hold Money in Trust.........................................................40
SECTION 2.05. Securityholder Lists........................................................................40
SECTION 2.06. Replacement Securities......................................................................40
SECTION 2.07. Outstanding Securities......................................................................41
SECTION 2.08. Temporary Securities........................................................................41
SECTION 2.09. Cancelation.................................................................................41
SECTION 2.10. Defaulted Interest..........................................................................42
SECTION 2.11. CUSIP Numbers...............................................................................42
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee..........................................................................42
SECTION 3.02. Selection of Securities To Be Redeemed......................................................43
SECTION 3.03. Notice of Redemption........................................................................43
SECTION 3.04. Effect of Notice of Redemption..............................................................44
SECTION 3.05. Deposit of Redemption Price.................................................................44
SECTION 3.06. Securities Redeemed in Part.................................................................45
2
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities.......................................................................45
SECTION 4.02. SEC Reports.................................................................................45
SECTION 4.03. Limitation on Indebtedness..................................................................46
SECTION 4.04. Limitation on Indebtedness and Preferred
Stock of Restricted Subsidiaries..........................................................47
SECTION 4.05. Limitation on Restricted Payments...........................................................48
SECTION 4.06. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries..............................................................................52
SECTION 4.07. Limitation on Sales of Assets...............................................................53
SECTION 4.08. Limitation on Lines of Business.............................................................57
SECTION 4.09. Limitation on Affiliate Transactions........................................................57
SECTION 4.10. Limitation on the Sale or Issuance of
Capital Stock of Restricted
Subsidiaries..............................................................................58
SECTION 4.11. Limitation on Liens.........................................................................58
SECTION 4.12. Limitation on Sale/Leaseback
Transactions..............................................................................59
SECTION 4.13. Change of Control...........................................................................59
SECTION 4.14. Future Subsidiary Guarantors................................................................61
SECTION 4.15. Impairment of Security Interest.............................................................61
SECTION 4.16. Amendments to Security Agreements...........................................................61
SECTION 4.17. Application of Proceeds upon Sale or
Loss of a Mortgaged Vessel................................................................63
SECTION 4.18. Tender of a Qualified Substitute Vessel.....................................................63
SECTION 4.19. Additional Amounts..........................................................................65
SECTION 4.20. Compliance Certificate......................................................................67
SECTION 4.21. Further Instruments and Acts................................................................68
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer
Assets....................................................................................68
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default...........................................................................70
SECTION 6.02. Acceleration................................................................................73
3
SECTION 6.03. Other Remedies..............................................................................73
SECTION 6.04. Waiver of Past Defaults.....................................................................73
SECTION 6.05. Control by Majority.........................................................................74
SECTION 6.06. Limitation on Suits.........................................................................74
SECTION 6.07. Rights of Holders To Receive Payment........................................................74
SECTION 6.08. Collection Suit by Trustee..................................................................75
SECTION 6.09. Trustee May File Proofs of Claim............................................................75
SECTION 6.10. Priorities..................................................................................75
SECTION 6.11. Undertaking for Costs.......................................................................76
SECTION 6.12. Waiver of Stay or Extension Laws............................................................76
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee...........................................................................76
SECTION 7.02. Rights of Trustee...........................................................................77
SECTION 7.03. Individual Rights of Trustee................................................................78
SECTION 7.04. Trustee's Disclaimer........................................................................78
SECTION 7.05. Notice of Defaults..........................................................................79
SECTION 7.06. Reports by Trustee to Holders...............................................................79
SECTION 7.07. Compensation and Indemnity..................................................................80
SECTION 7.08. Replacement of Trustee......................................................................81
SECTION 7.09. Successor Trustee by Merger.................................................................81
SECTION 7.10. Eligibility; Disqualification...............................................................81
SECTION 7.11. Preferential Collection of Claims
Against Company..........................................................................81
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities;
Defeasance................................................................................81
SECTION 8.02. Conditions to Defeasance....................................................................83
SECTION 8.03. Application of Trust Money..................................................................84
SECTION 8.04. Repayment to Company........................................................................84
SECTION 8.05. Indemnity for Government Obligations........................................................84
SECTION 8.06. Reinstatement...............................................................................84
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders..................................................................85
SECTION 9.02. With Consent of Holders.....................................................................86
SECTION 9.03. Compliance with Trust Indenture Act.........................................................87
4
SECTION 9.04. Revocation and Effect of Consents
and Waivers...............................................................................87
SECTION 9.05. Notation on or Exchange of Securities.......................................................87
SECTION 9.06. Trustee To Sign Amendments..................................................................88
SECTION 9.07. Payment for Consent.........................................................................88
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. Guarantees.................................................................................88
SECTION 10.02. Limitation on Liability....................................................................90
SECTION 10.03. Successors and Assigns.....................................................................90
SECTION 10.04. No Waiver..................................................................................90
SECTION 10.05. Modification...............................................................................91
SECTION 10.06. Release of Subsidiary Guarantor............................................................91
ARTICLE 11
PLEDGED COLLATERAL
SECTION 11.01. Grant of Security Interest.................................................................91
SECTION 11.02. Delivery of Collateral.....................................................................92
SECTION 11.03. Representations and Warranties.............................................................92
SECTION 11.04. Further Assurances.........................................................................93
SECTION 11.05. Dividends; Voting Rights; Release of
Collateral...............................................................................93
SECTION 11.06. Trustee Appointed Attorney-in-Fact.........................................................95
SECTION 11.07. Trustee May Perform........................................................................95
SECTION 11.08. Trustee's Duties...........................................................................95
SECTION 11.09. Remedies upon Event of Default.............................................................95
SECTION 11.10. Application of Proceeds....................................................................96
SECTION 11.11. Continuing Lien............................................................................96
SECTION 11.12. Certificates and Opinions..................................................................96
SECTION 11.13. Additional Agreements......................................................................97
ARTICLE 12
SECURITY AGREEMENTS
SECTION 12.01. Collateral and Security Agreements.........................................................98
SECTION 12.02. Recording; Annual Opinions.................................................................98
SECTION 12.03. Disposition of Collateral Without
Release.................................................................................100
SECTION 12.04. Release of Collateral.....................................................................102
SECTION 12.05. Eminent Domain, Expropriation and Other
Governmental Takings....................................................................106
5
SECTION 12.06. Permitted Releases Not To Impair Lien;
Trust Indenture Act Requirements........................................................107
SECTION 12.07. Suits To Protect the Collateral...........................................................108
SECTION 12.08. Purchaser Protected.......................................................................108
SECTION 12.09. Powers Exercisable by Receiver or
Trustee.................................................................................108
SECTION 12.10. Disposition of Obligations Received.......................................................109
SECTION 12.11. Determinations Relating to Collateral.....................................................109
SECTION 12.12. Release upon Termination of the
Company's Obligations...................................................................110
SECTION 12.13. Collateral Agent's Duties.................................................................110
ARTICLE 13
APPLICATION OF TRUST MONEYS
SECTION 13.01. "Trust Moneys" Defined....................................................................110
SECTION 13.02. Retirement of Securities..................................................................111
SECTION 13.03. Withdrawals of Insurance Proceeds and
Condemnation Awards.....................................................................112
SECTION 13.04. Powers Exercisable Notwithstanding
Event of Default........................................................................116
SECTION 13.05. Powers Exercisable by Trustee or
Receiver................................................................................116
SECTION 13.06. Disposition of Securities Retired.........................................................117
SECTION 13.07. Investment and Use of Trust Moneys........................................................117
ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Trust Indenture Act Controls..............................................................118
SECTION 14.02. Notices...................................................................................118
SECTION 14.03. Communication by Holders with Other
Holders.................................................................................119
SECTION 14.04. Certificate and Opinion as to
Conditions Precedent....................................................................119
SECTION 14.05. Statements Required in Certificate
or Opinion..............................................................................119
SECTION 14.06. When Securities Disregarded...............................................................120
SECTION 14.07. Rules by Trustee, Paying Agent and
Registrar...............................................................................120
SECTION 14.08. Legal Holidays............................................................................120
SECTION 14.09. Governing Law.............................................................................120
SECTION 14.10. No Recourse Against Others................................................................120
SECTION 14.11. Successors................................................................................120
SECTION 14.12. Multiple Originals........................................................................121
SECTION 14.13. Table of Contents; Headings...............................................................121
6
Rule 144A/Regulation S Appendix
Exhibit A - Form of Security
Schedule I - Description Pledged Shares
RULE 144A/REGULATION S APPENDIX
[FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN
RELIANCE ON REGULATION S.]
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 12% First Priority Ship
Mortgage Notes Due 2005 to be issued pursuant to this Indenture in connection
with a Registered Exchange Offer pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston
Corporation and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation.
"Initial Securities" means the 12% First Priority Ship
Mortgage Notes Due 2005, issued under this Indenture on or about the date
hereof.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to Initial Purchasers, in exchange for the Initial Securities held by
the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount at maturity of Private Exchange Securities.
"Purchase Agreement" means the Purchase Agreement dated July
20, 1998, among the Company, certain Subsidiary Guarantors and the Initial
Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount at maturity of Exchange Securities
registered under the Securities Act.
2
"Registration Rights Agreement" means the Registration Rights
Agreement dated July 20, 1998, among the Company and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company, in connection with the offer and sale of
Initial Securities or Private Exchange Securities, pursuant to the Registration
Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b)hereto.
"Units" means 100,000 Units of the Company, each consisting of
$1,000 principal amount at maturity of its Securities and one Warrant.
"Warrant" means a Warrant issued by the Company pursuant to
the Warrant Agreement to purchase five shares of Common Stock, par value $0.01
per share, of the Company at an exercise price of $0.01 per share.
1.2 OTHER DEFINITIONS
DEFINED IN
TERM SECTION:
---- --------
"Agent Members".........................................................2.1(b)
"Global Security".......................................................2.1(a)
"Regulation S"..........................................................2.1(a)
"Rule 144A".............................................................2.1(a)
2. THE SECURITIES.
2.1 FORM AND DATING.
3
The Initial Securities are being offered and sold by the
Company pursuant to the Purchase Agreement.
(a) GLOBAL SECURITIES. Initial Securities offered and sold to
a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, shall be issued initially in the form of
two permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Global Security"). Securities
initially offered and sold in the United States to QIBs in reliance on Rule 144A
will be represented by the U.S. Global Security, and Securities initially
offered and sold outside the United States in reliance on Regulation S will be
represented by the Regulation S Global Security, each of which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its New York office, as custodian for the
Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount at maturity of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially two Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Depository
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding
4
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount at
maturity of $100.0 million and (2) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to the Registration Rights Agreement, for a like
principal amount at maturity of Initial Securities, in each case upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount at maturity of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and
whether the Securities are to be Initial Securities, Exchange Securities or
Private Exchange Securities. The aggregate principal amount at maturity of
Securities outstanding at any time may not exceed $100.0 million except as
provided in Section 2.06 of this Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. (i) The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in accordance with
the Depositary's procedures containing information regarding the participant
account of the Depositary to credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions instruct the
Depositary to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Security
5
and to debit the account of the Person making the transfer the beneficial
interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 or
Section 2.09 of the Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A
or Regulation S, as the case may be) and such other procedures as may
from time to time be adopted by the Company.
(b) LEGEND.
(i) Except as permitted by the following para graphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange there for or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF MILLENIUM
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
XXXXXXXXXXX, XXXX (x) XXXXXX XXX
0
XXXXXX XXXXXX TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE
904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (v) TO MILLENIUM, IN EACH OF CASES (i)
THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, in the
case of any Transfer Restricted Security that is represented by a
Global Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a certificated Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security, if
the Holder certifies in writing to the Registrar that its request for
such exchange was made in reliance on Rule 144 (such certification to
be in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such
Initial Security or such Private Exchange Security issued to certain
Holders be issued in global form will cease to apply, and a
certificated Initial Security or Private Exchange Security without
legends will be available to the transferee of the Holder of such
Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange
Security or directions to transfer such Holder's interest in the Global
Security, as applicable.
7
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will cease to apply and certificated Initial Securities
with the restricted securities legend set forth in Exhibit 1 hereto
will be available to Holders of such Initial Securities that do not
exchange their Initial Securities, and Exchange Securities in
certificated or global form will be available to Holders that exchange
such Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply, and Private Exchange Securities in
global form with the Restricted Securities Legend set forth in Exhibit
1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(C) CANCELATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time
as all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depository for cancelation or retained and canceled by
the Trustee. At any time prior to such cancelation, if any beneficial interest
in a Global Security is exchanged for certificated or Definitive Securities,
redeemed, repurchased or canceled, the principal amount at maturity of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(D) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or co-registrar's
request.
8
(ii)No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06, 4.13 and 9.05 of
this Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article 3 of
this Indenture, except the unredeemed portion of any certificated
Security being redeemed in part, or (b) any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer
to repurchase or redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the con trary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(e) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
9
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 CERTIFICATED SECURITIES.
(a) A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount at maturity equal to the principal
amount at maturity of such Global Security, in exchange for such Global
Security, only if such transfer complies with Section 2.3 and (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act and a successor depositary
is not appointed by the Company within 90 days of such notice, or (ii) an Event
of Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without
10
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount at
maturity of certificated Initial Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(d),
bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF MILLENIUM
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (i) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED
2
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (v) TO MILLENIUM, IN EACH OF
CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Original Issued Discount Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THE ISSUE PRICE IS $965.93 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $34.07, IN EACH CASE PER $1,000
PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF
THE CODE, THE ISSUE DATE OF THIS SECURITY IS JULY 24, 1998. FOR PURPOSES OF
SECTION 1272 OF THE CODE, THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS
12-3/4%.
3
No. $
12% First Preferred Ship Mortgage Notes Due 2005
MILLENIUM SEACARRIERS, INC., a Cayman Islands corporation,
promises to pay to , or registered assigns, the principal sum of Dollars on July
15, 2005.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
MILLENIUM SEACARRIERS, INC.,
by
-----------------------
President
-----------------------
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE FIRST NATIONAL BANK OF MARYLAND
As Trustee, certifies' his is one of the Securities referred to in the
Indenture.
by
-----------------------------
Authorized Signatory
[SEAL]
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12% First Priority Ship Mortgage Note Due 2005
1. INTEREST
Millenium Seacarriers, Inc., a Cayman Islands corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
cash interest on the Accreted Value of this Security from time to time at the
rate per annum shown above; PROVIDED, HOWEVER, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, cash interest will
accrue on the Accreted Value of this Security at a rate of 12 1/2% per annum
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all Registration Defaults have been cured.
The Company will pay interest semiannually on January 15 and July 15 of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 24, 1998.
Cash interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
In addition, in the event that the Securities and the Units
are not listed on the Luxembourg Stock Exchange or on another exchange
substantially equivalent thereto by August 7, 1998, the Company will pay
additional interest on the Accreted Value of this Security at a rate of 0.50%
per annum from and including such date to but not including the date of such
listing.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the January 1 or July 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the
5
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; PROVIDED, HOWEVER, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, The First National Bank of Maryland, a national
banking association ("Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as
of July 24, 1998 ("Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general secured obligations of the Company
limited to $100.0 million aggregate principal amount at maturity (subject to
Section 2.06 of the Indenture). The Indenture will contain covenants with
respect to (i) limitations on the incurrence of additional indebtedness, (ii)
limitations on certain payments, (iii) limitations on
6
restrictions on distributions from subsidiaries (including the Subsidiary
Guarantors), (iv) limitations on sales of assets and subsidiary stock, (v)
limitations on liens, (vi) limitations on investments, (vii) limitations on
business activities, (viii) limitations on sale and leaseback transactions, (ix)
limitations on transactions with affiliates, (x) requirements for the provision
of financial information, (xi) limitations on mergers, consolidations and
certain purchases of assets, (xii) impairment of security interests and (xiii)
amendments to security agreements. All these limitations and prohibitions,
however, are subject to a number of important qualifications.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs below, the
Securities may not be redeemed at the option of the Company prior to July 15,
2003. On and after that date, the Company may redeem the Securities in whole at
any time or in part from time to time at the following redemption prices
(expressed in percentages of Accreted Value), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date):
if redeemed during the 12-month period commencing on
July 15 of the years set forth below:
PERIOD PERCENTAGE
2003 106%
2004 100
In addition, at any time prior to July 15, 2001, the Company may
redeem up to 35% of the original principal amount at maturity of Securities with
the proceeds of a Public Equity Offering following which there is a Public
Market, at any time or from time to time, at a redemption price (expressed as a
percentage of Accreted Value) of 112% plus accrued interest to redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date); PROVIDED, HOWEVER,
that at least $65.0 million principal amount at maturity of Securities remains
outstanding and is held, directly or indirectly, by Persons other than the
Company and its Affiliates, after each such redemption and that any such
redemption occurs within 60 days following the closing of any such Public Equity
Offering.
7
The Securities may be redeemed, at the option of Millenium, at
any time as a whole but not in part, on not less than 30 nor more than 60 days'
written notice to each Holder, at 100% of the Accreted Value thereof, plus
accrued and unpaid interest to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company or the Subsidiary
Guarantors, as the case may be, has become or would become obligated for reasons
outside of its control, and after taking reasonable measures to avoid such
obligation, to pay, on the next date on which any amount would be payable with
respect to the Securities, any Additional Amounts on the Securities or
Subsidiary Guarantees pursuant to the terms and conditions thereof as a result
of a change in or an amendment to the laws (including any regulations or rulings
promulgated thereunder) of the Cayman Islands, Liberia or Cyprus (or any
relevant jurisdiction, political subdivision or taxing authority thereof or
therein), or any change in or amendment to any official position regarding the
application or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction), which change or amendment is
announced or becomes effective on or after the date of this Offering Circular;
PROVIDED, HOWEVER, that (a) no such notice of redemption shall be given earlier
than 60 days prior to the earliest date on which the Company or the Subsidiary
Guarantors, as the case may be, would be obligated to pay such Additional
Amounts if a payment in respect of the Securities or the Subsidiary Guaranty
were then due, and (b) at the time any such redemption notice is given, such
obligation to pay Additional Amounts must remain in effect. Prior to any
redemption of the Securities, the Company shall deliver to the Trustee or any
paying agent an Officer's Certificate stating that Millenium is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right to effect such redemption have occurred.
6. MANDATORY REDEMPTION
To the extent that, after the close of business on July 31,
1999, the amount of cash and the fair market value (as determined by the Board
of Directors in good faith) of securities on deposit in escrow with the Escrow
Agent exceeds $5.0 million, Millenium shall use all such remaining Escrowed
Proceeds to redeem as much of Securities as can be redeemed with such Escrowed
Proceeds at a redemption price equal to the sum of 101% of the Accreted Value of
such Securities and the accrued and unpaid interest thereon to the Special
Mandatory Redemption Date (as defined below) (subject to the right of
8
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date). For purposes hereof, "Special Mandatory
Redemption Date" means August 31, 1999.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000 principal amount at maturity. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
8. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. GUARANTEE
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and uncon ditionally guaranteed on a
joint and several senior secured basis by Subsidiary Guarantors.
10. SECURITY
Securities will be secured by the Mortgages on the Mortgaged
Vessels, the security interests created pursuant to the Indenture and the
Security Agreements, the Escrowed Property and all the issued and outstanding
capital stock of the Subsidiary Guarantors.
9
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000 principal amount at maturity. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorse ments or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
12. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
14. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
15. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities
10
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount at maturity
outstanding of the Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
to cure any ambiguity, omission, defect or inconsistency, or to comply with
Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or the
Subsidiary Guarantors, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to para graph
5 or 6 of the Securities, upon acceleration or other wise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply with other agreements in the Indenture or the Securities, in
certain cases subject to notice and lapse of time; (iv) certain accelerations
(including failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $5
million; (v) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $5 million; (vii) a Subsidiary Guarantee
ceases to be in full force and effect (other than in accordance with the terms
of such Subsidiary Guarantee); and (viii) the security interest under the
Security Agreements ceases to be in full force and effect for any reason (other
than by operation of the provisions of the Indenture and the Security Agreements
and certain other reasons specified in this Indenture). If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount at maturity of the Securities may declare all the Securities to
be due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
11
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount at maturity of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in
12
common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
22. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
23. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
X/X XXXXXX XXX XXXXXX
X.X. XXX 000
XXXXX XXXXXX STREET
XXXXXX TOWN, GRAND CAYMAN
CAYMAN ISLANDS, BRITISH WEST INDIES
ATTENTION OF XXXXXX XXXXXXXX, ESQ.
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ASSIGNMENT FORM
13
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
--------------------------------------------------------------------------------
Date: ________________ Your Signature: _________________________________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) o to the Company; or
(2) o pursuant to an effective registration statement
under the Securities Act of 1933; or
(3) o inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933) that
purchases for its own account or for the
account of a qualified institutional buyer to
whom notice is given that such transfer is
being made in reliance on Rule 144A, in each
case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
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(4) o outside the United States in an offshore
transaction within the meaning of Regulation S under
the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
(5) o pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; PROVIDED, HOWEVER,
that if box (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
--------------------- --------------------------
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to
15
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease increase amount authorized
in Principal in Principal at Maturity officer
Amount at Amount at of of Trustee
Maturity Maturity this Global or
of this of this Security Securities
Global Global following Custodian
Security Security such
decrease or
increase)
17
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Section 4.07 or 4.13 of the Indenture,
check the box:
/_/
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.07 or 4.13 of the Indenture,
state the amount in principal amount at maturity: $
Date: _______________ Your Signature: ______________________
(Sign exactly as your
name appears on the other
side of this Security.)
Signature Guarantee: _____________________________________________________
(Signature must be guaranteed)
[FORM OF FACE OF SECURITY OR PRIVATE EXCHANGE]
[*/] EXHIBIT A
[**/]
No.$
12% First Preferred Ship Mortgage Notes Due 2005
Millenium Seacarriers, Inc., a Cayman Islands corporation,
promises to pay to , or registered assigns, the principal sum of Dollars on July
15, 2005.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
MILLENIUM SEACARRIERS, INC.,
by
-----------------------
President
-----------------------
Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE FIRST NATIONAL BANK OF MARYLAND,
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture.
by ____________________
Authorized Signatory
_______________
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
2
**/ [If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]
3
[FORM OF REVERSE SIDE OF SECURITY OR PRIVATE EXCHANGE SECURITY]
12% First Preferred Ship Mortgage Note Due 2005
1. INTEREST
Millenium Seacarriers, Inc., a Cayman Islands corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
cash interest on the Accreted Value of this Security at the rate per annum shown
above [; PROVIDED, HOWEVER, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, cash interest will accrue on this
Security from time to time at a rate of 12% per annum from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured] ***/. The Company will
pay interest semiannually on January 15 and July 15 of each year. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from July 24, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30- day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
In addition, in the event that the Securities and the Units
are not listed on the Luxembourg Stock Exchange or on another exchange
substantially equivalent thereto by August 7, 1998, the Company will pay
additional interest on the Accreted Value of this Security at a rate of 0.50%
per annum from and including such date to but not including the date of such
listing.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the
---------------
***/ Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Rights Agreement.
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January 1 or July 1 next preceding the interest payment date even if Securities
are canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of Securities (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by the holders thereof or, if no U.S. dollar account
maintained by the payee with a bank in the United States is designated by any
holder to the Trustee or the Paying Agent at least 30 days prior to the relevant
due date for payment (or such other date as the Trustee may accept in its
discretion), by mailing a check to the registered address of such holder.
3. PAYING AGENT AND REGISTRAR
Initially, The First National Bank of Maryland, a national
banking association ("Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as
of July 24, 1998 ("Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general secured obligations of the Company
limited to $100.0 million aggregate principal amount at maturity (subject to
Section 2.06 of the Indenture). The Indenture will contain covenants with
respect to (i) limitations on the incurrence of additional indebtedness, (ii)
limitations on certain payments, (iii) limitations on restrictions on
distributions from subsidiaries (including the
5
Subsidiary Guarantors), (iv) limitations on sales of assets and subsidiary
stock, (v) limitations on liens, (vi) limitations on investments, (vii)
limitations on business activities, (viii) limitations on sale and leaseback
transactions, (ix) limitations on transactions with affiliates, (x) requirements
for the provision of financial information, (xi) limitations on mergers,
consolidations and certain purchases of assets, (xii) impairment of security
interests and (xiii) amendments to security agreements. All these limitations
and prohibitions, however, are subject to a number of important qualifications.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs below, the
Securities may not be redeemed at the option of the Company prior to July 15,
2003. On and after that date, the Company may redeem the Securities in whole at
any time or in part from time to time at the following redemption prices
(expressed in percentages of Accreted Value), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date):
if redeemed during the 12-month period commencing on
July 15 of the years set forth below:
PERIOD PERCENTAGE
2003 106%
2004 100
In addition, at any time prior to July 15, 2001, the Company may
redeem up to 35% of the original principal amount at maturity of Securities with
the proceeds of a Public Equity Offering following which there is a Public
Market, at any time or from time to time, at a redemption price (expressed as a
percentage of Accreted Value) of 112% plus accrued interest to redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date); PROVIDED, HOWEVER,
that at least $65.0 million principal amount at maturity of Securities remains
outstanding and is held, directly or indirectly by Persons other than the
Company and its Affiliates, after each such redemption and that any such
redemption occurs within 60 days following the closing of any such Public Equity
Offering.
6
The Securities may be redeemed, at the option of the Company,
at any time as a whole but not in part, on not less than 30 nor more than 60
days' written notice to each Holder, at 100% of the Accreted Value thereof, plus
accrued and unpaid interest to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company or the Subsidiary
Guarantors, as the case may be, has become or would become obligated for reasons
outside of its control, and after taking reasonable measures to avoid such
obligation, to pay, on the next date on which any amount would be payable with
respect to the Securities, any Additional Amounts on the Securities or
Subsidiary Guarantees pursuant to the terms and conditions thereof as a result
of a change in or an amendment to the laws (including any regulations or rulings
promulgated thereunder) of the Cayman Islands, Liberia or Cyprus (or any
relevant jurisdiction, political subdivision or taxing authority thereof or
therein), or any change in or amendment to any official position regarding the
application or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction), which change or amendment is
announced or becomes effective on or after the date of this Offering Circular;
PROVIDED, HOWEVER, that (a) no such notice of redemption shall be given earlier
than 60 days prior to the earliest date on which the Company or the Subsidiary
Guarantors, as the case may be, would be obligated to pay such Additional
Amounts if a payment in respect of the Securities or the Subsidiary Guaranty
were then due, and (b) at the time any such redemption notice is given, such
obligation to pay Additional Amounts must remain in effect. Prior to any
redemption of the Securities, the Company shall deliver to the Trustee or any
paying agent an Officer's Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right to effect such redemption have occurred.
6. MANDATORY REDEMPTION
To the extent that, after the close of business on July 31,
1999, the amount of cash and the fair market value (as determined by the Board
of Directors in good faith) of securities on deposit in escrow with the Escrow
Agent exceeds $5.0 million, Millenium shall use all such remaining Escrowed
Proceeds to redeem as much of Securities as can be redeemed with such Escrowed
Proceeds at a redemption price equal to the sum of 101% of the Accreted Value of
such Securities and the accrued and unpaid interest thereon to the Special
Mandatory
7
Redemption Date (as defined below) (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date). For purposes hereof, "Special Mandatory Redemption Date" means
August 31, 1999.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
8. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. GUARANTEE
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and uncon ditionally guaranteed on a
joint and several senior secured basis by each of the Subsidiary Guarantors.
8
10. SECURITY
Securities will be secured by the Mortgages on the Mortgaged
Vessels, the security interests created pursuant to the Indenture and the
Security Agreements, the Escrowed
9
Property and all the issued and outstanding capital stock of the Subsidiary
Guarantors.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000 principal amount at maturity. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorse ments or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
12. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
14. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
10
15. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company,
the Subsidiary Guarantors and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
the Subsidiary Guarantors, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to para graph
5 or 6 of the Securities, upon acceleration or other wise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply with other agreements in the Indenture or the Securities, in
certain cases subject to notice and lapse of time; (iv) certain accelerations
(including failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $5
million; (v) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $5 million; (vii) a Subsidiary Guarantee
ceases to be in full force and effect (other than in accordance with the terms
of such Subsidiary Guarantee); and (viii) the security interest under the
Security Agreements ceases to be in full force and effect for any reason (other
than by operation of the provisions of the Indenture and the Security Agreements
and certain other reasons specified in this Indenture). If an Event of Default
occurs and is
11
continuing, the Trustee or the Holders of at least 25% in principal amount at
maturity of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount at maturity of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
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20. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
22. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
23. GOVERNING LAW.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
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X/X XXXXXX XXX XXXXXX
X.X. XXX 000
XXXXX XXXXXX STREET
XXXXXX TOWN, GRAND CAYMAN
CAYMAN ISLANDS, BRITISH WEST INDIES
ATTENTION OF
XXXXXX XXXXXXXX, ESQ.
--------------------------------------------------------------------------------
14
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
--------------------------------------------------------------------------------
Date: ________________ Your Signature: _________________________________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
15
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED
BY THE COMPANY PURSUANT TO SECTION 4.07 OR 4.13 OF THE INDENTURE, CHECK THE BOX:
/_/
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS
SECURITY PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.07 OR 4.13 OF THE
INDENTURE, STATE THE AMOUNT OF THE PRINCIPAL AMOUNT AT MATURITY: $
DATE: __________________ YOUR SIGNATURE: _______________________________________
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE
OF THE SECURITY)
SIGNATURE GUARANTEE:____________________________________________________________
(SIGNATURE MUST BE GUARANTEED BY A MEMBER FIRM OF THE NEW
YORK STOCK EXCHANGE OR A COMMERCIAL BANK OR TRUST COMPANY)
